tv Bloomberg Surveillance Bloomberg January 26, 2015 6:00am-8:01am EST
the opec and non-opec consider a new saudi arabia. microsoft reports what to do with some $89 billion in cash. good morning, everyone. this is "bloomberg surveillance " live from our world headquarters in new york. it is monday, january 26. i'm tom keene. joining me is olivia sterns. rent in greeley is off today. >> greece is on a collision course with the neighbors that came to its rescue. a historic victory was won in yesterday's election. belt-tightening followed the bailout. the prime minister elect has made it clear what his priority will be. >> the verdict of the greek people and beyond any doubt, the vicious circle of austerity in our country, the verdict of the greek people, your verdict, in
an indisputable fashion, annuls the austerity and indisputable disaster. at the same time, -- >> greece, at the same time still needs more financial aid. the web tech media down almost 3% in new york to a little more than $44 a barrel. brent crude is trading below $40 a barrel. there is growing speculation of the oil got will persist. the new king is expected to maintain current production policies. another sign that chris christie may run for president. he is creating a political action committee that will allow him to raise money needed to seek republican support across the country. he is expected to decide side -- to decide by the spring whether or not to run. >> and irish a line -- an error gyre line --
offering $1.5 billion, and deal requiring the backing of aer lingus shareholders, ryanair. two earlier officers -- two earlier offers were rejected. in the northeast, we in new york and northeast of new york, are bracing for what has been called a blizzard of historic proportions. the storm may be one of the biggest ever to hit new york city. up to three feet of snow is expected. this from northern new jersey to boston. yale university, new haven. better stock up on sally's pizza. traffic will be miserable. airlines have already canceled over 1700 flights. and olivia has an suv, a hummer h2 to get her to work tomorrow. there it is. we will have more reports through the morning as the northeast gets ready for a storm.
let's get ready for a data check. equities, bonds, currencies commodities. the 10-year yield, 1.79. a little bit of euro strength. oil, as olivia mentioned, it is an ugly chart. it simply cannot find a bit under $45 a barrel. remarkable resiliency. brent crude, 48 .10. the greek yield is 8.92 percent, which is not all that bad. let's go to the mac monitor. nirvana. up we go to 30%. this is the greek yield and the german yield, and it is deceptive. this is an elegant chart with that moving average. what is interesting is not just
about the greek yield up, but the unusual german yield down. there are two moving parts. >> and also the divert is between the greek yield moving up and the rest of the periphery not moving up in sympathy. >> and the difference is 855 basis points versus off bloomberg 203 basis points. really unique and all of that. after the swiss bank bombshell, the death of a saudi king, greece -- it may seem like an afterthought, although the news over the weekend was quite something. it evaporated sunday as the scope and scale of leftist victory became apparent. celebration and profound establishment -- joe let me go to the money question. the money question is, will the new leadership be up to speak directly to germany? >> yeah. i think -- look, they are going
to -- alexis tsipras talked about how he was going to germany and not wear a tie when he met angela merkel. he is heavy on symbolism. you look at the choice of coalition partners. he is partnering with the independent greeks, a right-wing party, whose only, ground is that they are opposed to the bailout. he is tying himself to the anti-bailout line, and it will be a fascinating coalition. >> is the establishment defeated and over or can they be like richard nixon and come back in two three, or four years? >> it is amazing how far the establishment in greece has been wiped out. the dominant party in greece is now nothing. you can always come back -- new democracy is always significant.
establishment parties everywhere are seeing her popularity fade. >> i heard people shouting at the rally last night, making the connection with what was going on in spain with the austerity movement there. does this victory light a match for anti-austerity parties across the continent? >> i think that is the huge story in europe, the fact that there is this sort of pan european leftists movement. the head of put apodemos -- this is the big story. i a lot of people on the european left are hoping that greece is just the beginning of a bigger story. >> joe weisenthal, thank you very much. right now we bring in hans hume,
who has brought in terrific perspective of emerging markets and the dynamics of distress. you like distress. there is opportunity in distress. is greece distressed? >> i do not think it is extremely distressed, and the relatively muted reaction of the market to the fruits of victory lays out that this is not as much as the media likes the headless -- likes to hype this -- the far left extremist party if you look at the economists behind them, you are not talking about far left. you're talking about people voicing illegitimate -- >> there was a movie in my youth called "z," which was a hugely popular movie and was shocking about the left in greece at the time and the brutality of it.
this is nothing like me dynamic in athens. >> the relevant thing is to talk about some of the key people. you have citrus -- seecipras former communists. they are much more like -- >> thank you. could you make a banner of that. "more like lula than chavez." that is brilliant. >> absolutely. all the rhetoric is tacked way to the center. if you think about what these guys are saying, it is consistent with what mario draghi is trying to do. they are pushing back against austerity as a way to promote growth, which is right back to whether versus keynes. you need a legitimate left party to question the austerity
pressure from germany, as soon as it became obvious that they had a legitimate shot, they were reaching out to the investment community to not only say to the media we are not going to be trying to come out of the euro but also to the investors to say what we are looking at is something pragmatic, more focused on growth than austerity. >> what about the shipping tycoons that we hear about? do you think they are going to be taxed? >> i think so. money against the oligarchs is a very good way to start to instill some of the measures that the germans might want as a trade-off. if you need to deliver some measure of increased taxation to greece you do not want to spook the population. >> what is the investment opportunity here? you are the king of distress.
