tv Bloomberg Surveillance Bloomberg March 11, 2015 6:00am-8:01am EDT
here is a partial score at 32,000, e-mails deleted to those selected to go to the state department. secretary clinton explains. spring is here. olivia needs a new upscale umbrella. she calls upon a mechanical engineer to assist. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. it is wednesday, march 11, i am tom keene with olivia sterns -- she is very dry this morning, no rain in new york. olivia: in hindsight, 2020 hillary clinton says it would have been wiser to use a government e-mail account while secretary of state. she called a press conference to try to quite the controversy over using her private account for official business. she said she did not want to carry a second mobile phone for another e-mail account. >> looking back, it would have been probably smarter to have used two devices, but i have
absolute confidence that everything that could be in any way connected to work is now in the possession of the state department. olivia: clinton says she is already turned over more than 30,000 e-mails and deleted another 32,000 as she says were personal. senate republicans are defending the controversial letter they sent to the government of iran warning her many leaders in the nuclear deal they make with president obama could be overturned as soon as he leaves office. which mcconnell says republicans simply fear the president will make a bad deal. >> to make a deal of this magnitude with one of the worst regimes in the world without any congressional input leads you to believe he is going to make a deal with all fear he's going to make. olivia: hillary clinton also weighed in on the controversy at
her tuesday press conference. she's of the letter was "out of step with the best traditions of american leadership." iraqi troops are reported in their offensive against islamic state forces and have captured large parts of the city of tikrit and the reports isis fighters have begun retreating. they lost without the help of the us-led coalition. american officials are not happy that shiite militias in iranian military officers are also taking part. the dollar has not been a strong against the euro in more than 12 years. overnight, the euro fell below 1.07. 22% since last summer. all this seems the dollar will be the next check on inflation. consumers will eventually see lower prices for imported products. airlines in the u.s. are expecting to have a bumpers bring break. a trade group says the march to april spring travel period will be the best for domestic carrier
since 2007, calling for the number of airline travelers to rise by 2%. as a whole, the u.s. airline industry has posted a profit for five straight years. it is time for singers pharrell and robin thicke to give it up. a jury found her big hit "blurred lines" fringed on a song by marvin gaye. they will have to take -- pay $7.4 million. the decision sets a verbal president's day safer music. tom: huge division on what this means. i'm not going to give my opinion other than to say there is a massive divide over sanctity of copyright versus a vibe or gro ove. olivia: i definitely heard the tom petty. tom: i purposefully have not compare this to the two. do you have an opinion? olivia: you just said i'm not supposed to have an opinion. tom: no, i am not supposed to.
olivia: this one was less obvious. tom: the euro -- forget about that, let's do a data check. we just got an update. let's interrupted data check. deutsche bank out with an important research note. olivia: a huge call. specifically, the euro call really caught my eye. there saying the euro dollar could fall to 0.85 -- tom: back to where it was. olivia: by the end of 2016 easily parity in 2015. deutsche bank so we could see a correction and equities in the near term. tom: i miss that. bring up that screen again. let's get started. here's the second screen, german yield. euro-yen shows the strong yen. dollar-dollar, 99 handle on dxy.
for those keeping score, that is a big number to go through 100 on dxy would be important. let's do graceful stop we have not talked about old. here's your basic gold chart. every cocktail party, people were talking about robin thicke at pharrell, talking about gold. we come up and here is huge gold inflation. u.s. dollars. gartman has brilliantly said, don't look at golden dollars, buy it in yen. this is stunning. it has barely gone down because of all of that yen depreciation. you are making me work way too hard. i am paid by the click. olivia: also saying we could see $1400 now in gold by the end of this year. tom: gartman buying gold in yen.
look where 1980 is. starkly different chart. looking at deflation -- there is gold. thank you, dennis gartman. the check is in the mail. you can donate it to n.c. state. let's get started with the excitement in the markets. europe is in full alert to the ramifications of draghi qe. yields climbed -- grind ever lower. cautious on economic growth. suggesting what we are witnessing is original and decidedly not in the textbooks. for draghi and yellen, this is original territory. >> there is no textbook basis for what the fed has been doing since 2008 but when you have such low interest rates and the economies in the price is low
we go from the 1930's, monetary policy doesn't work. tom: outlast that with scathing comments on the fed that they're trying to do too much and can't get it done. you agree and do you reaffirm a cautious view and the idea that yields can drive ever lower even in the united states? >> i am looking for. i've said the 10-year is headed toward 1.50 acting today we're back. i think we have a way to go before you hit 1.50. i think if yields are headed lower because of the global economy is very weak -- tom: you mentioned deutsche bank with her view on a two-year, what are you thinking and 90 days? where are we going to be by the fourth of july? and guys like sri-kumar are out two years and three years and four years out. >> that is how i get to 150. but i think you can reach it
before the end of 2015. on the exchange rate that you have talked about, i think the 1.05 handle you have on the euro today is headed toward parity. her only two things that can stop it. one, the european central bank says it won't buy paper at a yield less than -0.2%. olivia: you think they can't find the paper? >> there won't be enough paper. the second is, the fed gets frightened, as you said, libya, if the euro were to go to $.85 and we start not only not increasing interest rates but start one more quantitative easing -- olivia: but the $.85 call is a long way off. >> but even parity is going to affect washington and frighten congress. olivia: humans in a presentation. i was struck by the fact he said of the fed raises rates as many think janet yellen will do they
will reverse it because the weakness will become apparent. t this is for you. we have no chance of cashing in a bond out to 2068. you can enjoy this. united team yield. long-term paper am a -- bring up the chart. this is the united kingdom of 2068. this is a 53-year peace. oh, i'm doing it on my mac monitor. i'm sara. i'm so excited that i completely messed this up. here we are at parity, 100. this is a new low yield in your driving a 3.5% coupon ever lower. sri would you explain why governments fuel -- feel compelled to go up? >> because the yield is so low tom, this is a great time for corporations to borrow at lower
rates. the expectation is inflation sometimes is not going to pick up definitely within the next 50 years. if that were the case, these companies and the sovereigns will benefit. tom: bolivia, i feel like a dickens tower something. olivia: you should. sri, why are you so convinced qe is not going to work? >> because it hasn't worked in the united states. olivia: gdp is back unemployment is back to 5.5%. >> you're going to have a sub 2% economic growth rate in the first quarter -- olivia: combined with 5.5% unemployment. >> and the youth unemployment rate, which i think is the true measure, still in double digits. after six years of quantitative easing. second, this has -- is caused by the fact money is available in
plenty and interest rates are zero. how can you say things are working when you have zero interest rate and we don't know how the markets are going to behave if the rates are normalized? that is my big fear that is why think the fed won't. it is nice to get addicted to drugs and stay that way. it is very difficult to win oneself from it. olivia: very true. thank you for staying with us for the hour. we will continue the conversation about the stress test. bracing for round two. should bank investors be worried? we will discuss. we are on your tablet, your phone and bloomberg.com. basically, anywhere you get internet, because it is 2015. ♪
the euro quite weaker this morning. let's get to our top headlines on a wednesday. olivia: the controversy over hillary clinton's use of a private account to do government business. likely 2016 presidential contender says in hindsight, it would have been wiser to use a government phone while secretary of state. she says she is turned over more than 30,000 messages and deleted another 32,000 that she says were personal. senate republicans are defending that letter they sent to the government of iran running iranian leaders any nuclear deal they make with president obama could be overturned as soon as he leaves office. mitch mcconnell says republicans fear the president will make a bad deal. also seven marines and four soldiers are missing after a helicopter crash in the florida panhandle overnight. there on a night training exercise at a remote beach. rescue crews reached the scene early this morning.
