It is one of those touchyfeely ones, but it matters. I know you would be looking at product prada. Suede blacke prada pumps. They are dangerous. They are very low ones, very officey. How much time do you spend on pradas website . I spend a lot of time. John did not think we would go here. Every edge you can get. You are killing me here. After the bell, joseph a bank , if you want to stick to plain old boring suits like the ones i wear. The nba finals kickoff tonight the heat. E spurs and it is the 10 Year Anniversary of Ronald Reagans passing. Will have aama private dinner with francois hollande. After that dinner, mr. Hollande will then have dinner with mr. Putin. Yeah, it is a ballet. Esther obama will not be . Ining with hollande and putin correct. This is like your third marriage, right . More like your third marriage. Thank you, scarlet. And stocks. Quities the euro, 1. 3615. Vix just above 12. There is a german 10year yield. The yield is higher over the toward 1. 44 dollaryen. Maybe a little less umph we are getting out of mr. Draghi. Here is the euro back 20 years, stronger euro. I would to just and mr. Draghi would dearly like the euro down here at 1. 25. Absolutely. I would certainly make european goods cheaper to the rest of the world. It has not happened. What daytraders tell me is that because the euro is so strong, there is no inflation. Theaois and inflation is enemy of currency. They have the opposite. , we will focus on this particularly the ramifications for the markets. We have a busy day. We have scoured papers looking at websites. Here is the front page with scarlet fu. A lot of company news. Sprint inching closer to a deal with tmobile. That is in the works could value tmobile at almost 40 per share for a total value of 31 billion dollars according to bloomberg and the wall street journal. An agreement could be announced as early as july. This goes to the idea that the number three and number four players could be a formidable competitor to at t and verizon. That would be the argument that usair and American Airlines withthe deal to compete united. You wonder how the Government Works as well, how they fit into the mix. And how will they change regulators minds . We have been through this before with telecom and they have not gotten anywhere. You wonder what the backstory is behind the scenes. What else do we have . Increase tensions at the french bank bnp by rabaa the french bank bnp paribas. Sparking an internal debate over whether top officials including the chairman of bnp should step down. With this as strange this has strained relations, the french side perhaps threatening we have to tread carefully. Mill, speculation mill that is fun and center right now. Had no numbers are firm right now. Mr. Hat is interesting is hollande will speak with mr. Obama. Who is mr. Obama going to speak to . I cannot figure it out. Call up somebody in new york city and say dont do that . Story isst frontpage an internal probe of General Motors delay in recalling the vehicles, the defective cars. It is expected to conclude that there was no concerted coverup, but that managers failed to make connections and act on evidence of problems that are now linked to one dozen deaths. The ceo of gm, mary barra, is expected to take new steps. In other words, there was no grand conspiracy within gm, it may have been sort of siloing individual managers. Well, gm concluded that. We should note that. There are expected to be dismissals from this whole thing. There will be fallout, and mary barra will not be one of them. You have an accident, somebody dies, and it is because of it is hard to fathom. They will try to untangle all of this, that coming up at 9 00 a. M. We have had a big day with the European Central bank. Right now we need to begin our coverage. Frankfurt, germany. The ecb and mario draghi front and center this morning. In less than two hours we will know whether he will put his money where his mouth is and lower Interest Rates. Guy joins us from there. What has been priced in so far . Probably a rate cut or a series of rate cuts. Article here is the deposit rate. We will go negative. The question is how far negative are we going to go because there are potentially unintended consequences. If the banks do not pass that onto their customers, potentially you could be in a situation were that hits profits. You are talking about bnp paribas at the moment. They need to get that profit going, and that could be a problem as well. It could also affect the money markets. So they had to dip their toe in the water. It will be a very small deposit rate, fractionally 30 very quickly, how unified is the European Central bank panel behind president druggie behind president draghi . To ratenk when it comes cuts, bundesbank is on board. Maybe they are on board with some sort of longterm refinancing operation that will force more liquidity into the system. But the european banks do not need liquidity, they need capital. That is the problem here. It is when we get off asset per juices that i think off asset purchases that the problems start. Toe sort of buying of small mediumsize loans maybe that would work. I think we are on board, the is there, but beyond that i think druggie will have problems. Any idea about