i see a lot of churning and we are doing and international relations show every day. with geopolitics. where is the money opportunity in all of this? >> your assessment of this is that they will be some headlines around some of the initial negotiations between frankfurt brussels, and athens. it is going to be in greece. >> do you believe in euro parity right now? >> i don't think -- >> everybody is climbing aboard the bandwagon. >> matteo renzi says in his dream -- says it is his dream. >> euro-dollar parity is not inconsistent with that. i do not understand why there is such drama around this. >> what does qe do for greece in europe? >> the targets that are set for them to achieve in july -- again, you read it, you realize
there is enough room for compromise on where greece is coming from and frankly, what berlin is going to want. hopefully that gives them something they are going to achieve and they can become part of the qe. >> would you adjust u.s. investments based on the last 10 days of news flow out of europe? if someone was in blue-chip stocks, before 401(k), or whatever, how do you as a pro adapt to the amazing news flow with swiss bank, denmark, negative yields, etc.? >> i am really blind to -- my skill set is not well-adjusted. in our world, the investment opportunities are really amazing to read >> do you have any interest in european debt? >> we are very interested in -- newmont >> even though there is no -- we are very interested in? >> if things work, you are going
window this morning, you had better be preparing for the worst storm in history. that is what mayor build of lazio is telling new yorkers as that that is what mayor build of lazio is saying. >> it is irresponsible. a mayor comes out, we are all going to die! >> according to meteorologists, not just tom keene, the storm may job three fleet of snow today. the mayor says his message to new yorkers is to prepare for something worse. now is the time for extreme -- to prepare for the extreme weather. one to two feet in new york city, over those goofy in two spots. we will be counting it in feet, not inches. not only snow impact will be felt, but also when impact and coastal erosion. a brief reprieve wednesday. >> here we are at storm center.
here is virginia and washington d c, and it is -- and washington d.c. it is going to dump -- if you are at yeah right now you need to order pizzas. don't we overdo the snow with all of the technology and estimates? >> i would say that perhaps bill de blasio's ability to spin a message may not be as good as our former mayor. >> i will say that it is partly january. we need to prepare for blizzards with wind at 50 miles per hour. but i refer to mr. carolyn of bloomberg radio. one to two feet in new york? >> 122 feet in new york city. over -- one to two feet in new york city. over two feats in some spots. >> i am looking forward to
getting to work skiing. >> we hope that everybody particularly over -- particularly older people, shoveling snow -- >> and 1800 flights have already been canceled. experts say that is the way you want to play this. >> when you are you coming in, about 2:00 a.m.? >> i might have to walk in from chelsea. >> i have done that a couple of times. it is gorgeous, peaceful. >> it all depends on how quickly it falls. >> there it is, storm center. stay with "bloomberg surveillance." we continue storm center watch. there is no know in zurich. stay with us. "bloomberg surveillance." ♪
>> good morning from new york city, everyone. "bloomberg surveillance." oil is weak, not as weak as it has been over the last three hours. $45 and change. >> mine comes from richard haass, a friend of the program writing, "the big risk for saudi arabia stems from the appeal of isolates -- of isis to a population that is young, poorly educated and underemployed. the internet, more than bombs, to be the government's undoing." the issue is that the view of what is going on from saudi arabia's strategic point of view -- they are losing ground in the neighborhoods.
if the u.s. cuts in nuclear deal with iran that is relatively -- >> those are the worries as well. >> and richard haass is making the point that it is a matter of time before isis looks to attack the kingdom. >> and "attack" is the right word. i love what david kirkpatrick did in "the new york times" this morning. you look at the king abdullah dying and the new king coming in, but the real story is the headline after the new king. i like "the new york times", "new king, old order." >> the issue here is that the religious community in saudi arabia fostered the extreme brand of islam that literally
creates the textbook that islamic states and extremist groups are joining. >> roster that in "the new york times," king abdulla was a prisoner of the system he inherited interested in reform but unable to find the room or take the risks required to see it through. we in the united states are prisoners as well handcuffed to saudi arabia. the elephant in the room is oil. how do you play that? >> obviously saudi arabia is involved in trying to knock out -- not just in terms of country but >> at the same time, the -- how do you filter the politics into how you look at investments ? >> it has been tricky for us. we along with other people in
the investment community did not see -- did not expect to see oil come down as far as fast, and it has shaken up the markets. any other oil producing company has been shaken quite a bit. at this point we are trying to stay away from the pessimistic's, self side analysis. if you take a look at a country like ecuador they are aggressively cutting their budget and adapting. >> they are adapting. and this is important. haass said countries struggling with qatar struggling in the region -- >>should point out, 18 dead over
the last 48 hours. >> many journalists still in jail. syria looking very much like a puppet of iran. i really like a quote from yesterday, "his dynasty is founded on gangster-ish control of -- it strikes me that the president of india is here today and we are celebrating our relationship with india. and then he says that there is a disconnect with our current relationship with saudi arabia. >> is there a mature market within the middle east, within the gcc, as it is called? is there an opportunity to play politics with investments? >> we started doing things in the middle east in 2009. >> has it been successful? >> we are involved in a couple
of fixed income plays in saudi arabia. there have been some good bets there, but in terms of a true market, that if strict how to define that. >> the market views saudi as stable? >> i think so. but i agree with your analysis that there might be some cracks. hans humes, you are staying with us. this is "bloomberg surveillance ," on tv and radio. ♪
>> good morning, everyone. "bloomberg surveillance." tom keene with olivia sterns. let's get to top headlines. >> axis capital partner read, creating an $11 billion company. that comes amid accelerating consolidation in the industry. the new company will be a lung one of the five largest reinsurers. aaa says u.s. drivers are paying less for gas than it any time
since march of 2009. the average price at the pump has fought that has fallen -- has fallen for 122 straight days. the average price for gas has reached $2.04. another triumphant weekend for warner bros.. "american sniper," the clint eastwood or drama starring bradley cooper, dominated the box office. the film nominated for six oscars has so far collected more than $200 million in north america. i can say that i added $30. >> did you see that? >> i did. >> the surveillance movie review with olivia sterns. >> bradley cooper gained 40 pounds in 10 weeks. clint eastwood paste it terrific -- paced it terrifically.
