tv Bloomberg Surveillance Bloomberg February 17, 2015 6:00am-8:01am EST
some 8000 troops are trapped by rebel forces. the u.s. is gravely concerned. drones, they are approved to five -- black six feet off the ground at 89 miles per hour, reddy said ,dock. good morning, this is "bloomberg surveillance." it is tuesday, february 17, i am tom keene. let's get to our top headlines. >> eastern ukraine, he's remains elusive at this hour. a cease-fire is being ignored were up to 5000 ukrainian troops are centrally surrounded fighting between government troops and progression separatists continues. germany says concrete steps have been agreed on but rebels say that plan is not within the parameters of the truce agreement. the violence to end a fragile peace accord seal last week after marathon talks in minsk. the deal envision a withdrawal
of heavy weaponry beginning today. talks between greece and its creditors have reached an impasse. the 19 nation euro zone has effectively issued an ultimatum. greece must ask for an extension of its current bailout program by friday before further negotiations on its financial future can take place or face debt commitments on its own. the move raised concerns greece would have little choice but to leave the euro. the standoff is making markets nervous. greek shares opening 4% lower. >> record low inflation rate for britain as food and fuel prices plunge. under report shows consumer price growth slowed to 0.5% in december. economists forecasted up 4% rate in january. governor markell he says rates of oil could fall below zero in the coming months. -- mark carney says rates of oil could fall below zero in the
coming months. enter hanen in south texas has block the president's orders for now. coalition of 26 states is suing to permanently stop the president's orders. the judges move by some time to pursue that action. the president's orders could allow as many as 5 million people in the u.s. illegally to avoid deportation. >> brace yourself for another blast of winter. it is partly february. the season's first major snowstorm to blast the south and reach washington, d.c. early tuesday. poised to go up the east coast. the storm blanketed several southern states monday when many schools and businesses were closed for presidents' day. it moved into the mid-atlantic states early today, prompting the federal government to close washington offices until easter -- i'm kidding. six to eight inches of snow were expected in washington. metro new york and see three to five inches of snow. where men are men and women go to aspen or wherever olivia win.
come on, it is february. >> have you seen the pictures of south boston? >> amazing. >> eight feet of snow. >> individual will warns doug of reach car and fights break out -- warrens dug out for each car and fights break out. >> 1978, it reminds me of, a pilot. futures, negative two. 10 year yield does nothing maybe a little higher off the last couple of days. oil hasn't moved. i think that is an interesting idea. look at the dow. that is a negative yield. keep forgetting to put the minus sign in there, ever lower two-year yield in german.
let's go to the economics of the moment. this is u.s. economics. housing back to jfk and lbj. here is housing starts. here is that boom. that is a big hunk of blue forces even over here, the housing boom for the last decade. we're really not back there "bloomberg surveillance." if we extend this chart to around tom's bowtie, if we look back to before the baby boom doesn't look different. housing starts are a function of this to my graphic change that happened right along -- >> i will go with that. >> is this what it is going to look like? >> that is a key structural cyclical issue. >> i am still wondering whether or not millennials are buying homes. >> i totally agree. that is where we are relative down much further we have to go to get back to 2006. this weekend, any number of stories cap just going on a three day weekend. no question greece did not have a three-day weekend. the nation's leaders faced three
days of ultimatums from a relatively united european union. cons nichols dissects it -- hot's nichols dissects it. making international headlines. hans tell us about this conversation. >> we are trying to get what mr. bear focus strategy is if you does have a negotiating strategy. i put the question to him and here is his answer. >> if you're not playing games and you're not playing or blessing, what game are you playing? what can you do to assure voters who are not playing monopoly with fake money? >> i have never played monopoly with fake money, always with -- >> will there be a greek exit? we could get into the funny money scenario. commerzbank raised the risk
proposition a 50% of a greek exit before it was 25%. there are no talks that we know of taking place on greece, even though all of the finance ministers are gathered here in brussels. both sides are waiting for the other side to make an offer. until we have that negotiations won't start back up. >> it is more like mediterranean or baltic or worse than that. you have to know your monopoly. >> olivia is like, what? we have to play monopoly the next time we see olivia. >> tom has been sitting me hate mail because i was skiing. how did the deal he thought he had fall through? >> well, the initial offer he had came from the eu. they are the eu commission. the finance ministers got wind of it.
they pulled it off the table. you have this remarkable scene where mr. varoufakis. he had a deal. it did look pro-greece. that deal was yanked from him. then they gave him a return deal that said, you need to extend and stay in the program with some minor modifications. some flexibility, whistling which. those two words, "some flexibility" were far too nebulous to use, mr. varoufakis terms, for he missed and a program and now we are in a standoff, stare down, whatever you want to call it. >> what are the actual terms of this negotiation? we keep reading they want 30% flexibility 70% flex ability. what is actually at stake? is it possible they could reduce the need to run a primary surplus of 4.5%? >> the primary surplus issue would be for the longer-term
negotiation the six months negotiation. they need to figure out what they're going to do for the next two weeks, how they're going to stay in the imf package, in the eu/ecb bailout program. maybe having some reductions on pensions. this is clearly what the germans one. they want them to be more in line with the rest of the european standards. greece is saying, we cannot have pensions that are that low. greece wants a little forbearance on that. the value added tax. that is a big driver for tourism. those are the kind of technical issues we are talking about. >> we have ukraine going on with breaking news in the last five minutes. on the further fighting, no question about that, 12 armored vehicles reportedly crossing in from russia. is brussels even aware the ukraine cease-fire seems to be a little fragile? >> it is being talked about on the sidelines. these are mostly finance
ministers and the foreign minister meeting that was earlier in the eu leaders were here last week. that is when we heard the heavy skepticism from german chancellor angela merkel saying we have to see whether or not the cease-fire will hold at all the reports out of eastern ukraine is the cease-fire is not holding. it is a cease-fire in name only. >> thank you so much. we have two wonderful guests with us this morning. rbc capital inquiries can indication's as we look at our fiscal challenges in washington. let me start with you. within all of this, the idea is where is the economic growth? we saw this. is it a global recession that is a backdrop for all we have seen in greece and ukraine? >> certainly, one thing i think is fascinating, there was an argument over the fallen, saying
russia is going to be in so much pain, they're going to be more complacent in terms of foreign affairs. they're not going to be rattling the cages. this is a time to punish rustler -- russia with low oil prices. russia may be in a lot of pain but russia is not backing down on the foreign policy side. we hoped lower oil prices would make countries behave better, i think that is up in flames. talks do we have to wait for them to -- >> how far do we want to push this? do we want to go to the level of swift sanctions against russia? that could hurt the european recovery. i think we have no good options in terms of economics and russia, how we punish them for ukraine. you really are going to hurt europe in the process. >> as the cease-fire remains quite fragile and unclear if it is holding, they did expand the list of those are targeted with
-- >> did they add more sanctions? >> no. >> stand, helima croft talks about the ogre game saudi arabia place. -- poker game saudi arabia place. we just heard about monopoly and game theory and your. do we need to brush up on our game theory? >> yes, candy crush is the paradigm we need to use. what i hear a lot, the questions i get mostly from clients is, is something new going? when did we get back to normal the weight used to be? this is the new normal. we have to keep that in mind. this breaking news on international affairs, the situation in washington which is so unsettled and unsettling, this is not going away anytime soon. >> you heard it hear from stan collender, the new normal is actually normal "bloomberg surveillance." evan op-ed from yanis varoufakis saying, no time for games. >> when he left, get a phd
position at the university of at this -- athens. the first thing he did, he went and worked for online companies trying to develop within a game economies. >> candy crush? >> no. >> still to come, pepperoni pizzas will not be dropping out of the sky just yet. the faa has grounded was on's plans for delivery new drugs -- amazon's plans for delivering new drones. this is "bloomberg surveillance." good morning. ♪
