Cookbook. Stephanie what a way to start off with a great show and eriks haircut. Erik the top business stories of the day. General electric getting back to its roots. Sawing off the bulk of its finance unit to refocus on the industrial businesses. Ge will sell almost 27 billion dollars of real estate assets and most of it is going to blackstone. Some going to wells fargo. Ge announced the Share Buyback of about 50 billion which would tie apple for the largest of all time. The ceo spoke on a Conference Call earlier. This is an excellent time to sell financial assets. We think the performance in the Australian Consumer value demonstrated our platforms may be worth more outside the company. Erik ge shares up a. 7 five quarters a. 7 a. 75 . If you have not bought the computer for a while, you are not alone. According to Market Research more consumers are turning to smartphones and tablets when they went to go online. Corporate spending helped slow declines and the cycles will be over. Hillary clinton will make it official that she will run for president. Clinton will make the announcement on video before heading to iowa. It does not look like she will face many competitors in the primaries which will begin in february. President obama expected to take another step toward improving relations with cuba. The president is in panama for the summit of the americas. He will have his first opportunity to meet with ralph castro as they work toward restoring diplomatic them diplomatic relations. Cuba must improve its record on human rights. President obama we are committed to supporting human rights in cuba and around the world. I believe engagement is a more powerful resource than isolation. The changes we are making will help improve the lives of cuban people and i believe this new beginning will be good for the United States and the entire monsieur. Erik last night john glasslike, john kerry met with cubas foreign minister and the highest level of meeting between the two countries and more than a halfcentury. Here is something you have not seen in almost two years, Alex Rodriguez hitting a room hitting a home run. He was suspended for using performance enhancing drugs knocked one out of the park last night. He is fifth on the alltime list and new york lost to the taranto blue jays the Toronto Blue Jays. Stephanie welcome back arod. Erik welcome back . Why . Stephanie are you going to punish and forever . Erik yeah. Stephanie if used back on the yankees, he that is our home team and i hope he hits a homerun. If you dont want him to hit a home run, dont let him on the team. Erik again, not my decision. Stephanie he wanted the Toronto Blue Jays to win. It was not my decision, but if he is here, good, hit a home run. Erik rarely does that. I really enjoyed it. Longtime investor david says and get ready for the good times to end. He expects a 20 drop by december. David joins us from dallas texas. John is also here and he sees the s and p rising more than 10 by the end of the year. David, lets start with you since jonathan has a homecourt advantage. What do you think . David really, i have talked about this before. As a bear i tend to be early. We had a horrible market from 2000 22 thousand two. From 2000 322 thousand seven, that that could cut Interest Rates to zero. We enacted housing bubble and we had a 2008 crisis. We have utilized zero Interest Rate policy and the economy rate has not grown that much. We think we are set up for another decline. Stephanie jonathan . Jonathan at the end of the day, the only thing which causes 20 plus decline to the market are recessions. If you look back at the last eight times this happened with the exception of the 1987 crash, as long as we dont have a recession, you will not have a 20 pullback. Yes the fed may be printing money and there could be angst that are wrong and growth is slow, we could put all the things in perfect in the world, but i dont see how the conditions for that recession are in the next to 12 months in front of us. If that is the case, i dont see why you would not want to belong risk in your portfolio. David let me point out a couple things new compared to 2009. First time since 2009, recent Merrill Lynch reports talked about global nominal gdp growth was expected to be down in 2015. Corporate earnings are down. It looks at we have zero growth for gdp growth in the u. S. Europe is slowing down although the markets are out due to quantitative easing. Jonathan david, i am going to agree with you. This year, we will have near zero growth because of the fallen oil prices but i dont know if this is the report you are quoting, but eps should be in the high single digits, even taking currency into account. Gdp in the u. S. Is expected to be the percent. I dont think it will be that strong. I think it will come in weaker. Again, if you are looking at a bear market, the question is are those recessionary conditions are we seeing an overhang of excesses that are in the process of being toppled . If not, i agree with everything you are saying. Those are just not the things based on our work that caused severe pullbacks. That is a we are talking about with the 20 move. David Global Growth is negative since the First Time Since 2009. That is huge. We are at highest levels of cyclically adjusted pes. We really have not cleansed any excess since 2009. Recent mckinsey studies show that we have trillions of dollars in debt globally from 87 trillion in 2000. Debt is a percentage of gdp in every economy and in every economy it has been up since 2007. Jonathan again, i am in total agreement that the world is not a perfect place, but u. S. Total debt to gdp is down substantially. The consumer in the u. S. Has voluntarily the savings rate has been coming up in the u. S. Operations have the lowest level of net debt to equity that we have had ever. Again, not perfect but recession kind of conditions and hard for me to make the case. Erik jonathan, what about valuations . David has not brought up violations. On historic basis, that is pretty high. It may not foretell the kind of 20 drop that david is predicting, but at some point, it cant go on forever, can it . Jonathan at the peak of the internet bubble, you were 24. In the 1970s, you also had multiples hit 20 a number of times. At 16. 