Transcripts For BLOOMBERG Bloomberg Surveillance 20140404

Go see it. Arent you captain america . Only because i have the a. Be entering the cinema this weekend . Captainttend america. It is a bull market. We will talk about that in a moment. The euro a little weaker off the druggie festivities yesterday. Festivities yesterday. On to the next screen. That dow. It is twoline friday. Heres the Unemployment Rate, the white line. Better, better, better. We have the equity markets. Im not suggesting a tight correlation, but notice where they cross. As thehe equities Unemployment Rate goes down. It may be a theme for the Second Quarter of 2014. Our theme is there is no news. We scour the papers allege everywhere, and there are some important stories. Heres the front page. We are china look ahead. When we talk about the banks, it looks like they wrapped up a pretty weak first quarter. Ask jpmorgan next friday . All of the Bank Earnings. Jpmorgan back in february said trading revenue was on pace to talk about 15 from last year. Trading revenue and mortgage lending were probably weak spots for the big banks. We know citigroup, goleman, b of a will probably report lower profits. There have been layoffs at all the big mortgage and to raiders. Simply because rates went up. It is all about cost cuts right now. For them to really get any revenue growth, they need to see the overall economy improve. Lending. Our second frontpage story. The second biggest of the year ipo, raised about 1. 3 billion. I know nothing about it. It was taken private by private equity firms about four years ago. There is a theme about a lot of companies rushing to go public. Waiting and waiting and waiting and now is the time. We are making new highs, seems like, every day. Bloomberg radio plus. He walks around with like 40 perspectives is in his back. This he read these document. The rush is there because there is demand for equities. There is demand on wednesday, i look at the 12 ipos price in the past week and 5 up an average of about 40 . Five out of 12. Keene digital was not part of that, was it . Our third frontpage story of the morning, the ceo of mozilla resigns after being criticized for donating money to an antigay marriage group. He became ceo last month and , you know it as it makes the firefox web browser. There is an uproar, clearly. What is curious, i believe the donation was back in 2008. In the age of the internet, nothing dies. Five, 6, 7thing years ago, it is out there. Employees pushed him to quit. They demanded on a blog he said he would not. Hisinally announced resignation yesterday. Those are the frontpage stories. We will go beneath the headline data that a 30 and the dataset of labor reports. Bill gross will be with me right after 8 30. We will get a triptych labor perspective. Egendary with jpmorgan really focused on the American Labor economy. You write up a storm every month. What is your focus this month . It is the hidden unemployment that is interesting to me. Now that the fed has backed off or downplay the Unemployment Rate, we know why because theres a lot of parttime unemployment that folks cant find fulltime jobs in the 20 to 30yearolds are slowly to me back into the market. The Unemployment Rate is not telling the whole story. Is part of america in any way getting fulltime jobs . Slowly getting fulltime jobs. And people who are unemployed longterm and shortterm, theyre slowly getting jobs. Comingrm unemployment is down, despite all the angst about it. These folks have useful skills. They do matter. Alldly, i think were getting used to the idea of the economy is moving forward. The issue now is, what meaning are we in. I think were in the fifth inning. On how debate will be much slack is there and when you watch to figure out the risk . When you talk about slack im a youre talking about massive jargon alert. U6 is the official Unemployment Rate. Those working parttime and would like to get fulltime. I get out of school, cant find a job to me give up and do something else. I dont show up in u6. Let me bring up jim glassman s note. It is like 14 pages. I thought this was an important paragraph what is an alternative option . May be freelancing went back to school. Is a structural issue. I want to ask about inflation. What about wage increases . We sell pickup in february, but a lot of people say it seems like a weather distortion. Are expecting to see some backoff from the wage growth. A u. S. Phenomenon. This is going on across the developed economy. Are benefits crowding out wage growth . Are they growing so much that i cant get a raise . They have slow down more in line with wages. But Rising Health care does squeeze out as Health Care Costs go up, they cut back elsewhere. Jim glassman with us for the hour. Michael mckee in the next hour. News. s get to company our twitter question links this up. Lets jump in with this. Great question. Tweet as and we will share those thoughts and get jim glassman, one of the preeminent labor economists. Company news. Jpmorgan gets rid of the office that reduce the london well Trading Office sort of. They will fold the chief Investment Officer drew its treasury unit. It is part of an effort to streamline its infrastructure. Ok u. S. Urging a judge to sacs recordsetting fine. Government lawyers with the judge to approve the 900 Million Dollar penalty from steve cohens hedge fund firm, the largest fine ever for Insider Trading and part of a 1. 8 billion settlement with sac. The judge is set to decide on the matter next thursday. Mercedes has a sales record. Selling more vehicles in march than any month in his history. Sales topped 158,000, a 13 aint. Gain. That is todays company news. Were you looking for cars . No. Are you ready . I dont have a drivers license. What do do for id . I have a passport. You carry your passport . I am very fortunate i get to take the surveillance helicopter when i need to take a car. Heres a question that came up, who will replace David Letterman . Latenight talkshow host said he will retire next year. Though in day 33 run on two networks, the longest ever for latenight host. He is 66 years old. He made the announcement last night. Earlier today, the man who owns this network, he and i had better relationship for years and years and years. Weve had this conversation in the past. We agreed we would Work Together on the circumstance. And the timing of the circumstance. Iphone him just before the program and said, leslie, it is being great, you have been great, the network has been great, but im retiring. Really . You actually did this . Yes, i did. While wow. [laughter] do i have a minute to call my accountant . [laughter] he looked a little emotional. Paul schaefer as well. He is usually successful. He did Everybody Loves raymond. His production company. Once he leaves, cbs could hire a or anyay Ellen Degeneres polar or tina fey. Fan. Am and amy poehler ruhle tok stephanie see if she could float and she passed. She floated. He is iconic. Remember the velcro thing . I remember seeing him when he was nobody, just this kid from indiana. He was a weatherman in indiana, by the way. It is a real passing of the guard. Popculture icon. And he survived leno, too. Cook sat downer with the defense secretary chuck hagel court exclusive interview in honolulu. We will bring you the highlights coming up on bloomberg surveillance. It