Transcripts For BLOOMBERG Bloomberg Surveillance 20150303

I have an obligation to speak in the face of these dangers while there is time to avert them. Olivia new questions about whether head lori clinton broke the rules on email while she was secretary of state. She excluded a personal email account to conduct business that may violate requirements. A recordsetting day on wall street for the first time in 15 years. The nasdaq closed at over 5000. It is time for an Interest Rate hike. The Central Bank Must act. What has been promoted has potential bubbles in stock markets. Raising Interest Rates 25 in june. Olivia Interest Rates may not happen until next year. Brendan earning rose 12 . Barclays set aside 1. 2 billion dollars to settle an investigation into whether it rigged currency markets. They may face more than 8 billion in legal costs. What is the most expensive city . Singapore. They beat out paris, zurich, and sydney. The housing prices have soared thanks to rising wealth and an influx of foreigners. The city moved from a city moved from 26 to 22nd. Surf city, a rare hailstorm struck Huntington Beach california. Those are your top headlines. Tom hail, like ice. Very cool. Lets do a data check. Sliding. That guy was stretching it. He had a beverage of his choice going. This is the theme this morning. Careful scrutiny with a risk on field. Risk on feel. Oil does better. On to the second board negative yields in germany. The swiss franc backs up. Weaker against the euro. Global risk. Good feeling life is great, lets load the boat. This is where i buy. I load up in my 401 k . Here is the vix. Brendan the pros on the show love this. I am not a pro. I look at my 401 k , this makes me happy. Tom in 2007, way off. Olivia you would think that greece is on the back burner. Tom it was delicate last night in washington. We are practically family. President obama unable to watch. Peter cook will watch. 1600 pennsylvania avenue. Let me cut to the chase. Has washington ever seen this . Peter not since i have started covering it. The divide between israel and the United States over the speech by Benjamin Netanyahu israel, despite efforts to reconcile those differences. President obama is making efforts to reach a deal with the iranians. Netanyahu said he needs to warn about the risk to israel and the United States from such a deal, but is not trying to disrespect the president. The last thing anyone who cares about israel, the last thing i would want is for israel to become a partisan issue. Ira grad that some people have misperceived my visit here this week as doing that. Israel has always been a bipartisan issue and should remain a bipartisan issue. Peter we will see what happens after his speech. There are tensions here. Not everyone on capitol hill feel good about the relationship. Brendan lets stay on the theme of bipartisan. 50 Congressional Democrats not attending this speech. What are they telling you . What is the story . They are open about what is going on. They do not like the process by which the Prime Minister came to speak. They think it is a breach of protocol. They think it will undermine the u. S. Effort to reach a decent deal with the iranians. They think that alone is reason for why the speech should not have happened and they need to make a statement, including some of the most loyal democrats to israel will not be attending the speech. A tough choice. I spoke to members in the hallway. A very tough decision. Tom thank you. Look forward to the Coverage Later this morning. Prime minister netanyahus speech starts at 11 00. Looking forward to the Coverage Later this morning. To the markets, the quiet in the markets. We speak on efforts as a resilient bowl. Good to have you here, brian. Olivia mentioned the nasdaq 5000. We are back to history. Bring up the terminal, if you would, very quickly. This is how easy it is to work with a terminal. That is the inflationadjusted nasdaq composite. We are nowhere back to where we were in 1999. A lot of reports are misleading about a record high. Discuss. Brendan to have a bubble, you need access. You also need access in terms of the are volume. Think about the bubble we have seen in bonds. Tom they keep going. Brian if you walk down main street in lincoln, nebraska people do not feel the nasdaq has been part of their portfolio. Tom had a you see this working out through the years in the next year if bill gross is over in june and david is down here in september, he is not thinking clearly now. Brian i am shocked that the headline is rosie and pimco do not agree with each other. I am shocked by that. I think we are not going to see comfort ability and until Bond Investors start selling. Olivia perhaps they are going into negative territory. They were triple digits today and today they are in the low 20s. Brian over the last 15 years the standard deviation of Earnings Growth has dropped considerably. Think about the cash of these companies are throwing off and the dividends a are paying. What about price to sales ratios . They are lower and more consistent. Olivia the barricades margins are maxed out. Brian the margin call is wrong for five years. Heres the way like to think about the schiller pe if you use the schiller pe and apply it to two stocks, General Motors and apple in 2000 and two in 2002, you would have sold apple and bought gm. How would that have worked out . Olivia the biggest field to the nasdaq rally. Brian, thank you. Coming up, talking about the explosion in traffic of oil on trains. Raising questions about the keystone xl pipelines. Mrs. Bloomberg surveillance. This is bloomberg surveillance. Tom good morning. The euro number one on my watchlist. With me Olivia Sterns and brendan greeley. Brendan Benjamin Netanyahu may reveal details about Nuclear Talks with iran. He will dress a joint session of Congress Less than five hours from now. He wants lawmakers to stop any deal that offers compromises to iran. Hillary clinton conducted government business with her personal business account. That would break federal rules. Mourners remember boris nemttov. A surprise ally. Iran is supplying heavy weapons. The u. S. Is not involved in the operation. The end of barbara mikulski. The democrat says she will not seek reelection that might interest martin omalley. He is also thinking about a white house run. Mikulski is the longest serving woman in congressional history. A volcano eruption lit up the night sky. The volcano is about 400 miles south of santee auto. Shooting lava was visible for miles. Olivia 5000, the amount of oil being transported by rail has grown. There is also a spike in accidents. In the past four weeks, two oil trains have exploded. For more, lets bring in matt phillips. Why are Higher Oil Prices the solution . As oil has gone from 100 to 50, it has cut incentives to build pipelines. No one wants to build a pipeline when no one is sure what production is going to be like. Lower prices make it more attractive for Oil Companies to use rail more than they are using it today. With prices where they are, they want to get those barrels to the coast. To the gulf coast, and to the west coast where refineries take higherpriced imports and the only way to get it there is by rail. Olivia who was responsible for exploding trains . That is the