Charters biggest shareholder is billionaire john malone. Charter tried last year to buy Time Warner Cable, but that offer was rejected. Once again greece is trying to resolve its differences with europe, so yet more bailout money. Talks resumed today between greece and the imf. Greece is running out of money but european lenders will not release the bailout funds unless the greeks promise reforms on labor and rules. The biggest political up saint a decade. Polish bond yields rose after andres bruno was elected president. He also said said vice chairman sally fisher says the central bank is playing a waiting game when it comes to Interest Rates. Says of the fed raises rates too quickly, it will be difficult if the fed if the economy does not take off. We have another phrase. Our processes are not date determined, they are data determined. Wait and see what happens. We do not have to announce we are going to do it in september. If the economy is growing slowly, we will wait. Vonnie Stanley Fischer says putting too much importance it on the economy is and pro basketball, houston state alive in the western conference finals. James harden scored 45 points to lead the rockets to a 128115 win over the warriors. The warriors lead the series three games to one. Steph curry took a nasty fall in the second quarter. He went to the locker room for an hour before returning, ending up with 23 points. You always return after going to the locker room. Brendan i cannot even deal with that footage right there. I would never want to feel that much pain. Durable goods orders show up at 8 30 a. M. Hopefully they will not be in as much pain as steph curry. 9 00 a. M. , case schiller, we will see what housing looks like. More home sales data. And also the Consumer Confidence index. Tom i want to get a quick look at greece before we get back careful analysis of this historic television and cable tv merger. Risk off decidedly this morning. Nymex crude and the euro under a 1. 10. On to the next screen, please. The vix showing complacency. Of course, the greek twoyear is worse than it was two hours ago, showing the tension. That is not a typo or a 25. 8 per you per year yield. I dont not know what we learned over the weekend. Here is the catharsis of two ugly moves. What is the immediate thing you are looking at brendan, monday, tuesday, wednesday, and into this week . Brendan i do not think there is any specific thing. We had a New York Times article. We had a young is verified guess oped yesterday. We are going to talk about that, featuring roughly the same thing. I think the movement we are seeing is more defiance. Tom i like the word there defining it as we saw it in our story out of athens this morning. Lets go to breaking news. This is our most interesting transaction. Im flabbergasted, but i will also be flabbergasted at the government response. Chris marangi is with us and alex is with us as well. I want to go with us why would the government allow this transaction if it did not allow the last one . They probably have to break up comcast as is. Even when you put these three companies together charter Time Warner Cable, and bright house, you end up with a company that is smaller than current comcast. I would think that if the government had a problem with the transaction, they would also have a problem with comcast has comcast also owns nbc universal. They are a much bigger company. Tom the distinction is broadband. Through your prism of reporting, what does this mean within broadband, not our espn or that but what this mean for the Internet Connection that we get at the house . Even then this company is going to be a Smaller Company than current comcast. I would guess that we already know tom wheeler called the two ceos of these companies and the fcc and said because we rejected comcast is not mean we will reject all cable deals. That is a strong signal that this deal will go through. Brendan but the Justice Department has been out in front of the fcc and worrying about some of these deals. I worry about when we tried to figure out what the competition is for, we are not talking about competition for the consumer. All these cable groups have monopolies in their own foot trends, on their own wires. We are looking at the way they compete for suppliers. Alex the fcc had a problem with comcast Time Warner Cable because it had no Public Benefit. It was not that it was bad, is the it is that it was not good. How is this good . Tom i am thunderstruck by the valuations at 195. 71. 5. 5 times debt to equity. This is like an oldstyle john malone transaction. This is like back in our youth. Chris this all started back in june of 2013 when john pronounced charter, his horizontal acquisition machine. He got sidetracked, but it looks like he has finally gotten his prize. Tom is this dinosaurs mating . Chris no, it is all about broadband. Tom it has nothing to do if my espn, my nhl . Chris importantly, the Cable Companies control the last mile. They control the connection to the consumer. Brendan to alexs point, do you see any consistency value would say yes or no about this deal . Chris i definitely do not see consistency. The broadband was brendan we have been behind. We were four downturn why do we go up to 25 gekko chris even netflix says that you do not need 25 down to get good service from netflix. But you have to pick a number, that is the number that they picked. This new combination will be about 24 . Tom can we have a moment of silence for Robert Marcus . Alex sherman, have we ever seen this in the cable industry where he patiently waits and waits it is courted at the altar, and here we go . Alex you could say today is a victory day because charter landeds prize, but charter could have acquired Time Warner Cable. Now they are buying them for 195 per share. Tom is this stupid