the names of those on board are being withheld. the cia reportedly played a key role in government spying on u.s. cell phones. "wall street journal" says the agency opted to does help to develop -- helped to develop the system which uses an airborne device i can locate specific cell phones. duke energy agrees to pay shareholders 146 money dollars in settling allegations -- $146 billion in settling allegations. those plans included a boardroom coup that up in a leadership plans for the combined utility giant. duke and several dirigibles were accused of conspiring to replace bill johnson as head of the new company. in pro football, check-cashing season. a frenzy of moves open up the 2015 nfl free agency season and one of the biggest was defensive back that is leaving the super bowl champion patriots and returning to the new york giants on a five-year deal worth $70
million. tom: the guarantee is $30 million. absolutely stunning. i don't know much about it but i know that is a big number. 32 seconds on a chart i've never seen my life. we were talking about gold. this is gold at south african rand. the nation associated with gold-mining. it is stunning. i have never seen this chart. it is so very -- just a amazing how gold looks in different currencies. olivia: it is a stressful day for lloyd blankfein. the boss of goldman sachs will find out how much money the fed will let him return to shareholders. that is when we will learn the results of round two of the banks stress test. macklemore covers that and joins us on set -- michael moore covers that and joins us on set. as tom keene might put it, what is the sweat factor today?
>> there is definitely a sweat factor because they were the closest to minimums in last weeks test. there's a big debate going on right now about what it means if you are -- your internal tests differ from the fed. goldman says we will be fine 12% ratio. the fed said it is more like 6%. a huge gap. the question is, are the banks supposed to end up with numbers that are close to the fed or does the fed just want to see a reasonable process that goes through and even if they disagree, it is ok? that will be the question whether the fed will qualitatively fail people who ended up with different -- tom: they may not lose their job. the distinction today is, this is about dividend growth. is janet yellen to manage the dividend growth of jpmorgan? >> the fed is managing growth of all of the banks. they are so focused on the capital ratios that they want
them to hold as much capital as possible and banks are trying to push back a little bit -- tom: jamie dimon made $32 million in operating income line. why is komar sri-kumar were others telling jamie dimon what to do? i'm lost. >> the fed once more and more capital. tom: why don't they just settle up? >> they have been slowly upping the level. rather than being like the swiss bank and setting a higher level we have been more gradual. >> i think the objectives of major bank and the federal reserve are very different. for the federal reserve, it is all about stability. if your member 2007 and 2008 and how 2008 crept up on us so suddenly that this is not something the fed wants to see happen. in a sense, it makes -- you can
understand why they're being extremely cautious over all in terms of the capital requirements. >>olivia: we're actually going to get comments on what the fed thinks the banks are doing and how they match up. what are the chances janet yellen will fall the attorney -- eternal planning? michael: a couple of years, it was telling banks, you passed but we do to fix some things. last year, it was failing some banks based on the planning processes, including citigroup. this year, we may see more. based on last weeks tests, it is unlikely we will get anyone failing on the numbers. it is all going to be about their process. tom: i am fascinated by this. wendy we see this, 4:00 p.m.? michael: 4:30 p.m. tom: where is this tie from,
olivia: it comes from a man that is anonymous, a doctor running from syria about the carnage of barrel bombs. he says -- even the united nations estimates 220,000 people have now died in syria and 11 million people are refugees. he thinks the number could be double that in terms of casualties. it is a stark reminder of the fact while islamic state is putting out there carnage on youtube and celebrating it, we have sort of turned a blind eye. we're forgetting about the
things going on to civilians in syria. tom: the council on foreign relations, with mr. assad question of stability. not my opinion, but experts are wondering the legitimacy and stability of this regime. olivia: the western party has become too fight islamic state looks like al-assad is going to stay in place. that was my take away from the conversation with jonathan from foreign affairs. tom: this does folded to oil, which has been a bit out of the picture. you could of instabilities of oil. sri: you clearly can. one of the things that could push up the oil in the short-term otherwise, headed down in the next two months, but if you have a destruction of production centers in the middle east, that is one thing that can help. olivia, going to what you said about isis and the other
problems you have in syria, the united states faces a conundrum. bashar al-assad as well as the u.s. a administration, both opposed to isis. by supporting his efforts, are you really hurting and increasing the problems? olivia: a similar question on whether or not the u.s. should be supporting the shia militias jeffrey taken tikrit because they're being backed by iran. sri: there is no easy solution. olivia: certainly not. coming up, we will talk about the tpp. we will be back in a moment. ♪
tom: good morning, "bloomberg surveillance." futures up 10. zero cannot find a bid well under 106. dxy in touch with 100 level. that would take a back to 2003. we are there with our top headlines. olivia: hillary clinton is trying to call the furor over her private e-mail account. in a press conference, she told reporters she has turned over every work related e-mail to the state department. she and her husband president clinton set up their own. >> personal to medications from my husband and me --
communications from a husband and me. i believe i have met all of my responsibilities and the server will remain private. and i think the state department will be able over time to release all of the records that were provided. olivia: clinton says she already turned over paper copies of more than 30,000 work-related e-mails and deleted 32 other thousand she says were personal. said republicans are not backing away from the letter they sent to iranian leaders. it warns iran any nuclear deal reached with president obama could be reversed by the next president. mitch mcconnell says the negotiations don't have to result in an agreement. >> if there is not a deal, we have had some of our democratic friends say the choice is between this deal anwar. -- and war. no. we finally discovered one thing
that works here. one thing. sanctions. that is what brought them to the table. olivia: democrats are blasting the room -- republican letter. more fallout from the fraternity controversy at the university of oklahoma. the school has expelled two students seen in a video leading fraternity brothers in a racist chant. one has apologized in an e-mail saying the incident was probably fueled by out the hole. the parents of another said her son made a horrible mistake he will have to live with forever. the justice department report on ferguson, missouri has led to the city manager quitting. it has blamed john shot for overseeing policies that led to widespread discrimination by the police and courts. the justice department investigators compile the report after ferguson police officer shot an unarmed black teenager last summer. in japan, ceremonies today marked the fourth anniversary of the devastating earthquake that led to a tsunami and meltdown at a nuclear plant.
