tv Bloomberg Surveillance Bloomberg March 20, 2015 6:00am-8:01am EDT
want to prejudge. markets churned two days after janet yellen speaks people oil finds a bid. north from iceland, the majesty of an eclipse not seen since 1662. this is bloomberg "surveillance ," live from new york. friday, march 20 the march equinox. i'm tom keene. joining me, olivia sterns and brendan greeley. let's get to our top headlines. olivia: pick up the pace, that is the message from european leaders to greece. telling alexis tsipras greece must submit a more concrete plant within days said he bailout talks can speed up. greece is running out of money after four hours of talks in brussels, tsipras put a positive spin on the issue. mr. tsipras: we are more optimistic after this deliberation. i think both sides confirmed
their intention to try to do their best to overcome the difficulties of the greek economy as soon as possible. olivia: no clear-cut date when greece greece would run out of money. it could be a matter of weeks. president obama urging iran's young people to pressure their leaders on the nuclear deal. in a youtube video marking persian new year the president argued freezing the nuclear program could lead to a better relationship. president obama: a nuclear deal could open the deal to a brighter future for the american people. who, as heirs to a great civilization, have so much to give the world. this moment may not come soon. olivia: "the wall street journal" says talks have stalled over economic sanctions. the run want want -- iran wants sanctions phased out right away,
the u.s. and europe want them repealed of for a number of fields. gulf oil ministers say opec needs to keep pumping oil. the cartel has resisted calls to cut back production. brendan: a startling report about google. an ftc report in 2012 concluded google abused its monopoly in search and advertising in ways that hurt internet users. ftc staff recommended the agency sued google on antitrust grounds. google agreed to change practices. the agency gave the report to the wall street journal by mistake as part of a foia request. an eclipse in europe in germany that halted output from solar panels. they provide 40% of the country's power. grid operators switched to natural gas and coal to make up. in sports, some bracket busting
in the ncaa tournament. for the first time in 20 years, two teams seeded 14 beat the number three seed. georgia state stunned baylor. the coach's son nailed a three point shot with less than three seconds to go. georgia state trailed by 12 and scored the last 13 points of the game. alabama birmingham knocked out iowa state. vegas loved the game. tom: underdogs. i was mediocre. the only thing constructive i am ahead of the president in brackets. brendan: here we go. a lot of coaches get raises just to make it into the tournament. even teams that are leaving. olivia: this is an unusual way to start march madness.
less than 1% of all brackets filled out 273 out of 11.5 million brackets are still intact. that is not. brendan: stephen f. austin -- tom: it is like a lottery. olivia: it is a six sigma event. brendan: it is quadratic! tom: olivia with some standard deviation action. we will keep it math free, one big churned. nice undercurrents, oil, 43.66, somewhat of a bid. vix, 14.77, spread is flattening. renminbi is the huge story. the yuan shows a back story on real estate in china. that bears watching everything weekend. this is something brendan greeley is up to speed on. greece-german
yields. these are elevated yields and here is the crisis in greece we get better, draghi, thank you. this is the story. brendan: these are two different movements. this is credit uncertainty. this is political uncertainty. we do not know what is going to happen. new regime and new promises they had not been fulfilled or denied by the eu. this is political uncertainty. tom: the catalyst is the liquidity around the political uncertainty. there's a little bit on the markets on this off friday. my tie looks like i did my brackets last night. i am sorry. i'll tie my tie during the break. olivia: looks like the solar eclipse. tom: 1662 is the last time we had an eclipse. i was just starting geometry
back then. brendan: it is a shame that the german power grid cannot tap into your enthusiasm. you could power the country. olivia: live pictures right now. tom: this is between iceland and scotland on the way to the jonathan ferro islands. olivia: you know what that is called? a waning gibbous. tom: astronomy with olivia! we will move on to something we know about. after the yellen fireworks, markets are dropping markets adjust to the fed. to an economy that suggests subdued revenue and earnings growth. thomas lee is cofounder and head of research at fun strap. he is able -- he is able -- he is a bull. thomas: it is a minority
position right now. tom: what are the new walls of worry from the last time you were darkening our dork? -- our door? what is the fear your clients have? thomas: if there is a chart people do not like, one is the dollar, it looks very parabolic. and then it is oil because it is continuing to be weak. in their minds, two of these happening like once is like [laughter] a solar eclipse. olivia: you came out in december, your year and target to 3.25, -- 23.25, a 15% depreciation. a love that was on capex. does the decline in oil change that? thomas: we will get some sense in a couple weeks when q1 comes out. i think there's a capex story.