money . Alex charter stock would have plummeted if the deal did not go through. I was talking to various advisors and people around the deal over the weekend. They describe this as manifest destiny for john malone. Tom your cfa book, it says if you see manifest destiny, run. Alex chris it is not as big a gap. Alex but this company all teas but this company, altice just forced charter to pay more. Tom charter meeting with Time Warner Cable. Manifest can we get manifest destiny . Brendan we are sticking with it for our twitter question of the day how much do you lows your Cable Provider . s cable consolidation good or bad for the consumer . Tweet us bsurveillance. This is bloomberg surveillance and cable report. Good morning. Tom it is a best and beautiful thing, a fourday work week in the United States of america. Lots going on. Risk off in the markets. We have a big megamerger in charter acquiring Time Warner Cable. Lets get to our top headlines on a tuesday, not monday morning. Vonnie he is responsible for the look and feel of apple s most important products. He worked closely with apple cofounder steve jobs. Tim cook has expanded johnny ives role. The wall street journal says federal prosecutors will probably bring charges. The sticking points are the size of the fine and whether gm will need to plead guilty. It is the worst memorial day weekend for 2001. Since 2001. Tomorrowland had significantly less than expected. It is the first time in three years tom the movies yeah, big deal, but it really was a nonevent for hollywood over the memorial day weekend. Lets look forward into our show, bloomberg surveillance. Chris marangi is with us. We will talk about the game theory behind charters acquisition. They were forced into doing this expensive deal, some would say. Productivity brendan has a phenomenal chart on why america is different than europe. And we visit with they are not chanel but hermes somehow gets it right. I will try to score another bow tie off it. Shameless plug. Brendan you are on your own when you talk hockey and bow ties. Tom greece deteriorates. Also italian and german officials they opine that will they opine decidedly will they opine decidedly against athens . Hans nichols what did we learn over our three day weekend . Hans co. We learned the germans are not moving, greeks are not moving, and greeks are increasingly concerned. Nothing has changed from a month ago. Brendan at what point does a flutter of news turn into risk . Hans before, greece would not be able to pay their imf interest. They have a june 15 deadline now. This morning has more weight because previously there was a letter reported after the fact from Alexis Tsipras to madame lingard two to madame lagarde. That is a real deadline. I sit real deadline so many times, though, i do not even believe myself anymore. Brendan we saw two pieces of news about Yanis Varoufakis over the weekend. About how he deals with economics in general. There was this project syndicate oped in which he was defiant. Does it feel like he is prewriting his own obituary here . Hans if you are thinking of a way for maybe him to exit and for him to clinch a deal, his exit could be one bank. For he and sue reza are one and the same and he and sippers are one and the same. The idea of compromising on austerity is anathema. That is what they are saying we will not reform or cut back on pensions reform labor laws. Yesterday it was said that the Civil Servants are too bloated and their pension payments are too high. There is no coming together. Tom what is the position of germany . I saw Angela Merkels photograph over the weekend. Is there a nuance to what you observe in berlin of berlin . Hans there is a difference between Angela Merkel and her finance minister. He is clear that it is up to greece to do what it is what is best. Merkel is thinking ahead if there is a second or third bailout package, what does she need to do to keep her coalition together . She is thinking about speeches more about what if you do get an agreement, what is the next step . The german public is not prepared nor in the mood for more money for greece. Tom bring up the euro, if you would. This is really important. We are back on parity watch. We are coming back on a weaker euro, and you get down to 1. 10, and the markets tell you what to do. Brendan lets talk hail marys. From where you are, is there any hope that sue reza might make it easier to cut a deal . Tom that is exceedingly to different exceedingly difficult to do when you look at the numbers. Pay the imf or compromise on your Core Principles he won that vote 9575. That means 75 members will be comfortable defaulting if defaulting meant keeping true to principles. The math does not work out. Trying to think of a way to bring in hail mary and i could not do it. I am not clear. Tom ion not clear on how hair met how hail mary meets germany. Brendan it is basically a day where you sit outside entering here. Tom it is like a massive inside joke. Not in america on sunday would we sit outside and drink beer. Peter nichols hans the bulls i will get it right. Thank you so much. In the next hour hans nichols i will get it right. Thank you so much. In the next hour, peter or zag peter or zag. Coming up, cannot miss this. Chris marangi of gemelli, we will talk about the game theory of dinosaurs mating in the cable tv business. Good morning. It is bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Tom keene and Brendan Greeley on your Tuesday Morning. We will speak of john nash tragically killed in a car accident this weekend in new jersey at 86 years. Lets go to a wonderful quote that tries to explain in english the New York Times. I thought this was brilliant, explaining john nash. Tom that explains about 70 years of controversial mathematics and game theory, which is a