9 45, the ism manufacturing for new york. 10 00, we get factory earnings, chevron, cvs, msg, estee lauder, we will also get the annual meeting from Berkshire Hathaway. The differenceey this jobs date field, the up feel here, within the mergers, acquisitions, the dow at record highs. A change in nonfarm payroll at the 250,000, that is big, double what we need for population. That is putting america back to work. I know the Labor Participation at alan kruger is on a little bit later. Nymex crude, 99. 88 will stop lets move onto the vix and the idea of 13. 25 really shows what talking about on this job stay and gold futures 1285. Then there is the geopolitics, adam. You were going to mention president obama and chancellor merkel. He will indeed be meeting with chancellor merkel around 11 30. Think of merkel, putin as the equivalent of blair and bush. We will see what they have to say. And this is a levin 40 this morning, a joint press conference. 11 40 this is at morning. This is nonfarm payroll, here is zero, here is bad, there is the crisis, there is the 200,000 number, and what we desire are these spikes above 200,000, this effervescence, and we are sort of there, that is the hope and prayer. We are getting there. There is a picture of what we will see at 8 30 this morning, bill gross and the glass will be bloombergthat time on radio. Here is scarlet fu. We need to start with ukraine because forces are on the opens of. Theyre trying to take back the eastern city from prorussian militants. Theyre basically a nori warnings and they are basically ignoring warnings from Vladimir Putin. Within back your troops your country. And about that statement. I mean, come on. While our troops are amassed along the border. Why is this morning of violence different from what we have seen . People have died. We have a couple of deaths. Or stage ofew level aggression. A big difference is the word attack this morning. Tom, you were on this, sort of a want to say this incorrectly, prorussian militants shut down an army helicopter. That is the report at this time. The ruble does not really move, the markets are fairly stable. Pfizer boosting the bid for astrazeneca, now more willing to pay 106 billion, just 10 minutes ago, astrazeneca rejected the offer saying be terms are not a basis on which to engage with pfizer. This is part of the whole negotiating tactic, but it does speak to some delay in getting this deal done. Several of the longterm astrazeneca holders said the initial pfizer price was a nonstarter, so pfizer opted by 7. 3 . This is the game. Trading range and up you go. Would you call this a hostile takeover . It appears it is going away way, especially start adding in that pfizer is starting to think about moving to the u. K. Can we dub this immediately and then they may m a may . Oh, yes. Jobs date, we want to bring up the push to sign up millions of two ofns and you twear obamacare, the Affordable Care act. 8 Million People signing up for private help insurance through the Affordable Care act. The Congressional Budget Office excites 13 million to enroll for 2015. Next year, the penalty will double for those who do not have insurance. A people were saying the penalties were too low. Like only 100 this year. People are not incentivized to do much. 8 million. Those are the front page stories. We need to get to jobs and ukraine. A very busy friday here on this may 2. Top story ukraine attempts to in its eastern borders. Heather harris with bloomberg news, decades of experience the machine runs are recovered for all of Eastern Europe, she joins us now by telephone from kiev. Of eventthe newness and ukraine, what is different now from what weve seen in the recent weeks . What is different today, tom, is the Ukrainian Forces out of the government said earlier this week they essentially lost control of what was going on in the east, they have launched an operation, and really flying in the face of what putin said yesterday about pulling back forces from Eastern Ukraine being critical to deescalate that. You andst met preferred, germany, we were covering a story for the European Central bank. Chancellor merkel speaks to present obama today. And they have a press conference. What will europe want to hear from chancellor merkel . Will want what kiev to hear from chancellor merkel is that they are not going to hold back from further sanctions or any other action on russia after the latest exclamation escalation. Of course for its part, russia is blaming ukraine, saying they sent a convoy in order to negotiate the release of the eight monitors who were captured by prorussian separatists earlier. So i think what the ukraine wants to hear is that there is no stepping back, that they are ready to continue to back them on this. Right heather, yesterday Vladimir Putin effectively told erchnof ofchurch an pull back. How are they reacting to that statement in kiev . Are think people in kiev very much on amused by what putin has said after what happened here. It is pretty much business as usual, but they are obviously behind the government making some effort to control what is going on there and not just guessing the prorussian separatist take this buildings that will and gradually take control of the region. Heather harris, thank you so much, safe travels, our executive editor for Eastern Europe and emerging markets reporting today from kiev. On this job say, we have alan kruger for you in the next hour. Even better, Thomas Pacelli economist at rbc capital. Terrific notes day after day on the American Labor economy. Jobs report today, you are ,ocused on wages and hours earn is it up, up, up for tom . Everybody wants to know what that number is going to be right there. I think that number is much less important. Let me go to a black screen. Telling me i do not know what i am doing. That iti would say is is about the wage pie as we have wages have it, and been remarkably constructive over this entire recovery. Dip over thele winter months as ours fell, but other than that, you have already had the bounceback, so you are looking at this 4 to slip, which is enough to grow consumption at a 2 pace. I wonder, tom, because you cant be jobs of where our super bowl of the year, we except for too much on the nonfarm payroll number . Noise, there is. Uch revision, yes, look, the standard error is 100,000. So the consensus is 215. That means the number could be 115 or 315. How much stock can you put in that volatility . Your point, there was a report in the new york newspaper articles with five different opinions at 115,000. It all averages out. So what is the value . I think the value is really the wage element of this report, but make no mistake, we will get it. We want to see were sectors are getting jobs, highpaying, lowpaying jobs. There is value added in this report. A dinneright i was at with kevin worse formerly of the fed and said the two things that worry him most Labor Force Participation too low. I would say he is right in that regard, and what i would say is and this is something we should get into over my time here. We are moving into a period where if you think about what trends job growth is, it is about 150,000. Are you going to go above that and . Of course you will if you are in a cyclical upswing, which we are right now. But we are moving down to a transit drop growth of 50,000 over the course of five years. We will rip up the script and do that later because that is a shocking number to go from 115,000 to 50,000. As we monitor what is going on in m a and also pharmaceuticals. Here is scarlet fu. Earnings. Forget linkedin shares down the premarket trading right now. The professional network is expecting a forecast