is jobs stay. Perez, the secretary of labor for the United States of america, will speak from a prepared script im kidding. He will give us the official line from the white house on what is presumed to be a better than good report. Look for tom perez at 9 00 a. M. This morning on Bloomberg Television president obama spitted to asia . What came out of it . Defense secretary chuck hagel has met with asian defense nowsters in hawaii and headed to japan later today. The backdrop is the tragedy at fort hood. Peter cook sat down for an exclusive interview with the secretary in honolulu and heres part of the conversation. Thank you for the time. Ive got a lot to ask about including your trip to asia and ukraine, bellamy start with fort hood, the tragedy there. Giovanni better idea why ivan lopez opened fire you have any better idea why ivan lopez opened fire on fellow soldiers and why this is happening so often . It is a terrible tragedy that has been revisited once again on fort hood. Our thoughts and prayers go out to the families of the victims and those who have been wounded and we will continue to focus on them as we should. But in the meantime, let the investigators do their work. We dont have a lot of the answers. We dont know why it happened. We dont know why you did what he did. We will find that out. This is 24 hours away from the terrible incident, so we are working very hard to assure, first of all, the safety on all of our bases of our men and women who work there every day and their families, so they are reassured. We will find out. What does it say that americas military men and women are finding themselves in harms way back here at home as well . It is a terrible statement. I recognize that, we all do. But like anything, we have to figure out what happened and what went wrong. Adjusting to and implement in a number of recommendations that came out of the 2009 fort hood incident and the navy yard incident last year to further bring more security and further security to our bases. And we will see what comes out of this as to, how do we assure in every way possible the safety and security of those bases . Lets talk about your trip to asia. Given meeting with 10 of your Southeast Asian counterparts here in hawaii. Youre going onto japan, china, mongolia. This is a sign of the commitment to the rebalance to the asiapacific from the Obama Administration. My question is, given what is happening in ukraine, syria, american troops still in afghanistan, is this the right time to rebalance toward asia . I dont think you can develop your Strategic Interests based on one episode or two episodes. Strategic interests are driven by Nations National interests. We have been a Pacific Power for many, many years. The three largest economies in the world border the pacific will stop china, japan, the United States. We have treaty obligations. We have some of our strongest allies in this area. We have tremendous important interests in this area. It is not a matter of either of choosing which part of the world we are going to be in and which part we are not going to be, we are not retreating from any part of the world. We have 400,000 men and women deployed all around the world in 100 countries. We are strong in nato. We continue to be. But this is an area that is very important to america and for our future. China in you been to the past. Why should they take this rebalance as a direct threat . We have assured them in every way, president obama has in his recent meeting, mrs. Obama being in china, i have, secretary john kerry, all of our ministrations, that this is not a contained china approach. This is an approach to reach out, to try to be more open, communicate, coordinate, find ways we can work with each other in common purpose and interest. We do that now with the chinese in many areas. We will continue to do that. Do we have differences . Yes, we have differences. The only way to do that is be direct, open, and i was invited to come by the minister of defense and im looking forward to being there for three days and talking about these areas of possible new cooperation. We will talk about where we differ as well. He has beenprised defense secretary for his lungs he has. It seems like just yesterday it was robert gates. Or something that separates those that served him those that didnt. He is a real critic of the iraq war. We forget how out front he was out with the republicans and criticizing president and came up in the confirmation process. Did procrastinator said obamacare . They enrolled more than 7 Million People, but were they the right customers . The challenge of the eastern mediterranean. A siren over southern israel. This is the Palestinian Authority once prisoners released. Secretary john kerry canceled his trip earlier this week. This is from the west bank. There are protests at this moment. Israel checks on the reason for a siren in israel. The story is developing at this moment. Good morning, this is bloomberg surveillance. I am tom keene with scarlet fu and adam johnson. It is time for scarlet. A morning must listen. Spoke toneill Bloomberg Television in italy. Take a listen to his comments on the u. S. Jobs market in europe. In the u. S. , it is exitasingly about how the from the easiness of voluntary poly see has been in place. In europe, you this growing awful against deflation move against deflation. It is something that worries me. Jim oneill. Jim glassman, this goes to the real economy. We get so much mail saying jim glassman has it wrong, its not Getting Better, we dont feel it out here, out there. Why is that . Reminds meeople, it particularly in many parts of the economy, it is like being in new orleans when mississippi is flooding. It comes to you last. Look at the stock market. When the market is at an alltime record high and businesses are generating there isl profits, steady progress, but i dont think people feel it until it is touching them. If a Multiplier Effect in place and things will improve. They are slowly healing. We are only in the fifth year of recovery. We may have another five years. There are a lot of people not touched by this yet. Jim glassman. Socalled admission rate will surprise you. New york could barely sleep last night. The yankees won. Were so thrilled. It means we will win the world series. Beautiful april morning in new york. The reds are red because the red sox have opening day at fenway. Our 29threat view from floor here at bloomberg, the top of the bloomberg empire. This is bloomberg surveillance. Jobs day. There is other news. Time is running out to find the black box from the missing Malaysian Airlines jet. Contact was lost with the plane on march 8. The batteries that power the box usually last for about 30 days after a crash. Search clause are using underwater vessels and focusing on a 150mile area in the southern indian area in hopes of hearing some sort of signal. Ticket prices are sliding for next weeks masters tournament. Tiger woods is saying he will not be there. Stub hub spokesman said if woods had played in if you were in contention, passes would be not 1000. 