believe or not, that is sienna miller with brown hair. that you did not know that. >> mario draghi speaks and markets adjust. the 10 year and the u.s. dollar may get headlines. but the impact on serena miller -- is that right? >> sienna miller. >> sienna miller and emerging markets are profound. hans humes is the chairman and chief executive officer of greylock capital. bring up the chart here. this is the chart. i saw this on twitter. i am sorry i cannot get credit. i have never seen this chart. that is the yield curve moving from left to right. what a great chart by our department. it is all negative, out to a good 12 years or so.
hans what does that do to your world to see the great switzerland completely distorted? >> first off for the record, olivia, i think tom is threatened by bradley cooper. >> and gaining 40 pounds. thank you. continue. >> in our world, you are seeing a complete bifurcation of risk. you have the risk on assets that are blowing out, and anything that seems to be some kind of safe haven is coming in. switzerland germany, all the yields are going to the point where it does not look -- >> and dollars, the backstory, was like thailand. >> it was like thailand, as in -- the government tangentially dealing with draghi.
>> can the government close the gap? >> the gains that we speak to in copenhagen say yes. it will be interesting to see. they seem to be gearing up for an attack by speculators, and we will see how it plays out. it is hard for me to form an opinion on it. i am not an fx guy. >> what is the price to non-developed nations of developed nation monetary action? >> it has put some real pressure on all the emerging markets on the debt side, and i think that you are going to have to wait for this liquidity to come through the system and see if there are risk assets. >> that was a lead comment from lee frankel, circling back to stop the analysis and weight and see what the ramifications are. >> i was interested to see
before the drop in the price of oil and before qe, we were expecting top us to be dominated by russia. -- we were expecting davos to be dominated by russia. why are you still finding opportunity there? >> there are a number of companies the balance sheets investment grade, they are subject to the shock of obviously oil prices, but also the sanctions. if you take a look at oil in the russian economy, in ruble terms, it has not moved at all. and their expert -- their exports are all hard currency. >> are you saying i am long in russia? >> i think that the individual piece of paper -- the ukraine and russia it puts an overlay
on everything in eastern europe. our analysis in context on, we have to pay attention -- in kazakhstan, we have to pay attention in terms of working out with some arrangement with creditors and the imf. >> i found it surreal, francine lacqua's conversation with portion go -- with poor roshan go -- does the jump on russia change your investment phases at all he? >> not really. if we are looking at credit rating agencies we will be one step behind. so you can take a look at the potential impact on the technical basis, but our analysis on russia -- the sovereign still is not that attractive. it is in the corporate bond world, given the new volatility
that comes with the regulatory environment. you have got really good bargains that are available. >> because nobody wants to touch it. >> nobody wants to touch it, and it was 15, 20 points in a matter -- in a manner of weeks. >> there is a question of if you want to catch falling ice. >> it has been a falling ice environment for the last four weeks. >> you are staying with us hans. are the oil markets poised to rebound? we will discuss what history has to say in our single best chart. are we seeing 1986 all over again? this is "bloomberg surveillance" on bloomberg television streaming on your tablet, phone, and bloomberg.com. ♪
>> good morning, everyone. "bloomberg surveillance." some interesting nuances within the bloomberg terminal. getting my attention is a monday single best chart with olivia sterns. >> oil's current price may be staying down for a while. this is bad news for the oil market. it may take years to recover. if we look back to 1985 when west tech media -- with this -- west texas intermediate tumbled. we saw that prices did not crawl
back to losses until 1990, nearly a five-year recovery. opec members show little sign of scaling back and of course the new king of saudi arabia says or at least signaling that there will be no change. >> hans humes, classics. down you go, and you come up and you go like this. that is what a lot of times series do, don't that? >> the relevant thing is you have to understand that all the countries people are worried about now were producing oil in that time period as well. it comes back to how does their economy adjust to the new price environment? if that is all you are doing in terms of analysis. it is not that all these countries are going to disappear or stop pumping oil. we dove in two early -- we dove
in too early, i guess. we have been doing a lot of work since the middle of december. we have been looking at it closely because at some point you are going to find bargains. a lot of these companies are actually pretty strong. they are all conserving cash, the smart guys, looking for either opportunities to expand if they are big enough, or in some cases they are going to get merged with a larger company. >> you spoke with daniel yergin in. close -- in davos last week and this is what he says is different between now and 1986. >> it is a different circumstance because the u.s. is so flexible, and the kind of prices we are seeing now what we are pumping now is not going
to change. >> the new leader is saying oil is not going back to $100 a barrel. >> i guess you have to say that. venezuela is a tricky situation. you have the sovereign bonds, and there has been this extreme view by the market that there will have to be a halt there because of oil prices falling. it does not have -- it does not appear that that will be the case, in our view, because they will need to sell oil at some point. majuro, i am not sure how long he sticks around. what we hear on the ground, even the chavez party is getting a little tired of him. i would expect that could be a chance of a political transition in the next few months. >> and i was reading over the weekend that there are mumblings of raising the gas prices in venezuela.