debate. You have two industries the Energy Company that produced and shipped the oil. Railroads are in charge of moving it. They are on track and do not own the tank cars. Who is at fault and who will bear the cost of more regulation . If only the railroads would keep trains on the tracks, none of this would happen. If this was not so volatile and we had a better tank car this would solve the problem. Brendan is there such a thing as a safe tank car . That is up in the air. Take cars involved in the explosion were some of the newer models. They have thicker shells. It was a straight track. They exploded when they derailed. That raises questions about how we can impasse this with stronger tank cars. The feds are going to be mandating in a couple of weeks. That gets the issues about how volatile this oil is. Tom coming up, a conversation with peter fisher. His expertise from treasury. He is from blackrock on negative Interest Rates. Look for that in our 7 00 hour. This is bloomberg surveillance. Tom breaking news. The International Relations of the moment. Refinancing rate set to 30 . Brendan they are trying to pass a package of reforms. It shows the most important negotiating partner is christine lagarde. Tom a fixed exchange rate, this is defense of their currency. Brendan they wanted a free flowing currency. Olivia the unofficial inflation rate is 270 . The official rate is 28. 5 . Tom brian, here we are. They give us an uncertain neon u. S. Markets do you ignore whether it is switzerland or ukraine . Brian you have to think about that and talk about what it means with respect to global portfolios. We are not there. We think most investors are applying the same template to europe. We do not believe that is the right one. America was able to set itself up. We have not seen that type of change in europe at all. If the front and is what everyone agrees upon, consensus is going to chase that. Where are the earnings and the cash flow going to come from . That is the major question. People are having a hard time answering it. Brendan all of these countries have tremendous exposure to their sovereign death. Do you see a bubble . Brian there has been a reach for yield. Is there a bubble, bubbles tend to correct like we are seeing. It is a good thing. Olivia the damage that Vladimir Putin is doing to the ukrainian economy is more severe than the damage western sanctions are doing. Coming up next we are going to go to barcelona and speak to the ceo of blackberry. Brad stone will be talking to john chen. He will join us from the mobile world. This is bloomberg surveillance. Tom good morning. Ukraine raises Interest Rate. And ever weaker euro. Lets get to our top headlines. Olivia Benjamin Netanyahu will show why he fears negotiations will lead to iran getting a nuclear bomb. The white house was never consulted. Netanyahu rejected claims he is making a shaky relationship with president obama even worse. My speech is not intended to show disrespect to president obama or the office he holds. I have Great Respect for both. Olivia president obama says while he has problems with the president they are not personal. Benchmarks are setting new records. The nasdaq closed over 5000 for the first time in over 15 years. Dow jones industrials hit alltime highs. One reason the fed will raise Interest Rates soon. Potential bubbles and stock markets and i think the fed is willing to acknowledge that by raising Interest Rates 25 basis points in june. Olivia traders say there is a chance the fed will raise rates by june. Google has unveiled a new plan. It could make it easier for google to sign up more mobile device subscribers. Google says it does not want to come mine does not want to compete with large wireless providers. Brendan General Motors facing new lawsuits. Five people who brought injury claims have rejected the settlement offer. It is likely to lead to future lawsuits against gm. More than 4000 people have filed claims against gm. Exxon mobil taking the long view when it comes to sanctions against russia. Exxon has four times as many holdings in russia as it does in the u. S. Sanctions forced the shutdown of one russian project last fall. Saturday night live will start a chinese version. Loren michaels will team up with an Online Search engine. They already stream the u. S. Version of saturday night live to viewers in china. Brad stone watching smart phone prices get cheaper and cheaper. You are with the ceo of a company in the race. I am here with john chen, the ceo of blackberry. This is a touchscreen. 270 five dollars. Who is it for . It is for a similar market the entry enterprise levels. The young people like a more touch screenbased. In developing countries to start . Even with enterprises, the highend, mid to highend professionals they love the keyboard they grew up with the keyboard. The other aspect, a lot of them like to have a touchscreen. They have been asking for one and so we did one for them. It got a lot of attention. How strong is the business right now . It is doing pretty good. It will do better because we just got carried in store by at t. Vodafone is carrying it. The online and limited distributorship, we have been doing good. You have talked about software and bringing blackberry assets to other platforms. Tell me what that means and what you guys have that other platforms do not. The company has been around for a number of years. A lot of patents supporting it. We think it is time to be able to put it on other devices to expand our businesses. This is different from the past. If you look at blackberry, it is limited. I want to serve the entire spectrum. We were fortunate to have a Good Partnership with samsung. A couple of days ago, they announced paired we were able to add security on it. I think the market will like it. You are 10 months into a turnaround. What has surprised you so far . The beginning year is going to focus on financial wellbeing. We are generating a little bit of cash. It is a big change from a couple of years ago. We are executing and delivering phones and software. We are releasing more phones and getting to a point where going to stabilize our resolute our revenue. People are busy doing things. Every time people are busy they are happier. Heres the interesting thing, like the pc business, when the low end stops burning into the midrange, everyone has to innovate more stuff in add more features and functionalities. It has been disruptive. Thank you. Brendan, back to you. Brendan i noticed some tension. You have one asset the keyboard that everyone loves. The other asset, the encryption software. They are either a Software Business or they are a hardware business and they make the keyboard. And important dichotomy for the company. The devices are indestructible. I miss that. I could throw a blackberry across the room. I dropped a blackberry and a pool and brought it back to life with a hairdryer. Tom is the canadian government keeping them a flow . Brian i think it comes down to the hardware in the keyboard. In our business, we love the keyboard. Olivia the president still uses one. We will be back. We will be speaking with tom wheeler the fcc chairman. This is bloomberg surveillance. We are streaming on your tablet and your phone and on your blackberry. That was the show, portland