5,000, amazing. The white house is pushing back against selfies. President obamas object to samsungs use of the photos. The slugger said it wasnt planned. Samsung said it worked with ortiz and on how to share images from his white house visit. I dont know, it is in the public realm. I spoke to mr. Ortiz at a charity event. Hims irresponsible to nail for this. Outrageous on the part of samsung. What are we going to have, our president with the nascar uniform or goodyear label . They were looking for the genereszz when ellen de took that picture. We have learned that was allegedly planned. Totally planned because right after that they went to a commercial. President of the United States. But it is all in the public realm. It is not like it was in the hidden back office that you werent allowed to see. Jim, help us out. Could ucf dr with a decal on his could you see fdr with a decal on his wheelchair . You think it diminishes the office and effect . Know, to the idiot company with no taste. The brand. This is not how you do it in the United States. Drag david ortiz in this, and what tim does he play for . The World Champion boston red sox. Youre going to do this all morning. Opening day. Come on this up. Ut our mousepads. A magical day in a park built in 1912. It is going to be a rainy day in boston. We dont need a data check, we are talking about the red sox. We will watch this with unrest in southern israel, i should say, the west bank. Any movers . A big winner and loser. Anadarko petroleum up 14. 5 . Since 2008,gain closing at an alltime high. For finally settled a deal 5. 5 billion when it bought kerrmcgee, the refiner. They put up a high note. Obviously, it is moving about. I want to talk about barnes nobles. So tougher barnes noble. When was the last time you went there and bought something . I went to browse there you go. And that was probably the first time in two years. I go there to check out magazines when i need to kill time. First custom knitters procrastinators. More than one Million People the last day to sign up for health care. At minetterector Health Solutions joins us. Welcome. What are the early indications the late signups were the young , Healthy People that the system needs to work effectively . We dont know for sure, but most likely, the answer is yes. If you think about who comes in first, those who really need the coverage right now. We saw some of that at the end of last year. You think about the people waiting until the last minute, they probably dont need the coverage yet, still thinking about whether they want to come in the system. I expect the average age to come down and the risk profile to improve as we learn more about the final enrollees. Is that the single biggest factor in whether obamacare is successful . You need scale. This is state by state. Each state needs an upscale to have an effective risk pool. Agendly, you need a good and risk mix. I think we get both. A real surge at the end. Also, most likely, a pretty good risk pool. We have a good conversation here with you and jim glassman. Youre affiliated with Robert Wood Johnson . From a macro think perspective, is the Affordable Care act successful . It is still too early to tell. I answer the question yes before open enrollment started. Now im a little more cautious because we have seen a long hard slog through the open enrollment. The end sign is very good. I dont think 7 Million People in coverage are going to be taken out of coverage at any point. They were started, but how long it will take to really get to stable risk pool, the jury is still out on that one. And for the younger crowd. 20 to 30yearolds. Are they ready to be employed and do they desire benefits and health care . They do. They are doing things on their own. I think the generation that is having difficulty finding jobs is really a lucky because they are realizing the world is a lot more challenging and they need to improve their skills. I think they have faced reality and it is to their benefit. Back in school, you thought about your undergraduate degree was going to be nine years or 10 years . What you mean . Youre just going longer and longer. But you are a proponent of this. Theou need more than just four years of college. You need specialized training. The world is getting a lot more competitive. Figuringation that is that out, when youre young in your 20s, 30s, it is a good time to do that. When ice cream and my kids, they say, dr. Glassman says when i scream at my kids, they say, but dr. Glassman says. It is really expensive. The cheapest deal in texas he or she can get cost 1000 annually. Are we going to get any kind of relief on the cost . It varies widely by state and within states even so. What is true for one person may not be true for the next person. I think with the subsidies and the age rating coming into this system, the young people, especially, the cost can be quite low. If youre as old as me, you might have to pay a lot more but the subsidies will help you in that context. 400 poverty,w which is 96,000 for a family of four, you get some subsidy money. But lower premiums tend to high cost sharing. And drugs are going up. Will the increase enrollment put Insurance Companies in a better position to negotiate drug prices . I can tell you where Health Care Costs are going, then i could be that of jpmorgan myself. Fact withttleknown all this misinformation about skyrocketing and prices, we are at a 50year low in Health Care Inflation. Health care spending is not going down. But it is growing slower than it has for 50 years. For a while people said, that has nothing to do with obamacare, but the recession. We have been out of the recession for three years. So you think it is linked . I believe today it ought to be credited to the law. It doesnt mean he wont go up again. We have seen the story before. We are at a 50year low. When you hear someone say, this prices skyrocketing, the one thing you know is someone elses prices looking good. Overall, Health Care Inflation under control. The vicechairman of citigroup has been out front of this. Joel, the critical question is, do you see any chance of a reversion to socalled doubledigit Health Care Cost increases or have we broken that back . A couple of issues. As people move into their coverage, a couple of things will be said in criticism of the law. One is, the cost sharing is higher than we expected. I did not understand a 5,000 adoptable. The second thing will be, my networks are little more limited than i expected as well. Those two features are critical to the controlling cost. We have more skin in the game for the consumer. There are subsidies for the lowend folks i can even afford good costsharing. And secondly, the networks. You need to allow the insurer some elbow room to experience with networks. The political class, if they dont allow those things to go have Health Care Inflation. I think we will see them go forward. I find it sort of astonishing republicans who have always been champions of skin in the game and flexibility to the insurers, are suddenly totally distressed that people might pay some outofpocket and have some restrictions on their doctors. , appreciate the update on the procrastination of we were going to name the show that one time. Bloomberg progressed nation. Thata memo, i am the worst bloomberg lp. I dont believe that. Its a start up checks of the 500 billion bubble Money Transfer industry in the ceo will join us next on bloomberg surveillance. Good morning, bloomberg surveillance. It is jobs day. We will have that for you throughout the morning. It is time for a single best chart. It is a job chart. It is. Because back to what adam was saying, all of the seniors got their acceptance or rejection letters this week. We have the acceptance rates for the ivy league. Harvard was the most selective and added 5. 