that missed analysts estimates. General motors will be in a familiar setting today in a fight with owners of recalled vehicles. Gm is asking a big receipt judge to tell the car owners they are barred from collecting damages because of a ruling the judge made back in 2009. That year, the judge read gm for most of its legal liabilities when it filed for bankruptcy protection. And j. Crew creates a new brand for budget shoppers. The retailer has trademarked and j. Crew mercantile. They have been looking for new sources of growth. The wall street journal says they are planning lower cost clothing. I thought they already had that would be j. Crew factory stores. I bought a pair of khaki colored jeans at j. Crew adam johnson wears jeans . Yeah. I actually like the light blue ones. People tell me they are not chic, you have to go dark blue. And do you wear skinny jeans . No. Does that go with your man bag . And noan bag, luggage with rollers. I carry my bag. Our twitter question the day, what is it . Weeks biggest winner . Is it adams over of the nba . The montreal canadiens. Tweet us bsurveillance, this is bloomberg surveillance. On bloomberg television, streaming on your tablet, your smartphone, and bloomberg. Com. What a beautiful shot this morning. Good morning, everyone. On amberg surveillance bloomberg television. Look this morning for pimcos former ceo Mohamed Elerian will onn betty liu, dr. Elerian our jobs economy. This is bloomberg surveillance. A busy morning. I am tom keene. With me scarlet fu and adam johnson fo. 100 50 billion bid for astrazeneca. Astrazeneca rejected the offerings, said no thank you, it is inadequate, undervalues the company. This is the second operator rejected. Howill continue to monitor this plays out, but this has rman a huge week for forpha because only did we get the public airing of the initial bid, but we also hear that germanys baiyer is in talks to buy merck, the consumer unit, the wilson one who makes claritin allergy pills. I would go to the paris news bureau and astrazeneca, and we heard of bloomberg surveillance to getounds, they had from a 40 handle to a 50. And now it is 50 pounds per share. The issue for pfizer is it is not as good a deal. At all of a sudden th drifts away. Offer, it 50 pound relates to have you back woody. They want more cash. It is easy money committees cheap money, but much of that cash is held overseas and it is a matter of unlocking that. These transnational transactions, the french tiptoe around a division of alstom, looking at ge at the german atmens come in, looking astrazeneca pushing back on pfizer. David cameron is not the proposition minister, does the prime minister, but his office did voice being open to the possibility. M a may. E him an him in this is the first pharma transaction since the First Quarter 2009. Us, you canlli with talk about maynard came and animal spirit. This is an indication of a better nominal gdp, isnt it . It is embedded in our forecast. I would take it a step or there and say we expect capex will rebound over the course of the year. Make no mistake we are not looking for a robust outcome as it relates to the s aex space, but there hi place for it to perform well. It is in good shape to sort of take on additional capex. Point 2 you are basically on the verge of a replacement cycle in the u. S. , so i would actually argue that there are some very todamental underpinnings think why will advance. What has changed from this year versus last year that makes customers willing to spend . I would say nothing. Last year was a strong year from the capex perspective. This is what most people miss. We are not looking for again these robust or explosive rates of growth. We are simply looking for capex running around an 8 clip. 8 gross or 8 of revenues . 8 gross. Throwbe pfizer will something back. A breaking story. It is like the rangers playing the penguins. Twice what time is that game tonight, scarlet . Time 8 00 is my guess. Wife that is a good way to spend the friday night. Lets go, rangers. Tom is with us the entire hour, he is that rbc capital marekets. We want to draw your attention to bloomberg businessweek, incalculable hubris, or as tom says, Silicon Valley plays by its own rulebook. You can read it on the app. Good morning, everyone. Bloomberg surveillance. So much going on. Stay with us. I am tom keene with scarlet fu and adam johnson. Lets get to top headlines. G aukraine is defyin warning from Vladimir Putin. They are trying to take a city from row russian militants, who had warned ukraine to push back from its eastern region. In other words, president putin of russia tell ukrainian force s to pull back in ukraine. The practices at of companies such as google and facebook. Some in Silicon Valley are skeptical and say it is an attempt by the government to regulate how they can profit from the data. And we have to tell you you what is happening in seoul, south korea. A collision on the citys busiest subway line. A trained traveling east is minded to a train parked in the station. At least 172 were injured. Because after the deadly ferry accident. It leaves questions about the safety of south korean transportation. Lots to talk about. Speechy noonan, former reagan, but inld the wall street journal, i was captured by this quote great leaders are clear, honest, suffer for their stance. When they are gone, the crowd declares what they heard. When john paul died, he was a saint. As for president obama, there is a sense he operates within the parameters of political safety and no more. In other words, look at the example of the pope going on a limb. Keystone pipeline come post won it again. Mapping out from with ukraine. Theyre going to compare the pope with a president elected by the she, by the way, acknowledges that. I will make a comparison to liberals and conservatives when we start electing people by white puffs of smoke in a chimney. We are not doing that in 2014. We are clearly not. It may be a reach, but leadership it is tough to quantify leadership, but i think she did a good job. Leaders are clear, they are honest, and sometimes they have to make unpopular decisions. It is a good point to make and there has been questions about the president s leadership. That is something we will continue to discuss and not just on surveillance. Is there any news flow today . It does not in bank, and it is a friday, too. Maybe more news will come as well. It is job say, and economists are saying before cuts in jobs growth has never been this optimistic in the last three years. We is cut the labor economy with tom porcelli. Good morning, everyone. Bloomberg surveillance. At 8 30 this morning, the whispers up, a better than good jobs report. They will agree that enthusiastically, republican and democrat that your nations capital. This is bloomberg surveillance. I am tom keene. With me scarlet fu, adam johnson with us as well. A quick data check, quiet before the job stay. Look at the s p 1880, the dow 16,005 hundred 59. I know the euro is stronger, nymex crude under 100 government gets my attention as well. We have got a gainer, one single loser, here is scarlet fu. Lets pick a Weight Watchers as our big gainer, up almost 20 yesterday raising its 20 14 profit forecast. They have a new mobile app as well that is helping the company fend off technology upstarts, but juice cleansing getting in the way. How is your juice cleanser . My oneday juice cleanse. Get out the watch. 