that is one way to get a lot less popular. >> let's make clear that $45 and change, $45 a barrel the technical structure of oil is miserable. >> we start in turkey with number three. a twitter local -- a twitter logo showed turkey with its beak sewn shut. a new bill in parliament could give turkey's prime minister the power to shut down websites without a court order. it is scheduled for discussion next week. corruption protests in 2013 online leaks damaged government reputation. hans, are you concerned about the crackdown we are seeing in turkey on social freedoms? the prime minister has been pretty unapologetic about shutting these things down. >> in short, we are not particularly strong buyers of
anything turkish right now. and certainly for the region -- i think the more important thing is the falling out between turkey and israel, for example. my view is that that is a sign of stability. >> what else do we have? >> angelina toured a refugee camp for ices victims in iraq. >> this is what you do if you are snubbed by the academy? >> "unbroken" did not get anything. >> can we say she is putting action and money where her mouth is? she is not doing a photo op. >> no, no, it is real work. and obviously that refugee camp is a serious situation. >> the scope and scale, we have not capture the size of it. >> and most of them are young children. our top photo -- the head coach
of the duke blue devils, mike krzyzewski, he he is celebrating his 1000th win. the duke blue devils won. >> after the third shot of whose oh -- all he could talk about was duke basketball. they have a freshman who is a big deal. >> i have a feeling there are many duke boosters in. close -- in davos. still to come on "bloomberg surveillance," microsoft has set its sights on the success of the virtual headset as it works to regain relevance and an apple
in the next hour, william rhodes , global advisor at -- of global advisors. we will do that in the next hour of bloomberg television and bloomberg radio. right now to olivia sterns with top headlines. >> it looks like a russian online dating site is the latest hacking victim. 20 million usernames and e-mail addresses. they were put up for sale or stolen on a website. top face's ceo says he has no proof of the security breach but says the company is investigating. the motivation perhaps -- a spurned lover? i don't know. after hiring 95,000 seasonal workers to address them and spikes, ups has more workers than package volume on some days during the recent shopping period. ups investors have spent money
to improve after major delivery woes in 2013. bill ackman made more money for clients last year than any rivals. he profited on investments, including drugmaker allergan and canadian city -- canadian pacific railway. those are your top headlines. >> hans humes is with us. how unusual is the volatility year-to-year of some of these hedge fund giants, whether it is mr. paulson loading up this year, or bill ackman having the mother of all years? is that business as usual, year-to-year up down, up, down? >> i think so. what you see in the past, the guys get it right, they want to reproduce what they have done, and they take too much risk.
the underlying -- the underlying market volatility -- i am not surprised. what is interesting last year you have got more extremes. guys who really have done well and then guys who have nailed it. i would expect to see that going forward. >> i just want to get that from hans humes here. >> while you were in davos, he was so long google glass. a new product allows you to see items around you. it is essentially a computer that you can wear on your face. he says microsoft has become relevant again. earnings are out after the bell today. it looks pretty interesting. this is the kind of innovative new thing we expect to see from google. is microsoft cool again? >> microsoft has become part and parcel of many conversations
with its software hardware cloud. microsoft has been talked about in this conversation, which did not have many years ago. the hololens -- let's not hold our breath, but it is it that it is an interesting product. the fact that they are in the mix is interesting. >> it is exciting that they have some of their groove back, but some are looking at the consumer hardware division, saying that you have to sell the xbox, what is the point of making a headset? >> absolutely. microsoft is making a large pivot from traditional software to cloud-based software, and you want to see continued momentum in that space. but at the end of the day, microsoft's bread is still buttered on windows. >> i did not see a single
service. when are they going to get rid of this stuff? >> the surface is a great product very badly priced. for the past two years -- >> how much is the surface? >> the surface runs well into $1200. it is too much to ask for from a product strategy perspective on the earnings call, but from a product perspective the pc has become relevant again. >> this is microsoft. it has been great. with all this and with the surface in the nfl and all that, what do you expect to see to drive the financial story forward? >> you do not want to see mishaps as they pivot from traditional software to cloud. >> like ibm. >> software companies are making the pivot sometimes as a hiccup.
sometimes there is not. you do not want to see the hiccup. you want to see cloud infrastructure and cloud software-based sales growing rapidly, well enough to offset any declines in traditional software. >> $89 billion in cash. i want action today. am i going to get it? >> look we have talked about this across all of tech. there is a lot of cash, a lot of it offshore. you bring it back, you get taxes. you have to use it for large-scale m&a outside the u.s., because it is that which is hard because you do not have targets that are that big that matter. >> seeing a $9 billion bump in revenue, where is that coming from? >> a bulk of that will traditionally come from office and windows, which has seen some strength. you also want to see that come from the cloud.
>> i think it is absolutely responsible. not only with microsoft, but with some of these companies are doing. mario cavalli -- where is my money? >> the alternative is you raise a lot of debt and you use it to finance buybacks of stock. the problem with that is that you have seen it time and time again in tech? companies are not good at buying back their stock. they are not good at it. so the relative returns on buyback is poor. so what do you do in that situation? and these are large companies with a lot of cash, and they are not large enough m&a targets that they can use the cash. >> bill belichick has surface? i wonder if there is a deflation app. >> thank you anonymous unit bostoand srinivasan.