the prime minister attended one memorial service in tokyo and another held in northeast japan where the disaster struck. the earthquake and tsunami killed almost 22,000 people and concern the nuclear accident will have long-term health implications. a jury ruling in los angeles may rock the music industry. a jury found a hit song by pharrell and robin thicke "blurred lines" went too far. they said the song copied elements of marvin gaye's 1970 song "got to give it up" without permission. they will have to pay marvin gaye's children $7.4 million. a lawyer for the performer say the decision sets a herbal presidents for the music industry. i guess it is not that great of a line after all. -- gray of a line, after all. tom: a huge decision for copyright worldwide. we watching history get made this morning. this is on trade. olivia: bureaucrats have taken
over a beach in hawaii. trade delegates are meeting on the big island all the cameron at the deal of the transpacific trade -- hammering out the deal of the transpacific trade pact. crucially, your's influence in the region. for more, i want to bring in angela who joins us from washington, d.c. is the u.s. in or out? angela: president obama has signaled out trade is one of the areas he is making a top priority for this year. he used part of his state of the union address for it. he is saying trade and specifically the tpp is something he sees as a rare opportunity for bipartisan agreement this year with republicans in control of congress. the president is talking about the agreement, but he is in a top place because his democratic supporters are not as enthusiastic as republicans or even as the white house is about
the agreement. the democrats are concerned a new trade agreement, the new -- the biggest since 1994, might hurt u.s. exports. they think it might bring in more imports and hurt u.s. jobs u.s. manufacturing. the president is in a top place between something he really, really does want to get done and something that some of his supporters are much more lukewarm about. olivia: one of the few areas of bipartisan copper mice we can expect in washington, d.c. this year what will this mean for american businesses? angela: it depends on who you talk to. supporters say a new trade agreement would open markets bring more u.s. exports to asian countries -- japan in particular has high tariffs on u.s. goods that go into their country. supporters say this would give an opportunity to u.s. businesses to sell more goods overseas. opponents say the projection is
not so rosy. they caution this could lead to fewer u.s. jobs, lower wages. the prospects for the agreement really depend on who you talk with and what their opinion of global trade agreements is. tom: with us this morning komar sri-kumar. i am curacao this juxtaposes to our -- i'm curious to how this juxtaposes. how critical is this transaction, this multilateral transaction to just simply doing more business? mr. sri-kumar: following up on what angela said, i'm all for free trade. look forward to nafta in 1990 three, subsequently, the tpp, they're negotiating, would also be good, even though some sectors are going to be adversely affected by competition. that is how it works. the point i think to keep in mind is that china thinks this is a way to keep them out of the
global see and it is become more like the u.s.-japan partnership against china. tom: this is critical. the idea of a multilateral gap round or doha round versus this new contraption we have. is this a step back from what was good decades ago. mr. sri-kumar: i think so. in order to make it effective, you need something which is global. you talked about gas. that could be a positive. to get all of the countries to agree to a common set of tariffs -- what this does, what others have written, it diverts trade when you have trade agreements with one country or a group of countries, it reduces trade with the others. that is not necessarily as beneficial. tom: that would be china in this case. olivia: exactly.
saying earlier this week and in "the wall street journal" the monopoly dissipated would leave a political vacuum for the chinese to step into. thank you so much. coming up, time to order that yacht. the number of u.s. millionaires. today's single bus charters after the break. this is "bloomberg surveillance." ♪
tom: good morning, "bloomberg surveillance." trying to keep you up-to-date on all the markets moving. the euro simply cannot find a bid, 105.65. this is front and center greece. this has come out of nowhere. major shout out to goldman sachs who nailed this about six days ago. this is greece ready to go. this is the spread, greece versus germany. some of this is the german move, move lower, but this is the tension greece faces. olivia: it speaks to the pressure on the euro right now downward pressure noting deal in thing it would take to turn around this plunge we are seeing in the euro the past couple of days is good news coming out of greece. tom: we will come back to greece
in a bit. let's get to the singer best chart. olivia: the number of people in the u.s. worth more than $1 million is a new record. it is back above the prerecession level. what about the super rich? today's chart shows the $25 million club is getting bigger too. in 2014, there were 29.5 million mass affluent households with a net worth between $100,000 and $1 million. the number of 20 plus segments 10,000% increase. tom: 29 million down to 142,000. this is a huge question. how much is enough? 100 years ago, $1 million was a big deal. now in the imputed value of what your social security is worth, it is up there. olivia: 10 million millionaires in america. tom: it is not unusual anymore versus what is it, 5 million and
then you go up to 25 million as well? olivia: the ultrahigh net market, grew to over -- komar sri-kumar with us. this is about trickle-down or trickle up economics. is there any validity to trickle-down economics? mr. sri-kumar: the validity is the trickle-down is for a short period of time and the people are able to enjoy. if you see what is happens is the 2008 financial crisis, the number of people at the very top level, not the so-called 1% but the .1% .01% multi-billionaires are doing quite nicely. olivia: is this going to be a political talking point going into the election? tom: i don't think so. this is much more about janet yellen. these people need to send a holiday greeting. mr. sri-kumar: tom is spot on.