international military action against islamic state, wanting airstrikes against the extremist group inside libya on monday. the attacks and north africa followed the release of a grisly video showing the mass beheading of 21 egyptian christians. egypt's president is lobbying europe and the u.s. were coordinated international response. supreme leader of iran taking aim at "american sniper." he says the film encourages violence against muslims. that is according to a state newspaper in iran's paper come also quoted saying he had not watch the film, but learned about the plot from others. in denmark, thousands marched in copenhagen late last night in freezing winter to remember a pair we can shooting victims. police say the violence may have been an attempt to copy the massacre at charlie hebdo in paris. those are your top headlines. >> the skies are about to get a
lot more crowded. the faa finally released its long-awaited proposed rules incorporating commercial drones into civilian airspace. peter cook has braved the snow in d.c. and more on this proposal. peter, i think what everyone once to know, does this give domino's the green light to drop pieces on my doorstep via drones? >> it does not. i did not get here into the bureau in a drone, either. but it does give the green light to whole host businesses -- hollywood, the real estate industry, to be able, to use drones for commercial purposes, which right now is illegal in the united states. this is a big step forward. a lot of folks thinks this was a letter touch approach than expected from the faa. anyone hoping to deliver something physically through a down -- drone, that is off the
table for now. the faa is leaving the door open to at least a conversation on that topic in the future. >> lighter than expected touch on regulations. the couple of months ago, amazon threatened to take its drug development offshore if the faa did not change the rules. do we have any sense that the faa is bound to commercial pressure? >> not necessarily, though that has been a factor. there facing pressure in congress as well. they see the opportunity here or the u.s. to be a leader in this business, and they did make it clear over the weekend they want to let that happen, but they have to have safety as their foremost concern. the big issue, the threat all along, you would have to have a pilots license top rated drones. that is not a move the faa has decided to go with. you have to pass a written test and be vetted by the tsa a beef 17 years old, the reality is tom keene could fly a drone if you wanted to. >> terrifying. >> i don't think this is funny.
remind me, you can go 70 miles an hour? >> they can go really fast. the real problem for commercial companies, if i understand correctly, with the new regulations, they cannot be automated. they have to be flown by a pilot within a line of sight. checking the pipeline, for example, that activity not be allowed. >> absolutely. you have to be able to see your jerome. that has a big factor for amazon people trying to fly over pipelines and crops and mountains and things like that. that is the one thing or the one aspect the faa has put the line in the same for now, but opening the conversation -- they want to be shown the technology is good enough they can trust a drone to fly away from its operator and still maintain a certain level of safety in terms of its location on a back whether gps tracking system could be enough to control the drone when it is out of line of sight. >> we have stan collender with
us who advises private companies on how to talk to washington. how would you advise jeff bezos on hearing these faa rules? >> we have a flash gordon star wars, thing going on. people are fascinated with it the possibilities. the technology has not advanced to the point where the average person is demanding it. >> i am demanding a pizza drone. >> i don't think this is funny, stan. we're talking about putting 80 mile an hour hunks of plastic or metal? up in the air? >> forgive me, you're sounding a little crotchety and old-fashioned. >> one of them looked right at me as central park. >> it was very scary. one flew to the white house. >> the technology is coming, it just isn't there yet. there already problems of drugs interfering with commercial flights.
-- drones interfering with commercial flights. the average person is going to have to demand it to members of congress. >> the innovation is happening. either we figure it out or we don't, but we can't stop the innovation. >> and it can do cool things like bridge inspections, aerial photography. >> that is within sight. >> i am holding on to the word "crotchety." can you banner "crotchety" under tom? >> do i get quote of the day? >> peter, thank you for getting up with us in the snow in washington, d.c. carl weinberg joins us as guest host in the next hour. this is "bloomberg surveillance." ♪
helima croft this gets to the idea, it is not getting to 10 or $20 a barrel, it is the bet the vector is in that direction. >> one of the big things we're seen in the oil markets with the recovery, this sort of tension between falling rig counts but high inventory. just waiting to see at what point this rig count will translate into a meaningful sewing of north american -- that is the gamble in terms of if you're betting on higher oil prices, betting on a recovery trade, and also betting this growth slows materially. x you are an expert in job political risk. >> you have the libya story. libya has fallen off a cliff.
one of the reasons why oil started to retreat was the return of libyan barrels. it went away and no one cares. >> quickly, where would oil be right now ex-libya? >> you mean if libya was fully going? we would be lower at this point. i would argue it is not priced in geopolitics. you could have a bit of a shock. >> helima croft on geopolitics and oil. frank keating on banking, on his oklahoma. stay with us. ♪
>> good morning, "bloomberg surveillance." i am tom keene with olivia sterns and earning grilli. >> west virginia, hundreds of families were evacuated after a train caring more than 100 tankers of crude oil derailed in a snowstorm. look at that fire cloud. intense flames burned for nearly nine hours, at least one plunged into a river. the accident occurred near the town of mount carbon. no fidelity's reported. a major panic at lax, about 20 passengers fled through emergency doors and onto the
tarmac after incorrect report of an armed man on the loose. the incident your boarding area partly stem from a police pursuit of an unarmed driver that ended outside the terminal. it took about 15 minutes for authorities to get the scene under control. $10 million judgment goes against lance armstrong, an arbitration panel ordered armstrong and tell sports corporation to pay up with a fraud dispute surrounding armstrong's tour de france bonuses. the company accused armstrong of unparalleled pageant of international perjury, fraud and conspiracy. those are your top headlines. >> it has been more than a year since the last time washington shut down a federal agency. this is america, that is way too long. >> you are so cynical. >> in eight business days the homeland security department will officially run out of money. stan collender literally wrote
the book on the federal budget, has done time on both the house and senate budget committees. stan -- >> i love the way you say i have done time. >> how do we get here again? >> this is a republican versus republican problem, not republican versus democrat. house republicans are much more and possibly conservative than their senate colleagues. they can't agree on what to do. the house republicans are demanding they do something to stop the president's executive actions on immigration. the senate doesn't have the votes to do that to minorities it clear they want to do that. now you have speaker john boehner over the weekend saying, a shutdown would not be that bad. >> you look at structure, not ideology. the differences, are about redistricting, right? >> absolutely. 2012 republicans basically in control of redistricting and more states the democratic states. they made though states much
more reliably conservative and republican. as a result, the primary becomes the most important election. those are militants aggressively conservative voters to make compared to the senate which doesn't have districts, but states. they're much more moderate. different political needs. >> if you have the opposition in control of the house and the senate, doesn't that bode well for the president and the democrats? >> first of all, republicans have a lot of baggage, going back to the newt gingrich days. yes, number one, the president has the authority to keep as much of the government or the department functioning as he once, and republicans get blamed. >> wonderful experience with the joint economic committee, the sausage of all of this, can i ask you where this started? the whole attitude that everybody blames reagan, but that is too easy. if we gum it up, it will go
away, attitude, where did it come from? >> the earliest days of the republicans. remember -- >> and you were there. >> don't go there. >> crotchety. i love this screamed. >> this is nothing new. it took on added meaning in 2010 with the tea party and redistricting of 2012. >> is this just baked into american politics until 2020 will we get another redistricting? >> 2022. even then, there's some indication a given the control of the state by the republican party it is not clear it will change even then. at that is the next time it is likely to go on. >> when you go back to the 1890's, it was the same way blame. it was a lot like this. what does it take to get ourselves, republicans and democrats, out of this vicious loop? >> i'm sorry, can we get someone on the monitor again?
