Them. Brendan Benjamin Netanyahu says it will lead to a Nuclear Armed middle east. Investors are bracing for a market to drop at the open after fridays jobs report. Employers added 126,000 workers in march less than the most pessimistic free throws in Bloomberg Survey of economists. An outside review is slamming Rolling Stones story about a gang rape at the university of virginia. It is calling the story a failure that failed to follow basic journalistic practice. It unraveled and Rolling Stone retracted it. The review said it may have spread the idea many women invent rape allegations. The editors and author will not be fired. In california Governor Brown is defending his order for mandatory water cutbacks. The drought is in its fourth year and brown has ordered towns and cities to reduce consumption by 25 . He tells abc news it is not just a california problem. Governor brown the weather that is in california will show up am other parts of the world. I can tell you from california the Climate Change is not hoax. We are dealing with and it is serious. Brendan browns order doesnt apply to farmers who use 80 of the supply. He said they are not frivolously using it on the lawns or taking lawn showers. The pay gap is narrowing on wall street. The difference between what banco c. E. O. s and staff make has gotten a lot smaller since the financial crisis. Last year they made 124 times as much and that is down from 273 times in 2006. Tom we will end in sports how many were blown out of brackets saturday. Steve roach did. I did. Wisconsin is taking on duke tonight for the ncaa mens basketball game. The badgers shocked unbeaten kentucky. They shocked me. Along with everybody else in the bloomberg bracket. In is the first time wisconsin has played in the finals since 1941. Duke will be seeking its fifth national title. The wall street journal said today it is duke as obligation to be in the finals like every other year. Brendan i thought it was an amazing game. Frank kaminsky of wisconsin is a big guy who can move quickly and i read a really interesting essay he wrote a year ago explaining why he returned to wisconsin. He realized even though he tired of being poor there is no guarantee of what will happen when you get in the nba but in is a guarantee get to play in front of crowds with that type of energy at that level if he stayed in wisconsin and he got what he spent a year working for. Tom there it is. Great upset to say the least. I will get to a data check. This is important for those of you who stepped out on friday jobs report down 15, yields came in with a vengeance, 184 184 10year. Nymex crude elevated. On to the next screen. 14 boy 67 that v. I. X. Will change and twoyear yield is 0. 49. Not down to record lows but there it is ever lower twoyear fed influenced yield. Yen well under 120 and gold up 16. Lets catch up on the jobs report. Back to world war ii nonfarm payroll with a 50year trend. I have extrapolated from 2000 and it is a stunning chart. Im not saying it is an accurate chart but does it tell a picture of america. Brendan so many indicators change around 2000. Things changed in 2000 but we didnt notice because there was a real estate bubble that kept us from understanding what happened. To understand it is necessary in a lot of indicators to look past the crash. Tom you go past the crash which is about right here and come back here and you have this nice recovery but nothing to gets back to a sense of where we were going back a good half a century. Lets get someone with some Historical Perspective on this to tie it into economics, finance and investment. Friday we enjoyed a tepid job report. Yield surge and bond prices higher. Equities are light signaling a fed caught between a belief and market reality. Steven roach at Yale University and always been worried about bubbles that can develop out of the fed. Steve lets start with first of all you are a die hard wisconsin fan. How exciting is this tonight . Steve it is unprecedent eded since 1941 for badger nation. It even precedes the trend break you show in 2000. It goes 74 years. It is possibly older than you, tom. Tom it is wise guy. Back to the terminal, the caution that you have shown about the American Economic experiment goes back to a vitality that creates jobs. It is Getting Better for a lot of america. Why is so much else of america struggling . Stephen im in the Larry Summerscular stagnation camp. We have tried to squeeze too much juice out of the lemon. We opted for Financial Engineering through bubbles and that provides temporary gratification but ultimately comes back to bite you with Balance Sheet recessions. We are in one now. Tom do you just presume when we finally start to raise rates we have great instability . Stephen we will definitely have difficulty in dealing with another piece of bubble induced Economic Activity as we are doing right now. The debt overhang is there and inability of the economy to generate sustained job growth and income generation through normal economic fundamentals remains a profound problem for the u. S. Economy. Brendan four years ago a book was written about secular stagnation that said there are a couple of things to cause group. Bring kids in from the farm and educate them and put well in the workforce and growth is essentially over. Do you subscribe it that part of secular stagnation . Do we need to look for emerging economies for growth . Stephen we have an excess of supply over demand and we have been on the demand side of the equation for the United States for a long time. The emerging economies especially my favorite one china have been on the supply side producers. So the world needs to rebalance and realign and get more demand out of the producers and less demand