Jobs in this country since late 2007. There is a discussion of the quality of the jobs. We will talk about that. Consumer credit comes out at 3 00. After the bell earnings descendents. Alcoa and bob evans kick off the earnings season. Bob evans, a nice place to have lunch. 1 00, richmond fed president jeff lacher speaking. Soon after in minneapolis, the fed president. Very interesting, maybe the fed president and nobody knows but should know. There is your morning brief. Lets look at the data check. Equities, bonds, currencies, commodities. A sustained equity market. 17,024 on the dow. 10year yield, 2. 59 . Nymex oil pulls back. 11. 33, still outstanding. Brent crude. And there is gold. Let me go to the monitor here. This chart does not go back to 1789. Year, new low rates. Irwin with a great article in the New York Times today. The idea that every asset around the world including spanish bonds is in a bubble. We will talk about it. Talk is almost too much to about today. We look at the front pages, the webpages. Here is our front page. Here is scarlet fu. Israel is launching more air and sea strikes in gaza third and military says 50 targets struck in hamas controlled region during israel is also calling up reservists for possible ground operation. This is after palestinians fired rockets into israel. The recent violence came up after the kidnapping and murder of three israeli teenagers, setting off a chain of events. Followed by the kidnapping horrificre it was of a youth from palestine. There,ine, real tension as you see the images of the bridge being blown up. Rebels retreating into towns. New newsnot many stories coming out of iraq. It is something we will continue to monitor throughout the day. Our second frontpage story, u. S. Authorities are looking at germanys Commerce Bank in their investigation of alleged sanctions violations. Germanys second biggest lender may have to pay at least 500 million, and this has to do with whether the bank violated u. S. Sanctions doing business with iran, sudan, cuba area why would Commerce Bank have to pay that much when bnp paribas had to pay 5 billion . It is biggest tension is 17 owned by the german , to Credit Agricole bnp ce, or could be a lot more agreements, negotiations to come area and you wonder where all the money goes. The 9 billion from bnp, where does it go . Does it pay down our deficit . Does it help people in detroit . I dont know. Maybe the authorities could do a bet with the germans today germany. Does germany even stand a chance, by the way . Definitely. I have become an expert in the last two weeks. How many people are on the soccer field at one time . 11. He did not know that. I knew that. Tom, you referenced this. This is the question has everyone asking, are we in the middle of and everything boom or and everything bubble echo neil in said every asset class nearly every asset class is expensive by historical standards. Bonds, whether it is in the u. S. , spain, or anywhere else. Real estate, including farmland, emerging markets you have two interrelated forces more money piling into savings to businesses think they can use to make productive investments. They are hoarding it as cash. This has been an ongoing story. Central banks have been on this Long Campaign of keeping Interest Rates low and creating money to stimulate the economy. We move from the Great Recession to the great distortion. This is what we have to cover at bloomberg is the nowwhat. I do not think we have said this enough. In the past 12 months, the stock market is up 20 . One great example from this article says using the current s p 500 valuations, every dollar invested in stocks buys you 5. 5 cents of corporate earnings, down from two years ago. It is also lower than before they financial crisis. You could make the argument that you are not getting what you should be for your investments. And retirees are not getting the income they deserve because the rates are being held artificially low. I am in the leverage cash one. Two for those are frontpage stories this morning. Our twitter question for the day. Ets look at it bsurveillance what asset is not in a bubble . There is the Boston Red Sox, would be my answer. What is your answer . Eric came up with this, did he . Our intern . Where do you want to put your money now . What can you buy and expect to make a return in the next couple of years . The s p 500 is up 20 in the past 12 months. Theing has lagged even as United Kingdom seems to enjoy elements of the housing bubble. She hasers, published important and early research. If you were to write the seminal article you wrote two or three years ago, what would you say today about where we are now housing economy . I think we are still in the process of recovery, particularly for housing construction. For home prices we are at the latest stages of the recovery. We have seen pretty rapid acceleration at the bottom in early 2012. Last year prices up 11. 4 . Up double digits. The recent data suggests a kind of makes sense. If you look at home prices relative to income or consider arguablyation, we have become overvalued in a lot of the country. We are not seeing the wage and Income Growth to sustain doubledigit appreciations. Is probably a Welcome Development for the market. Here is a Welcome Development. Lets look at the bloomberg chart. This is inflationadjusted prices set in 2014 dollars. We come back to 2003, 2004, 2005, 2006. Why is housing not in a bubble when others talk about the equity markets or commercial real estate . Give another when here, adam. What is another bubble . Oil, bonds. Why isnt housing like highyield bonds . Trying to identify a bubble in real time is extremely challenging. If Monetary Policy makers were able to do so, they would a they would be able to appropriately lean on the bubbles and i think it is a huge debate in terms of any asset class being in a bubble. Specifically on housing, i think