tv Bloomberg Surveillance Bloomberg April 16, 2015 6:00am-8:01am EDT
it be here to stay? madame lagarde cannot ignore the market vigilantes, they scream distortion. goldman sachs report in our 7:00 hour. is lloyd playing find -- is lloyd blank find running a bank? imf in washington, d.c.. joining me in new york is olivia sterns. after the interview with wolfgang schauble, this could be the most interesting meeting i have seen. brendan: one thing that is not going to happen wolfgang schauble has no plans to meet with yanis varoufakis of greece. he said the deadline of the program.
he says when the program is up, there is nothing in place and that is the only option. tom: the greek spreads have widened. in the last 20 minutes we got the new idea of greek spreads widening. olivia: i wish you were hear to go through the churn. two year yield that 23%. german debt, 10 year trading at 0.09%. that is unbelievably low. the average yield on german debt is negative. who are you looking forward to speaking with? tom: madame lagarde in our 10:00 hour. before that ken rogoff of harvard, jacob frenkel, formerly
of the bank of israel and now at j.p. morgan, in moments, a conversation with john lipsky of johns hopkins. olivia: speaking of washington, d.c., yesterday on capitol hill, a surprise raising concerns about the security. a gyrocopter landed, the pilot was arrested. the tampa bay times reports that the pilot was a 61 euro postal worker who wanted to deliver a message. his act of civil disobedience was in protest to campaign reform laws. a friend was worried he would get shot down so a friend called the secret service. for the first time in five years, the way president obama is handling the economy is being seen more positively than negatively. 49% surveyed approved of the job the president is doing with the economy. 46% disapproved. a change from december, more
than half of those polled disapproved on the economy. the clinton foundation will keep accepting money from foreign governments even though hillary clinton is running for president. "the wall street journal" said the board is releasing a policy. the clinton foundation would only accept donations from the u.k., canada, germany, and the netherlands. other nations would be barred although they could still take part in the initiative. brendan: the german finance minister rolling out more concessions for greece. wolfgang schaeuble told me it is up to the greek government so it can unlock more a lot money. he reminded greece the deadline is approaching. >> it now runs through june 30. if greece wants to avail itself, the solution must be found by june 30. brendan: your deadline is the 30th of june? wolfgang schaeuble: that is the deadline of the program. brendan: no end in sight to the
standoff with creditors. viewers around the world cannot get enough netflix. shows such as "house of cards" has helped attract 62 million viewers. subscribers rose more than expected and sales were up 24%. reed hastings says the company is on a roll. reed hastings: when the internet and television is catching on and we are leading relative to competitors, we have got competitive's all around the world in each market. we are feeling very bullish on the long-term brendan: in all of these markets. brendan: shares of netflix up 12% in the premarket to an all-time high. hastings is expected to recommend that the board split netflix stock. the swimmer who has won more olympic gold medals than anyone else is back. michael phelps will try to
qualify for next year's olympics in rio de janeiro. he will be 31, relatively old for a world-class swimmer. earlier this month he came off a suspension after his second arrest for driving under the influence. it is a or headlines. you have gotten out of your gyro copter and are ready to talk in d.c. at the imf. tom: we have met a lot of people today. there is no more appropriate way to begin the spring meetings and with john lipsky. to say he is at johns hopkins bailey describes his public service to the country and international economics. thrilled to begin the meetings with you. how important are the meetings to madame lagarde? john: this is a challenging moment. happily, global growth seems moderate, as madame lagarde told us a couple days ago.
the downside risks are very palpable. there is the mystery of the meaning of this super low long-term interest rates in the context of unprecedented monetary accommodation that is a puzzle and potentially a challenge. tom: the wednesday meetings are always very important. i have participated in those and there is always tension in the room. what was the tension in the room yesterday? john: right now there is no easy solution for a set of problems. some that really cannot be discussed here in the sense that there is the challenge of ukraine and russia and of course, greece. that does not lend itself to a broad discussion among broad membership but it will hang over everything they are talking about an ad tension. tom: to your work at stanford the theory behind this.
this beautiful building, that is great. there has to be a theoretical foundation to what we do that makes our lives better. is our theory worn out? you have been doing this, are we just worn out? john: i hope not but certainly the super interest rates for sovereign debt in which in some cases, as we were talking earlier, for german government bonds up to nine years now negative yields which seems unprecedented in the modern era it represents a real challenge to understanding what is going on. yesterday, the imf sponsored the first day of what they call rethinking macro economics seminar. tom: did you flunk that at stanford? i got a c minus, rethinking macro. john: this is challenging, how do we understand what is going on within the context of our
existing theory. tom: you talked to phd's and i looked at twitter. criticism of the germans and people are looking for leadership as they confront rate. what is the lipsy prescription -- lipsky prescription? john: no easy answer. the notion that the central bank should be reversing the monetary accommodation does not seem very wise. the notion that germany can just turn on a dime and completely change its fiscal policy and budgetary stance is not very realistic. tom: let's go back to something you said before we came on camera. a great misunderstanding about what madame lagarde and the imf can do to salvage greece. the imf has a very limited legal toolbox. john: people say that the imf
deal, the debt should be restructured the imf cannot do that for fundamental reasons. the money they have lent to greece belongs to the members. for countries like liberia, to clear those arrears requires other members to donate to pay for those. tom: australia or the u.s. or canada has to write a check if we restructure greece's obligation. john: exactly. the likelihood is not great. the issue of restructuring greek debt hardly seems to be the issue. the interest on their outstanding debt is quite low by international standards. if there were a program that was agreed to there would be ample
funds to roll over the existing principal payments. more important is to fix the economy. tom: ken rogoff will be with us later. china and the asia infrastructure investment bank. there is the relationship of the u.s. and china and china and the imf. how should the president react to a new assertive china? john: at the g 20 summit in november 2010, there was an agreement to reset and reform imf voting patterns that would have increased china's share of the imf-- tom: that is blocked by congress. john: the government has not managed to arrive at an agreement to approve it. as a result, here it sits with
only the u.s. blocking this universally approved reform. that cannot be good. tha a -- the aiib, that's an institution that has a clear role. the other is the international institutions have welcomed it. the u.s. position might be reflecting the difficulty the administration sees in getting congressional approval in joining but it at a note of difficulty for international governance. tom: you came out of the midwest. cedar rapids iowa. good morning. an esteemed career and economics. the money question, how do you respond to americans who say the american taxpayer is funding the playground of the imf? how do you respond to that criticism?