perfect jumping point to speak of this morning press merger of charter and time warner. I am sorry, Chris Marangi this is all about game theory. Charter had to do this deal because they were inconsequential if they did not, right . Chris there are only so many women in the bar. Tom altice, the french israeli backed method. Sometimes people do mergers for reasons that are not visible. Why did john malone five find 5 billion of cheap money for this transaction . Chris overblown fears about regulation and secular change. These are the hedge funds, and john committed. They put their money where their mouth is. I have not run all the terms. Tom i think it is just fascinating, the gain the game theory involved. Brendan we have john nash to thank, in a way, for the way we think about game theory. It was a mathematical way of looking at things in the 1950s. It was john nash who made it more acceptable to economists more as a principal easier to grasp there it tom he wrote a 32 page paper at age 21. There is a huge controversy at princeton. As you say, it is a part of everything we do now. I look at it as, what is behind the curtain. What is behind the curtain of this transaction . Chris if charter had not done this deal, they would be middling scale. It is all about scale in this industry. You need subscribers to add the programmers, to Fund Technology development. Comcast has it, and they have been executing well. Tom within the tragedy over the weekend, john nash of princeton, dead at 86 with his wife. I flew back from abreu dobby with john nash, his wife, and his son. He was not the most outgoing individual, but he had a huge graciousness, trapped in an airplane. John nash is dead at 86. Tom good morning, everyone. Bloomberg surveillance. There is not a Single Person who likes their cable tv provider. We know this after careful research. In midtown manhattan, what a weekend. It was cold on the beach. Everybody that went away froze. It was gorgeous in new york city this weekend. Truly gorgeous. Lets get to top headlines with the always gorgeous vonnie quinn. Vonnie tom, what a greeting. Billionaire john malone has been after time warner for two years and now he may be getting it. Charter communications has agreed to buy charter Time Warner Cable. Last year Time Warner Cable rejected charters takeover bid and later accepted an offer from comcast, but the comcast bid fell apart in april, opening the door for charter to try again. Greece may be running out of money, but the country will not accept a cure that is worth that is worse than the disease. Yanis varoufakis blames creditors over the impasse over bailout funds. He says they keep insisting on more bailout moves. The two sides are meeting again today in brussels. In texas there was more rain and flash flooding overnight. Five inches of rain fell near houston, and more is expected today. At least 12 people are missing after a Vacation Home they were staying in was swept away by floodwaters. In a case, u. S. Military jets escorted an air France Flight into jfk airport. The fbi says someone claimed the chemical weapon was on board. It is one of the biggest homes ever built in the u. S. , and it can be yours for a record 500 million. A developer is building this 74,000 square foot home in the posh bel air neighborhood he says it will have every amenity you want, including an imax style theater, a 5000 square foot master bedroom, and a monaco styles casino. I think you would add a few bowties thrown in there. Tom i would get lost in it. You are going to do something here bigger and broader on cable. Brendan we are talking about deals. Chris cappelli is with us. Tom Chris Marangi. Brendan sorry, you are Chris Marangi. You work for gemelli forgot what i want to understand is, there is one thing Cable Providers can do for telecommunications in the u. S. Which is expand their wifi footprint and turned that into Wireless Phone service. Is that what we are looking to do here, or is this just beasts swallowing other beasts . Chris there is no doubt that is part of it. The Wifi Mesh Network covers new york city and a lot of other cities. You put them together and it becomes more seamless. You mentioned the m word earlier. Monopoly. It is really not. Wireless is to the point where it is competitive with wireline. Everywhere in america you have the choice of the big three wireless providers. Brendan do you really think so . Even with lte right now, you cannot ever get the same bandwidth. Chris clearly it is Getting Better every day. More spectrum will come on the market and be deployed but wire will always be more costeffective than wireless. Tom he is over it . Chris there are more transactions to come. One of the lesser appreciated aspects of the chartertime warner deal was swaps. That deal was going to straighten them out. What happens to new york, what happens tom is this a duopoly . Brendan what i want to understand is, what do these deals, or what does this pattern of deal making Capital Investment in this space . Your broadband get that your broadband gets better, are we looking at that future at all . Chris what happens with title two and you have your hand regulation. Brendan what that does to investment, we do not know. That is out there, and these companies have chose to invest capital in broadband. Brendan what has driven investment in the past his investment you basically get faster speed has been the appearance of a new competitor. Chris absolutely. Google fiber definitely spurred investor investment in cities like kansas city. They are inextricably linked, and you have to have a Regulatory Regime that of thats a new company. Tom lets go to the chart. Time warner cable up up and away. Mr. Marcus, the y axis is correct. It has gone from 143 to the green circle, 195. 70. How does your world change if we ge