i hear tom saying, let's go back to the 1890's. i want "crotchety." >> they are exhausted. >> two things historically that have gotten us out of this -- >> war is one. >> then call it three. crises in general. a charismatic leader who can overcome this kind of partisan differences. sometimes you need accommodation of those to make it happen. my question is, what kind of crisis do we need at this point? how bad does it have to be for we are ready have crisis fatigue? >> s&p taking us to the brink to the downgrade in 2011. nancy pelosi likes to say it shows the tea party still holds the gavel for the gop. do you agree? >> no. especially with against the republicans had in the last election. speaker boehner has a little more room to maneuver. what is going to have to do is what he is done in the past, do it at the last minute
basically, get permission from the tea party folks to cut a deal, get some democratic votes we're going to vote against you. they clearly have some substantial impact. >> and they're happy to see with that texas judge did overnight, blocking second of actions on immigration. >> which is expected to be overcome by the court of appeals very shortly. >> coming up, we are focusing on the young and the restless and saudi arabia. that is the subject of today's single best chart. how the country's youth unemployment problem compares to other opec nations and the world and the u.s. will stop we will discuss. this is "bloomberg surveillance." ♪
>> good morning, "bloomberg surveillance." i am tom keene with olivia sterns and brendan greeley with me. let's get to the single best chart. >> there are some things that oil money cannot buy. youth employment is one of them. that is today's subject. it comes from our guest helima croft of rbc. pay attention to the yellow. that is saudi arabia. look at the green, that is the world. the measure is youth unemployment rate. helima i feel like we've been reading for decades about saudi
arabia attempting to change its economy, to get away from this reliance on oil. it turns out, they can't do it. >> it hasn't worked. king abdullah is focused on the young population. he understood young unemployed restless saudi's were in economic threat. he wanted foreign investment and new opportunities, new jobs, yet remained. oil. 90% of government revenue comes from oil and saudi arabia. you don't have the employment generation. for saudi arabia now, they're facing a security challenge, once again. thousands of saudi's joined isis, having to build a 600 mile wall with a wreck, having to face once again the challenges of, what do you do with the young population that has no jobs? >> what is it so hard to create jobs with oil money? why doesn't it work? >> how do you diversify? how do you attract foreign investment into a system where if you have your choice between opening up in dubai, a little more liberal and friendly for
washington companies were even qatar, are you going to set up shop in riyad? >> isn't the problem the saudis don't want the jobs they want? the bulk of the workforce particularly in the middle and low income, is all migrant for an workers in the saudis don't want those jobs. >> the leadership to the credit, or trying to bring a new laws that essentially say, you have to hire saudi nationals before you hire foreign workers. some are horrified by that. they want people willing to work , willing to do the jobs, who don't to be managers. the tension -- the government is aware of the problem with the young population. they just haven't found the silver bullet terms of policy reform. >> they don't want to be chauffeurs or housekeepers or work at mcdonald's. >> the talk about were the foreign and the x-men goes in the expertise goes, goes to more
-- foreign investment goes in the expertise goes. atlanta was farther ahead on integration and ended up being a hub of investment were cities like birmingham, which of a more powerful, did not integrate and did not get there. >> arguing in the gulf context, there's a difference in the united arab emirates and being saudi arabia. there's a reason why s&p downgraded saudi but kept all be dobby basically the same because i'll be dobby has done better at diversification. it is an easier place to operate in. even in the gulf context, saudi arabia is lagging its peers. >> they have indoor skiing hotel industry, and natural resources. a very diversified economy. >> it is an investment hub. >> i would suggest away from the stereotypes, the skiing, four busloads of indians living bus -- leaving to see the arab
economy. there's a lot of poor people. it is grim. >> i think the foreign workers the is becoming an issue. it will be a challenge for these governments. >> let's get to some photos. >> in damascus, staging a publicity stunt comparing bishara al-assad dices. children reenacting the execution of the ladainian pilot was burned alive in a cage. the protest was held at the side of a recent airstrike in damascus, which killed 55 women and children. >> grim. no other way to put it. wood is the egyptian beheadings. >> number two, in texas, kenyan runner crawling to the finish line of the boston marathon. this is unbelievably corrode. she was leading the race 23 miles and when her body collapsed. the runner crawled the final few miles to the finish line and
still came in third place. that is commitment. she was offered the wheelchair several times and offered help with walking, but repeatedly refused help. she came in third place. >> so hard to watch this footage. >> she said she is going to come back and run it again and win. number one photo, if you are in the week -- new york this week this is tommy hilfiger's runway fashion show. models walking in the fall women's collection. football field to celebrate the brand's 30th anniversary. some of the designs have already sold out including a $550 faux fur vest. >> of all of the teams to pick. >> what you think of spring this year? i looked through the "the new york times" sunday and like 95% of it, no one could wear to work. >> you're not supposed to wear
the runway work -- looks to work , and the models are actually 14 years old so they are not designed to be worn by anyone going to work. >> where would you wear that? to dinner? >> i would probably not even be able to fit into that so i don't think i'm wearing it anywhere. it is probably to dinner on the weekend. >> today out price the market -- did they out price the market? the different culture markets? >> i would not say so. reporting this morning, gucci not doing well saint laurent doing well. it is very price insensitive. >> robert burke was great last week. >> i'm glad we got to olivia on this. congratulations. that is something apple has learned as well. our twitter question of the day --
>> good morning, "bloomberg surveillance." i want to officially say i hate helima croft. first, top headlines. >> eastern pakistan, at least five people are dead following an appearance is that bombing this morning when the bomber attended to enter a police complex. the police chiefs said several others were wounded in the blast and some nearby buildings caught fire. there was no immediate claim of responsibility. japan is waiting further into the global fight against islamic extremists. providing $15.5 million in development for anti-terrorism initiative. the foreign minister says the contribution incentives -- is to bolster. japan's moves follows the recent beheadings of citizens held hostage by islamic state militants. officials in china are drawn complaints for toning down chinese new year events. the muted festivities follow a stampede in shanghai that killed
