Groupon reporting after the close. Let me do a data check. Futures are up three. The euro impinges on european exports. Nymex crude under 100. The next showing a good feeling in the equity markets. The euro stronger yen. Markets in a jumble. Lets get to front page. We have some news right now. Merck has reported the sale of its consumer unit to bayer of germany. Point 2 is 14 billion. Richer than expected. Merck will update its guidance. This collaboration includes a 1 billion upfront payment to bear. Terck will make an upfron payment to bayer. There have been a couple of different vendors. You have to wonder what some of them just hold out. This is why hate pharmaceutical deals. I cannot pronounce anything. Coppertone and claritin. That is with the businesses. Expects a boost of eight to 9 billion. Bayer will go after hawaiian tropic you remember when you use to put coconut butter. Of people would put on all of oil because they want to be tan. Lp, put foil on it. This was an entire semester of school. We will keep an eye on this developing news. Merck wants to sell its Consumer Care unit to bayer. Will beof bayer joining us to discuss this. Experience american for a european. Alstom. Trying to buy back and forth across the pond. When scour the newspapers in europe. Here is scarlet fu with the front page. We have to start with ukraine. Fighting intensifies. Mark as these on both sides. Russia will beef up its b lack sea fleet. Ukraine desperately trying to hold on to odessa. A strategic city, which you have been pointing out it feels more significant to europeans. It is only a couple hundred miles. It is about 150 miles. You are effectively part of europe. Dynamic of the story, it migrates away from the diplomacy. We will speak with a director about the developments. Credit suisse may be looking it it could include a guilty plea and a fire more than 1 billion. Credit suisse created a separate legal entity for the business. That could result in the Justice Department targeting just that union unit. You have to believe that washington is involved. You mentioned that the word distinction. Another distinction is potentially Credit Suisse we do not know yet, but if Credit Suisse admits to criminal wrongdoing, that is a big deal. Thanks will avoid saying it is criminal so they do not open themselves up to lawsuits. Of unintended consequences, that was front and center. The rangers cannot score a goal. They were completely shut out. Another activist investor are making peace. Were talking about dan lowe. Otheby and dan loeb. The bottom line, he was successful. Here is another example where it appears to have worked. Familiarght i saw a back of head. Is this another member of the keen family . You are in the third row. Look above the fireplace. Those are the front page stories. Lets bring you up to speed on the top front page. Reports of a greater intensity to the fighting. There is less than diplomatic rhetoric. Announces plan to strengthen the black sea fleet. As a retiredn fourstar general. Within the biography, hes he has toured in germany. On . Are you focused what do we need to focus on within the west, russia, and ukraine . If you want to use the chess think it is quite correct. If you want to use the chess analysis the analogy, i am fearful the ponds are beginning to control the board. The violence in the street, which may or may not be directed by anyone is driving events. Putin wants a war, but it is almost as if he has started a fire and the embers that he has kicked up are landing and lighting different parts of Ukrainian Society up. What is the place of our military in this debate . I cannot get a clear description of the u. S. Relationship with militaryse u. S. Historic relationship with germany. Where does the military fit in . We have moved some military forces into the baltic states. There are some Fighter Aircraft and paratroopers. I think what we need to do is to step up advisory function in kiev. They are not nato members and we to defend their borders, but we can help them control a situation that is getting out of control. Fbi and cia members are in kiev. What is the appropriate role for those americans . The best thing that could possibly happen is that you have a functioning government in kiev. There has not been a functioning government therefore a long time. Organ ofilding up the ukrainian states. They can govern. The real enemy is chaos. Michael hayden, thank you very much. The formal director of the cia. Host for this hour is leo hindery. He is the managing partner of intermedia partners. He speaks on media. We will get to that shortly. I want to start with ukraine. As e will be remembered of the postwar era. With i disagree with the general. If the ukraine starts to pretend or act like a nato nation, youre going to jim you are going to do the eastern and southern parts of ukraine. Had a popularly elected president , by every president , a , we andd Fair Election the eu encouraged his overthrow. Morsi in egypt. The minute that happened, crimea had to go to russia. If the ukraine begins to act like a nato nation, tipping west end of the ooh, then russia has to act. What we needed to do was instantly reach out to prove in and figure out where his activism would stop. Would it stop at crimea. Public. Did was went we said this offends us, more later. Would republicans have done better . I think john mccains 150 pockets troops that we put on the order of ukraine and poland, this is not going to be settled by traditional military fashion. We have company news this morning. It developed over the last hour or two. Francois hollande is weighing in s offer toelectric buy alstom. He says it is not sufficient. He says any purchase must improve when it comes to guaranteeing jobs. Counter to see if a offer from siemens is better. Cost increase in at aig propertycasualty business. At the end of 2012 from the taxpayer bailout. Online sales grew faster than amazons. It increased 30 last year, compared with amazon 20 growth rate. Contest. No amazon sold 60 billion online last year. Company news. S everyone lives in an amazon world. Treasuries falling for the first time in five days. Could it the beginning of the recovery . We will discuss. We are streaming on your tablet, phone, and at bloomberg. Com. Good morning, everyone. Dow futures up 20. Coming up on bloomberg the chief executive officer of sprint. He will be on market makers. There is friend, softbank, tmobile, Catherine Zeta jones that was like 10 years ago. There is hope they will bring it back. Good morning, mrs. Zeta jones, if you are watching. Scarlet, you get us started. The headline story of the moment. Struggling ford direction, the yield on the 10year note, about a sixyear low sixmonth low. Yields are under pressure. We have the escalating tension from ukraine and russia. Some people say uneven economic data. Some parts raise concerns. Now, i read jersey. He is the director of a Credit Suisse. The bull case for stocks remains emphatic. In good company in thinking that bond yield will rise. Indicators suggest a bond yields are ahead of themselves. He has been wrong for 90 days. We have been wrong from the beginning of the year. We think yields will rise. We have been in a range of 