Those instant cameras these days. We will be talking to the polaroid ceo. Welcome to Market Makers anarcho. Erik schatzker will be here with us shortly. Before we take you to mid town manhattan, we have to take you out to the newsroom with some breaking economic eta. Here is michael mckee. Hold onto your hat. We have a holy cow number out. The expectation was for a small increase, new home sales go up 18. 6 . This is in the month of may. This puts us at a 5004000 annual sales pace. Billed as a been telling us that they have been growing more confident about people coming into the market. This seems to support that view. Much of the increase in the northeast and in the south, we saw it increase all across the nation. Housing seems to be back after the big increase in existing home sales. These numbers will increase the amount of supply out there. The number of homes for sale is not changing. Consumer confidence is up. There is a chance of those things go together. From 83er goes to 85. 2 even. To 82. 2. Vised down that is three points and a betterthanexpected. Some really good Economic News to start your show, stephanie. That while, for holy cow number, michael mckee. I want to take you to Erik Schatzker. He is standing by with hank paulson. They are speaking about Climate Change. I am here in midtown with the former secretary of the treasury paulson. We have known about the relationship between Carbon Dioxide and atmospheric warming since before the second world war. Many people do not realize that. Scientists have been predicting Climate Change for 50 years. Research is overwhelmingly conclusive. I know you share that opinion. Nothing has been done. Plan. Rld needs an action give me three practical steps that we can take to deal with this problem now. Short term is the enemy we all face. It clearly is. We face in all facets of life. We face it on a wall street and in washington. Steps that i think have come out of the study we the firstsed is attempt and i think it is a good one to quantify the risk that climate has to our economy. The steps that come out of that are things that i think Business Needs to do. Study. Ll be a it is a first attempt. Arethe first time, we quantifying the risk. Risk andthe immediate not just the most reasonable cases, but the outside risks. The really perverse outcomes. What i would call the big risks. Demand thated to businesses make disclosures. Make disclosures about the risks. Make disclosures about carbon emissions. Make disclosures about the risk of stranded assets. Secondly, i think Business Leaders in the United States are the best i have ever seen. U. S. Companies are the best managed companies in the world. U. S. Businesses need to lead on this issue. The investments they are making today are going to have a lot to do with our economic future. Businesses need to do more in terms of investing in resilience. We need toantly, take out a National Insurance policy. We need the federal government to take action. And city, businesses governments are way ahead of the National Government. Businesses need to do a better job of lobbying and pressing the National Government to put the kinds of policy in place that would let us avoid the most adverse outcomes. Transparency, disclosure, Business Leadership, a National Insurance policy. You cochair to the risky with michael bloomberg. You talk about the quantification of economic risk. Put it in blunt terms. If this country does not take action on Climate Change, what happens . I think it can be catastrophic. The risks and the costs are already baked into the system as it were. Adversevoid the most outcomes. Really averse are in terms of the impact that they can have in the environment in which we live and on our economy. The real value of this report. This report does not say that this is the most likely outcome. This report looks at best cases and worst cases and uses modeling to really understand the rest. The worstcase scenarios are in the hundreds of billions of dollars. Very much so. Timee maintained for some that there really is unpredictability. Are of these outcomes centuries from now coming much sooner. But scientists are doing, they are very conservative and looking at facts. Extrapolating historical data. We are living in a new world with manmade co2. Just take a couple of examples. 15 years ago, scientists were predicting that the polar ice caps might melt at the end of the century. This in theeeing next decade or two. Who knows what they will be forecasting 10 years from now. I think when youre dealing with something that is unpredictable, you need to take out an insurance policy. What about the political question mark . If you asked the republicans how much do you believe in Climate Change, none of of the hands would go up. How do you create a safe space for these people to participate in the discussion about solutions . Let me again with the fact in the study that we just did. This is bipartisan. We have two Republican Former treasury secretaries and a democrat. We have republicans and democrats and we agree that there is a common problem. We may disagree on some of the solutions, but we believe there is a common problem. That is where you need to start. I am a part proud member of the republican party. I know many republicans in business and in government that want a factbased discussion of this. Is going lot of this to start with the American People. When it takes to get congress to act and what it takes to get our National Government to act is for the American People to demand it. What do you do in the interim . Lets take marco rubio as an example. He has a promising future. He changed hise, position on Climate