900 companies have given guidance, they are fighting for single digit increases last year, the same companies guided down 6. it ended up being flat. companies rarely cut capex. i think we are talking, even with energy cutting capex 20% to 25%. brendan: i have been hearing the same argument about the bull market as i have about growth in china. because it has gone up at some point it has to go back down the reversion of the mean argument. sounds like there's not going to be a perversion to the mean, we are seeing a long-term change. thomas: there's something unusual about the u.s. economy. the consumer has been deleveraging for like five years
. companies have not been spending. we are almost essentially in a recession in some terms. housing starts are at recession levels. brendan: do you call that a credit recession? tom: come on -- this is critical. as an equity guy when the atlanta fed says 0.3% gdp, that is lousy. the you think that is a one-off first quarter event or do you drag that in to the rest of 2015? thomas: when i think of the components of what gdp is, i think there is some suppression. there is upside for investment to pick up. we know investment spending in the u.s. collectively is 23% of gdp. it should be, midcycle is 25% ended peaks at 28%. tom: this is the yellen chart, the qre chart, correction free. there was a government slowdown
glitch. help me with this. we are addicted to owning stocks and nothing bad happens. howdy respond to the people that say you are setting yourself up for a 10% correction or 18% beer market? thomas: both are inevitable. tom: obviously but it has not happened. you and i have aged looking at this. thomas: we tried to study what drives corrections. they are very unpredictable. a correction instead of something we want to anticipate is how we want to react. their markets are a lot more predictable. the two things to watch are the business cycle maturing and yield curves inverting long-term . neither is happening. the bull market is in great shape. i do not know about a correction. brendan: you have written that this is a good time to be an active investor?
are there good and that times how do you know when that has arrived? thomas: for the last three years it has been an awful time to be an active investor. the benchmarks trounced most managers. part as it is that price discovery has not taken place in the markets. sector dispersion in the last three years was narrow. you could not really sector weight your way out of beating the benchmark. i think the bond proxy trade made it tough to do anything but owned low-volume stocks. my anecdote i think the bond proxy trade moved to europe. a lot of hedge funds think it is easier now that qe is taking place. second, historically low dispersion is followed by normalization. i'm optimistic. i think 2015 will start to be a good year for managers and is a return to the early 2000's and the 1990's. olivia: you are predicting the s&p is coming up 15% and you are
telling your client you're going to do better than that net fees this year. thomas: yes. and things that are subtle like contrarian stocks, beating the index. tom: tom lee with us. we focus on the dollar strength later. olivia: tom lee at fun strap -- fundstrat. eu leaders pledged to extend sanctions, will they follow through? happy friday. ♪
his country must submit a more concrete plan so bailout talks can speed up. greece is running out of money and president obama is urging iran's young people to pressure leaders on the nuclear deal. in a youtube video marking the persian new year, the president argued that a deal could lead to a better relationship. crossing the terminal this hour, islamic state and other groups are claiming responsibility for the massacre in tunisia. nine suspects in custody. the attack when stake at a museum killed 22 people. two gunmen were killed in a shootout with police. the fbi investigating the hanging death of a black man in mississippi the victim is identified as 54-year-old otis burns. the body was found there his home. officials not saying whether it was a homicide or suicide. the first nationwide safety rules on fracking could be released today. the announcement is expected p
limits would apply only to land and by the government. environmentalists want the practice band. manny pacquiao and floyd mayweather will square off. pacquiao wanted a penalty if either opponent failed a drug test, mayweather said no. the bout could be a mostly grid of all time. here's a look at what is coming up. at 6:30, will the strong dollar stop equities from hitting new highs? we asked tom lee. 6:40 is the weak euro sending tourists to europe? 6:50, why it might make sense to charter your next flight. tom: we are lucky to have this from the prescott observatory. i believe this is the faroe islands between iceland and
scotland. this is the actual eclipse going on near svalbard. brendan: svalbard is farther north, up to almost the top of greenland. tom: this is a moon closer to the earth than normal. this was 12 hours ago, the mood much closer to us in much bigger blocking the sun. what's fascinating is a curve north and south at the north pole. brendan: we've never seen this. i was not a route in 1660 two, you speak for yourself. i am considering which patent right -- pagan rite i will participate in. ryan: last night, eu leaders announced a that they had agreed not to do much on ukraine.
they strengthened -- they neither strengthened sanctions neither decided to extend them. brendan: you reported on this from moscow and just came back from donetsk. one of the things we read is that vladimir putin's goal is to split europe in two. the baltics and pollen pushing for hard sanctions and southern europe not excited. has he succeeded? ryan: they had a couple options, one of the things that was not on the table was strengthening sanctions. they had the choice to extend onto the end of the year or waiting until june. they found a more aggressive option than doing nothing which they said we will return in june. we will not extend them now let's give the russians an opportunity to do what we want. but we are going to tie the removal of the existing sanctions to that minsk deal ho llande and merkel cut with
putin. brendan: is the minsk deal being upheld? ryan: a deal is held as long as the parties that signed it think it is. more or less, they are happy to say it is. there are a lot of science, this is something i saw in done yet international airport, this could fall apart easily. olivia: fantastic reporting. i encourage everyone to go to bloomberg.com and check out those reports. you said everyone you spoke to nobody did expect the peace to hold. is there a belief that putin will not stop until he has a land bridge to crimea? ryan: i do not think it is about a land bridge. it is about asserting the power of russia and the importance of russia i ukraine.
