Most of the bad loans that caused the problem -- they have worked off their books.
What will be much more interesting is the numbers behind the scenes.
If you look at mortgages, everyone talks about mortgages.
Behind the scenes, there are some banks with single-digit losses.
Another bank for the same category has gone as high as 16%. for the first time, they're looking at earnings.
More than the quality of assets.
They're looking at growth, which is interesting.
They're looking at the individual.
What are the other factors?
We are looking at the approval next week.
What is behind them?
It is a big city bank.
They have losses out of a fraud case.
They will look at those controls.
Does the bank have the right controls?
The shift now is towards controls and reentering a new phase which is not evident from the results.
A used to be the quality of assets.
Now there is a focus on earnings.
The illusion that the banks are looking good is because you forced them to save their money.
For four years or five years, they could not pay dividends.
Once they get into that process, their earnings taken hit.
Can they maintain that?
I think analysts are projecting $75 billion in dividends.
How much of that is at risk?
I know a number of banks in the city can do four percent better.
Citibank says they can do three percent better tier 1 than the fed looked at.
Almost all of them -- the big ones have overestimated.
Here is the catch 22 -- it is a two-year stress test.
You make a loan today, it acquires 10% --$.10 in capital.
That will pay you one cent accumulated.
The more you grow, your capital requirements grow.
How did they game the system?
They showed low growth rates.
You require less capital.
This year, the fed says timeout.
You'll decide how --we will decide how you grow.
Will they be able to maintain their dividends?
They will maintain their dividends.
The question is, when there is tremendous opportunity, rates change.
Then there will be new sets of stress tests.
These tests will happen every year?
Every year, there is a new scenario.
Another stress test.
The stress test will start focusing more on earnings.
Growth will be the problem.
Will the fed always pass every bank?
Once they start -- your conspiracy theory is right.
I think the banks that fail fail for different reasons.
There were other failures within the details of the numbers.
The fed is giving the bank a message.
You better fix your portfolio quality.
There are hidden threats.
The fact that they could pay dividends -- accumulated earnings for 4-5 years.
You cannot read too much into it.
The numbers behind the results -- and how the banks are gaming.
They will try to game is much as they can.
Thank you so much.
It was just your luggage first.
One airline wants to charge to $16 just for printing out a boarding pass.
How expensive can it be?
We will talk about super airline ripoffs in just a moment.
? we are approaching 26 cap the hour.
It is time for on the markets.
Check out the broader market.
We have gains on the s&p and do w. the nasdaq is taking a bigger hit.
The s&p gaining about a quarter of a percent.
I actually have been away for so long -- there is a lot of trade action.
We are raced the wednesday losses.
We are heading into the witching moments.
We're also watching nike sliding.
They are climbing at a slower pace than projected.
The strong dollar is hurting too.
They're relying on a lot of overseas -- that definitely hurts.
There's a lot of competition overseas.
Blackberry is going to sell most of its real estate holdings in canada.
That is the country to the north was.
This will help the smartphone maker to shore up cash for a turnaround plan.
People think it is cooler to use it in car navigation.
They continue to get stuff done.
Coming up, pay to play on the nation's airlines.
Your ticket only gets you on board.
Everything else -- pretty painful.
Stay with us.
? welcome back.
I am matt miller.
And i am alix steel.
Before you think something is happened, erik and stephanie still anchor the show.
Airline fees are soaring high.
Profit is the only thing doing it.
They took in over $23 billion in fees for food, baggage, c preference, other services.
We take a look at how airlines doubled their profit forecast.
Here is brian kelly, joining us from miami.
Thank you for coming on.
I have talked to people about this all morning.
I will date myself and say what i was in college 20 years ago, a round-trip ticket to columbus, ohio cost the same as it does now.
They have to do something, right?
Airfares have remained affordable.
The big difference is digging you on those fees.
United announced they will start policing carry-ons.
If you're used to carrying on multiple bags and pushing the limits, be prepared to check it.
What kind of fees did you pay for your trip to miami?
I have airline elitist status.
I do not generally pay for checked bags.
Airline credit cards also give you a lot of those for free.
In general, the consumer will get hit for fees.