that is the reason i said a quantitative easing hasn't worked. if you lowered income, if you are a wage earner, the employment -- full-time employment has risen fast enough and wages as we saw on the latest month is not doing well either. olivia: some of that is their job of the fed and monetary policy, and fiscal policy and all the fed really can do to stabilize the economy to create the political space for politicians to do something. mr. sri-kumar: i couldn't agree more. you need structure and reforms tax reform, employment tax credit. but if i were janet yellen -- actually, if i were ben bernanke -- tom: which you come out and postponed june? mr. sri-kumar: they're not in the habit of doing that that far ahead. they need to do the closer to the date. i would imagine if you had -- tom: control room, please, stop showing my bentley will be
talked about millionaires. it really upsets me. let's get to photos. olivia: as many of you know, tom is a space geek, into nasa. the number three comes from utah where engineers are preparing to test a new rocket this morning at 11:30 a.m. this morning, containing the most powerful booster ever. all tom wanted to know this morning is how it stacks up to the thrust of the saturn five. it is 10% more thrust. tom: very cool. so it is bigger than that china was market we remember from the movie "apollo 13." olivia: the enormous explosion you're seeing is just a test. tom: it is not going up in the air. this is a test on the ground. olivia: exactly, a rocket test. tom: what else? olivia: this is fun, do you know what apple's logo truly looks like? sri i will give you five
seconds. look at the screen. mr. sri-kumar: second from the top. olivia: he is only one of 47% of people who are able to correctly identify this. we did this in the morning meeting. i don't think i got it right away. it has the dimple at the bottom. that is one of the differences. no one in the meeting got it right. you did well. mr. sri-kumar: thank you. olivia: loved this from yesterday, in paris, movie characters walk in the valentino fashion show. they dazzled the runway. the characters are played by the really, really ridiculously good-looking ben stiller and owen wilson. the movie was announced in the event which will air in february -- tom: i miss the first one. olivia: it was 2001. this is so cool because everybody loves " zoolander" and
ben stiller as the character. what a cool way to announce the movie to send these two buffoons characters, down the runway? this is hilarious. brilliant marketing. tom: it is a generation gap. help me out. olivia: here's something you like, umbrellas. always losing yours? you can stop pouring. we will be joined by ceo who will tell us how he is changing the face of the half $1 billion in berlin market. that is coming up next on "bloomberg surveillance." ♪
tom: good morning, "bloomberg surveillance." rain for the next six months. we will talk about that in a moment. you do for new york city this morning. the headline for me is the euro, 105 point 69. let's get to other important top headlines. olivia: hillary clinton's e-mail and the controversy over her use of a private account from government business.
the likely 2016 presidential contender said it would have been wiser to use a government account while she was secretary of state. she says she has turned over more than 30,000 messages and deleted another 32,000 she decided were personal. senate republicans are defending a controversial letter they sent to iran. they warned leaders in the nuclear deal they make with president obama could be overturned as soon as he leaves office. rich mcconnell says republicans fear the president will make a bad deal. -- mitch mcconnell says republicans fear the president will make a badge of. seven marines and what joe soldiers are missing after a helicopter crash in florida overnight. they were on a night training exercise at her remote beach. rescue crews reached the scene early this morning. the names of those on board are being withheld at the moment. president obama is resisting congressional calls to help armed ukraine. the senate panel yesterday urged him to send weapons to government forces, but "the new york times" has the president
wants to see the cease-fire will actually hold. a setback for fans of new york city. the board of health refused in its ban on keeping the musky mammals as pets. only three of the 10 board members voted to repeal the ban. i'm glad to see it were busy. tom: the most important interview of the day if you're in new york or london, spring has sprung which means to try and sign any manhattan block will be filled with garbage umbrellas 20 us under by the winds of new jersey. what the world needs is an umbrella built by mechanical engineer. david cohen is the force behind the embolus. full disclosure, i am a convert. i paid money for the one olivia: is using. why are you the only umbrellas that are indestructible? if i buy one in london and pay more money than god for it, it lasts a month or two.
what are you doing differently so i own the thing for a year? >> there are 200 parts to make a single umbrella. it is a very uncouth -- unforgiving device. if a single part doesn't work the whole thing doesn't work. it is costly to incorporate all the quality control systems in place to maintain high-quality products. most of the other manufacturers out there for years have been producing disposable goods. tom: how do you respond to the disposable world? how do you within a business plan respond to all the lesser products? dave: we chose to go different route. i just think there's a large group of people that want to buy high-quality goods. we believe it is better to buy one good high-quality product that will last for many years than in endless stream of replacements. tom: these fabrics don't say
olivia sterns, do they? olivia: perhaps i'm not your customer. who is your customer? dave: we have a few pink. umbrellas are unisex. olivia: are you selling more of the disposable? dave: the most popular is the $99. tom: this goes in my man back. dave: this is fabulous umbrella. put it up above you so we can see it. dave: every ebola has one weakness. -- every umbrella is when weakness. this is the rib that causes inversion. you can see hours are composed of different materials. fiberglass, aircraft grade aluminum. olivia: there is new smart technology? dave: losing your ability is one of the most bothersome things --
losing your umbrella is one of the most bothersome things. olivia: umbrella gps? dave: gps is expensive to incorporate and uses a lot of power. we discovered something called proximity awareness. it utilizes -- this is a small beacon chip. olivia: bluetooth. dave: exactly. it uses low-power and connect to an applet your iphone. olivia: if tom leaves the monkey bar without the umbrella because it stops raining, it will alert -- tom: what do you do when there is zero at home because the children and their friends take them? you have a children monitor or some help? where are these made? dave: it depends. we design and engineer them in new york, but manufactured in either china or europe. that particular model.
tom: when you are a mechanical engineer, was this a dash of light your software year? dave: it was. it started years and years ago when i was studying engineering. it is been an interesting thing for me to work on, a project. mr. sri-kumar: i like the one that tom was holding. it looks nice and sturdy. how much does that one cost? dave: $350. mr. sri-kumar: no wonder. dave: it is hand assembled. olivia: is this a cultural thing, battalion spent more money on numberless? -- on umbrellas? dave: europeans do. olivia: i want to point out we have about 21 years of bad luck after this segment. tom: thank you so much. let me do a forex report. what a reported his front and center this morning, the euro making history, 105.73. it is all euro, not the yen.
