Transcripts For BLOOMBERG Bloomberg Surveillance 20150212

Without an agreement. These sites are trying to merge differences over the eight program that the new greek government blame towards economic woes but the absence of a deal or even a plan for a move forward has not been agreed. Finance ministers jan mr. Yanis varoufakis minister varoufakis from crisis to crisis, we always find a solution. Brendan obama requests more military action against Islamic States, and many say the president is likely to get his way. The political maneuvering is expected to be extremely partisan. Some think republicans think limits on Ground Troops could tie the president s hands. The president emphasized a clear vision for how to move forward. President obama i do not believe americas interests are served by endless war or by remaining on a perpetual war footing. As a nation, we need to ask the difficult and necessary questions about when, why, and how we use military force. After all, it is our troops who bear the costs of our decisions, and we owed them a Clear Strategy and support that they need to get the job done. Brendan the president s request set the Islamic Extremist Group with right in the u. S. If not confronted. Tom sad news from the world of television, an auto accident in new york has claimed the life of 60 minutes correspondent bob simon. His vehicle struck another Party Traffic light before slamming into metal barriers separating traffic lanes. This is a huge loss. Olivia, help me out here. Brendan, he was the real deal in international relations, a fulbright scholar, a huge loss. Brendan you can only offered up as a small blessing that he passed away tragically at the end of a rich career and not at the beginning of a promising one. Tom he was a threat back to cronkite. I will not say he is the final thread, but he was the past. Olivia an enormous loss, incredible to think that a man who was a prisoner of war in iraq tom and ended up being an anchor. This is a major deal. He was out in the field, he wore a trench crowed and it was not like a prop. I wear a trenchcoat as a prop. The bowtie is a prop as well. Lets get to a data check right now. Equities, bonds, currencies, commodities. Improvement up 11. You just see olivia, the headlines new tanks from russia into ukraine. On to our next screen, please tania. Ukrainian currency, new weakness, 20. 00. Ever weaker ukrainian currency and the ruble has abruptly reversed. Lets switch gears to the United States. Brendan, help me here with a great chart. You talk about bob simon and the career he had. This goes back to world war ii. This american consumption, retail sales out today. Here is the trend we knew and here is the fallout. This is a 2 trillion consumption gap off what we knew decades ago. Brendan what we are looking at right now is what the debate is in economics, right, so this is off of the 70year trendline. Is this what the future is going to look like or are we going to bend this backup in this direction . Academics are widely debating that come olivia. Olivia you look at the boom in consumptions is already starting to decline. You might think of it as deleveraging but that chart shows it is not. Brendan it speaks about when we will talk about tom it sticks about when we talk about diamonds later. New york city is not on this chart. They are off the monitor. Ok, lets get to ukraine. What a morning. What a history has been this morning. There has been some 30mile demilitarized zone, come to think of it a korea, ukrainian dmz is the outcome. Kievf will control the border by yearend. I have no idea what that means. Neither does Ryan Chilcote and our london bureau. Ryan, i am honored to have you on the today. If there to organization to this, or is this foreign chaos . Ryan there is a little bit. They agreed on a ceasefire midnight saturday, they agreed to pull back weapons. Ukrainians will hold back weapons from their current frontlines as the prorussian rebels are going to pull back their heavy machinery from the frontlines they had september 19, so they are giving up, they are ceding some of the ground may have taken over the last few weeks, and then it gets money. Muddy is the political part. In exchange for doing that giving special powers to the east what the ukrainian president is hoping for, counting on is he is going to get to control his own corner. He will have ukrainian troops on the ukrainianrussian border as opposed to separatists that are there right now. Olivia is it clear that Vladimir Putin has gotten more of what he wants . Ryan that is a good one. He has gotten a little bit more of what he wants, but this is not an outright victory. There is a real roadmap, if you will, to peace. Angela merkel and Francois Hollande havent going to these negotiations for months, and if this one fails, they will take action i. E. More sections against russia pretty quickly. Brendan ryan, the longtime or reform, is a new constitution, one of the process for creating that . Ryan they have got to agree to change the constitution. Here is the issue and i think what the whole deal hinges on what the russians want if they want to make sure that ukraine never becomes art of nato and preferably never becomes part of the european union, so they want that region and the east to be a kind of a buffer state that would have the toe power over federal government assistance have a power over federal government assistance decisions like joining nato and the eu. Olivia ryan, a lot of people are saying Vladimir Putin will not stop until he has a land bridge, read burialmariopal. Ryan there would be no bridge to crimea. It would be the territory that is controlled now. There would be a Little Pocket where the ukrainians are still hold up, 6000 to 8000 of them they have been surrounded by the prorussian separatists. The russian president said those guys have to give up because otherwise it will get nasty before we even get the ceasefire. Tom what does the buffer zone look like echo is it like a 30mile no mans land . Ryan they have one like that between russia and no norway. I have driven through it. Probably no fence at least in the beginning, although the ukrainians have been talking about wanting to build their own kind of berlin wall to completely keep militants out, but this would be checkpoints. You drive down a road you get to this checkpoint and you are turned away, and if you try to go any further, there is a big chance so that he is going to shoot at you. Tom all right, Ryan Chilcote thank you so much. Rocket launchers across russia into ukraine. Brendan does anything other than Vladimir Putin and getting exactly what he wants in the beginning . That is what he pulled off in moldova and now we will have this in place were maybe there is an act of fire being exchanged, but it is indeterminate status and prevents ukraine for making longterm decisions. Tom paul donovan from ubs lori harris joining us now, their chief u. S. Economist, when you speak to european conrads at ubs comrades at ubs, how will this impact some form of new ukraine . How does it impact the greater european political economy . What this tells you is that it will be very hard to expand nato to expand the european union. It puts up a real block to try to integrate Eastern Europe into the rest of europe. Tom we will talk