36 people last month. the city has canceled its lantern festival, which attracts millions and authority's have asked stores to notify police of any sales. seven-day holiday kicks off wednesday. those are your top headlines from around the world. >> 75% is the percentage of revenue derived from oil, so note surprise it is hit nigeria's economy hard and sent the currency into freefall, now don't -- done more than 20% since july. helima croft from rbc capital markets, warns africa's most populous country may be the first sovereign casualty of opec's price war. as tom said, essential reading on nigeria. why do think nigeria could be the first metro state to fall? >> they're going into elections and they're usually very volatile affairs. this time that no money and very deep political and regional divisions and a scary islamist extremist group running around occupying territory south of
belgium. we look in the jury and say this is primed to potentially go over the cliff. venezuela could go afterward. election has been postponed. we're very concerned you could have major unrest accompanying this election. >> terminal headlines they're going after cameroon troops as well overnight with the rebels in the eastern part of the country. bring up the chart, if you would olivia. this is the currency chart and it shows the chaos. this is back 20 years. some sense of stability. you have a new junk in addition. >> that is the civil war in the 1990's. >> nigeria is ray much still regionalized. you're talking about voting not clinical parties but regions voting against each other. what did they fail to do during that time of stability to avoid where they are now with the price drop? >> the transition back to elections in 1999. yet a predatory elite and a jury
that basically the compact was fueled by oil money, not terms of distribution. lagos has a good governor functioning tax collection system, administration services. lagos remains an island. you have desperate poverty, lots of weapons, and huge the justified. >> and the corruption reaches all the way down to the local police precincts. >> of course. part of the reason we have cut off certain types of military aid is corruption and human rights abuses. we don't have a great partner in terms of putting down boko rom -- haram. >> it was interesting to see "the wall street journal" had an interview with jonathan good luck -- elect jonathan. it is hard to get your head around everything going on in this country. you have lagos a booming luxury market and the fastest growing middle class in the world by some estimates, than 60% of the country in extreme poverty and
religious crusades going on. just nigeria make sense as one country? >> it was put together for convenience in 1914. they basically did it because they did not want two foreign office units. they had a civil war in 1967 that defined the country. but now that is fraying. >> to my point, where is the institutional structure in the west or the united states, to assist whomever in nigeria? we talk about helping ukraine or we help greece. there's no dialogue to help in a country like nigeria. >> afrikom. >> generally, the one institution, the western institution during the most in ukraine is the imf trying to figure out what other terms of this bailout. if anyone, the imf seems -- >> would you agree with that? >> that is not what nigeria needs right now. >> they literally need an effective military and policing and massive anticorruption.
they've had significant debt forgiveness. >> we talk about the reduction the u.s. becoming more energy independent. west african oil -- >> great story. when i covered the story, we took 10% of our imports from nigeria in 2001. we basically take no imports from nigeria. there isn't a strong asian demand for nigerian barrels. the cargoes are floating, so they're hit by lots of market share and falling prices. >> west african oil has been the big loser. >> the biggest loser. >> in nigeria, they don't have any domestic refining. >> no, they import it. there is massive corruption stop at some accounts cost the country $7 billion. >> an update on iran. >> we have to be watching the end of march. do we get a framework agreement? if we don't, you will be looking
at new u.s. sanctions coming out of congress. >> does anyone in washington care about iran? >> no. there are one or two people, but there is not a lot of dialogue. >> what about iraq? lots of scary headlines over the weekend, looking like islamic state is closing in on anbar. what does that mean? >> go back to tom's point about oil market geopolitics. there is a sense right now there is no risk in iraq because violence is up north. physically, well, we're going to get 500,000 barrels out of northern, and there's ice is running around in the backyard but i think those northern barrels are at risk. isis at some point, why don't we go south? we want oil prices back up, our own revenue needs. i don't think we should say there is no chance ever they won't go south. >> it doesn't look like the iraqi military can hold them off. >> no, it is she a malicious.
who has influence? iran. providing security in the fight against isis in iraq. >> when you look at iraq and back down at nigeria, are we just discovering it is one more place where regionalism is so much more important than we had thought? >> absolutely. it the kind of question of benign neglect. there's a nightmare in a closet and we pretended is not there. >> stand, we are all baffled by washington, maybe more than nigeria. what is the stan collender scorecard look forward to? what are you focused on for march or april? >> i am watching this republican versus republican thing. if they can't -- if we have a shut down, it is an indication the rest of the year is going to be a disaster. it is the same type of thing we will be repeating over and over. >> i have to get up to speed on this. i'm not up to speed on this. stan collender thank you so much.
just say no backfires upon eu leaders. ultimatum being with drawn. it is a fragile cease-fire this moment in ukraine. some 8000 troops are trapped by rebel forces. the u.s. is greatly concerned. the enemy is within. forget yemen or the islamic state -- think oklahoma city. good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is tuesday, february 17 full stop i am tom keene. joining me olivia sterns and brendan greeley. we need to get started with top headlines. here is olivia. olivia: cease-fire in ukraine may be over before it even begins. 5000 ukrainian troops are currently surrounded and still fighting with pro-russian rebels. the cease-fire agreement reached last week in minsk called for russian rebels to start withdrawing their weapons from ukraine today but it has not happened so far. germany wants to put international observers in there, but rebels say that was never part of the deal.
now to brussels where talks between greece and its creditors --are yet again at an impasse. greece must ask for an extension of its current bailout program by this friday or negotiations are over and greece will have to deal with its deficit on its own. the move raised concerns that greece would have little choice but to leave the euro. the standoff is making markets nervous. brendan: britain has record low inflation as food and fuel prices plunge. a new report this morning shows consumer price growth slowed from 2.3 -- to .3 from .5. projections reflect falling oil prices. governor mark carney said the rates could fall below 0 in the coming months. a federal judge threw a wrench and president obama's executive actions on immigration. u.s. district judge andrew henan
in south texas has blocked the president's orders at least for now. a coalition of 26 states is suing to currently stop the president of the orders. the president's orders could allow us many as 5 million people who are in the u.s. illegally to avoid deportation. tom: on the weather, it is february, brace yourself for yet another blast of weather. the season's first major snowstorm in the south hits was no d.c. and is now poised to head up the east coast accompanied by bone chilling cold air. the federal government is cold -- is closed. are you kidding me -- toughen up! imagine new york, three to five inches. brendan, friday, saturday, there is a blizzard coming in all the eggs are gone. it is a blizzard. there is no snow. brendan: we are not prepared for that. i grew up in the washington, d.c. area.