out of the excess consumers like the United States. We need to live within our means and countries like china need to step up and stimulate internal private consumption. They have just begun. Brendan often you look at germany that export too much or china that doesnt sell to itself. Is there anything we can do domestically to help that in the u. S. . Stephen we need to wean ourselves from the temptation to juice up our asset markets to derive temporary satisfaction from bubble induced economic growth. Ben bernanke when he is in there give and take with summers he says we can opt to create financial bubbles from time to time if we can to the lower real Interest Rates below the negative 2 level. That is an explicit admission of what has gone wrong with monday Monetary Policy. He admits he tried to use pwublts to stimulate growth. Tom but in defense of those in Public Service this white line is moving up because of those q. E. Policies, those monetary policiless. If we had a steve roach policy there white line wouldnt move up . Stephen if you have good eyes im not sure i do but the slope is still below. The gap is still opening up. That is the problem with secular stagnation. That red area gets larger and larger as we forgo more and more of or longterm potential by, well brendan you are making my head explode. Tom there is the rope slope thats not as good as this. Stephen thats right. Brendan it is not just economists who need to skwraufradjust assumptions, it is voters, people savingor retirement. We have a system built on this of postwar growth. Stephen we promised too much and delivered poorly on those promises. Every time we get into a growth problem, we seem to go for more juice from asset markets to address the problem and thats not the way to do it. Tom allen kruger was sitting here friday believes we are also into two of americas where one is doing well and another group where it is not happening. Do we have a fed that needs to do their daytoday work looking at two americas or can they assume a great Macro Economy . Stephen the fed has blunt instruments. They have a hard time directing a piece of that stimulus to one part and a piece to the other part. What they have been doing with q. E. Is they have been providing a lot of wealth for wealthy people and that doesnt really address the middle class problems that i know somebody like all len kruger is so concerned about. Tom we have a lot of emails on that new Infrastructure Bank in china. We will address that with dr. Roach. Our twitter question of the day, will the jobs report delay the feds rate rise . We are thrilled you are with always. This is bloomberg surveillance in a beautiful new york. Tom good morning, this is bloomberg surveillance. Lets get to the top medicine lines. Brendan we have the Iran Nuclear Deal president obama calling a once in a lifetime opportunity telling New York Times it doesnt mean the u. S. Is giving up military spear superiority or protection of israel. But Benjamin Netanyahu says it will lead to a Nuclear Armed middle east. Rolling stones story is being blasted. It was called a failure that didnt follow basic journalism paralysis. Practices. Right now new details about the campus massacre in kenya. One of the gunmen is being identified as the son of a government official. He and three others were killed by security forces. Militants claimed responsibility. The net neutral ityity guidelines could be in the federal register preventing internet providers from speeding up, slowing down or blocking content. Lawyers for Aaron Hernandez will present their case today. The former nfl star is accused of arranging a Fatal Shooting two years ago. 131 people testified for the prosecution since it opened in january. The defense says it will call all of its witnesses today. The st. Louis cardinals enjoy the best record in baseball, 10 shutting out the cubs in wrigley. Major League Baseball official opening day is today. 28 teams will be in action including toms red sox. Those are the top headlines. Tom they will. There is way too much annism about the red sox. I think that the manager change should have been made and they should have picked john kelvin. Brendan like a button you can push just below toms ear and he starts talking. Tom it is april and everybody is beyond brendan the snow is melting, rosy fingered dawn appears and once again we believe the red sox can take it all. Stephen what if the red sox and conduction lose. Tom we have a triple tease this morning. Stephen roach on china must listen and we will address the asia Infrastructure Bank. Then german exports brendan with a smart chart on that later in the hour. Then we begin to tear apart jerry browns endorsement of real action about the drought in california. I thought New York Times article this weekend was superb. Looking for a smart hour. Then another hour this morning. Brendan chinas 5 years old. The worlds fifth largest smartphone vendor and it is the largest largest. It is projected to have revenue around 16 billion 4 millionbillion more than last year. Stephen roach you look at the world from several different positions and you just returned from china. Is in a company that did everything right or are we looking at a different environment for startups in china . Stephen china is a huge place so it is now just xiaomi and nobody else. There is plenty of room for apple and other smartphones. There is huge demand and what can i say . Plenty of opportunity. Brendan i looked at some research by Bloomberg Intelligence on this and what they are looking at is not just the chinese market. I think i at least was mistakeningly that it was very successful in china beating out everybody else and that accounted for its size but it sis investing in r d