ke what they hear this morning. is janet yellen not focusing on the nitty-gritty of banking? taylor swift is fearless. she takes on a life. goliath blinks. good morning, everyone. this is bloomberg bloomberg "surveillance"." it is tuesday, june 2013 we can talk about taylor swift all show. brendan: did you say "neetay greetay." tom: i think it is from the steve miller band. brendan: we will prove the theory that it is impossible to talk about streaming services without a photo of taylor swift. tom: greece. brendan: what we thought we knew on sunday night, turns out to be true. there is the deal. there may be a real debt restructuring. tom: bill rose with us in the next hour on "surveillance." let's get to our top headlines. vonnie: the prime minister of greece has until tomorrow to make it a done deal. eurozone leaders agreed that greece was finally getting serious about reforming its economy, and they want to see a breakthrough. tsipras offered a plan that addressed pensions and fiscal targets. german chancellor angela merkel cause the proposal a step forward. angela merkel: all participants of the discussions, including myself, said we would like greece to stay in the eurozone. what greece put forward his progress, but within our discussions we also notice that there is a lot of work that needs to be done, and we are running out of time and, therefore, we have to concentrate on this work. vonnie: if he convinces european leaders, tsipras faces a battle in athens. he will have to convince his government to support a deal that would breachhi his party's pledge. a republican government has done what was thought to be onuthi nkable. the governor nikki haley said it is time to end the fight over the confederate flag. governor haley: today, we are here without ill will to say it is time to move the flag from the capitol grounds. vonnie: she says she will call back legislators to deal with the flag issue if they do not handle it in a special session today. in mississippi, the house speaker has called for confederate emblem to be removed from the state flag. there is a showdown in the senate today over president obama's trade agenda. the president needs 60 votes to get fast-track authority. last month 62 senators backed the issue. republicans restructured the package so that it could win approval in the house. oracle is going all in on the cloud. it unveiled two dozen new services. clients can move their applications out of the data center and into the cloud. ellison was not always this enthusiastic about the cloud. in 2008, he said that cloud computing was a fad. and in soccer, the u.s. has reached the quarterfinals of the u.s. world cup in candada. alex morgan and carly lloyd had goals. the u.s. have not given up the goal in the last 32 minutes of playing time. next up china. tom: 8 games. brendan: america has amazing defense. we are not is good on offense. we keep winning in this world cup but we do not win in the fashion we expected. vonnie: the colombian goalkeeper is a 20-year-old -- tom: very interesting. the nhl, they do not score enough goals. they have not scored a goal against the usa in 19 games? brendan: their gaattack is not where everyone hoped it would be. tom: the data check. equities, bonds, commodities going nowhere. the euro 1.12. i'll duck when you throw the pencil at me. on to the next screen. good equity markets 12.7 for risk on. greek yields come in. gold futures well under the $1200 level. let's go to an interesting chart. i will write this up for joe weisenthal. the goal of a society is to build jobs. since august 2007, this is greece employment on a percentage basis, and it is ugly. here is germany, predictable. how about the nuances of the u.s. and italy. the ul.s. lousy at first. italy slogging along. four pictures about employment. brendan: i would take issue with the goal of a society to create jobs. the story with germany there was austerity imposed on greece that had a consequence. it did not work. tom: this shows greece versus everybody else. right now, over to greece. we need an update. this tuesday, there is great doubt of whether an agreement on greece can get done. guy johnson is in athens. hans nichols in brussels. hans, let me start with you as we did yesterday. are we just waiting for tomorrow or waiting for thursday, or can something get done this tuesday? hans: there is a working group today, but that is too technical to bore you with. we are in a debate about means. so much of the four months has been a debate about the ends. they agreed to that yesterday. mr. dombrowski told us that. they have the end point. now we need a debate on means and verification. what guy is reporting on in athens is just as important as what is happening in brussels. is the deal palatable to voters in athens? brendan: i'm going to throw his question to you in athens. did alexis tsipras cave or is he getting a deal done? guy: it is too early to tell, because we do not know how his party is going to react to it. i have to say we are at the early stages of taking the temperature of the left faction of the coalition government, and it is by no means clear that those parliamentarians will vote this through. we are watching brussels, but it is a dual track we are watching. will brussels go for it? can alexis tsipras sell it to his own parliament? by no means are either of those two things clear. it is not even clear of the leader of the house will allow an exceptional procedural vote to take place on sunday or monday. none of this is clear. this is by no means a done deal. brendan: some brass tacks getting negotiated in brussels. among them, increased pension contributions, earlier pension contributions, and also increases to the vat tax at taverns. have any tavern owners complain to you? guy: i have not heard about that, but this is a -- a serious economy. the tourism industry is pivotal. this feeds back into the electoral story. if we were not to get tsipras able to get this vote through you could see early elections right in the middle of the tourism season. we have never done that before and nobody wants to find out what the impact would be. life should become -- be colorful. tom: we will touch on this at the top of the 7:00 hour. greece is small. the argument goes that athens will not cause contagion, except when there is moves. the u.s. 10-year moves. a resilient optimist through all of us. let's bring up an important quote that goes to your belief. this is eric nielsen of unicredit. this came out 20 minutes ago. this is an important quote for the optimist. "now with a deal inside, there is still a good deal of catch-up to be made after recent weeks' wobbles for european equities and for core peripheral spreads. it is why across european risk!" i look at eric nielsen as i look at neil dudley society heals itself. we move on to a point of optimism. if we do get optimism on greece, how does that redound on to the u.s. markets and the american economy? >> the first that it will do as it will put upward pressure on u.s. bond yields. most of the ups and downs in the treasury market has been about the term premium. the term premium goes down as risk appetite comes down. and it goes up as you have more -- tom: the deal going up can be a positive sign of the american economy? neil: it is largely risk on, risk off traits. no, general he i agree with you. absolutely, guilds going up as a sign that things are getting better. more growth in the u.s. economy. while we may have a relief rally now, i do worry a little bit about the u.s. equity markets. at the end of the day, the economy is improving. the economy is normalizing and monetary policy is still far from normal. the fed has been saying the same thing for a year now. we are going to go slowly, gradually, rates are going to be low. in my view that baseline scenario may come under pressure next year. in which case, the stock market is going to come under pressure. vonnie: the pricing of the else would help the fed. u.s. equities are not moving on the greece tsipras-- news. neil: at the end of the day it comes down to corporate earnings and productivity. and u.s. productivity has been very weak. at the same time, wages are rising. so there is a risk that compensation growth translates a bit more quickly into higher selling prices, and that is not a good scenario. tom: oliver chen will be with us. on gap and j. crew. i want to talk about the nerd moment which is we are not consuming what we used to and we are saving. the marginal propensity to consume has gone down. tutti by -- do you buy the idea that americans are going to save more? nieil: i do not think the rhetoric that is put out there is accurate. it is amusing, actually, with home sales hitting cycle highs. vehicle sales hitting 17 million. we are talking