5 forward earnings because that is where we are, you are about a. 5 standard deviation above normal. If you look historically, it is not the level that matters. It is the direction it is moving. When you are moving from a multiple of 10 upwards, until you get into the high teens or low 20s, population is not the problem. More important, based on our work of the 50 years, valuations below and being the reasons why the market fell apart. Erik david, the one thing that jonathan did mention which we have to make part of the conversation is quantitative easing. Fight the fed works really well for the bulls for the past several years. The fed may not be quantitative easing any longer, but you have the European Central bank pumping into the market and the bank of japan has doubled down and the bank of england is still out there. The fundamentals have not been to matter have not mattered. David latin america would be the leader if that was the key to prosperity. Where we think global central bankers are one trick ponies only know how to print money and over 6000 years of monetary history, politicians often time do this. They debase currencies. Every currency has ended dimensionally worthless. Stephanie hold on, before it ended up worthless, there is potentially a great amount of money to be made. David it you want to play a greater fool theory, i think that is a risk you gain parried the market can go up a lot longer. Markets can remain irrational longer than sovereign and that is why we are not sure of the market right now, but it is not a game i would like to play. Jonathan in this case, i will agree with david. The market is not up because the fed pushed it up. Interest rates are where they are because we have and to davids point, we have low nominal growth. Economy is low, inflation is low, but what does that low growth and low inflation environment do . It makes the environmental and makes it longer it makes it Economic Cycle longer. What causes markets to fall apart, and that is what we are talking about with the 20 correction argument, is that we are at the very end of the cycle. The yield curve is steeper than normal. We have never had a recession without an averted yield without an inverted yield curve. I think you are going to get an average middle cycle return that will be in the low double digits even in the light of the fact that they are forced to print money because they have nothing else to do. I think it is essential cycle that matters and other Central Banks. Stephanie thank you. Erik coming up next, investor activism hit the big banks. We will talk to someone who calls them and styles themselves the activist analysts. Stephanie plus, he was the man in the middle. Electronic trading controversy. We will be sticking with rod of ueiex. We will be speaking with brad of iex. Stephanie welcome back. I am stephanie rolet Erik Schatzker. Time to bring you uptodate on the top stories of the morning. Jeff lacher says he is still in favor of raising Interest Rates in june. Just like her said imported today that he thinks recent stock figures on the economy will probably only be temporary. Last month, policymakers works with on whether to start raising rates and that was before the weakest jobs report in one year came out last week. Apples new gadget under ceo tim cook is debuting today in eight countries. Crowd in tokyo could not wait to get inside to see the new apple watch. It is not like they were walking home with one. Apple is only taking orders and wont start shipping for another two weeks. It is estimated apple may sell one million watches this weekend and he says the company may spend 8 million may sell 8 million during the fiscal year and generate 4. 4 billion in revenue. Did you see the new movie imitation game . A brought to life breaking the secret code in world war ii. Up for auction then opened will be sold this coming monday and it is expected to bring at least 1 million. Also personal and enigma cipher machine quoting machine that the germans used to code their messages. Those are your top stories of the morning. Remember him from last years best seller on highfrequency training, we will speak to Brad Katsuyama of iex. Hillary clinton will announce sunday that she is in fact running for president and it is snack time on Market Makers. We will be speaking to the ceo of a Snack Bar Company that almost doubled its sales in one year. Sounds pretty kind to me. Erik now that we are in the heart of the proxy season, it is showtime. Mike, last year well, you took an activist approach to the bank. You called out the bank for many things you thought were failing. We talked about other positions where you were taking on banks or you fall they deserve the kind of activist treatment. How is it going . Mike it has been going great. Since when youre go on being on your show, we have had to activist stephanie that is highprofile. Mike we also who is calling for the ceo to be fired. What is interesting is a lot of shed events in terms of having an activist investor on the board of a major thanks. That has never happened before. Erik activists were allergic to banks. Mike you of regulation and. The unknown. Stephanie unknown in in unknown in terms of what could happen or investing . Mike well, what would be the reaction of regulators . Erik anderik two will give you the next leverage alone . Mike you have going to bank for the meetings. I think the root cause of that is the regulators do not trust the investment world to hold directors accountable, so why dont we go to annual meetings . Erik you do. Mike