via. Since the recession, we are not building tiny houses. That is the single best chart. This is data from the department of housing and urban development. All of the growth came out of smaller houses. We are not downsizing, we are not getting simpler. What does that say about assumptions i had about the trend in housing . There are two things. The big trend is the knocked down situation, where they are knocking down properties here in the east. They are knocking down both properties in building a big house. This is america. We do things big. Brian there was someone we dug deeply into the data, there was a trend that supports the idea tiny houses. People are building their own houses without contractors. Overall, it is larger. Another thing that could be skewing the data is the fact that we are talking about the percentage of overall home build. The people who have money to build a home have money to build a large home. The trend is very clear. Olivia the average American Home as 2400 square feet. I live in a rental in chelsea. It is not 2400 square feet. Tom i used to live in big places and have gotten used to living in smaller places. I enjoy less space. Brian every once in a while you have to purge the closet. Tom i do not know what i would do with all of that square footage. Tom you throughout the middle child like a month ago. Olivia it is a bubble in new york. Tom can you imagine the day when we throw out our frozen stuff . Lets get to our top photos. Olivia starting in south africa. Helicopters water bomb a large bushfire. Dozens of residents are being evacuated. Tom this is south of south africa. Olivia a portrait revealed of Queen Elizabeth ii. The coins are in production and will appear throughout the u. K. This is the fifth portrait over 63 years. Jody clarke designed the portrait to make her look warmer. Brendan do you think near a allowed himself to age on the coinage of the roman empire . I think not. Olivia google zip day camera through treetops for its street view collection. You can explore the jungle. The team trekked through the jungle to obtain the imagery. The goal is to raise awareness for rain forests preservation. I amex excited. You can go online and see more street view. As we head into the break, answer our question of the day. The nasdaq closed above 5000 for the First Time Since 2000. Tweet us. We are streaming on your tablet, your phone, and bloomberg. Com. Tom good morning, everyone. Lets get to headlines. Olivia israels Prime Minister may reveal details about Nuclear Talks with iran. Netanyahu will adjust a joint session of congress. He wants the u. S. To stop any deal that offers compromises to iran. New questions about Hillary Clintons online correspondence. New york times suggests she conducted personal business with her federal email accounts. A homeless man tried to grab an officer j kagan before he was shot. Police say he was suspected in a robbery and resisted arrest. Teenagers getting virtually free access to ecigarettes. Underage buyers succeeded nearly 95 of the time. Vendors to not crosschecked buyer information. Costco shoppers will be leaving home without american express. They are switching to the synnex month. Costco will team up with citigroup to offer a cobranded card. A rock brand getting ready to end its long, strange trip. The grateful deads final three shows are sold out. Some passes are being offered at more than 100,000. Tom, are you going . Tom no, but i love alabama getaway. We are going to make a Product Announcement and then talk about the failure of education and science. Apple pay even with fears of how safe it is to use, stratos card is different. He has a card of a decidedly different stripe. You built a new toy a better mousetrap. Why is yours distinct . This is available in five different colors. There is a computer pass inside here. It can swipe as though it is your american express, the next it is your debit, your loyalty card. Tom Everybody Loves the idea, we are scared stiff of security and theft. We incorporate a friday of security features into the card. A connect to the phone over bluetooth and can lock down. This card, it is much more secure than the rest of the card in your wallet. We are incorporating a lot of security features. It seems like you are assuming the cars as a clearinghouse. It works identically to the card brendan can we get a shameless plug. He is always holding the card when he is talking about it. Olivia and you can get it in five different colors. Basically, it works as though it is an original amex, mastercard, visa card. It keeps the existing brendan you assume the rails are not going anywhere. Olivia i use my apple pay every day in a yellow taxi. We view this as a compliment. If i am in a restaurant or bar and need to handoff the card, i can rely on the stratos card. Tom are you jamie dimons friend . Are you there enemy . You are taking away the brand. We are their friend. We are working with tanks and issuers. Allowing those that work with us to work with cobranded cards as well and having a digital version of your card. When we are building as the itunes and the ipod for your wallet. Imagine downloading cards instantly instead of having to wait for your cards in the mail you can have them instantly. Olivia the waiting for the cards does not bother me. What is the technology and the card . You said if you lose it, you can let the card no, but it has to be within bluetooth range. It can lock down. If it is away from your phone two hours, you can have it locked down. Olivia if it is nearby . It can sense when it is out of range of your phone. It is about 20, 25 feet, if you get outside of the range, it locks up. We built unique technology that allows it to be used everywhere and we are incorporating apple pay, the tokenization onto it. Tom thank you. In the Foreign Exchange market the euro today below 112. Very close to the nine day. Stay with us. Futures, negative two. Good morning. This is bloomberg surveillance. Tom it is 6320 miles from washington to tehran. This morning, the white house and capitol hill are light years apart. The premise or of israel speaks to congress. The new volatility is no volatility as markets and some waiting for janet. And we to a rockefeller republican about conservative america. Good morning, everyone. This is bloomberg surveillance. We are live from our World Headquarters in new york. It is tuesday, march 3. Im tom keene. Join me Olivia Sterns and brendan greeley. We get our top headlines. Olivia it is the hottest ticket in washington, israels Prime Minister Benjamin Netanyahu addressing a joint session of congress. He is expected to announce a compromise. Netanyahu is gambling that those will delay or derail any deal. House Speaker John Boehner invited netanyahu without approval of the white house. Prime minister netanyahu and as Prime Minister of israel i have a moral obligation to speak up in the face of these dangers while there is still time to avert them. Olivia meanwhile, president obama told reuters that the rift with netanyahu is temporary and will not hurt u. S. s relationship with israel. And officials tell the New York Times that Hillary Clinton used a personal email account to conduct government business. Clinton did not save her email which is required by federal law. She has now turned over thousands of emails. Jeb bush tweeted that clintons emails should be released and he allowed his to be seen as governor of florida. And for the first time ever, the nasdaq closing over 5000. The s p 500 and Dow Jones Industrial opened this morning at also alltime highs. That has bill gross saying it is time for Interest Rate hikes. Gross told bloombergtv the Central Bank Must act because borrowing near 0 are threatening to create market bubbles. Bill what has been created can create potential bubbles in the stock market and bond market and i think the fed is willing at this point to at least acknowledge that by raising Interest Rates 25 basis points in june. Olivia meanwhile David Rosenberg disagrees full stop he says the fed will not raise rates until inflation actually hit 2 . That may not happen until next year. Brendan in london, shares of barclays are down as much as 3 . Earnings plunged at its investment bank. R clayton set aside 1. 