Transcripts For BLOOMBERG Bloomberg Surveillance 20150417

That it will improve gdp. Maybe it will. But if it does not increase middleclass incomes, which is the greatest problem we face in the country, i cannot before such an agreement. Brendan the white house said it will open the economy to more products. The imf is playing hardball with greece. Christine lagarde said she will not let greece skip a payment. Greece told creditors earlier this month that it might have to skip a payment. The issue comes down to other greece will agree to more economic reforms. The greek finance minister said that the answer is yes. What were asking for is absolutely sensible. We are a new government. We need to come to terms with our partners on four or five large returns reforms. Brendan chances appear to be shrinking that the fed will raise Interest Rates in june. In february, the atlanta fed president said he wanted to keep the possibility open. After his speech yesterday, he said the june was not off the table. Dont we all just sit around and listen to allen center Ellen Zentner . For the first time, an american citizen has been accused of training in syria and then returning to the u. S. To conduct a terrorist attack. They say he was trained in weapons and hand to hand combat. His lawyer says the charges are a bunch of nothing. Verizon announced that its tv will allow users to pick which channels they want to watch. They are facing pressures from Companies Like netflix and youtube. Tom yes, i watched it last night. It is not the force that is with us. It is the hype and the buildup. The december release of the new star wars sequel. Disney hit the ball out of the park. Star wars the force awakens. Brendan spiked all over america. Tom watch the trailer. It is not like blowup explosion. It is about script and story line. Brendan it is about tjehe wookie and han solo returning. I realized that this story relies resides in my limbic system. Tom i dont know what you just said. Brendan i am excited. Tom my favorite of all of them was the Empire Strikes back. Star wars is back. Lets get the force with us on the bloomberg terminal. Equities, bonds, currencies commodities. Euro advances. With all that is going on in greece. Stronger euro. Nymex crude. It could really use a multi week rebound. On to the second screen, if you would. Greece threeyear yield, we will get to in a bit. German yield staying at the zero bound. Yen that is important. An everstronger yen. Lets go to the bloomberg terminal. The threeyear greece paper. This is fascinating. 100 yields. Excuse me, that is summer 2014 restructuring. Normality for a cup of coffee that good greek coffee. We are now through 20 . Impossible 20 yields. Brendan i looked at this and i saw something completely different. Right here, you say you think it looks like luke battling against darth vader. Then he loses it. He is saved at the last moment. Then we are not really certain what is going to happen. All we know is that he is lived. Perhaps he will endure. Im sorry. What were you talking about . Tom im going to spend the entire weekend getting back up to speed on star wars. Ken Princess Leia can Princess Leia have the hair like she had in episode one . Orrin hatch and the republicans handed the president a fasttrack authority on trade. Senate democrats are 44 shades of livid. Peter cook is in washington where an ancient dance commences. What is the back story . What is the drama . Peter a few democrats wandered over. Ron wyden. This is a very big deal. The announcement that he has reached a bipartisan agreement with orrin hatch on trade Promotion Authority this means that the obama trade agenda, which has been in the freezer the last couple of years is once again on the front burner. The president has a real chance to pass two major trade deals before he leaves office. This is the most significant economic items the president could achieve in his final 19 months. Tom as you always do, you cut to the chase. It is about the senator from oregon. How were the Pacific States lining up around this trade deal . Peter oregon is a big exporter. They potentially could benefit. Ron wyden made a difficult choice in backing this kind of legislation. He faces criticism in his home state that this is a deal that may do more harm than good to american workers. That is the hurdle he has to overcome. He is convinced this is good for oregon, the country, and american workers. He thinks that because he has insisted that there be certain conditions within the legislation that will ultimately help, including tougher labour provisions environmental provisions, and more transparency. Tom what is important is that this is not a trade dialogue of 10 or 20 or 30 years ago. It is a new american economy. Brendan i saw the name ron wyden and i heard a dog whistle which opens internet access. This is what people in Silicon Valley are talking about. Only recently has this become a trade priority, but that has become part of the deal. Are we seeing the increased lobbying power of Silicon Valley on capitol hill . Peter you can be sure that technology is part of the debate here. The reason the 2002 trade Promotion Authority was out of step with the times today is that it does not involve enough of the digital economy. It has to be updated. This is a direction that ron wyden was going anyway. He has faced protesters that almost every single stop as he goes home. They did not want him to vote for this, a lot of people in oregon. Tom kevin rudd will be with us in the next hour. Brendan one last question. Is this a oneoff issue or is congress unstuck . Peter this is a oneoff issue. You will not see paul ryan and Mitch Mcconnell working as hard on any other issue. This is republicans, the president , a handful of democrats and a lot of democrats powerful democrats standing in the way. Tom ready, set, lobby. Bringing out the big guns to sell stories two senators of all stripe and color. How does your firm react to an announcement like this . There is a change that may be taking place in all of this. We are thinking that this packs will now go through and that is a very important thing for the country. Tom do you lobby for selected groups . No. Tom did they call you . We tend to look at this and think about what is best for the country. Tom what would you say to senator schumer this morning . He is a 1940s, 1970s mode whatever. It is global. That is the only way it has to work. We have to make these changes because we have to compete in the marketplace overall. Brendan what has changed to allow this to happen . I dont know what happened but it did happen. It is probably because this is good for the country. We need to be more competitive. Brendan there has always been the argument that trade is good for everybody overall and there has always been the resistance from unions. It is an ancient dance, as tom described it. The unions to not have the power they used to. The argument you are advancing his winning the day. What i cant figure out is what has shifted in the last five years . May be something in the politics that is behind the scenes to bring the country back to more normalcy. I am hoping that is the case. Brendan nothing has changed in the arguments. Nothing has changed. It is a repeated game that is being played. Tom i want to turn you to twitter right now. This is important. Dr. Evil is rumored to have taken bloomberg down with a laser given to revebels. Brendan there are too many memes to figure out. Tom we have been down through the morning on the bloomberg terminal and we are now restoring full coverage on the bloomberg terminal worldwide, as we speak. Brendan tom keene said the Empire Strikes back is the best Star Wars Star wars movie so far. Tom is the force with disney . I am loving this. This is bloomberg surveillance. Tom the many residences this at the cologne cathedral. Angela merkel is attending