john: i don't know if that is a criticism or a fact. the u.s. has approximately 17% of the voting share, about 70% of funds paid to constitute the funds of the imf. these are occasionally lent out. when they do, the u.s. receives compensation for those funds. more broadly this is an issue of creating a rule-based system that will support international trade and prosperity. there's every reason for the u.s. to want to maintain the largest shareholder position in the imf. tom: thank you for getting us started at the spring meetings. much more to talk about. joining us next, jp morgan's jacob frenkel.
brendan: this is bloomberg "surveillance." let's get some top headlines. surprise on capitol hill raising concerns about security. a gyrocopter landed on the capital lawn. police are investigating. the tampa bay times says the pilot wanted to protest money in politics. for the first time in five years president obama's stewardship of the economy is seen more positively than like it of late.
49% approve of the job the president is doing and 46% disapprove. a change from december, where more than half disapproved. a beat for black rock and larry think in the first quarter. adjusted earnings per share was just below expectations. shares are up about tony 5% in the last 12 months. malaysia could be expanding the search area for flight 370. officials are saying they plan to explore an additional 23,000 square miles if the jetliner is not found by may. the boeing 737 went missing last year. a judge sheldon general motors from billions of dollars in death claims. saying gm cannot be sued for
losses before the automaker entered bankruptcy. lawyers said they did not get a chance to sue because gm covered up defects. could amazon's next target be supermarkets? amazon fresh is the cheapest grocery delivery in new york city. amazon beat its closest competitor by $20. olivia: still to come how robust is a global growth. we are going to ask jp morgan national chairman jacob frenkel. tom speaking to him in washington, d.c. is googled a monopoly, do not miss our single buster. -- best chart. will greece exited the eurozone? $62 million -- 62 million harmony subscribers netflix had
at the end of the first quarter. up from the end of last year. he was dialed in to the conference call last night. the forecast was growth of $.63 per share. netflix put up $.38. the stock is still up. >> the mainmast was due to foreign exchange headwinds. you can get a sense that the company outperforms. it was no surprise foreign-exchange was a factor because they are accelerating expansion. the real story is subscriber growth. they beat by a large margin. there seems to be at inflection in the business model and there seems to be no sign of slowing down. olivia: total outside u.s. subscriber stands at 21 million. ubs thinks it could hit 87 million.
tuna: if you think about the addressable broadband households , potentially reaching 60 million to 90 million subscribers we are beginning to believe it could get there. the real upside is internationally. there are going to be 200 countries of the next few years. olivia: international expansion is costing them. what makes you confident they can stop the bleeding? tuna: as long as they keep delivering subscribers and leveraging the content spend kind of a fixed cost spreading across a broader base, while they are making losses internationally they have guided to "significant material profits" to 2017 and beyond. brendan: when we looked at data
about streaming internationally and netflix is the biggest service in the u.s., internationally there is a huge presence of piracy, particularly in asia and latin america. as they expand we're not just talking about different households, we are talking about a different culture. how do we defeat piracy? tuna: there are mitigating that by actually doing a number of things. content in getting global licensing countries where there is more control over piracy. piracy is still an issue. it is not an overwhelming concern. brendan: after the decision on net neutrality, did the street say now we have certainty are now a lot of lawsuits? tuna: four netflix that was a
positive development. the idea of paid prioritization is something the company has near india to their heart. overall, the reason to be concerned is for an isp. for a content creator like netflix is it positive. olivia: brendan and i are fans of "the unbreakable kimmy schmidt." you can do anything for 10 seconds. my producer would like me to go to break. what do you want to hear tom keene ask christine lagarde at the imf? ♪
brendan: this is bloomberg "surveillance." one of the beautiful things about running your own country is you get your on television show. hugo chavez had one. of coarse you have vladimir putin's yearly call in. it lasts up to four hours and he takes calls from anyone in russia. it looks a lot like a pbs pledge show. what they are doing is asking him for various favors. there was a promotion to this year it was almost like a trailer for hollywood. you had him staring down barack obama. olivia: it looks like an arnold schwarzenegger film. ryan: -- brendan: he will do various dictatorial benevolence.