9 . Cornell, at the very end, but have to give a shout out to. It shows the popularity. The average was 8. 9 . Where was princeton . Just after columbia. About 18 . 8 . In 12 gunmen about about one in 12. In. You know who is even more selective than the ivy leagues . Walmart. Based on data last year when walmart, over 23,000 applications for 600 jobs. The consultant acceptance rate of 2. 6 according to the washington post. White mens had an acceptance rate of 5 wooded open in pennsylvania. This is the heart of the matter, parttime america, desperate. Desperate for basic jobs. Where did they go . Was a technology that took them . Dec there are robots doing stuff that people used to do. Did amazon take the jobs away from walmart . If they did, they created more than they took away. Amazon is creating a process so the pie is growing. It is hurting a lot of people that got taken away from what they were competing in, but it is creating something much bigger. That isnt the quality of the jobs a big issue . Process creates a lot of demand for Technology Job in those kinds of things. The problem is for guys who have minimal skills, theres not much there. You can see it in the pay scales for midscale workers. How does a pro like you described the class . It is difficult. I am putting you on the spot. Median income the and it brackets around that. It is more than a feeling. I think people who thought they were middle class are feeling more like it is a squeeze than their parents. You get on an airplane and go around the country. Dont do at 10022 that. They come to the data. Youre out skeet shooting on the weekend or whatever. There is something really dynamic going on out west. California in the regions he thought were really battered by the real estate debacle are coming back. How about phoenix . A little slower, but california is really energizing. Employment is starting to be the national trend. Even with the drought and number culture . It is all the tech sector, real estate activity. Arizona is coming along. Could you come onto a sixhour surveillance someday . That would be pretty boring. Theres a lot to talk about today, specially with jobs. Unemployment numbers will be coming out soon. Will we see hiring or firing . Our twitter question of the day treat us. This is bloomberg surveillance. This is bloomberg surveillance. Lets get you some company news from the files of bloomberg west. A legal setback for apple, they lost a bid to show jurors how it uses patents at the center of its legal fight with samsung. Apple wants to show how it uses the intellectual property after samsung accuse them of not using some disputed patents. Youre squaring off in court in a 2 billion trial over smartphone technology. Now under scrutiny. The pentagon, fbi, and u. S. To look on companies. They want to make sure this deal would not give lenovo access to a secrets and infrastructure. Inn malone cuts a stake barnes noble. As Liberty Media selling the most all of its initial investment. The but he will give up a seat on the retailers board. The party had offered to buy barnes noble in 2011 for 1 billion. That is todays company news. The World Bank Estimates Migrant Workers send 500 billion annually back to their home countries. They work very hard and then they have to pay fees of up to 9 . One company changing the business. The ceo michael kent joining us. How did you take on these giant banks and turn them around . I may migrant and everyone who works there is. We found people were working so hard for their money and were being charged so much to get that money home. We looked at the value chain and said, who is eating that cash . We found it was the Traditional Networks using people on the far end, the banks and the wholesalers, taking all that cash for themselves. Taking this people out of the value chain. And turn the business on its head. Youre potentially in 195 countries. Its not like everybody speaks english. How do you get people to believe a start up is secure . Great question. It is all about trust. We over investing customer service. Speaking 19le different languages on our staff at the moment. We will expand that over the time. It is about building trust. We have to work harder. The meetings coming up will be about ukraine and world growth. A huge backstory is your wheelhouse which is remittances from profitable countries back to poorer countries. Lets take a bite to india. Youre an indian worker in to buy. They go to you and move the money back to india. Wheres the biggest challenge, the corruption in india or dubai . Is awould say dubai difficult place to do business. We are not live in dubai. Market conditions make it difficult to do business there. We are currently live in europe and coming soon to the u. S. But if you go back to india, is at the corruption that blocks you or is india a minimal to the internet helping out . If you talk to the government in india, theyre very positive. They want to see more money coming through. The corruption thing i think is overplayed. Is there an Influential Group youre targeting . I think of Migrant Workers from the philippines and how they in hong kong and drought asia in dubai. Is it a way to broaden our market share . Absolutely. We love the filipinos, but if you think about europe, theres 100 billion of flow every year and no more than 10 of that is going to any one country. We are looking after everyone. Latin americans, filipinos, indians. The people who are really important to us are the people who have a connection. Has the big bang gotten behind you . I dont understand why they wont say they support you. You are made for jamie dimon or brian moynihan. I will be sure to pass that on. Thank you so much. It is interesting. The banks are looking at growth. Retail banking is back in fashion. Where the next 2 billion customers would come from . Theyre going to come from developing. It is a gateway drug into what is coming next. Companyook at the phone operating in africa. Even tmobile here what theyre trying to do. How to compete with those guys were people already have the phone and maybe just need to dial the numbers . We love them. Tosend money from europe there. We will see more of that. In africa, we want to see basic Financial Services to more people. Have you ever had a conversation with bill gates or Warren Buffett about this . I havent. I am a big follower of gates. He said, if we can cut the cost of migrant remittances from 10 to five percent, that frees up lines of dollars every year. I would think bill gates would be all over this. Scarlet has a better relationship with him. This is important stuff. If you think about how much these people are paying for nonrisk transaction, if you drop the cost, they can afford their own health care and you wont have to have a debate. Michael kent, thank you for joining us. Jim glassman, where is your payroll number . Around 200,000. I would say the whisper number is a little like 220,000. Jobs day. Stay with Bloomberg Television and radio through the morning as we see the yen weakening. Our twitter question of the day marketsca faces the job. The good and the bad. When will wages rise . Changes afoot in the American Banking system. Banks go back to the 1980s. Forget the frenzy over mba programs. What are the best undergraduate Business Schools . Good morning, everyone. This is bloomberg surveillance and were live from our World Headquarters in new york. It is jobs day. Im tom keene. Executive of kbw. Joining us as well is michael mckee. Going to start with our morning brief. We will go overseas. German factory orders rose. 6 . Mercedes had its best month ever. Here in the u. S. , it is jobs day. This is the big one. Economists evicting it will fall to 6. 