formed increase. germany worst nightmare is reality. oil slips to new lows as the opec and non-opec nations consider a new saudi arabia. and modi creates obama on the tarmac and the president disses the taj mahal. it is monday, january 26. i am tom keene. joining me, olivia sterns. brendan greeley is off. >> our top story -- now on a collision course with euro-era neighbors, the anti-austerity parties teresa -- syriza won the greek election yesterday. the prime minister-elect will form a coalition government and has made it clear what his priority will be. >> the verdict of the greek
people and see on down the vicious circle of austerity in our country. your verdict annuls indisputable fashion bailout agreements and austerity. >> it would force greases creditors to renegotiate the $70 billion bailout. increased still needs more financial aid. the russian ruble is down more than 2% and that has led to speculation that there will be more sanctions imposed on russia. president obama says the u.s. will ratchet up pressure on russia after a rocket attack in ukraine saturday. the price of oil is falling from its lowest lows and almost six years. down almost 3% this morning in new york, little more than $44 a barrel. there is going speculation that saudi arabia's new king is
expected to maintain current production policies. the aggregate price of gas in the u.s. is down to $2.07 a gallon. retail prices perhaps have bottom out. >> governor of new jersey in the news. another sign that is christine a rough resident. -- chris christie may run for president. he is getting a political action committee. christie is expected to decide by the spring weather he will run. there is an apparent 24 other candidates running as well. christie has to worry about snow. he is on the back end of a boston-to-new jersey blizzard. three feet of snow is expected to fall because it is virtually january -- partially january good traffic is suspected to be miserable. airlines of cap more than 1800 flights -- airlines have canceled in 1800 flights.
i don't mean to make light of the danger of it. it would be like a record in storm central. >> we should seriously consider outsourcing the plowing to uber. >> i could see you at the ritz-carlton in central park south. >> to be honest, i would rather go to the four seasons. >> bloomberg radio stay tuned all day on bloomberg 1200 and bloomberg 11 30. the important weather forecast. really proud of rob's work. how about a quick data check? euro-dollar, there is not a bit on oil. west texas is down 1.4% as well. it is not carte blanche, it is amended, pulling to alexis citrus --.
-- according to alexis tsipras. joe weisenthal is in athens. what other promises mr. tsipras has to deliver in the coming days? >> the biggest thing that the supporters of tsipras want to see is the end of the troika the ecb and i met who regularly come to athens to make sure that greece is sticking by bailout commitments, not just in terms of school consolidation, but other types of reforms to the greek economy. if there is one message that supporters and he had last night it is that the troika era needed to end, that there needs to be any discussion of what greece needs to do for the bailouts. >> joe, color for us the numbers replacing -- i will use this
word with respect to my non-knowledge -- the fascist vote. how fascist is the fascist vote and what does that mean? >> yeah, i think -- look, i think golden dawn, which got third place is what everybody thinks it is. it is not just another far right party. it is not like marine le pen in france is that it is much closer to our true fascist ideology and pretty much everybody thinks it is an embarrassment. it was very unlikely, the weight greek elections work -- if the first place party can't form a government, the second-place but he gets to try, and then if they can't, the third-place party extra drive. you could about a situation if things had gone to play work you have the situation where golden dawn would have been invited to form a government. that would've been a huge embarrassment. this is what happens when a country is pushed to the brink economically kid extremist
ideologies start to rise. >> the concern about greek debt has never actually been about greece right? freeseas 2% of euros -- greece is 2% of euros and gdp. the concern is about contagion. as the victory of tsipras sparked a rise of anti-sturdy movements across the continent? >> that is the huge question for europe. greece in and of itself is not a huge economic worry for investors or economically. but if you were to see a similar story play out spain come if you are to see podemos, whose leader campaign with tsipras this week, there would be a major disruption, major concern to everyone. obviously, we will be watching to see what happens with greece specifically. what happens with politics across europe is going to be the huge story the rest of the year.
>> mr. wiesenthal is in athens and will be with us through the day. right now, bill, what is on your mind is divisive the right, whether it is marine le pen -- is the rise of the rectum whether it is marine le pen in -- divisive the right, whether it is marine le pen in france or what is happening in greece. >> podemos u.k. independence party, marine le pen, it is the casualty of the prolonged debt crisis that we've been suffering through. >> you are part of the establishment. how at threat is the establishment in europe? >> the euro zone in particular has missed the ball on so many occasions. too little, too late.
mario draghi has been trying to push through quantitative easing for the past year but even he was too optimistic to years ago. what will the impact be? quantitative easing alone can't do it. you have to have actual reforms with it and if you don't have the two combined, it won't work. >> we are connecting the dots between al the anti-austerity parties but i have a chart that shows just the profundity of the greek debt crisis. this the recession increase in blue compared to the great depression in the u.s. the recession increase is more severe than what happened in the u.s. in the late 1920's and early 1930's. this is so much worse than what is going on in the rest of the continent. >> i totally agree. i surprised -- i am surprised the greeks put up with it as long. five years of negative growth without a doubt as really
-- they themselves had debt forgiveness. then friedman has been talking about this from harvard. at the end of the day there will be some sort of arrangement made -- >> is a that this goes back to the moral consequences of what germany has to do for greece and the depression. >> but it is also very realistic because you really want the greek economy to grow and in order to grow you have to push up the debt burden. they can extend the maturities and take the interest rates -- yeah, but they can do more compared to what we did in latin america with of the brady plan -- >> i just wonder how they tell the times they should have the lower debt. this brings us to our twitter question of the day.
>> good morning, everyone. before the blizzard -- all the hysteria about the blizzard, but be careful out there. olivia, you mentioned 1700 flights -- >> 1800 flights. >> >> we're getting ready for a blizzard this afternoon and tomorrow with ferocious winds as well. one foot maybe two feet and as you get to new haven it gets to be sporty. >> another round on friday. >> second ground.
-- second round. great. >> cadbury chocolate fans are up in arms. the british streets will no longer be available across the pond. it is a win for hershey but for one columnist it is a question of patriotism. essentially, what is going on is that the chocolate that cadbury is making for the u.s. market is too similar to hershey's and hershey's is objecting to it. if you are cap very fan -- if you are a cadbury fan, you will not be able to get a chocolate. >> this is the tribute i brought back to my bloomberg team from close. -- from davos. this is not what you are talking about, right? >> this is not what we are talking about.