25 258. Points from that is almost exactly where we got yesterday. We have done that for four years and bounced around. The market is leaning short. Like yields. Economic growth in new york is Getting Better and no one wants to be long. A lot of people are leaning short and it is hard for us to sell off. The volatility is deadly. Jamie dimon talking friday about profits on ao jpmorgan bond desk. What is the why . Why is it so quiet . We put out a note last night. Regulation, lot of desks have to get smaller. People have the same opinion about where bond yields are going to go. They wait until that occurs. En colette had a great shirt out about banking employment in new york city. This is what Robert Kaplan was talking about yesterday. The liquidity crisis that may come about. What happens is we wind up everyonento ranges and leans one way, dealers cannot take down the product because they cannot expand the amount of bonds they own. You get these selloffs. It is similar to what you have the last may and june, when Corporate Bonds and treasury bonds, no one could buy them. You had forced sellers. People pull their money out of mutual funds and no one can buy the bonds. This shows the new wall street out there. It goes to the idea of everybody adapting seven years out of the financial crisis. We are still adapting and trying to figure it out. There are still these little moves, like the moved to 258 yesterday, was that about ukraine . Part of that was ukraine and part of it was the economic disappointment. China was a little bit weak. They are one of the growth engines of the world. The world. S. Sneezes, gets a cold, now there are larger economies like china. If they sneeze, everybody gets a little bit of a cold as well. There are multiple pieces to this. The jobs report is interesting. You had headline payrolls, but not a lot of wage growth. Aggregate income grew at the slowest pace in the last couple of months. Thank you. Come back when you are right. The forecast by bloomberg is that the tenure will and that 3. 8 . They have been staying in a two percent handle ranges. I read jersey, thank you so much. Former u. S. Chief Technology Officer will join us. He will be our guest host. We are on bloomberg television, streaming on your tablet, your phone, we are everywhere. Good tuesday morning. I am tom keene. With me, scarlet fu and adam johnson. If you do not read them, your life will be better. Sothebys. Loeb and scarlet reads these at the bedside. They are the best place to read the story of hustle and m a battles. Matt levine, this is on sothe bys. Activism is on the rise. It is is it different than the 1980s . The 80s was about all shareholders on the activist side rising as one. Todays is a different sort it is analogous to green mail. It is too often 21 shareholder block. Carl icahn practices the all boats rising style. What are his best practices . It is when he asks for performance, when he asserts himself in a security. He does not position himself to be the only share block that rises. They had no voice. That is the issue. Leo, what is the best way to deal with this . Ahn approach is something we have to fall back to. It is in the best interest of shareholders. We will continue. He will stay with us and talk about media. Ceo will joiners us. We are excited about the is the data hottest topic in software. Companies who compete over data over the next decade are going to win, companies who do not are going to lose. Good morning, everyone. Everyone in the view of new york city has a hangover from cinco de mayo. Some tequila. I am not a particular fan, but mr. Petrova visits us, and that is great. Double what they were last year. This is new york city, and we say good morning to you worldwide. This is bloomberg surveillance. Lets get a quick data check of stocks, bonds, commodities, futures up three. 1. 3925. 5 nymex crude seats under 100 per barrel. 35. 60,ian ruble, added trending stronger. Friendly weputin call that. Talk about apple, which gained 1. 4 yesterday to just over 600. Analysts at Rbc Capital Markets raised fifthyear earnings capital for apple by more than one dollar share. Can we have a moment of silence . When itday on this desk was over 400 . Failure, tim are a cook, you are a failure. Are you kidding me . By the way, trading at six times x cash. You cannot take the cash out of the equation. That is the whole story. You know what, lets bring up for you, french for loser, jpmorgan down 2. 5 , the lowest since november of 2013. A sweet jamie dimon warned an increasing trading slump may last through the second quarter. This is getting a lot of traction through the financial circles. This is a story that continues, jpmorgan talking folks off the microphone, off the camera, with this announcement by jamie dimon. It is always on a friday, isnt it . That way no one will notice. Having the beverage of our choice on friday. Scarlet, this is an important interview right now. Absolutely. We talked about the murders, transactions, transit the mergers, transactions, in the pharmacy they. Business,ck consumer bayer. The price 14. 2 billion. Joining us from germany is the ceo of bayer, dr. Marjin dekkers. Good morning, sir. Good morning. Why now . Why did you decide to make this purchase for merck posco soon her business now . There is a bit of a frenzy between for mercks business now . There is a bit of a frenzy. Did that play into your calculus . No, i think those peaks and values in m a activity every five or seven years or so, the industry was due again. , as a company, very well on track. We had good growth, a record first quarter. Nothing we needed to do as a deal per se, but merck put up its consumer business for sale. We are strong in overthecounter business with bayer aspirin and other products, so this was a great opportunity for us to strengthen the business and truly become a global leader. Jin, the trend is for these companies to swap assets. Does this mean you will be sending the material side plastic unit . Is 14. 2 billion, a little richer than analysts had anticipated. No, i think the price is not cheap, there is no question. But these are very good, stable businesses with good cash flow and profitability and a lot of Customer Loyalty to the brand. Transactionsonal with merck in the cardiology space in pharma, where we are together putting our resources in a specific cardiology, medical approach, and this is a deal that is worth up to two 2 billionon two in payments over time. Value creating, also synergy creating. I need to ask you about the dental cost cuts. ,e, in its bid to purchase creates job redundancies. Will you be laying off people in new jersey . No. I mean, minimally. There is very little effect on jobs. The synergy here is that merck has a very strong u. S. Position, stronger actually than they are. But bayer has a very strong position in other countries across the globe, particularly in emerging markets and in europe. Our intention is to take a merck products, the brands, and bring them to other geographies. With that, we will create a lot of revenue synergy that partially makes it possible for us to pay this type of price. What do you think that pharmaceutical industry will look like one year from now when the