6 . Getting america back to work. T hit twoerica hits theaters today. Has returned to the public market. The secondbiggest offering of the year. 1. 3 billion after pricing shares at 20 apiece. The pricing range was 1820 two dollars per share. Mozilla resigning. Stepping down after being criticized for donating money to an antigay marriage group. He became head of the firefox web Browser Company just last month. Urges judge to ok the sac capital finds. Fineuld be the largest ever for Insider Trading and is part of the 1. 8 billion settlement with sac. The judge is set to decide this matter thursday. Very good. It is jobs day. Ofrting with crushing defeat my beloved denver broncos. Herewith a conversation on the news. Snow melts. Finally. Its here. Baseball season. He new york mets perfect. They have lost every game. Thank you, michael. We are on radio. Big red sox group. We have a rebound from the weather. Thats the forecast that everybodys expecting. A much better performance. We are running at a 200,000300,000 rate. In winter of discontent. We fell off considerably. Now, were suppose to come back to do hundred thousand. Most forecasters think about that next month. What is the whisper right now . The wall street whisper number according to the folks at Bloomberg News is about 250. The market is leaning to a stronger report. Report, thattter is 202 eared. How many months do you need for an all clear for the jobs market echo three months that 200,000 plus . Much. Doesnt sound like but you do that over a year and is over 2 million jobs per year, which is way above the level you need for replacement. Over the last 18 months, 12 months and six months with the average has been 180,000. Has not changed or id. Ft are small banks single li of Deutsche Bank . We think the economy is Getting Better and we think it is happening across the nation and its happening at different speeds across the nation. We think the economy is Getting Better and we are starting to see loan growth in the small banks. Where is it happening fastest . Look at markets like texas and the southwest. That is Real Technology is having a big impact. We are hearing from those banks. Growth . That lead job this is what you need in a recovery. The most startling thing here is it just has not been fast enough. It will lead to job growth. I looked at median duration and i stopped looking at that. What are you looking at this morning . Wages and hours worked . Hours worked you normally look at. It was really affected last month by the weather. We went down to 34. 2. That will rebound. The wages component has to keep rising for people to feel good. Hourly seen it in the nonsupervisory number, which is not the headline you get. Got to look below that. People get paid by the hour they have been making significantly more. 6. 7 Unemployment Rate and that number of 12 , which is more important . U six to comee down. U3 is theem with yo Participation Rate we keep talking about. This cursed workers back into the labor force and people working parttime can transition into more fulltime work, you will see a healthier economy. I was talking on Bloomberg Radio and he was talking about, what numbers would make the market move . What is the market moving on at this . Point it wont make any difference to the fed. They would want to see a number of very strong months before they changed anything in their outlook. It means more to the psychology of americans than anything else. If we get a strong number today, people will feel better. They may buy more and that might lead companies to hire more. Tell me what economists are saying about the fact that the u. S. 10 year is 2. 79 . That is still incredibly low and yet we are talking about a potential 6. 6 Unemployment Rate. You will to see that move if we get this number. We are looking for three percent over the next couple of months if we start to see a stronger economy. Some forecasting would get to 3. 5 by the end of the year. What you want is the 5year note because it has been the most active throughout this whole process because its reflecting Inflation Expectations that we see Hourly Earnings go up. You might see that move the most because people are thinking, by the time the fed starts to move in 2016, we will have an inflation concern and the fiveyear will reflect that. All thats needed is Economic Growth at christmas time. Where is your gdp number that you signal in all clear for america . We have been stuck in that two percent range. We have to get out of it. The Banking Industry is doing well. We are seeing positive signs. Things could get very interesting if we could see an acceleration in gdp growth. About three percent would be a bullish number. The company,und helping smaller, midsized regional banks. You are still flying around the country. What are you hearing from those banks . There is a big difference in the Banking Industry from the universal blanks, which get most of the press. Jamie dimon gets most of the press . Happening. s the message i want to send this morning is that there is a very vibrant and successful regional Banking Industry out there. Something that is happening at our firm is we are currently only recommending three of the 24 banks in the bk x. That is one of the lowest numbers i can remember. Were recommending 12 of the 50 members of our care ask, which is the key regional banking. Why so few . The stocks have moved a lot and the banks are still challenged without their Business Model being changed. Key the kbw x bank index is the main index. The Kbw Bank Index is the main index. Ands the banks get smaller asset size, their stock valuations are getting higher. The profitability tends to get better. That reverses itself when you get to the really small banks. The billion dollar and under banks. There is a story here of how we are developing regional champions and regional success stories. Has the profitability peaked . The majority of the improvement has happened. We are public and alive. 10. Am on record saying to saying 210. My number is 240. Michael, thanks so much. Futures up 23. What am i looking at . The yen. 103. 