11 hours. I hold off till the weekend. Blueprint cleanse it tasted great. I do not do shameless plug normally you tried the green one. The did the kale, pineapple, something else. So you had a sample. I did the vodka meant with lime. That is not part of the jews cleanse. Rice that was to cleanse the jews. Cleanse theto juice. What will come in the american job economy . For tom porcelli of rbc Capital Market will shock you. Lets get right to it. Notsee our run rate is 200,000, not 150,000, but we need to dampen our future expectations to 50,000. Why . This is part of this demographic idea, and there are a couple of demographics. There is an excess supply of labor in the market. We all recognize that. You have 17 million excess probablytay to status 12 million timothy 5 million truly at the fly right now, so we have been absorbing about one million of the excess supply over the last two years, so if you take that average two or three years out. Exactly. What that means is all you are left with is growth, population growth in the working demographics of america. If you count that one million plus the 700,000 in population growth, that is 1. 7 million that comes out to 150,000. That is your potential job growth today. Want to sort all that excess supply over the next five years. That means all you are left with is the working age population, growing at about a 700,000 clip. That is your potential job growth per month that comes out to about 50,000. The first thing i say is what David Rosenberg is suggesting is out there with fewer people, guess what goes up . Wages. That is why rosenberg is on a way to push inflation. Some incentive the what the common characteristics of are the people, what are they like . How has that changed over the last couple of years . We have this excess supply over what happened over the downturn. We lost almost 9 Million People. Those are effectively the folks that are this excess supply. A lot of those jobs believe it or not came in the housingrelated space. Farreaching tentacles, if you will, because it was not just people working stores, etc. ,hing etc. , so a lot of these people that would be sort of the makeup, the composition of a big portion of that excess supply. About david comment rosenberg takes you back to econ formerthe lecture hall, vice chair of the fed coming talked about the deflation, in your scenario, we are talking about only 50,000 coming into the working force than each month. How long does it take before we get the inflation that the fed wants . Which rosenberg is talking about. First of all, i should say i love dave rosenberg. I worked with him for a while. He is a great guy. What i would say is in todays environment, it is almost impossible to generate real wage oflation because the pool excess supply is so significant and if we are right that it gets worse and down over the next three years to five years, i think that is a very reasonable period to think about when you start to see this wage inflation. This has huge implications for the fed. So here is the important point i get it. The structural idea of the economy slowing down and trend rates shifting lower, i get it. He structure story is therefore the fed to keep things really lose for a wild. Continue, please. Is,he big but on on this but if all of a sudden you have this environment where you have the structurally very soft backdrop, that is not with the fed responds to. If that responds to cyclical swings in the economic backdrop. Wife but this is critical. Slack is the word of the moment. Are they fighting the last war . That is what the fed is trying to mop up. Here is a perverse idea we like perverse ideas. We all think of slack as drying up because of actual growth accelerating. What im telling you is that you can actually have the apartment shrinkstual debt because trend rates slow down. That is a different way of thinking about how you could mop up a lot of the slack. Scarlet fu. The fed is more passive than it ought to be right now. Is that always true . Not if you are aggressive early on. When you think about real fed funds, on average, 2 . I hate averages because it masks swings. Fed funds are never average. And about the period in the 1980s. You were materially north of 2 for a decade. 1990s, north of average real fed funds for seven years come in here we are today, you are materially below average fed funds for the last seven years. There is a pendulum that swings consistently over decades way too far out. And the fed is responding to cyclical factors, not these structural issues. This is critical. This is a wonderful discussion. We all have our fancy suits, you look lovely today, scarlet. Or the half of america that is not participate in this discussion, they just want a job. Where is the, mr. Porcelli . If you look at the job openings data, there are job openings basically in every single sector of the backdrop. You just have to want to take that job. And to that point, i will say at rbc, we have a Consumer Confidence report that comes out every month much like the michigan report as an example, and in addition to our standard allotment of questions, we ask people would you take a job that you felt you were overqualified for . Does anyone want to guess what percentage of people said yeah . A lot more than we realize. 20 of people said yes. That is a real roadblock to this absorption process. And that is a qualitative interpretation of the youth 12. 6 ,yment rate, up at people who work parttime to want to work fulltime. Would you take a job and ready or tv if you are underqualified . The answer is yes. I want to bring in my morning mustread that has to do with manufacturing versus service jobs here and abroad. Gillian of the ft, and she said where it is to be money at low cost production as a dove across borders, no ideas are following suit courtesy of the internet. The new face of globalization does not threaten just western manufacturing jobs, but many service jobs, too. Inwe are a dominated economy the u. S. , and thats where the bulk of our jobs come from. Are those being exported overseas to china, for instance . Wife there is a certain amount of export that takes place, but it is not occurring to the degree where it would worry anyone at this point. If someone has a strong view on that as this article does, then maybe that is something that should be on your radar. Or today, it is not something that is going to trouble me, at least not in the immediate term. Tom porcelli with rbc capital. We will get toms take on housing. We have more Macro Economics mac question, wiseguy. I got a little carried away. I thought today as macro friday. Our single best chart is actually one of tom porcellis charts. We want to bring you our reporter question of the day. Who is this weeks biggest winner and why . Wicked strong in the kentucky derby. Name two days after the boston marathon. I like that. Tweet us bsurveillance. We want to hear from you. Good morning, everyone. As we go into the United States, 8 30 this morning, a report in the april jobs economy. With me scarlet fu and adam johnson. Lets get to our top headlines. Ukraine will be at the top of when president obama speaks with Angela Merkel. It is putins first trip to the white house in almost three years. There was a press conference, it will be at 11 40. Bloomer will take that live. Malaysian government said no one is shouldve alarm about the missing plane for 17 minutes. He described the confusion in the first few hours after the mystery first made itself apparent. Ne hour after the plaintiff disappeared, they told air Traffic Controllers the jet was on its flight class. Incredible. Plan on making margaritas for your Cinco De Mayo party . You will be squeezed by the price of line. Lime prices are up 81 . Crop disease in mexico has ravaged lime trees. Those are your top headlines. Chimingorcelli in. It is some thing that people are starting to realize food