consolidation for all this plays out . Well, some of this consolidation is, first of all, focus on what you are good at. Broad, butto be too focus on what you are good at. The pharmaceutical industry has pressure with respect to prices for new innovative medicine. Devolve these to drugs. If you do not get the right pricing, the Business Model is under scrutiny, so combining forces with other capabilities is a good idea. Is driving,ination i think, people to get together, and often in these cases have partnerships. What merck is doing with bayer now and with glaxosmithkline a few weeks ago. Thank you so much for joining us this morning. Marjin dekkers, the ceo of bayer. Shares are higher in trading with bayer and with merck as well. It is incredible when you think of the different deals happening, whether it is pfizer, astrazeneca him and now this most recent deal. The threeway deal with glaxosmithkline. Another thing a very big week for media earnings. Discovery communications, disney, directv, fox news corp. , are you with me . These are some of the companies recording all week long. Run intermediau partners, and you also run the yes would network the yes network, home of the beloved yankees. What do we hear from the ceos of the content providers versus the ceos of the distributors . Not many years ago when we talk about earnings if we had done the show, the four of us together, they were sort of blended. It was an era of vertical integration, the content distributors and the programmers were one and the same. Beginning back in january of two thousand nine when the broadcasters it essentially became multi channel programmers the broadcasters it essentially became multi channel programmers, you had a clean split. Significant Companies Owning very little content. The comcasts of the world, etc. Wireless for ryan directv, verizon wireless, the other significant cable operators. Theho is going to win . Content guys. Content wins, copyright wins . It depends on who has content that is sticky and can attract value unto itself. What is fascinating is that there is roughly six big programming combines and nine, 9. 5 fairly distinct content distributors, and by the way, that does not count google, apple, amazon coming back in and trying to be vertically integrated under themselves, yahoo included. The katie couric show on yahoo . Is that going to work . No. Half show with katie couric is not ring a lot of bells. The Significant Players apple tv, amazon tv, google have the wherewithal to be asnificant content producers well as quasidistributors into the future. What is the risk that content creators are assaulted by the Supreme Court decision honoring areas right to reo is going to get thrown out. It is pure theft of copyright content. This is not some hacker who takes it over the year takes over the air and gives it for free to you and i, households. Aereo is just a test of copyright law, and the Supreme Court is going to affirm and john roberts was right. He did not mess around, did he . The issue is matching content with revenue. It is easy to produce, hard to generate revenue associated with it when there is so much over the top going on. Is all about margins, right . Mariano rivera. And that jeter guy now . I shudder to think . Lets not have any more yankees retire. And nice not have the rangers win while we are at it. Coming up, Cloud Computing stocks rumbling. The latest ipo. We will show you are single best chart next. Good morning, everyone. Bloomberg surveillance. Tom keene with scarlet adam johnson. Adam has top headlines. More than 200 schoolgirls kidnapped last month alone. The leader of the group boko them says it will sell girls. And this is on twitter . Amazing. Twitter. T on amazing. Had the firstts Health Insurance exchange in the nation. Now the state will either have to fix it or close it. The Massachusetts Health connection broke when the state changed to comply with obamacare. The state may shut it down and become the third share the third state to join the federal Insurance Market place. A banner year for hedge funds managers. Alpha magazine, the highest earning Hedge Fund Managers tacoma total of 21 billion in 21 in 2013. Those are your top headlines. To me it is irresponsibly reported. They take 25 guys who hit the ball out of the park. . Here was another 2500 people if you look at Credit Suisse, the average hedge fund was up 9. 5 . As a client we are paying two percent of the assets on management. Lets have a responsible single best chart. Scarlet fu reports. This one is something we have been talking about quite a bit, the loss in momentum of the momentum growth stocks. Cloud companies being apartment. It shows why box may have the latest ipo, or their bankers. Tracks 30ud index publicly related cloud companies. They have done far better than the market but have of late fallen faster than the dow, s p, nasdaq. Once again, although they have outperform the broader markets, the recent trend looks far from attractive. There it is. What is the price of this stuff . We keep talking about it is the cost of electricity. Thee should mention that chart is from Bessemer Venture Partners as well. It also speaks to the crash of momentum we have been talking about for the past six weeks, whether it is tessa, twitter, etc. Hindery, you may not know it, but he was a great supporter of john edwards a short time ago. He was talking about two ever widening on income inequality. You have focused particularly on income manufacturing jobs. I thought we had a better job economy. I dont think we have a better job economy at all. Jobs created last month, that was on friday over notweekend if you have realized it already, only about 11,000 of them were in manufacturing. We are so far overweight toward services. Of the other reality, of all the jobs that have been created since the recession was declared officially over thomas 43 of them make just 16 an hour or less, so the quality of these jobs is something we keep ignoring. To aboutno quality half of them. You have been a critic of the president. We see mrs. Obama at the met gala last night, a big soiree in new york. The president at the correspondents dinner. He loves to talk to Silicon Valley. Can Silicon Valley create new jobs . Withe last time i was on you, we talked about facebook having a market value twice or actually more than gm and ford combined. About 6500 employees. Silicon valley is the future of s jobs, we are doomed. We have to have about 20 of our women and men making something. Whether that is through an Infrastructure Bank that reignites that part of the manufacturing cycle, whether it is stronger trade enforcement against china that tries to stop this manufacturing jobs, there are countless ways to dress the issue. The most notable is we have to have a manufacturing policy. Can you vote for president obama again, a third term . Would you vote for him . Up anduld have to back think who use running against. I have been disappointed that we have not paid more attention to manufacturing jobs in this country. Leo hindery, our guest host for the hour. Coming up, we will speak to the ceo of a company that makes chips and credit cards. Good morning, everyone. Bloomberg surveillance. We are at bloomberg and lexington. This is the view. That s like to show extraordinary. That is a live shot. No filter, no pandering, no camera plus. Is ups up there, victor on top of the highest skyscraper with a live shot. Our twitter question of the day our science and technology overshadowing humanities . Do you need humanities to win today . Science and technology overshadowing humanities . This is bloomberg surveillance. Scarlet fu with tom keene and adam johnson. Company news from the files of bloomberg west. Apple is keeping up its tradition of giving generous pay to executives. Angela learned has been giving samsung plans to challenge the verdict that when apples way in the smartphone patent trial. 