93. The yen is weaker this week. April two aing of 14. April 2014. How much harder are you than you were five years ago . Tweet us. Its all about productivity. Good morning, everyone. We heard a siren earlier. The Israeli Government was looking at that. This is in the west bank of palestine. Tension there secretary kerry canceling his trip earlier this week. The Palestinian Authority looking for some elements of statehood. That is the tension this morning. We are monitoring this very closely. Look to the bloomberg headlines out of the terminal on bloomberg. Com for updates. This is bloomberg surveillance. , the chiefhost officer of kbw. Er how are the 1980s back . We watch consolidation very carefully. We think its returning to the error of the 1980s. The 1980s was dominated by legislation that said they were regional compacts were banks could only emerge with states next order them. There was no chance for National Banks to be developed. Then those regional compacts were off and use all the era of consolidation really be dominated i the big banks. He saw a company like an cmb become nation bank, bank of america, and it kept rolling. Which checked do i use . That big Bank Consolidation has stopped. The regulators are still adjusting to the post. Fr. Frank dodd frank world. The other constraint is the pace of acquisition for a really active acquirer has slowed dramatically. We went back and studied history and we found that the most prolific a wire meant had actually done as much as 18 murders in one year. I had no idea. I was surprised. Now, we think the most prolific acquirers are going to do one or two. The small banks are there. I have always said that the reason they dont emerge as they want to go to road rage breakfasts. They are comfortable in their jobs. Where is the catalyst to take Andrew Jacksons vision to get us to fewer banks . Is it there . The fact the stocks are working as a powerful signal to all of the boards of directors out there. Stocks on average are going up more than a typical bank stock. The market is rewarding this consolidation. You will see these regional champions being developed. 8 30 this morning. Headline datahe on Bloomberg Television and Bloomberg Radio. From new york city, and bloomberg surveillance. Good morning, iran. It is job stay. Good morning, everyone. It is jobs they. Kbw. S michaud of a first view. Here is adam johnson with top headlines. Investigators say the iraq veteran in the fort hood shooting may have argued with another soldier before the attack. Officials say they have a strong indication that ivan lopez clashed with at least one fellow serviceman before killing three people and then taking his own life. 16 people were injured in the rampage. Time is running out to find the missingx of the Malaysian Airlines jet. The battery that our the box lasts 30 days. Theyre focusing on a 150 mile area of southern indian ocean. Hoping to hear the signal from the box. It is job stay. Bs needs to make a big higher a replacement for David Letterman. He broke the news last night that he is retiring from his cbs show next year. I just want to reiterate my thanks for the support from the network. All the people well or care. All of the people in the theater and all of the staff. Everybody at home. Thank you very much. What this means now is that paul and i can be married. What a guy. The longest running latenight Television Host ever. How many years was it . 33 years . 34 years. He outlasted jay leno. You can always tell a talkshow at night by the quality of the people and the character of the band. What paul schaper has done and what people of gone through their the others that have come through the superb. Re 18m hoping they hi fa or amy poehler to replace them. Amy poehler would be awesome. Im hoping they higher a tina fey or amy poehler to replace him. The report in just over an hour from now. We bring back jeff jervis to tell us the trend he sees across the industry. He comes to us from you are message for the month. Really for the quarter is that you see hiring, not firing. Temporary hiring dropped off a bit last fall. There was a slow start back in january. How is it real this time . It is difficult to tell. One of the things we have besides the data of 18,000 is a lot of clients. What were seeing more than ever before is our clients are starting to look through some of the disruption and bad news. Before an event like with happening in israel, they are looking through that and saying, we see the demand and we can feel that the ba the demand a b. Out of four employers are keeping on keeping their staff. A lot of people wonder, how much work can they squeeze out . No doubt. We have heard this doing more with less. You can see in our survey is that maintain or stay as you are is the highest it has been over the last 34 years. 7074. How to do more with less or how not to do as much in some cases. Saying, i would rather pair off some of the work than hire more people because i want to keep myself on edge. When you look at this, how do benefits intrude on wage gains . How do benefits intrude on hiring . No doubt, it does. More than ever before, companies are much more algorithmic. They know whats going on with all of the dollars. The full load of that pay. Would you are seeing in wage. Nflation, which is next to nil going to hold down. That means benefits are going up, they will replace it with holding down wages and doing more with less. Algorithmic is what you and i do it about 4 00 p. M. On friday. Of an algorithm for you. Help us understand why it is that Capital Expenditures have clawed their way all the way back to th where they were in 2000 and. In 2008. Pendin you are seeing a bit of a replacement. Im not going to go into the whole robot speech. That is not whats happening. You are starting to see much more efficiency in replacement. Resting Capital Expenditures go up. What you will see is more of a lag than what you saw before. You will see Capital Expenditures and the increase slowly. R will fall manpowergroup joins us from the walkie. Our twitter question of the day has to do with all this. How much harder are you working than you were five years ago . Tweet us. Are people feeling maxed out . Everybody i know is working harder and making less. 40 hours is a short week for most people. What makes an undergraduate Business Program great . Bloomberg businessweek answer that question. We will share the results with you. We will be right back. Good friday morning. This is bloomberg surveillance. Im scarlet fu here with tom keene and adam johnson. Says troopsuck hagel could be headed back to crimea. He spoke with peter cook on his way to asia. Take a listen. Did the Obama Administration misjudge Vladimir Putin and the challenge by russians Going Forward . I dont think anybody misjudged Vladimir Putin. Lets go back to 2008 when putin invaded georgia. Approach thatnew he has taken. What you always have to do is you have to always be prepared for any contingencies, any possibilities. I dont think it was a matter of n. Sjudging puti what his intentions were, why he did what he did. We still dont understand fully. The point of responsible governance is to have strong options and capabilities and be prepared for any contingencies. Its a dangerous world out there. A very unpredictable world. Inyoure having to negotiate an environment of dwindling defense dollars . Is the situation in ukraine leading you to reassess the budget you just submitted . Would you do things differently now . The number i presented in the president s budget was not my number. That was the president s number. That was the number that was already agreed to by congress in a bipartisan budget agreement in december. Wevebillion budget already presented a bigger number. Was adget i presented bigger number. We have asked for 116 billion more than what the numbers are right now based on sequestration. A 26 billion increase this year. President obama made that very clear. Does this crisis in some strange