Change. He says he does not believe in it. What do you say to senator rubio . What do you say to all of these people who for the time being . Re in office i willam doing tell you what i am doing i think actions speak louder than words. Paulson institute. I spend a lot of time in china. Chinas going to happen in is going to drive economic and environmental outcomes all over the world. Do the chinese get this . They get it. I think americans get this. And the Young Americans get this. I think the chinese have an urgent need to deal with dirty air. It is killing people. There is a great opportunity for our two countries to Work Together. Only if they Work Together are we going to be able to solve this problem. The u. S. Needs to lead. In terms of what i am doing in the u. S. , i am supporting the study. This study is not aimed at the broader american population. This is aimed largely at the Business Community. It quantifies the risk and we are going to try to energize the Business Community to put more pressure on federal officials do give them more cover to the sorts of things that they will need to do. Approach that one support,the one that i some way of pricing carbon and change behavior. I think that is what it takes to change behavior. Others would have a different approach. Part of the problem here is a lack of incentives. Why would anybody not build a beach house on a piece of sand if the government will pay for you to build up after a hurricane . How do you incentivize people to change behavior . Lets come back to incentives. Oppose the people who changing the national incentives, that believe that a carbon tax is all about the government, are missing the point altogether. It is rather perverse. Here, they areg guaranteeing that the government is going to have to come in repeatedly. When we have a hurricane or a flood or a killer tornado or a fire or a drought what happens . The National Government comes in. That is the role of the National Government. We all pay. That is a recipe for bigger government. That is a very large hazard. Is there a way of achieving without a change in government policy . Born . Etbased solution there are a lot of things we could do. There is not a onesizefitsall. There are risks that are very immediate. What is a whole lot of businesses should be doing. They want to minimize the damage that is going to come from the and thend the storms debts. That does not address the problem at its core. A very deals with immediate problem. Were going to need to take more extraordinary action. One less question. You spoke passionately about the work that you are doing. How do you reach the people whose minds you need to change . In terms of reaching the people whose minds we need to change thomas , i have a lot of things i do well. I am not an order. Or. Orate what i think it is going to take to reach their minds is young people already care. Just go to the universities. Young people care. I think it is going to be very difficult for any politician over time to deny that Climate Change exists. Therell be so much tangible evidence in terms of the weather events, they will not be able to do that. That is not my concern. People wills acknowledge that it exists but wont be prepared to take the strong measures we need to take now to take out an insurance not only protect ourselves but our children and grandchildren from a very different world and one none of us would want to live in. Thank you very much for your time. That was the former treasury secretary hank paulson. This was a passionate conversation about Climate Change. A fantastic conversation. Thank you eric. Thank you mr. Paulson. Alan mulally sits down with our own matt miller. It is a bloomberg exclusive. How polaroid it reinvented itself. It is not just instant cameras anymore. We will be speaking to the polaroid mc ceo. Turcos Market Makers will come back to arkham makers. Getting the new apple will make the biggest iphone jet. One of the phones will have a 5. 5 inch screen. The current iphone screen is just four inches. Eight tc have a big screen phone on the market wants to go. Now apple is getting in the game. If you like betting on long shots, you should apply for a summer job at Morgan Stanley. There is a 92 one chance you will get a job. They received 90,000 applications. Only 1000 people were hired. People who say that young people dont want to banks, yes they do. Is askingutin lawmakers to resent approval to use military force in the ukraine. He is traveling to vienna. He will meet with european officials and broker peace talks. Daysmulally has just a few left as the ceo of ford. Happy with his successor. With matt miller, he said this will not be the last we hear of him. He is part of that conversation. This team created not only lamp and then Business Review process. We have had wonderful success. This is served everybody well. I think mark is going to continue those processes Going Forward. Will he do Something Different from what you did . You came here and it was a revolution. Now the best thing for him to do in the eyes of the board would just be to continue your administration. Does he have changes to make . They created the process and created the strategy. We are just getting started. We are serving all the markets around the world. We are restructuring europe and will be profitable there next year. Brand the fastestgrowing in asia pacific. There is a lot of growth for us. Even though the end of the month is a fischel he officially how many more days . You have a sizable position in the company. I assume youll be coming back once in a while. I will maintain many of the great relationships i have. Ford is a great company. It