in india to understand that market and sell cheap smartphones. We think 100 phones and they are thinking 40, 20 smartphones. Tom they are not even in a market we perceive. They are in a separate world. You were in china a few weeks ago. Is still there that separate pwhraof of tppding and manufacturing of a third world we cannot address . Stephen i think that is true. Tom did is back to your labor ash arbitrage. Stephen there is one that the market is domestic china and russia and emerging asia. The u. S. Is certainly out there at some point in time for them to try to penetrate. But they have got a lot to do in the developing world first. Brendan to your point about developing world with smartphone makers the one from spain has a lot of wireless providers in latin america doing things we cannot think of in the u. S. One thing is pioneering smartphones that run the mazilla operating system but the Network Demand that apple draws on is so great that it is too expensive to run there. So we have a luxury here that prevents us from innovating for latin mark. Tom because the product is so cheap . Brendan they are so cheap and our networks are so good. Tom coming up in the next hour folks, we will have the ramifications of the job report and we will talk about the bullish tone. We are in search of tony dwyer our next hour. Tom good morning, everyone. Washington, d. C. Girding for what is it, april 14 brendan, the various vote on . Brendan april 14 is an important date for me, too. Tom april 14 as we look at the beautiful sunrise. Time for the morning must read. Richard haas been on the show many times with the council on Foreign Relations it seeks regional prime say even a Nuclear Agreement that is signed will tphotnot affect this rattle and may make tit worse. Iran could emerge with its reputation enhanced in a longterm option to build Nuclear Weapons intact. That is one side of the debate. Steve roach we are drowning in complexity over the middle east. How do we make it simple . Stephen pretty hard to do. I read tom friedans interview with obama on the way in this morning and the president tries to make the point that this sis an opportunity that we have to seize and it is hard to argue with that. Tom the ambassador agrees with that. Stephen we have to deal with this. We cant always be defending one position and not allowing for the possibility that we do have to take some risks as the worlds superpower and the president s point on that is a powerful point. Brendan i also think there is something that bob corker of tennessee the republic and the president know to be true and neither can say which is we dont have the power to work our will in the world the way we used to. We cant look at iran and make iran do anything. This is the hardest thing to do in american politics is accommodate the rise of other powers when away dont have any when we dont have any choice but to let them grow. Tom i know you have studied economics the game theory of the degrees of freedom and number of players within an iran, what is it p5 plus 1. In are a lot of there are a lot of players and that makes it harder for the president to speak to congress and the congress to speak to the president. Stephen congress is sort of skirting the edges of what is appropriate in weighing in on the president s role to formulate Foreign Policy before it really cuts a deal. And i think the president alluded to that and had alluded to that for some time. Tom steve roach will us. We will get to china. Our twitter question of the day moves on to the challenge that the fed has with the job support delay. Markets moving friday. Stay with us. Bloomberg surveillance. Tom good morning everyone. Dow futures negative. Gold up a solid 17 as we catch up with thursday of last week. Lets catch up with the top headlines with brendan. Brendan now this a he has the framework after agreement president obama has to sell it. He tells New York Times it is opportunity of a lifetime to make sure iran doesnt get Nuclear Weapons. He says the deal doesnt mean the u. S. Would fail to protect israel. The chairman of the senate Foreign RelationsCommittee SaysCongress Needs to play a role. I want to see a negotiated agreement. I know a lot of water has to go under the bridge the next 90 days and it is very important that congress is in the middle of this and understanding, teasing out, asking those important questions. Brendan president obama praised senator corker as somebody who is sincerely concerned about iran but the president says he insists on preserving his right to enter into deals with foreign powers without congressional approval. Futures indicate u. S. Stocks will be lower at the open after the disappointing jobs report with just 126,000 workers in march the fewest in more than a year. There is concern a weaker economy may lead to a drop in corporate profits. Closing arguments set it the Boston Marathon bombing trial. The Defense Attorneys say he was in the attack but he was the pawn of his brother who died in a shootout with police. The jury is expected to find him guilty and they will have to died whether gets the death penalty. With yemen rebels are ready it resume talks to some the crisis but they want the saudi group to under air strikes. Rebel leaders wont accept the president returning to power. Disney is betting on americas love for Fantasy Sports. The party of espn is investing 250 million in the online Fantasy Sports business draft king. That values it at 900 million. It is promising to spend more than a half million advertising on espn in the coming years. John oliver hits ed snowden with tough questions. Here sis the post taking snowden to task about the risks of dumping classified data in the hands of journalists. We have to accept