120company was awarded million. Sprint is getting into a price war with tmobile. Matching tmobiles 40 per month payasyougo plan. Customers will get unlimited messaging and calling with highspeed data. 2, dow is up 19. And target. Talk about turmoil. Million breach of 40 credit card numbers claimed another victim. This time it is the ceo. Gregg steinhafel is gone. You are on the short list, right . I was in, but i heard you were. Cards encrypted with tiny chips managed with software could have prevented this fiasco. Pugh, thank you for being here. What is the delay . The u. S. Is aware of the today there is new technology called waving. It is a question of i look at my chase visa card. The chip is managed by software that your company rights. Explain to us how that actually works and how it prevents theft. Inside the chip would put the key to show that it is not a fake. It determines it is not a fake, and when they have gain mutual panic if you have a minor a magnetics stripe, what is the cost to target or macys or sax of converting to your technology . The total was estimated and 8 5 billion billion. That you have to put this in perspective that the payment business of more than 40 billion of profit every year. It is a question of who will take the risk . There is anyying risk. But if you look at the cost of it is a few cents, not a big deal at all. Where is the growth . Here in the u. S. . Is it in asia . In the last five years in the u. S. It was 30 per year. In europe, in france, in holland, we have grown quite a bit here. You do not realize it, but the first electronic id was here. You see it all over the world now. Same for the chip that you have in your normal phones. It is in your pocket but you do not know it. I am glad i am carrying the technology. Ou, thank you for joining us. Leo hindery, thank you for joining us. There is a lot more to talk about as we get to the november elections. November stay with us. It is bloomberg surveillance. ,. The fighting intensifies between ukraine and prorussian insurgent. Russian will strengthen its black sea fleet. American medical care will change. We go into the obamacare trenches. On the success and the underside of asia america, we look at scarlet fus world. Good morning, everyone. Tuesday, may sixth. With me, scarlet fu and adam johnson. Scarlet will be interesting this morning with that wonderful seminar you did last night. The new paradigm of asian influence. We had a great lineup. Two of those guests are with us this morning. We have the author of innovative stay, chief. Echnology officer debrief. Overnight u. K. Services were the fastest since april with new business picking up. There really is only one to note. But we are still going to report it. Earnings before the bowel, Starwood Property and then disney. All stable foods and then groupon. It has to be off the chart for what i paid for meet this weekend. I could mortgage a middle child. That is what they call whole paycheck. But you know what . They have great stuff. Companies this morning, scarlet fu . A lot to go through. We have to begin with Credit Suisse. Does it help americans evade taxes . There could be a guilty plea with a penalty of more than 1 billion. Yesterday eric holder said that the department of justice would show that banks are not too big to prosecute. Directors at target are under pressure to do something that has never been done before, hire a ceo from the outside. The ceo was pushed out, a casualty of the massive data breach. Remember Warren Buffett when he told get when he told shareholders that he was game to do another deal when he teamed up to buy heinz . According to data from bloomberg, three of the companies, kelloggs, craft, and general mills, he said he likes simple businesses with is tent in our theory good morning, everyone. Continue on ukraine, lonnie chen, r Bloomberg View columnist, former i mean this seriously key adviser on policy to governor romney. Chief Technology Officer for president Obama Joining us as well with his new book, innovative state. How would republican ukraine policy different from the president ial democrat ukraine policy . I think it goes back in time. If you look over the course of the Administration Since he took office, his posture with russia has been fundamentally one of weakness, which has emboldened the russians. That is why you are seeing a lot of this activity. We wont see a republican president on an Aircraft Carrier in the mediterranean saying Mission Accomplished . They made that mistake before. The reality is that if you of engagement,pe the socalled asian rebalance is the perfect example. The notion of trying to be more robust in the World Without following through. You need assets to be more robust. Today,he High Technology is it a debate of cost cuts in the Defense Department . Is that done . I dont know. The American Public is split. Some americans want more engagement, somewhat less. That affects the debate on the defense spending we should have. We have seen significant cuts to the army, the navy, the Defense Department, that will be very harmful. Mitt romney needs to take a victory lap year. He identified russia as one of the biggest threat. You could talk about this as well, the tradition of the Republican Party, the macarthur Republican Party of the midwest america, the isolationist view. If you look at the magnitude of support for someone like rand paul i would not go so far as to call him a true isolationist, but it is clear he wants to pull back and that is a popular view. More technologybased, get you see a Democratic Party that is isolationist . Both sides of the political aisle have factions in their party that speed more to the needs of the domestic. If you look at the economy and our need to continue to engage around the world, opening up new markets will create more jobs at home. I tend to see a rising middle, if you will. In other words, America First is the wrong way to go . Putting the American Economy first, including a vibrant and robust engagement. I want to get the heart of the matter and i want to congratulate you, scarlett on that magnificent seminar. It was exciting for me to be in that room with an Asian Community and the Larger Global Community in transition within america within the diversity of bloomberg. To both of you, i want you to address this, what does white, oldline america, why are they so threatened by guys like you . I dont feel that way black there is a but there is a voice out there with within politics that is scared stiff of welleducated guys like you. Thats true. I dont i dont believe that assumption. , on. In jump in general are people who view the life there are people who view life as the pie is fixed and you have to fight over the scraps. I am of the view that the pie grows. Canou are the view that we expand the economy together, that changes your perspective. Then you are more enlightened than most people. We keep hearing that china and india are taking over our jobs. Are you moving to montana . I might. For the college. [laughter] is not so blackandwhite. Their growth is in part their ability to purchase goods and services. So, it does help to create jobs at home. That does not mean that we should not keep investing to stay competitive. 