with stephen king of hsbc about this in an hour but the german report on deflation is tangible. Does that export over to america . Maury we do not think it will export over to america because the biggest part of inflation in our country is labor cost. They are not going up very rapidly, but at the same time they are not going down. I think we will get a better read on this this week when we get import prices data and so far we are not seeing much of a passthrough from the currency to prices, but maybe too soon to see that. Brendan one of the things we saw in the wake of this agreement last night is a little bit of movement in the polish zloty. Are we going to see longterm what is good to happen with civility in ukraine. Maury i think it is something at the margin, and that said, with the u. S. Said likely to tighten fed likely to tighten, you do not want to make a bet for the euro. In the long short run, this could be good for the euro. Brendan our reporter question of the day will the ceasefire worked this time . They returned to minsk, did something worthwhile come out of it . Tweet us bsurveillance. This is bloomberg surveillance. On bloomberg television, streaming on your tablet, your phone, and bloomberg. Com. Tom good morning, everyone. Bloomberg surveillance. I am tom keene. Futures up 11, markets all over the map out of the news after the news out of ukraine. Lets get to top headlines from world news. Here is Brendan Greeley. Brendan eu leaders are meeting in brussels to talk about ways to combat terrorism. 28 major bodies will consider measures nurse like exchanging airliner past your list like exchanging airliner passenger lists. In taiwan, a failed as an escape led to the suicide of six prisoners. A mob boss held guards and wardens hostage. All hostages were said to be released. Inmates were upset about long sentences and lack of medical care. Earlier today, the daughter of the airliners chairman got one year in prison. She was furious about being offered macadamia nuts in a bag instead of on a dish. This led to a physical confrontation of the firstclass crew. Those are some of your top headlines from around the world. I think it was just Quality Control. Tom absolutely. There we are with ukraine with the headlines. Indications of hope on ukraine that cannot be said about greece. A true stalemate is the tone in brussels as greece races against time. Joseph rosenthal joins us joseph wiesenthal joins us and hans nichols. Hans the minsk news has been a big deal and we are waiting to have a little bit more on the greek situation because tom we learn something very important and that is that Yanis Varoufakis cannot make a deal without calling athens first. We had a remarkable scene last night. Six hours of meetings. About four hours into it, they thought they had a deal. Varoufakis calls athens, checks in, they say they cannot agree to the language. Wolfgang schaeuble did not agree had already less of a given message on his phone saying no deal yet for my visually he realizes there is not going to be a deal and he drives often everybody does their recriminations and the fingerpointing in front of the cameras. Brendan hans, this is a political thriller. I will review and interview from Yanis Varoufakis merkel is the most astute politician by a long way, and schauble is the only politician with substance. Hans let me count the ways i can flatter you as a host. It would be almost as diffusive and almost as im genuine. There is clearly a charm of fact going on by mr. Varoufakis. I spoke with him coming out of the meeting, and he said look, we will find a way. We have progress moving toward the goal but no goal. He insisted markets will be positive and actually this morning, it is up a little bit. Olivia speaking of heaping praise, i thought that Wolfgang Schaeuble actually indicated reiterated his offer to send Tax Accountants to at hens pro bono. [laughter] this greek drama gives rolling on. What is the timetable here . How long do leaders have to make a deal . When do greeks just run out of money . Hans so it looks like on monday we will have the next big meeting to really discuss this. At the end of this month greece will leave its bailout program. They want to leave the bailout program. The language they stumbled upon in the communique last night with that greece was going to extend and conclude their imf bailout package. What the germans want to do is keep them in the package as long as possible, make those necessary reforms. Tom hans nichols, thank you so much, and brussels with this continuing story. Joe weisenthal has just returned from athens with perspective. The backdrop, joe that you know so well is the true poverty. Not medieval poverty but just the new poverty. Joe absolutely. That is one of the striking things that i saw, not necessarily the poverty but the sense that there is a strong will and a strong eagerness on the people and the government to fight. You saw last night that there were large protests in athens in favor of the government. This is the second time since the election that masses turned out in the square protesting in favor of the government, encouraging them to hold their hardline. There has been a real shift from fear to just sort of anger and frustration tom the shift in the last couple of days . Joe i think it is hard to say tom the nation have got this guys back right . Joe that is the thing everything that tsipras is doing right now is incredibly popular. He said look, i was elected to change the program, and though it is clear he is going straight to the edge and risking possibly an exit, everything he is doing things really popular so far. Brendan joe, is this a new negotiating tactic . Given what hans was just telling us, it seems like the greek public is playing bad cop while Yanis Varoufakis is in negotiations playing good cop. Joe mr. Meissner the u. S. Debt ceiling negotiations and how they always went to the last second and a consistent story was a couple of days before the final agreement it look like they had an agreement at all collapsed without that is what last night reminded me of. There is always a collapsed before his final agreement. Olivia obviously it resulted in a downgrade in august 2011. What is the rating . Joe junk i think. These negotiations that are designed to go up to the wire, you have to play every card possible to agree and it falls apart and then there are recriminations and it will come back to the table monday. It will not shocked me if they still found some sort of deal. Tom joe weisenthal, thank you so much, with bloomberg markets. Brendan still to come, we look at the lives that have been turned upside down by cheap crude. Bloomberg surveillance on bloomberg television, streaming on your tablet, your phone, and bloomberg. Com. Tom good morning, everyone. This is bloomberg surveillance. Olivia sterns with the morning mustread. Olivia it comes right rare interview that Bloomberg News had with Supreme Court Justice Ruth Bader ginsburg. Here are her thoughts when it comes to samesex marriage. Justice ginsburg i think it is awful that it would not be accepted. The change in peoples attitudes on that issue has been enormous so i think it would not take a large adjustment. We cannot speak much more on the subject because one way or another, it will be decided