he will give a child a puppy or fixed pipes. >> how can we carry on living without a suburban train service? because our youngsters cannot attend schools, etc. what can i say? >> yes, of course, i agree with you. i cannot go into details on the problems -- brendan: vladimir putin agrees with a color. -- a caller. we are considering changing our format. ♪
expects international sanctions to remain in place for some time. an economy heading into its first recession in six years. he's answering questions live on a television call in show. the financial sector is thriving. putin: despite the volatility of financial markets, russia's banks have been developing well. our bank assets have grown to 77 trillion rubles. these assets are larger than the gdp. olivia: the ruble is the world's best-performing currency after falling 46% against the dollar. it gained more than 20% in 2015. oil has rebounded. you can watch putin's call-in show live on bloomberg.com. a new poll has good news for president obama. for the first time in five
years, the way the president is handling the economy is seen more positively. 49% approve of the job the president is doing right now with the economy. 46% still disapprove. that is a change from the summer. more than half disapproved of the president's performance then. it turns out the law enforcement knew in advance man was going to fly the gyrocopter into the capital. the aircraft landed on the lawn leading to a complete lockdown. the pilot was arrested. the tampa bay times reports that it was 61 year old doug h ughes. a friend was worried that hughes would get shot down so he called the secret service before the flight. brendan: jack lew is saying it is not good for the u.s. to be the only global engine of growth. he told peter cook the u.s. strength could be a double-edged sword.
peter cook: it is a great thing the u.s. economy is doing better. i do not think it is sufficient to drive the entire global economy. now, obviously, there is a pick up in economic activity in a bunch of places. how durable it is is something it has to be a focus. on brendan:. lew says it is no surprise the dollar is so strong given the strength of the u.s. economy. shares of three copies begin trading tonight. virtu financial raised $314 million wit. the firm to latest original plan for an ipo last year. other companies price their ipo. party city and craft marketplace etsy. in sports one of the great international rivalries. the u.s. versus mexico. last night the u.s. beat mexico
2-0 in san antonio. that was considered a frine endly, an exhibition game. tom was not watching the game last night. he's preparing to talk to people in washington, d.c. his annual big game is tehe imf. who have you got lined up? tom: it is a wonderful morning from us. madama lagarde would be with us. the german 10 year yield approaches a negative yield. one distortion within our global great distortion. we know, we just know, even if we do not know, it is not right. jacob frankel joins us. he is a former governor of the bank of israel and as with jpmorgan international. a lot of our audience does not
know, professor, that you had an entire academic career. we went mondo-frankel-rogoff in currency research. should we freear a strong dollar or fear the obviously current scores -- currency wars we are in? jacob: if we think about it as currency adjustment, we should not fear about it but rather try to understand. we have a situation where the u.s. has started its quantitative easing long ago in a dramatic way. today, the size of the balance sheet of the fed is 500% above what it was in 2007. and obviously, since europe started later, we have a situation where initially the u.s. currency weakened. now we have a situation where the u.s. is talking about tapering. so the markets expect a slwoing
-- slowing down of monetary expansion and u.s. at the same time, a market expects a quicker expansion of money in europe. when you have these kinds of things, obviously the price of the relative price of these two currencies will adjust. tom: they move around and adjust? jacob:. it is except what the world needed we have a situation where europe has been in a deep recession. it is starting to recover. one of the mechanisms by which your full gang competitiveness is through the exchanges. tom: one of the great themes within our viewers in our listeners and all the sophisticates at the imf is this diversions convergence. the u.s. in linked in to a global economy that is struggling or are we diverting into separate parts? you take issue to some of the themes here. jacob: there are two sectors.
section number one, we are all in the same ocean. we are interconnected. by the same token, once you are in the same ocean, you can swim in different directions depending on where you want to be. coming back to the analogy, what we are talking now about is that the u.s. has started its extension -- expansion much earlier than the rest of the world. tom: we were responsible and tried, not perfectly, but we try to clear our markets before others. jacob: the u.s. has done the right thing before others. and therefore, if the world -- were unconventional policies for such a long time the u.s. is recovering and is talking about restoration of normalcy, that is good news. now europe is not yet there.
it should expand his liquidity. then it will resume its growth. it will have structural measures and then europe will come to -- during this trend in, they will go on office directions -- during this transition, they will go in opposite directions. tom: translate this into a policy perspective for washington and president obama inand a new president. how do we project the right values to allow for a global economic recovery? we seem reticent to do that. jacob: there are two issues that markets need to have. first they need to have policies guided. by the long-term rather than by the short-term it has been a curse that political pressures and other short-term pressures have dominated the scene. we need to talk about growth. we need to talk about innovation. we need to talk about structural policies. those are long-term issues. and therefore, when you are talking about the u.s. policy
today, you are right to say and what does it mean about the next administration? number two, the world is integrated. it would be a great mistake to anyone to think that it can separate itself from the market. tom: the oceans. will not protect us jacob: the markets are our friends. they should not dictate. they should not be viewed as our enemy that we need to intervene and prevent -- tom: let's bring it back to the stock market. is bob shuler right, that our policy has created an equity bubble? do you agree? i want to get you in trouble with mr. diamond. jacob: bob shuler is a great guy. i strongly believe -- let me make it more general. when we have interest rates that are close to zero for such a long time, and with it, real interest rates -- all over the
world are negative -- we know it is not sustainable. we know that typically asset bubbles are created when interest rates are too low for too long. they never end up well. and therefore, the dream of every central banker today should be how do i bring myself to a situation where i can start raising rates? therefore, when the u.s. is talking about raising rates next quarter, the quarter thereafter, etc. it's good news. i know some are worried. wow. we will squeeze the economy. the fed has shown it is not going to rush into raising rates unless it is convince the economy is robust. let allow markets to work. tom: jacob frankel, thank you so much. coming up again, we have got many more people to speak to. none other than madame lagarde.