500 companiess p were founded either by an immigrant or the child of an immigrant. Why can we not figure out immigration and use that . Amen. It is a terrific question. I have said many times that i think we need to fix the broken immigration system. I have said this before as well, the publicans have to share the blame here. The opportunity existed to get some real fixes to the system. We did not get them. Maybe after the election. Im going to go to jeff flake , from arizona. A pinata, on the border, on the ball, he had the courage to move away from a traditionalist immigration republican policy. Do you think we will be able to get any work done on immigration . I think it is our best shot i am skeptical that at the end of the day we see big reforms, similar to the ones that bush and mccain were gone in 2007, but the reality is that it will be huge for our economy to fix our broken immigration system. Trade and technology, secretary clinton spoke about fair trade and she was aggressive as secretary of state with linking commerce. Has that been completely derailed by ukraine . Is secretary kerry unable to be more like secretary clinton . For presume that the rarity secretary kerry would be the issues in eastern europe, but that does not mean that the team is not moving the ball down the field on ukraine. There is clearly a lot of work being done with europe and with continuing work on the asian a committee. Common grounde between you . We immediately love to polarize it. Immigration. Immigration, i agree completely on the need for trade. I am disappointed, frankly, by the administrations lack of progress. I dont think it is the president s all. It is some of the democrats and some republicans, too. The reality is we have to come together on immigration, trade, and tax reform. Not only do i think we have an agenda Going Forward, but lets not forget the three areas where we have already seen widespread agreement. Just last week the president signed a data act. Eric cantor and mark warner aong others, basically in unanimous vote on both houses said they needed to open up a death to allow accountability and transparency. But in addition to that the jobs , which the president called for in his joint session of has had athe jobs act tremendous impact on the capital markets. If you look at that, that was also a bipartisan effort. All right. That brings us to our twitter question of the day. Our science and technology overshadowing the humanities . Tweet us. Our guests will stay with us. Surveillance, how did the botched rollout of obamacare impact the midterm elections . Canhis is the only thing i come up with. Does it reinvigorate republicans . We will discuss, coming up. On your tablet, your smart phone, and bloomberg. Com. Have a great morning. Good morning, everyone. To our guest host who worked with president obama as the nations chief Technology Needs extinct or Technological Progress and innovation . Clay christiansen, the disruptive christiansen, says that to understand how messed up washington really is what can we take from christiansen and from chopra and bring it over to the political morass known as washington . There are a lot of lessons we will learn, but the key is a series of handshakes and handoffs. We will find an emerging consensus on both sides of the aisle the technology and innovation can help us to improve, leading to handshakes between leaders and levels of government. The key is the handoff to a growing number of entrepreneurs and innovators, who are taking all of these opportunities on open data to the products and services to make our lives better. Tell me about the roddicks of technology. The antiintellectual strain of america there is a value to , the fear of fancy people from fancy schools, how do we combat that . You have a middle that comes together pretty well on both sides of the aisle. President herbert hoover, when he was secretary of commerce put together a vision of the associates of state, the government playing the role of convener, convening stakeholders on the internet to find ways to open up markets in health care and education. As applications on the right. Do we have a risk of an antiintellectual question crushing Technological Advancements . What you have opened up these opportunities, it can be impossible to turn off. The good news is that we will see rewards in decades to come. Do ap courses matter . Is the answer more physics . Im amazed the kids today that dont take physics. It is just as important to understand the application. Even if you dont want to take a physics course you are killing me. You have to have an opportunity for everyone to participate. Physicst have to take as a senior in high school . From my point of view you dont have to take ap physics, you need an understanding of the basic elements of our society, but to get to the level of an advanced placement course . Ethicals or Something Like that, we like to quote physics formulas here on bloomberg surveillance. This is a great hour, i want you to stay with us as we talk about the Asian American experience. Stay with us, it is bloomberg surveillance. Good morning. Good morning, everyone. David einhorn, of greenlight capital, look for that at 11 a. M. This morning on market makers. Fresh off his interview yesterday at the sohn conference yesterday. Good morning, everyone. With mia scarlet fu and adam johnson. Is with us, the author of innovative state. The Lessons Learned from private enterprise and what can your government do to be that are functioning as well . Top headlines this morning, adam . Casualties are riding rising in the u. K. Offensive. For Government Troops have been killed, along with 30 rebels. They will be sending reinforcements to Odessa Thomas a struggle to keep the port city out of rebel hands. Massachusetts had the first statewide Health Insurance in the nation, now they have to fix it or close it. It broke when the state changed to comply with obamacare. They had to shut it down and became the third state to join the federal Insurance Marketplace. Cindy crosby broke the longest slump of his career and the penguins beat the rangers, 20. He hadad the series, gone 13 playoff games without a goal. Those are your top or bottom headlines, as the case may be. Dont follow hockey, the cacophony of it is just great. You have so many spectacular teams and outstanding players going night after night. It is different from the other store the other sports. The basic analysis is great. Different hockey is a sport entirely. Like