prices are up again. People are confident that food prices are on the rise. Index,look at the stuffs which leads food inflation coming to thing you should be prepared for a significant rise in food prices, which will obviously seep into the headlines as well we know cocoa and coffee are up, but you were saying even corn and wheat, the stuff that matters . Pretty muchicken, everything is up. The answer to save money on food juice cleanse. Was go up in price. Demographic pressures resent a longterm challenge for the u. S. Housing market. Our guest host, tom purcell he porcelli of rbc, the white line, resident working age old,ople 15 to 64 years and since the late 1990s, it has been on a downward trend. He aligned tracks a change in total household. What does this mean . Is householdline formation, literally households being formed. What is interesting is there are two dynamics, and we touched on these ideas over the last 45 minutes since i have been here. There is a cyclical element and a structural element to this. He cyclical is very obvious and you can see what is happening now, how the information is trending a bit down because ddp is below are. Is below par. Gdp the extreme example is people are not leaving their parents house. Is a structural element that i think its much more compelling and that is what this chart shows because it basically, we have the working age populations rejected out there. Given these two lines follow a similar path, because you are working on an environment where the growth rate will shift down, so will household formation, which will create a much higher hurdle for increased home sales generally speaking. What about immigration . That is funny. We call these population projections, but they are not projections, they are reality. They are reality unless you do things like open up the borders of an extreme example and who wants to come in. If everyone starts having a lot of a beast. Aside from these two things really coming online, these projections will become reality. And this is also the aging population. It is not being replaced, which is why we have an imbalance in medicare, medicaid, social security, etc. That is exactly what it is. I can pick on housing here, which is what i have done i think quite nicely, the reality is this has implications for growth within the excitement today of what appears to be a better number, do you have a confident that all that american somewhere out there will benefit from this new old normal economy, or are theoing to be two americas, people getting it done, a large body falling behind everyday . I think it is the latter. A lot of this has to come from washington. I do not want to bid on washington it is ok if you do. I think absence of real reform emanating from out of d. C. , i think it will be the latter situation. All right, i have got a little tidbit i want to share. Warren buffett says fans are getting gouged by hotels in omaha. He is watching out for the little guy. Do. As he is wont to warren, write a check. Warren buffett assaying check omaha. Bnb in he tells the wall street journal that he has grown extremely concerned about obama excuse me, omaha. That is a funny one. Omaha is jacking up prices for the berkshire weekend. Hotel operators are saying buffett is wrong to point the fingers at him, they are just being capitalists like he is. Obama. Bashed like i said, if tom wants to go after washington, that is ok. [laughter] alwaysand demand should dictate pricing. Does this stuff matter . Now. B, i am using uber at the margin, you are hardpressed to say it matters. The convenience factor, if tom you can come into work everyday and feel more comfortable and do your job better, maybe it matters from that perspective. From a macroeconomic perspective, it is more marginal. Worknding when i come to its top. Especially when the winds are up, like yesterday with the rain. Oh, boo hoo, tom. Coming up on surveillance, has big shoes to fill when he filled in for alan mulally. He will becfo, the ceo. This is bloomberg surveillance. Streaming on bloomberg television, streaming on your tablet, your smartphone, and bloomberg. Com. Good morning, everyone. Bloomberg surveillance. It is job today and it is a view of new york city. Rainiest day. On wednesday . It was difficult. I have seen one day worse than boston. About like when you read when the english attacked the french, it was like a Kenneth Branagh movie. Life i will say, running in central park yesterday, everything was suddenly green. There you go. That is what the rain did. So you juice cleansed and ran 10 miles . I had a steak last night. You are such a man. It is killing me. Free 30. D it back to adam, take us to detroit, please. Ford makes it official. Chief operator and author gets the key to the corner office. He beat other candidates from engineering and design. He was a marketer. Jamie butters from our detroit bureau, you know this Company Better than almost anyone. Why dont you give us the back story here . Mark has been the frontrunner for this job for quite a while. He has been coo, he was clearly the number two and the guy in position to take the reins. It is funny because he is only 53 years old full stop a lot of comments about him being fairly butg for an automotive ceo, he has really been on the short list at ford for it seemed like 15 years. Ever since he turned around mazda in his late 30s, he has been seen as somebody who isnt a ceo material and someone who just needed a little ripening somebody who is ceo material and 70 who just needed a little ripening. He has matured a lot under alan mulally. The main runnerup wouldve been joe henrichs at ford, who is very well thought of, a really smart guy, and he has the engineering chops. He is really a manufacturing guy , and joe is really well thought of. But he is six years younger than mark fields, so presumably he will still get a shot after mark. Jamie, talk about a turnaround. The Consensus Forecast for earnings at ford down 18 this year. So he actually has to do something. What is number one on mark fields todo list . The reason the projections are down is because they are having to spend so much money to bring out new models, which is a new and exciting challenge for a guy like mark fields. They are bringing out 23 new models worldwide, a record 16 for her american of course the with thes the f150 aluminum body, changing over two plants, a really dramatic manufacturing shift. That is a big job for him and the whole team to work on. Jamie, i was thunderstruck at the compare and contrast yesterday and the pageantry of bill ford, alan mulally, and mark fields versus the song and dance we got out of redmond washington. It was almost like an antimicrosoft transition. What did you think about this idea of peer is mulally being a total class act compared to the downing we saw with ballmer and gates and the rest of them . Well, alan mulally gets to go out a champ. He came into a company that was hemorrhaging money. He brought the team together, change the culture, turn them around, and now they are making a lot of money and doing well, growing in china where they need to and trying to get the whole vehicle line from top to bottom to be more fuel efficient to be ready for the future in north america, so he has this Great Success story, and it is easier to be magnanimous when youre winning. Ballmer announced he was going to retire and the stock shot up. They did a big search inside and outside was as you do not look outside that hard it must you are not entirely happy with who you have inside. So ford was really able to pull this off in a much smoother manner. Maxwell, they certainly have come in a happy work cut out for the bulls up jamie butters, thank you. Rcelli, what is your nonfarm payroll . 