about the u.s. consumer crawling under a rock. i think what happens in financial markets as people take two months of data and extrapolate and make these big, sweeping conclusions. tom: no! neil: largely speaking over the last several years, consumer spending and income have been running on top of each other. no, i do not buy. brendan: at "surveillance" we are all signal, no noise. tom: we extrapolate once or twice a year? vonnie: it is data dependent. brendan: taylor swift. let's make that transition. we are not going to try to finesse that. when she speaks, music companies have to do what she says. look at her holding a golf club. we will talk about why apple is terrified of taylor swift. blackberry reports earnings at 7:00 a.m. news of his death was exaggerated. our twitter question is as they move into new services and security, can black very survive -- blackberry survive? ♪ tom: good morning, everyone to read our top headlines. vonnie: at least 7 people are heard after severe thunderstorms hits the midwest. homes were damaged and power was knocked off in illinois, and a tornado touchdown in a small town south of chicago. tornado watches are up and parts of indiana and michigan. uber may be getting a boost from the chinese investor. they are in talks to buy uber bonds that could be converted into shares. that is seen as a sign that uber may be close to getting public. and a california plane crash takes the life of oscar-winning composer james horner. his single-engine craft went down yesterday near santa barbara. his identity not yet confirmed, but he was at the controls. horner wrote the scores for "avatar" and "braveheart" and "titanic." he began his career watching -- writing scores for b movies. tom: the "titanic" story was phenomenal. he was the first one in the studio who said screw computer monitors, put up big monitors. he changed how you do the process. he's one of my heroes. vonnie: more than 100 movie scored. tom: let me look forward to bloomberg "surveillance" this morning. a lot going on. good news in greece. we will focus on janet yellen and her focus on the financial side of fed responsibility. brendan has some smart thought on steel. forget about iron ore. once again, i guess there is too much of it. an important conversation on how healthy is the housing market? emotionally important to so many americans. speaking of emotions, taylor! yes! brendan: beware of the market shifting power of 125-year-old -- one 25-year-old. she gets what she wants. tom cannot say enough good things about apple. here is what i will show. here we go. this is the ft. one in a string of examples, you cannot talk about streaming, weather spot of fire apple unless you are talking about taylor swift. she runs that coverage. vonnie: i have started thinking there in conclusion. both of them got a lot of press out of this. b, apple is only paying a fraction during this trial period to artists. brendan: when we look at taylor swift and spotify an apple, what we missing is the market making power of the labels. they have been able to determine for spotify what its prices are. spotify is very much a creation of the labels. it was the service they could not create on their own. now, with apple the labels have been pushing both apple and spotify to keep their prices at that $10.99 a month level. apple wants to string much lower. what taylor swift is doing, i think, is a sideshow. she is one artist with extraordinary power. the real struggle is between the labels. tom: and the manufacturing of a sausage. it is widely known that artists make much more. i watched lady gaga come out of her place on central park south. 300 people and the police around. that star making quality. do you say, miss gaga? i don't know. the star making quality of swift and gaga are still there. that is the one thing that has not changed. vonnie: where will streaming go? the price is going to be reduced. it will be a price war. brendan: again i think the labels are in that mix. there would be a price war already. you have services like ardio, which do not have as much market share, which are experiencing with $3.99 a month. is back when we bought albums the round things that tomexplained that spun -- when we bought albums most consumers that were buying music paid on average $3.99 a month. that is assumed to be the average price of what someone is willing to pay for music. that is where they want to get. i do not think there can be a price war. vonnie: can they get there if they infiltrate china? brendan: it turns out we have right here from brian white at cantor fitzgerald, ignore everything. they got taylor swift into the intro. then talked about how all the money for apple is in china. tom: the mystery here is how do artists get paid in the united states? to ms. swift's defense, nobody knows. nobody knows where apple is going to be. we have done enough on this. i can't even tell you one taylor swift song. brendan: i would tell you one except the control room has told me i can no longer sing. tom: how about we get to our twitter question after we killed the apple-taylor swift story? the -- can blackberry survive? we need to hear from you. do you still use a blackberry? maybe that is the more important question. futures up. stay with us. good morning. ♪ tom: churning markets. let's get to our morning must read. mohammed ali arion was superb in looking at switzerland and the great distortions. switzerland is a wealthy country and can rely on past earnings to maintain living standards during a period of stress. it is getting a little long. it is agile enough to counter the impact of exchange rate overvaluation through a gradual, internal devaluation -- that is the acceptance by workers of lower nominal wages." this is a brilliant essay. if you are studying economics, i urge it for you. switzerland is this island. it shows how broken europe is. it is the ultimate to robert or of how screwed up europe is. neil: it also has important lessons for europe. for the ecb, for greece, because you are going to need to see some sort of workers, chris -- capitulating in greece. for greece, the euro is expensive. tom: let's look at a chart of swiss francs held in zÜrich. it looks like the fed balance sheet. it is a moonshine. up here. showing that mr. jordan and the rest of switzerland has an immense job with all that money coming in, negative interest rates. do negative interest rates, low interest rates, that has not worked. it has been a tool, but it has not worked. neil: i would tell your viewers to take a look at the paper out of the san francisco fed where they look at the experience and switzerland and they highlight the increase in excess reserves and the extent to which that lowered yields and how that helped the economy. look, q.e., all these programs they did not work as well as we thought. but we can see the results on both sides of the atlantic. in the u.s. we presumed -- purser -- pursued an aggressive policy. europe had the same amount of fiscal tiling. our unemployment is declining. brendan: we are going to take a look at next at whether the fed should watch the markets or the people. this is bloomberg "surveillance ." ♪ tom:tom: good morning, everyone. i going on in the markets if you look at greece, greece. greece spread in 56 basis points. that is a big two day move a celebration on greece. vonnie: greece's two year yield, 21%. eurozone leaders agreeing that greece is finally getting serious. alexis tsipras can he finish the job? he has until tomorrow to end the five-month stand up over bailout funds. he submitted a new plan that addresses pensions. it is the first real proposal he has seen in weeks. >> prime minister tsipras has assured us of greece's seriousness -- to work constructively. if thate last hours have shown we can see all parties fully committing to find a solution. vonnie: still, both sides are arguing over the fine print, and tsipras will have to convince his own party who have pledged to end austerity. president obama will go to charleston, south carolina friday to attend the funeral of one of those killed in the church massacre. the president will deliver the eulogy at the funeral. of the referent who was also a state senator president obama says he met pinckney while campaigning in 2007. in the wake of the shooting, walmart will quit selling confederate flag items. the company says it does not want to offend anyone. sears will no longer allow third parties to sell confederate items. the talks on iran's nuclear program may extend beyond the deadline. differences between the sides are unresolved, and a deal by the end of the month might not be possible. he ran in lawmakers have said they will not allow inspections of military bases. the u.s. said that is a dealbreaker. maybe apple knew what