before we leave town in june. Olivia and it is true, tom, it is incredible just to see how far public sentiment has come so quickly on this issue of gay marriage, and you see what has happened with the alabama Supreme Court, the Supreme Court head of alabama ignoring that law essentially. He says he has a host of legal reasons why, and he sees plenty of lower courts going ahead with marriages. Tom this becomes 2016 as this court ages. Brendan that is the issue, there is a little bit of movement, they love the notorious rbg. Olivia a color count set up by a tumblr account set up by a law student called the notorious rbg. Brendan at the end of which she would be 91. Olivia she said it takes her no longer to former opinions than it did when she joined. Tom she will be 91 in eight years . And some others behind her as well as the court ages. Stephen king will join us in the next hour from hsbc. The ever younger stephen king. Stay with us. Bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. A thursday morning from new york city. We welcome all of you. We need to get to our top headlines. Olivia after passing through the house, the Keystone Pipeline construction bill is now headed to president obamas desk. Proponents are not getting too excited yet. The president has promised to the to it. The 2 3 majority not likely to overturn the veto. And an Unmanned Falcon 9 rocket carrying the 340 million you climate Observatory Mission has taken off after being delayed several times after bad weather and a greater issue. Liftoff came after clear skies yesterday in cape canaveral. Russough seas to recover the booster a setback for founder elon musk who wants to cut the cost of spaceflights by creating reusable rockets. And a blunder for netflix, they actually posted house of cards weeks early. All 10 episodes were online. I miss out. This is the series featuring kevin spacey, francis underwood. Those are your latest top headlines. Bake house of cards fan tom . Tom no. Brendan i cannot even get to the second season. There is not enough time in the greeley household to get there. Tom i have been told i would like it. You are almost as cynical as i am. Brendan no. We will take a look at a real person, he used to own hundreds of thousands of dollars as a project planner in norways brent crude, but it glass, and joergen now works for the biggest dairy producer. This is a big story from our oslo bureau. Here is the bigger theme even norway, a responsible diverse oil economy, has to rebalance. As many as 40,000 of those good go. Mark harris is here and he understands the world. Maury harris is here and he understands the world. Is this just a blip right now . Maury i do not think it is a blip that oil is half of what it had been stop you can make the case that oils able eyes is near Oil Stabilizes near recent levels, but we see a partial recovery a little bit over 60 a barrel next year the energyproducing parts of the Global Economy are just not going to be what they were. There will be some longerterm adjustments if people in those economies are forced to make. Brendan we have been focusing on the swing producer so far on surveillance, we talk a lot about the american west, permian basin, saudi arabia, brent crude coming out of the north sea is very expensive to extract. What is that going to meet for the economy of scotland, which really revolves around oil . Maury the whole Independence Movement and separatist movement rest on the assumption that they are making ona a lot of money on oil. Olivia yeah, i felt bob dudley the head of bp, saying Central Banks are in negative territory. We are talking with the plunge of oil. Do you think the Norwegian Bank is the next . Maury they certainly could be. Brendan you talk a lot feeling like the 1980s, there is a great Bloomberg News piece about just a much aberdeen has changed. At cafe boem about 30 christmas bookings were cut in december. Luxury used to exist in northern scotland that is not there anymore. Maury this is a redistribution of income. Away from Oil Producing countries to oil consuming countries. The counter to all of this will be the United States probably having a pretty good year because we are on balance and oil importer, and this is good for us. It is good for a lot of developing countries that are net consumers of oil, be it china, india but personally think there has been too much focus on the losers are not enough focus on the winners. Tom you have been out front on this. You had leadership and optimism on the american economy. You do that in your new book maury inside the crystal ball how to make and use forecasts. Lets summarize the latest work you have done. We get a lot of mail that is like, eh, maybe not. Maury it is good for america when you look at how much money we are saving. When i say we, i mean the Consumer Sector and the business sector. When you compare how much we are saving on energy bills and you compare that with the potential damage to the Domestic Energy industry, the benefits far outweigh the potential damage. We have run scenarios where the Energy Investment drops off every bit as much as it did during the great recession, and even in those scenarios, the benefits of having lower fuel costs outweigh the costs. Olivia but there is some collateral damage. What is that . Obviously job losses in the energy sector. Maury there will be losses in the energy sector. Remember when you look at direct energy jobs and support jobs they are only a little bit over a halfmillion. They are about. 4 of total jobs, so it is not a big enough job machine where it is going to upset the whole laugher curve laffer curve. Brendan we are looking at real consequences to north dakotas economy in texas economy, but for the u. S. Of a whole, not nearly as much. In the loopmaury that is right, and it comes to the United States still being a net oil importer. If we were Energy Independent hypothetically, then this would be a redistribution of income within the country from Oil Producers to oil consumers. We are still a net oil importer. His gasoline prices are down. It has got to be a positive tom can you get to a sustained 3 gdp where more of america feels better . Maury i dont know that you can get to a sustained yearin yearout 3 gdp because our population is not growing, demographics are not there but in terms of coming back and having a good year, it is certainly possible because all of these people are starting to farm households. Tom i want to congratulate you when it did was the gloomiest of the gloom, you were having things thrown at you. They through med drew they threw them at drew mattis, coffee cups, paper clips, pieces of chalk. Brendan coming up, we all know jon stewarts exits will affect comedy how will it affect politics the echo that is our single best chart. This is bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. I am tom keene, Olivia Sterns with us, Brendan Greeley. Olivia is wearing a valentines red. It is saturday. How can valentines day be on saturday . Olivia well, i am off tomorrow. Brendan jon stewarts announcement that he will retire as host of the daily show will leave a void also in democratic politics. This explains why his exit will be so painful for the left. E are is what we are looking at. On the left side, we have turn up come on the bottom we have