snowstorms are an occasion. it is not like we live in boston. it is a big deal. olivia: the new york city weather forecasters are losing a lot of credibility. they appear to be crying blizzard, in boston, though, they have eight inches of snow. governor keating, thank you fort slashing income actually in your -- thank you for sloshing in, actually in your galoshes. frank: i apologize for looking like this. tom: the 1880's, the homesteaders, they ended up with 14 feet of snow and moved the cattle around. olivia: are you asking governor keating because you assume he was around then? [laughter] frank: surely they stop all work and when inside. tom: they turned to the weather channel. frank: for those involved in the cattle business, and i have been in a small way -- i love animals
of all sizes and types -- but you have to wonder what the weather is like because you have to water them, if you do not have water coming up to see them, if you do not have feed, you have to give them shots and all this tom:. tom:it sounds like your kids. brendan: it is exactly right, that is how we treat our kids, we put them in a pen and shovel hay and let them fend for themselves. tom: i want to give a shout out to robert carroll who has been fabulous throughout this winter in the northeast will stop a data check for you, right now futures -2, the euro $1.1431. brent crude of $53.26. greece did not have a three-day we can like we did. rather they faced three days of ultimatum. we go to brussels and our hans nichols where he spoke with the greek finance minister. hans?
well, we have got a little bit of a technical problem hans not being able to hear us right now. we will get back to hans nichols in a bit. right now we can talk about greece and the challenges over the weekend. this is simply a verbal warfare. brendan: you had a new coalition partner for grace show up, which was the european union itself, the structures, the commissions, so jean-claude juncker actually attempted to intervene between the finance ministers of europe and the caucus. it did not work. the eu wants this to work. tom: hans nichols had become a station and press conference with the finance minister in brussels. hans? tom:hans: tom, sorry about that earlier. lots of distractions. it is incumbent upon the other side to make the next move talks have collapsed they are suspended, however you want to couches, and overhanging the big question is -- what is yanis
varoufakis' new strategy? he has the most to lose and it is the question of put him last night. you're not playing games, you're not bluffing, what game are you playing? what can you assure voters that you are not playing monopoly with fake money? minister varoufakis: i have never played monopoly with fake money i have always played monopoly with monopoly money. hans: the euro is not blinking. they have raise their profile to 50% for a greek exit. we've seen the greek indices down, but the euro is not moving a whole lot. perhaps they are more optimistic that there will be some meeting coming together before friday, which everyone says is a deadline because then the deal has to go to the national legislatures and they then have to approve it. olivia: hans, yanis varoufakis the finance minister, said there
was a bait and switch. he went into the meeting thinking he had an agreement. what happened? hans: he had an agreement but from the wrong people. he had a piece of paper from people who could not enforce it. they of course are representing the european commission. it is the 18 other finance ministers that have to sign off on that. the minute they got word of that they withdrew the offer. they offer him something else, and then that offer, they said stay in the current bailout package. we will extend it for a little bit and in return we will give you "some flex ability to cope those -- we will give you some "flexibility." tho two wordss were not enough for yanis varoufakis. e talks to star in a moment. there is a separate finance meaning taking place here in brussels. lots of opportunity to start talking if people do indeed want to talk. . brendan: hans, that is the great thing about europe, wait long enough in a new finance meeting
will happen on its own. the rodeo, do you get the sense is is all theater on the way to a resolution, or is this actually breakdown in negotiations? hans: well, people that i know who have been here a lot longer than i have been and have been through greece cyprus, 2010 they seem almost -- not thing sanguine, but resigned to the fact that there will be some drama and histrionics but ultimately a deal. it is hard for me -- maybe i'm not that imaginative -- it is hard for me to see a deal emerging right now unless one of the side links. -=--- sides blinks. the warning a 50% chance of a greek exit, guys. tom: hans nichols, thank you so much, greatly appreciate it. olivia, you have a quote. olivia: yanis varoufakis wrote -- one may think of this retreat from game theories as motivated by some radical left agenda. not so.
tom: philosophical again. olivia: brandon, what do you make of that? brendan: i don't know. [laughs] the pike is what is possible and who was at fault. the german say it is the greeks who should pay for it. the greeks say it is not matter, we cannot possibly pay it. tom: carl weinberg joins us this morning with high frequency economics. carl let's with a basic economic backdrop. can you use the dreaded "d" word? carl: credits contracting prices going down, industrial production is 12% lower than where they started back in 2008. it is a depression. tom: you saw inflation numbers
-2.8%. brendan: even more important these inflation numbers out of the u.k. the u.k. was supposed to be one of those economies levitating above the rest of them. carl: you look at my chart in high-frequency economics today cpi has been slowing in the u.k. since 2010. this is not a surprise to anybody. if you are looking at the numbers, you saw this coming. the bank of england is not hiking rates anytime soon. tom: that was a shameless plug. weinberg 1, keating 0. carl: the chart is right here for stop i do not see what the problem is. [laughter] olivia: that brings us for twitter question today -- what is the likelihood that greece exits the euro? ♪
from a ruined nation incredibly what the french and british were doing to germany, is now actually not quite as bad as the current great depression. we have with us on set carl weinberg of high-frequency economics. carl, you think greece needs a 25-your grace period? carl: it could not hurt. when i give them a quarter-century? it is what we did with the latin american the early 1980's. what europeans are either not grasping about publicly acknowledging as this is not about extracting money from greece. the whole endgame from europe is to preserve the stability of the banking and financial system, and that means nobody takes a hard-hit now or anytime soon. there is $300 billion worth of debt that someone will have to suffer if this gets written off right now. keep the banks going, they get them 100-year bonds, 25-your grace period on interest and principal, a 2.5% yield to maturity. nobody takes a haircut, note has
a right off the banks are safe, the greece has -- the greeks have .5 years. -- have 25 years. brendan: when i hear this extending the duration of the bond is a haircut by another name. how you get germany to accept that? carl: this is a fault, and germany does not have to accept it. greece is not need germany's permission to default. all caps do is pick up the phone and say "we cannot pay, now it is your problem." when you're financial businesses are risk, that is what they're doing, they have a planet cannot be finance with the current resources they have. their easiest resources to default on their debt. they are defaulting. this is not a game, this is real, and your past to accept the fact that there is no way out on their terms. they have to find the best way to manage it.