the event. The doomed plane went down on march 24th. Among the dead was the copilot accused of deliberately crashing the airbus. Brendan the news caused a National Conversation in germany. This cathedral is as close as you can get to a Nasa National cathedral. The cathedral itself remained at the end of world war ii and it is such a powerful place for germans. An Unlikely Alliance is taking place. Republicans are trying to rescue a trade deal proposed by president obama and opposed by Many Democrats. Many democrats say the deal will hurt wages and eliminate jobs. The white house says it will open markets to American Goods. The imf is getting tough with greece. Christine lagarde told tom keene she will not allow greece to skip a payment. Greece told its creditors that it might be able to skip a payment. Security officials and washington are trying to explain how way gyro copter got through restricted airspace to land on the capitol lawn. 61yearold doug hughes literally flew under the radar. He faces felony charges, but he has been allowed to return home. The centers for Disease Control said the use of ecigarettes highschoolers has tripled. It is ahead of traditional tobacco stoping smoking. A majority of americans think pot will be legal nationwide within two decades. The brandnew survey 17 say it is five years away. 2 think it could happen in the next year. Recreational marijuana use by adults is now legal in four states. Tom we have much to talk about. Ge reports. We will look at the new production. Ned phelps will join us. A very important conversation on america. Brendan and i quote, stop lying, you were lying, you are lying, and you keep doing it. The leader of the u. K. Independence party. He was speaking at the debate before the u. K. Election last night. It was in opposition only stage. Labour leader ed miliband won the evening. Lets turn to francine lacqua. Help me understand what was everyone allegedly lying about . You are saying it perfectly. He took center stage and he was on the righthand side of the political spectrum. He was saying that the people of britain are being lied to about pretty much everything, about the state of the economy, nhs, immigration. It was on the attack. The people in charge were not there. It made for an interesting debate. You are missing David Cameron and nick clegg. On ed miliband, the main opposition party, he did not talk so much about the economy, but talked more broadly about Foreign Policy and about what it means for the british person voting on the election. I believe that britain can do so much better. Not a penny of our plan is paid for through borrowing. We will have more doctors and nurses paid for by a mansion tax on Properties Worth over 2 million pounds. We will clamp down on the tax avoidance and we will freeze your energy bills through 2017. They are lying about borrowing more money, is what one of the opposition leaders was alluding to. Tom mr. Cameron tweeting out yesterday, giving a major shout out to Christine Lagarde. Is there validity to the idea that Christine Lagarde thinks David Cameron saves the u. K. Economy . The imf has been a supporter of some of the measures put in place by the Coalition Government over the last few years. Things are pretty rosy at 5. 6 unemployment compared to 12 unemployment in italy. It is not doing badly. My question is if the economy is not doing so badly, why are they still lagging in the polls . If you have been in charge five years, you should be winning this. Tom it is an audit, on time. It is thenan odd, odd time. From new york city, futures are negative. It is bloomberg surveillance. Tom well, they are no Cherry Blossoms but it is a beautiful new york city. Spring is here on this friday. We welcome all of you. The greece threeyear is out of the 26 handle. This brings us to my morning mustlisten. This is my conversation yesterday with Christine Lagarde at the imf spring meeting. Lets take a listen. We never heard an advanced economy asking for that kind of thing delayed payment. I very much hope this is not the case with greece. I would certainly not support it. Tom her press conference and these comments moved to the market. Your purse your perspective on why greece is unraveling. Brendan the german finance minister talk to us. He has made it clear that he is not interested in anything but the program. Tom do you think they talked to Christine Lagardes people . Did they talk to greeleys people . Brendan no one talks to greeleys people. Greece is finding out that the deadlines are the deadlines. That is the news. Tom we will continue the discussion through may 12th. General electric is out for with earnings. Stay with us. This is bloomberg surveillance. Tom it is earnings season breaking news on jeff immelts ge. We forget how large they are. What i first see within the headlines is the industrial segment down 1 . It is a nominal gdp, real gdp analysis and looks to be a bit of a struggle when you see that any price already. Brendan this is coming on the heels on the move away from ge capital. We have how with us from Boston Consulting Group. Hal with us. In a very boring but incredible important things they might like turbines, is that a good bet . I think it is, the world is growing coming , economies are growing, we need to have more infrastructure particularly in the developing world. It is a good idea to start investing further in that. Brendan the question we address all the time is why we are rain for it . Do you see a will to go out and pay for this infrastructure we need . In the emerging markets it is there and i assume ge is focused on the emerging markets because that is where the spending is. Tom the technology of how we get earnings ge used to come out with a clear press release and now they are trying to do it over their website, and i do not know what organic Revenue Growth is which is the number everybody wants to know, the interior company Revenue Growth. To be honest, the headlines are very strange, the stock is down 1 , fractionally that speaks to it. Brendan it is fun to be reminded that the journalist is their job is not to make your job easier. Tom jeff immelt, Brendan Greeley mesic, we need to get perspective on the theoretical challengings he is facing. He was doing applied mathematics as a young turk in dartmouth. Net phelps was big on the labor economy later in this hour. We are honored to bring you that phelps on jeff immelt and your industrial america. Professor phelps has been out front in his difficult world on the new new, dynamism. If you were sitting with jeff immelt today, what would be your advice about how to spur that strangest of things, Economic Growth . Ned phelps you have to do a whole bunch of things and any one thing will not be enough. You have to have a change of attitude, and orientation of Companies Towards innovation, much more than we have now. My impression of the established industries in the heartland is that the ceos are obsessed with efficiency. Every dime of inefficiency brings a horde of people who invest that, nobody is thinking about innovation. Tom you address this in your speech at the bank of international settlements. We can bring this conversation forward to the trade agreements. Here is the president and republicans agreeing to go forward on trade, if you are sitting with orrin hatch or chuck schumer, how do we move from the legacy attitude of trade towards the Phelps Fortinet phelps toward net phelpsdynamism. Ned phelps it is huge. Tom what about in washington . They have to have a change of attitude there. Ned phelps what washington has to do is introduce competition to the business sector. My impression of the business sector is it is very oligopolistic, vested interests are dug in and, we have regulations that create a hurdle for new entrants. We are not getting a flow of new entrants. And the government is not just failing to do something