he can do that without a land bridge, he needs political power in kiev. you can ferry stuff to crimea. russia has an enclave that is not contiguous. i do not think that is a huge point. he wants to destabilize ukraine. tom: ryan chilcote on ukraine. wendy you go back to ukraine? ryan: i don't know. i have to rest. a few weeks. tom: we look at new capitalism on wall street. vikram mansharamani from yale joins us. stay with us on this friday. bloomberg "surveillance," futures up 5. ♪
tom: good morning. bloomberg "surveillance." brendan: morning must-read "facebook crashes." i think facebook can succeed even though every company wants to get into payments. when it comes to networks it is hard to compete with facebook. wantthis is the network effect. if you have to introduce a new product you have got to make sure everybody on the new product for example, i cannot remember what it is called -- snapchat. olivia try to get us to use snapchat. facebook has this amazing network. how do you take that out for a ride and use the network you have created to introduce new products? katie's opinion, it makes sense
facebook is in a position to roll new things out. olivia: they now own what'sapp which has how many million users? this is a huge deal. i wonder if this is a death knell for venmo, that has caught on like wildfire. when you want dinner in new york city with people between the age of 20 and 35, half of them have venmo on their phones, one person pays and they say i will venmo you. it's a sticky network, everybody is artie on it. brendan: i'm struck by the thought that olivia is living five years in the future. tom: i have a sheltered life, how does this fit into apple pay? brendan: what apple pay can take advantage of his credit card networks. facebook does not have, is not yet offering a source of credit. i do not think that is in the cards for sheryl sandberg. apple pay uses existing systems
and makes them better, facebook is creating a new one. olivia: you wonder if facebook is going to go person-to-person or person to commercial transaction, they brought in david from paypal. you have the feeling you are going to walk into a store and pay with your facebook wall. tom: i have a checkbook, do you know what a check is? olivia: i do. tom: i'm afraid to ask the last time you wrote a check. olivia: every once in a while. our twitter question "is the strong dollar affecting your vacation plan?" ♪
tom: good morning. s&p futures up five points. top headlines, here is olivia. olivia: a bailout package. not making any guarantees. leaders met late. greece is running out of cash. the prime minister's also running out of time. >> we need to speed up the process. there has been too much time. we should not lose any more time. we discussed speeding up the process. if i said it was done in a
fashion mutual trust. olivia: a promise to do so last month. there was no firm deadline. estimates are that greece could run out of cash within just a few weeks. president obama has a message for the young people of iran. tell leaders to accept the deal off the -- the deal of the nuclear plant is on the table. he told them agreeing to free the nuclear program could lead to a bigger relationship. both sides have agreed to a deadline for an agreement. the relationship between president obama and benjamin netanyahu not getting warmer. the white house is reconsidering using its veto on behalf of israel. that came after a phone call between the president and netanyahu. the president told no yahoo! the u.s. would reassess its --.
netanyahu is backing away from remarks. brendan: a billion dollars in emergency spending to deal with drought. record rain and snowfall have left california reservoirs less than full. global warming will cause other problems the state must address. >> a climate change and there will be more extreme weather events. you get drought and all the sudden while you are focused on drought, you can get massive storms that flood through these channels. they overflow and cause havoc. brendan: if they approve it would be used for flood control and other projects. the first-day of spring, more snow. a storm will dump up to half a foot of snow in the
mid-atlantic. the worst here in new york, four to six inches of wet snow. for once, boston will get a break. it will be burning socks. the faa has given the go-ahead for amazon to test drone delivery. only within 400 feet of the ground and insight of a pilot with a license. tom: a raging debate, interview after interview. how to gauge and measure the impact of u.s. dollar strain. cofounder and head of research let's dive into this. is the dollar the market's friend or enemy?
>> the market has not determine that yet. i think it is a friend. tom: what does it mean for a dow stock. what does it mean for the different sizes of companies? thomas: it makes companies with more u.s. revenue more secure. tom: do you have to go true domestic? thomas: it depends on if you look at what happened straight if the dollar strength is not sustained or plateauing it can make a difference. i am not a dollar forecaster. brendan: he is trying to tell you he is quietly skating to where the puck is going, not where it is. olivia: a no-win out that it is
all rubbish. there is no relation between stronger dollar and equity performance. thomas: that is correct. when you look at historical episodes of dollar strength when the dollar goes up, pe goes up, but there is an earnings hit. domestic stocks do better. olivia: you are saying there's a negative correlation between gas prices and apparel sales. thomas: we published a note this morning. 80% of households spend the same amount on gasoline as on apparel. olivia: i spend more on apparel just for the record. thomas: the drop of gasoline means a lot of prior power for apparel and entertainment spending. this correlation -- tom: cinderella in imax is in
your future. brendan: i hate to recite the pledge of allegiance, but do we have a unique economy? thomas: we have a growing population and encourages business formation. consumers have a lot of cash. companies have cash. i do not feel the business cycle is something i am more it about. olivia: wire retail sales still soggy? thomas: the weather, we are still in the heat and oil season. brendan: the euro is down.
tom: good morning. let's get to a single best european charge -- european chart. brendan: does this mean more families are going on european vacation? that is the subject. what we have, two lines. nights spent by nonresidents. the yellow line is nights spent by residents. over the course of the entire crisis, they basically tracked each other. then, you see the euro start to drop in value. that is when you see residents and nonresidents begin to emerge. when you see this drop, and has been slowly growing.