2005000 . 04,000 . We look at the euro and yen today, sterling, baby George Holding a pound sterling. We are going to continue our focus on the jobs market because alan krueger, Princeton University professor is our guest host in the next hour. This is bloomberg surveillance. Ukraine forces attacked proseparatist. Russia says the geneva accord is dead. Fiveyear up the antie good morning, everyone. Were live from our will headquarters in new york. It is jobs day. Im tom keene here to join me, scarlet fu and adam johnson. Our guest host this hour, alan krueger of Princeton University. Lets get right to the brief this morning. Also from Princeton University, here is adam johnson. Some mixed economic data. Euro area manufacturing grew at the fastest pace in three months. We should point out that unemployment in europe hold steady. 11. 8 . Economic data here in the u. S. , 8 30, a change in nonfarm payrolls. The isam, new York Manufacturing number. Earnings, we have a bunch before the bell. Chevron, estee lauder. President obamas meeting with germanys chancellor Angela Merkel. We will present the News Conference live at 11 30. 11 40. They tend to be late. They go 22 minutes late. Ms. Merkel is there. On time. Ll keep him lets get to some company news now. This just broken the last hour. Astrazeneca ejecting the new takeover offer from pfizer. They boosted their bid to the offercalled the inadequate. Talk of another acquisition involving big pharmaceuticals. They are in talks to acquire merck. Ayer is prepared to pay 14 billion for the business. J. Crew plans a new brand. They have trademarked j. Crew mercantile. The wall street journal says j. Crew is spending on lowercost clothing. A two weekends ago, i bought 1952 rochester red wings baseball hat at j. Crew. Thats part of their whole thing. Other brands. Kind of retro. Like retro cool. I look like a dork in it. You fit in j. Crew sizes . We will go to Angela Merkel at the news of the day. She will meet with the president at 10 00 a. M. In washington. Look for that press conference at 11 40. I would say this is the moment of the day and into the weekend. What will be the discussion point, the distinction as the chancellor meets with the president . Toobama is going to try gather intelligence from Angela Merkel. She speaks to prudent so often speaks to putin so often. German is their common language. There is a sense of how far is youre willing to push on sanctions. The challenge for merkel, germany has much more exposure to the russian market than any other european country. You look at eu exports to germany, 30 of them germany. You exports to russia. How for will she push on sanctions . How does the dialogue change over what we have seen in the last six hours . Frozendialogue is between what happened late last night, which was russias calling this call from russia telling the ukrainian president to pull his troops out of his country. A last conversation that we know of between merkel and prudent merkel and putin was yesterday. It is so hard to tell whats going on on the ground right now. There is a helicopter that was shut down shot down. It is a question of how much can obama push merkel for additional sanctions. Merkel and putin speaking on the phone every 10 days. There was just this time in june of last year that obama visited here and gave a speech and he and merkel had quite a bit of time there. And ukraine not happened, this would have been an ugly visit because merkel would have complained about Edward Snowden and to the nsa and all the eavesdroppings. A lot of that has been brushed aside and the focus will be on ukraine. Alan krueger is much more qualified than i am to talk about the overall benefits of the trade agreement. This is all about ukraine. Berlin was busy morning. We will get a report on the American Labor economy. A wealth of information on those employed and the longterm unemployed. Alan krueger is one of the nations were most labor economists. He has recently served as the chairman of a president obamas council of economic advisers. He focused on the longterm unemployed. He ran policy on this for the president. Have we made up any ground on getting america back to work . We are gradually making up work. There is such a big hole to fill because of the recession big city in 2008. If you look at the shortterm Unemployment Rate, that is back down to normal. Slightly below where it was. Exceptionally high now is the longterm unemployed. They will exit the labor force it we dont provide opportunities. There is a debate centered on Janet Yellens speech. Focusing on cyclical unemployment in the better shortterm rate and forgetting about the longterm unemployed. Set up the risk in washington now that we forget those that have been out longer than 26 weeks. Is a risk to the economy. Have 4 Million People who have been unemployed for more than happier. On the margins of the labor force or have left the labor force. 4 Million People who been unemployed for more than a year. Theyre more likely to stay committed to the labor force. They are not now. T2 yearsrmal pattern, after the recession, you go back. That is the real risk to the economy now. This creates a path dependent problem that the labor force remains lower. A lot of the longterm unemployed eventually go back to find fulltime jobs and are finding it in the same industries that they left and not willing to move into those fastgrowing sectors. Is there any evidence that all of the training that employers and the government provide is working . Thats exactly what i found in my research. The longterm employed, when they do go back to work, they tend to work in the same kind of jobs that they had before. Which suggests we have an enormous challenge for helping to prepare them for new opportunities and expanding sectors. Thats a political debate. Talking about the microeconomics of all the spirit of the idea of supply and demand dynamics that we never talk about with nonfarm payrolls and Unemployment Rate. The other side of that same coin is the fact that the senate voted not to extend benefits. Might that actually pushed people to consider jobs that they might not have considered before . Senate voted to extend benefits, but the house has not picked it up. My worry is that we will see more of a longterm unemployed leaving the workforce because they need to continue to search for a job. I think one of the reasons why they have hung in there is because we have extended benefits over the past few years. It the Research Suggests there are tradeoffs. Discouragingably excepting the first job people get. There are many benefits i called and people meet their bills. Extending Unemployment Benefits now is quite good for the economy. The higher minimum wage was voted down. Could not even get it done in the senate. Votes and they got 54. What does that tell you about the willingness of washington to get behind labor . Im optimistic that eventually you will see Congress Come around and have a reasonable increase in the minimum wage. We have seen lots of states to that. The city of seattle just did something unprecedented where there was an agreement to gradually raise the minimum wage quite significantly. There is a fair amount of momentum that will take some time to get done. Alan krueger with us on this job stay. Forget, 8 30 this might come i will speak with jim glassman and bill gross. Ets look at the data check currencies, commodities at the usual job stay quiet. Jobs they quite. It is our twitter question of the day. Who is this weeks biggest winner . The nba or ford or the stock market or big pharma . Good morning, everyone. To alan krueger surprise. The deficit is better. Could we move to Budget Surplus . The former chairman of president obamas council of economic advisers. You and i have talked about this before. To me, its the story of the last three years. We have less deficit. The deficit went down from 10 to under three percent of gdp for the next couple of years. Ago, alanmember ages greenspan lecturing congress that there were disadvantages to a Budget Surplus. This is sophisticated economic talk. Should we fear less of a deficit or a true Budget Surplus . Problemwould be a great to have, frankly. Our problem is the longterm deficit. Over the next few years, it is manageable. Because of the crisis we had, the data rows. It one of the problems of having hired that is, should we run into problems down the road, 510 years from now, we have less headroom that the economy will need to get us out of the next recession. You have an exceptionally eclectic body of written work. The terror of washington. As an economist looking at policy in washington, is it so dysfunctional that they need a deficit crisis to really get anything done . One of my greatest frustrations and working for the government for four years has been that there is very little will to address the longterm deficit problem. The president was interested in the grand bargain. Speaker banner walk away from the table and they were not very far apart. It got kicked down the road. We will have to address our problems, but we have some time to address them. Can you suggest where we will with three percent of gdp . We are heading below three percent. In the two percent range for the next few years. It that is certainly manageable. At that level, that is not growing wher relative to gdp. Why dont we hear more enthusiasm about this good news . Its a mixed blessing. We should be spending more on certain things and we should be spending more on infrastructure investment. Research and evelyn. Research and development. Thats one reason why youre not hearing so much about it. The distinction of a better deficit for the wrong reason or the right reason. Your is a reason to stay around. Wr interview with steve ynn. Coming up, more on bloomberg surveillance. Please stay with us. It is an incredibly busy morning. Good morning, everyone. It is jobs day. Scarlet fu and adam johnson with me. Alan krueger of princeton in diversity. Princeton university. Theyre trying to take back the city. The prorussian militants utin had warned ukraine to pull back its troops. The report looks of the s of google anda facebook. A collision on the citys busiest subway line. Theraveling east accident comes after that deadly ferry accident. Questions about the safety of south korean and transportation. South korean transportation. So many caught in the mix. The media landgrab continues. Worksr tie may be in the because at t is in talks with directv about a potential takeover worth 40 billion. This comes as regulators review ts plan toan to buy Time Warner Cable. This is about owning the delivery to your tv and smart phone. Absolutely. What is happening here is you cant be just a pure video provider or just an internet provider. People are getting their media across all these platforms. If you look at directv, they are just a satellitetv provider. What they dont have is a strong broadband offering. Pare it all together. That is some of the rationale between at t and directv. Regulators are reviewing the Time Warner Cable plan. They got in the way of the directv deal 10 years ago. Theres a lot of elements into the regulatory gamer now. Its all game theory. There is a lot of different ties we could see. Its all about what regulators will actually allow to happen. They dont want to see anyone consolidated too much and controlling too much of u. S. Households. What we are waiting to see is if they will actually allow at t and directv is all of this nothing more than masking what is an outright consolidation to almost monopoly or utility monopoly . Concern. S part of the if you look at it from the provider standpoint, what theyre saying is, we have asked out the number of tv households we can reach. 97 of households. Like w you dont what you pay per month for cable tv . 72. To 200hat going to go and 10 . , you are paying for cable tv internet and phone altogether. We bring in alan krueger he knows true macroeconomics is nothing more than more micro. What does it say about this . You like american idol. The going to be able to afford this in five years . If it covers my phone, internet and television, it it much more affordable. It can make our lives much more uniform and unified. Going to one check. Also one provider for many different services. It tow reasonable is think at t and directly become i would be able to walk run on my iphone and watch any channel right here . It is becoming a more real proposition that i think. Theyre working towards getting you a bundle of internet delivered channels. The same way you have a bundle of cable channels. It will go to work phone. Dishes thing they might have something ready as early as the summer. Theo we overload infrastructure if we are streaming that Much Television over millions of phones . Can i give a concrete answer . ,n radio worldwide rangerspenguins i get this on nbc sports or on cell phone is like that. Its great. This is the future. Absolutely. That is the ways going to be delivered and thats why pay tv is becoming less important. If you need to be able to deliver video and content over the internet. Does the infrastructure exist to support that streaming . Thats another reason you are seeing another deal with tmobile and sprint. Or part of the rationale for at t going up edition set of directv, which is another idea that has been brought up because about spectrum. There is a limited amount of spectrum to deliver. At t is part of the thinking that they buy directv, they can do all the tv delivery via satellite and they can have more capacity to deliver your broadband. Why the idea of Net Neutrality doesnt always make sense. There is a limited resource. We allocated by how much people are going to pay. Since people will pay more is the general statement, is it better for more regulation or rest regulation here . Better to have smart regulation. Regulators can messed things up by going against the grain of technological development. Oni can get on my cell phone kentucky derby. Who do you like . Grown . Nia candy boy. Im on wicked strong. Take you so much for joining us this morning on the deal taking place in the media space. Lets get to our quarter question of the day. Who is this weeks biggest winner . Treat us. Tweet us. Good morning, everyone. The perfect day yesterday in new york city. We begin that again today. The job report and eight david this morning. Perfect mayy a day. It is jobs day. The jobs report at 8 30 this morning. 1. 