preference so those are all cable shows that skew toward the Republican Party and on the right import a democratic audience on the west, so for example that cluster in the upper righthand corner is all fox news channel. That one teeny blip in the upper lefthand corner, that is john king on cnn, so the daily show was sort of the best that the left had in terms of size and preference olivia and quality because the kardashians they are much more concentrated. Brendan and then you have sort of up top on the rights, you have a little blip of cnbc those are republicans were not quite as partisan but have even more money. Tom kardashians, is that msnbc . Brendan no, is that bravo . Olivia believe it or not, i do not know. Brendan that is embarrassing. I am told it is e, but i turned to olivia for advice. He changed the news. Im am sure the things weve seen on jon stewart are changing what we are doing right now. Tom years ago, i joined my two seconds on the jon show. As they filmed me, they both tied into the democratic convention, and a guy came up and said oh, my god, there are republicans here you have bowties olivia it is the only news that millenials watch. It his sad, but that is how powerful he is to thel left. I like to say i more or less knew how to handle myself. I walked up to him, i was so excited, i said hello and that i just totally choked. I got so nervous because i love him so much. Brendan i think there are a bunch of tropes of tv news that he just blew apart. If you look at what happened to the spin room after debates after the campaign, you walk in with a camera crew and people are literally Holding Signs saying this is al sharpton, you just cannot do that anymore. Lets make up a rumor right now. Tom maury harris, inside the crystal ball, like jon stewart the blather all day has changed the speed of information in our world. Maury that is right. What bothers me, and what we addressed in the book, is that you have instant analysis that can be nonvolatile non thoughful analysis. When an event happened that 8 30 in the morning, it is pretty hard to 30 seconds later know what it means. Tom jon stewart translates this and destroys it usually. Brendan jon stewart was so good they invented something that we do now, which is keeping a record of past statements, comparing what people say now compared to what i said to years ago and five years ago. Olivia it speaks to what many call the absurdities of having a 24hour news station. Jon stewart had the luxury of creating a halfhour program for ur nights a week. Tom we have one photo today one photo, oncee stud. Olivia you are a daniel craig got . Uy . Tom no, you are. Brendan i love james bond. Olivia the scene was shot in the austrian alps. The story focuses on a message from bonds past which sent him to cover a sinister organizations will stop us up between fourth james bond movie. Spectre will hit movies november 5th. Brendan Christoph Waltz is in the movie, we have somebody playing on jo odd job, dave bautista, we will hear Christoph Waltz say the words no, mr. Bond, i expected to die. Olivia a lot of it was shot in austria, and i like to see all the bond babes decked out in all the fur. Spectre, the new james bond movie, coming up. A gift for your valentines day, how about a stunner with americas ceo, a 9 million ring on set. I cannot wait to get my hands on it. This is bloomberg surveillance. On bloomberg television, streaming on your tablet, your phone, and bloomberg. Com. Tom coming up next folks, bloomberg surveillance, our annual visit with robert burke. The fashion show was on a new york. We will speak with mr. Burke about the state of luxury in america. It is a troubled challenge deal with some big victories and defeats. Robert burke on our next hour of radio and television. This is bloomberg surveillance. Good morning. Rendon has our top headlines from around the world. Brendan an Italian Court has sentenced the captain of the Costa Concordia to 16 years in prison. He was at the helm of the ship when it capsized three years ago. The accident killed 32 people. He was convicted of multiple criminal charges including manslaughter for stop he has an eye any manslaughter. He has denied any wrongdoing and saying he has been turned into a scapegoat. The Indian Government is asking to spare the lives of two the Australian Dollar and asked indonesia to new details about the american who died in the custody of Islamic State. Friends say Taylor Mueller was determined to reach of syria and learn arabic. Her death was confirmed earlier this week by her family and the white house was of the militants claim she died in a jordanian airstrike. The pentagon says Islamic State is responsible. Those are some of your top headlines from around the world. Olivia valentines day is just around the corner and is you had 16 million to spare, i have the perfect gift for you. Take a look at this 100caret yellow vivid dimon. It also sold for 16. 3 million last year at action but if you are in the market for this type of rock, or perhaps i could should say glacier, there is one place to shop, that is graff. The ceo is joining us. Thank you so much for lending me this unbelievably gorgeous 9 million, 30caret ring. It is hard for me to think while this is on my finger, but i like to know how strong is the market for a 1090 ring . Henry for a 10 million ring . Henry surprisingly the market is strong, that is highquality, very rares stone. The quality not only in america but around the world. We have obviously clients all over the world, and when we get such a rare stone, which is obviously not that often, we know who to call, who to speak to. Brendan henri, sometimes i am amazed when people come on the show that there is a level of luxury so high that it not know existed, so graff is news to me. I apologize. Other than Olivia Sterns, you usually do not put your stones on celebrities for stop why not . Henri we are a very highend brand and we sell exclusive products. I think if i can loan it or if anybody can borrow such expensive jewelry it kind of defeats the purpose. Olivia but you advertise in the wall street journal . Henri advertise of course because i need my brand to be known. Brendan why buy the cow when you can get the ice for free . Henri that is a completely different olivia what is the average price of a transaction at graff . Henri 150,000. Brendan did you pointed her finger and say 9 million . Henri yes. Brendan oh, my god tom you have the class act of bringing in one of your entrylevel diamonds, which is 20,000. Why should someone by this gorgeous, small statement versus a 90 of the riffraff that is out there . Tell me why i should step up between entrylevel diamonds versus the garbage that is out there. Henri fashion for diamonds long graff gave all his life or that come in the magic is in the way you cut the dimon, which is what makes the difference. We have cutting centers in johannesburg, botswana, in antwerp, and new york. There is a 1. 5 caret or a 1. 