olivia: a lot of this is coming from asian tourists. tom: it is a very important point. deutsche bank talking about a weaker euro. brendan: this has been a problem for greece. had they had their own currency, they could have dropped it further. as it is, they are stuck with the economy of germany and the inability to attract tourists. brendan: i was struck by how long is going on. i would have thought people pay attention to sharp swings, but it shows trends are making vacations cheaper. olivia: you look at when the
euro started to selloff. the euro was trading at 1.4, 1.5. the number is still up. brendan: i am going to dublin. it has affected my plans toto have a family visit us from germany and they are not doing it. it is too expensive. tom: let's get to our top photos. olivia: a professor at auburn university discovered an unknown species of catfish. it was named for its resemblance to the star wars character greedo. tom:brendan: greedo did not shoot
first. if you do not know what that means, you would to -- you would be to board for me to explain it to you. olivia: a drone to capture the largest cave. the impart -- the entire empire state building could fit in it. it took two days of hiking to reach the case. two sinkholes were used as skylights to capture the images. olivia:across northern europe, a total eclipse of the heart. a total solar eclipse. more than 90% of the sun was covered. it marked the first day of spring. the u.k. will not see a total solar eclipse until 2026. tom: the images coming in, this
is a partial eclipse. my take is it is spectacular. this has been a home run eclipse. brendan: the next eclipse will they have solved the euro crisis by then? thomas: of course it is going to be resolved. i do not know. olivia: the weather is so rubbish in england they are having trouble through -- having trouble seeing through the clouds. wyatt might make sense to charter -- why it might make sense to charter your next flight from new york to ally. ♪
and look at the top headlines. brendan: a simple message to greece. bailout talks can accelerate. greece is running out of money. president obama urging her on's -- iran's young people. new details emerging about the u.n. public health agency's response to the ebola crisis. they suggest a delay may have cost lives. the who resisted calling it a public health emergency even though officials knew the situation was dire area -- were dire. internet technology at the white
house. a directive to maintain the exclusive control of information resources. he has tasked a former facebook engineer with --. the unclassified networks were hacked last fall. government investigator sued, saying a bank cheated customers. the lawsuit says bny mellon kept the best rates for itself instead of its clients. malcolm fraser was the unelected leader of a caretaker government when he took power. he led the country for eight years. olivia: a look at what is coming up. we see what leaders are being told to pick up the pace. how to make wall street more
responsible. the rally in the stock market growing major tailwind for minor jets. it is the fastest ride money can buy. if you have money to spare there's only one way to fly. in a cessna citation 10. >> it is the fastest plane not operated by the u.s. terry. olivia: brad stuart is the ceo of the jet. >> they tend to be men and women who own their own companies or run a company, who value the 35 or 45 minutes.
olivia: the ride time, four hours on the dot. charter cost 25,000 to $30,000. if you have more time, juan a kush year ride, you could try that challenger. >> it is built for a larger load. it is a great plane to go to the mountains. olivia: you are looking about five hours from new york to outlay. the cost, a little more than a citation. >> individuals who tend to have
a network of 30 to 40 million or more. olivia: private jet business attracts the s&p. no surprise with stocks near record highs, stewart says business is great. >> the economy is good. it is the golden age of private aviation. olivia: a couple of things to remember. the difference between this jet and other jets you do not have to buy into a fractional ownership stake of the company. you can order up a charter a la carte. tom: where are we in terms of a private jet where there are six or seven people on board but ar
separate -- but they are separate parties? olivia: there are these companies such as blackjack selling legs of flights. the point of flying private is about convenience. brendan: i have never fallen on a private jet. how would this business, are we back before prerecession levels? olivia: we are nowhere near back to where we were during prerecession.
the business model has changed so much and you are seeing these new ways to fly and so there are more options. brendan: there is a certain stock of aircraft. we have an understanding of what is being used? olivia: we have interesting stats on who is flying. the typical flyer is 80% male. these are people that own their own companies. brendan: i am half of that graphic. olivia: -- brendan: we can learn
about the economy free track the decline in that route over the last four months. olivia: these are the most popular routes. there was a fastest-growing route from venezuela to miami. they say safety is superior to flying commercial. that is their line. brendan: is it the safety of recovering your luggage? we are going to take a hard right turn into march madness. they are taking part in bloomberg's brackets for cause. they had 26 points.
if either wins donahoe will donate his money. tom: impressive. congratulations to tom keene. you are doing better in the bracket then president obama. tom: i would like to thank the new york post to that i read for five minutes to -- me on this. rendon says a contract went from $25.1 million to $52.5 million. tom: thank you for joining us. how about a four x report. a quiet day. i put that up top. that is a stunning, stronger you
tom: european union leaders pledge sanctions against russia. a france that does not want to prejudge. markets turn two days after janet yellen's weeks. across the pharrell islands and to the north pole a solar eclipse not seen since 1662. this is "bloomberg surveillance." i am tom keene. joining me, olivia sterns. olivia: pick up the pace, the message from european leaders. bailout talks can speed up. greece is running out of money. severus put a positive spin on the issue.