2 5 billion dollars to settle an investigation as to whether it rigged currency markets. Barclays may face more than 8 billion for misconduct. The world was the most extensive city is singapore. The Economist Intelligence unit said in a poor beat up paris, oslo, zurich, and sydney. Housing prices in singapore have soared in recent years. New york is getting pricier, too. The city move from 26th most excessive all the way to 22nd. A rare hailstorm struck Huntington Beach, california. By the time it was over, about an inch of hail cover these sand. It looked like snow. The second winter storm to hit california in three days. The first one brought rain, this one brought winter. Tom Bloomberg Radio predicted this. I am kidding. Olivia for those of you on radio, we are looking at a picture of this. Brendan it is great when people in Southern California for gloves on when it gets below 50. Tom that happens as well. Lets look at a data check as well. Ukraine braces the Interest Rate at some point of production of a staggered economy. The euro, a big deal 1. 1158. That bears the most careful watching, and the parity as well. We will speak to David Rosenberg on Bloomberg Radio in our next hour about the various markets and movement. We are practically family. So said the Prime Minister of israel as he attempted to defuse the uproar over todays speech to congress was that president obama will be unable to watch. Our peter cook will. He will watch the speech and reaction of democrats. The majority of republicans and those occupied with other matters at 6000 pennsylvania avenue. Peter, we talked about there being no precedent for this. Who is the Prime Ministers speaking to . Is this basically an election speech for israel . Peter that is certainly part of the mix here, tom. He faces election about two weeks time, and that is one of the unusual circumstances here but the main message is to congress and the administration about israels own questions about the iran nuclear deal, and there is a central disagreement between the Obama Administration and the Netanyahu Administration over whether or not the u. S. Can achieve a deal with that run that provides not only safety to israel but United States, the rest of the world. come in with susan rices job last night, it was susan rices job at the apex. Ms. Rice i want to be very clear a bad deal is worse than no deal, and if that is the choice, there will be no deal. Peter interesting speech from miss rice, she got some cheers and some jeers as well. If this deal is not up to snuff the u. S. Will walk away from the table was the message. The premise or of israel is clearly not convinced the u. S. Is ready to walk away if the deal is not up to his Standards Committee will make that case today. He may point out specific areas of the steel that he thinks are inefficient. That will be interesting as far as he will go in terms of revealing. Olivia peter i was very much struck by those comments by susan rice. Do you think the u. S. Whatever cut a deal with iran that israel disapproves of . Peter i think right now that that is possible. One thing they present point out yesterday in his view, is listen come in the cross the Prime Minister of israel, while he respects him, he has been wrong about the iran negotiations, and he could be wrong this time as well, so is it so there is a gap as well. It remains a possibility, certainly nobody in the administration wants that to happen, but that is the reality we are looking at now. Brendan peter, i was struck by the fact that the president that sent to the white house not just susann rice but also samantha power. She said we believe the u. S. Israell partnership transcends politics. That sounds a little bit like boilerplate, but how was she received at aipac . Peter i listened to that speech, and she got a pretty warm reception. Again, susan rice, lengthy speech from susan rice as well and she got a pretty warm reception at moments, she talked about her own experians to israel, so i think they got a warm reception, but you could feel the tension in the room, brendan, while both of them were speaking. Tom peter, thank you. Mark halperin and John Holloman will bring you there perspective their perspective as they listen to netanyahu. Surveillance no one has thought harder about this alchemy then peter fisher at blackrock. Also joining us as Peter Wallace of the American Enterprise institute as we discuss later in the hour what has become of his Republican Party. Peter fisher we have a disagreement between bill gross at janice. Days and rosenberg with us in an hour ago in an hour or so will say later, how do you get in this position of a parlor game of gaming our centralbank . Peter f . well the fed gave us a calendarbased view of race, and now they are trying to move to a data dependent view of rates, they still published the dots, so we are left between their time passed and the data and now we enter the mix, in comes stan fisher saying 0 is the wrong number for this economy, so there is a lot of mix right now. Tom the mixture andin washington, Peter Wallace, how we got into this mess, let me guess, both of you as august mines, how distorted are we right now, Peter Wallace . Peter w. terribly. We are more distorted now because the fed has made some decisions that are very unclear, and were operating under a regulatory system now that is far different from what we had in 2006. Tom have we changed, steven fisher, from income statement dynamics, companies doing that over to Balance Sheet distortions with the fed and wanted of easing . Peter f. yes, seven years of Interest Rates is a funny place to be, that means we have a zero risk free rate coming up on a decade. A zero risk free rate is not something the fed is focused on. Tom we will come back with peter fisher particularly on negative Interest Rates, and Peter Wallison he is a rockefeller republican. Brendan he makes a face every time you say that olivia coming up, we also want to talk of it he nasdaq hitting 5040 since 2000. What is the difference between that market in todays . Tweet us bsurveillance. Tom good morning, everyone. Bloomberg surveillance. We are discussing rockefeller republicanism. We would assess a in a bit. Our morning mustread, it is not on rockefeller republican politics. Here is Olivia Sterns. It is those. Olivia