it is not a problem -- it is a fact. a problem can be solved. a fact has to be dealt with. greece has to be dealt with as a default. that is what it is. that is what the finance minister has said. this is not a liquidity problem. do not lend us more liquidity. this is a default and insolvency. olivia: it certainly looks like it is coming down to the brink. carl weinberg of high-frequency economics, you are staying with us will stop any meantime answer on twitter question today -- we want to know -- what is the likelihood that greece exits the euro? tweet us @bsurveillance. ♪
tom: good morning, everyone. "bloomberg surveillance." pretty good take this morning -- the euro $1.1428. when you top headlines from around the world. here is brendan greeley. brendan: egypt is calling for international military action against islamic state. it launched airstrikes inside libya on monday. attacks in north africa fall the release of a grisly video that showed the mass beheadings of 21
egyptian christians. egypt's president is now lobbying europe and the u.s. for coordinated international response. the supreme leader of iran is taking aim at the hits gnome "american cyber." he says the hit film encourages violence against muslims according to a state newspaper in iran. it also quoted that he did not watch the film but learned about its plot from others. in denmark, thousands of people marched in copenhagen to remember paris weekend shooting victim. the violence may have been an attempt to copy the massacre at "charlie hebdo." the suspected gunman was killed in a shootout with police. those are your top the list from around the world, olivia. olivia: a new study suggests that dodd-frank may be helping wall street more than main street. according to a harvard school of government report, community banks account for 20% of u.s. banking assets and lending markets down from 40% just 20 years ago. the report concludes that dodd-frank is excel or emit a
client. our guest host this hour is frank keating, pressing and ceo of the american bankers association, a leading lobby of the financial industry. he is also former governor of oklahoma. governor since dodd-frank passed in 2010, the share of u.s. assets have been doubled at a rate through the deficit crisis, do you agree with the conclusion of this report that dodd-frank is killing community banks? governor keating: well, at the time there was a feeling now i am a part of the american bankers association, that if you had a $10 billion cut off, anything less than that is a community bank, anything more than that is not. less than that, dodd-frank would not impact the cfbpb consumer financial protection bureau, well, the impact all of it because the prudential regulators and the cfpb
basically every thing is put on the banks equally, so we have lost 2000 banks since the fall of 2008, 2000 community banks. i've got to say from sea to shining sea in small-town america, the community banks provide the small business loans, they provide the agricultural loans, they provide the loans for, if you will start up capitalists far more so than the larger institutions on a per capita basis, so that means those 2000 community banks are not in a position to help small people get their first flip on the first rung of the capitalists latter. that is very bad, and clearly you can aim your sights at dodd-frank and its excesses in the community banks basis. brendan: those banks are being acquired by other smaller banks normally. i talked to some small banks in louisiana about this a couple of years ago, and they said something very similar to what you are saying, that they had to hire new back-office staff which is very hard when you are
a $100 million bank, but the fdic said that is not the way they see the problem. the real problem they think is one slow growth in new loans. two -- low interest rates that makes it hard for low banks to prosper, so this is not just a regulatory story, right? governor keating: the reality is the economy at large ought to move at the same speed. large middle sized banks, small banks, the fact is the qualified mortgage rule says there has to be a 43% debt to income ratio. it is a fence line lending product. when i bought my first house at 27, and by the way, it is 37 today because of student loan debt and also the rigidity of mortgage finance, when i bought that home i was offered various options for stop have your dad cosign the note. have the owner/seller, which he did do collateralized the first $500,000. today that is not a loan therefore the load is not made. that is not good. tom: i'm fascinated how you represent jamie dimon or mr.
moynahan over at bank of america and you also represent the bank of oklahoma. have you ever seen banks as far apart as they are right now? or is this just andrew jackson as usual? governor keating: of the top banks in the world, we have four, maybe three. the of -- the rest are all easily other countries. my big view is let the big guys compete overseas, that is great, kick ass take names overseas. oklahoma, a $26 billion bank lot bigger than the $10 billion threshold, let them make the ag loans and a small business loans will step i think, vision as healthy as good, but some of the community banks tell me this 2% to 20% of their operating income is used for the purpose of responding to compliance. think about here in new york, if you want into a restaurant and 50% of the uprooting revenue of that restaurant was to satisfy the new york health department. there would be people in gloves
with some thermometers. the small banks are merging and being acquired because they are frustrated. brendan: i know senators brown and vitter were completely on top of this two years in three years ago. they tended to draw the attention of the small banks and bigger bank that it failed in congress. how do you turn this distinction into legislation? governor keating: if they can get it done, there is a lot a bipartisan support. if you make a mortgage loan, you as a community bank or any bank and you keep it in house, it is a portfolio loan, it is automatically a qualified mortgage loan. that would be good. that would have a lot more mortgage activity. in the dodd-frank space, there are arcane rules, for example, my twin brother, a utility maker, was chairman of the utility board in tulsa, and under the dodd-frank rule, if you had any relationship of any sort, you as a bank or municipality you cannot do that
without taking a course with the fcc. i mean, it is very complex, very detailed, and simply -- olivia: trickle-down regulation. governor keating, you are staying with us. coming up, the ceo of costar is staying with us. this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your phone, and bloomberg.com. ♪
olivia: good morning. this is "bloomberg surveillance." i am olivia sterns. cap headlines -- we begin in west virginia where hundreds of families were evacuated after a train carrying more than 100 tankers of crude oil derailed in a snowstorm. intense flames from the explosion burned for nearly nine hours and at least one taker lunch into the river. the accident occurred during the town of mount carbon no fatalities were reported. a major panic at lax. about 20 passengers fled through emergency doors and onto the tarmac after an incorrect report of an armed man on the loose. the incident near a boarding area apparently stemmed from a police pursuit of an unarmed driver that ended outside a terminal. it took about 15 minutes for authorities to get the scene
under control. and a 10 nine dollars judgment goes against disgraced cyclist -- and a $10 million judgment goes against disgraced cyclist lance armstrong. is surrounded his tour de france bonuses. a company accused him of an unparalleled hatch and of "perjury, fraud, and conspiracy." tom: this matters not for a guest host carl weinberg of high frequency economics. a true expert on debt restructure. we talked about that earlier. now what does the battle of greece in the eu -- what does it mean for the united states? the first idea is that you parsed between financial chaos and economic chaos. it really depends some of the decisions made, what it means for the united states. carl: the risk to the u.s. coming from europe -- i think the economic risk has been contained already.
bank's have already positioned for contraction or slow growth. the grease thing is a new overlay. we are looking at the risk of a disorderly default by greece. i think the risk of high enough to think about as more than a tail risk right now. depending on how this default is handled, if the europeans come to the table and say you're defaulting, let's fix it in an orderly way, then risk for u.s. institutions is my demised. if they say no, -- is minimized. if they say no, we are going to restructure in an orderly way, that is a shock to europe that could in pinch the u.s. tom: based on your knowledge, what is the exposure -- i'm afraid to say the names of some of the major banks because i do not want to associate it with it, but given the nature of european banks, how exposed are they to athens? carl: well we do not know where the debt is. we know they have a 300 billion euro problem. that is the sum of all -- tom: that is not in greece.
carl: that is money greece owes to the world. some of those are indeed in greek banks, but we do not know where it went to. it used to be prior to 2010 largely banks around europe, high yield bonds. since then, it has been repositioned in hedge funds, pension funds, insurance companies will stop we do not know where it went to come and we do not know how prepared those holders are for a credit event, which might evolve. just to remind her self here, ltcm was not a bank, was not on anybody's radar scope as a risk until everything went terribly wrong. tom: are the greek leaders aware of the financial response abilities that these parties have come a order they have blinders on back and forth with brussels? carl: i think they are acutely aware. this is the card they are playing that they can cause harm to the european financial system. they can cause a $300 billion hit and they do not have to negotiation tom: let me flip it, is merkel
and hollande and european leaders aware that they could have exposure? carl: i think they are aware but i think they are incapable of admitting that the greeks have the upper hand in this negotiation. the grief can cause pain to europe, and the europeans cannot prevent that from happening. the europeans -- it is hard for to imagine them causing more pain for greece. i think most of the money in europe has to stay in europe. most of the money that is left there. institutions cannot go fleeing into dollars and take on the currency risk that is associated with that, so i think most of the money that can can g have gone already. tom: carl weinberg, thank you so much. we need a data check. here's olivia. olivia: equity futures are little changed for stop the s&p close of an all-time record high friday afternoon, s&p futures down more than 2 points.