is so important on what it does to the economy. I am going to say close to ford Going Forward. Mark would like to call me and i said absolutely. What will you do after this month is over . I heard you say you have not given a lot of thought to it. I havent spent much time on it. The focus that i have wanted to have is on this transition. Not just a Leadership Team but also the strategy and the management system. We are going around the world and visited all of our operations and wonderful employees. I wanted to thank them and congratulate them and wish them the best and share with them that i have all the confidence in the world that ford will be fantastic Going Forward and they are part of something very special and i wish them the very best. The way you deal with a i remember pops up, when Steve Ballmer said he asked advice for microsoft. You can have a rectus advising other leaders. Mark . Ibility is has know that the world lots of opportunities or service. Now, i am focused on this transition of ford. I look forward to what the future might bring. I might get to talk to you every once in a while. Will you take a couple of weeks off . Like to do isd call you on july 2 and tell you what i am thinking about. I will probably call you from a starbucks. Promise. Matt is back from detroit. Call you on july 2 from a starbucks . I dont know if that is where his favorite coffee is made or if he owns some shares in starbucks. About five or six times that if you want to know where i am, i will call you from starbucks. Even mark field came on and said that allen will be at starbucks. There is a lot of talk. I dont think he is going to go there. It would be fascinating. The talk is he is going to run the veterans administration. That is a place they could really use the help of a guy like alan mulally. Kind of problems that whoever goes there will fire everybody and start fresh. He did not fire everybody afford. He was able to get them. Where would he have to live . He would probably continue to live in seattle and commute. I am sure he has earned the plane at this point. He has made 400 million. He owns more shares in four then bill ford. What are other possibilities . He has advised Steve Ballmer and president obama. He can kind of do anything. He says he has not given a lot of thought to it. I believe the things he says. He is very truthful. Ofhis mind, not given a lot thought to something maybe thinking about it for a half an hour a day. He is working from 5 00 a. M. To 9 00 p. M. He doesnt sleep well. I dont. Thank you. Matts exclusive with alan mulally. We will be back with more Market Makers in two minutes live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Welcome back. I am stephanie ruhle. Theirors are hungry and appetite is growing for m a deals in the food industry. Tyson foods announced it will acquire hill scheier brand for eight lien dollars. One of the largest takeover bids of the year. I want to bring in kevin dreier. He is here to tell us what the next big deal is in food. Lets talk about hill scheier and tyson. Price was 35 and ends up at 60. What is happening . Analyst to their homework. It is a couple of things. We thought it was an undervalued company. We thought the valuation was attractive. There was a lot of synergy in the transaction. The company is going to do 550 million. You can pay a lot and create a transaction. How far away are we from looking at these companies as vice stocks. The food industry, this is highly processed food. It is filled with preservatives. Michael bloomberg and said sugar is the new tobacco. That is packed into all these products. Sodium and sugar. Hill scheier has a lot of natural products. They are basically a meat company. Highlyat company, it is processed and filled with preservatives. Not all of their products. I would say the proteins is on trend with consumers right now. Their brands have done a great job and that was part of the attraction. For those who missed the boat on this trade, what is next . Looking more broadly at Consumer Products, part of what m a trend ishis Financial Engineering and spinoffs and companies separating themselves. The pieces get acquired down the road. We saw that with hill scheier. That used to be fortune brand. Several others going on. That may lead to more deals read energizer is not a food company, they are in the process of splitting themselves up. They are separating the battery their personal Care Division like schick razors. What is all this going to mean for consumers who are in the Grocery Store . How will this the affect the pricing of these products . I dont think it will affect things a lot of. A lot of them are on the backend. Pricing power is part of the attraction of acquirers. It will give these when they are a Food Producer or a compact Consumer Products producer, they will get more leeway with retailers like walmart who have been beating them up for the last several years. Is any this being driven by commodities prices . Driven a little bit of the acquirers with the spread between chicken prices and feed harry and the profits are high. Wherewithalm some to do an acquisition. It might be a good time to diversify. People are gasping and 8 billion price tag. Was 20 billion. Are there other big tickets . There could be. Up, energizer splits itself 11 or 12 billion. We will see what happens in that. That could be a split up candidate or a takeover candidate. General mills, for instance. They have a joint venture with nestle. Maybe nestle will want to buy them and that would be a big deal. Do they have any social responsibility at a time when see consumers are saying we more americans with the threat of obesity an