it was doing all the time. singer taylor swift blasted apple for his plan not to pay world these two artists when user sign up for a trial. apple quickly reversed that position. as it turns out, whatever money is involved will not mean much to apple and they may have one brownie points. in pro football today, tom brady will appeal his four game suspension. the new england quarterback will make his case in front of the nfl commissioner roger goodell. brady's lawyers are expect to refute -- he knew about the deflated football's. tom: there are people -- taylor swift and tom brady back to back in news? i feel like i'm doing "entertainment tonight." brendan: which story are you most tired of, greece or deflategate? tom: tough call. brendan: one might say that greece is slightly more important. moving back to things that -- tom: that we care about. brendan: i was going to say matter. last week danielle left the dallas fed. i asked her whether there was enough experience among the fed chairs. she gave the answer you might've expected. >> there need to be more people who understand financial markets, who have actually worked inside the markets, who understand the fixed income markets, especially the currency markets. people have been on the street. tom: i was ofrf that day? i would have taken her head off. i do not know what else to tell you. let me start with brian sack. brendan: let me quote you an e-mail that immediately arrived in my inbox that morning from one neil dutta. time stamped at 7:23 a.m., where was dudley before? is that financial enough?? neil, thank you for watching bloomberg "surveillance" what is the right relationship the fed should have with financial markets? neil: speaking to daniel's criticism, the fed has a lot of macroeconomists, but there is a whole school within macro economics that looks at financial economics. so, i think the notion that the fed is not paying attention to financial markets, that they do not understand financial markets. to quote rdrew mattis at ubs, in order to flush the toilet, you need to understand how the plumbing works. that is why the fed is paying more attention to the financial system. i do not think the fed has blinders on. there are plenty of smart people at the fed. william dudley is someone who understands financial markets. brian sack understands financial markets. jerome powell. there is a wide range of people that understand financial markets that have worked in financial markets. so -- brendan: first of all gross. second of all, it is possible the problem is not with the fed but with macro. macro until five years ago completely ignored finance. it was not a factor. the academics is having trouble keeping up. the fed chairs, the fed presidents come from academics. neil: we are talking about monetary policy. it transmits itself to financial markets. so if the fed makes an announcement that is more accommodative than financial markets expect, the outcome of that is going to be relatively easy to predict. the dollar will sell off. equity one rally. bond yields will come down. look, financial markets and monetary policy of always been important because financial markets, the way monetary policy transmits itself into the real economy. tom: i would go back to a wonderful point that simon johnson did -- many people including me, marked the tipping point when the sec allowed greater leverage at banks. the fed did not do that. a lot of people think the fed is the one that put the fox and the chicken coop. it was the sec in 2004 that says you could leverage up. brendan: i want to repeat something she said danielle. two is not just talking about the plumbing. she actually said that this fed has criminalized saving. there was far more pointed. is that true? neil: janet yellen told us it is trooper it i would not say criminalized, but janet yellen said that she recognizes that savers are coming under pressure. in washington d.c., we want more policy makers to think in terms of benefits and costs. the fed does. we should be thankful for that. vonnie: there was a definite bias from the texas side. but there is just location market pricing and where the fed dot plot is or some futures -- tom: are the fed and the market closer? neil: there is still a pretty big cap from 2018 f7 and beyond. they could be a variety of reasons. the fed has a high balance. there could be differing opinions about longer run economic growth. brendan: sometimes i feel like there is this proxy. warmly talk about returns and fixed income markets, we pretend we are worried about. our neil: most of the people that save, the fed, people have argued that the fed is widening inequality fail to recognize that most of the people that do saving in this country are the wealthy people. they are criminalizing saving you are punishing rich people. i think of anything the fed is by promoting full employment, they have been reducing inequality. tom: what is the fed going to do and when? september, december 2016? neil: i think the debate is whether they go once or twice. i think there is a risk to markets next year because i think inflation is going to be more of a problem. tom: do they go once? why cant they do that? i'm not disagreeing. neil: i do not think janet yellen wants to raise rates to patter self on the back and not be called a blockhead by, by some financial fixed income portfolio managers. she is going to do because you think the economy is strong enough. the fed is going to raise and after they do that, the economy will still be strong. and they will keep raising rates. that is my view. i think that is janet yellen's view. brendan: neil is with us this hour. coming up, china's appetite for steel is shrugging. so much of the steelmakers are deepening the first cuts in 25 years. a turning point in steel is today single best chart. this is bloomberg bloomberg "surveillance" ♪ tom: green ont he screen. futures up four. brendan: china steelmakers are in a bad place. that is the topic of today's single best chart. steel will shrink 2% this year. that chart could not be clearer. it is the first time there has been negative, they have shrunk, negative growth in chinese still output since 1990. so neil dutta, what are we looking at? does this, i can't figure out looking at this chart whether we are just looking at a chinese story of the end of construction or whether we are looking at something more closely tied into the commodity super cycle. neil: both. china was such a big driver. right now china faces sort of baton of the title iv between achieving its short run growth forecasts, but also implementing a longer run reform agenda. china still has some firepower. they are running an account surplus. they have low inflation. i think you will continue to see this small ball stimulus. i think you're seeing that right now with the stabilization in their manufacturing indicators. i do not think it is falling off a cliff. i think it is getting -- i do not think it is getting away from them. tom: back to the united states. we are waiting for productivity to get better. we are waiting on infrastructure. they can start with 50 eight st. -- 58th street. where is investment in america? it has not been there in a su bpar economy. neil: capital spending has not kept up with hours worked. that is why productivity has not picked up. i think as the recovery progresses, you are going to see more normalization. we should see some pickup in cap x. but that baseline case, i do not think is a slamdunk. brendan: this is what i love about tom. they could start with 58th street. your new yorker view of the world, that is where it ends. you do not even know it gets to new jersey. tom: over 2nd avenue maybe. brendan: staying with china. the party has said they can maintain output for scale by focusing on massive's researcher projects. like the new silk road. do they have to go through a 1970's u.s. style deindustrialization? neil: i think they are. you are seeing it. their currency, it is no longer considered under valued by the imf. that is an important signal that is going to help overtime boost consumer spending. a stronger currency and at the same time the industrialize the economy. remember, china is growing more slowly but it is a much larger entity. in terms of its contribution to global gdp, it is really not as bad is it's being made out. tom: i still say janet yellen central bank or to the world. vonnie: a little light relief. hopefully. number three, san diego, -- s antiago, chile is shut down due to a smog emergency. 