Especially for food or wi-fi.
Can you get around that?
Can you get airline elite class without flying three times a week?
The big game is credit cards.
Most credit cards will give you a lot of waivers.
They will even give you a lead qualifying miles.
Even if you are not a frequent flyer, if you have the right card, you can get you elite status.
That sounds to me like we are paying for it either way.
If you have a super sweet platinum card, then you also get baller status.
My husband and i have a delta miles card.
What airline is the worst offender?
Look at business week.
Delta is the worst one.
$400 to switch your ticket?
They just increased their change fees.
If you want to upgrade internationally, be prepared to pay for a refundable coach fare.
That may be marked sense of the business class.
We just bought a ticket to europe.
We wanted to upgrade and they told us we had to buy a whole different ticket for $400 apiece.
What is the point?
Why am i using this card?
You get double slammed.
They charge you the fee to change and the re-fare.
The economy is rebounding.
There are business travelers paying for this business class seats.
It is so unfair.
You do not want to fly to europe and have to fly luggage class.
We saved our miles to upgrade.
This was our big dream.
What is the worst the?
Airline websites are generally terrible.
You have to call to book an award.
They will charge you.
It is ridiculous.
I have this problem with iberia back and forth to spain.
The website never works.
I have to call to confirm that things are right.
Then they charge me 25 dollars, even though it is their website that failed.
. and you have to wait on hold most times.
When you calculate the value of short time, it is ridiculous.
When you use your frequent flyer miles, a lot of time to book and nadine you with a convenience fee -- they ding you with a convenience fee.
Do any of the fees have an adverse impact on consumers?
Are people flying less?
A lot of the fees due makes sense.
American came out with fares that will allow you to change your flight.
Your next miles.
Even getting the best seats on the plane.
I do not mind paying extra.
Some of the fares due makes sense.
In general, they're pretty annoying.
How far away are we from an airline actually asking you for money to use the restroom?
Ryanair has used that as a vote was based on.
They are one of the worst.
They actually cut off online check-in three hours before your flight.
I got slammed with us.
I had a $100 for them to print my boarding pass.
That was twice the price of the cost of the ticket.
That is insane.
They are cheap.
Looking at the list of fees, spirit, allegiance -- all of these airlines that we would never fly on.
They charge you for everything.
You can still use the restroom for free.
You can for the time being.
That would be my worst nightmare on a plane.
My final question to you -- you are the point guy.
What is the best way to use my miles?
I would recommend to everyone, all of the airlines have -- delta came out with tearful programs.
Get a credit card that allows you to bank points into a pool.
That way, your diversified --you are diverse five.
I got tendinitis inscriptions.
It was my only option.
Do magazines is still exist?
The only time you need them is when you are on the airline and they charge you for in-flight wi-fi.
Businessweek is still awesome.
Check out this weeks magazine.
Brian kelly, went from wall street to helping people figure out airlines.
Coming up, holy glaucoma way.
A shortage of avocados.
I love avocados.
That is the next.
? rising up line prices.
What is a mexican restaurant taddeo?
One says that the key to cutting costs is to have an executive chef.
We have the ceo of costa veda.
Is this a crystal ball?
Or is this about how the executive chef handles food?
It is planning.
We found with our supply chain, as we identify ingredients, we get them from all around.
We deal directly with farmers.
Our avocados come out of mexico.
They're from a mountainous region.
They have the oldest avocado trees.
Their 150 years old.
You mentioned you love avocados.
What makes one great is the oil.
These older trees produce more oil.
We have avoided the challenge in california because we get our avocados out of mexico.
You never know when we will get hit.
We have to respond to that.
How far ahead do you walk in your input cost?
Starbucks buys their coffee 18 months out.
We have an executive chef that is over the supply chain.
He is looking six months out.
We look for where our ingredients come from and negotiate the price points.
As you reference, 18 months with starbucks -- we are two years out with contract bridge we constantly monitor that.
As our farmers move, we move with them.
Do you ever run out of ingredients?
Or do you just pay more to get them?
Occasionally, we have found that we do not deal a lot with limes.