7 mediocre diamonds it is not matter if it is only one caret if it is a perfect storm perfect stone. We cut them to perfection. That is what makes a difference in the value. Olivia have you ever had a customer faint . Henri almost buitt they usually maintain their composure. Olivia colored diamonds, we have a 31caret blue diamond, a 102caret graff consolation classic, and the yellow delaire sunrise. Henri the bluestone is extremely rare. It is the same gentleman who found the hope diamond, and he sold in the late 1600s to the king of spain, and it is an unbelievable story, and we bought it back. Tom if i go to tiffanys, there is no read because of the and on the ban on myanmar. Can i buy a three of . Can they buy it through you . Henri the only way is through an antic piece of jewelry. Because of the embargo. Tom if somebody who wants a ruby can go to ubs london and by a ruby . Henri you can always go romney system and do what you want, but i cannot import a ruby. That is the end of it. Brendan maury harris, help me out, i am in between a monitor about falling off a cliff and i am looking at a 9 million diamond that evidently demand for that is unabated. Tell me what this means about the american economy. Maury what it means is there is a big difference between wealth and income. In the last couple of years, you have had tremendous boom than the property markets, tremendous boom in the stock market, said the people who elicited from the can by this gentleman the people who benefited from that can by this gentlemans diamonds. There is a very important wealth effect that we have had the last couple of years and people are spending that wealth on his diamonds. Tom tell me about the metal wrapped around the dimon. Is white in now, is yellow gold coming back, what is the trend right now . Henri white diamonds are set in platinum or white gold, yellow diamonds obviously you put a yellow, what is called a basket, so it is not interfere with the color of the stone. Olivia what is your fastestgrowing market . Henri it wasnt until a couple of month ago asia it wa until a couple ofs months ago asia, now everybody in the luxury world seemed to have their eye on america. We kind of rediscover america. Did you percent of all Diamond Jewelry in the world is sold in the usa. Olivia henri, thank you very much. Tom you have got to go. [laughter] henri dont worry, i have security. Tom let me do a forex report, again, a story today in ukraine with a buffer zone set up and currencies gyrate down. I saw the ukrainian rhythm blowdown. Stay with us. Another hour of bloomberg surveillance there will be a 30 mile buffer zone across eastern ukraine. The imf sent 40,000,002 k million to kiev. Luxury fashion stumbles. Good morning, everyone. This is bloomberg surveillance. It is thursday, february 12. Im tom keene. Join me, let yesterdays and Brendan Greeley. Olivia sterns and Brendan Greeley. The leaders have reached a ceasefire agreement after more than 18 hours of nonstop come allnight talks. The trees begins midnight at sunday and hold out hope for an end to the conflict that has claimed more than 5000 lights in eastern ukraine. Vladimir putin said negotiations were tough. It was not the best night of my life, but a good morning. We agreed on the main thing. He has cold on both sides to end the bloodshed as soon as possible. Talks between greece and the sides are trying to bridge differences over the eight program that the new greek government blames for was. As well as. Its woes. Crisis to crisis this agreement to this agreement, we always find a solution. Disagreement to disagreement we always find a solution. Many lawmakers and the president is likely to get his way. The political maneuvering is affected to be partisan, though. Republicans think limits on Ground Troops can tie the president s hands. I do not believe americas interests are served by endless war or by remaining on a perpetual war footing. We needed to ask questions about when, why and how we use military force. It is our troops who bear the cost of our decisions and we owed them a Clear Strategy and the support they need to get the job done. The president s request to Congress Said Islamic State has committed despicable acts of violence. Very sad news for the world of television. An auto accident claiming the life of bob simon. He was riding in the backseat of a town car that struck another vehicle. This happened on the west side of manhattan. Before slamming into a metal barrier separating traffic lanes. Here and more than 40 major awards, 27 emmys. He had the legit Foreign Service credibility, a fulbright scholar, a Woodrow Wilson scholar. He was perhaps the last thread back to a cbs of another time. He provided grace and intelligence. You talk to so eloquently earlier this morning about the connection to the other time. What does that mean . What are we missing . We are not seeing it now. Each network had a character that was done you do business week. You are a real journalist who does real stories. He wore a trenchcoat for real. I have a trenchcoat. It is a prop. It was not for bob simon. He was the real deal, not only in the persian gulf war it was week after week after week he carried on where cronkite started. Through his storied career, and men who spent time as a prisoner of war in iraq ultimately died in a town car. Charlie rose is trying to get cbs back we have learned how authority is created on television. Brian williams authority at risk. Bob simons authority hard one through years of reporting. A huge loss for tv. Let me do a quick data check. A historic data check with whats going on in ukraine. The markets are up, but that does not show the nuance in the currency markets. There will be some 30 miles across eastern ukraine. Maybe a berlin of 1961. The headline signals deep division in the last hour. Military headlines out of ukraine with russian tanks over the border by one report. Hans nichols is in brussels. Do we know any more on this buffer zone . Not much more on the buffer zone. We will have to figure that out. The key issue was how enforceable and will it eat and forced . It be and enforced . Angela merkel seems to be the most sp skeptical. It is unlikely that they will push ahead with additional sanctions for russia. We have a few details coming out. It will be a 50 kilometer buffer zone. It is not clear where that goes. All foreign troops and mercenaries will be pulled from ukraine. All hostages must be released. This ceasefire will go into effect on sunday. It sounds a little bit like everybody gets a ceasefire and gets to come away saying they got what they wanted. There is a bit of that. At the same time, they do have something that all sides say they have a chance of success. That is what we will try to figure out throughout the day, talking to leaders. How are the prospects for this to be enforced . Last time, we had a ceasefire and since then, 5000 people have lost their lives. I want to step back for a second on europe. This is how europe moves forward. Awkwardly stumbling. Is that how you see it as well . It would be hard to call any of the negotiations as elegant. Elegant. He is correct in that. Just because you have difficult negotiations this time will it look like the negotiations last time . This time things and seem to be a bit different. You have a germany that could live with the prospect of greece leaving the eurozone. No agreement last night. We will be reporting on this thank you. Sometimes you get lucky. Someone in the real world of business in russia. Robert burke providing consulting internationally to people in luxury retail. And stephen king with a quick handshake in davos. Brendan mentioned, this seems like a huge victory for pru utin. As calling for russia this morning there is a big question about what the ceasefire means. You had the treaty of versailles , the formation of the berlin wall 1961. A ceasefire is not peace. Its a breakdown or agreement to not fighting. It can be a nasty thing. What will it look like . 