7 million residents were told to stay indoors. the andes mountain range involves a great haste to get trapped over the city. tom: you mentioned new delhi. we were looking at yoga photos. brendan: we used to think of smog is a beijing problem. it is a developing market problem. it is a difficult problem to solve. delhi has a huge problem. mexico city has a problem as well. tom: i look at mexico city from our childhood. but these are new geographies. vonnie: ventilation -- that is what we need. is his number two. yesterday afternoon, while floating over russia, the ester not tweeted a picture of a red aurora borealis. " i have never seen this before. spectacular!" that is your lesson for the day. the color depends on which atom was struck. the most common color is yellow-green. these ones are rare. tom: wow. science with vonnie. brendan: nicely done. vonnie: yesterday, the london bridge was covered in rainbow tiles. the insulation was designed by an artist who collaborated with spark to spark joy in everyday life. they could see "surveillance" and that would spark joy. brendan: how do you make people feel better? not through wellness initiatives. fewer hours, better pay. tom: i wonder what prince charles thinks. he has been conservative on his architecture. vonnie: you will have to tell us next time you take tea. brendan: we will focus the rest of the hour on what prince charles thinks. that is not true. we will focus on the health of the housing market and not at all about anybody royal born. this is bloomberg "surveillance" on bloomberg television. good morning. ♪ tom: good morning. bloomberg "surveillance" ouirr top headlines. vonnie: 14 brands of bottled water are being recalled because of e. coli. one of its sources was contaminated. the voluntary recall is for all spring water products produced at its pennsylvania facilities. more than a decade ago, martha stewart's empire was worth $1 billion. yesterday, they bought the company for 1/3 of that. they are getting a business with a brand recognizable to millions. martha stewart is staying on as chief creative officer. martha stewart's sotcktock rose on speculation it would be a takeover bid. samsung is working in an idea to save lives on highways. a see-through truck. cameras on vehicles show what the truck driver sees on the back of the trailer. it's tested in south america. a see-through truck. i would not want to see a trucker from behind. brendan: amen. tom is making skeptical noises. flat screens are inexpensive enough for samsung to play around with this. but they are not yet inexpensive enough for this to be worth it for any trucking company unless it is mandated. this is conceivable but not yet possible. tom: i think that people gaming that difficult passing -- even m ore. brendan: that is a good point. tom: sort of like driverless cars. let's think this through. let's think through what we are going to do in the 7:00 hour. hans nichols in. brussels. bill rose is on with us. this will be in important conversation. i have no idea what we are doing with raisins. we are doing raisin. the raisin reserve. it is like a petroleum reserve. weave a serious take a the retail industry. we will look at the implosion of gap and j. crews among others, let's look at housing. economists a way to true housing recovery, they have done better than good. while new home sales have taken forever to recover, neil dutta suggest jobs and wage growth and confidence are here. and that housing will do better than good. will it be a housing recovery or a housing economy like what we knew in the past, like 2004? neil: not thatlike 2004. to get back to normal, there is plenty of upside. what is most interesting is the fact the housing market is starting to percolate at a time in the business cycle when it normally starts to fade out. we are getting close to full employment. when that happens, we are past that peak conservation from housing. now we are just starting. brendan: what is driving that new households? neil: it is lending standards easing. wages beginning to pick up had going back to kids moving out of their parents house. that will help construction. brendan: are the millenials going to fix everything? they are going to buy stuff, they are going to get jobs everything will be fine. is that true? neil: i think we had a delayed recovery. i do not think that is saying much. we had a weak recovery for several years. but we have come a long way. the economy was growing 2.25% over the last five years with household deleveraging and governments tighten their belt with no recovery in the housing market. a lot of these headwinds are fading. to some respects, the forecast of the consensus, the fed, 2.5% may be too conservative. vonnie: who says housing will get back to the old normal? what would be the new normal for housing in terms of millenials finally buying? neil: i think 1.3 million on housing starts. i think that is probably the new normal. but we are still well below that. there is plenty of upside. brendan: um, what is the indicator that we should be paying the most attention to? the thing i cannot figure out is whether we should pay attention to new housing starts or existing house stock. whether those are being resold. neil: there are so many ways to slice the apple. you can look at builder sentiment, prices, home sales, construction. with home sales, for example, what we will likely see going forward is a pickup in new home sales relative to existing home sales. a lot of the increase in existing sales was investor led, distressed sales. that market is normalizing. elders are positioned to gain share. tom: go ahead. vonnie: the trouble is, that indicator is related to gdp, not whom set -- not new home sales. neil: retail is 80% of the market. there is broker construction and new construction. for equity investors, it is not clear to me that this is a green light on builders. builders are facing challenges now. for example, construction costs are rising. wages are picking up. because they are catering more to the first time buyer, they are going to have to sort of slow the price appreciation, the pricing power a bit. and i think that is going to put some pressure on homebuilder markets near term. for the broader economy, it is a positive. tom: thank you so much. on the american housing economy. forex is quiet versus what we have seen over the last 48 hours. the euro does get my attention. that is a much weaker euro. the bears close watching. euro-yen mixes into that. 1.39. a stronger euro against yen. the litmus paper that the global system uses as they measured the new -- deal out of greece. weaker british sterling today. 1.5783. futures up four. bill rhodes will be with us on a restructuring for greece. it is bloomberg "surveillance" ♪ . . greece and new leaders absolutely do not agree on "where we need to be." markets into like what they hear this morning. america is selling beige. gap and j.crew are in big trouble. building up the warchest -- in case liquidity fails. good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is tuesday, june 23. i am tom keene. joining me brendan greeley, vonnie quinn. she takes a first look at blackberry. it is not like deathwatch -- vonnie: well it is a company that is pivoting from one thing into another. earnings out right now adjusted loss per share was five cents looking for a consensus loss of four cents per share. it is continuing to anticipate positive cash flow. this is a company looking for $600 million worth of sales and software for next year. it seems to be on track for that. blackberry coming out and saying it has strong software revenue. tom: do they still make telephones? brendan: no -- vonnie: they do. this is the first full quarter where the classic blackberry is on sale again, so we are waiting on numbers to see exactly what that is. they are counting on hardware sales to get them through the pivot so they can concentrate more on software. brendan: this is a class example of if you cannot be with the one you love, love the one you are with. they have amazing software amazing security, secure servers -- vonnie: angela merkel uses this. brendan: they are sticking with security, which seems to be more durable for them than hardware sales. tom: there it is on blackberry, as they look forward to restructuring and realigning to say the leave. their chief executive officer, their chairman john chen will be on during the noon hour. let's get to top headlines. vonnie: blackberry in the premarket, not too much trading. the prime minister of greece is on the dock. he has until tomorrow to cut a bailout deal. eurozone leaders things greece is finally getting serious, and they want a breakthrough by tomorrow. alexis tsipras tackles two major sticking points -- chancellor merkel: all participants of the discussion including myself, say they want greece to stay in the eurozone. what grace put forward today was certainly progress, but in our discussion, we also noticed there is a lot of work that needs to be done, and we are running out of time. therefore