my morning mustread comes from Alan Reynolds of the cato institute. He is writing in the wall street journal today when he is saying what he accuses Elizabeth Warren of being wrong, that incomes have not just stagnated since 1980 but they have actually stagnated since 1968 and is also saying the used average income for the bottom 90 as a process for median as a proxy for median wages. How do you define middleclass . Peter f. i think the Median Household Income is the right place to look, if you want to look at what statistic i would look at. I do not have data at my fingertips, but it is an important piece of data. I think they have been stagnant a long time. Olivia is this mumbojumbo, Peter Wallison . Peter w. it is not just that they have declined. Median Household Income that is very significant and very rare, too, because over time in the United States that has not been the case. Olivia is this stagnant from the 1960s or the 1980s through 2008 . Or is it hard to say . [laughter] brendan the one of events going on is in that essay in the wall street journal, we are looking at different ways of measuring the economy for stop you have panel data, which economists sometimes rely on, you have this new approach looking at tax return data. Peter fisher, what is the best way to look at his data so we can all be examining the same apple . Peter f. hmmm. I think the tax data is good, but then you have got to follow the changes in a tax code. It is good to work with tax data, but as the number of people have pointed out, you have got to watch the changes in the tax code over that long a period of time. Tom we will talk about this later in the hour on republican politics, but the emotion comes to trickledown or trickle up economics stop where did trickledown economics come from, Peter Wallison . It really have not worked out has it . Peter f. peter w. it is only a political phrase, trickledown economics it is a way of describing the significance of growth and incomes by calling it trickledown, that in fact we all know where growth and incomes comes from, and that is from increases in productivity, and that means through investment. If you do not have investment, you do not have growth in incomes. Olivia coming up on surveillance, we will be talking about something that is not a middleclass problem. We will be talking about negative Interest Rates in corporate debt. Both nestle and bp to a become covenant charging investors to hold their money. Tom good morning, everyone. Bloomberg surveillance. Futures 2. Lets get to headlines. Olivia Benjamin Netanyahu may reveal details two days before the talks with iran over nuclear. He wants the u. S. To stop any deals that offers come from ices to iran. Netanyahu said that would threaten Israeli Security. New questions today about Hillary Clintons online correspondence as secretary of state. The New York Times said she conducted a government business with her personal email account. That would break federal rules. Also, mourners are remembering russian Opposition Leader boris nemtsov. Nemtsov was gunned down friday night within sight of the kremlin. He was one of the most out close outspoken critics of russian president Vladimir Putin. And taking Saddam Hussein hometown from isis militants. The assault of the Northern City is in its second day. The u. S. Is not involved. Taser International Getting closer to a police chief that had bought the companys body cameras. Taser makes stunt guns but is also a leading supplier of body cameras. It hired some recently retired chiefs as consultants. Now to a amazing video from south america. A volcano eruption lit up the night sky. The volcano is about 400 miles south of santiago, chile. It was visible for miles. People living or by were evacuated. Those your top headlines tom. Tom very good. Central banks are powerful and as they establish policy to drive bond Prices Higher and yields ever lower, corporations well, reluctantly or maybe with some enthusiasm follow. Your fisher is in your director is senior director at Blackrock Institutional study is never seen this before apple at3 8 3 8 a percentage point. It is probably be careful what you wish for. What is the risk to our financial livelihoods of the shockingly low rates now for corporations . Peter f. i think first lets see where they came from. One of the theories of ortega easing was the Central Banks in this case, europe is on the verge of it is going to buy a lot of not very risky assets and force investors to buy riskier assets. It is not working. It did that really work here. It had a little chase for yield but mostly address up the price of low risk assets, as we see in europe today and even with bonds. So the Central Banks have been hoarding the best credits, and that drive the price up. Investors want more of the same. Tom this is not in the textbooks. Peter f. it is not because most of the thought about central bank was the size of their Balance Sheet, not with they would do to price the muscle is driving a behavior of cash flow hoarding. People want to board the best asset. Tom then that value brendan in january used book to Daniel Kruger of bloomberg news, and you said coming im tried to figure out, investors are underestimated the ultimate corrections that the fed will have to make, so right so what is the right metaphor here you go is the yield curve like a spring that it got to pop back up here . Peter f. it might back up. We do not know the answer to that. In a world that might have deflation or oppressors, we might have the raising rates moving up the belly of the yield curve, and i and not sure of the 30 year point or the 10year point. That is yet to be seen but that is part of the uncertainty we all face. We have called it liquidity trap. I would refer to call it a volatility trap. Tom how about a free lunch . A free lunch induced by the genius of helping us out of the financial crisis . Peter f. a free lunch for whom tom . Tom i am asking you. Brendan it is a new metaphor for him. Usually uses hunchpunchbowl. Peter f. yes, it is a free lunch. The worst thing is it drives down margins and discourages lending. Olivia which is ironic because the intention was to drive lending. Do you think that your willingness to buy a negative yield Corporate Bond is a that on deflation, is a bet on appreciation of the currency, or is a bet on further cash hoarding . Peter f. it is a bet on wanting to have the low risk asset the quality asset. You want to keep that in your portfolio. The world is a risky place. I want to keep that in my portfolio. Tom mr. Wallison, back up illinois, that was ugly as well. Is that the outcome of this . We have further bank unrest because of how surreal peter fishers world . Peter w. banks are in serious difficulty for a number of reasons. Mostly i think the kinds of regulations put on them. We are talking about the financial industry when we should be talking about the real economy. The question is with Interest Rate so low, why is it that institutions or firms that are producing things, services and goods, are not borrowing . The idea was to reduce Interest Rates so they would put into place longterm assets. It is not happening. Brendan they are not spending what they have all. Peter w. they do not see the reason to spend the cash or to borrow. Olivia