31 miles. All of that has changed since september. Moving from russia and ukraine you get to do what we talk about onset. Deal internationally in Eastern Europe and across asia with business people. Less sanctions for russia is a good thing, right . It will be a good thing. We have felt the effects across the board with the sanctions. The russians who had spent a great deal in europe and the u. S. And abroad were staying at home. They were not spending. It started to trickle into other countries with the recent evaluation of the currency in context on the evaluation of the currency in kazakhstan. Our twitter question of the day will the ceasefire worked this this time . Good morning, everyone. To our morning must read right now. This morning the former member of the executive board of the ecb, a german he had to be replaced by another german. It is not germanys fault. It is not a matter of one country dictating austerity to another. The periphery are responsible for having lost access to the Financial Markets in 2010. You are looking at a copy right now. This feels like a pure expression of german id. We did nothing wrong. I dont think the argument is quite right. The reality is germany has a huge balance up 7 last year. Germany by definition is acquiring foreign assets. When things go wrong they get upset that those people cannot repay their debts. Why is germany deciding to save so much and not spend enough domestically . The secrets of german success are low inflation, working hard and when a currency suppers. Not every country in the world there is an issue of history as well. We have the same issue we talked to germans, there is no understanding that their capital went into greece to help inflate that bubble. Export revenues were very strong. Using those revenues to pay workers looking for highyield with low currency risk. You have or know about this carefully. There is a legacy here unspoken a new buffer zone. You go back to conrad there is a german memory. To be fair what germany wants to do is make sure the euro is secure. It wants to make it secure on the terms that germans understand. The eurozone does not have the devices in a normal monetary union. There is no such construct within the eurozone. A great resistance to that. Coming up, investigations into currency manipulation. New yorks first superintendent of financial services. Good morning, everyone. Bloomberg surveillance. Im tom keene. Olivia sterns and Brendan Greeley with me. Lets guitar top headlines from around the world. Breaking news from egypt. The release of two Al Jazeera English journalists. Lets get to our top headlines from around the world. Their australian colleague the three were sentenced to seven years in prison. To brussels were eu leaders are meeting to discuss ways to combat terrorism. The dialogue comes in the wake of the Charlie Hebdo attacks in paris. Combating extremism on the alternate internet. In south korea, a tantrum over macadamia nuts has landed a former korean air executive in prison. Sentencing the daughter to one year behind bars for violation of serious about being offered the nuts in a bag instead of a dish. When is the last time i complained . She was responsible for Quality Control and first class. In first class. She might have overreacted. It is fashion week here in new york. We have someone with us onset was a fixture on the front row. Robert burke serious question. Is it harder to get a seat on the front row nowadays because of the nature of Fashion Shows that has changed so much . The big labels are not so concerned about catering to the buyers . The demand and attention on Fashion Shows today is greater than ever. The celebrity element has always been there. You also have the blogger element online, some in the different things. The buyers will always be taken care of at a certain level. Fashion shows are entertainment for many people. For some people, it is strictly business. Mercedesbenz is dropping its sponsorship. It doesnt say much about the luxury market in general. Where cities bentz has been the sponsor for eight years. Mercedesbenz has been a sponsor for eight years. The background on that is the new York Fashion Week has become so sponsored and everyone from it was maybe overexposed. A luxury brand like missing these bentz wants to be in good company. Mercedesbenz wants to be in good company. This is nate screaming at andy on the streets. That is the spirit of american fashion. Peter copping is a talented designer. He recently joined a bit of overlap before Oscar De La Renta passed away. Im sure he is a talented designer. They have two price points. They cant afford it price point oscar de la hoya to had a reasonable entrylevel price point. The successful brands are always going to have it and entry price point and of the uber luxury over the top. You can have 20,000 and you can have 9 million. How is gores doing co they had a 38 increase in profits. They are doing well. They saw a 6 increase in the u. S. They recognize things are slowing down. Youre the only retail person to come on the show this year to say things are slowing down in the u. S. They expanded and they saw a window of opportunity and expanded. A great deal of market share away from people like coach. It is hard to stay at the top when you have expanded like that. Our audience is dying to get into the polo restaurant. How does that help a brand to set up a restaurant . And 80 stakeeak . I was fortunate to go there opening night. It is an 80 steak. Gives the designer the ability to express themselves. The way the waiters come in the way the plates are, the glasses, the wine service. He was one of those pioneers of taking his retail brand and creating a lifestyle. This all feels very alien to me. How is it important to something in the economy a year from now . Lets look at what fashion week represents. 887 million in the city spent. The u. S. Open, 700,000. You look at the marathon, 300,000. Even the super bowl was 500 million. This is a serious industry. Who are you wearing today . Patrick johnson. Stay with us. Bloomberg surveillance. Good morning. Good morning. This is bloomberg surveillance. It is a great morning for the People Holding the three lucky tickets in the powerball drawing. They wrestled in North Carolina, puerto rico and texas. Were sold in North Carolina puerto rico and texas. If the winners and select the lump sum option, each will get one third were 380 million before taxes. A rocket carrying the 340 million keep space Observatory Mission is l lost. Rough seas forced the abandonment of the booster. Netflix quickly reverses a technical blunder. The company accidentally posted the third season of house of cards on its streaming service two weeks ahead of its scheduled release. 10 new episodes of the hit series were briefly available before the company took them down. Im devastated. 