march madness over two months. I played hockey as a kid on ponds, but they put me in the goal. Better, theget goalie is the best skater, typically the best on the ice. People dont realize that. What are we doing here . Im lost. Lets talk about president obama taking a victory lap, with wounds still fresh over the botched rollout, he talked about it himself. Will democrats rally behind the president or abandoned him head of the midterms . Toormer a policy advisor mitt romney, specialist on Health Care Policy in this country, you are saying that 2014 will be worse for obamacare because of the political liability for democrats. Will we get enough of a read on whether the Affordable Care act is working by winter . From the perspective of the white house they want to argue that it is working fabulously. A lot of democrats would be smart to run as far as they can away from obamacare. Dont they will suffer the consequences. Let me just interrupt. What is the liability . Healthcare. Gov is emblematic of the failures of obamacare more broadly. People like to focus on the which will get fixed as we have people working on it. The bigger problem is the underlying policy, which is where we have to go. What is the Republican Party doing to change the conversation to how they can fix the Affordable Care act . I think you are seeing some thehe leadership talk about need for republicans to have proactive solutions. Developing, but the fundamental issue will be that we have as big law, the president and democrats supported it, and it has been a failure. They are not going to change their tune before the elections . The focus will be on the failure of obamacare, but the reality is that Going Forward talking about solutions will have to be important to be on 2014. Innovative state, a smart book im getting something done in washington, is the issue here just about complexity, Aneesh Chopra . Do we just have too much noise in Public Policy . Christ or technology we can simplify that. Do you agree . It can play a huge role if it works right. An example, the world the weekend we saw the rollout struggle, the government opened up the underlying data. Three kids over the weekend called healthe sure but because they were able to grab the open data and provide a Shopping Experience for the American People because the complexity was simplified my the release of the data. That i see, debate correct me if i am wrong, republicans say that it will get more expensive, peter or zag and democrats saying it will not, it will get cheaper. That seems to be a simple debate within the complex policy. What evidence do we have that the Actual Technology of obamacare, healthcare. Gov, lowers costs . Let me be clear, it creates a competitive marketplace, which put which puts pressure on the Insurance Companies to keep business down. A startup Insurance Company here in new york grabbed significant market share. One of the lower barriers to entry. Massachusettse in is that it in fact lower the cost . Massachusetts had some difference from the federal plan, but what we have seen from there is a highly regulated marketplace where premiums are not going down. Have people losing doctors and plans that they like. This year could be worse and letting it will be worse for obamacare the last year. Thank you so much for joining us this morning. A Research Fellow at the hugh hoover institution, lonnie chen. Ising up, the tiger mother now out with a controversial analysis about what traits determine success. The surveillance. Next, on surveillance. This is bloomberg surveillance. Lets get you some company news headlines, starting with directors at target, under pressure to do something the company has never done before, hire a ceo from the outside. As a casualty of massive data breach. Warren buffett told shareholders that he is game to do another buyout. According to data from bloomberg, three Food Companies may fit the bill. Kelloggs, craft, and general mills. Buffett has said that he likes simple businesses with simple earnings power. Credit suisse, finishing an investigation as to whether they help americans evade taxes. The deal could involve a guilty plea and a penalty of over one billion dollars. Yesterday eric holder said the Justice Department would show that banks are not too big to prosecute. That is todays company news. Theo me it is more about pressures from washington politicians to do something. Politically motivated. Jpmorgan, which we mentioned thater, the information came out on friday, the timestamp on the bloomberg p. M. ,ne was for 12 00 but in the defense of jamie morgan, they did not release a on fridayhiding it afternoon. The regulatory filing was publicly available, but many people may not have seen it until later on. An important distinction. They did not maliciously hide it. To take away was that the fixed income trading slump would continue. Thank you to our Bloomberg Team that routinely goes through filings for news. Yes. Well, we get up at 3 a. M. After all. To we start at noon . We start at 11 59, be honest. Can know play dates and no television create accomplished kids . People wonder how asian parents creates a mini math whizzes, whoing us now is amy chua, created a parenting manifesto. Was it a manifesto or tongueincheek . It is a memoir. It is supposed to be funny. A lot of people who read it think it is, but it does embrace away a parenting, for sure. I am a proud, strict mom. The idea was that you do not want to raise entitled children who got rewards for just participating. Aboutot of us are worried being an immigrant. Your children watch you, you are hungry. The parents of immigrants are insecure. When my father wore the same pair of shoes for 10 years, it made sense that i had to work. The nextgeneration unlike why, why should i do well . The two of you were incredibly eloquent last night at the Bloomberg Panel that we had on these kinds of challenges. It was fabulous. What is the worst practices of egypt evil asian mothers frome keeping children advancing in society . What is the worst practice . Are you joking . No, this is how americans feel. I think it is common sense and traditional american values. Hard work, not giving up, not letting your kids give up too early. I do think that there is something else. I think you need to be driven, right . Lots of children of wealthy parents are not because they are too secure, too comfortable. This were talking about earlier, the idea of antiintellectualism, something before we fight every day here, of having a smart , and maybe thats smart conversation starts at home . I think a lot of it comes back to that immigrant mentality. Do buy do you thirdgeneration . There is no more. Why is it that we give everyone an award . A blue ribbon to the first place and everyone else gets a ribbon . I dont know. America was never like that . What changed . Part of it was the success of america. In the middle of the depression, no one worried about selfesteem. Ironically, how can i cultivate selfesteem . Severed it is they from accomplishment. There are all these studies showing that it just doesnt work. Cant tell somebody. Nouriel roubini. Thats why you like or. Lets get it data check. Trade balance coming up at 8 30, but ahead of that