tom: the markets adjust with the dow up and up plunging euro singles -- signals a european boom. here is a partial score. that is e-mails deleted to those selected to go to the state department. secretary clinton explains and we consider the legacy of one jack vogel. this is bloomberg surveillance, we are lie from the world headquarters in new york. i am tom keene, joining the is olivia sterns. bolivia: hindsight is 2020. clinton called a press conference to try to quiet the controversy over using a private account and she said she just didn't want to carry a second mobile phone for another e-mail account. senator clinton: looking back it
would've been smarter to use two devices but i have absolute confidence that anything that could be connected in anyway to work is in the possession of the state department. olivia: clinton says she has are ready turnover 30,000 e-mails and deleted another 32,000 that she decided were personal. senate republicans say sanctions against iran have worked in the past so why don't we try them again? they have sent that letter to the prime editor saying any deal they make could be overturned when he leaves office. mcconnell: to make a deal of this magnitude with one of the worst regimes in the world without any congressional input leads you to believe that he is
going to make the deal we fear he is going to make. olivia: hillary clinton also weighing in on the controversy and said the letter is out of step with the best traditions of american leadership. iraqi troops are gaining ground with an assault on islamic state forces. there are reports that isis writers have begun retreating and the iraq is launched the attack without the help of the us-led coalition. some officials are not happy that the shiite coalition and i romney and led soldiers -- iranian led -- the dollar has risen 11% against the european currency since the start of the year, it is march 10. all of this means the dollar will be the next check on inflation and consumers will eventually see lower prices for
imported goods. airlines in the u.s. are expecting to have a bump for spring break. the march-april travel. will be the best since 2007. they have posted a profit for five straight years. now it is time for singers phare ll and robin thicke to give it up. a jerry in los angeles found that blurred lines infringed on a song by the late singer marvin gaye called "got to give it up." as a result they will have to pay his children $7.4 million in the lawyer says the decision sets a horrible precedent for the music industry and tom keene and enforce me that every cocktail party is hotly divided. tom: it is a value of compromise and homage versus touch -- olivia: in my humble opinion
that was clearly a ripoff. the sam smith refrain was clearly a ripoff of tom petty. i didn't hear this one as closely. tom: i promise you this week and i will listen to blurred lines and go listen to marvin gaye. olivia: i have seen your playlist. tom: there it is this is the data check and this is all about the euro will talk later on in our history being made as the euro plunges. right now, hillary clinton's challenge may be plunging in the polls. she was in full damage control. mr. cook has deleted all of his e-mails about the world series champion washington nationals. he did that a while back. it is new technology, obviously she was wrong, what is the distinction of this debate between those for and those against?
guest: all of my e-mails predicting washington national victories remain intact on my server at home. [laughter] the distinction here is she is about to be a candidate for president and she may trust that the american people can make their own choices and she did things with her private e-mails that anyone at home would have thought reasonable in terms of her yoga schedule and wedding planning for chelsea clinton, but she is not like every other american or did she is -- american. she is arguably the odds on favorite not only to be the democratic nominee but perhaps the next president of the united states. this is going to linger and will not necessarily derail her presidential campaign but it will be like an open wound that keeps getting packed at by reporters for the next months or weeks. olivia: it seems that what hillary clinton said yesterday did almost nothing to settle it
it feels like it is only going to get worse and the only thing that would put it to bed is handing over the server. guest: that may be the only decision. whether or not the server exists 's in its entirety. she said she deleted the e-mails and we don't know what that process entails and it is hard to get rid of e-mail these days but i have to imagine some professional could take a crack at it. if they destroyed the hard drive that will be another wrinkle in the story. that is undoubtedly where the questions will go from republicans for not one but two separate congressional appearances for hillary clinton on this topic. tom: does this up the interest of other democrat candidates? does this change the language? guest: i am not sure it changes the picture entirely but you can be sure that anyone thinking about it just to get their name out there this time around so
they might be a challenger maybe they are giving it a second thought. she is not indestructible and this last few days reveals exactly that. if she is the lead story on saturday night live again more democrats may give it a whirl. tom: my red sox in first place e-mail from last year are archived. guest: right next to your fallout boy songs. tom: thank you peter. what is required is a synthesis from challenging equity markets and eight plunging euro. jeffrey rosenberg is the chief investment strategist for blackrock and this is really important here somebody said to me just get rosenberg on. they didn't mean david, they met jeffrey. how much fun is this for you? guest: we have talked about this for so long, the unprecedented
historical interventions by central banks have consequences and one of the biggest consequences this year has been diverted's in monetary -- divergence in monetary policy. you have the fed about to signal the end of six years of zero interest rates. tom: this is not in the textbook, it is not in for rosie it is not in able bernanke, how do companies react to this? how do the banks react? guest: everyone is reacting and you are seeing a couple of important developments around this divergence. one of the most interesting ones relevant for fixed income investors is a slug of u.s. companies go over to europe and issue debt. olivia: coca-cola. guest: it makes sense because they are taking advantage of low level interest rates. that is one of many different kinds of iterations. tom: how does siemens plan?
olivia: it is a brain trust in bavaria. a tight circle. guest: what tom is highlighting is a good point there are unintended consequences of the policy. each central bank pursues monetary policy. you don't target the currency it is not a policy lever but the currency of just what the policy is. this is an economy and global economies have to deal with currency uncertainty and currency volatility. that makes investing and hiring much harder and that is one of the undercurrents of this divergence. olivia: how does janet yellen react to this incredible strengthen the dollar? guest: it is a good question and one that a lot of folks will have. one of the things he said a minute ago is the rise in the dollar will reduce the pressure on inflation.