12 guest host, stephen king from hsbc. To our guest host. This is linked to tangible deflation. Gary shilling in his book deflation speaks of good and bad deflation. Europe is in the midst of bad deflation. It is bad deflation. Lower oil prices will boost real wages. Inflation has been coming in lower and lower long before oil prices fell. Europe has a huge amount falling prices with Interest Rates at zero. The real debt burden gets bigger and bigger. The ecb has done qe. The evidence from other countries and may raise inflation or a year or two. Do we wait for Technological Progress . How do you jumpstart that geometry . There is a fundamental issue of Political Trust between creditors and debtors. The worldwide debt is too high. If you demand the debtors are just they get left with austerity your after year. Year after year. The whole of the euro zone into this deflationary story. You think of dollar excess currency depreciation. Does it come to the only solution to lessen deflation effects is Currency Movement . Everyone tries to devalue their currency through qe. The world as a whole cannot devalue. The japanese devalued the export of their deflation to asia. The europeans have there are still deflationary pressures. Lets find some ways of having a collective stimulus policy in the u. S. , china, germany. How does jenny l in full listen to her american calculus Janet Yellen Fuld this into her american calculus fold this into her american capitalists . The rest of the world is looking quite vulnerable. Japan is not looking great. The danger is the u. S. Raises Interest Rates to try to normalize. The damage to the rest of the world is so great that there is a negative feedback loop. I look at this, the basic idea of a shock. That is the real risk here. We become more vulnerable. Absolutely right. One of the problems the west had today, there is not the same kind of insurance in terms of policy. In the good old days, you could cut Interest Rates. With relatively large budget deficits and qe not working as good as it was, that is ammunition. Will i have to take a quiz after this . A pop quiz with stephen king. Lets check were futures are trading. Pointing to a higher open come up 9. 6 points. 22 points from the record high they hit on december 29. This comes after allnight talks led to a ceasefire agreement in ukraine. The euro slightly stronger against the dollar. Good morning, everyone. Bloomberg surveillance. Im tom keene. We look to washington. Coalition is strong, the cause is just, we will succeed. Those are the worst president obama used in his speech wednesday afternoon, asking for authorization to go to war with Islamic State. Words president obama used. He wants to dismantle and destroy isis. I have not seen his strategy at. Yet. Peter cook joins us from d. C. The president asked for permission. How is that working out so far . John boehner is not thrilled with everything the president is asking for. He is less of a problem that a lot of the president s fellow democrats are. The president will get the authorization for the use of military force maybe tweak here and there to satisfy both democrats who worry it is to lose and some republicans who think it does not give the president enough authority to wage war. After some pretty intense hearings and floor debates, the president will likely get his way. Helped me understand these strange words. The republicans are concerned that they are not giving barack obama enough authority . Amazing given what we have seen play out. There are a lot of republicans who want the president to have a blank check so they can wage the fight they think is necessary to defeat the Islamic State. They do not think the language in here gives the president that freedom. They want to make this a bit more openended. It flies in the face of Everything Else we have heard about the imperial president from republicans in recent days. Perhaps it is a blank check but a blank check for now. The new war powers are only for three years. Doesnt that tie the hands of whoever takes office in 2016 . That is a demand made by democrats. A lot of consultations between democrats on capitol hill and republicans. It was suggested by a whole host of people up on capitol hill. They want to make sure the next president is bound by the same obligation, same rules and guidelines. They can always come back and ask for an expanded one in the future. Help me understand, this agreement, if it passes would replace the 2002 agreement. It would leave standing the 2001 war powers authorization against terrorism. We are still conducting a 9 11 war. That is true. This is a very important point because there are a lot of democrats who say the one thing they would like to change in here they would like to include language in this authorization to repeal the 2001 authorization for the use of military force. The president in his letter indicated he would like to revise or appeal that 2001 authorization. It will likely happen on a separate track. Does this leave the window open for boots on the ground . American boots on the ground in syria . It does leave the window open. But for limited operations. The language is specific. No wind during combat operations for u. S. Troops. Andenduring combat operations for u. S. Troops. It does limit the president to prevent the ground where we saw in iraq and afghanistan previously. Two limiting in the mind of john mccain. The president does not want to see another u. S. Ground war. How does this change his dialogue and history and legacy with democrats . He was a peace prize winner. Is he a peace prize president . It will be a fascinating vote for a lot of democrats. On capitol hill, there is a strong feeling this is a mistake. This is going to perhaps change his legacy. If he is successful with this strategy the president can say he was successful in bringing u. S. Troops home. Peter cook joining us from washington. Please answer our twitter question of the day. Do you think the ceasefire in ukraine will work this time . Good morning, everyone. History today in ukraine with discussion of the new buffer zone. Joining me, ian bremmer of eurasia group. When you were at stanford i know you did a study of korea. We have seen the president look across that zone. How do you envision a buffer to be in ukraine . It will be more like a dmv. A lot of tanks moving around from the russians and ukrainians. Disagreements has all b Foreign Military needs to be removed. The russians have consistently said they have no weapons they have sent to ukraine. We should see some sort of lull in the fighting the idea this is going to be firmly implemented xgrid you woody at this point. Where is the russian border this morning . It is moving. Around this small town they have more or less surrounded. They are down to the port town within shelling distance, a bit of a jog. That would be an important port facility. You will continue to see some fighting over the next couple of days. Whether or not we end up in a full ceasefire is a question. Part of this agreement is that by the end of 2015, you will have monitors on the border. Mr. Lavrov said he did not believe this was realistic. Russia basically continues to occupy a bigger piece of ukraine is the baseline expectation. We have some comments this morning from the lithuanian prime minister. The deal on borders is weak. Lithuania shares a border with russia. Are you feeling