-- tsipras put a positive spin on the issue. there is no clear-cut day when greasewood run out of money. president obama encouraging the young people to pressure leaders on the nuclear deal. a deal freezing the nuclear program could lead to a better relationship. >> it could open the door to a brighter people. this is what is at stake today. olivia: the talks have stalled. the u.s. and europe want the sanctions phased out.
oil down more than 1% this morning. it is heading for its fifth weekly decline. there are signs the glut could get worse. the call has resisted calls to cut back reduction. -- cut back production. brendan: startling conclusions about google. a staff report concluded google abuse its position. they recommended the agency sue google. fcc commissioners decided against the suit. the first of major eclipse of the solar age. in germany, it briefly halted
output from thousands of solar panels. operators switched to natural gas and coal plants to make up for the lost solar power. upsets have killed your march madness brackets. two teams beat the number three seeds. georgia state 57-56. georgia state trailed by 12 and -- scored last 13 points of the game. underdogs beat or covered the point spread. olivia: i am devastated about baylor.
eclipse. i am greece. i agree with your wonderful view that we underplay the importance of greece. jon: other people would turn around and look at other countries. there has been an amount of ignorance, people are comfortable with the situation. you see the big move in greece. politically, you will not find many people who find the fact very important to the eurozone. thompson's they speak of liquidity in greece. what does that mean? what liquidity is missing?
jonathan: a couple of trades and you get these big blowout moves. you see a move towards 24%. you think it is the end of the world for greece. they do not borrow at those rates. the rates they pay interest at our very comparable to the likes of germany. that is the liquidity situation. then, you have the liquidity situation in terms of the banking sector. that has not gone anywhere. people worrying about deposit flight and how banks can fund themselves. cold said -- tom: i go over to --. brendan: you look at spain and portugal, the conclusion is people are comfortable. what if they are right. greece is just its own special problem?
>> you will not see a move in the bond market. what if they are wrong. not much credit risk. you have seen it come down. a qe fueled bond market. a lot of people making big bets in the european bond markets. olivia: is there a sense that the rally is sustainable or currency driven? jonathan: security driven -- currency driven. the dollar investors have missed nothing here once you adjust the charts, currency, no moves.
you put your money into the equity market, you have a lot of ane for your euro -- a lot of bang for your euro. the rally is being incredible. beyond most people's expectations. the biggest equity market falls here in europe. they have had to revise their forecast. the moves have been very quick. tom: new haven and yale. a lecturer joins us. we will speak of his effort in a force for good. i want to talk to you about, you come out of el the certitude of m.i.t. what have we learned through the financial crisis when you look at global markets. the rates of news have to adjust
how we think. guests: the incorporation of the news is faster and faster. it makes it harder to find opportunities to distinguish yourself from the market. tom: with politics, do we go passive? vikram: the regulatory risk associated with the financial services, whether it is -- or otherwise, is problematic. tom: it was played out on twitter saturday morning. brendan: we have to look at the real time information. you wrote a book that says we did not use micro-matt rowe biology, psychology, everything. what are we looking for? vikram: the thing that concerns
me the most is the degree of political negotiation the market. we can call it the macroeconomic lens, but it is the money taking place and quantitative easing. as it unwinds, we will have problems. one of my key tenants is stability itself generates instability. the longer we have stability and people feel comfortable, they take out more debt and that turns into problematic forthcoming problems. olivia: our twitter question of the day -- is the strong dollar affecting your vacation plans? ♪
pharmaceutical companies and biotech companies spent to develop a drug. he says generalizations are unfounded. it is germane to what we are seeing going on in the m&a market right now. a huge price tag. you see merck doing it. brendan: a direct -- of a trend we have been watching for 10 years. what do you think is driving this trend to acquire the pipeline rather than run the pipeline? is it easier to not been the money? vikram: it has to do with the nature of what we were discussing in terms of regulatory framework and the rules of the game. when you were worried about the regulatory environment, you go with what is certain. what is or is that the drug exists.
tom: the risk of passing off rmb to other services -- other sources. brendan: it takes pharma companies and turns them into venture capital. olivia: that is detrimental to society. we need more investment in drug research. outsourcing it to biotech firms does not get it done. tom: do you said at a bar and read this stuff? olivia: i do. i started drinking at noon. tom: very cool. it is like a typical process. we are getting there. vikram: m&a is a great indicator of corporate conference. you had a story about air travel, private aviation and it
reform plan for greece is running out of money. president obama pressuring leaders on a nuclear deal. the president argued a deal freezing the nuclear program could lead to a better relationship. the islamic state and other terrorist groups staking credit for the massacre in tunisia. days after a fierce cyclone ravaged a nation, the death toll has increased to 13. villagers were flattened -- of villages were flattened by the cyclone. there is a twist in tesla's plans to update software. it is thedelivering the software
over the internet. brendan: that is a hack waiting to happen. olivia: -- one of a $5 million penalty if either side failed a drug test. mayweather said no. it could be the most lucrative aboutbout of all time. we take a closer look at why he you leaders are telling greece to speed up the bailout process. at 7:50, is canada's economy heading for a crisis? tom: we have been looking at "a force for good." it brings together a number of thinkers about wall street.