treasuries rising following a two-week selloff. the euro stronger against the dollar clearly marcus not panicking against the talks with greece and its creditors. nymex little changed at $50.79 per barrel. tom: good morning, everyone. "bloomberg surveillance." i'm tom keene this tuesday morning, olivia sterns and brendan greeley. brendan gets us started with real estate. brendan: a joint study by google and the national association of realtors, 52% of first-time homebuyers headed to the web to start their search. he studied a not going to say when exactly the buyers had to give up and call a broker. andrew florance is the founding ceo of costar. andrew, you said the goal is for your group to become the amazon of real estate. i have one question. i will continue to ask it. how you plan to do this without brokers? andrews: actually the apartment
industry, the group we are focusing on, generally does not use brokers for stop consumers interact directly with property owners. the thing is -- the internet is perfect for doing that, and right before the launch of this product, we felt the solutions on the internet were pretty much broken. brendan: what is wrong, what is broken? andrews: the industry has been served by that little print direct you see at the supermarket that lists the handful of markets in a particular neighborhood, and the internet is ideally suited to show all the options out there. olivia: how can you say it is broken? i do not know anybody who is using a print magazine to look for an apartment for some of point is -- what is wrong with zillow? andrews: zillow's print only hitting the resale marketplace and that is basically working off the content from the multiple listing services. on the multifamily sites and area we specialized in for about 20 years, 30 years, and we are presenting now about half a millionn rental options up
from 18,000 when we bought apartments.com a year ago. brendan: are you really competing with craigslist? how do you compete with a company that has such low margins because it is money to make a profit? andrews: craigslist is definitely a goto source for apartment hunting but there are a lot of frustrations with craigslist. it does not have a good structured search experience. it is very fragmented, it is hard to post up there, and it is not cover his this. what we have done is put 1000 researchers around the country visiting half a million apartment buildings and collecting high quality, safe predictable content that folks can search on the internet. olivia: are there searches for buildings, maybe commercial office space of that will always need a broker? andrews: sure, commercial, if you move over to the retail space, brokers will always be involved because those are much more collocated than renting an apartment. brendan: you have a very famous
man sitting right next you, the governor former governor of oklahoma, frank keating. in his tulsa, you know, stay away from the commercial robbery market here in d.c., how do you go to tulsa and release the death grip of brokers on private property for rent that they have got all over the country? andrews: again, the private brokers are not really big players in the apartment industry across the united states. if you going to tulsa, we have got people in tolls or who have visited every single building in tulsa, every single apartment billing, industrial, retail property, and the brokers on the industrial side want to put the content on our site because they want to move it, sell it is like listing a stop. -- a stock. on the apartments i come of those owners are motivated to get out on a rightist exposure possible out on a website like ours. tom: what i see here off of apartments.com is deerfield
estates tulsa, oklahoma, this is like something frank keating could slip into. two bedrooms for $669 a month. are we moving to tulsa? governor keating: my wife has a lot of clothing. we need for bedrooms. andrews: we can find you four. 1[laughter] tom: to your point andrew, this is critical, you are going away from the romance of san francisco and new york and seattle -- forget about locations -- there is a whole other america out there. andrews: there are 100 million americans renting out there right now and it is growing. the shine has come off of homeownership, so homeownership is at the lowest rate it has been. tom: in yearstom: yeah but a -- lowest rate has been in years. tom: but in new york -- olivia do you have clothes racks in the hallway? [laughter] olivia: i did find on apartments.com $7,300 for a one bedroom. in chelsea.
we are focused on the boston red sox will stop pitchers and catchers in a matter of days as all hadead south to see the red sox get out of last place. [laughter] brendan: i will let you struggle. olivia: i am a yankees fan. brendan: i am a mets fan. you know we have on that with us? we have betty liu. the great challenge in any athlete's life is what you do when you turn 38 and you cannot hit fastballs anymore. derek jeter has that problem. bett:y: he is 40 now. he hit the big 4-0. brendan: don't call it that. i am 4-0. betty: derek jeter, the guy that every woman wants to be with the guy that every man wants to be, and also the person that every person wants to grow up to become.
he is on his, as you say, brendan, his second act. he goes from being mr. captain to now mr. ceo, and he has launch this company called the players tribune, which is a platform, a multimedia platform that allows athletes to pen basically first-person columns on any kind of issue that they want to talk about. aside from that, this is kind of -- it is not about the players tribune but about -- what does eric jeter do next -- what does derek jeter do next? might he own a sports team? derek jeter: i do not know enough about it. my biggest fear in life is being unprepared, so i make sure i am fully prepared before i would do something like that, so no i do not think i have time for that. betty: 12 months from now we will not see a team owned by derek jeter? derek jeter: do you have some money from me? [laughter]
betty: i think anything from you. he is one of the athletes who saved much of his own earnings and has this 200 million dollars. he cannot buy one on his own, he has got to obviously hook up with a few people, but i'm sure there would be many who would want to be on his team. brendan: who out of hockey has transitioned management the best? you leave the sport and you go to a life you have been unprepared for because you spent your entire life doing the same thing? tom: it is a huge deal in pro sports, not only the money part but also the psychological part. i would say emanuel rivera has done as well as anybody with the new york yankees, but it really varies sport is for. in hockey, i would say ray with the bruins did a great job with the transition. brendan: you have got to do more than open a bar. that is what these guys do. they take their money and open a bar with her name on the top. betty: i think of athletes who has transitioned well, michael jordan, magic johnson those are
in basketball, so we will see. brendan: shaquille o'neal makes more and sponsorships than he ever did. he has figured out how to hone his post basketball in the a guy with a big smile. olivia: betty looking forward to it. be sure to catch betty liu's interview with derek jeter coming up on "in the loop" starting 8:00 a.m. eastern time for some in time, please answer our twitter question of the day --we want to know -- what is the likelihood that greece exits the euro? tweet us @bsurveillance. ♪
tom: good morning, everyone. "bloomberg surveillance." i am tom keene, with the olivia sterns and brendan greeley with our top headlines. brendan: in pakistan, at least five people are data following a apparent suicide bombing. the attack occurred in the city of lahore. no immediate claim of responsibly. afghanistan, this morning television suicide bombers dressed as police officers attacked a police station in kabul.at least 20 people died in that assault. japan is waiting further into the local assault against islamic extremists. foreign minister says it is intended to bolster efforts in the middle east and africa.