we need to concentrate on this work. vonnie: even if tsipras pleases european leaders, he's still faces a battle in athens. his party wants austerity to end. and the confederate flag on the capitol grounds. and calling legislators back to columbia, the governor wants the flag removed in south carolina. gov.: it is time to move the flag from the capitol grounds. vonnie: pictures of the accused killer on the web shows him holding the confederate flag, and in mississippi, they are calling for the emblem to be removed from the state flag. the president is at least 60 votes to get fast-track authority for an asian trade bill. 62 senators passed the bill last month. publicans restructured the package so it would win approval in the house, and that has led to the second senate vote. oracle is going all in on the cloud. two dozen platforms and infrastructure services. chairman larry ellison says clients can move all of their applications out of the data center and into the oracle cloud. ellison was not always so enthusiastic about the cloud. in 2008, he said it was a fad. and america's women seem as down the quarterfinals of the world cup. soccer, the u.s. he's columbia last night in edmonton, canada 2-0. the u.s. has not given up a goal in the last 333 minutes of play. they play china friday night. tom: this is a company with almost as many employees as jpmorgan, 200-6000. they have been a happy list performing stock -- they have been -- since 206,000. they have been a fabulous performing stock. putting properties into a real estate investment trust. i'm going to call this textbook financial engineering by a company that has always been really one step ahead in a very competitive industry. so there is darden spinning into reit in the regular business will up let's do a data check. we look at equities, bonds currencies, commodities. simply equities up 3 the euro up $1.1220. second screen, the mixvisx $12.74. yields coming much in. tuesday does not bring the fireworks of yesterday. our guy johnson is in athens, hans nichols is in brussels. let's go to you guys quickly because i know we will give you major love later in the week. hans chancellor merkel, who is her closest ally right now in this struggle, in the debates she speaks to her german people who is her closest world ally? hans: so you mean worldly, not domestically. domestically she does not need an ally because i think merkel has the votes to get whatever three. that is the indication we have been getting. on the world stage, she is very tight with francois hollande. they are pressing greece to make the necessary reforms of the they can give them the money. the whole message from merkel is let us help you, but to do that, they need to see progress, they need to see tangible aspects, and that is more than just a tavern tax, although that is guy johnson's next assignment. guy, a little hint, if they serve champagne, technically is not a tavern. brendan: i happen to know hans 100 are% guy is an uzo man. will syrita be in power after this? guy: he is trying to make sure the left flank of his party will be on board with this. they are interviewing the leader of the left, the energy minister. will be really interesting to see whether or not he has got the vote to make this happen. i am being told here next week is when the crescendo really happens. that is when the fireworks are really going to take place here in athens. back to you guys. tom: very good, guy johnson, thank you so much, and hans nichols in brussels. we have got the right guess for you this morning. waiting for a debt restructuring. that is how these things get fixed. william rhodes restructured herman years ago and then brown. i love what your wikipedia says. in 1998 when the republic of korea x. liquidity problems -- experienced liquidity problems i remember the sweat and the absolute panic. we have got the same sweat and panic, yet no one is calling for a bill rhodes-like restructuring full stop i am baffled. why can't they just restructure? william: there is no doubt they will need debt relief. i have been saying this for months on the show and others that when you have 180% debt to gdp, which are the latest figures out, there is no way that they can do a deal overtime to be successful and implemented without some sort of debt relief. one of the big problems has been the ecb, which by the way i have to give a lot of credit to mario draghi, who had problems with his board to keep shoveling the money in for these greek banks, but they have not wanted to do a debt restructuring. what you can do is take their debt and put it over to the european stability mechanism, and they then can restructure. tom: the interest rate out 25 years, details that guys like you workout but the thing i do not get is clearly greece is in depression. people are suffering majorly, and whenever thing is that is done, there has got to be a party saying no restructuring. who is that party? william: i think brussels does not want the restructuring. the imf has one of the restructuring, and ecb has been against it, but as i said, you take the ecb funds, the bonds they hold, and you get to the stability mechanism, and they restructure. vonnie: i do not think you need german by in right? olivia: william: i think germans will buy in. two things key to merkel, one is greece, and the other is getting some arrangement on ukraine. her reputation stands and falls on these. brendan: bill, has there been a move toward actual restructuring where you lighten the debt load a restructuring on the cheek where you extend and pretend? william: well, you have seen both of these happen, but i think yanis varoufakis and tsipras are correct in saying any plan we agree to will not work out over time in less you have some debt relief. in less they are realistic -- baby in brussels, the imf have already come out and said they need it, the ecb the defines that the way i mentioned. tom: our twitter question of the day goes back to blackberry and their challenges. do you use a blackberry? how about the question -- can blackberry survive? this is "bloomberg surveillance." ♪ tom: good morning, everyone. "bloomberg surveillance." let's get to a morning must-read. brendan: i came in this morning prepped with a perfectly good morning must-read about the u.k. and the euro, and i was told no, we are done with europe greece kind of so instead, i will make you guys talk about raisins. from "bloomberg view," megan mcardle writes -- why do we have a raisin reserve? without it, our government could be forced to fight future wars without adequate supplies of raisin bread or christmas fruitcake. at any point our economy could be brought to its knees by wild swings in the price of raisins. you are is why we are talking about it -- there is a supreme court decision a came, there is in fact a national raisin reserve, the agricultural marketing act of 1937 actually enables the secretary of agriculture to create a market for raisins and promulgate spoilers for raisins so as to hordes them so we do not run out of them. vonnie: a raisin pile? brendan: a raisin pile. this is one of the fascinating, agricultural orders that the european union just got rid of. this is what i find fascinating, vonnie is the european union just got rid of its agricultural caps. ireland is gearing up to be a major agriculture producer. vonnie: exporting beef to the united states of all places. tom: will raisins get more expensive? brendan: they will be differentiated. we will have different varieties. merlot raisins, you will be able to decide exact way which kind. we will have our'tis no raisins -- artesenal raisins. get ready. there has been a movement, bill rhodes it is amazing to see that these agricultural caps are still in place in 2015. they were only one by one shocking them off. william: that is one reason we do not have a door agreement agriculture, among others. tom: i believe we had a thing called the new deal in the 1930's, which, am i right, was not austerity? greece does not have a new deal, do they? william: no. there were a lot of suggestions if you years ago to put in a german marshall plan for southern europe, and the germans obviously rejected that. they said they would not ballot anybody. when you take a look at these use unappointed figures throughout southern europe frankly they would have been wise to have looked at that. brendan: bill rhodes is going to be here all hour talking about greece and denmark, among other countries in europe, our twitter question of the day, looking at blackberry moving from hardware to software. can blackberry survive? let us know that is today's company news.. -- let us know @bsurveillance. ♪ tom: good morning, everyone. "bloomberg surveillance." if you live where they are please be aware of the new technology in use it to protect yourself. the season begins -- tornadoes here they last a number of days have really been something. this from illinois, vonnie, is that right? vonnie: yes. tom: really challenging conditions. please avail yourself of the trusting technology that can save lives through the hurricane and tornado season. we have got much more the startup of months this morning --in the top headlines this morning. vonnie: at least seven people are hurt after more severe thunderstorms hit the midwest. homes without power knocked out in northern illinois. tornado, what you are looking at right there, touched down in a small town south of chicago, about 60 miles. 