about that, it is one of the actors. Brendan i was fascinated by this point in your book, that this we lack the political language to talk about this. Large Companies Often do not like competition. They extol the values of competition but we do not have a Party Structure in america to talk about Big Companies succeeding, that are squashing innovation in smaller companies. How do we change the language in washington to have this conversation . Ned phelps read my book. Brendan that was a shameless plug, even from a Nobel Laureate. Tom hal with us from Boston Consulting Group. What is your worst practice doing at ge . Hal you want to focus and that is what they are doing now. Focusing on the area they can grow in. They have decided to jettison their Financial Services area because they are not going to have the future they need. Tom how do officers delegate responsibility today versus five or 10 years ago . Hal there is much higher delegation in many of these things. What we are watching now is the concerns of the ceos because they are watching difficult decisions being made poorly. There is a real change here that is taking place, but it is switching back and forth as they are trying to find ways to deal with very large companys. Tom they are also working seven days a week. You wonder about exhaustion. Brendan innovation in europe, no matter where you go, you talk to innovators and they described what they are doing as a silicon x. A silicon roundabout in london stockholm is the new Silicon Valley, but Silicon Valley still remains the definition of how you create innovation. What is the element of that . Why is it so hard to export that . Ned phelps although we have been criticizing america and i fully agree with that, i think it has to be said that europe is in much worse trouble than we are. China which likes to talk about innovation, has a long way to go. In europe, there is simply no conception of competition, no conception of leading vested interests to see whether they can survive. The europeans are mired in some sort of classical economics with no concept of innovation change, challenge, brendan but really good coffee. Tom we was big about the American Labor economy in two minutes. Brendan we are going to talk about innovation and labor because they are into intertwine, what happened you are the buddies your company when your coworker is a robot. Available to any place that calls itself a silicon x at bloomberg. Com. Tom good morning. Worldwide with markets on the move, we have seen abrupt moves in both jon ferro and i agree. I will go to the tension at the imf on greece. There is a correlation among different markets whether it is u. S. Futures down 14 or the german 10 year is now at. 05. What do you see off our london desk . John a Southern Movement in the last 20 minutes in the dax, off 2 . I think the bond market is instructive of what is going on. The last 12 months has been a buy everything scenario. Yields follow. Today, you saw that story yesterday, the record low in germany is stunning but a move higher in spanish and italian yields over the last couple of days is the risk aversion we used to see in 2012 come at with the big difference, the overall yield is lower. We are starting to see that risk aversion pumped into the bond market in a way we havent seen in a number of months. Brendan a sharp move starting at 610 this morning, the german 10 year surging down to five basis points above zero. I can only conclude it has something to do with the reappearance of han solo in the star wars trailer. John when you look at a move like that you want to find the trigger. We sit back and everybody will blame greece, i will not pinpoint the trigger, because it is impossible. As tom points out, the last couple of days the concerns over greece have started to escalate. Tom has been in washington and listen to the noises coming from the imf and world bank. The creditors and the in greece are no closer to finding a deal and there are big on reductions coming up and they do not have the money to meet them. Tom i want to go back to your report. The market guys seem to be more in tuned with the angst than the economists. And the talking heads what are the notes going into the london weekend saying about what the markets will do, monday or tuesday . John economist look at this lowinflation environment and are looking for Central Banks to put your foot to the pedal and have estimate. The bond market guys are looking at the moves and thinking, there is a reason to be uncomfortable yields are at record lows and what you could see is extreme volatility. The last couple of months, what you saw with the japanese Government Bond yields, the yields have doubled within a month and the guys on a fixed income side of the business are looking at this bond market and getting uncomfortable with what is going on and the sun the southern direction. If we get a southern rebound and what we have seen the last year things could get messy. Tom thank you so much, greatly appreciated in london with markets on the move teachers 14. Lets get to our single best chart. Brendan robots the topic, this comes from Boston Consulting Group. What if i percent of the worlds Manufacturing Task will be done by robots. How do we know they are human friendly . By 2025, we are looking what countries will say and labor cost. When i but that this i think of chuck schumer, wherever he is in new york, freaking out as he watches what happens when economies innovate and you see labor being replaced. How do you sell this idea the savings in labor cost to the democrats in washington are adamantly against this . Hal i am not focused on the democrats in washington. I think it is the basics of economics. We need to be competitive as a nation. If not, we will fail. We have baggage we need to deal with. The use of robotics makes us sharper. Tom this goes back to we will talk about this later, ned, the arch fear of our listeners and our viewers is simple, those robots are going to take our jobs. Is that still true today . Ned phelps the same process that generate the robots have all sorts of effects on the economy, so it does not make sense to focus on just the robots. You have to ask whether a more innovative economy is on net, taking everything into account, contractionary. Historically, it is expansionary. The years of enormous innovation in the u. S. History from 1830 until into the 20th century was accompanied by a amazing expansion of the labor force. Tom a Nobel Laureate can say that, secretary clinton and the republican whoever is running they do not have that luxury. Brendan how wants to jump in. Hal. Hal ever since there has been a complaint that we will lose all these jobs. Every cycle we do this brendan it depends on how you time the cycles. Of course we will lose jobs and we will regain them on the backside what does it do for the people who are momentarily displaced for the longterm greater good. Hal it takes time, we have been through a recession where we had a lot of that displacement and we will see that again, but this will not happen in the next one year or two years, this is a 10 to 40 year change. Tom you are bringing up what every candidate has to confront, i have 2 smart guys at this desk and the politicians do not care. They are getting heat from americans disenfranchised by this gobbledygook. Brendan voters do not think about the long economic run they think about the negative five years of their own life. Faster phelps, in his Boston Consulting Group data, i was shocked to see the cost savings over the next 10 years in india and indonesia in robotics or zero. Is this a developmental phase they have to go through . Hal their costs are so low, they do not want to put any robotics. Tom this is extraordinary to have you in the real world and talking about a dynamic america, an election coming through, there are 2 americas. To borrow