8 30 a. M. , Consumer Price index, do we have inflation . Thats why the fed is meeting today. With the fed meeting, it folds into one. Over the summer, where will inflation trend . Also, we will get a lot of Building Permits and construction, etc. I like eggs and sausage. Where did that come from . I am looking at the teleprompter. Earnings today. Evans. I like mine sunnyside up. President obama will be in new york city downtown. Dont even think about going there. It will be at Anna Wintours house. A bunch of Upper East Side steps. Stiffs. The village is already bad enough for traffic. That is your brief brief this morning. Lets do a data check. There is a big churn with futures up. 106. 48. De is at it is watching the news out of iraq. The twoyear yield migrates up and this is a big story. 0. 50 would be news. Lets go to the mac monitor. Here is the poverty rate for the nation. Go. Up we this is the feeling of a lower poverty rate in the 1990s. Down to 11 and then we come back up. This is 2012, 15 , we sustain. The great challenge as Christine Lagarde mentioned that got the most splash. Your interview yesterday with Christine Lagarde there is many things to it but what captured the american attention is the minimum wage. Its hard to reconcile a u. S. Like that with the being the best economy out there. That is like stgflation. Lets go to the front page. Did not have to go very far to find our first frontpage story. Iraqi islamic rebels are closing in on baghdad. They fought with iraqi forces 40 miles away from the city. The Obama Administration is weighing its military options. The u. S. Is sending 275 troops in to protect the u. S. Embassy. These trips are equipped for combat and will remain in iraq until the situation is under control. That is frightening. Words, marines are going into protect the area so we can get other americans out but we are also talking about sending advisers to erect. Exactly, the u. S. And iranian officials have spoken about iraq. This is on the sidelines of the discussion about the nuclear program. It changes hour by hour. It has pushed ukraine off the map. There it is. It was the only topic in washington. Eric twitter question of the day what is the next move the u. S. Should make . We want your opinion. Our second frontpage story brings us back home another round of recalls for General Motors, bringing the total number of vehicles recalled this year to 20 million. This time you got more than 3 million cars being called back because of admission ignition problems again. The same engineer is being blamed again. Orgio. Me is ray dege this is important. Herary barra is spending first year as ceos testifying before hunger is. What a distraction and we forget that people died over this. Its not about keeping count. Gm has been doing ok when it comes to april sales and may sales. I cant believe its not affecting them. Our final frontpage story is something we have been monitoring all this quarter alibaba is out with a new file as it prepares for its large filing in the u. S. Sometime later this summer, maybe august. It shows the Fourth QuarterRevenue Growth slowed down and margins got smaller because they are spending more to attract mobile users. The filing name 27 members in the partnership. These are the guys who nominate the nine board members. Cofounders the yahoo and the former hong kong chief executive as well. Effect on shares of yahoo in the u. S. Almost immediately which fell almost six percent. What amazes me is the fact that jd. Com got in there faster. It started at 26. 89. What . Those are the frontpage stories and we will continue to monitor them. Our guest host this hour is Jpmorgan Fund global strata should strategist amaroso. Front and center is the fed. Do emerging markets care what janet yellen says . Of course they do. Last year, they had to embark upon a whole lot of policy to stay off the declines of the currency. They will be watching the movement in the twoyear because as that yield goes up, this is a critical thing. Is there a hurdle rate for the two year yield . Is there a yield where it gets miserable for your emerging markets . I think it climbs but it does depend on what the emerging markets do. The situation is not dire because if you look at the real rates in places like turkey or brazil, there is that advantage. They have the carry trade back on the table. Right now, its not a dire place to be. Define what you mean by carry trade. The nominal yield that you can earn lets say in brazil if you take out the inflation and that is the carry versus what you get an United States. Which is the long and the short leg on the trade . The long would be the brazil and the short would be whatever the funding would be. You can earn that. The dollar or the japanese yen . Perhaps. There is a Bloomberg News survey of economists that show they expect the Federal Reserve to raise his Interest Rate faster than what money Market Investors are looking for, specifically euro dollar futures over the next two years. Do you see a discrepancy between the what the fed expects what the market expects . Not right now. Pretty wellactually aligned. If you look at the fed futures rate, it is aligned with the do ts. Up or the dots will move the fed funds futures will react. Is that new jargon . Amoroso explain the dots. Wethis week on wednesday, got the summer Economic Projections from the fed and one of the items we will be looking for is what is the federal funds rate that the fed will see in 2014, 2015, and 2016. There is a great dispersion between tyhe dots. Each member of the Federal Reserve gets a dot on a plt . Thats right. It really highlights the lack of perhaps conviction or consensus within the fed. They will also be watching the mediumdots. The medium dots . [laughter] i can see people who totally disagree with this. Look at that. Its out of control. Is that all i am . There it is, your explanation