"surveillance." tom is in d.c. for the imf meetings. it is time for our single best chart. what is google? that is what eu commissioners are trying to figure out now. they believe it might be a monopoly. but google actually is is the subject of today's single best chart. so, here's what we're looking at. the green is what you think of as google. their sites, youtube, display ads. the blue is ad sense, networks that search results feed into. the yellow is other. hardware sales. olivia: and google play. brendan: what you do not see there, however, is what it is google is being investigated for by the eu commission, which is taking its google shopping network. which is not really a part of revenue.
the other thing that is being looked into is android. looking at this chart, we know except what google is. google wants to become something else. it is that something else that is the problem. olivia: they are investing huge sums in thhese mo-- these moon shop projects. we were surprised they are going to investigate android. they are saying that google forces mobile phone carriers to pre-install apps on their phone. google prioritizes its own comparison shopping results. the android investigation was new. brendan: android is open source but it is not quite. it is heavily controlled by google. and released in agreement with the hardware providers. google has a lot of cloud. olivia: you gave me a five-minute expo nation about cod -- explanation about
coding. it is a week to have a goofly y y lunch. on twitter, the los angeles dodgers honored jackie robinson. 42 was on the back of every player at dodger stadium. this week march the 60th anniversary of robinson's first base. again jackie robinson broke the color barrier in mlb. brendan: that is amazing. olivia: speechless. brendan: u did not even know that was an annual dayi. . olivia: i'm a sucker for a good animal photo. in kenya, the last known white rhino is under 24 hour guard. the rhino's name i s sudan. two females live with him in a
conservancy. they're hoping they get pregnant. brendan: this is so depressing because there have been a lot of progress made in poaching over the last 40 years. one of the things is the rise of wealth in china has made it difficult. just such great demand for rhino horn and elephant tusk that it has made poaching a much more difficult crime to deal with. olivia: you can read more about it on twitter with the #last mailstanding. giselle bundchen. taking to the runway for the last time. she has been the highest-paid model in the world the past 8 years. she may $47 million last week -- last year. $16 million more than her husband. the quarterback for the patriots. brendan: i mean i've just
realized how old i am because a couple years ago was me being depressed because people my age were retiring. now it is people much younger than i am. she's 34. olivia: this brings me to my morning must read. speaking with the brazilian newspaper. giselle said, my body tells me if what i wanted to is worth it. it asked to stop. i respect my body. it is my privilege to be able to stop. she looks unbelievable but do not worry, you will see her in print. she store presets oral b and under armour. brendan: that shows an amazing knowledge of for industry and self-awareness for her to say, it is a privilege to be able to stop. other models stop much earlier. she has so much money that she can. olivia: cearlylearly, she's in good
brendan: this is bloomberg "surveillance." our top headlines right now. bewe begin with russian president vladimir putin who says that he expects sanctions to stay in place for some time. he's answering questions right now on a nationally televised call in show. the ruble is the world's best performing currency and, after falling 46% in 2014. it gained 20% this year. for the first him in five years president obama's stewardship of the u.s. economy is seen positively. 46% disapprove. that is a change from december when more than half those polled
disapproved of the president's performance on the economy. quarterly results are due out minutes from now from goldman sachs. the bank's stock is up $200. aaron hernandez's legal problems are far from over. the former new england patriots star is facing double murder charges in boston and several civil law suits. hernandez was sentenced to life in parole after being convicted of first-degree murder. ♪ [playing "taps"] brendan: ceremonies today in israel to remember the 6 million victims of the holocaust. two minute moment of silence was observed on of those killed by the nazis in world war ii. ben bernanke is signing on to advise one of wall street's biggest hedge fund. he'll analyze global economic issues for said adel investments. -- for citadel investments. those are your top top
headlines. olivia: at 7:00 a.m. blackstone earnings are out. at 7:100 a.m., a conversation with ken rogoff. a looming slowdown. tom keene will speak to them from the imf meeting. goldman sachs the latest big bank to report results. we will report them live. let's get back to tom in washington, d.c. who has more from the imf's spring annual meeting. tom: klaus regling is a name that many americans do not know. for his germany and for europe, he is the managing director of the european stability mechanism. this is an important conversation today with greece -german yields widening out. before greece you agree these meetings are to gloomy.
why are you more optimistic than so many in washington? klaus: let me also emphasize the imf said for the first time in six years that the risks for the world economy are balanced. we got used to the last six years, the risks are on the downside. now the risks are better. so gloomy may be when people look at long-term growth projections. growth will be less than the past. that indeed i don't find so convincing because there are some good reasons why that is the case. the last 50 years, up to the crisis, we saw strong growth for good reasons. like the opening to globalization, world trade expanded every year much more than gdp growth. world trade negotiations successfully concluded. we had a big one off including women in the labor force. then there is the batteries in.