futures are not doing a whole lot. The thing that everyone is looking at here is the 10 year yield. The rally kind of halted yesterday and we are still seeing its trouble a bit there. The 10 year moving up a little bit on the yield. The euro is stronger against the dollar. Good morning, everyone. Bloomberg television, Bloomberg Radio, look for all of our digital products, they are not countable. Particularly with podcasts on radio. Absolutely. Make sure you check out Bloomberg Radio plus, bloomberg tv plus. Such our guest host for the hour is Aneesh Chopra. The narrative of the American Dream is all about upward mobility, but there are some groups to thrive in mobility better than others. The bestselling author of the battle hymn of the tiger mother says that some cultural groups are just better than others, that is the case throughout history and that is the case today, that is what your new book is about all the, a triple package yourself you highlight certain groups, and you say at one point the history of america was about this hunger that has disappeared a bit. First of all, i dont think of some cultural groups are better than others, it is about the rise and fall of groups. It is very applicable. Asianamericans have sat scores 140 points above the national median, but by the thirdgeneration they perform no better than anyone else. It is not inherent in the culture, it is something about first and second generation. An incredible statement. Questionable package is the title of the book. Superiority complex, insecurity, flipping pages, impulse control. Can you explain what those mean . The first thing is a deepseated sense of exceptionality, like you are special. This can come from belonging to a group or apparent that makes you feel like you are special. If you only feel you are special and exceptional, you could be lazy. Add to that a dash of insecurity, which a lot of immigrants have, because they dont know if they can make it. Mormons are very much an outsider group. You combine that cents and you essentially get high expectations. We know that you can be great. That is the exceptional part. But you are not there yet. Impulse control is the perseverance. Ok, the triple package meets the reality of what we have economically. My morning must touches upon this. David brooks writes about the streamlined life. Not sure if students are less sympathetic to having meaning in their lives, but it has become more socially acceptable to present yourself as utilitarian and success oriented. Our guest host for the hour is Aneesh Chopra, former chief Technology Officer of the united states. You deal with packets that are about results, analytics. There is a sense that you have to have the results to back you up and it does not matter what the ambiguous qualities are that you bring along with the ride. Is that the case now . Quite the opposite. Context matters, if you try to scale. Does data allow for that context when we look at those numbers all the time . You want to draw insight from the data with creativity on your hypothesis and how you test it. The bigger point is when you take a look at the talent in our society, we have the wrong filter. Challenges,prizes, and competition, it opens up the aperture. Sir isaac newton could not solve the longitude problem in the 1700s. Today you see a similar problem. Ill watch mark watchmaker responding to a prize said here is how we design it. Harrison . That the idea of prizes and challenges gets to the talent in our society that may not be obvious. Pulling us back is this word, inclusive. How do you respond to the idea that we should be inclusive . I think there is a Positive Side to inclusiveness, the opposite being xenophobic. Is wherere right, that this sense of exceptionality comes in. People should be proud. Everyone is equal all the time . Completely relativistic. We do bloomberg, sir we do surveillance, we are exceptional. We have a great team and puts us together every day. And we thank amy chua for her time. The original tiger mother, the author of the triple package. This is our twitter question of the day. Our science and technologies overshadowing humanities . I was history, you . Economics . Biology and space engineering. Good morning, everyone. Newset screen, a lot of coming from ukraine, we will have it through the morning. With me, scarlet fu and adam johnson. Top headlines . Islamic militants have confirmed that they have kidnapped over 200 schoolgirls just last month alone. The leader of the militant group said that he will sell those girls. They have been waging a campaign of violence to impose islamic law on nigeria. Massachusetts had the first Health Insurance exchange in the nation, now the state will have to fix it or close it down. The Health Connection broke when the state changed to comply with obamacare. They may become the third state to join the federal Insurance Marketplace. A better year for Hedge Fund Managers, even though most do not admittedly beat the market. Magazine, theur 25 highest earning hedge fund inagers took home 21 billion 2013. Topping the list . Three point 5 billion in one year, those are your top headlines. In one year . I know a lot of asian parents who would look at that and say that is what my kid should be doing. Academically, asianamericans hit it out of the park, but what happens after the degrees . There is a distinction to be made between east asians who are visibly active in academia while south asians are doing better as ceos. What percentage are immigrants right now . Are0 of east asians immigrants. Part of it is a language problem. Worse, a lot of those parents push their kids into math, technology, thats great, but some of them dont want to do that. The nextgeneration, i think you will see a lot more rising. Some of theking of very prominent south asians who have done very well. If you go back 15 to 20 years , south asians who wanted to become start up ceos were shunned. They were relegated to the role of chief Technology Officers and not given the chance to shine. A few broke free, gave the , and ultimately meritocracy is playing a role here. Very quickly, why is it that on wall street we are so focused on technology . Media funny thing is the may not know, but the underlying operations do. Issuing prizes and challenges, finally bringing a lean startup culture into government. Shameless. Ok. Amy was not that rude. , author of tiger mother and triple package. We will be right back. Morning, everyone. Bloomberg surveillance. 