20tornado watches her up right now. -- are up right now. uber bonds could be converted into shares as uber goes public. that means uber may be considering an ipo -- another one. and a plane c claims the -- in a plane crash claims the life of hollywood composer james horner. he was at the controls. he wrote the scores for "avatar" and "braveheart." james horner was a 61 years old. he had written more than 100 scores over all. he started off -- tom: he flat out change the business. there is no other way to put it. "titanic" was his breakout film for me, maybe i'm wrong on that, but i think it was. he truly changed how you make movie scores. it was john williams and then james horner afterwards. brendan: the best way to learned anything as quickly and without resources. vonnie: high emotion, high drama. tom: we have got the drama and retail as well. it was in the mostly ugly american retailing, truly reeling from too much product and product that people do not want to buy. the winner'ss -- fast-moving foreign shops. oliver chen is senior equity research analyst which barely describes his enthusiasm at wharton for retail. you got the retail book right away. oliver: i grew up in a retail store and then i did commerce and banking. we are in the malls every other week so we're pretty exciting about doing these channel checks and knowing what is hot. tom: i go to gap -- it is dead. am i right? how do you know a gap store is dead when you walk in? oliver: gap has been famous for classic american cool and optimum color, and that is not what they have in the store right now. there's a big opportunity for them to restore this, and that is in progress. what is happened is democratization of fashion, so as fashion have gotten faster with supply chains abroad, and consumers have more power -- tom: i agree. bring up the chart here. i have no idea, folks, because i do not shop at zara. the white line is the zara people, and the yellow line is gap. oliver: they have really simple fight how a retailer works. they have simplified the roles and response abilities, so the supply chain is a lot shorter, and that leads to better fashion. tom: can j.crew beat this? oliver: j.crew is a work in progress as well. american companies are soul-searching. vonnie: european and japanese retailers coming into the market -- do they start to cannibalize each other? there's another coming in the fall, pre-mark? peter:oliver: yes, and it is a unique integration of a grocery store and fashion. the british have good taste. [laughter] brendan: i don't even know where to start with that. tom: should we go with the german word on soul-searching what is soul-searching? brendan: this is the thing that we keep hearing is that retailers need to adapt to the need to have a smaller footprint, use a warehouse. what changed, what store is right now best adapted to getting that right, and what are they doing write about it? oliver: we like macy's, macy's has been focused on this for over five years. 10% of macy's is online. they're integrating their inventory between stores and online well. nordstrom's is a great innovator. and then walmart is on a journey. walmart really recognizes this. brick plus click is really the answer for the future. brendan: we exit have later this morning on bloomberg television doug macmillan will be on with olivia sterns. what is it when he to be asking him? oliver: i think it is about how do you inspire this consumer to come into your store reserve and store at the front of the store, how they will leverage a new kind of shopping. millenniums too, you have got to get younger and retain your existence. tom: vonnie the stores are packed with stuff. is there too much stuff out there? oliver: in some cases there is. with clothing, you have got to get the fashion right. at the heart of retail is supply versus demand. tjx does this well. vonnie: tjx does it really well and they keep their secrets close to their chest. what happens to american apparel? and i'm not talking but the retailer. i mean in general because it is the zaras of the world they are taking over from abercrombie & fitch. oliver: the competitive advantage has really changed the game. it is not as much a key item strategy -- it is a lot of choice. it is consumers making choice more room for fashion errors. when using about instagram, bloggers, what has happened in the fashion magazine world consumers have more power, so it is great that consumers can demand it and get it quickly, and the global story has been true too. brendan: bill rhodes had nothing to say about zara. william: what i do have to say is terry lundgren hangs in there with macy's. brendan: "bloomberg surveillance ." good morning. ♪ tom: good morning, everyone. it is a tuesday morning, not like monday's fireworks and festivities in greece. a little bit calmer out there this morning. let's get to top headlines. vonnie: the prime minister of greece is in a race against time. he has until tomorrow to cut out a bailout deal. they want an agreement by tomorrow. the latest plan from alexis tsipras tackles two major issues in a five-month standoff -- pensions and fiscal targets. the head of the european union told us the first sound plan he has seen in weeks. >> prime minister tsipras has assured us of greece's willingness to work constructively. as the last hours have shown, we can see a commitment of all parties to finding a solution. vonnie: tsipras will still have to convince members of his own party who have pledged to and austerity. a minister killed in south carolina's church massacre -- the president will speak at during the funeral of reverend clementa pinckney in charleston. he was also a state senator. president obama met him years ago while campaigning. vice president and first lady michelle obama will also attend the funeral. and walmart says it will stop selling confederate flag items, and sears 10 longer allow third-party -- will no longer allow third-parties to sell it through their website. reaching a deal by the end of this month may not be possible. the u.s. and five other world powers are offering to lift sanctions if iran promises not to build nuclear weapons. sales falling short of targets. blackberry has five cents a share, a penny less, and smarts phone -- smartphone sales also dropped. and the patriots quarterback tom brady will appeal his four-game suspension to the nfl commissioner. the league says brady new footballs were tampered with during the title game. those of the top headlines. we haven't following that one closely. tom: we will. we will know what it is over -- probably in time for football season. joe weisenthal this is jobs in europe in the united states. i just sort of put this together in my head and brendan, i was sort of dazzled by what it shows. it shows from june 2007, greece unemployment on a percentage basis down over 20% -- this is units, not rate. the count of bodies in greece south, germany is in yellow, just like you would expect, up up up like a machine italy isn't green sort of slogging along, and here is the united states with the ugliness and in 2009 and 2010, and then we do better and we are catching up nicely with germany. brendan: and this white line wandering down, this is greece, austerity is not specific enough for a term. by last year, greece had gotten up to a 3% surplus. that is extorted very for any country to pull up, even a great times, much less be terrible times greece is going through. tom: this is the human condition between behind the restructuring story. this is all it takes. bill rhodes is with us. the real economic facts of banking world are changeable. william: what i have in thing for months were the greek banks he basically had a slow run on the greek banks over the last couple of months. if the ecb had not stepped in on a regular basis -- tom: including a few days ago. william: exactly. in talking with mario draghi lesson to a pseudo-, he told me it was not easy with some of the board. he cap shoveling the money in there through the central bank of greece thinking there would be ideal, and it looks like there will be a chance for a