peter fisher, if we do adjust for inflation, it might be textbook because investors have been accepting negative real rates a long time. Peter f. yes i think that is true. I do not think we should be calculating real Interest Rates the way conventional wisdom has us, which takes nominal Interest Rates and takes the cpi out. No one earns their real income approximately in the cpi. Or per margins have been substantial for the last five years, six years, 10 or better. If a Typical Company as borrowing at 5 a double beats credit, and they have 10 operating margin that is 5 real rate. It should be enough to encourage the borrower. Tom peter fisher, thank you so much on the real and nominal. Olivia we are going to the Geneva Motor Show. We will be speaking with the ceo of lamborghini. This is bloomberg surveillance. Hes out there. Theres a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. Somewhere in that pack is a driver that can intimidate the intimidator. A guy that can take the king 7 and make it 8. Heck. Maybe even 9. Make no mistake about it. Theyre out there. I guarantee it. Welcome to the Nascar Xfinity series. Tom good morning, everyone. Bloomberg surveillance. A 1. 1159 euro off the bloomberg terminal. In the morning note talking about the riskon field. Lets go to the bloomberg terminal that we have got here. Here is average on volatility, about a 20, got a 19. I arbitrarily put a 13 on the vix. This is the volatility of the s p 500. Here is a good feeling down here and this is the best, brendan greeley, that everybody made on a more volatile moment. Boy, has that stopped with a vengeance in the last three weeks . Brendan i am a stranger to finance, so the best way i have of his winning this to myself is these periods of volatility is what gets wall street excited and peoria freaked out. Tom this is good for wall street is the generalization and this is more quiet, but in this volatility is the linkage of our finance system with confidence will stop Peter Wallison with the American Enterprise institute with a very controversial work on our financial crisis. Are we getting our confidence back as a country . Peter w. i think not yet. We will not get the confidence back in this country into we have real economic growth, and as we are seeing, we had growth last quarter, this quarter we are taking again. Tom critically, alan krueger of princeton very quickly believes in two americans. We have a prosperous america getting more confident and another america getting left behind. Do you agree . Peter w. absolutely there is a group being left behind, and this is due to a lack of investment. Investment is not happening, people are not interested in taking risks on the future right now. Tom Peter Wallison with us and we will talk politics in a little bit. Olivia sterns has our headlines. Olivia the Prime Minister of israel goes before Congress Hours of now to try to derail a nuclear deal with iran. Benjamin netanyahu will explain what he feels why he fears iran getting a bomb. The white house was never consulted about the imitation from john boehner will stop netanyahu rejected claims he is making a shaky relationship with president obama even worse. Prime minister netanyahu what is not the purpose of my speech my speech is not intended to show any disrespect to president obama or the esteemed office that he holds. I have Great Respect for both. Olivia president obama tells reuters that while he has problems with netanyahus approach to iran, their differences are not personal. And nasdaq has not been asthe days of the. Com boom, and you know what happened after that. The nasdaq closed over 5000. Meantime the Dow Jones Industrial and the s p hit alltime highs, and that is leading bill gross to saying there is a danger of a market bubble. The fed will raise Interest Rates soon. Bill gross what has been promoted has been potential bubbles in stock markets and in bond markets, and i think the fed is willing at this point to at least the knowledge that by raising Interest Rates 25 basis point in june. Olivia according to the fedd s fund futures data, traders say there is a 17 chance that the fed wont raise rates at its june meeting. And google has an android mobile operating system that will that will offer its own Wireless Service that could make it easier for google to sign up more wireless subscribers. Google says it is not want to compete with the larger providers. In fact, it is teaming up with some of those carriers to launch the service. Brendan General Motors facing new lawsuits. Life people who brought injury claims have rejected the settlement offer. It is the first time it happened it will likely lead to future lawsuits against gm. More than 4000 people have filed claims against gm. The company set aside up to 600 million for settlements. When it comes to russia, exxon mobil is going long. The world was the largest Energy Company has been buying up russian oil drilling rights. Exxon has four times as many holdings in russia as it does in the u. S. Economic sanctions forced exxon to shut down one russian project last ball. The question is who will be the first one to shut up the immortal words live from china, it is saturday night . The show was the creator Lorne Michaels will team up with sohu. Com. Sohu already streams the u. S. Version of saturday night live to viewers in china. Olivia shouldnt it be friday night life in china . Tom let me do a data check. We look at equities, bonds currencies, commodities, and futures 3 dow futures made of 19, the euro is weaker. 1. 1160. Careful watching. Nymex crude back above 50, 50. 20 nine. The ukrainian currency has come in as the chinese remembernembi goes ever weaker the 10year. 102 . This is bloomberg surveillance. I am tom keene. With the Olivia Sterns and brendan greeley. Olivia lets head over to switzerland where our International Correspondent on ankles is that the eight event Geneva International motor show with a lamborghini super and a very special guest. Hans, we pass it over to you. Hans olivia, thank you very much. I am joined by stefon vin kleman. Thank you for joining us. Tell us about this car. [indiscernible] it stands for superfast. We were concentrating on three items, weight ratio increasing horsepower from 700 to 750 reducing the weight, we have a perfect weight ratio, we improve the ergonomics, so it is increased by 170 . It is in the big ring, and then the drivability, so make the drivability better by shorter suspension, magna ride. Hans not on selling the u. S. What do they sell for in europe . Stephan around 20 from the coupe. Hans tom keene my host, he goodbye to it that price. Stephan he is a good boy. Hans i think lamborghini, i think low to the ground, yet there is some talk you had a concept talk about an suv. What is your thought . I know the board has not decided. What is your thought of raising this one up and making it a crossover suv . Stephan lamborghini, besides the history of super sports cars we also made a back in time suv so it is a growing segment it is redistributed all over the world, it has a lot of emotion for a fourdoor car, so we think this would be a perfect fit. Hans give us a little but in terms of Market Expectations for 2015, china has slowed down, russia has slowed down. Where are you optimistic . Stephan