11 a. M. This morning, david einhorn, talking on the investment world, his enthusiasm, maybe also on hedge fund performance. Look for that at 11 a. M. This morning on market makers. I am tom keene. With me, scarlet fu with me, scarlet fu. Lets start with apple. Keeping up with their tradition of generous pay packages, the angela or ends, came to apple after being ceo at burberry. Samsung, challenging the verdict him of their federal jury that agreed with apple. Sam and samsung had been awarded 120 million. Tmobile, matching their 30 per month pay cut plan, customers will get unlimited messaging and calling. That is todays news from the files of bloomberg west. Good morning, everyone. We are having a wonderful conversation this morning on the future of the nation, the future of our output, what it means for markets and the economy. Is with us, out of Johns Hopkins university and harvard, most importantly, his new book, innovative state, how new technologies can transform government. Alan mulally just took abbasid victory lap at ford motor. An aerospace guy in of kansas, he personifies the ceo route of technology. He gets the headlines. How do we bring it down to everyone watching and listening this morning . . Supportive thing is to understand if we can build on each others capabilities a platform, the idea that we have to have one really innovative government on its own is behind us. The key is a more open government allows others to bring that information to light. Bloomberg itself is an open government innovator. Take the data on the open it. Ngs, you make sense of the weather industry is a 5 billion industry built on government data. You advise president obama and you have a whole education complex, a bureaucracy that makes the court of Queen Elizabeth the first look rose at. The idea here of how we bring this down to just do math, how do we just start jumpstart cap logical progress in the minds of younger people in america . That is a larger conversation that starts with exposure. If you are a science or math teacher and you are volunteering to help the kids build robotics, you dont get extra credit. You are not getting paid. Where is if you are the coach, you get paid. You reward the differences. I am a proud supporter of these programs, but they dont get the same treatment as sports teams, even though they provide that opportunity for folks. The incentives are misaligned. Is this a bipartisan idea . Could it gain traction with republicans in the white house . The origins of much of this went back to father bush and his administration. And to clinton and bush number two. The Republican Party has changed so much. There is a strand within both that understand that if we open up a deck, get the foundation right, connect to entrepreneurs and innovators, we can fix the big challenges. We are looking for growth in the u. S. It is about health care, energy, education. If we can spark a data revolution, we could make a big difference. As anyone who is listening to you, myself included, would think, that is wonderful, but how would we do it . First we have to open information that has been in reserves. Medicare just released the information about how it pays doctors. That was a difficult battle for them to overcome. There was a lawsuit that stopped the release of that data. It has been overturned. Which is radical. There is a nostalgia in america to fall back to another time. We all remember the movie october sky. A National Science fair from the 1950s to me that is personal. My father was a judge at the fair that homer hitman was at. How do we bring back a that 1957 officer, joy . All we are worried about is who is going to be the new head coach for the vancouver canucks. Sports is the only thing that matters. How do we bring you back . This is a great role for the president in the bully pulpit context. He calls for a collaboration with the private sector, hundreds of millions of dollars, from discovery, intel, you name he does. Eate that organizations have been stood up in the last couple of years whose main focus is to find what works, community by community. It is a slowmoving, but it is happening. The president has created a science fair every year in the white house. Of the widely tweeted pictures is a president with that marshmallow cannon because inventedoung kid that the marshmallow cannon. Two weeks ago they used the marshmallow cannon. You are on season two. Starting season three. You are talking about blackwater. Totally different. [laughter] all right, the most Important Company you have never heard of. The Worlds Largest supplier of Health Care Products to doctors and veterinarians. You have probably seen your doctor use this companys stuff. Delivered 10 ly to 12 growth annually, even as doctors and hmos are getting squeezed. How do you do it . Thank you for inviting us here today. We are the largest provider of products to dentists, physicians, veterinarians. Prevention is a key part of health care management. Most educated generation ever, the baby boomers, they understand prevention is important, therefore they spend money and time with doctors and veterinarians. Aneesh chopra is with us. How do we use technology to better track prevention . That is important. You are the right man at the right time. At the end of the day, the way we go to provide better quality care at a lower cost, ensuring that there are less errors and better quality and delivery is through technology. The medical data record is critical, making some progress, but not enough. What are those stumbling blocks right now . It is not easy to put those systems in. There are symptoms, but they are not significant. Been a Movement Towards the installation of Electronic Medical records, but not enough for the office space setting. You are in the trenches of the application of the revolution of medical service, medical coverage. How do you respond to politicians going on about the medical care act . The you have got to get best syringes to a hospital in pennsylvania . Healthcare reform began 20 years ago with drg. The goal was to move procedures from the hospital to the office space setting. The hospital is the most expensive space to provide a procedure, number one. Number two, there has been a movement for a long time to advance Preventative Care wellness. Working fast enough . Who will pay for it . That is the big debate. Companies,eutical doctors, hospitals, taxpayers this is the debate, Health Care Reform did not start five or six years ago it began 20 with wellness procedures from the doctors office. Inc. , a strong namesake for you, thank you. Lets bring up the twitter question of the day. It has generated a lot of debate. Our science and technology disciplines overshadowing humanities . Here is the first answer combine is the key thing there. Liberal arts in that question. Do humanities, right . The idea is that the vacuum of humanities and the vacuum of chemistry history shows that excellence is at the intersection of multiple disciplines. The last answer is not a science and technology can bring nations together as one. Global citizens. Very good. Great answers, we are thrilled with those. Aneesh chopra, thank you so much. Come back again. Bloomberg surveillance on radio continues. In the loop with betty liu is next. Have a great morning. Is tuesday,ing, it may 6. We are live from bloomberg world headquarters, in the loop. I am betty liu. They are has agreed to buy the merck consumer unit for 14 billion. They are acquiring claritin. Letting you shop by hashtag, customers can add them to your shopping cart. Twitter teams up with amazon. Be spending more on twitter advertising in return. The counterterrorism hero, jack bauer, has returned after a fouryear absence. The new series debuted last night. We will hear from him in just a few moments. First, sergio is holding an the hills today, a fiveyear business plan. Matt miller joins us from that event. What is he expected to say about this fiveyear plan