but it is the opposite problem we have today. we have too little inflation. the dollar pushing down is if anything a small challenge to the ability to normalize. what the fed will say is we live in a world of flexible currencies and currency adjustments are essential -- tom: 33% down from the peak is flexible. we are getting to real moves. guest: exactly but how will the central bank react? they will say that is part of the adjustment. tom: mr. rosenberg with us for the entire hour. olivia: as we had to the break please answer our twitter question for the day. how much money do you need to retire? tweet us. ♪
tom: good morning everyone, the euro front and center. olivia: president obama taking action tuesday at helping students crushing -- crushed by school debt. president obama: we're trying to make sure more and more young people can afford to go to college and afterward are not so burdened with debt that you cannot do anything else. olivia: the president said that in an assortment of policies
making it easier for americans to discard certain loans which would make student loan debt on par with credit card debt and mortgages. tom: huge deal. olivia: over $1 trillion in student debt. what is his main? guest: the biggest thing is this will help students with federal loans manage their debt. they can see in a portfolio which servicers they are paying their debt to. they can make complaints better. this is just for the federal loan portfolio which is that 80 to 90% of the $1.3 trillion in student debt. olivia: that is wild the federal government involved in 80% of student debt. guest: there was a big change in 2010 in the federal government became the originator of all student loan debt. previously you had private lenders such as fannie mae that could originate federal loans and they were backed the federal government. tom: the dissension here is will
they in bankruptcy give up their student loans? guest: not necessarily. olivia: not a haircut? guest: know they said they would look into studying this. that's different than what we are going to do. tom: so march, we get april letters intuition and august is the ugly month. how ugly is august of 2015 and what was the liberal arts college in iowa that went out of business? guest: sweet briar. tom: will there be more? guest: the cost at some private colleges is over $60,000 in year. you mentioned august when families get tuition bills. right now is the time when they get their letters, did i get in and how will i pay for it? you have to be very savvy. tom: but is it different? to me we have reached the tipping point of insanity. guest: yes, part of it is there
are fewer high school graduates coming down the pike. so the demographics are going down and colleges are getting nervous. if they don't have as many students it could be tricky. olivia: a very important issue and great coverage from janet lawrence -- janet lorin. as we had to the break, please answer our twitter question of the day. how much money you need to retire? tweet us.
have been wiser to use a government account while secretary of state. she says she turned over more than 30,000 messages and deleted another 32,000 that she decided were personal. senate republicans are defending the controversial letter they sent to iran warning leaders any nuclear deal they make with president obama could be overturned once he leaves office. senate leader mitch mcconnell says he worries the president will make a bad deal. also, seven marines and four soldiers are missing after eighth helicopter crash in the florida panhandle overnight. there were flying overnight on a remote training exercise. rescue crews reached the scene early this morning and the names are being withheld at the moment. duke energy agrees to pay shareholders -- those plans include a boardroom coup that upended readership
plans for the utility giant. they were conspiring to replace ceo bill johnson as head of the new company. major labor unions are planning to freeze campaign contributions to members of congress. they are trying to stop them supporting fast-track trade legislation. president obama is negotiating a transpacific ownership with 11 nations around the pacific ocean this week. the unions fear this deal will send u.s. jobs to low-wage countries. the world's biggest solid rocket booster will be tested today. it is part of nasa's new heavy lift space launch system. the agency is developing a vehicle to carry astronauts to mars. tom you had a question about how this stacks up to rocket number five? tom: standard five not rocket -- come on. olivia: but why am i supposed to care? tom: is supposed to care because they are moving a heavy rocket array.
about 30 years ago it was going to be nuclear and that was a huge issue, could we throw something vision or fusion up into space. olivia: thank you so much. tom: this is a different approach and it is out there. [laughter] also out there is your ability to retire. your 401(k) does not care about negative rates in germany mario draghi or anything but modest or tangible underperformance over the last five or six years. in the spring of 2015, too many must catch up. this is a huge issue and this army it's everything -- and this permeates everything within that equity or strategy am a how do i be a little more aggressive in equities if i have that fixed income and need to catch up? rosenberg: that is a real
problem, if people feel they have a need to catch up and are taking on more risk than they can tolerate, the issue for retirement planning is you have to have a long-term horizon. whether or not you can stomach the downturns that you observed one of the biggest problems for investors is their own emotions. managing their own emotions and not trying to time the market. if you are overexposed to equity risk you might find yourself reacting to the short-term. tom: we know the equities were 18% of the bear market and we had not experienced that in quarters. we haven't been there. tell us about your world a fixed income. if our listeners and viewers owned bonds and bills, how crushed are they going to get when janet yellen gets her way? rosenberg: it is going to be an issue because you are starting at low interest rates but i want
to go back to the retirement problem. it used to be for folks who were more risk-averse that they could look to the income environment and the yields which are the best predictor of your long run return were much higher so you can find a slow and steady way of achieving those results. and with zero interest rates the world over that means you cannot get that out of bonds and that is pushing people toward more equity returns. the good news is that the transition period will be difficult. if interest rates go up, on prices go down. the bright side on the backside is restoring some sense of normality will make some safer investing that has some perspective better returns. olivia: how do we get to a place of normality when one third of sovereign debt is in negative yields? and all those people who have to would prefer a 1.5% return from the u.s. government? rosenberg: it is very hard.
thinking about the precrisis normality and when we talk about that what is the metric? what is the level of inflation adjusted yield available in the bond market? historically that inflation adjusted yield was around 2%-3%. today it is negative. tom: to rip up the script jeff is saying that janet yellen will block it. that she will have to retract. are they going to be like the japanese 14 years ago that they will raise rates and then say -- we were wrong. rosenberg: the criticism particularly is whether or not this is a repeat of what the european central bank ended up doing in 2012 for the shift was in the matter of three months to six month. will the fed have to backtrack? over a long period of time that's part of it.