i am the only one so far. But why dont they go to annual meetings to publicly hold directors of major banks accountable . If you dont do that, you have a void under was going to fold that point . Washington d c regulators. Erik the regulators are going to do it for them . With results that we may be would not want to see . Micah yeah, everyone is griping about what they are doing well step up to the plate. You are seeing a couple highprofiles doing that erik the annual meeting is next week. Mike tuesday at 9 00 a. M. Stephanie what is in store . Mike i have a list of questions. Stephanie shocking. Mike the bank of new york missed their 2007 merger targets and 2011 targets. Since the 2007 merger predicated on scale, they have added 10,000 employees. Up to 50,000 people while core earnings have not increased. Who do we hold accountable and what is the bank of new york doing about it . The question is, why does the board continue to support management in the wake of lousy performance over the last could . Stephanie lousy performance in the last decade . Stephanie who is on the board . Erik they are old. Mike over one year ago, they had the exact same makeup as they did in stephanie hold on a second. The board has not changed before the crisis . Mike good news, they have some new directors now. I would not only like to see the ceo chairman answer questions, but other members of the board answer questions. Other banks have allowed directors to answer questions. Lets hear from stephanie be honest. Do you really want them to answer or are you poking fun . Do you think they are qualified to answer questions . Or is this your moment to expose them . Mike i would to hear answers. Ideally, you would have each director in charge of committee give a brief presentation. By the way, you have the cio on the board. Erik ed garden. We are going to run out of time, lets get to bank of america because that is another annual meeting you plan to attend. Mike wow. This is an open invitation. Like you said, Hillary Clinton might announce she is running for president sunday. If elizabeth board wants to run, if Elizabeth Warren wants to run, she can use bank of america as exhibit a. Bank of america promotes the ceo to have the chairman job when they have had issues with the fed. They have had for chief risk officers in the last eight years. Last you, they had a 4 billion regulatory capital misstatement and what do they do . They promote the person to chairman. We intend to go to the bank of america meeting and say why did the ceo also get the chairman job . Erik so you asked that question directly . Mike ryan is the one who wanted the job. Who can you ask that of . Ideally, we would have other directors at bank of america who would answer the question. Otherwise, it looks like an incestuous industry which is poster child for erik bad government. Is poster child for bad government. Erik is that what it is . Mike bank of america has come a long way improving earnings but in this case, promoting the ceo to chairman in the wake of the bad events over the last couple of years, that is a poster child stephanie you dont think bank of america has gone out of the hole at all . they have increased mike still, you need good governance. Erik mike mayo, clsa. We will be back in two minutes. Live from bloomberg headquarters in new york. This is Market Makers, with Erik Schatzker and stephanie ruhle. Erik good morning. You are watching Market Makers. Im Erik Schatzker. Stephanie i am stephanie ruhle. Lets take you to the bulletin. The top business stories of the morning. Blackstone group is on a real estate buying tear. The largest Real Estate Investor is spending more in 14 billion to buy General Electric assets. Most of those our Office Buildings in southern california, seattle, and chicago. It is also buying ges assets in europe and a portfolio of commercial mortgages. In a separate deal, blackstone has agreed to buy xl for about 2 billion. They own a chain of shopping centers. Investors are betting on the proposed deal with intel that it is not dead yet. Earlier this week, the chip maker rejected the offer and shares are up nearly 5 in altera. A sign that altera could be pressured into reconsidering. Computer sales have fallen to the lowest level since 2009. The Market Researcher says they fell more than 5 in the First Quarter and people are using tablets and smartphones more to go online. Plus after a surge lasted corporate spending on pcs has officially tailed off. Hbo has just released its new stand alone streaming service. The Service Called hbo now is available just in time for this sundays season premiere of game of thrones. Ceo Richard Plepler told charlie rose about it. Richard we want since fibers say this is more than worth it. If we provide all kind of possibility on how to get the service board, we think this is multilateral. It is not binary. It is not either you are a streaming service or locked into an old system. Stephanie you can watch all of the interview with Richard Plepler tonight on charlie rose. It is on bloomberg tv at 7 00 eastern. In golf, i hate to say people are not watching bloomberg, but i have a feeling they are watching the masters. They teed off about one hour ago taking a three shot lead into the second round of the masters. The 21yearold kid shot eight under par and 64 at augusta national. There is a fourway tie for second base. Meanwhile, tiger woods is in 40 first place. The fourtime masters winner shot a 73 in the first competitive round. In his first competitive round in two months. Erik the debate on wall street. In the middle of the controversy, Brad Katsuyama who spoke out against things he found unfair in equity markets and looking for a solution. Wanting to give one to clients who started iex. There access trading venue. We want to know how iex is doing now and we asked Brad Katsuyama to come back. Welcome. Why dont we find out. How are they going .