deal, but we have to wait. meeting is thursday with the has of state -- the next big meeting is thursday with the heads of state. tom: what happens the next day if you get your hope? william: we get debt relief i think you will see a chance for growth because we keep talking about anti-austerity. what we ought to be talking about his growth because that is what greece needs is growth. that is the key, and they have not had an five years, and you have a depression, i think, among the mass of greeks. now you have the elites who always managed to get out one way or the other, but i think the math of the people want to see growth, and you have got to get growth or you will have this depression-like mentality continue. tom: without a restructuring. william: exactly. tom: let me do a quick data check here, folks. some things to go over, futures up 5 now. the euro is weak or this morning, watching a $1.1212. oil back above $60 a barrel. greek spreads come in with a vengeance, way, way down in the last 48 hours as well. greek spreads and a solid 57 basis points this morning. brendan: this is "bloomberg surveillance." i am brendan greeley with tom keene. denmark out of the euro but pegs to the euro. now a new problem -- denmark does not have enough debt. it has a liquidity problem. yesterday, bloomberg caught up with head of denmark's central bank and he seems pretty laid back about it. >> again, we have to admit the liquidity, parcel parts of the market have declined the golden bond market is not as liquid as it used to be. that said, i do not see any kind of stock of that sort because in general, the liquidity of the danish system is in very good shape. the liquidity, currency, holdings of the danish central bankers are obviously quite high, so i do not see any risk at present at least for this kind of development. william: the real issue in denmark is not that -- the real issuree is immigration. the surprise, the far right party, which campaigned against immigration, won a vote that no one thought they would win. this is the big issue along with use on employment is the whole immigration question. brendan: bill rhodes with us talking about the politics of denmark. that election on friday really -- the same story we have been seeing all over europe politically. people do satisfied with what is been happening with the european level. lisa abramowicz with us from bloomberg for so she covers the debt market and has been sounding the alarm about liquidity for at least a month now -- lisa: a couple of years. brendan: you win. i decided your superhero name is the liquidity lady. the danish central bank of kind of not worried about liquidity. that is what i am fascinating by. the danish central banks as says, "eh, we are good." lisa: it is important to distinguish what he is talking about with the various words of liquidity. first, he is talking about the ability to trade danish government debt, right, that it is actually getting harder to do that because they are selling less that and because frankly it is becoming a little more volatile because of what is going on with the macro european region and because of the fact that they do not wanted to be too much of a safe haven. they are actually making it more difficult or hedge funds to rely on as a safe haven asset. but he is also talking about the fact that central banks have essentially been pumping money into the system de facto by not issuing government bonds and by dropping benchmark rates lower. they are two different things that pose different problems for the system. liquidity is a complicated term, and he used it. brendan: denmark stopped issuing debt and he actually calls it a soft qe. let me go back to the tape. mr. rohde: we do not know. it is our version of qe, by stopping the sale of government bonds, it does exactly the same impact as having the government issue -- issuing government bonds and in the central bank buying it. we will go on with these -- or we cannot go on with this at least until 2016 because of the pre-financing of government debt. brendan: bill rhodes, denmark has a unique problem. it is a little country but it is a responsible country. it, just like other countries has trouble figuring out how much capital should come in, how much capital should stay out. it is a universal problem. william: i think throughout europe it is a problem, and i think you pointed it out very well, on this whole liquidity issue, because of what is going on with the ecb, their whole you know, quantitative easing program, the doubts in greece these clinical issues that we are talking about -- all of this i think creates a lot of actions and volatility. we cannot forget that we have tremendous volatility in the markets. brendan: the hot money does not just flow south, it flows north as well. lisa: despite how responsible a country is, it cannot avoid the currency wars. brendan: exactly, every country has to play this game. lisa abramowicz, thank you for coming and talking about denmark for stuff for our twitter question of the day, we asked -- can blackberry survive? let us know @bsurveillance. ♪ tom: good morning, everyone. "bloomberg surveillance" with vonnie quinn and brendan greeley. brendan: today on "market makers," olivia sterns will talk to doug mcmillon the ceo of walmart. events trump everything, and walmart having to make a very serious decision after what happened in charleston this week. olivia: yes, this made big news walmart cannot it said they will make -- they will take off their shelves any merchandise that has the confederate flag. it is particularly interesting because it is a latest move by walmart to really stick their neck out on social issues something that you do not think of walmart doing. obviously there is some concern that this could be alienating the base customer of walmart, so one of my questions for doug mcmillon at this interview and unlock a.m. is -- why are you doing thatis? is this good for business? or is this ushering in an era of corporate responsibility? vonnie: walmart is beginning to focus on e-commerce and get it right almost. olivia: certainly. that is a big opportunity for walmart. that is what everyone is excited about, that is what everyone things could actually move the needle on this, the largest right employer -- private employer in the world. there are a couple of reasons that if anyone takes on amazon it could be walmart. the scale but also the fact that they have this incredible retail footprint of 500 school -- of 4500 stores, and if they could transition those into back-office fulfillment centers and create is on the channel model, then maybe they could take on jeff bezos. tom: i am really interested in this cultural sense. this is a guy out of the university of arkansas. he briefs -- he is bentonville. if you want one guy to represent walmart who is not a walton, he would be at. -- be it. olivia: it says a lot of what a close, family oriented company it is. his father moves to bentonville because he saw big opportunity because of the big business sam walton was building. doug mcmillon had his first up at walmart as a teenager in a warehouse in arkansas. he is been there for 23 years. tom: he is the one who sold the cases of gummy bears that you went home and eight so then you had to go see his father, the dentist? olivia: he has done every thing from focusing on u.s. stores he ran sam's club, he ran walmart international -- vonnie: he have a tradition of being hands-on. olivia: exactly. william: you have to ask him about china because they have had a big push in china. they have had problems in china but they keep coming out and saying that one of their great objectives going forward is to build a tremendous business in china, see you have got to ask him -- olivia: i sincerely well. one of my questions for him on china will be why is store traffic down and china, but also is alibaba a more formidable opponent of an amazon? oh bill, i love you. thank you. [laughter] brendan: olivia sterns talking to doug mcmillon in about an hour and a half, the ceo of walmart. what was going to be a business discussion is going to be a cultural discussion as walmart tries to figure out what its customer is. this is "bloomberg surveillance" for the time being on bloomberg television and radio. good morning. ♪ tom: futures up 5.5, markets training, a little green on the screen. top tuesday headlines with vonnie quinn. vonnie: thank you so much, tom. 14 brands of bottled water has been recalled because of e. coli. the voluntary recall is for all spring water products bottled at a pennsylvania facility. papa john's is purging artificial gradients and additives. the effort will cost 100 million dollars. papa john's is targeting 14 ingredients that will be dropped by the end of next year, including