way make your case for you . That these numbers need to be higher . Will the challenge by russia help chuck hagel get the budget you want . Is not just one episode. Tot is it going to take fulfill the missions and obligations of our Defense Department effort in order to assure the security of the u. S. . We have laid that out in our testimony. We have weeks of continued testimony. We have senior members today on capitol hill explaining to the congress what we need in the way of resources in order to fulfill those missions to assure the u. S. That we can do the job that they want us to do to assure their security. To takeve its going increased resources. We have laid that out and given the numbers. The two purple hearts chuck hagel. Peter cook joins us on his way back to washington. Army, that upper of 12 weeks ago gone . I try to push secretary hagel on whether or not this ukraine crisis might actually allow him and the u. S. Army to make the case for maintaining a larger size army. He didnt by an entirely. In entirely. Because of what happened in ukraine, the situation with russia those folks who feel like the numbers are being depleted, they are making the case, this is why we need a larger u. S. Army and more dollars devoted to that ground game. This is a very important interview. Does the president have a secretary of defenses back . Does he have the support of his president . I think he does. It has not been an easy time for chuck hagel. You remember a year ago he went to that brutal confirmation process where some of his friends in the senate were really taking them on, challenging his nomination. He has been there for one year now. This is his fourth trip to asia that he is making. I think he feels more comfortable in the job. The situation in ukraine has put under the test. So as the situation with ford appeared we were there when he got word about the shooting that had happened there. Real challenge for chuck hagel. Hes to help run the veteran affairs administration. A very tough issue for him. Peter cook, thank you so much. Our chief washington correspondent. This is a huge deal. This will be over the weekend. The discussion of the u. S. Army back in germany. Looking ahead, we have the jobs report coming out less than one hour. Futures are higher ahead of that. At 8 30. Remember. Bloomberg surveillance on Bloomberg Television and Bloomberg Radio. Look for all of our digital media, including our conversation with Michael Lewis yesterday. Look for that at Bloomberg Radio plus and bloomberg tv plus. Tom keene with me. Ofhave the perspective thomas michaud. A noted banking bank. A week away from jp mornings earnings. Producing earnings that are lower than last year. Bloomberg businessweek has just released its 2014 ranking of the best undergraduate Business Programs. Here is a shameless plug. Reflectsigned to the changing landscape. Before we get to the actual winners and losers, what exactly makes an undergraduate Business School Program Successful . When you get into the upper edge line of these really top undergraduate Business Schools, they all rank really strongly on various measures that we judge them on. We look at their economic quality, what students say about the School Experience and what employers say about who they hire. When you get into the top schools, what you are looking at is very different programs with very different curriculums. So it comes down to what works for particular students and what fits you. You try to provide as much information with these rankings that are launching as we speak. To really give students the information they need to make that decision. Inwho came out on top here terms of all the undergraduate Business Programs . Was the top. They have been the top school for five years running. One of the things they base on is the student assessment. Is this rate . Is this rigged . About cornell is the students say, its the best of both worlds. They have this big recognized brand and a great Alumni Network and this huge number of graduates but the business was quite small. This is not the usual look at the undergraduate level versus the mba graduate level. We find that schools that shine with their undergraduate Business Schools tend to not be competing with the corresponding mba programs at the same school. Either the school has an mba program but at a different college. Students are competing for resources. Indiana got into the top 10. What is indiana doing right . On our rank really high Employer Survey and picked up on their academic quality score. Students are asked about their interdisciplinary curriculum. In thomasto bring michaud. Should i go for a specific degree or you like to see a more general business graduate . There is not anyones sole path to success. If you are going to go into a specific industry, it is likely you might need more specialized training. You can come out of a liberal arts school very well prepared. If you have made up your mind that you have a specific direction you want to go in, there is tremendous value to getting a schoo skill set out oa Business School. Wreckers in illinois sell their scores drop. What happened there . Illinois saw their scores drop. Theyre working on changes to curriculum. How angry is the university of michigan this morning . Do they hate you . Michigan did not drop that much. They did fall out of the top 10 but they are still a strong school. Thank you so much for coming on today. Im assuming the rest of your day will be miserable. 130 two u. S. Business programs are included in the 2014 Bloomberg Businessweek rankings. We will be right back with more surveillance. Good morning, everyone. It is jobs day. The voice of the labor department, thomas perez at 9 00 a. M. It appears to be a better than good jobs report as the nation warms up. What should be over 200,000 is the survey prediction. The whisper is the number is a bit higher. 225 tra. You said 240. Jennifer lopez outbidding her ex. Acquiretle to televisions from Madison Square garden. Offering 200 million in cash and equity. Stephanie ruhle joins us now. This is a big deal. It has to do with building an empire. We broke the story last night. Diddys network had been trying to buy fuse. J lo came in with over 200. Its all about distribution. 