debt -- the bad reason. debt grew everywhere. private debt. all of that pushed up growth. we will not see that happening again. tom: for the bloomberg "surveillance" audience, there is almost and exhaustion in stumbling from greece to china to ukraine. this morning, it is about greece . give us a confidence that berlin and europe can come to a constructive agreement with greece so that tghehe greek people can move forward. klaus: it is not only germany. the euro areas, it has a special responsibility. it is the 18 members of the euro area that is trying to find a solution with greece. there is another meeting of the 19 finance ministers the end of next week. tom: it is difficult but i was
talking to rebecca christie. the idea of the price of this to the real economy. the greek economy has imploded. has that been the price of phd's in fancy suits and ties going back and forth at the meeting? klaus: no, i do not sure that view. i know that is expressed in greece today. the adjustment was unavoidable because in the 20 years in the run up to the crisis, there were imbalances developing in greece major imbalances. large account deficits. labor had risen by 45% more than in the rest of the euro area. they lost competitive. -- competitiveness. they lost 15% of gdp. there was a need for adjustment. this included a drop in real incomes. it was unavoidable. tom: klaus regling with us
growth. world leaders meet at the imf meeting. the new mediocre, is it here to stay? metta lagardere should not ignore -- lloyd blankfein running a bank? good morning, everyone. this is "bloomberg surveillance ." we are live from washington. i'm tom keene. in new york, we have olivia sterns and brendan greeley. brendan:olivia: let me put taking questions right now at a time when the economy heads into its first recession nears. >> sanctions are a political issue and we should not actually
expect them to be lifted very soon. it is a strategic issue for our western partners and probably not much to do with ukraine anymore. olivia: the ruble is the world's best-performing currency so far this year after falling 2% last year. -- 50% last year. you can watch his: show live right now on bloomberg.com. the white house has not seen these poll results in five years. the way obama is handling the economy is seen more positively than negatively. 49% of those surveyed approve of the job of the president in dealing with the economy. 46% disapprove. in december, half disapproved. there are plenty of questions this morning about this bizarre incident on capitol hill yesterday. a gyro copter landed on the lawn
of the capital. the pilot was arrested. the tampa bay times is reporting that the pilot is a 51-year-old postal worker named douglas hughes who wanted to deliver a message. his act of civil disobedience was in protest to campaign reform laws. he called the secret service just before the flight. brendan: germany's finance ministers rolling out anymore concessions -- ruling out anymore concessions for greece. it's after to the greek government to commit to reform so it can unlock more bailout money. >> the program has been extended twice. it now runs through june 30. greece wants to avail itself of the remaining funds in this program the solution must be found by june 30. that is the deadline of the program. brendan: he also told me that he
has no plans during the imf meeting in washington to meet with best no end in sight to that stand up with its creditors and no plan to release any more bailout aid yet. in sports, michael phelps will get the olympics one last shot. he has won 18 gold medals. he will try to qualify for next year's olympics in rio. he has 118 gold medals. -- wib==on 18 gold medals. brendan: blackstone -- olivia: blackstone earnings just out. the first quarter earnings coming in at one dollar 37 -- $1.37. $310 billion.
steve schwarzman has built up the world's largest alternative asset manager and worksdwarfs competitors. blackstone coming in along with wells fargo, buying up a lot of those ge real estate assets. a big beat for blackstone. i'm looking for the net income number. that has yet to cross. stay tuned for an interview with steve schwarzman at 8:00 a.m.. brendan: that deal, blackstone is the only place it could've come up with that capital. let's get back to tom in d.c. he is at the spring imf meeting. clthere is a one-time hit of women entering the workforce in developing countries.
there are these donning realizations that maybe the engines of growth that worked in the past are not working now. would you call this the imf of dawning realization? tom: it's the imf in search of an economic growth. we will get christine lagarde for her reality of a permanent mediocrity. we are watching the imf meeting -- much of that is your conversation yesterday. the news this morning, without question, is the unraveling of greek yields. that will be the backdrop to a busy day of meetings here in washington. olivia: you can see greek yields jogging higher the highest since the euro zone crisis began. what is the tone like in d.c.? the mood has changed and people are developing plan b's for a so-called crisis. tom: it goes back and forth.
it's a nuanced deal here. optimists like martin feldstein say things are really doing better than even the balance risks that christine lagarde speak of. there are others that worry about what we are seeing within the distortion of those low german yields. also, the general challenge worldwide for economic growth. whether it's brazil or china or some of the other emerging market economies. we will speak about these currency dynamics. brendan: he's best known for his work on how long financial crises last. judging from what you're saying, the sense of the imf is we never really got out of the last one and now we may be looking at a new one. tom: you go right to the important point.
they absolutely nailed it the hardest thing in economics, the length of time of whatever you're talking about. kevin was adamant that this would take much longer to work out than expected. people thought they were nuts then. they have been proven more than correct and christine lagarde has validated their caution with her new mediocre. olivia:brendan: tom, thanks. like a five-year-old at a birthday party. olivia: with us onset, josh wright. let's talk about the economic data that came out yesterday. industrial production, a huge miss, growing at the slowest raisins 2009. the seems to reflect 126,000 jobs reported march. josh: a big disappointment.
a lot of weakness driving the headline and utilities. that was inspected due to weather fluctuations. we saw a downward revision in january numbers. that is a big worry. there was a bright spot yesterday. an upturn in housing sentiment from homebuilders. it will be interesting to see whether or not that carries through into actual housing starts. we're talking a lot about the first quarter this year versus last year and what kind of rebound we will have. lest year, there was a big drop-off in housing sentiment. but housing sentiment has been resilient. brendan: olivia just broke the blackstone earnings. the only company that could come up with $23 billion in the couch cushions to pay for that much property. this is a broader trend were looking at. josh: that's right. private equity, hedge funds, religion real estate investment
trusts. we are starting to see those knock on effects years down the road under the legislation passed a few years ago. you have less regulated entities , pretty cash-rich right now. that's part of what's propping up the housing market. the fundamentals of the housing market are starting to normalize and that's why people are feeling this could be a pretty good year for housing. we are hearing about reinhardt's work. the historical averages -- how long it takes to recover from a financial crisis. we had a more severe crisis than average but a more proactive response on the monetary side. we are coming out ok given how deep the troubles were before. olivia: give us a reading of the temperature of the consumer.