We use them for desserts and -- with the once we get, because we do not have so much volume, we pay a little bit more.
This is making me start.
I am so hungry watching this video.
Get some delivery.
What is going on?
We're seeing all of the shortages.
You talked about limes yesterday and avocados today.
Some is weather-related.
Brazil, coffee, sugar -- the issue with lime is the growers got together and decided they were trying to put as much as they wanted to control the price.
Good for them.
They said we want a certain price and we will hold back.
It seems that mexican food ingredients are hit the hardest.
Bananas have been in the news because of the merger.
Here's a food that i love.
It is going to die out and get more expensive.
You are with mexican food, the ingredients are fresh.
We take the raw ingredients and apply recipes to create the flavor profile that are demanded.
Everybody wants fresh food and taste.
Because mexican food has festivals and --vegetables and the demand for fresh taste, we feel that pinch.
What happens when you do get squeezed?
Do you raise your cost or suffer the margin compression?
We have not raised our cost.
That said, we have to constantly watch what is going on.
As we look forward, we do not anticipate having to do anything with pricing.
We will continue to watch what happens and adjust a greatly.
Where is your worry spot?
With the vegetables and the droughts, the climate changes -- that is when we have to watch closely.
We also deal with cheeses and proteins.
We have to watch every ingredient.
Our quality, the specifications is very high.
When there is a demand, we have to make sure we are buying enough volume that we are first to get the product available.
Looking at your restaurant there and the scene behind you, more and more reasons i would rather be in celtic city.
-- salt lake city.
If you are up here in the big apple, where richard e? -- would you go to eat?
Keep watching for us.
We will be out there.
There are some places, i don't think you can go wrong.
I have to nerd out one second.
Do you enter the commodity hedging market at all?
With our executive chef, he watches that.
I would say he does some of that.
We try to preempt that and negotiate our contracts well in advance so we do not have to react in that arena.
We try to avoid that.
Buying two years out is quite a feat.
Take you so much, we appreciate it.
Mexican for lunch?
I want to go to eat some guac and burritos.
I would have a margarita.
Your pet needs to stay in shape just as much as you do.
That is where wearable technology comes in.
That is next.
? we have all heard about wearable tech for people, but what about for dogs?
San francisco startup is making -- emily chang found out where the idea came from.
There is the fit bit, the pebble watch -- and then there is whistle.
Wearable tech for your dog.
Is all about communication between pet owners and pets.
Bridge that gap in communication.
Attach this desk to his collar and it starts to collect all kinds of data.
How much activity he gets and how much he sleeps.
All went to the app.
Kristen o'brien likes how it helps her compare her great dane's data to similar docs.
I like to keep her healthy.
It is like a fit bti for dogs.
The cost is $130. that may sound crazy, but it turns out that dogs are not just man's best friend.
They are also one of man's biggest expenses.
In 2013, american spent $55 billion on pets.
Then there is the ripple effect grade pet owners can use whistle to see if their dog walker took a shorter route.
It helps them use features.
When i put in a picture from that day, it illustrates the whole story.
Whistle inked a deal with petsmart for exclusive rights to sell the gadget.
One of the reasons that pet retailers are excited is because they do want an apple experience.
With the household using $60 million a year on their friends, whistle could find it running with the big dogs.
$1600 a year on dogs.
Would you buy this product?
A couple times i day, we run him.
He has no choice to pass out.
He has a vest and a hunting collar and a lot of fake mallards.
He has a lot of stuff.
I have three cats and they get no exercise.
They sleep all day.
We need fit bit for cap.
It is time for off the charts.
There are two things that the fed cares about.
Jobs and wages.
Especially the fast food industry.
This should be concerning.
This is on wage deflation in the fast food industry.
We are a fast food nation with job growth on the rise.
You can see that it is now at three percent in terms of the increase as a percentage of overall workers.
That is almost 4 million workers.
An increase of 400,000 since january 2000 and nine.
The white line is the adjusted annual wage.
This is from the labor department.
Our economics data team crunched these numbers to come up with the sharp.
People who depend on a fast food wage face pressure.
When we were growing up, those work for kids.
Not people needing to feed a family.
It is for those who have dependents now.