japan's move follows the recent beheadings of two of its citizens held hostage by islamic state militants. officials in china are drawing complaints for toning down chinese new year's events. the muted festivities follow a stampede at shanghai that killed 36 people last month. the city has canceled its lantern festival, which attracts millions. authorities have asked tourists to notify authorities. those are your latest top headlines from around the world. olivia: it has been nearly two years since 20 flows and went off at the finish line of boston marathon, yet the trial of accused bomber dzhokhar tsarnaev continues to be held up. testimony was supposed to begin three weeks ago. today there is still no start date insightful step frank keating had just been sworn in as governor of oklahoma three month before timothy mcveigh blew up the federal building in oklahoma. two years later, a court in colorado had already sentenced timothy mcveigh to death. governor keating, why is this taking so long? governor keating: maybe they are
having a very difficult time finding a fair jury, and open-minded jury to listen to the facts will stop in oklahoma city, for example, everybody assumed that oklahoma city could not give mcveigh a fair trial. analysis suggested oklahoma city could have given mcveigh a fair trial. they moved it to denver anyway. that is probably what is occurring. it is technical. it is nothing to do with the speed of the courts. they are probably concerned but having a jury pool that is open-minded and fair. olivia: that is indeed what the lawyers are trying to do get the k-smoove, and there has been a whole that because of the weather. there is an interesting question as to whether or not we can governor keating: get a fair trial in the internet age. governor keating:i think most people want to do the right thing, and they think that guy probably did it, but maybe there are a sunni waiting circumstances, maybe there is a reason, maybe the -- maybe there
are extenuating circumstances, maybe there is a reason, most people want to do the right thing and juries are usually pretty fair. brendan: governor, how important is the trial itself in allowing the city to move on>? do you need the verdict to close the chapter? governor keating: yeah i think so. the reality is you still have a ticking time bomb, which is the memory and the agony caused by those people. in the case of oklahoma city obama city thunder, all of the things that came after, the complete revitalization, renewal of downtown occurred as a result of the pride of the city putting all of that stuff behind it. brendan: you really draw a line from that awful day to the revival of the city? governor keating: i do. out of evil good comes. that is what a lot of people do i do is welcome, and that occurred in oklahoma city's case. olivia: how do you think the threat of domestic terrorism has changed? governor keating: it is a hell of a mark lot more intense. olivia: is that threat purely
domestic or is it a threat of lone wolf attacks like we've seen across europe? governor keating: who knows why all of this occurred, but when i was growing up, you never heard of a columbine, you never heard of the horrors that occurred in schools. i think there is a lot more family breakup, a lot more indifference toward the feeling of individuals but i think clearly the likelihood, the reality of those kinds of events are greater now than they were-. . tom: governor, i want to rip up the script the homeland security debate, your oklahoma is a place you would look for immigration debate yet research says it is front and center in oklahoma. tell us about the immigration dynamic and how it fits into republicans in washington. where will the republicans be? governor keating: wel little thel story perspective,, in a 1986, i supervise the u.s. customs service, secret service,
atf -- most of the federal law enforcement agencies including the secret service and the border patrol -- our view was we will secure the border and regularize all these people. we have a constitutional issue if you aren't illegal, you on your white, and you have a child born in the united states, because duchenne says that child is -- the constitution says that child is an american citizen. it is a difficult situation. in oklahoma, it is rule of law -- tom: the border is not arizona anymore. the border is outside tulsa. brendan: talking by the debate between citizenship of the soil and citizenship of the blood. in europe they have citizenship of the blood. we had helima croft of rbc capital markets on in the last hour and she has a deep understanding of the middle east, and she says america does -- forget the border for second -- does a better job integrating its immigrants over the longer term than europe. governor keating: absolutely.
olivia questioned about the boston trial, it stunned us to see two young men raised in the united states, active in their high schools, who would be radicalized. that is stunning to us. whether it is irish extraction, jewish instruction, whatever it may become a cuban's in florida haitians we do a very good job of innovating, but we have to work on metal the time. tom: the backdrop to that is is of course economic might. to go back to where we were an hour ago on europe in depression, what is the key policy to get europe jumpstarted? carl: they have to fix the banks. tom: they have to go back to where we were in 2008. carl: that is right. the banks cannot lend -- right now nobody is recapitalizing them, and that is the problem. in the u.s., whatever you think about the bridge capital events that allows them to restore the capital by themselves, european banks to not have the margin for
capital adequacy they are required to have to lend comfortably. tom: when you are done at the aba, you can go in the head of the european bankers association. [laughter] governor keating: i wonder how much an apartment would cost over that. the doctor is absolutely right. in the united states, the result of the resilience of the american economy, our banks are highly capitalized. the issue is -- can they lend? are all these regulations and restrictions retarded? carl: what they need in europe is a king to tell all of the government to do that the politicians cannot. maybe you would consider that job. brendan: oh, they do, and her name is angela merkel. carl: they need someone who is not a politically elected person to tell them -- this is what you need to do for europe, and they can go back and say we did not once do this, but thinking told us we had to -- or a queen. it could be a queen. olivia: isn't the eu president supposed to be the ceremonial head of state? carl: but he is not come he is a
politician. like mark carney, for example, he would be a good king or summary from outside of europe to come in and tell them all with a need to do. brendan: it should be tom keene! governor keating: i vote free markets, limited government, it works very well. tom: the man from obama has the last word frank keating, thank you so much, and carl weinberg. olivia: carl weinberg things europeans are kings. we ask you -- what is the likelihood that greece exits the euro? the first answer -- unless germany case, the greek exit is 100% certain. second answer -- highly unlikely. eu is a political, not an economic union. state markets always repeat. brendan: amen. politics are more important than the economics over there. olivia: that dovetails nicely with the third answer -- zero. greece is a spoiled kid. get back in line. tom: what is the ramification, carl, if there are "cut off"?
carl: if they are cut off, they have to live within their means, which is what they have to do anyhow. tom: are they still going to pay their cell phone bill? [laughter] olivia: i think that is a lousy metaphor, but greece needs to go on a dais, and they are running a primary surplus. tom: there it is. carl weinberg and frank keating. we have an interesting week here on "surveillance." there is a lot going on. brendan: and we are watching the constant theater of the greek negotiations. as olivia pointed out, they are at 3% primary surplus. they are expected to get to 4.5% and hold it there under the current agreement. almost no but he has ever done that before. tom: economic data -2.8% inflation takes you back. olivia: an inflation and england's lowest level in record, only going back to the 1990's, so this meeting in brussels yesterday between greek and its creditors on incisively breaking down, but they will be meeting again. tom: that is a good day to get our four-day workweek started
with us, greek-american billionaire john catsimatidis the red apple group chairman. he weighs in on the european standoff with greece. derek jeter. i talked to the former yankees legend about his bid to become a media mogul and business titan. here is a look at our top stories. germany's commerzbank says there is a 50% chance that greece will leave the eurozone. here is greece's finance minister. >> in the history of the european union, nothing good has ever come out of ultimatums.