it doesn't seem that to dollar gas is making its way to the cash register. josh: not just yet, but consumer confidence is holding strongly. there is hope that we will see a rebound in consumer spending in the second quarter. not as a as we did last year, but first quarter is not likely to be nearly as we does it was last year. we could have a similar trough -peak cycle but it will be more moderate than last year. olivia: josh wright sticking with us for the hour. much more still to come. tom keene at the imf meeting. what is the biggest threat to the global economy right now? ♪
tom: it is a beautiful washington for the spring meeting. sometimes it is pouring rain. i saw some cherry blossoms coming in from reagan here yesterday. "bloomberg surveillance" from the imf spring meeting. always different themes. they confirmed challenging economic growth. no one is more front and center than kevin rogoff. professor rogoff has the most
important panel here with lawrence summers and olivia blockanchard. what a great panel. you've got four guys like you in a room, does summers take over the meeting? kevin: he is a very powerful speaker. we will try to do better today. the whole focus on stagnation is wrong. we've had a financial crisis, we are having deleveraging now come emerging markets in china. china spend a lot during the crisis. other emerging markets are failing. as far as the next 30 years being horrible, that is wrong. tom: you are the optimist. i read the monograph on 14
different kinds of floating currencies. explain why they should be optimistic about the benefit of currency wars and dollar adjustment. ken: the dollar adjustment clearly helped. yes, it hurts the u.s. but it's helping europe and europe has been in trouble for a long time. we are seeing the first really robust looking growth in europe for a long time. oil prices are the first thing doing that. the very low value of the euro 13%. tom: professor rogoff does not wake up sweating about a euro going through parity. ken: not at all. there comes a point where it's overshooting. when monetary policy shifts comments change rates -- ships come exchange rates -- shifts
exchange rates change too much. tom: we will talk about the idea of china in the obama administration. coming up later, the former prime minister of latvia. he will join us for a conversation on his baltic state. putin and europe. this morning, my conversation with christine lagarde. this is "bloomberg surveillance ." ♪
against the dollar in 2014 and more than 20% this year. for the first time in five years, president obama's stewardship of the u.s. economy is seen more positively than negatively. 49% of those surveyed approve of the job the president is doing. 46% disapprove. that is a change from december 1 happened those polls disapproved of the president's performance. a senate panel will take up charges -- changes in the dodd frank law last month next month. restrictions on the federal reserve will be considered. malaysia could be expanding the search area for flight 370. there is a plan to explore an additional 23,000 square miles of the indian ocean. the boeing 777 went missing in march of last year. 61% of the current search area of australia's coast has been --
a judge is shielding g.m. from billions of dollars in death and injury claims. lawyers for the plaintiff said that they do not get a chance to sue because gm covered up the defect. some news that might drive i geo investors to drink. the maker of tank array and stout -- tanqueray -- sales rose in north america and africa but less than expected. olivia: still to come, goldman sachs report. we will break the results live. a conversation with the european commissioner for the euro. tom keene will be speaking to valdis dombrovskis. at 7:50 a.m., moreover interview
with will bank shot -- tom: thank you so much. can rogoff -- some of them, you have to stop and read every word. this ranging debate of how president obama and america should react to an assertive china, a china wanting to partake more in the asian community all of this goes through this asian infrastructure investment bank. is a threat to america? ken: you guys have a knee-jerk reaction to these initiatives. back in the 1990's, japan wanted to give money to the asian financial crisis. china is already pouring money through africa and asia. we are complaining that the new bank will not be transparent.
it is probably better than what they are doing now. they are trying to come into the international community. tom: how do you respond to the imf -- how do you respond to how we should develop that practice with a new china? they do capitalism, but not our capitalism. how should we bring in china over the next decade or two? ken: it is right to be insistent that we have free markets, a legal system that has been robust for a long time. on the other hand, you have to engage with them. world bank insists the president be -- the imf has always -- you want to play, give more money to the world bank. the imf says this is ridiculous. they are forming their own infrastructure bank.
if this is the way they are engaging with the world, let's face it, asian needs aid. tom: can you go into act 10? no notes and degrees of chalk and someone goes negative interest rates in germany, explain. would you please explain this oddity of negative interest rates? ken: no one knows for sure. the leading explanation is that people are very risk-averse. a lot of our models show that the odds go up just a bit, you can get low interest rates. that is much more reflective of what's going on that same we will be in slow growth wherever. i don't see that. tom: you disagree with professor summers. there is not secular stagnation.
do you have an optimism that we can unwind ourselves from this great distortion? ken: it takes time. we have this one off with female participation increasing in the world. china had a super cycle that is probably slowing down. you look at technology, i do not hold with those saying it's coming to an end. it takes time. gradually the leverage -- we are reaching it to pinpoint in the u.s. tom: this time is different. how much longer? ken: the u.s. is basically there. europe has this further problem of an income played euro and they are not there. olivia: we have lost the signal. we will continue much more with
olivia: people are getting more bullish. what are you looking for in the numbers? scarlet: it's all about the trading numbers. goldman sachs more than any other bank depends on capital markets in trading for its revenue and profit. analysts are looking for an increase in the first quarter trading for the first time in at least five years. first quarter is typically the strongest for this banks -- these banks. in the previous four years goldman have posted double-digit declines in first quarter trading. we already heard from jpmorgan that trading rose 5% for them versus last year. bank of america disappointed with a drop of 7%. a lot of people are looking for goldman sachs to set the ship right. olivia: what is the outlook for legal fines?