Families ate fast food every day.
Imagine how much better things would be if both of those trends were reversed.
If you had fewer people eating at fast food restaurants, fewer people working there, you would have less jobs, but more people eating food that is good for you.
That is an industry that with eight more manpower.
They're responding to what the market needs.
What i found interesting is that megan mcardle said that technology has made this worse.
Employers face cutthroat competition.
They're using software packages to maximize profitability and maximize inconvenience to workers.
They keep ours lows of people do not qualify for overtime.
This requires employers to make more hours than they get.
They cannot string together two part-time jobs to make a full-time income.
Every week, we read a profile of someone who works three jobs and struggles to pay their rent.
They go from working at kfc to another -- they don't necessarily have bargaining power.
Due to the smaller workforce, we have so many easily replaceable.
There is not good enough quality jobs.
Think about when you go to mcdonald's nowadays.
They often have you put in things on your own to pay with your debit card.
A lot is being replaced by talent.
And by apps.
All of the fast food chains are doing that.
You can pick up ahead and that might reduce add power.
Workers are more spendable.
Fast food is a huge problem.
It is a tragedy.
Garlic two, thank you for that.
--scarlet fu, thank you for that.
We're going to get you to on the markets.
The nasdaq took a bigger hit than the other two major indexes.
It is now getting better, only down 2/10 of one percent.
The s&p is up half a percent.
The dow jones adding 90.3 now.
Markets getting better.
There will be more volatility.
Traders trying to find out what that means.
Symantec fired their chief executive officer.
That is after two years on the job.
The director, michael brown, is the interim ceo in the meantime.
They are down 14%. i'm looking at tiffany.
Annual profit fell short of estimates.
There was an increase in spending to improve the i.t. systems.
You do not think about i.t. systems with tiffany, do you?
I think of gold and silver.
I think about spoons.
Also, we sell gold make a comeback.
One of the best commodities.
That also might have been interesting.
Isn't it a pewter place?
I think old and tiffany.
"market makers" will be back.
? live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle.
Rating janet yellen, how the federal reserve chair rated her first big moment in the spotlight.
Would you buy a $.5 million line?
Just one of the shockers, stick around for a bloomberg special bracket pick.
Welcome back to "market makers." i swapped out matt miller per tom keene.
True story come in sixth grade, the teacher walked up to me and said mr.
King, skeeter skates on.
That is hall bad of a basketball player im -- how bad of a basketball player i was.
It is time right now for the newsfeed, the top business stories from around the world.
The first full day of march madness turned out to be a really big racket buster.
Harvard was just one of the series of upsets about surprising cincinnati.
There was a record for overtime games, more than 11 billion people in ref dirt -- entered the bracket, and only 1/5 of one percent and all five of yesterday's wenders.
Do not pick -- miss our racket special.
He plans to lead by the end of the year that is according to a person familiar with the story.
Sac has agreed to plead guilty to securities fraud, plus it will not manage any outside money anymore.
Russia's president has made it official, at least from his point of you.
Vladimir putin that signed legislation making crimea part of russia.
The region voted on sunday to secede from ukraine.
Speaking of, has really been dead for tax -- tit for tat sanctions.
Those who have had the sanction seem rather proud to be singled out.
Peter cook joins us now.
Tell us about this.
This is good for domestic politics to be sure.
This is one of the most exclusive lists right now, because it shows you are a nationalist flavor.
Bluebird told -- was told that now i'm at peace because he is on the list as well as his friends.
You have nine u.s. officials, including several top members of congress from both rds about house eager john boehner, harry reid and john mccain, they very critical senator.
I guess this means my spring break in siberia is off.
A little tongue-in-cheek lamotte john mccain, but the best news of all, she is in a tough reelection fight in louisiana, and she thought this might be the best news and reelection campaign that they may have gotten.
Was there any sign that these sanctions are finally taking a toll?
We did hear president obama talk about economic sanctions, but it was really the bank and those individuals.
There are some signs that there is some rattling of the russians.
The stock market has taken a hit, down 30% for the year.
-- 13% for the year.
Many books have got rush into negative because of the sanction of and there started to feel the pinch.