>> chocolate in the u.s. -- listen, in my humble -- are you really nuzzling -- >> i am nuzzling the case. >> the point is, it is a better product in england. it is different taste. number one ingredient in cadbury's chocolate in england is milk -- thank you. >> keep going, olivia. please. >> rare treat. >> only 11% made of cocoa, whereas cadbury chocolate is a little bit five-year -- is a little bit fudgier. terrible news for stores like teams to the come which is a chocolate store -- like tea and sympathy, which is a chocolate store -- >> they sell european chocolate. >> interesting story about trade wars. >> do they have european
>> good morning, everyone. let's get to our top headlines. here is olivia sterns. >> japan is using "every channel available" to free a journalist being held by islamic state militants. it is believed that the islamic state in his armor to kill the hostage who is being held with him. now they are asking for a prisoner exchange.
it looks like a russian online dating site is the latest high-profile hacking victim. 20 million names were stolen and put up for sale on a website according to fraud detection software maker easy solutions. the ceo says he has no proof there is a security breach but the company is investigating. hedge fund manager bill ackman made more money for his clients last year than any of his rivals . his pershing square capital management generated $4.5 billion for investors after fees . that is profits on investments like drugmaker elegant and canadian pacific railway. >> very good. $16 billion, much more on that on bloomberg television and radio through the morning. let's go to deserve it. be careful out there. the world is changing the
blend reality. marc faber, familiar with the known unknowns, joining us from zurich. so much of what you pretty good has come true but there is an inherent resilience you to america. why does america prosper given this great distortion? >> well, thank you for having me on your program. i wouldn't call america prosper and. what is prospering is the u.s. dollar and u.s. financial aspects that the economy of the lower income recipients is not doing particularly well. it is all relative, but relatively speaking, i agree with you. in asia we still have numerous countries that are growing at say, three 4%.
india, 6% per annum. so -- hello? >> marc, i look at where we are within this great distortion. what action would you like to see out of janet yellen? >> well, basically, i think that it would be better if interest rates are higher. i have been in this business for four years. i started to work in 1970. and i really never dreamt that in switzerland, 10 years, government bonds would go to a negative yields. in other words, if you buy the 10 year, the swiss franc government bonds the yield would be negative every year for 10 years. >> if it is all gloom and doom
out there, where do you go for safety now? >> there is, in my opinion, one asset class that is inexpensive it has actually done reasonably well over the last 12 months and that is gold, and gold shares have bottomed out between the october-november lows. unlike other strategists, who say the americans is the only game in town, i would look at some emerging economies. >> marc faber, thank you so much. marc faber this morning with some caution. bill rhodes marc gets a lot of criticism for a lot of gloom out there. i would suggest that the resiliency has been remarkable. if there's some element of truth to what mark copper's -- marc
faber's messages? >> i'm surprised you didn't comment on china this morning. china has been an interesting story. everything today is focused on greece and quantitative easing and switzerland. what is most important when you look at the world and where it is going is what is going to happen in -- >> is it going to be resilient or have the gloom of marc faber? >> the new normal needs to be tested out. china is going to have a difficult time reaching what they say will be next year's goal of about 7%. most of it think it will be the 6% range. given that it is the greatest user of commodities, i think this has real impact on the developing world. we need to continue to pay attention to china. >> the story coming out of davos this year is economies towering forward. how far away for me -- how far
away are we from the tipping point? >> only 15% of our economy is with exports. the other side of that is imports. if the dollar gets too strong, it will be a poll on imports. grandma >> people should look at the interesting chapter titles. your book is about action in leadership and governance. are you seeing enough action out of world leaders? the critics of the president -- he has been getting on an airplane and moving around and angela merkel is doing something . are you seeing leadership from our leaders? >> the simple answer is no. we have not seen enough leadership in western europe or the united states, particularly at this crucial time when we take a look at the middle east and what mr. putin is doing. we need to see stronger leadership. >> have you been to the top
>> good morning, this is "bloomberg surveillance" i am olivia sterns. two insurers are teaming up creating an $11 billion company accelerating consolidation in the industry. the new company will be among the world's five largest insurers. bitcoin gets a big boost today is the first licensed u.s. exchange opens. "the wall street journal" says that it will offer enhanced security for individuals and institutions and real-time pricing of the virtual currency. and another triumphant weekend for warner bros.' "american
sniper." the war drama starring robbie cooper dominated -- starring bradley cooper dominated the box office. the film, nominated for six oscars, has collected more than $200 million in north american ticket sales. those are your top headlines. >> william rhodes is the founder of william rhodes global advisors. he stared across guantanamo 40 use ago and looked at castro's c uba. just change value given the historic -- davos is the most interesting one in the decade-plus since i have gone. uba. how do you full been all the geopolitics for the world of investment? >> one of the great things about
davos in addition to the ability to meet and greet people , is that it actually tackles some very important issues. without a doubt it was instrumental in the opening up of south africa after apartheid. i did the first actual operation that they had their at the world economic forum in cape town after that. also, the opening up of eastern europe russia, the relationship with china, played a very important role in all of that. >> in my conversation with the president of the arab republic a lot of controversy around these people and then the death of the saudi king. the middle east snuck into the story. what is the optimism on america and the west can assist the middle east towards some form of stability?