scarlet: we will look closely at the compensation ratio. goldman's best asset are the people. how much money does it put aside for compensation? right now, the most recent quarter, it put aside 44%. it has been steadily declining. the high water mark was in 2008. it has been steadily drifting lower. lloyd blank find has been firm about this idea that they will start cutting cost in this area. brendan: from somebody who did not spend the entire crisis following banks, it seems like goldman is the one eyed man in the land of the blind. what has it been doing righter than anyone else? scarlet: it stuck to trading. the investment bank changed into a asset management profile.
it's extremely volatile, as we've seen. it can make or break a quarter. for goldman sachs, we will see whether the volatility we saw in january carried through. olivia: goldman sachs has been in touch early -- a touch early in quarters past. being an investment banker doesn't pay what it used to. three ipos today. what is the forecast for investment banking echo scarlet: they're looking for these to go up. the number of deals have not kept pace with the same time a year ago. the deals are bigger. goldman sachs missed out on a couple of big deals like the kraft foods and heinz deal. they are not alone. olivia: we are eagerly awaiting
these first quarter results. they are yet to come out. scarlet thank you for the preview. let's get to some top headlines. vladimir putin answering questions on a live call in show. telling viewers he expects international sanctions to remain in place for some time. that would add pressure to an economy -- he says the financial sector is actually driving. >> despite the volatility of financial markets, russia's banks have in developing and growing well. our banks assets have grown to 77 trillion rubles. these assets are larger than russia's gdp for the first time. olivia: one of the topics has been the ruble, the world best-performing currency this year after falling 46% against the dollar in 2014. drupal has now gained 20% in
2015 -- the ruble has now gained 20% in 2015. you can watch the show live on bloomberg.com. they bring new poll out this morning with good news for president obama. for the are simon five years the way the president is handling the economy is being seen more positively than negatively. -- for the first time in five years. 46% disapprove. that is a change from december one half disapproved. -- win half disapproved. u.s. futures are a little bit lower. s&p futures off by eight points. the yield on the two-year little changed, down one basis point. the euro slightly stronger against the dollar. nymex crude down 1.8%.
this on news that saudi arabia is going to boost its output. brendan: jack lew arguing that this movement we've seen is because the was economy is just stronger. -- u.s. economy is just stronger. tom: good morning, everyone. it's time for a "bloomberg surveillance" quiz. do you know estonia, lithuania, lot be a -- latvia? one of the challenges we have in understanding the complexities of europe. we are honored to bring you valdis dombrovskis of the european commission. with vladimir putin speaking in russia he is going through his annual event with the russian people.
give us an update on the relationship of the baltic states to mr. putin and his russia. valdis: good morning. baltic states relations with russia have been quite obligated. since russia's aggression against ukraine, fueling worries about security inside the region. we are working closely with our nato partners and seeing increased nato troops presence in baltic states to partially boost our security. tom: i need to go back to new york city. here's olivia sterns with goldman sachs earnings announcements. olivia: a big beat for lloyd blank five. first quarter earnings coming in at $5.24. well ahead of estimates. we have an expert on set.
scarlet: fixed revenue, $3.13 billion in revenue. the consensus was for an increase of $2.9 billion. equities revenue also increasing as well. $2.33 billion while analysts were looking for $1.74 billion. goldman sachs giving us a report that supports jpmorgan's increase in first quarter trading as well. investment management, revenue of $1.58 billion come also topping the consensus. this gives you an idea of how big a deal trading is. it's a investment lending -- this is a bank that is leveraged completely on its trading. olivia: following in jpmorgan's footsteps, boosting its quarterly dividend to $.65.
the compensation ratio in the first is now 42%. overall, a huge beat. scarlet: we have to see if there is a charge or credit in there from accounting adjustment. that 42% comp ratio is interesting. what goldman sachs typically does is put aside a lot of money in the first half of the year and that reduce the amount of money it sets aside in the second half to keep that cap at 44%. we will see how it plays out the rest of the year. the dividend was something we expected in the stress test results. we want to find out how much in shares goldman plans to buy back. they were extra aggressive. olivia: shares barely moving in the premarket. the first time goldman sachs -- right now, they are up to 204.
with abrendan: if you look at these results in the eye of a regulator common equity tier one ratio is 12.6%. well above what bank of america reported yesterday. you see banks be more cautious now? olivia: if i were a regulator, i would want to know where is this pop in revenue trading coming from? these shifts with global central banks have to be good for trading. years ago, people were complaining that there wasn't enough volatility. olivia: it looks from the bloomberg headlines like it
in washington, d.c. i saw some cherry blossoms coming in from reagan airport. we say good morning to all of you. the spring meeting of the imf. return to europe now. valdis dombrovskis is the former prime minister of latvia. we continue our discussion -- let's focus on europe right now. i see greece back-and-forth day after day and yet, the currency in weaker euro seems to be benefiting europe. do you come to these meetings optimistic about european growth? valdis: the economy grows europe is cowering -- we have already updated our growth forecast for the european union and europe area. also come in the next month, we will update our forecast.