3bile is showing million subscribers added in the First Quarter. Of more than at t and verizon combined. It people familiar with the matter sing sprint plans to push forward with the takeover bid. General motors will be in a familiar setting today. They have asked a manhattan bankruptcy judge to tell the car owners they are barred from collecting the damages because of the ruling back in 2009. A pregm for most of its liability before it filed for bankruptcy protection. The doortodoor cosmetics seller has paid 135 million to settle u. S. Claims that it made improper payments in china. You know that movie, swingers . It should actually be replaced with macau. Vince vaughn i will introduce you to it. I have no life. Its clear. Stephanie ruhle spoke with steve wynn on gambling casinos and she asked him, which is more fun to visit . The government is more predictable in china than it is in the United States. The government in nevada is very easy to work with because we are the industry in the town. In gaming and tourism, its everything. The political environment is extremely friendly and understanding of that industry. The federal government in the United States is much more unpredictable and unfriendly to business than the government in china is to business in china. Asally counterintuitive as it may be, it is absolutely true. You can ask any american businessman that is in both places. Interesting take. I could not take my eyes off of his suit. I blew. Light blue. For wynn issiness in macau. Thats a pretty big shift. Whatey say, dont watch they say, watch what they do. In this case, its both. He is putting his money where his mouth is. It speaks to transnational investment and the idea of investment jobs. Do they take away from jobs here . We have lost manufacturing jobs to china. No question. Less the case in macau where its more entertainment. A job is a job. Secretary clinton spoke of their trade. Fair trade. Fair means the government does not give one industry an advantage compared to the industry in another country. It does not nickel its currency. American companies can compete with anyone on a level playing field. Do we have that now . You agree that we have lost a lot of textile jobs . I was just in china. What is striking, you buy chinese socks and walmart and theres only five percent cheaper than if you buy the same socks and china. We dont have a level playing field. I have a friend in china who says the same thing. It goes back and forth. You look at some headlines over the past couple of weeks. It for pepsi, china sales up double digits as the u. S. Declines. Gm, china sales rival u. S. Sales. Apple how important is china to u. S. Growth . At the moment, not terribly important. In the future comment can be. If you look at where you are going to see Income Growth and consumption growth in asia were not that dependent on china in the moment. , if itsdown that line going to be more important, wont that mean that manufacturing will increasingly take place there as well because it will be closer to the end user . The manufacturing renaissance is fleeting. I dont think so. There at the limits of the infrastructure. We do see Companies Bringing their supply chains back home and we have to prepare for that. Alan krueger joining us this morning. Lets get you a data check on this jobs friday. The big number at 8 30 a. M. Future is not doing a whole lot. Sit back and let the number come out. 2. 62. 10 year yield at good morning, everyone. Dont forget, later this morning merkelmberg television, and obama. The press conference at 11 40 am this morning. Conference. Tant im tom keene. With me, scarlet fu and adam johnson. Alan krueger with us on this jobs day. We have something here on set that has never happened before. Two powder blue bowties. One by tom keene and the other by adam parker. He has a bloomberg surveillance bow tie on. I get the email. I got it for being on the show a couple of years ago and figured, where else can i wear it but here . I dont think he knows about it. Thank you for giving me the gift when i was on. I cant really wear it except on the show. Im still 200 in cash. You are killing me. We have seen this before. Momentum stocks like tesla and twitter getting crushed. Value stocks like walmart and exxon suddenly start attracting attention. Lets get serious. On previous rotations were people go from momentum into value, how will value do . Months thatut 10 value works and spreads out about eight percent against groep you have already spread out more pretty quickly. I think its going to last a bit longer, particularly if people are optimistic that growth is going to improve. Value is tough to quantify because value are stocks that are cheap. What sectors are actually values based from where they are priced and how they are growing . The historical playbook says, when valley works and growth starts to lag and you sell discretionary intact, i dont know if its. 2 go the way his recess. That has happened the last few weeks. Its almost selffulfilling. Three surgeons in value and how it is healing a lot of retirement plans out there. What is the new distinction in the use of cash . We had a Game Changing announcement with apple. Lessrch would suggest share buybacks. Not a classic growth value playbook to start out with. There has been this curve flattening over the line. I would not say it is necessarily a value here. Its a couple of things at once. One thing that is clear is come a Biotech Software internet got sold. Your question comes down to how the management is compensated and how that makes of buyback works out. The value will continue to do better. Where does tech fit in . Is hard to define. Classically, value means you growth, cheap on pricetobook and the dividend that you are grown. There is some big cap in hardware. , youu are managing money dont want to say, all right, i have no exposure to the fastestgrowing industries in the market. My view is, i want to have some exposure to the fastgrowing stock which he will call more growth that valley. The best place there is an software. I think companies are in cap inng a lot of people. Alan greenspan talks about the animal spirit. The advantage of a better stockmarket. Do you buy that in 2014 . Are certainly better off with a stock market having returned to the previous heights. We need broadly shared wealth growth. The fact that housing markets are coming back will help thats a great question. Is that more important . One dollar in housing value is going to have more effect on the economy than the dollar in stock rally. Interesting. It does not and. Adam parker of Morgan Stanley and alan krueger. We have power on set today. Dont we . Anhen the jobs report is due in an hour. Good morning, everyone. Im tom keene. With me, adam johnson and scarlet fu. Ukraine. Of chancellor merkel and the president later this morning from the white house. What do we have next . Betty liu is here. She is going to take us to the jobs number. Who do you have to round up the discussion on it . Trusthave a big brain with us this money. Alan krueger is going to be joining us when those numbers break. , his reaction to the jobs data. Be in oner is going to the conversation as well. Finally, jason furman. He will give us the white house view on the future of jobs. The guy before him was hit or miss. I know. What happened to him . We found him im a huge fan of jason furman. He is going to give his own view. Come on, alan. At 8 a. M. Tarting new york citys Bike Sharing Program is looking for an investor so it can expand. Ill to bicycle share has been term withing a equinox. Bikes and6000 city talk of expanding it. It launched last year and has more than 100,000 lenders to pay 95 a year. The Company Wants to raise the price, saying higherthanexpected usage among new yorkers is hiding it hurting its own line. Is a degrading Taxicab Services . Thats your vote on uber charging too much. Im using it because i cant get a cab. Were looking down from the studio in front of bloomberg. At 5 00 this morning, the rack was empty. Adam parker from Morgan Stanley. The surveillance bike expert. Is an interesting social project. You partake in . I walk. Have you ever taken a bite . A bike . No. I need a helmet. Met thee, i have not heavy Bike Sharing Program washington. Its called bike share. We all know it is impossible to buy government. It has been successful in london. I go back to my story about how they have naked bike races. Where . Is that