encouraged by this as a leader of a baltic state . Im certainly a little bit able to feel less constrained than i west 24 hours ago. Any progress is progress. There is a difference between a baltic state and ukraine, which is not an ally of any sort. The willingness of the United States or the europeans to prevent putin from destroying ukraine is pretty limited. What can we do to stop russia and ukraine . Why do you think theres an answer to that question . Thank you so much. Greatly appreciate it. Ian bremmer with eurasia group. What do you think . Will the ceasefire work this time . This is bloomberg surveillance on bloomberg television. Good morning everyone. Futures up 10, dow futures up 83. The ruble ever so slightly weaker. Lets get to our top headlines from around the world. Italian court has sentenced to cast to 30 years in prison at the helm of the cruise ship when it capsized three years ago. The accident killed and 32 people. He has denied any wrongdoing. Please for mercy from australias foreign minister. Watching the indonesian government to spare the lives of two australians facing execution for drug trafficking. Indonesia said last week the two men are among a drug smugglers they plan to execute by firing squad. New details about the american who died in the custody of Islamic State. She was determined to reach syria and learned arabic so she can perform a work aid work. Her death was confirmed earlier this week by her family. Militants claimed she died in a jordanian airstrike. Those are some of your top headlines from around the world. It is bloomberg surveillance. Stephen king of hsbc is with us. Also, robert bu robert burke. Both are focused on china, Global Consumption all about the marginal china. You lived this huge in everyday. One of our Staff Members enjoyed six week in hong kong weeks in hong kong and noticed the balls are empty. Malls are empty. You are seeing the chinese travel like they have never done before. They have access to be says they are buying abroad visas they are buying abroad and they enjoy buying abroad because they know it is authentic. How important is new York Fashion Week to the industries dialogue with industrys dialogue with china . You get 500,000 people coming to fashion week in a year. The chinese are a very important part of that. Chinese retail is an important part. Is new york on par with lawn or paris milan or paris . Far surpassed. We are suffering from our own success in promoting young designers. Some people are complaining there are too many shows, there is too much. This is the country of dreams. Bloomberg surveillance last night the girl magazines, the one technology that has not changed. The american fashion, because of the support of the fashion designers, many people heading up many initiatives, the blog seo build a blog a lot of attention and support. I want to talk about the effect of china that has on the design shop. In hollywood, they are thinking about how they can make sure they can sell it domestically and in china. Our design shops aware of this . The brands of today realize they are a global brand because of the internet and the amount of research the consumer does today. It used to be that we would say with a brand, this is for asia this is for europe. It is much more global. Where is the native chinese hermes . Pretty far away. Just because it has not had the ability and the support and the education to create. They are very good manufacturers. I remember london hugely influenced by the oil boom and Eastern European movement is london at the margin to have a chinese f buyer . I am not into fashion who are you wearing . A portsmouth tie. A very english brand. On bond street you see plenty of Chinese People who have come over to buy stuff. There is no doubt that when you go to shanghai or beijing, the equivalent shops are mostly empty. They go window in shopping in china i have been disowned stunned by the discounts i have seen. There had been deep discounts. We saw handbags, Shoes Accessories stronger. But a lot of discounts. I can buy a pair of heels in new york for 75 off and that will never happen in paris. Brandon . The discounting culture in the United States is very different. After your statement, the executives will make sure that will never happen again. The worst fear in the world is that you start waiting to buy those products until they are marked down. We have been sitting here all day talking about luxury. We had a 9 million diamond ring. Im thinking about the one caret i scraped money from the couch cushions together to buy my wife in 2007. Thank you so much. Newark fashion week is very cool. New York Fashion Week is very cool. Will the ceasefire agreement in ukraine work this time around . Not a chance come unfortunately. Yes, europe has shown they are serious. Works for putin mostly. That is my take away. Between september and today Vladimir Putin has gotten a whole lot more of what he wants. Daily thing he is stopped short of his insisting he gets a land bridge to crimea. Francois hollande speaking now in france. My agenda is the dmc. Dmz. How crucial are the next 20 for 24 hours . It is the next weeks and months that will determine whether it will be successful. With any kind of dmz, you end up with a situation where the polarization on either side is greater and history does not help in this regard. What else . I am looking at greece watching europe stumble forward yet again. Agreement but a lot of drama coming out of bris no agreement but a lot of drama coming out of brussels. More stubbly. The big issue is whether greece can negotiate something. There is no negotiation of any significance you mean Angela Merkel there is a huge problem. The gap is now very, very wide. If the greeks managed to renegotiated deal, the spanish and irish will say, what about us as well . I want to read a tweet you put out recently imagine if maryland told mississippi how to run its affairs. Thats how they bit like what we heard from the former fed chair. Alan greenspan thinks the euro will inevitably unravel. It either unravels or you create that integration. The polarization between nationalist views in Northern Europe and increasingly leftwing antiauthority views in southern europe. Antiausterity views in southern europe. Things tend to be very difficult in these circumstances. Keystone pipeline. The house finally passed it yesterday. President obama has promised to veto it. Incredible that we did finally get a vote. Stephen king, thank you. Robert berg, thank you wes welker it robert berg, thank you as well. Good morning. Its, february 12. We are alive bloomberg headquarters. I am betty liu. Were night minutes from the opening bell. Retail sales. The consumer, how are they doing with us. Steve newman has been the president of the brothers and eddie will be my guest host for the hour. Rio tinto ceo says not surprisingly, it will be a tough year for the Global Mining industry. We will talk to him in this hour. Shares of tesla are plunging in the free market here at a disappointing quarter for elon musks electric car company. We will look at what may have to be done next. And look at the top stories. Camusso and succeed where the other has failed . Germany and france worked out a truce. An allnight summit in belarus. There has been no decision on how much