it is going to be more upwards and downwards. tom: currency can solve a lot of problems. within the dysfunction of europe , which the baltic states have had to dealt with since world war ii within the way europe is now can you be optimistic of a european model two years out or five years out if we have to discuss greece leaving? valdis: certainly come i think there is reason for being optimistic about europe's economy. we see this recovery strengthening. there were several factors helping externally, like low oil prices and currency exchange. it is also important to understand those currency developments and ecb
quantitative easing can only buy time for eu member states to deal with problems in the economy. that's why there is so much focus on structural reforms. tom: it's very important to bring this up -- do you have an optimism in this game of chicken? who will blink first so that we solve greece's challenges? what happens in the coming seven days? valdis: technical negotiations with greece are continuing. there's no secret that they are going quite complicated. there is still some time. it's important that all sides are engaging seriously in those negotiations, providing credible set of reforms to deal with
olivia: good morning. this is "bloomberg surveillance ." tom keene is at the imf spring annual meeting in d.c. he will interview christine lagarde on "market makers" at 10:00 a.m. we begin with russian president vladimir putin who was expending international sanctions to remain in place for some time. he's answering questions this morning on a nationally televised call in show. the ruble being the world's best performing currency this year after falling 40% against the dollar in 2014. the ruble has gained 20% in 2015.
for the first time in five years, president obama's stewardship of the u.s. economy is being seen more positively than negatively. 49% of those we surveyed approve of the job the president is doing with the economy. 46% still disapprove. that is an improvement from december when half of those polled disapproved of the president's performance. some breaking news from goldman sachs. the bank posted a blockbuster first-quarter. earnings per share of six dollars. revenue blew past projections. the number came in at $10.6 billion versus estimates of $9.3 billion. the bank stock above $200 a share yesterday for the first time since the financial crisis seven years ago. the first time since 2008. opec reporting a big boost in march crude production.
saudi arabia boosted output by 658,000 barrels per day last month to a daily average of 10.3 million barrels. oil prices have rallied eight 18% in new york last month. the house is expected to vote in favor of repealing the estate tax. republicans a say it is unfair to read tax wealth after someone dies but president obama said it would help just a few families while costing the government to our $70 million. -- $270 million. said the dell is a $25 billion fund founded by -- citadel. brendan: wolfgang is talking to the finance minister of ukraine. he is not going to catch up with
his counterpart from greece. i got some time with him yesterday. he spoke in a kind of code about where greece belongs. >> greece remains part of europe in any case. what ever happens in greece greece remains part of europe. the european union. if greece stays in the eurozone it must create the conditions for it. whether greece has the money to meet its obligations is primarily a decision of the greek government. if greece wants support, we will give support. of course, within the framework of what we agreed. olivia: lucky for us, we have hans nichols with us from berlin. what did you hear their? >> a difference between the geographers and greece is part of europe and a member of the eurozone saying greece may not stay in the eurozone.
yes, you can be in europe when you visit athens. are you going to pay in euros? it seems as though he and others -- they are disappointed with progress taking place at a technical level. there is disappointment. at this, there may come acceptance. we are getting closer to some sort of event. brendan: i got the sense yesterday that he is willing to let greece dangle in the wind a little bit. there was knows adjusting of what a concession might be. he kept on using the word "the program." do you get the sense that there is no copper mice coming? -- compromise coming? >> greece is not helping the atmosphere of compromise by talking about reparations from world war ii. what was great about your
interview you got him to say that publicly. they think the real deadline is sometime in june. up to that point greece will have a very hard time paying their bills. they have had a primary surplus for the first time in three months. may is in expense of month and june gets even more expensive. brendan: he said that is the deadline of the program. i want to indulge in a bit of philosophizing with you. i asked him if it was possible to enforce the masters criteria. this was his answer. >> as long as we don't have a single economic and fiscal union , the currency union is not really stable. now, we have to make sure the differences in performance in the competitiveness of national
economies doesn't get too large. otherwise, the common monetary policy is unable to cope with it. that is the problem. it's not only fiscal discipline but competitiveness. brendan: a fiscal union? who was talking about that? >> there is quite a strong european push from merkel's government. that means closer, tiger fiscal union. -- tighter fiscal union. not having a primary budget deficit of more than 3%. france has broken that. the bigger challenge will be how do you keep german competitiveness down. this is a strong economy with a weak euro. they will be printing money. brendan: competitiveness is
important for the german economy. hans nichols, thank you for decoding germany for us. olivia: very cool interview. cool that we got that. on my agenda have you noticed how many ipos are going to start trading today? etsy and party city. they all priced last night. they will price at the top end of their range. i'm curious to see what they do today. this will be an important read on the temperature of the ipo market. there has been a bit of a slowdown this year. they are smaller deals, but three ipos in a day is exciting. brendan: they are not necessarily raising capital for new organic growth. my agenda, as always, is greece.
there has been a lot of news from the german finance ministry and the spreads are whitening. -- widening. olivia: i saw the two-year at 23%. german 10 year debt -- brendan: negative four sovereign debt. olivia: what are you looking for today? tom: what i think onis on the agenda here is the disagreement -- christine lagarde and the extended -- caution we see from imf. a nice tension here about where we are going.
brendan: it has been interesting, watching your interviews and everybody's pre-read on the imf. what we are hearing is not just how do we solve the current crisis, but how -- what happens in the future? how do we move on? we don't know. tom: the mystery is there and you see it in the news this morning. are those wider spreads in greece with much higher yields? olivia: cannot wait for your interview with christine lagarde . time for our answers to our twitter question of the day. what do you think is the biggest threat to the global economy right now? "the growing disparity between the poor and the rich." "the failure of global central bank and the explosive growth of global debt."
blackstone chairman and ceo steve schwarzman joining us. the man behind the world's biggest real estate a management fund. are we hitting a netflix moment in music streaming? competing for your ears. anthony bay joins us for his strategy. the founder of the international law firm weighs in on u.s. politics and her friendship with hillary clinton. what does she think about clinton making a run for the presidency? citigroup releasing their results. scarlet fu has those numbers. scarlet: let's start with earnings per share. citigroup reporting items 152