from john edwards. There is in america, including us at this desk doing great, and another america that feels like the boat left the dock. Brendan this is something you have addressed in your work, it we have a hard time dealing with how bp real people make decisions. Ned phelps it is about real people solving real problems and having a new ideas. Classical economics does not have room for that. That classical economics is what most economists are talking about night and day. Tom i say this with Great Respect to your multiabilities across economics, if paul krugman is paul krugman onto something when he says we have to go back to the 1930s and the analysis of pain and hicks . I just want to get you upset this morning. [laughter] is professor krugman on to something . Ned phelps no, we have had too much keynesian economics. It is true that when the government lets people off it creates they become unemployed. To understand unemployment, we have to understand the adjustment process, how long does it take for the unemployed person to get drawn into a job. Brendan we will talk about that in a second, we need to take a break. The forced is not with john maynard keynes, but our twitter question of the day is about disney. Tweet us. This is a star wars report. Tom good morning everyone. An incredibly busy day, futures 15. Markets coordinated, lets call it a risk off fuel. Lets get to our top headlines. Brendan an Unlikely Alliance taking shape on capitol hill, republicans trying to rescue a trade deal back by president obama and opposed by Many Democrats, congressional leaders have agreed to legislation that would give the President Authority to the finish negotiating a partnership. Democrats say the deal will hurt wages and elevate jobs but the white house says it will open markets to American Goods. The International Monetary fund is getting tough with greece, managing director Christine Lagarde told tom keene she will not allow reese didnt skip a payment. Greece to skip a payment. Greece told its creditors earlier this month that it might be able to take a break on this one. Right now, the Islamic State is closing in on a city 80 miles from baghdad. Residents say they have captured three villages near ramadi. Coalition airstrikes will not be used to save ramadi, instead saving a city where a oil refinery is. Pope francis considering a trip to cuba him and he is already expected to make stops in new york, washington, and filled up yet. It could put the pope into the debate about the countries revived relationship with u. S. Instagram updating its guidelines on nudity, no longer a blanket rule to keep your clothes on. The app is now certain images allowing women breastfeeding, nudity in paintings and sculptures, and also. No comment. When it comes to ceos earning their money, nobody tops tim cook of apple, that is the finding in the first ever bloomberg pay index, comparing the come at to what the ceo is paid. Cook writes 17th last year in the highestpaid u. S. Executives. Those are your top headlines. Tom our next hour, the trade pact peter cook will give us a fabulous briefing. Secretary clinton has a new hire, we will look into that. As the banks come out with earnings, we will get an earnings review with betsy grayson, a morgan stanley, with a more than optimistic view on the ability of our too big to fail banks to make money. Time for an important few minutes with no phelps. Ned phelps. Most economists have zero clues about nehrus nuances. They gauge and optimal unemployment rate. Given what the economy and inflation are doing. The debate is heated over where is nehru. We have admin Phelps Edmund phelps. Did you ever think when you are inventing this that it would become a religion of pseudoeconomists like me that would talk about nehru is blah, blah blah . Did you ever think it would be a big deal . Ned phelps i knew it was pretty important stuff. What i didnt realize that the qualifications i made at various points in the years following. I tried to explain that the growth rate shapes the natural rate of unemployment. There are 75 things that vary and pull the natural rate with it. Tom this is a Common Ground with you and just a glitz the growth rate matters. D you have an optimism of Global Growth or u. S. Growth in the coming years, or is it a new secular stagnation who is the economy at harvard summers secular stagnation who is right . Ned phelps i disagree with larry about the idea that we are facing a chronic deficiency of demand. I am afraid thats what he means by secular stagnation. He could have gone another route. Tom can you come back we are running out of time. Ned phelps yes. Tom thank you. Ned phelps i did not go to the office this morning. Tom hal. Thank you so much. Is this a job . For ex report, stay with us. Tom president obama seeks fasttrack authority on trade to keep america out front of china, it is the president and republicans against selected democrats. The bill is due to the imf. On china and his iron or, a conversation with kevin rudd the former Prime Minister of australia. Good morning, everyone, this is bloomberg surveillance. It is friday, april 17. I am tom keene, joining the is Brendan Greeley, Olivia Sterns is off. Brendan you are not hearing things republicans are trying to rescue a trade agreement backed by president obama. Congressional leaders have agreed on legislation that would give the president the authority to finish negotiating the transpacific partnership. Unions an environment of groups oppose, Many Democrats say the deal would hurt wages and eliminate jobs. You can make the argument that a trade agreement like this will increase corporate profits, it probably will. You might even make the argument that it will improve gdp, maybe it will. If it does not increase middleclass incomes, which to me is the greatest problem we face in america. I cannot be for such an agreement. Brendan the white house says the deal would open more markets to American Goods while preventing American Companies from outsourcing jobs. The imf is planning to play hardball with greece. The managing director told our tom keene she will not let greeces get a payment that would have bought the greeks financial leeway. Greece told creditors that it might have to get a payment, the issue comes down to whether greece will agree to more economic reforms. Their finance minister says yes. We are asking for sensible principle that, with a new government, we need to come to terms with our partners on a 4, 5 large reforms that need to be instituted tomorrow, which we can do because we have Common Ground. Brendan greek Government Bonds are headed for their worst week since the new Prime Minister was elected. The low has risen 1. 