of the dot chart. We will havey, much more particularly on ukraine. Lets get to some company news we start with bp which has agreed to a 20 Year Contract to supply liquefied natural gas to china. The deal is valued at 20 million 20 billion. In new york, a breakthrough agreement involving walmart and costco. The two retailers and for others have agreed to add information to websites that let shoppers compare prices by unit. Perunit pricing is required in stores in 19 states but showing it online has been pretty rare. Hackers have found a new use for youtube they are using it to sell stolen credit card data. A report says a youtube search for how to get stolen credit card numbers yielded almost 16,000 results. The company is constantly removing videos that violate its policies. Very good, child abuse, its fathers day, heres a tweet tolan of new jersey, good morning to you and your father. We blow up the image. The father is screaming while he was watching bloomberg surveillance. Is that you . That could be adam. This coffee stinks. Tochr ran that down istioes and blow it up, they would spend 5 million on it. I love it. We say thank you. We do have some breaking news. Siemens and mitsubishi have put in a bid and it it values alsom energy, the units that the two companies along with other partners want to buy at 14. 2 billion euros which works out to about 19. 3 billion u. S. Dollars. Ge has put in its own bid to purchase alsom energy units which is more simple. Its almost 17 billion. This is a superior bid but its complicated with two companies. Semen intends to provide franceg for 1000 use in is the headline. The french government wants more job guarantees and want to make sure that siemens does not outsource the jobs. We will continue to monitor this. We will check in with alex webb of Bloomberg News in a few moments. We will take a very quick commercial break and come back and figure this thing out. We want answers on this cap located deal. There is the french president who will speak today. This is bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com and now available on apple tv and amazon fire. We are everywhere. Good morning, everyone. Later this morning, john brown, lord brown, former ceo of British Petroleum joins Market Makers in the 11 00 hour. We are looking forward to that at 11 00 a. M. This is bloomberg surveillance. We go abroad right now. The battle for france at alsom is heating up. Siemens and mitsubishi have offered to buy parts of the company. Bosses from both companies met with the french president this morning. Will be offered derail a competing bid that has been put in by ge and accepted by the alosm board . You just sent headlines on this story so you are on top of it. It looks like the value of the siemens bid when you translate into u. S. Dollars is higher than ge . Thats what siemens is saying. The siemens bid is more complex. Ventureses joint particularly with the Japanese Company and siemens is trying to take the gas turbines. What are the merits of the complex bid aside from the fact that it seems to be crafted with the interest of french politicians in mind . Its higher but it has more complex parts . Argument seems to is left without able asset so it is able to fund its less successful businesses by convincing bondholders it is still a viable bid going forward. This thing has gotten so complicated. Bestis about getting the price for these assets or about spoiling a crossborderu. S. Deal . Ultimately from the political point of view, the french government does not want to be seen selling plum Industrial Assets to the americans. From the Siemens Point of view, its a question that has been put to the siemens ceo on numerous occasions do they want to spoil the bid . They say no but they never like to say that in public. We mentioned earlier that the executives will meet with the french resident president. Who do these Companies Need to impress, is that the president or the economy minister . Ensuring thef deal, it is the economic minister. He is skeptical of american bids in general. When it comes down to it, hollande holds the cards. He is clearly the president. Thank you so much for giving us a primer on the latest with siemens and mitsubishi on a joint bid for alstom. The next up is waiting for ge to respond. I cant imagine this discussion happening in the United States. What i find fascinating is the french government pushing siemens to do something to come in with a competing bid. That franceappear would rather see a deal with germany than the u. S. Somehow european deal is better than the u. S. Deal. If the antiu. S. Deal. We will continue to monitor this. I think they are focused on franceswitzerland. They probably are. Coming up, wells fargo on track to become the most valuable u. S. Bank of all time. We will discuss mainstream versus wall street with our next guest host. This is bloomberg surveillance, on bloomberg television, streaming on your phone, your tablet, and bloomberg. Com and now available on apple tv and amazon fire. Everyone, oilg, is churning as the news comes out of iraq. This is bloomberg surveillance. The second time in two days, islamic militants are ng blamed for an it tack for an attack. Eight people were killed and sunday they killed 48 people. Iraq is being blamed for rising gasoline prices which are on track to hit a sixyear high. The average rice at the pump is 3. 68 per gallon. The jump in crude a boost guest rises another . 10. Night whenild last the u. S. Beat ghsana in the world cup which was an upset. John brooks scored the winning goal in the last minute of the match. Next up is portugal on sunday which will be tough. They got crushed by germany. Ghana would play portugal . This is the group of death. But we beat ghana, we will take it. Christine lagarde was asked three times about the world cup. She had three different answers and they all said nothing. There is other thing she said in it is time for our morning must listen. This is from my interview with Christine Lagarde of the International Monetary fund. The major theme yesterday in the review of america by the imf is what i would call the new neutral. Neutrale. We have revised them or the 2014 numbers but we dont think it will be a downward spiral. 