i am optimistic for the u. S. , some middle east markets asiapacific is an important market, where we have growth and taxation, we have a slowdown in china like you said, but all in all i think we are going to increase the number of sales in comparison to 2014. Hans is that true in russia as well . Stephan russia is a very small market when it comes to super sports cars. So there is a very small market, so we are not so affected by other manufacturers on the fact that there is a slowdown. Hans cap a sales been . How have sales been . Stephan they have been well, so the result car, we almost cover the entire year, 2015. Hans you are in a position to adjudicate the claim that the yen is weaker, you are here with a weaker currency, but no t that much weaker. Do the japanese have an unfair advantage right now . Stephan advantages come and go. The ups and downs are part of our business, otherwise we would move production every second minutes, and i think the more we have a unification of a free market, the better it is also for the currency that we will see where this is going. We are happy at this stage, and we hope there will be further growth. Hans thank you very much, i appreciate your time. You just heard taunt, advantages come and go, i bet these lamborghinis come and go as well. A bargain, tom. Maybe this is not your color. Maybe its more olivias speed. Olivia oh, no, hans nichols that is definitely toms mustard yellow. Tom there is a pothole on 58th street that would take that puppy out. Olivia im not into cars, but that car is great looking, and a ventedador superveloce. If you like cars, good news, we will bring you more special interviews from the Geneva Motor Show all day of bloombergtv, including at 12 00 em, we will show you our interview with you know of daimler. You do not want to miss that. This is bloomberg surveillance. On Bloomberg Television and Bloomberg Radio. We will be back in just a moment. Olivia good morning. This is bloomberg surveillance. I am Olivia Sterns era tom keene and brendan greeley. The Hotel Industry is really hot right now. It is above the 88 that were asking in 2007. In the loop anchor betty liu joins us to discuss why we are seeing these numbers. Betty that is right. And as that, it feels like it is 2000, in the Hotel Industry, we are rocking like it is 2007, and that is a good thing. Hotel occupancy is at record highs in some cities of new york city, libya, you mentioned some of those numbers, revenue or average room is actually at 223. That is double the average of the top 25 u. S. Markets here in this country. That is the reason why our guest on the program the ceo of life stone group, they are investing about 1 million with marriott to bring in some of these europeanstyle hightech rooms into the u. S. It is time to build up more hotels. I do not know about you that but when i go to hotel rooms my two things i want olivia the minibar and netflix . Betty olivia i want free wifi, and i want plugs. Brendan bloomberg surveillance on the television. Betty, we have Peter Wallison. He claims he is not an economist, but we will make them play one on tv. The difference between the real economy and the financial economy, when you look at these hotel numbers that betty is sharing with us, what does that say to you . Does that say this is as arsenic people out to travel . Is that a hopeful sign . Peter w. if were talking about United States, for example, up until now, it has been a good time for tourism because the dollar has then weak. Now you will not hear so much italian spoken on the streets of 5th avenue. Olivia i find it disappointing, but you will hear more chinese. That he is talking about whether or not we are 2007 in the Hotel Industry apropos of the nasdaq is back to where we were in 2000. The wall street journal is saying more december 2007 is more relevant or the nasdaq because that was the last time before p e ratio was at 21 where they are now. Tom i strongly disagree with that, on the comparisons to 2000 , widely off the mark. The profit structure and income statement structure of the nasdaq, either the nasdaq composite or the nasdaq 100, which was hugely apple induced but i think a simplistic comparison to 2000 is flat out wrong, and we learn that four months later when they said the profits were not there in 1998, 1999, and 2000. Brendan looking at those numbers you bring up, i am struck about the differences of the trends we write about and trends in the data. Top of the sharing economy with airbnb, that is not seem to be affecting the Hotel Industry. Betty that is right. Airbnb is still a small part of the hospitality industry. Olivia even your friends warren buffett, is recommending it. Betty airbnb, omaha is not a big plays. Olivia betty liu, thank you very much for that, coming up in the loop also, David Lichtenstein will be up. Tom good morning, everyone. Bloomberg surveillance. I am tom keene. With me Olivia Sterns and brendan greeley. Lets get to top headlines. Here is olivia. Olivia israel Prime Minister may reveal details about the Nuclear Talks with iran. He will address a joint congress. He says the compromise will threaten Israeli Security for seven new questions about Hillary Clintons online correspondence as secretary of state. She is alleged to have communicated government emails from her personal account. The terrorist attack in benghazi, libya and 2012. L. A. Police chief said a homeless man tried to grab an officers gone before he was fatally shot. The audio and video recordings made sunday at the scene of the shooting, police say the man was suspected in a robbery. The confrontation was reported by witnesses and body cameras one by two officers. Twitter is a spending at least 2000 accounts linked to Islamic State according to abc news. A terrorism analyst said twitter has thwarted some of the most important distributors of the terror groups messages. U. S. Security officials want the accounts left active for intelligencegathering purposes. And greece will receive financing through 2020 to promote an economic overhaul. The money will come courtesy of the European Bank for reconstruction and of element. The londonbased lender is looking for a shortage of capital among greece finance companies. Finance ministers approved a fourmonth extension oft the countrys bailout program. And the world was the largest electronic chain, best buy, is slowing down. It will increase its quarterly payout by 21 . Earlier today, the Company Posted earnings that Beat Estimates but it fell short on the revenue side. An iconic rock band is getting ready to end its long strange trip. The Farewell Party will not come true. Cheap. The grateful deads shows are totally sold out. Some passes are on the recent market for as much as 100,000. Brendan, we never ask you, are you a big dead fan . Brendan i do not know, but Peter Wallison just made a face at the 100,000 price tag. Peter w. i am busy that weekend. Brendan you have plans . From the dead to Politics Congress is a gang that cannot shoot straight. Those are not my words, they come from Peter Wallison. The Reagan White House that is what he was doing when the dead were on tour. We just watched the same dance. John boehner cannot pass a spending bill of his own caucus so he goes to democrats. Is john boehner the most