5 this week and moving today. To keep Federal Reserve officials wary of raising Interest Rates too soon. The lead the fed president says raising rates in june is not his preference although the option is not off the table, and the boston fed president says the Economic Data would need to prove before improve the four date would be raised. Fast before they would be raised. For the first time an american citizen has being accused of being trained in syria and return to the u. S. To plan a terror attack. Officials say he was going to attack Police Officers or military targets. He was trained in explosives, weapons, and hand to hand combat, his lawyer says the charges are a bunch of nothing. Tom we need to report on our own company, the bloomberg professional system went down due to network issues, service is being restored to our customers and we have it on the desk in new york, the bloomberg terminal is used by more than 300,000 financial specials around the world. It is not the force that is with us it is the height, the build us dust buildup in hyperdrive for the new star wars sequel. The trailer was released. Disney stock spikes 1 at the same time. Japans airways is doing its part to promote the film, they will paint one of its boeing 787s to look like the star wars droid. This is great. Will they give us a saber . Brendan i showed the trailer yesterday to my kids and he did not know who han solo was. They were excited for me because i was excited about the return of han solo. Tom four radio, the sound of started the sound of star wars. When Harrison Ford comes back and chewbacca does the voice that is a radio thing. Brendan before that, the light saber ignites and you can hear the sound of luke skywalker. The sound is amazing. Tom can you tell we are fired up . Thanks to tony for retreating that the Empire Strikes back is the best of the movies. I have a fan boy problem and his name is jon ferro. It is something do you have a wide we are seeing futures 14 . Not in terms of the trigger. I think we have had a big runup in european from 20 in a matter of three months, it takes a little thing to the bond market much more the periphery blowing out. Risk aversion feeding through to the bond market. Everybody said it had no contagion risk. Tom you see the correlation into a stronger japanese yen this weekend, what will you look for within the german media and the german press . What is the tone you will be searching for . These two sides are these two sides going to come together and make concessions . That is what has put this back at the forefront of the news flow for these markets. The noise you hear from the imf, from the interview Brendan Greeley did, it looks like the creditors and he greece, they are this far apart. I want to see them this far apart when we have those big bond redemptions through the summer. Tom brendan, i thought your comments or conversation your conversation showed the tension in germany. Brendan we have known what these deadlines are and that there will be a payment due to the imf and there will be a payment due to the ecb in the summer. The question has always been, will we decide to make these deadlines fungible. What i expect is moving these markets is that no, we are not moving these deadlines, they are the deadlines. Tom lets go to washington on trade, orrin hatch on republicans make news with the president , Many Democrats, including senator schumer, upset about a pending trade agreement. Peter cook is in washington. Where are we is this an important vote . Is the deal done or is there more to discuss . Peter this is not a done deal. For american businesses who have made trade their top priority. This bill is the top legislative priority, this is a big deal, a bipartisan agreement with orrin hatch of utah, and his top democratic counterpart, ron wyden, a lot of other democrats upset by this legislation. They will not back it at this move moves the president s trade agenda out of the priest. Out of the deep freeze. Tom one question, how does paul ryan fit into this discussion over in the house . Peter he was part of the negotiations. He signed off on the same agreement, the same fasttrack trade bill that will be introduced in the senate and the house, there will be test votes next week and then votes on the floor. Watch for how Many Republican defections are there, people who do not want to give the president any latitude on any issue, and democrats, they need probably 50 democrats. Businesses are lobbying on this. Positive its positive comments from walmart yesterday. Tom much more on Bloomberg Television and radio throughout the day. The politicians battle, investors go out and do, one of them is James Lockhart, a doer with his public service. Assisted by august the free trade is good for James Lockhart, why is it good for americans that do not have the dealmaking capacity that you do . It is good for manufacturers to be able to export more going forward. I think, over time, it will decrease the gdp. We are a strong believer in international trade. We are an investor around the world. We are an investor in greece. One of the issues not only the payments they have to make to the imf, they have to make a payroll at the end of this month and pay their pensioners. Brendan wilbur ross early ireland is trying to encourage foreign investment, how do you make these decisions in place that are seeing right now as beyond the pale . Week spend a lot of time looking into countries, we invest in banks in those countries. Tom you realize they call their offices the death star . Millennium falcon. Brendan that is the right answer, you may stay. Tom how do you do it, mr. Lockhart . How do you get there so early . It is courage but looking at the macro trends. In ireland, it was more and more apparent that the government was going to take their medicine and he took it early. They cut back on their pay. And it worked. Brendan week one of earnings session coming up next. We will talk about how big banks performed. This is Bloomberg Television and radio, streaming on your tablet, phone, and everywhere else. Tom markets on the move futures 14. Brendan five days after she announced she was ready for president , Hillary Clinton was named gary gensler as her financial. Phil mattingly joins us from washington d. C. What is the significance of this position within the Clinton Campaign . Phil this is a bigger, no other way to cut it. What Hillary Clinton has been trying to do is figure out a way to position herself with the left. There is a lot of concern on the Progressive Side that she is too close to wall street from the paid speeches to her husbands policies, to her connections with wall street. There has been some movement forward, she called out Hedge Fund Advisers earlier this week and talked about interesting something she wanted to address. She wrote an oped supporting elizabeth warren. There has been some movement. Gary gensler is no joke when it comes to financial reform, he was the bane of wall street during his four and a half years. He attacked the 700 trillion Derivatives Market with new rules, some which wrangled the Obama Administration with how strong they were. It is not official, but a big deal. Early feedback last night after we broke this from the financial reform community, which has been skeptical of clinton, very excited about this higher. Brendan deep cynicism is an affliction of political journalists, do we see this as a sincere move or a strategic one . Phil a lot of us shook our heads when she wrote about elizabeth warren. It seemed a little blatant in terms of what she was trying to do. This is a concrete step. There is to think to look at gary gensler has ties to the clinton treasury and was an advisor to Hillary Clintons campaign in 2008. He is not someone who gets sideline, he has sharp oboes and will be in play, he will not be symbolic, not a figurehead. This is a big deal. Brendan we will do a screeching turn and pull up a poll that we will take a look at. The movement on gay marriage in the polls we are looking at, this is a Bloomberg Politics poll, has been extort eric. How much of an issue do you see this becoming in the Larger Campaign as we move forward . Phil so much so that Hillary Clinton had to evolve, 58 saying it is will be legal in the near future. This matters in the Democrat Party and Hillary Clintons position shows that. Brendan our twitter question of the day is the fourth with disney . The force with disney . Tom we are thrilled you are with us. Olivia sterns is off today. We need to get to our top headlines. Futures 14. Brendan an Unlikely Alliance taking place, the republicans tried to back a trade deal. Congressional leaders have agreed on a deal that would give the president the deal to finish to go shooting the transpacific partnership. Immigrants 80 partnership will the International Monetary fund getting tough with greece, Christine Lagarde telling tom keene she will not allow greece to get a payment. That would have given the greek government financial leeway. Reese told us creditors it might have to