He just had to sell this entire staying on march 19 to his partner.
That keeps the company off of the u.s. settles even though he remains on it.
Visa and mastercard stopped servicing the bank that has been singled out.
They are starting to have something pink, and we have the russian finance minister acknowledging as much today.
I do not want to overplay it but the ruble is stronger than the morning, as we look at the dauber -- dollar-ruble.
Through the weekend and into the sunday talk soulful will peter cook listen for about pressure cooker ukraine, and crimea?
Rewritten to listening to vladimir putin and what we are hearing from the russian officials on their effort to ravens try and bring attention down.
Vladimir putin indicating that russia might not need to retaliate anymore.
That is a surprise given given what we have heard so far.
There are also some overtures of following -- allowing monitors and ukraine.
Thank you so much.
Right now to the story of this week, as we go into we can markets, late away from the shock and all of janet yellen.
The new venture, her post press conference was on wednesday.
Someone out there gave her a c minus.
With his track record with effective and with monetary policy in the nation and he is not a hater today.
What is no haters mean?
We spent a lot of time working on the lovers of the heaters in 2013, and we rotate piece entitled stocks are for lovers of gold is for haters.
Your optimism was correct versus the doomed crew.
What does the doom grew get wrong by janet yellen?
I think they get wrong about the fed in general.
I think the fed has prided a backstop.
Post 2008 they saw how disastrous things could get in financial markets and they have acted.
They have acted in a very strong and very direct manner provided has done a wonder for our economy.
I think also in driving other central banks to think them a little into the bed.
The balance sheet expansion that had taken place, not just with the fed but with all of the central banks as worked very well.
Positive assessment of the fed.
C minus for janet yellen.
I far the hardest review that i ran on her performance.
Why is it so hard?
We were pretty harsh on ben when he first started.
The market was and i certainly was.
He made a lot of medication mishaps when he first article which should not surprise us that the first time in the ctv make a supple of mishaps -- in the cd you make a couple of mishaps.
At the end of the day, she did mislead us a little bit.
She talked about this being very much and unchanged statement and it unchanged as conference.
There were a lot of changes.
You came out of washington university lords meyer school, this idea ages ago.
There's a different economics other companies and academics about clear a in believe the numbers.
Is this a fed that is grounded in the math that you grew up with, or is this a fed without a rulebook of ongoing ad hoc moment to moment?
That is a great question.
This fed under janet, and even then's fed, although transition from the beginning to the ad is much more model based on the greenspan that.
You thought about the markets and what his reaction would be, and he believe that confusing was might be one of the better.
There because himself was generally confirms -- confused.
I worry that we put too much precision on our models, too much precision on our central bank thinking.
Do you believe that there is this ship that comes out, do you believe in the position of the.? i think the guys use that to tell us something.
It is their way of giving us forward guidance.
With the use it in the game of thrones as well.
It is all we have.
Then we get their speeches, but at the end the day they're putting a jeep over us -- a gdp forecast, the four big variables for 2015 at 2006 think of that as they what they're doing for the end of the year.
They raised things up by 50 basis points but the end of 2016. you could cannot say we are little bit more my mystic, but -- you could come out and say we are little bit more optimistic, and i would be ok with that.
The market was a taken aback i this considerable time that would be six months.
I think six months was at the lower end of anybody's expectations.
That brings up an important distinction here between the fed overall being a little bit more hawkish, but janet yellen still being dovish.
What adjustments has she did made knowledge and taken the chair?
The cynics out there may say she gave us a lot of dovish bottle when she was the battle to get the job, now she is in the seat and she is going to act more like a traditional central banker and be a little bit more hawkish great i find that argument suspect.
I think she is still quite elvish -- dovish, and these are growing pains.
We will get to a b. nice of you.
Will you curve?
He does not curve.
I gave been straight eights -- i gave been straight a's. can that food inflation in the commodity dynamics that we see shape the markets as we go into the summer of this year?
We have to watch it carefully.
The interesting thing as you point out is the battle softness, the copper softness, oil is not training.
You had this craziness with the grain and oil it down, not that.
I find it very interesting.
My matt has really been a -- math has been a late 90's roadmap.