or the least talented politician of his generation . Peter w. no he is facing Serious Problems in his caucus and the problem is he has really got to get this behind him. He can do it, you probably will do it this week, he will put a clean bill on the floor in the house. It will pass with democratic votes without a majority of the republicans, and that is the way it is going to work out. The important thing is that the republicans show overtime that they can actually legislate and govern. They have been pushed aside that whole thing has been pushed aside by this fight over the immigration. Brendan lets get out a shovel and dig into the caucus. You are just at cpac, a gathering of the base in d. C. What sense do you have of this will work out, that boehner will be able to pull his caucus together . Peter w. the cpac is probably the worst place you can look to find banner being endorsed putting a clean bill on the floor of the house but that is fine. This is a fight in the Republican Party. There are a lot of arguments in the Republican Party about the right policy. We have to get the controversial is used behind us so we can start doing the kind of legislation that republicans have promised they will do. Olivia peter, what did you learn at cpac . Peter w. i was there to give a speech about my book, which they asked me to talk about because it describes what actually happened in the financial crisis, so i didnt get based each, and what i found what there was a lot of support for the kinds of things i was talking about. That is reducing regulation because regulation was the result of the financial crisis and was unnecessary. Tom the Nobel Laureate of chicago raves about your book. I think liberals would be surprised by that. Why does farma of chicago say shut up and read wallison . Peter w. because we do not need the regulation that comes out of the financial crisis because the crisis was not caused by lack of regulation on wall street, it was caused by the housing brendan Government Housing policies have a distorting effect on the economy, but there is what an economist things on the blackboard and then there is the real world friction to get rid of those will stop people argued to get rid of fannie and freddie, but then there would be huge, wrenching problems in the American Economy if we were to do that. Do you see a transition . Peter w. not yet, and there will not be, especially with fannie and freddie, and until there is some opportunity for both the house and senate to take the same position. Right now, the house wants to move the government entirely from the Housing Finance business was up i am for that. The senate will not do that. Until we have a president that comes forward with a proposal that does one thing for the other we are not going to have any resolution of fannie and freddie. They will stay in place because they are the mainstays of the housing business today. Brendan real quick, you say we are waiting for the house to get on the business of governing but they made their decisions about what they were going to roll upout first. Cant you lay a little bit at their heat . F feet . Peter w. they could have avoided this except they had to finance the department of homeland security, and to the extent that that was something they had to do, either in december or do it in january and february, they said well, we will not do it in january, we will work on it at february, and they ran across this problem. There is a large number of republicans who want to make a statement about what the president did on immigration and i am afraid we cannot get by that problem. Olivia statement is a little bit of a euphemism. [laughter] peter w. i agree. This is a serious problem. These are people who were not interested in governing they are interested in making statements, and they have to be pushed aside, but that means the speaker really has to put legislation on the floor that will solve this problem this week. Olivia speaking of statements the Prime Minister of israel will also be making one, which brings us to our agenda. On my agenda, this speech from prime and mr. Netanyahu speaking to a joint session of congress. He will be the third world leader ever to do so, i believe Winston Churchill is the only as her head of state who has had that honor. Obviously this has been politically devisi divisive. The Vice President is in water molecules that we will hear from Benjamin Netanyahu some kind of revelation that he was hoping will delay or derail a deal between iran and the u. S. Brendan the president has extended an invitation to democrats on the hill in case they needed something to do, and excuse on their calendar. My agenda is china, the Political Consultation Committee meets later this week, and what im going to watch for his luxury, the word within the party is no luxury allowed. What are we seeing in the restaurants of beijing this week . Tom i am looking at auto sales. Coming up here, we will be a 17 million units. Olivia real cars, main street cars. Tom not lamborghinis. Peter w. perhaps a few were olivia perhaps a few were invested in the nasdaq, you would be in the market for a liberating, which brings us to work toward a question of the day what is different about the nasdaq today than in 2000 . First more buyback. The great hunt for yields is upon us. The second back then, tech drove the nasdaq higher. Today it is the fed. Third what is different about the nasdaq in 2000 . It is simple. No sock puppets. [laughter] my big take away is the p e ratio is now about 21, back then it was triple digits. Tom i think that is the right measurement between an elevated pe and something that was absolutely stupid. Peter wallison congratulations, hidden in plain sight. A wonderful book. Peter w. thank you. Tom on what we have all confronted. Brendan, this is history may today, with mr. Netanyahu. Brendan this is, and we will be watching for body language and cues. This will be exactly like a state of the union. We will get a lot of pushback from both sides afterwards. Tom 50 some democrats will not show up. Mark halperin and John Heilemann will show up at 11 00 a. M. Look for their perspective on this moment with Prime Minister netanyahu before congress. Futures 4. Stay tuned to bloomberg surveillance with David Rosenberg on radio, in the loop with betty liu next on television. Betty good morning, it is tuesday, march 3 and we are live from bloomberg headquarters. We are 90 minutes away from the opening bell and we are all over the markets. Stocks are hitting fresh highs. The nasdaq above 5000 for the first time in 15 years. We have a great line of guests. Days after the vote on net neutrality, tom wheeler joins us to defend his decision live from the mobile world congress. Why it is it feeling like 2007 all over again in the hotel world . That is a good thing by the way. David lichtenstein joins us. It takes a lot of moxie to do it. Here is a look at our top stories. Benjamin netanyahu may reveal details today about the Nuclear Talks with iran. He will address a joint session of Congress Less than three hours from now. He wants u. S. Lawmakers to stop any deal that offers come to iran saying it would threaten Israeli Security. He is appearing at the invitation of house Speaker John Boehner who did not consult with