take a breather. Greece. The victims of last months plane crash are being remembered at a memorial service. The german chancellor is among those attending the event. The plane killed all 150 people aboard. Among the dead with the planes copilot who was accused of deliberately crashing the plane. Right now, Security Officials in washington trying to explain how that gyro copter got through restricted airspace to land on the capitol lawn and why i do not have a gyro copper. The 61yearold man flew under the radar, he faces to federal charges am including a federal a felony. More job cuts on the horizon. The french American Firm will cut 11,000 jobs. That is in addition to the 9000 it eliminated in january it will make the look make them 50 smaller than they were during last years third quarter. The majority of americans think pot will be legal within two decades. A new poll says 13 say it will take 20 years, more than a fourth say it will happen in 10 years and 17 see it ive years away. They are clearly smoking pot and 2 say it could happen in the next year. Most one third of it will never happen. Recreational rick tom important comments from dr. Roubini and we are honored to bring you the former Prime Minister of australia. On the troubled iron ore business of australia. And James Lockhart will join us on fannie and freddie, there is a rumor that lockhart could be selected by the white house to be these are in charge of gyro copters czar in charge of gyrocopters. Brendan our next guest says it is obvious this earnings season has been positive for the banks. He is the coauthor of reckless endangerment. You have josh lets look for morgan stanley, will we see this trend continue . This has been an Investment Banking driven quarter, we have seen disparities. Morgan stanley should be ok. It will be a slight beaten. I am more concerned of fact with the fact that big banks demonstrated that they are the big investment banks. Very little going on on the commercial banking side or Retail Banking side. It has been volatility driven. Equity trading driven. You have seen mixed performance, but generally good on debt trading. You have to say, as rates start rising you will see a lot of that business go away and we will be back to the business of banking and how to how do we agree hedge our books . Brendan this movement away from Retail Banking, are we learning james what the shape of a bank will be in the future . We are starting to, the regulation has been overpowering for smaller banks, we have lost about 25 of our banks are in this crisis, 500 shut down by the f yeah i see an 1800 disappeared by the dfdic. The regulators are pushing the banks to get smaller rate more capital. The u. K. Is looking to make the more retail banks. Tom it ties in with the imf greece, James Lockhart josh, you just nailed it, we going to a higher rate environment and the real people doing real derivatives. Im terribly worried about it. Tom it is a global rehabs that has to happen. There is not enough quality collateral. I worry about it. Tom what is the quality of the shadow Banking System in europe and United States to withstand the shock of those rehedges . It will be difficult, we pushed a lot into a variety of hedging vehicles that are outside the banks. From my standpoint, at least we have built a lot of capital in the banks. Tom will it buttress us i guess that shock . If the problems are outside the bank, the capital inside the bank brendan a run on the shadow Banking System is a good way to describe it. Tom is this front and center or bill gross . People criticize him, he was way out in front of this rehedge stimulus. If you look at where Quality Companies are funded, it is through the capital markets. Locking in longterm, the weaker credits are gone. They are concerned that as rates rise, you will not have volume to put on, you will have more problems. The Capital Buffers are important, but the problem rehedge is an issue. A lot of the bad loans have gone to the capital markets. Tom we will have to come back. James lockhart. Next stay with us. In australia, this is bloomberg surveillance. Tom what a friday. Good morning. The spring meetings of the imf still going on, greece has a difficult thursday and friday. Risk measures surged into a difficult and of april. Nouriel roubini, while he attends these spring meetings in washington and the professor discusses dismissing greece is too small to matter is dangerous thinking. Great accidents are rising because they are running out of money. They have a payment due to the imf. In the next few months here it i am of the view that the probability of a greek exit from the eurozone is limited. They are playing hardball, but reaching an agreement on how to deal with it of the necessary reforms, there will not be any debt. I am still of the view that they will reach a deal. Tom josh rosner with us and James Lockhart. Lockhart on business, rosner on the shadow banking, it is about shadow banking in europe. That is the issue. We have limited insight into what it is there, limited collateral and risks out there. In the euro and the u. S. In terms of future trajectory of rates. Tom we are investing in one of the great fakes yes. Tom you are in the thick of all this. Yes. Tom the travels good, right back . James lockhart with us. Greek is affordable. Get to our top headlines this morning with Brendan Greeley. Brendan something you rarely see in washington. President obama lines up with the pump cans a bill opposed by democrats. He agrees on legislation that the president could finish Transatlantic Partnership. Some say of hurt wages and kill jobs. Some republicans and democrats want to give the president trade authority to fasttrack the deal. The white house writing the rules and setting standards. If we dont, other countries like china most certainly will. We can address all these concerns by passing strong tpa legislation. Brendan the white house says the deal will open more markets to deals and prevent other companies are outsourcing jobs. The clock is ticking for greek result talks before next weeks key meeting. There will be proposals for financial reform before deciding to release more bailout funds. A group working for greece has assigned to meet this weekend. Liam cohen is saying that congress should reconsider that bill on the nuclear deal with iran. All negotiations are going on congressional actions may send the wrong message to iran. It depends on the agreement coming out of the committee, frankly, it looks like there something in the works to make a bipartisan deal. Even if they were to pass it today and appears they will do next few days, should it be for a vote prior to the time that this agreement is worked out in detail . I think that would be a mistake if they bring it to the floor. Brendan is expected to pass the house and senate and give the congress 30 days to vote on a deal with iran. The Prime Ministers hoping that the changes will happen. He will discuss with president obama about encountering extremist groups. Tom we are happy to report on her own company was morning. A significant part of the bloomberg professional system excretes a disruption today. We were served restored service to most customers, including in new york. We are china bring all parts of the network back online. We apologize to our customers. The bloomberg terminal disease by more than 300,000 professionals around the world. In pro football, the nfl is reinstating Minnesota Vikings running back Adrian Peterson today. This is controversial. Peterson was banned from the League Last Year after being convicted in abuse case involving his fouryearold son. He was accused of hitting his son with a switch. Peterson was the nfls most valuable player in 2012. Doing a day to check really quickly. With markets on the move, a major shout out to david of Cumberland Advisors who notices that banks in some parts of the