corn syrup, artificial colors, and some preservatives. brendan: wow! what will they make that garlic sauce out of? vonnie: maybe garlic for stop what a novel idea. samsung is working on an idea they think and stabilize on highways. a see-through truck. drivers who want to pass trucks can also see around them. cameras on samsung's vehicles show what the truck driver sees on the back of the trailer. it is already being tested in south america. the idea is you look at the back of the trailer in what is in front of the trailer. brendan: i think technology is amazing. tom is doing his "i do not approve" stare. you do not see it on radio, but maybe it resonates out on the airwaves. tom: full disclosure, i have done stupid things going around a truck. it is sobering. hey, if it saves one life it is important. let's move on and look at the future of banking. they are young, they are eager they want to be bill rhodes bankers to the world, working at the international level or even better, working the glory of transactions like the late jimmy lee of jpmorgan. there is still a romance to banking, but will the banking industry be there in five years, 10 years for the new bill rhodes, for the new james lee? with us bill rhodes. yesterday was an amazing service for jimmy, the gathering of the clan, i was there with betty liu and others of bloomberg, michael bloomberg was there as well. is this industry going to be around in five years or 10 years? are you going to be able to go to williams or go to brown and say hey, kid, you can be like jimmy, you can be like bill rhodes? william: no doubt there is a challenge to the shadow banking legislation,. frank and other versions of it, people are -- dodd-frank and other versions of it, the volker rule, banking has changed, but it will be there. we have to get back to the basics were culture counts -- tom: and community. william: exactly. i'm a cochair of the group of 30 where we are talking about culture and combat in the sense that the bank really has to go back to that idea where it if the customer comes first, the community must be served, and you must create trust within the community that banking is something that is positive. tom: can you do that in the world of derivatives and financial engineering? william: you have to do a because if you do not have the trust of the community, then the regulators and the politicians will just keep piling on on regulations, and you will see banking turn into a utility, so i think yes with all of these scandals, libor, exchange, all of this stuff i think the banking community now understands that it has got to go back to some of the basics on culture and conduct and trust. brendan: how do you break out of the cycle? that is something we have been watching for for a while, which you have a change in coulter, which leads to ethical lapses which leads possibly to overregulation. how do you make cultural change happen? william: well, if you are a regulator, you want to see the culture of change, but you cannot decide that. you can decide capital levels liquidity levels culture must be designed, implemented, and frankly disciplined within the company itself. tom: do you see that at mr. corvette at citigroup, mr. dimon at jpmorgan? william: yes, i believe they can, and this report coming out in a month on culture and conduct by the group of 30 gets into this, but there has also got to be disciplined, via compensation or even firing, when people do not do it. it has got to start a ceo-board level, chairman level, right down to the teller. that is the way it was, tom, when i started back in the late 1950's. tom: where were you first training? citigroup? william: yes. brendan: it starts with discipline at the compensation level, possibly even firing. what about the possibility of real, personal prosecution? that is something the justice department has shied away from. william: i think you will see some of that because the fines have been enormous, but in some cases you probably will see that. i think more importantly too, is that the institution itself has to discipline itself. one is compensation the other is firing. one thing being looked at when you look at these traders who have gone from one institution to another, there is not a proper checking being done on what their record was. so i think you will see more of that, too. tom: bill rhodes, thank you for your comments on the future of banking. we have got twitter, we segue over to twitter. twitter over to blackberry. vonnie: it is time to answer our twitter question the today -- can blackberry survive? first answer -- in a market dominated by touchscreen smartphones, there is not enough market left. tom: what does john chen do? william: you never underestimate john when you take a look in his past history. one of the things that is very important as i would not doubt you would see more linkups with china because the chinese respect him a lot. he is a very bright guy, and he is very careful what he says in the sense of what he can do. tom: yeah, i agree with that. he has not shot off the mouth, he is very good about that. vonnie: we just got a deal after earnings cannot, small business on the top and bottom line, but there is a deal now with cisco and blackberry will receive a license fee. tom: rich truman and radio saying up 9% or so. vonnie: only true after innovation our second answer significant capital are indie probability position to compete. tom: brendan, do you know anybody who uses a blackberry anymore? brendan: only as a statement. william: the president of the united states still uses a blackberry. brendan: that is actually a really important point because what blackberry does really well is encryption all the way to the server. other companies do not do that as well, so it has a product that it can compete on. the problem is that product is not the device -- it is the encryption. the blackberry is in that painful shift where it has got to realize it does not make devices -- it makes encryption. vonnie: when you talk about the blackberry customer, you are talking about the software customer more as opposed to the hard work customer. every this to our third answer -- blackberry can survive a knot in its current business model. take a bite out of the apple book. brendan: i mean, how? how do you do what apple has done? i think it is impossible for library to jump back in a maker of luxury devices. tom: john thain on -- john chen on bloomberg markets during the noon hour, an important conversation off of their good announcement on cisco as well this morning. brendan: let's take a look at what we are talking about today. my agenda -- vonnie, who is first? thomas first. tom: greece yesterday and greece today, all in all, it is a quiet day for grief, but by no means is anything solved. i am hugely skeptical of the ability to get to thursday were the weekend with a solution. we may get to a delay, but i am like, "where is the beef?" william: the problem is the banking system because mario is going to have to keep pushing money into the central bank. tom: this week as well. brendan: i love having bill rhodes on because he is the only one who can call him mario. vonnie: he was speaking to him last night. i will be taking a look at the economic data. 10:00, housing, new home sales speaking withh neil dutta about it. not as much of an increase as the previous muscles of durable goods orders coming out a 8:30. brendan: i am taking a look at south carolina and across the south. what nikki haley day, yesterday, the governor of south carolina was extraordinary something we would not have believed was possible, it has happened, and it may yet happen in mississippi, removing that confederate banner from the statehouse. tom: very good. bill rhodes, thank you so much wonderful to have you here. restructuring is something that we need in europe. we leave you with futures improved, up 5, dell futures up 35, the euro, a $1.11. stay tuned to "bloomberg surveillance" on radio, bloomberg television worldwide. good morning. ♪ >> live from bloomberg headquarters in new york this is "market makers" with erik schatzker and stephanie ruhle. olivia: good morning. i am olivia sterns. matt: and i am matt miller. eric -- erik schatzker and little -- and stephanie are off. olivia: big company news this morning. we will see how likely a fiat takeover is. matt: doug mcmillon will be here for an extended interview with olivia p it i'm looking forward to this. the company is in the mists of a lot of news and not just business news, but cultural and social news. olivia: walmart saying they will take off their shelves all merchandise of confederal fly -- confederate flags. matt: time for your top stories. eurozone leaders agreed greece is finally getting serious about striking a deal.