a joyous week to run through this. responsibility. it is not privilege. a lecturer at yale university, it barely describes his thinking on what we need to do in business. he asks -- a number of quotes to get us going. i would go back to john f. kennedy and to twist a quote, ask not what you're wall street can do for you, ask what you can do for wall street. you quote kennedy in your chapter. how close are we to responsibility versus privilege? vikram: we are not there. we are working towards it. we need to change the culture of wall street. it does not change easily. it is short-term oriented
culture and we need to work on changing that. tom: it is about incentives. vikram: part of it is individuals playing in finance -- tom: they would say they are not playing. vikram: i understand. it is a five -- there is not a partnership that there once was. brendan: i keep coming around to the same question. it is good they feel it should reform itself. can we do nothing? is this not about regulations? vikram: the first thing we
should think about but i think a clarification at the very least of conflicts of interest and when they exist, a transparency is important. we need to have a transparent understanding of the conflicts. a does not mean we cannot manage them or have to eliminate them but we have to understand what they are. olivia: we put so much emphasis on profits and exclusion of all else, it is like we have ripped the humanity out of our company. he is putting his money where his mouth is and started something called just capital, a nonprofit. what is the reaction to that. vikram: it makes sense. if one had already made the amount of capital he has, it is easier to do that.
tom: these quotes always come with -- always come from someone with eight figures in their net worth. vikram: it makes sense to do it, honestly, i am not in the capacity to do that. brendan: people subscribed to big ideas. everyone is enthralled with the ideas of some dead economist. we are possibly revising the idea that shareholder value is more important than anything else. vikram: there is a desire to think in terms of stakeholders. that is the conversation that has been going on. we need to think whether it is the inclusive capitalism, the compassionate capitalism, there are a lot of labels for it. it is a complex issue. tom: sum this up. how do you bring this to wall street? vikram: we need a change in cold
a massive change for the euro optimist. there does this week -- no question about it, the grease that german spread showing that tension. brendan: i am fascinated the way he close that by saying a deeply committed european -- there is a psychology that happens in brussels or even as a journalist, you get captured where you believe that no matter what, more integration is good. you talk about deeply committed european, 10 years ago, we could -- 15 years ago, we could have done with slightly less committed europeans. tom: you set up a polarity with charles dumont. he is decidedly skeptical versus what eric nielsen has been
saying. this is a huge note from sunday. this is a huge shift of a european thinking. brendan: vikram: is here. vikram: i get concerned when we talk about europe. there is still these national identities that are quite large among individuals in europe. to have this sense of being captured by the european logic i think it's a nice concept. you are starting to get there in some areas but it's not clear he will ever have individuals give up their national sovereignty. olivia: there is a real chance of your breaking up? vikram: i think over the next 10 years, you'll either get the united states of europe or you will have it crumbling back toward individual countries print it has to do with the identity crisis. amite european or french? brendan: in the u.s. we have a government party and
antigovernment arty but in the eu, there is no responsible anti-eu party hashing this out in brussels. tom: the events will be there on the timeline is key. let's get to a timeline that includes our top headlines. olivia: president obama has a message for the iranian young people by telling them their leaders should accept the nuclear deal on the table. the president used youtube to greet the iranian people on the persian new year. he said a nuclear program could lead to a much better relationship on both sides have agreed to a march 31 per luminary deadline to reach an agreement. it seems as though president obama and israel's primus or benjamin netanyahu are still at odds. the white house is saying it is reconsidering using its veto in the united nations a cure to counsel on behalf of israel. that came after a phone call between the president and benjamin netanyahu and the president said the u.s. would reassess its options in light of comments that the israeli leader made earlier this year of opposing a palestinian state. netanyahu is backing with him those are martin says he is committed to astute -- to astute
-- to a two state solution if circumstances change. brendan: the record drought in california's prompting jerry brown and democratic legislators to appropriate $1 billion to ease the crisis. record low rain fall have left them have full. jerry brown -- blames global warning. >> we see climate change and global warming, there will be more asked her name events brief extreme weather events as you get drought and all of a sudden when you're focused on drought come you can get massive storms that flood through these channels and overflow and cause havoc. brendan: if the california legislature approves it, the money would be used for lot control, water recycling and other projects. the first day of spring and winter is reluctant to say goodbye. forecasters a storm will dump up to half a foot of snow on the
northeast today. we are supposed to have it worst in new york city. for once, boston will get a break after a winter of record snowfall. they may only get an inch or two. it is the first major eclipse of the solar season. in germany it halted output from solar panels which provide 40% of the country's power. electric writ operators switched to natural gas to make up for the lost solar power. those are your top headlines. tom: the images have been spectacular of the clips. this is in a tough of the world for clear viewing. there it is cloudy. it's going back to 1662. let's do a data check. it is very quiet. futures are up seven and not bad but the euro is churning and oil
is churning. i am watching oil more than anything else. remembyi gave us some theater with an abrupt strengthening of the yuan but we are struggling today for a good way -- for good day. this is "bloomberg surveillance pe." olivia sterns is with us and brendan tells us about the bracket in washington. brendan: 17 republicans are openly considering a presidential run. they are already competing in what i decided to call the twitter primary. who is following whom? what are we learning from the twitter primary? stephen: we looked at the 17 prospective candidates. we paid a lot of attention to what they are tweeting and who is following them and who can
build the biggest following but we took a look at who they are following. we found some surprising things. jim demint former senator of south carolina, founder of the heritage foundation is the most followed person when you factor in his foundation on twitter. brendan: let's bring this up -- not only is he the most followed but more followed than john boehner or mitch mcconnell people who you would think would be followed more. mitch mcconnell only has four followers. olivia: are we confusing political influence with twitter influence? stephen: we don't know how many of these candidates are handling their own twitter accounts. a lot of them have staff members working on this. this is still there public face. it says a little bit about who they care about. brendan: vikram may have some
issues with your methodology. vikram: i'm sure there are different ways to interpret this but i think the concern about who runs the account is probably the most valid. tom: it's just not clear. tom:within this, there is a lesson from barack obama as a democrat. senator obama did better than good with social media. within this combination, what are you learning about the gop and twitter? stephen: the gop is doing a fantastic job is using it as a platform to reach their audiences. rand paul in particular is a person who you can see making real efforts to utilize social media. tom: what about jeb bush? stephen: he is just getting going and is a little more conservative on his frequency of use.