southern and southeastern europe are concerned about greece papers as well. Some of this market move including a lower twoyear yield and the eurodollar weaker to 10791 in the grease reported. Well have much more reporting on this. Dow futures 131. Brendan this is bloomberg surveillance. Olivia sterns is off today. President obama may get Fast Track Authority on trade goals to finish Transatlantic Partnership and maintain influence in chinas backyard. Kevin rudd, the former Prime Minister of australia just released a report called the future of u. S. China relations. He joins us from d. C. Mr. Rudd, the title this report includes the phrase constructive realism for a, purpose with china. Help me understand what that means with china. The first thing that i know about chinese and american friends is that when it comes to things like Security Policy is that these countries are deeply realize. They understand where the bottom lines are from both their perspectives. My argument is to be realistic about the things the two countries ask the disagree on, but make sure you have a protocol to manage this dis agreements. Brendan let me jump in on that. When you say be realist, apply that to actually dumping sand in the middle of the South China Sea to create an island. What is the actual realism to practice their . What does that mean . On territorial disputes, you just mention one, they have fundamentally different positions as the many countries within the region. The question that you have to ask is that in the management of that particular territorial dispute, do you allow people to hold the u. S. China relationship . My argument is that you manage it. On the constructive side of the management, theres a bunch of stuff for these two countries to do while globally together that if you do it well you can build levels of Strategic Trust over time. Not easy, but a credible framework. It translates ok on the chinese side of the argument as well. Brendan we have had a parade of people come on the show saying that the u. S. Watch the rollout of china Asian Infrastructure investment bank. What is your prescription . What is the realist way to approach that . Im not about to preach to the United States government. I think a whole bunch of foreigners coming to the country is not helpful. My advice is that we should frankly call down a bit. It is not pretend the western collapse of civilization as we know it. The bottom line is that is one player among many in the Infrastructure Investments business right across asia where there is Something Like a 3. 4 trillion investment deficit. Theres frankly enough to go around. Tom theres an article on australia calling it the unlucky country. As you know, all of australia is being buffered by these falling oil prices. I want you to explain to our global audience what australia is going to do to stop the decline in iron ore prices. The bottom line is that for 150 years we have been in part and only in part a commodity exporting country. We go back through economic history and their ups and downs and right now, we are going through a structural down. We understand that. It together the 1960s and 1970s and 1980s, we have been down this road before. To go to the second part of your question about longterm restructuring, and our case, it is to broaden the ace of the Australian Company across economy across manufacturers and servers. One of the biggest exporters as education services. We have the single largest presence of Chinese Students in australian universities in any country in the world. We are not just a one trick pony. We have a bunch of stuff that we do and the infrastructure and continues underway. Tom i thought your best export was the veronicas. They are always touring. It is good to see them in america as well as kevin rudd. Greatly appreciated. Have you heard the veronicas new album . Brendan i have no idea what youre talking about. I was going to thank him for purcell of Priscilla Queen of the desert. Tom the veronicas are on a roll. Brendan betty liu explores the future of your workspace. This is bloomberg surveillance. Tom good morning. A stormy day in new york. A stormy day in greece. Let us get quickly up today. David of Cumberland Advisors showing information from cap summary need. Brendan what is happening is that some Central Banks in europe when we talk about this, it is good to get these banks right. These are countries geographically surrounding greece. Some are in the eu and some are not. They have instructed their own banks to be wary of lending to greece thanks. These are verbal orders from the Central Banks. What we are reporting right now is that romania at the very least acted independently. This is how you get bankrupt. Very slowly and then all of a sudden. Tom this is maybe the new challenge. James lockhart is with us. You have a confidence in our ability to move forward here in cyprus and in greece. Yes we do. I agree that we are playing chicken in greece now, but we are hoping that the great government gets their act together. And cyprus were pulled down by the greek bonds a couple of years ago. That gotten out of greek on snow. Most of those countries i assume do not have a lot. Brendan the problem is that you are engaged in very real world investments. The longer these negotiation straw out the worse their position gets because we are seeing that this is not a fixed system. We are seeing the world change in real time and every new drip of news, to live this, makes it harder for greece to negotiate. I agree. It is going to be difficult for this government to do it because they have a left wing and the party that does not want them to move. But theyre going to have to make decisions to save the euro in the country. I think the other piece that is meaningful here is that it shouldnt be a surprise. These economies probably do have limited exposure at this point. Most have limited exposure at this point. The problem is that perceptually, they are making it worse and worse. And you end up with a risk of frankly a real run which make the unmanageable. Brendan let me clarify what happened. Banking subsidiaries of greek lenders in the country to exit all exposure to greek state bonds. These are the instructions. Many of the great tanks to have subsidiaries in those countries. Many of them are nicely being funded by their parents rather than the other way around. Tom i want to emphasize for our audience. This is paul tumble off the Bloomberg News desk. This is the new transmission of information within our Global Financial system. Forget about the canary in the coal mine. I dont even know what the right analogy is. We will continue this discussion into next week as well. We have a far more important in the twitter question. The force is not with athens. Brendan the force is with disney or is it . They have done the will out of this so masterfully as we reach the seventh star wars. We going to watch all six. Tweet us is the force with disney . Bloomberg surveillance. Good morning. Tom we say good morning from new york would german tenured 10 year yield lower. We have positive headlines. Heres Brendan Greeley. Brendan republicans are trying to rescue a trade deal back by president obama and opposed by Many Democrats. Legislators agreed on legislation that would give the president the ability finished negotiation with Transatlantic Partnership. Opponents say it will limit jobs, but the white house says it will open up markets to American Goods. Christine lagarde told tom keene that she will not allow greece to skip a payment. That wouldve given the greek government some fiscal leeway. Greece told its creditors earlier this month that it might have to do just that. Also crossing bloomberg terminal right now, Islamic State is closing on iraqis to be 80 miles from baghdad. They say they have captured three villages. Airstrikes will not be able to save ramadi. Pimco