adjustment here and this is a very ugly chart and people are talking under $1000 an out. what i love here and i want to redux is the victory lap by dennis gartman, he is allowed to take it even though he said boards n.c. state. gartman says ajit and by being in yen he says it is a starkly different cart. we as americans forget what foreign exchange does to our chart. these are just different ways of looking at different instruments. rosenberg: one is gold and dollar and the other is looking at the effect of abenomics. you can look at the two together and say gold and yen or look at golden dollars which is the normal way and look at the dollar versus yen to -- yen. olivia: there is a significant
part of the market that has retailed and is buying gold again. rosenberg: sure, but it is two different pieces put together. you could separate the pieces and show gold and dollars or pull up the yen versus dollar. tom: jeff rosenberg here right now. top headlines here is olivia sterns. olivia: hillary clinton is trying to quell the controversy over her e-mail accounts. she told reporters she has turned over every work e-mail to the state department already. secretary clinton: the server contained personal communication from my husband and me and i believe i have met all of my responsibilities and the server will remain private and i think that the state department will be able overtime to release all of the records that were
provided. olivia: clinton says that she already turned over paper copies of more than 30,000 work-related e-mails and delete it 32 dozen others that she said for personal. republicans are not backing away from the letter they sent to i run in leaders. -- iranian leaders. mitch mcconnell says negotiations do not have to result in an agreement. senator mcconnell: if there is not a deal, we have had some of our democratic friends to the choices between this deal and war -- no. the choice is between this deal and greater sanctions because we finally discovered one thing that works -- sanctions. that is what brought them to the table. olivia: democrats are blasting republican letter. we haven't heard the last of that controversy surrounding a
fraternity at the university of oklahoma. the school has expelled to brothers leading a racist chant. one of them has apologized in an e-mail saying it was probably fueled by alcohol. the parents of another say he made a horrible mistake that he will have to live with forever. the report had blamed the official john shaw for overseeing policies that led to white or discrimination by the police and investigators compiled the word after a ferguson police officer shot an unarmed black teenager last summer. in japan they are marking the fourth anniversary of that devastating earthquake that led to a tsunami and meltdown. prime minister shinzo abe led one memorial in tokyo are you the quake and tsunami killed almost 22,000 people and there is concern that the nuclear accident will have long-term health implications. a jury ruling in los angeles may
rock the music industry. they ruled that a song blurred lines went too far and copied elements from mark again -- marvin gaye's song "give it up period -- "give it up." they say the decision sets a horrible precedent for the music industry. tom: ♪ got to give it -- ♪ ♪ ok enough of that. please. i promise to listen to both of those songs and i will opine monday and -- monday. how about a data check? euro-dollar 1.0573. jeffrey rosenberg driving it ever lower with his comments this morning. crude at 48 point or nine and
the brett spread -- brent spread is narrow, some $10 differential and that i would suggest is a huge deal. futures up seven and now futures up 47 this morning. this is "bloomberg surveillance." he has won the war and john c vogel will celebrate his birthday may 8 and the giant of vanguard enjoys 2015 when the marginal dollar is fleeing to index funds. but robert dietrich tells us it is the gospel according to jack and his disciples had some nuances. mr. assets, mr. lola -- lull. this is a fabulous article. it takes beyond the jack to these new people. let's start with the nuance of
jeff vogel by index funds to something like smart beta. what is smart beta? guest: if you ask jackie will wave his arms and say it is baloney. don't say smart beta in this office. there is like a 10 year history in which the early versions were called fundamental indexing and they were trying to take what jack bogle has built at 10 guard and move it in a different direction. tom: jeff rosenberg with blackrock that does both and we can say that but do you see a new pass at management. do you agree with dr. lowell at m.i.t. that there can be something other than this dumb passive investing? rosenberg: of course and we are certainly a big part of both sides and in between you have this concept of smart data tries to bring in some concepts.
what can you do inside a portfolio to add value beyond just your passive -- guest: i will play jack's role in say don't call it dumb. it is not just him it is simple. he doesn't want complexity. tom: your must-read article has affected like rock and everybody else in the money management everybody agrees that low-cost is the permanent regime. guest: let's move beyond low-cost. if you look at ishares there is a median in the middle and these guys are definitely moving in the direction of low-cost but what jack will object to is the ever larger number of etf. if you have 700 how is picking your etf different picking your stock? rosenberg: part of the reason for the proliferation of so many
etf's's we have moved beyond the initial sense of passive investing where it is passive broad investing. a lot of what we are doing in fixed income is about creating market vehicles. in fixed income in particular it is harder for investors to get the kind of exposure and access they are looking for. tom: i would say that jeff makes that distinction. guest: and mark wiseman makes that distinction early well he says every portfolio begins with an active distinction. if you're going into passive funds you have to decide what you want it to look like a he makes that point clearly. olivia: fascinating conversation. one of the things i learned is that jack's son is his stock picker. guest: they get along ok. [laughter] you cannot account or what will happen with your kids. tom: where does he come down on this? he is a one guy.
guest: there are a lot of aspects to the role that jack global lays in the money management industry. one of them is he is willing to speak his mind and callout organizations and put their own profits ahead of the investors are you i think -- investors. i think where cliff asked this is that he tries hard to be one of these voices that is willing to say it as it is. cliff will say there are a ton of hedge funds that do not earn their keep. that is not a popular thing to say. but cliff is willing to do that and that is where i think jack bogle made an interesting comment even though cliff is a hedge fund guy. the headline says it all, ask jack bogle, not really anybody. olivia: certainly not jack junior. tom: thank you so much. olivia: look for that article in
olivia sterns here with tom keene. betty liu has ditched and hatton for the sun and fun of boca raton. she is not on vacation but is attending the audience annual teachers industry conference. she will be interviewing heavyweight business leaders. including tim acid, bob greenfield and sandy chambliss. can you make -- betty: i don't have my coffee i have my cocktail but i'm still working. bob rice felt will be joining me -- bob griese field will be joining me exclusively at the conference. what was interesting, i went to the list yesterday and it is not on the agenda here at the
conference, he is a guest and will be attending some of the offense. so i don't what to say he is crashing the party but he is certainly going to be making some major waves with this announcement this morning and he will be joining me exclusively on net news. this is a really interesting time for exchanges. there is a lot of competition and less liquidity in the market and more volatility so competition is even more fierce. the nasdaq has been seeing a lot of competition from its neighbor, the nyse in new york. they have lost out on some major tech ipos alibaba being one of the biggest. i will ask blog -- rob how he plans on taking back some of that market share. olivia: give us a little more sense of what are some of the other burning issues on the agenda?