>> we always end up optimistically in the sessions and then reality hits home. >> 18 people killed in egypt over the weekend. >> what we need is more leadership there. the saudi position is weekend and they don't understand what the u.s. policy is with respect to iran. one of the things the united states has to do with western europe is clarify what our policies are. i think we have finally done it with isis but we played around in iraq with maliki for a long time. >> can they get a form of power there that other nations like egypt and kuwait coalesce around? >> egypt is working with saudi arabia and the emirates. >> the march business conference
they're looking at. >> exactly. the problem is what the west is going to do, the united states and europe, working visa the iraq and syria and then of course iran. >> what should be the american task for secretary kerry and for president obama? what is their to-do to assist the nudge to stability? >> they have to stay off the bat that they will work for saudi stability in the area. we have interesting things in the price of oil and the whole negotiation with iran. the saudis and the emirates and even jordan are suspicious of our negotiations with iran. >> bill rhodes coming up on russia. olivia come i think we need a data check this monday. >> futures are trying to a
slightly over -- lower open after the win of the anti-austerity party in greece. the yield on the 10-year is unchanged, and a is again moving lower, dropping below $45 a barrel. this is "bloomberg surveillance ." i am olivia sterns here with tom keene. indian prime minister niagara modi broke protocol to create president obama and the first lady on the tarmac. he gave the president a bear hug which has gone viral all over the world. phil, what other real headlines from this trip? is this nuclear deal a real breakthrough? >> it is progress, step forward. the united states back in 2005/to help india with the civil nuclear capabilities. over the last seven years eight
years from actually, there have been major problems with that. india has a law that would require suppliers to be liable for any type of accidents. u.s. companies are very wary of that. that has been a major problem. on the u.s. side they want to be able to track type of nuclear facilities in what a need officials say is a very intrusive way. if you talk to officials of the companies, olivia, is not quite there yet. it was a lot that needs to be worked out going forward. >> we are making a big you out of this their hug. the first time a sitting president has been to india twice. this this april relations -- is this a whole new step for relations? >> the relations of always been good but somewhat cool.
they are now clearly in a better place. take a listen. >> today we achieved a breakthrough understanding on 2 issues that were holding up our ability to advance our nuclear cooperations and commit to think towards full implementation, and this is an important step that shows how we can work together to elevate our relationship. >> you hear the president underscoring the nuclear negotiations going forward and on the relationship in general, the president being in india and sitting next to the prime minister major step forward. the two countries are in a better place than they have been in a couple decades. >> i was reading about india buying less expensive weapons from the russians and looking to source them from the u.s. what are the president's foreign-policy priorities with modi? >> i think the interesting thing -- i mentioned the parade --
many of the military vehicles tanks, planes, helicopters, where russian-provided. you have a president sitting there watching russian arms moving past him. when i was told is that there were a few boeing-produced military vehicles as well. you see the u.s. trying to enter that market. on defense and more broadly on investment and trade, when you see the president and top officials doing is looking to expand relationships. there is a ceo meeting going on right now and the president has been doing this in every major international visit he makes. the big push is that the u.s. wants to enter that market in a major way. >> phil, what is the indian lobby in congress? it is always important that congress has his back. is there an india lobby in congress? >> there is. it exists. it is not as powerful as the other strategically placed countries in the united states. but it exists and it is mostly positive.
when it comes to india there was a was concerned about human rights and things of that nature but there is an understanding on capitol hill and in the white house that relations with india, if they get better, could strategically be very important between russia and china as well. there is a push on capitol hill for the president to make even bigger steps that he has made so far. >> phil mattingly, thank you so much. bill rhodes went to india for citigroup right after the raj. no we are steeped in history on india and what is the real id we should consider? >> there is a real opportunity with modi because the business community in india is very much behind him. the diaspora in the united states is also very pro-modi. the opportunities are big time. when you mentioned the russian arms, the chief supplier ever since independence in india has been russia. this is the first opportunity
>> you are looking at live pictures of new york city. we are bracing for a blizzard. tom keene is blowing into his microphone. in all seriousness, it is expected to start dumping at 1:00 p.m. flights have already been canceled but there is no excuse not to make it into the office. >> no excuse. olivia sterns tonight at the ritz-carlton. >> i told you i am staying at the four seasons. microsoft is reporting results later today and analysts are looking for shares of $.75 revenue and we're looking at 26 point 43 $3 billion. a lot of questions on what they are doing with mobile. as you said, it seems like nobody in davos had a mobile in their hand. but mobile and cloud are the key here is you wants to push into -- key areas you wants to bush in two. google is taking its glass back
to the drawing board. does anybody care? what are they doing with the $89 billion of cash? >> can we have a moment of silence for what the stock has done? >> is microsoft itself changing? where is our perception of microsoft -- >> i think it is a rounding error. >> i know who to ask about this. we have betty liu. >> it is a meta question. >> xbox and playstation 4 consoles are having strong sales which is living electronic arts and take two interactive to highs last week. >> i don't know if all of your big gamers. grand theft auto is one of the best selling video games ever. the title grand theft auto v has sold 40 million copies since september.
it is huge for taketwo. the stock is up to a 62-week high. the companies reporting earnings next week and as you rightly point out, microsoft has a big boost as well as playstation 4. the chairman of take-two says he experiences the virtual reality side of gaming a few weeks ago and i will ask him more about his impressions and bringing video games to the next level. the other thing about him is that he is a venture investor. he invested in a company a messaging service and for businesses that is much more secure. he and his company believe that it is the next wave of internal communication. >> that to me is the core of microsoft, business services. there is still pressure on
microsoft plenty of questions being raised about whether or not they should spin off the consumer product division. >> whether it still matches within the enterprise. it is a question for a lot of tech companies, whether they have gotten too big and unwieldy. >> you have sons. i'm sure they play grand theft auto. >> it is too risqué for them at this age. >> betty liu will have an interview with the ceo of take-two interactive.