is still feeling the aftershock of bill gross is the parts are. Shares fell more than 5 . The firms father worst withdrawals in history. He left for james n last september. The space s lightship reaches the International Space station and brings with it the worlds first espresso machine belt for astronauts. The jack and capsule was launched in florida three days ago. Its arrival means more than 4000 pounds of groceries and equipment and that espresso machine is for an italian astronaut who has been stuck with instant coffee since the Mission Began last year. Tom you are serious . Brendan that is the best news item that we have had today. Nobody tops tim cook of apple. That is the first ever bloomberg pay index. It compares a companys profit to what the ceos pay. Cook ranks 17th last year and is among the highestpaid u. S. Executives. Tom it is a really legit analysis. I give them great credit for losing the silliness out of it. Looking forward to the 8 00 hour, markets on the move. American express their revenue is a little bit challenge. We will take a look at your credit card. In the future of your workspace we will look at that at eight10 00 a. M. As well. It is the most mail i get. Every time i say the housing economy is better, i am flooded with emails and a handwritten letter saying that you are wrong , tom. I cant get a mortgage. Fannie and freddie mack have become americas housing economy. With us is James Lockhart and arch constructive critic josh rosner is with us. It is wonderful to have both of you here. One to be get away from this diction when do we get away from this diction . Is it forever . There doesnt seem to be much moving in congress. It would be nice if the administration was pushing congress, but they are not. They are sitting back and we are in a stalemate. At the height of the crisis the represented 90 of the mortgages in this country. Tom you are wearing a republican tide this morning. For those of you on Bloomberg Radio, it is blue and has elephants on it. Brendan greeley, do we blame the republicans . Brendan i dont know why youre talking to me about ties. Josh rosner, the debate over fannie and freddie is between economists and pragmatists. It is still washingtonwall street issues. If we were thinking about it rationally. At the end of the day, fannie and freddie operated in various forms up until the crisis fairly well. We had a problem in the 1980s with fannie mae because it was so rely on portfolios and became insolvent on the market basis. But they function as the backbone of liquidity in the secondary mortgage market. They got off track with a Business Model and the ridiculously low Capital Requirements and with the use of the portfolios in the late 90s. They moved into the primary market. And that created the problem. To suggest that we can rub them up and replace them with the banks and a single mortgage securitization platform that is run by, let us say, they think. It does not seem to be a realistic option. How do we bring in private capital . That is the issue. No one has offered a really separable way to bring private capital in. Is this hope and prayer. Brendan let me bring up a chart though. We are looking at basic as antidata. For radio, you do not have basic s and p data. For radio, you have to look at it. Are we too dependent on housing . People have to live somewhere. It is an important part. I think what happened in the crisis was that fannie and down too far in the credit and congress was pushing them to do that and so was the administration. We have recovered in housing. It is a slow recovery, but it is happening. We have banks starting to make mortgages by themselves. The problem is in terms of access to critical hearing and access to credit. It is much a problem of borrowers who really do not have the qualifications for that credit. It is much of a demand problem as it is a supply problem. Tom within that demand problem, you are supportive of the bush family, mr. Lockhart, for years. I believe another bush has another hat to throw in the ring. Could there be a new republican politics for mr. Rosners america that is worried about getting a mortgage . Hillary is trying to talk to people. Could jeb bush go out there with the same resonance that Hillary Clinton is attempting . I think he has a strong message. He is a moderate in some ways and conservative and other ways. The message has to be that we have to get the government out of housing as deeply as they are. They always will be and i agree with josh. We need to find a way to put some other capital in the front of the government when it comes to housing. Brendan i would say that jeb bushs most enduring achievement out of florida is a caged his education. Can you run a campaign on your education record . I think education is important in this country. We have to do a better job of educating our kids from Nursery School and on. Tom is he going to be a six hour surveillance . Brendan im driving this afternoon. Theyre going to see their grandmother and it is going to be great. Tom your agenda. Brendan my agenda is greece. We have seen pressure downward on the bond yields. We have seen news added countries around greece where the Central Banks are telling rate Bank Subsidiaries to limit their exposure to greek government debts. Theres a lot happening today. We always say grace is an issue but it is definitely an issue today. Tom trade war is upon us. This is great. We have an actual trade discussion going on in washington. Congratulations to all for jumpstarting this debate. Brendan my agenda is star wars today. Im clicking refresh on that new trailer. It is extraordinary in a hits all the right buttons to people who grew up with this. I have to explain that was born in 1974 and this was an elemental part of my childhood. It belongs to my own mythology. It brings us to our twitter question of the day. We asked if the force was with disney. Their rollout of this has been masterful and leaking out photos and news of harrison force participation. Our answer yes, it is. On top of frozen, disney has created a merchandising pipeline even hasbro envies. We have got to move on. Disney is a moneymaking machine. They keep recycling their own and they have done an amazing job to moving star wars on to you too. It comes from Brendan Greeley. Im following the millennium falcon. Tom lets go to the money question for disney right now. There is a james who is three years old. Will grandpa be taking him to star wars . Thats all the disney people would like to know. Grandpa will be taking him and so is his father who is a star wars fan. Is going to be interesting to go back to see the special effects from the first part of the series relative to todays. Brendan i think you have a movie that turns into mythology when he can move it into three generations. A father can pass it on the sun and then to daughter. That has always been disney. Even the recycling of the animation. Tom were going to do a shout out to the best star wars movie the Empire Strikes back pick. Stay with us on Bloomberg Radio Bloomberg Television. The force be with you. Betty good morning. It is friday, april 17. You are in the loop and im betty liu. We are 90 minutes away from the opening bell. Watch the markets. U. S. Futures is taking a hit this morning. A spill over from europe and asia. Some concerns on greece and also a popemobile possible exception of selling in china. We are trying to figure out what is going on here and why we are a sea of red around the world we are keeping on i world. We are keeping an eye on the world. This is the view from the top. For this view, 750 dual us 700 a month. Speaking of highflying entrepreneurs, will the lebron james backed restaurant be the aaa of the pizza world . The problem is that supposedly is trying to be the chipotle of the pizza world. Let us look at the top stories. Yields on greek wants now the