30 million homes. Fuse, 74 million. You have to have the eyeballs in order to sell advertisements. I say im and 20 million homes versus 70, 70 wins out. They cant be put in opposition. This is a big win for jello. Outbidding diddy. Is a big win for j lo. J lo is the creative director. Its not that they are doing anything to change whats already on the network. Its an englishlanguage channel marketed to latinos. A much bigger distribution platform. They will start working with some distribution platforms to sell their own stuff. They have been a lot deals this year. This is a big source of revenue for the bank. It is. All of these firms should have a good investment banker. We are seeing deal activity pick up. Midandsee is that smallcap space. A lot of activity there. Its a natural part of the Economic Cycle that you will see more Successful Companies acquire those that meet scale. There have been looking for potential bidders. J lo was advised. We see bankan mergers . We dont think its one big wave, but very consistent. That is what has been happening. Is this stronger banks buying up there is evidence to suggest that you need some Critical Mass to be more competitive. That really starts at that 5 billion asset mark. Immersing banks come together to do that. The whole distribution scale there is some of that there. Thank you for bringing us the latest on fuse tv. It is jobs day today. I put a question of the day. How much harder are you working than five years ago . We will be right back with more bloomberg surveillance. This is bloomberg surveillance. Im scarlet fu. And adam tom keene johnson. Some backdrop on jobs day. Kerry canceling his trip. Really ker is weaker israeli a mix of news of some form of attacks against israel. Im unclear on that. The reported rocket attacks into gaza. Leading to a fourday high. Whats happening here, decided to try to seek statehood outside the more traditional negotiation framework. That is why kerry changed course. This is something we will keep an eye on after that militant attack. This get you some company news. Downeo of mozilla stepping. Resigning after being criticized for donating money to an antigay marriage group. He donated 1000 to an organization supporting proposition eight in california. He became head of the firefox web browser just last month. Lenovos server business. Government officials want to make sure they would not give china access to secrets and infrastructure. Malone is cutting his stake in barnes noble. Selling almost all of his initial investment in the bookseller. He will give up a seat on the retailers board. That is todays company news from the piles of bloomberg west. That was exciting yesterday. With Michael Lewis. It was. Everybody on wall street talking about it. Has that new book which everybody up in arms. The raging debate over how high trading fx markets. Michael lewis joined us earlier this week on surveillance. Take a listen to what he said is the fundamental problem in the system. The Market Structure itself has created inefficiencies. It is permanent. It is structural inefficiencies, which is different from the price of chevron getting on with the price of oil. That is not the nature of this. This is like the plumbing is broken and people are sucking on the pipes. The plumbing is broken and people are sucking on the pipes. He alleges that the system is right. Do you think the market is rigged . I do not think the market is rate. We need more regulation but i dont think the market is rate. Market is rigged. There has been an unbelievable amount of attention to it. If there is anything that is youasteful, the idea that could have shorter connections to exchange and get an advantage is unfair to all investors. I think that needs to be fixed. Hows that different from a pro athlete going into the weight room and training to be faster and stronger . People elect to be pro athletes and compete at that level. We want a demente democratic approach to the stock market. It ought to be fixed and regulated. You mentioned that regulation we need more of it. Why have regulators not jumped on it . Michael really took a twin new level. Im not involved in that work. Have beene regulators busy with the dodd frank rules. You have to look at the big picture perspective. Doesntes mainstreet trust wall street . Trading costs have improved dramatically over the last decade. This is a negative and needs to be fixed. The net result will be a better outcome for investors. So my view is that this needs to be fixed, but there is still investors trading at much lower costs. I want to give credit to. Ichael lewis what we did here on surveillance publicly traded exchanges. Before exchanges and now the supercharged exchanges that need volume. Are they the problem . We have these animals that have to have volume . You have heard a lot of wall street saying we have too much regulation. We need to have a level playing field. The regulators need to be carefully paying attention to technology. Technology can change faster than the regulations have been able to keep up. The exchanges are being charged with maintaining that fair market. There needs to be regulation so that investing public you just talk about feels like theyre getting a fair deal. That is critical. I will not go in so far as to say the market is rigged. That is dangerous. What about some exchanges paying to buy order flow . Ofim a big fan transparency. If youre going to run an exchange from all parties need to know who is getting paid for what. That is something that ought to be transparent. So there is a lot of folks watching to make sure they feel comfortable with how that is all playing out. That is fairlye new, does it sound like a solution to the problem . There will not be one solution. I do respect brad and others for having really highlighted this issue because i think the market does need this scrutiny and regulation in this area. I dont think there will be one venue. You will see the whole market evolves to say, look, that is an uneven playing field. Lets get it fixed. A debate that will certainly continue. Some of it was ridiculous. Lets get onto the agenda. Tom, you will get a started. My opening day of the great then they have to get back on the baseball field. I will be optimistic. I dont see much hope for new york opening at fenways magical. Fenway is magical. New york is first. What do you think of that . I wish they would speed up the game. Even opening day. Four hours is a lot to sit through. Youll break the jobs number. Whats on your agenda . We get a bunch of Bank Earnings next week. Jpmorgan expected down 10 . Wells fargo up five percent. What are you guys looking for . Were looking for the big banks to have sluggish earnings. You are going to see a decline in earnings. Those are for the biggest banks. That is why we are not recommending very many of them. We think the stock prices have already rebounded a lot and reflect the current earnings outlook. When you get down into the midsized banks and smaller, we are looking for earnings per share growth there. Were seeing Something Like four percentfive percent yearoveryear. Smaller banks are growing faster than the bigger banks. A lot of it has to do wit the Business Models are the bigger of the bigger banks still changing. The jobs report due out at 8 30 a. M. A growth consensus of 200,000 in the month of march. Ive been working my tail off looking for a job for the past 2. 5 years. Much harder than people think. Answer, huge travel. A lot of positive demands are harder. Being willing to work eight hours of unpaid overtime per day. This does not make it into the data. We are all working harder. A lot of people are making less. At least we are all in this one together. All in the name of productivity. The ceo of kbw. The jobs report comes out at 8 30. Good morning. It is jobs day in america. Were live from bloomberg World Headquarters. Youre in the loop and im betty liu. I have some great guests a had. An exclusive interview with chuck hagel as he wraps up a meeting with asian defense ministers and why. Mary gemelli in the loop to walk us through the opening bell. Gabelli. Th exclusive thoughts on the the economy. At a 200,000 jobs more than in february. Shares of online restaurant ordering service grubhub they start trading today. 192 Million Dollars in its ipo. Originally thought to be about 100 million. Once they were a couple, now they are rivals. Exnifer lopez has outbid her