>> good morning. "bloomberg surveillance." better take in the last two hours. let's get to the top headlines. your is olivia sterns. >> after having 95,000 seasonal workers to address demand spikes, this company has more workers than package volume on sundays during the recent shopping period. ups invested $675 million to improve its network. u.s. drivers are paying less for gas than at any time since 2009. the average price has fallen for
122 straight days. it is three cents less than just a week ago and one dollar 25 less than a year ago. an enduring new york television personality has died. joe franklin was a picture on late-night radio and tv in the big apple since the 1950's. his employers included wjz and most recently at the bloomberg radio network. he gave early exposure to the likes of woody allen, dustin hoffman, and barbara streisand. >> the impact of mr. franklin who i only saw a few weeks ago and was incredibly kind to me, was billy crystal's killers proof of joe franklin -- killer spoof of joe franklin. it was wonderful. this guy was way out front and yet an immense grace from a different time and place. >> as you said, terrible
surprise. we had him in the office a few weeks ago. >> he let a full wife. very cool. joe franklin, strong to the end. >> treasury secretary jack lew has been speaking to reporters in brussels a few weeks ago. he says the u.s. must be prepared to do more forr aggression. bill, looks like we're talking about more sanctions. interest rates in russia are at 17%. how much longer can vladimir putin ride this out? >> is still us ample reserves. he has lost 100-some-odd billion. he can still hold out. we need to have more concerted action with europe. we had the new foreign minister of the euro zone a week ago saying that she wanted to lift some of the sanctions. the baltic countries oppose
this. you really need more commonality between the united states and to really the eurozone. if you don't, they are not going to work. sanctions take a long time to work. >> is the appetitive and germany to impose more sanctions on russia? i think they are more concerned about athens and alexis tsipras. >> germany, france, and italy are all hesitant of putting on new sanctions. in the u k and sweden they are strong on doing something. you need to get uniformity here. >> what is the fragility rightnow now of the russian banking system backup> what does it mean for the russian banks?
can they do business? >> so far he has bailed out to banks. >> smaller banks. back to where it was 12 years ago. >> my friend, someone i always listen to on russia -- >> former finance minister. >> he pulled rush out of 11 years of difficult economic problems and he is respected by bruton -- putin. he is constantly saying that putin cannot continue -- >> is there that urgency there, given the headline slogan that was ignored in davos? >> it really seems like the war is back on. >> well said. what is the urgency to affect his behavior or politics? >> putin is doubling down.
eventually he will have to do something. >> is it a market function or people-politics functioned? >> combination of the two. >> does he care about default? >> i don't think we are anywhere near the fall but if the government has to keep bailing out banks, it will hurt and you know how you know it will hurt? if you decides to announce that meant he had have -- medvedev is no longer prime minister -- >> i'm getting over olivia sterns going to sochi for the olympics. it seems like a dream from five years ago. >> it really was. i had the russian tracksuit and now it is incredibly awkward and i don't wear it around new york city anymore. what a difference a year or two makes. >> gone, gone, gone. >> what you have is the western
advisers telling putin that he can only go so far. otherwise he is going to undo all of this work of these guys did to get russia back -- >> should i use ruble as the litmus paper? is that important? >> going back to your original point, the biggest pressure will come when the banking system. >> bill, great to have you as always. >> great to be with you guys. time for our twitter question of the day. >> that is an important note right there. >> it goes back to this question
that tony barber is raising -- is tsipras going to be more lula -- >> that is brilliant. >> is he going to be more ideologue -- of course it does. i think the difference between now and 2010 is whether greece chooses to leave or whether they are pushed out. >> citigroup has been way out front on greece. >> let's hope he is like my friend lula because lula embraced the private sector and he made it work. chavez did the opposite. >> and lula change the two. >> i knew them both very well. one of them is dead now.
>> we will have you back on the relationship with hugo chavez. we are looking at the stories shaping the day. what is at the top of your agenda? >> it has got to be greece. this has got to be front and center. the end of austerity. david lunch flour on television -- david lunch flour on television with that in view. we need to go through the ambiguity the pros and the cons and all that. again, austerity is front and center. >> top of my agenda is the visit between modi and barack obama. huge bear hug they had could look at all the smog in dehli. president obama breaking protocol to join modi -- look at that smog. it is the first time a sitting u.s. president has been to india twice during his tenure. obviously we're looking at -- look at the smog!
>> the usual military going down the street. >> speaking of storms, the winter storm. i'm talking about 12-24 inches of snow in manhattan. it is going to start dumping. we might expect a second storm surge coming up on wednesday. over 1800 flights have already been canceled. be careful. it is going to be a mess. >> we will have that for you in the next -- this is fascinating. which chocolate did you like best? i like to the one with the rum in it. >> shocked that you like the one with booze in it. great to have you on. you are picking your teeth? >> no, it is a cavity. >> i had my chocolate breakfast very european. >> very good.
opening bell on this stormy monday in new york. much more ahead on greece. greece on a collision course with europe over the bailout. the anti-austerity party syriza has won the greek elections in a surprise victory. we have got the former u.s. ambassador to greece nick burns, joining us with his analysis on what this means for your could we will speak to dartmouth a economist danny blanchflower. and it is one of the biggest selling videogame series ever. you recognize these characters, don't you? it is cap theft auto. we will talk to the ceo of the coming that publishes the videogame, take-two interactive. strauss zelnick will be joining us in a few moments. here is a look at our top stories. the incoming prime minister of greece has a warning for europe.