betty: i know market makers will have his the segment on cyber security and cyber security is a huge issue for the exchanges. it seems like it is inevitable until hackers get in the system so getting into one of these exchanges systems -- you can bet they are all putting tests in place and they've already tested for future cyber attacks. tim moss it made that -- tim assad made that his number one issue. he says it is not the big exchanges that are optimal for this but the private sector has to chip in as well. they have to allocate more of their budget. olivia: looking forward to all of it and i don't want to rub it in but it will be 60 degrees here in new york or it -- new york. he sure to watch betty liu on in the loop and her all-star lineup of guests later today. tom: the message here to me is the market top to bottom are
scrambling to figure out what their future is with the new dust of the market. it is clear as a bell. olivia: huge moves on the market here this morning. dow futures up by 40 points with a 300 move lower on the dow. big selloffs across the equity boards and a huge move in the euro. we're coming close to $1.05. our twitter question of the day much money do you need to retire? ♪
tom: good morning everyone let's get right to our top headlines. olivia: we begin with hillary clinton's e-mail response to her use of a private e-mail to conduct business. the likely presidential candidates is it would've been wiser to use a government account and says she has already turned over 30,000 messages and deleted another 32,000 that she deleted -- decided personal. republican senators sent a letter to iran warning leaders that any deal they make with president obama could be overturned when he leaves office. also in the bloomberg terminal,
they are resisting calls to arm the ukraine. the president wants to see if a cease-fire will actually hold this time. the violence in eastern ukraine has killed more than 6000 people. lawmakers are voted to execute contex in that matter only -- convicts in that manner only if lethal drugs are not available. some democrats are horrible. >> i think it would be bad if utah is the only state that is actively shooting people. i think it is about resident and a place we should not go. olivia: that is a headline i did not see coming. utah's governor is not saying whether he will sign it into law.
the number of american children warned to unmarried parents is up sharply. government figures show that cohabitating couples show a quarter of u.s. births. births to single mothers have declined in the last five years. those are your top headlines. the single-family homes number is down but people are cohabitating without getting married. tom: that is appalling. i am shocked. [laughter] olivia: you wish someone gave you that option. tom: that is part of the script not to olivia, the careful what you wish for. the euro this morning dashes below, weaker deutsche bank suggesting it will be just to stop on the way to a .90 or .80 euro off the cliff. jeffrey rosenberg is the chief investment strategist for fixed income at like rock. they suggest a weaker euro is
critical for blackrock recovery. rosenberg: it is great news for germany and part of the news we are starting to hear and should be talking more about and certainly will be hearing more about. they upgraded their forecast and this is a contribution the u.s. is making the global recovery and stronger growth. a stronger dollar weakens our export channels and you are seeing that in the weekend data. tom: we are seeing that with the confidence like the expectations index. olivia: exactly, i am impressed. my question is if the growth is tolerable are in take spain for example with had made a little bit of progress on these structural reforms. gdp is picking up and unemployment is at 24%. will they put up with that? rosenberg: what you are bringing is the political side and certainly we are in the middle of that.
your political issues in greece and syriza. the risk is the template if greece and it's a reason are successful in walking back some of the agreement. that political risk will be with euro for a long time. the economics of what draghi is adding to the story have been helpful and you are finally starting to see that flow through. olivia: i have a headline here from mario draghi thing the upward gdp revisions you mentioned are due to oil, fx and qa. none of it due to fiscal policy. rosenberg: every time he talks about monetary policy is that monetary policy without fiscal policy won't achieve the ultimate goal of sustainable economic growth. tom: within this is if it walks like a duck and quacks like a duck it is a duck.
the trade weighted dollar is out three standard deviations, a strong dollar from the beginning of the financial crisis. is it the beginning of a 1995-2002 trend? i put that on bloomberg radio plus. rosenberg: we can see the chart. you had a post crisis environment. the u.s. and the federal reserve led the pros -- post crisis response with euro interest reserves. the dollar overall was on a downward trend in what you see here is the dollar has made a breakout. what we're talking about here is a significant inflection point in monetary policy. that is part and parcel of the progress the u.s. has made we can normalize interest rates and the expectation here, you can see on the chart of the dollar
could go much further. tom: olivia will get this out on bloomberg radio plus as well. olivia: where are the opportunities for you? rosenberg: in european fixed income we have to play a little bit of defense. you of how lot of compression in the qe trade. most of the qe benefit -- it is interesting to talk about the benefits but it just began monday. most of the benefits have been the anticipatory benefits of markets anticipating the reaction. you see tremendous compression and spread and negative yields across 25% of the bond market. tom: is there a shortage of bonds? i cannot get a straight answer. when you talk to peter fisher and others blackrock's basic tone is there will be a shortage of taper to buy. -- paper to buy. rosenberg: when you look at the
basic math of when is the next issuance relative to the size of druggie's program -- draghi's program you cannot quite where that. -- square that. there is the net issue and the debt someone might be willing to sell. olivia: but they have new capital requirements to hit. rosenberg: what is mario draghi ultimately trying to do areas if he has success tanks will reduce their sovereign debt, free up alan sheets and make well with it. -- free up balance sheets and make well with the sovereign and debt. and you started to see a turning point of credit usage in europe. it is no longer declining at the rate that it was.
tom: everything i have ever stuttered you have an immediate effect. olivia: it is time to answer our twitter question of the day. we asked viewers how much money do you need to retire? about $1 million just to generate an acceptable return on investment to make a living in this 0% interest environment. the third answer after buying total many $10,000 apple watches. imagine how german savers are feeling of have a lot of government debt thinking they would prepare for retirement and they are now losing money. rosenberg: if i could add on the twitter question this is the downside of negative interest rates. while you are getting the economic growth and export renovates and central bankers are doing that for the near term economics crushes savers.
that's why you're seeing headlines from bankers saying this cannot be normal. they cannot sustain it just like this with bank. because of the other side and what it does to retirement portfolios. tom: i promise you we will get you on the data set links if they do link. olivia: where is the opportunity in this diversion's -- divergence? rosenberg: there are a couple big things here. the most important one is that investors have to be aware of currency risk in their portfolios. you have a lot of foreign diversification. when the fed is pursuing week currency you want to get out of dollar and now you want to unwind that. olivia:, i cheated and ask you a
i am matt miller in for betty liu. that he is down in florida right now. we have got a great show in florida this morning. she will interview chairman timothy -- the nasdaq chief, and the former senator. i will follow the big drop in markets for you here. i will speak with the deutsche bank chief u.s. economist about his call for the s&p and why he says we have got much further to fall on the index if the fed raises rates. here is a look at our top stories this morning. hillary clinton says she deleted about 32,000 e-mails from her years at maturity of state and decided none of them were related to work though she did hand over the -- more than 30,000 e-mails that she did feel her official. she says it w