2015 will beat down but we have revised our growth trend on an ongoing basis from where it was on average in the last 50 years or so, three percent to 2 and we have done that on the basis of the aging population and the basis of lower productivity based on the latest trends. There she is. I walked into the press conference with her team not knowing what to expect. I was sort of board. That changed with this statement. Anastasia amoroso is with us. I was thunderstruck by the imf the view of tepid. Your global team at jpmorgan do not agree. I think there is a couple of things from 2014 gdp standpoint, yes, we are revising down the forecast because it is difficult to overcome the First Quarter we had. Not to say the economy is not good. The view forward is there are some reasons to believe that is the case. Thats big news yesterday. The new neutral. Coming up, is baghdad about to fall to islamic rebels . We examined the crisis in iraq and the effect on the u. S. Next. Good morning, everyone bloomberg surveillance. I am tom keene and scarlet fu showed up for week for work and so did adam johnson. Lets do a data check. There is not much going on. Futures are flat and the 10 year yield is flat and eurodollar is flat. Is 112. 70 in the news overnight 34 miles outside baghdad. Lets stay with that theme 100,000 kurds are guarding iraqi oilfields against the extremist rebels in the north and secretary john kerry has suggested the u. S. Willingness to cooperate with iraq to prevent civil war. Michael rubin of the American Enterprise institute is joining us now. He wrote the book, dancing with the devils. He is joining us from washington. How does the u. S. Possibly transition from sanctions last year to coordination this year in a run in iran . It is easy to talk about our shared interests but firefighters and arsonists have a shared interest in fire and it does not necessarily mean we will be on the same page print the iranians might want intelligence sharing because they are the things putting boots on the ground but the problem for us is once the iranians go in, what will it take to get them out . They have been waiting in lebanon for has a lot to stop for 30 years. When we talk about potential u. S. Iranian cooperation, is it military or intelligence or arms . How would it work . It might have to do with intelligence. Troops think american will be marching handinhand with iranian troops anytime soon. The american troops going to iraq will go to effectively the green zone where the u. S. Embassy compound is. Hasmajor problems so far been a huge intelligence failure. We predicated our withdrawal on the fact that we can provide security from over the horizon. To do that, you have to have intelligence on the ground and we did not see the uprising coming. If iranians have boots on the ground, maybe there could be intelligence cooperation and then our drones could come into operation. You are known for going on deploying aircraft carriers and speaking to Senior Officers and briefing them. If you are on the George Herbert walker bush this morning, as it goes to the persian gulf, what would you tell the officers . Ultimately, its an issue of trust but verify. They are going to be wanting to know what actions they are taking will contribute to the stability. They will also want to know the motivation which is easy. Territory,eizing this is a group that has been too radical even for al qaeda. That is why there mission is important. Connect the dots between what is happening in iraq with what has happened in syria and lebanon and whether there will be a spillover into other laces like turkey . I am most worried about a spillover into jordan but i was in mmosul earlier this year. It has always been a hotbed. When i was driving in in late january, Iraqi Army Checkpoint stilled me to go no further because it was not safe. I was with a local vouched for me but when i went income you have the city which is already full of dissent. Of where the Saddam Hussein officer corps came from and tens of thousands of Syrian Refugees sitting idle. It was pouring fuel onto the fire. It is an aftermath or reverberation from the syrian conflict and that is something the iraqis have been warning about for what sometime. You said you are most worried about jordan. Why should we focus on the royalty of jordan . Ultimately, the syrian conflict is spreading not only into iraq but you have tens of thousands, hundreds of thousands of refugees in jordan. Everyone i talked to said they have not seen a more radicalized population. Not just aws are humanitarian issue. When you pour them into a country that does not have a great amount of resources, the price of housing goes up and the price of water goes up and food and other goods. That creates a great deal of tension. Isys already has thousands in jordan and when we think about isys is being a sunni group that lashes out at shiites, most of the people they execute have been sunni who are the low hanging fruit and of jordan falls, that fundamentally reworks the middle east. What you are talking about is a complete realignment. Let me share with you and editorial from the financial times. Can you bringsunnis and shiites together legitimately to fight this . You can but do they have an interest in coming together . At this point in time, it looks like not. Shrines inheshiite baghdad and other cities get attacked, that sets the middle east on fire. Most of the oil in saudi arabia comes in these turn province which is a majority of shiites. I want to bring and Anastasia Amoroso, our gues