he talks about his blackberry use as much as he can. tom: what about the secretary point in twitter stuff and the obama clutter stuff? stephen: she has been reluctant -- she has been tweeting lately about the budget. she is using it more but she is more conservative. olivia: she is hastagging the3m#grandma knows best. vikram: i was interested in the comparison you did between stephen king and grover norquist. it's says the iowa primary is more important than making people happy in washington. stephen: here is steve king somebody who will be courted by a lot of these candidates especially the ones who need iowa to win. there's a whole group of them that if they don't perform in iowa, they will have a hard chance to go much further. we saw this with his cattle call in january when he had his iowa
freedom summit. everyone came running and they came on stage and gave their performances. he is not as followed as some people on twitter. he's got a pretty good following. olivia: i always think that talk radio is the literal mouthpiece of they conservatives of the republican party. should it be twitter? steven: conservative media on twitter is just as strong as anything. you can look at sean hannity and laura ingram. olivia: but is it the media of choice for republicans? steven: this year. brendan: it's important the person running the fee. aaron shock got into trouble for what he put instagram. steven: with possible campaigns that are just starting to form that staff members are getting held responsible for previous tweets. brendan: thanks for coming in.
live picture from new york looking downtown. there is a little bit of sunshine there but there are supposed to be snow later today. we don't have any snow in the studio. we have betty liu in the studio. tell me that kim kardashian is coming in today? kim: no, she's not coming in. i'm trying to give you the next best thing. it is her game. have you ever played our game? brendan: am i supposed to play yes? yes, i do. kim: if you do, it will teach you to get to the a-list. glu mobile has generated like $70 million in revenue from linking up with kim kardashian. what did they do? they doubled down and they have now signed on her sisters kendall and kylie. you know the whole clan.
brendan: i'm not proud. i know about this videogame. there was a great piece in "business week" six months ago by an editor who said i enjoyed this game more than i thought i would. she played it and got into it and realized it does all the things that video games are supposed to do. kim: it is addictive. brendan: one of the problems with actual mobile phone-based video games is that they've been having problems breaking out of that first success. rovio made angry birds at ran out of ideas. none of their new games had the appeal of angry birds. it is now turning to hollywood. kim: exactly, and others are turning to hollywood. might they be the ones, the celebrities, to get beyond the one-hit wonder question mark think about farmville or candy crash. --crush.
it was hotmail be a year ago and you don't hear anybody talking about it. brendan:the way that industry works, it's much more in the sense that vc capital should be pushing one idea and letting that idea slowly die but these companies that have one idea want to survive as companies. what is glu mobile going to do to build off of the success of the kardashian game question markkim: don't knock the kardashian's. they have a huge business empire. they got clothing and i wear and perfume and all sorts of other lines. brendan: god bless capitalism. betty: they are doubling down on the kardashian sisters but they will use other celebrities as well. they signed a deal with katy perry so you can play a katy perry game later. brendan: will there be a betty liu game question markbetty:
that might be negotiated later. brendan: ok, thank you. sadly, not talking to kim kardashian later today. i'm going to get that interview if it kills me. our twitter question of the day -- i had germans were supposed to visit me this summer but they are not doing it. you can tweet us. this is "bloomberg surveillance."