condoned by the good people at barclays . I doubt it. Thank you so much. Alan krueger stays with us. Coming up, tens of thousands of Berkshire Hathaway staples will spend over the next investor meeting with mr. Warren buffett. Good morning, everyone. On monday, bart joins us. You know him as the former cft commissioner. Talk about. Ngs to whether its highfrequency trading what was the book . Flash boys . That was so last month. Good morning, michael lewis. This is jobs day. It is jobs day. Our guest host is alan krueger of Princeton University. Lets get you some company news now from the piles of bloomberg west. Shares of linked in down in early trading. The professional Networking Service giving Second Quarter forecasts. A mobile phone owner is suing google over restrictions, including the android operating system. The suit filed in california claims that google forces and held device makers using android lessso provide googles popular apps. Google denies the claim. Google is also the subject of another lawsuit. This one over the controversial bus that shuttles employees from sentences coaches look on ballot. Suing Employee Union is saying that buses should not be allowed to park. They are not commenting right now. That is todays company news. Moment, pimco shifted a few days ago. It may be returning to some form of old normal, good economic growth. Better job growth. Alan krueger teaches normal and nonnormal economics at princeton and joins us to give us perspective. Announcement, this idea of a gloomy view of the economy. Baby we get back to some form of normal. Lets start with this idea. Where is normal . I think normal is the on implement rate back down to five percent. Under five . We are not there yet. But we are heading in that direction. Washingtonough for to be patient on and let it migrate down or do we need a more do we need more stimulus . What we need are targeted efforts to most of your problems. Which is longterm unemployed men. About the rapid decline in the unemployed rate. So much so that the fed has dropped it as a measure that it focuses on. Are we still writing that off as an incomplete read on the labor economy . It does reflect a broader improvement. It is still one of our single best indicators. You look at the whole portfolio and you need to look at what has happened to the Labor Force Participation and work hours and so on. Which metric would you focus on the most . I would still but the most on the Unemployment Rate. Even though it might be incomplete. Everything is incomplete. It you look at gdp which is the broadest measure and how often it gets revised and how significant revisions can be. In realtime, the Unemployment Rate, even though its extremely fabulousneil had a piece in the New York Times about how much the numbers jump around even if the truth is very steady growth. It on bloomberg television. Here is what professor krueger is talking about. You make it six New York Times article is with different headlines about the same jobs report. Our world, thats fabulous. They draw from the same distribution and show how you can get such a different pattern with the same numbers. Everyone has to take these numbers with the appropriate grain of salt. They are indicators of where we are going but they can overreacted them. There is one number thats hard to argue with. The Unemployment Rate which tries to count people who are working parttime. Or who have given up. That is 12. 6 . Becauseis high longterm unemployment is high and because there are a lot people working parttime who would like to work fulltime. I think a stronger economy will certainly help with that. The problems for the longterm unemployed are going to be difficult to assess with overall Macro Economic policy. Something more targeted like a tax credit would be money well spent in terms of lowering unemployment. Be pentup to demand, whether its consumer demand or demand for business putting. Do you think pentup demand from employers and hiring until they see more customers, they will be slow to hire. They need the gdp to jumpstart us. Lets get back to the base. Anywhere near inescapable lusby which drives us down to five percent unemployment . Since i have started working in government, they have said we dont have enough momentum to escape velocity. We can continue growing at two percent. We did continue a two percent. I think we are on a path where we will be back down to five percent unemployment. How important is it to bring the profits of apple, google and everybody else back to america . Can you construct a policy that forces them to put a portion of those billions towards job creation and investment . Our Corporate Tax code is really a total mess. One simple idea is to have a minimum tax on earnings that companies are in a broad and they. Each year and after that they can keep what they earn. Why cant we affect that to bring money back to create investment . There are companies that benefit from the current system. All of them. Is 27 versus the official rate of 35 . They can take more advantage of the loopholes in the tax code and shift money around and others find it more difficult. It is an absurd system. It is very hard to get out of it because there are companies that benefit tremendously from it and say, im not foreclosing those loopholes. Lets get to our agenda where we focus on the stories shaping the day. You are laser focused on nonfarm payrolls. Ande will talk about this the idea of, are we at that shift moving from a new numeral new normal to a dip in view or something more effervescent . I will be focused on the revision to last months number and wage growth. What are you focused on . Jason furmans performance . I would like to hear what the white house has to say about the numbers. The white house has a huge advantage. They get the numbers yesterday. They have any chance to think about them and i just them and study them in much more detail than people like us. Tom, you have to get to radio. You will be breaking the news for us at 8 30 a. M. My agendafett is on this morning. Berkshire hathaways annual meeting takes place this weekend in omaha. The oracle of omaha is recommending that people go to air bnb. Thats a new take. Do you think this trade, whether its uber, is this a real impact on gdp . Its disruptive change. It will have a real impact on the economy. Gdp is awfully hard to measure. Bnb. E used air ive been very satisfied with it. I have used it twice. To go to florida and to go to puerto rico. Alan krueger a fan. On my agenda, kentucky derby. Gets right about 5 30 on saturday. Candy boy is a 151 on favorite. Let me check my notes. California chrome is the oddson favorite. Tom has wicked strong. That will be interesting. Lets get to our good question of the week. We asked everyone, who is this weeks biggest winner . Obvious might be the nba. Nokia with apple and samsung constantly battling in court. Have not heard that one in a while. I forgot about nokia. Ford. A new ceo coming on in july. Mark fields coming up. Finally, this one is a shameless plug. Tom keene is the biggest winner of the week. He gets to hang out with adam johnson. Present that . Who sent that . Alan krueger, thanks for joining us this morning. Bloomberg surveillance continues. Good morning. Jobs stay in america yet again. America yetin again. You are in the loop. Alan krueger is in the house . We will be joined by Mohamed Elerian. Here is a look at the top headlines. U. S. Probably created 218,000 jobs last month. The jobless rate is expected to fall 0. 1 . Warren buffetts fan club is gathering. Buffett will answer questions for more than five answers. Hours. Stephanie ruhle just spoke with steve wynn