if you look at the measures of valuation, we are only slightly overvalued based off the measures. You dont have the amount of leverage in the system that you do typically when you determine if an asset class is in a bubble or not. You do not have the same investor participation. Holding properties, looking to rent them. I think it is different. Obviously we have seen rapid appreciation thread you have to be concerned in regions, but i do not think it has the typical determination she would say as a bubble for asset classes. Michelle meyer with us for the hour. But skip to company news. Here is scarlet fu. Some Congressional Republicans want to shut down the u. S. Export import bank. The bank helps overseas firms finance major purchases or it s p says boeing would have to double its financial backing to airlines. Petsmart is being pressured by two major investors. Long View Asset Management is urging the company to consider a sale following a similar call from jana partners. A holds almost 10 of petsmart while longview has a 9 stake. And a company shutting all its stores crumbs has 65 locations in 12 states and washington, d. C. It will file for Chapter Seven bankruptcy liquidation. No word on how many workers are affected. If you look at how cupcake shops have done, there is so much competition. There is crumbs, baked by melissa, i know he a bakery in bloomingdales, sprinkles. When was the last time you had a five dollar cupcake . America to bank of authority on cupcakes michelle meyer. This is a disease, isnt it . They got popular very quickly. They are so easy to pop in your mouth. Crumbs they are big cupcakes. They are too big. Pay eight dollars for a cupcake . Eight dollars . All these cupcakes are expensive because you buy the brand, the look of it. We could not have this conversation with ethan harris. He could have views on cupcakes. I never understood the whole cupcake thing. I think it is kind of stupid. Well, explain it here it what is so good about a cupcake . A remind you of birthdays in second grade. You kind of want a candle coming out of it. I wonder if it is going to go along like the hamburger bubble. There are hamburger joints everywhere. I understood the other day that one of those juices that we did costs there is a juice craze great is it a juice bubble . Neil irwin, if you are youring surveillance, next bubble article can be on juices and cupcakes. There you go, folks, with our attrition will supplement. In knowna bubble coming up we will be talking about sam. A big disappointment. They are not selling as many of those oversized phones as thought. We are glad you are with us on bloomberg surveillance. We are also on bloomberg. Com and streaming on every device imaginable. Good morning, everyone. Bloomberg surveillance. Coming up on bloomberg television, this is always interesting. Richard dell fun of imax. On the state of media and the state of craft in hollywood and in new york. D of imax. Lfon i am tom keene. With me, scarlet fu and adam johnson. Germany will win. Samsung. Carlet fu on samsung results them out overnight, a quarterly drop in operating income. Second quarter saw profits down 24 . Estimatesnalysts had prior to the release of the results. End, and one low the high and you have apple of course. This is a big deal. And at the same time samsung is trying to put a positive spin on it, saying it sees a recovery because of the unveiling of new products. Sam grobart with the article of the year on apple in bloomberg businessweek, they are saying price matters. Samsung says unit matters. What does the sell side say . Samsung sales parallels with apple maybe two years ago because it is facing slow leadershipck price, transition problems. A lot of investors, Foreign Investors in particular are pushing samsung to do an apple. Buy back its stock, start paying a dividend. Powerestimated the cash will rise to 100 billion by the end of 2015. I have a one Year Growth Rate on apple, just 1 . Cashback,iving whether it is buyback, whether it is a dividend. Investors will continue to wait for samsung to do something. I am not buying a dorky watch. We had a guy on the show yesterday wearing it. It was kind of clunky, like a giant square. Coming up on bloomberg adam shows us as his iwatch, dean maki will be our guest host. We look forward to speaking with him about the labor market. This is bloomberg surveillance. Good morning, everyone. Good morning, bloomberg surveillance. Im tom keene. With me, scarlet fu and adam johnson. Warning must read with our editorinchief matt winkler, marty schankel are all from the wall street journal. Look at this. 125th anniversary. Was a cub reporter when this came out. Next toright down here denver six and seven cigar makers. They had some special celebrity columnists. My morning mustread read is from taylor swift, the songwriter the economist. She is talking about the future of music and she says it is like a love story. She said every fan had already seen this show online. To show them something they had never seen before, i brought out special guest performers to sing their hits with me. I know her. If you were romeo i was Scarlet Letter good music. Today was a fairytale. Excuse me. I thought her work was def leppard. I must have missed that one. We are not the key demographic. You dont think taylor swift is trying to appeal to the Surveillance Team . She can keep up with these guys. She has an excellent voice Mark Zuckerberg also weighing in. This is part of the 125th Anniversary Edition of the wall street journal. Internet for all. Populationof the lives within a Cellular Network it only one third is connected. The challenge is to make it more affordable. I did not realize some of those figures. Powers are there but they have to be upgraded. The data that upgrade process is expensive. In the u. S. Than other parts of the world. On the streets of new york, everybody is doing more and more of this. This