We are growing, we are taking growth back from the end, and we see that every day in the end prices.
China is just darting to get the message of and they're starting to devalue a little bit.
From all of your research, do you believe in a rollover?
It is possible, but it also depends on china.
Cost are is really the risk that copper is really the risk.
It is really the u.s. driving growth and price coming out of emerging markets, what is your gdp or cast?
I'm still reasonably optimistic area i think maybe markets are little too optimistic at more than three percent, and is probably a little bit less than that.
I always step back and say as an economist we are all pretty awful at forecasting gdp.
What we have before guesses out the fed will would react various gdp outcomes.
As things we can, they are going to do what they always do which is, on fixing the markets right -- market.
Thank you so much.
Coming up, you will be able to buy six-figure art by the same way you are able to buy to figure books.
Is your bracket broken?
North to go to state -- dakota state, stick around for a bloomberg special bracket visit.
? welcome back to "market makers." here are your top tech and media headlines.
Microsoft has been caught up in a dispute over privacy.
That is up wording to court papers the company served.
Microsoft used the information to identified and fire an employee accused of stealing code for microsoft eight.
He does not like it, he is now calling for rules that would prevent companies like comcast room extracting it's cold over shows -- hold over shows.
Consumers will get stocked with lousy service.
Turkey's prime minister has banned twitter.
Is carrying out a promise to shut down lynx targeting government corruption.
Someone has used twitter accounts to upload documents and files linked to the register and his followers.
It was all over twitter last night and through the weekend this will be fascinating to watch.
Stay at bloomberg.com for the news out of turkey and the continued search for the malaysia airlines flight.
On the art business convenient something like he's over water over the couch.
If you're like millions of other consumers, amazon has become your place for everything and from books to bowties, and a half-million dollar painting, amazon is getting into the yard gain.
With us, deputies entered her a bloomberg pursuit magazine.
What was the single thing you and your team learned about this chasm between the fancy pants arts galleries and jeff bezos's amazon.
They are different in the way that you expected to make of this is not a hyper curated environment, this is not art on the.
You have worked i just comes sending next two photographs from total unknowns.
Visit everything in one.
Quick there is an antiwar whole -- there is an antiwar hall --an dy worhol with six figures.
Am i going to spend $200,000 on amazon?
Amazon is sitting back and saying we're good but at this up i and you we don't not mind -- reviewing to put this off on the site, and we do not mind if you go through another person.
Because time and time again they put up the item and they get lowest sale.
In the airplane the long game with this.
The ark market is work that reacting.
What is in it for them?
Into just another area they had not covered.
They're looking at these galleries, and the art market has gotten so speculative that there are people buying of living stuff left and right.
It looks so good in the entryway.
A velvet elvis come in is gorgeous.
My question is, the distinction between amazon and the other online art size that have already been in this game for years.
Amazon is not charging them a fee to list wears on the site.
This is an ad for your gallery on a very visible flat for -- platform.
What percentage versus other sites?
They would not reveal that information to our writers and we do not know.
Is amazon a even painter, or those artist, is amazon their friend?
Will those artist what they need is visibility, which is what the amazon platform provides.
The blue-chip gallery, everyone knows their name.
I want the price to return -- price return is.
If you're going to spend so much money you want to see the art before you buy it online.
Quick they are going after the consumer who is looking to flip stuff.
Quick people would buy $.5 million of art without being echo if you live in cleveland are you going to fly to los angeles echo you can return it like any other thing?
The shipping is free.
Most of the galleries that are putting their items up have that.
Like i could see that over your couch.
You can see how this would look on your wall.
What is the percentage ratio between investment-grade and decorative?
Week loaded a gallery don the pc said that this was too populous, so i think that is and was -- amazon's and, to have it be everyone.
Your wonderful magazine comes out four times year about the economics.
There is nothing in it i can afford.
Not a. you guys are going after legitimate pursuits that people what to do with their money, the things they want to go after.
What is the number one thing on amazon people want?
Do they want oil paintings, prints, what is the thing that sells on amazon?
Photography is doing really
This text has been automatically generated. It may not be 100% accurate.