tom: good friday morning, "bloomberg surveillance." let's get to our top headlines. brendan: in brussels, the european leaders are delivering a simple message to greece. the clock is ticking. they are telling the prime minister the country must submit a more can't create reform plan so they let talks can accelerate but greece is running out of money. president obama's urging iran's young people to pressure their leaders on the nuclear deal. a youtube video he posted says the deal freezing iran's nuclear program could lead to a better relationship. also, new details are emerging about the yuan help agencies public response to the ebola crisis in west africa. they are suggesting an unnecessary delay may have cost
lives. the who resisted calling the outbreak a public health emergency even though officials knew the situation was dire. e-mails indicate the agency was worried about angering the african nations involved or hurting their economies. the big companies getting it online tv are looking for some preferential treatment. showtime and sony want comcast to treat their web traffic is a so-called managed service that would help them bypass growing internet congestion but it raises questions about whether it might violate net neutrality rules. in japan, man accused of making threats against the u.s. embassy is in custody this morning. it are partly a suspect in recent death threats against the ambassador caroline kennedy. he allegedly made that bomb threats from it a phone -- from a payphone. they frequently complain about crime and noise related to u.s. army bases. the u.s. prime minister was the unelected leader of a caretaker
government of power in 1975 but when on to win two elections and led the country for eight years. malcolm fraser was 84 years old. those are your top headlines for it olivia: also coming up in the next hour, at 10:00 a.m., we look at the impact of the strong dollar on the earnings of nike. at 8:00 we look at the slump in oil prices. there is a cash crunch in canada. household debt is at a record high, above 163% this past quarter which is far more than the u.s. which stands at 102% and get home prices in canada just keep on rising. there has been essentially on interrupted growth and the late 1990's. for those of you on radio, we will put out some very impressive charts about it. our guest host this morning is with us and says anna it is one of the world's most vulnerable large economies. -- says canada is one of the most vulnerable large economies. they are usually seen as
conservative. are you saying canada could go bust question mark vikram: i am concerned about it. credit and debt have been rising rapidly. the absolute level of household debt is concerning. number two, home prices which collateralize the debt have been rising quite substantially. vancouver is the second least affordable city in the world. olivia: why wasn't there a massive housing correction like in the u.s.? vikram: at that point, the affordability and housing prices cracked here, it was still ok in canada. it was not out of whack. it has risen substantially since. it is the top point of being able to pay for your home but more importantly in canada crude oil prices. the economy has been driven by crude oil and in particular, i think the statistic i so was 70% of employment created in canada since 2011 came from the province of alberta. brendan: is this a problem born
of having done things right in the past question mark i read these articles five years ago about how canada did everything right. they had no problems with banks. two you need small problems to avoid big problems? vikram: i think the banks are still well run. i think the banks are doing a reasonably good job. where a get concerned is in the private mortgage market that is starting to emerge. you have situations that i find crazy. you have individual homeowners respectable high credit quality homeowners that our borrowing off their home equity line and lending to individuals that cannot get access to credit. i take my home-equity line down to 3.5% and lend it to someone who cannot get a home equity line or mortgage for 10-12% for one year. tom: how much of this is on the pacific ocean? there is a massive amount of money coming in from china and
asia. that has to factor in. vikram: it does although it has probably factored more into the housing price dynamics in those parts of the country. the slowdown in china adds fuel to this fire. the slowdown in china means there is less demand. tom: this is a big theme. well investment in new york city stop with a stronger dollar? as you say, the other dynamics outside of this have more of an impetus to bring money to canada or the united states. vikram: that's right. tom: what else on canada? brendan: these crazy home-equity loans you're talking about, what is driving this? are you getting mortgage brokers going into neighborhoods like in the u.s.? vikram: this goes back to the first point earlier. when interest rates are manipulated down the slow people search for yield. how do i get return a my
capital? what do i do? equity prices seem full. what do i do question mark i get a home-equity line. i can lend it and sometimes professional organizations will modify it. tom: there is no question the dynamic of oil of $35 per barrel. olivia: huge consequences for the canadian labor market, $30 oil. vikram: even though it is focused on alberta, many of those individuals fly in and out from other parts of the country. olivia: 70% of job creation in canada. vikram: about. tom: do we want a solar a clips twitter question? olivia: no, we are talking about dollars -- this is our twitter question of the day -- tom keene might take a vacation and go to europe. a strong dollar will not change my plans to drive to walmart. tom: that's the domestic angle.
olivia: the second answer -- i have seen a lot of interest in skiing in japan. tom: you go to japan instead of colorado? olivia: yes. tom: what's it called? olivia: nisecco. brendan: i can escape the feeling that oh olivia is living a better life. olivia: our third and final answer -- tom: very good. olivia: i want to thank a very special gentle man in the control room, greg mills our graphics editor. he has done a wonderful job. it is his last day and think you very much. tom: there it is. olivia: time for the agenda where we look at stories of the
day. tom: the spread in greece is widening this week. we are not to crisis but this is ugly. it deserves focus over the weekend into monday morning. brendan: my focus right now is on the republican national committee in boca. they are supposed to come out of the gate with a republican majority in both houses and do amazing things and they have gotten hung up. tom: what's their next story? brendan: they are talking about figuring out with the messaging is around the various candidates. they will be defining the party of the course of the summer. they've got to be thinking about strategy in congress britain they were supposed to prove they were the responsible governing party. i don't think they have pulled that off yet. someone was have to figure out what their direction is. olivia: on my agenda, i am a sports fan. i am watching march madness. my team is actually playing
today -- the oklahoma sooners will be playing albany later today. number one seed duke is playing robert morris this evening so good luck. i know you've got to run out to radio. "bloomberg surveillance" will continue on radio. brendan: my big game today is date night. for the first time in a long time, my wife is coming into manhattan from long island and i am not going to watch a basketball. if anybody has an idea of something interesting and fun to do tonight, let me know. olivia: that is lovely. i will be at a sports bar -- i won't be. brendan: do you have a game you are following question mark vikram: i was disappointed to watch harvard. two disappointment very quickly. olivia: a major up stat -- upset
we are 90 minutes away from the opening bell. we've got a great show. market watchers are saying there is a chance that the s&p will hit 2600 this year. he makes his case in a moment. the e-commerce site that was once the darling of the tech scene valued at $1 billion. what does he plan to do with it keeping up with blue mobile how the kim kardashian game is crushing it in the mobile gaming world. do you get enough of the kardashians? let's look at top stories. the prime minister talks