is actually interest. There was a picture of everyone staring at their smartphone while waiting for a train somewhere. ,he picture from 100 years ago everyone was doing the same thing but with newspapers. We have not changed that much in our habits, but what we are using. Is it wrong that i am almost fed up with people almost bumping into me because they are on the phone . I am bumping into you. I feel it is more chaotic that we are on phones and not paying attention when the trains are coming. And we trip over each other to get on the train. The 629m being, he of oakland as, having a good year. Didurse, scarlet fu that with a single best chart. Cameery single ball that to me, it went right to my legs, hit me in the shin. It was ugly. Setting the oakland as up to finally win the big one. They are the exciting story in the bay area right now, the oakland as. Congratulations to the journal on 125. Theirr stepped up competition with yellow cabs in new york city. We discuss it next. Coming up on bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Im tom keene. Scarlet fu and adam johnson here. Esther johnson has are tuesday top headlines. Are tuesdayon has top headlines. Children should be treated as refugees in battle. Able told make them be be treated with asylum. Sayingma administration that sending them back home is complicated because of a 2008 Human Trafficking law that protects children. A scorchedearth strategy to get a standoff with rebels. For are holding out final fight with government forces. Forg on a roller coaster hours. It is only fun if youre moving. Two dozen thrill streakers seekers were stranded after a mishap at a six flags and california. The coaster hit a tree branch and the derail the front of the car. Four people were slightly hurt. Those are the top headlines. Top headline. Ferris wheel at the bloomberg summer party. They had to hold my hand. Planes are landing at laguardia. You are waving to them. The sevenyearold is holding my hand. That sounds about right. I dont like those rides. Im surprised they let you one. You are like 65. They said no bowties. Thats what they said. Has lowered prices to compete with taxis. What did your sprint to laguardia teach you . It taught what people already know. By organization was founded a Realty Developer to bring attention to these kinds of issues. Sometimes you need to perform stunts. Like writing a speed bike to laguardia. We had seven people take different forms of transportation to get lip to laguardia. Taxi, uber, airport transportation, and i wrote a city bike. Rode the city bike. Did you wear a helmet . I did. I got there and 49 minutes. You followed all the traffic rules . I followed all paths. Some of the red lights were little but optional. I the middle of my ride, did have an nypd cruiser notice i went through a red light and follow me for a few blocks. You work for the Port Authority. You are uniquely qualified to talk about why america has lousy infrastructure. Theser destroys industries with lower prices come does that prices, does that assist us . Your point is right. The Mass Transportation infrastructure needs to get better. We show that double transportation we need Public Transportation access to our airports, particularly laguardia. It is the only closed in business airport that does not have a direct transportation link. Someta try to create links, but there is no Mass Transportation link. It highlights a larger problem. We have completely underinvested in Mass Transportation infrastructure and it asserting the Business Community and people and passengers. We tried the experiment going out to jfk. We put out a monorail but you have to make three transfers. This thing was how many billions. What are we doing wrong . You dont have one seat ride. Every time, you have to transfer you lose passengers. Even air train, which you described, to jfk, the transfers. There is not a direct transfer platform. You have to get off, walked down, walk. We have talked about building a flyover. A simple 200 foot connection. Us fromlle meyer with bank of America Merrill lynch. Can infrastructure boost the nations economy . Of course. Focus of a lot of the fiscal stimulus we saw during the heart of the recession. Pumping money into the economy, build out infrastructure. That helps in terms of hiring and investing in real time, but it has benefits and multipliers down the line. It can make things more efficient, if it can make transportation run more smoothly. It will be beneficial for the economy. That was one thing we started to see. It arguably did not go far enough. A lot of people say we did not invest enough in wifi, as well. New york city airports now offer 30 minutes of free wifi. Why are they limiting it to 30 . It took about a year and a half of work to get that 30 minutes. The port should be credited for getting the contractors there. 30is being limited to because there was a terrible situation in 1999. I want the answer. With all of these agencies and all of that, what is the number one constraint to better trends like switzerland or Better Airports like heathrow . Heathrow was down in the dumps and they rebuilt it. Why cant the Port Authority or sfo is or lax worst in class. Some parts are pretty good. What are the constraints . And the, commitment, federal government. Because the Aviation System and because item is an integrated national system, you have to have the federal government spend money and make a commitment. There is a satellite system for air transportation, nexgen, you have to spend the money in the time and the commitment to get nexgen in 21st century technology. Given your perspective on infrastructure and logistics, uber price cut. How does this percolate through the whole network and disruption . I think it is a very interesting move. We use uber. There was a Technical Glitch is the reason it came in third. The apps it not work particularly well. That uber a