security purchases by the ecb . Stage, i think i see what youre talking about with liquidity operation. Like the bankheme of england put through, we do not know how that is going to work. If you are coming onto qe, we are so far away from that at this stage, talking specifics it is probably too early. We still do not have systems in place and the plumbing in place for regulators to allow the Central Banks to come through and buy assets. They have a problem on the constitution site in germany. I think we do not have the system in place to deal with buying small to mediumsized loans. Guy johnson, thank you so much, in frankfurt. Expert oneconomist the labor economy and the belief in what the ecb will do to the are thrilled to bring in Jonathan Ferro this morning with bloomberg as hen london as we visits new york city this month. John, what is your reading of situation this morning as we go to this momentous 7 40 five announcement. Let me cut through the noise. For the last five years, the ecb and particularly but despite putesbank has tried to pressure on. The pressure is on bundesbank because they cannot carry on and let it mum along. 0. 5 , that is where inflation is now. Bring up that chart right now. John, how afraid of the new level of inflation, the low the double oft is fear that mario draghi has . Very fearful of what the number is. You do not know the unintended consequences of having a deflationary scenario, especially when you are worried about the ability of companies to pay back loans. You were a freshman at brown years ago and you learns how to spell asymmetric. The downside is more damaging than getting it wrong to the upside. That theetric is it ecb today . Oftentimes Central Banks feel they can deal with an Inflationary Pressure environment. Uncomfortable dealing with the need with a deflationary environment. It was suggested that druggie will disappoint, that he will be more timid, more gradual that draghi will be more timid. Like guy potts point. We are nowhere ready for quantitative easing in europe. For those people who are thinking quantitative easing, no. But again, i would go with asymmetric. Going into a slightly negative deposit rate is kind of an interesting experiment in terms of monetary policy. We do not know the unintended consequences of that as well. Very well. Right now, lets get to company news. All right, let us start with amazon, finding to introduce a smart phone later this week according to a person with knowledge of the matter. The company is holding an event on june 18 for the product unveiling. That would ramp up amazons rivalry with apple and plunge online retailer into the device market. 54 to 34ncome fell million in the First Quarter from a year earlier. An initialonsidering offering for later this year, and there are buyers looking as well. Glaxosmithkline has reached a payout. Millionl shell out 105 to california, new york, and 40 other states that it is legally promoted as not and other antidepressant drugs. It encouraged uses of drugs not indicated on their labels. Also from using paid doctors to promote its products. It is this mornings company news. Coming up after not one but two big errors and corrections on key u. S. Economic reports, can we really trust the numbers . We gave the chinese a hard time, but what if we have a problem in the u. S. . We will verify the accuracy of u. S. Numbers right here. Surveillanceerg. Good morning, everyone. Bloomberg surveillance. How did a 4 yearold company overtake apple in china . Find out on a special edition of bloomberg west. Today at 1 00 p. M. Eastern time. This is bloomberg surveillance. Tom keene with scarlet fu and adam johnson. So exciting we are going to look at data economic data. In i sm we trust when it comes to a snapshot of u. S. Manufacturing. Earlier this week the institute for supply management had to issue not one but two corrections of its main manufacturing index. It went to Computer Software for mistakes. Note right put out a afterwards, and your take on this was that is why pencils have erasers. Yes, maam. Absolutely. Is this an indication of how over reliant we are and reactive to any number that comes out . I like the term reactive. We are very reactive to these numbers. It is a challenge for us. We look at the numbers specifically. Another problem was not only were the numbers revised, but there was this open space of time when people realized the number was not right, and we did not get the new number. I want to point out, dr. Silvia your report went viral two days ago. We are talking to the data guy for all those clowns who say dont trust the people in washington. John silvia totally disagrees with the disparagement of the industry. Regardless of what happened with the ism report, it indicated we have growth ahead but no necessary boom, right . Good economic growth, no necessary boom. If you look at the purchase for germany, that is the purchasing managers for germany, that is beginning up that is picking up. For france, it has weakened. Is mario draghi fighting the wrong war this morning . In terms of . That the economy is doing better in europe so he does not need to act . The economy in germany is doing better, not necessarily france. s point aboutan the euro is key. It is the euro that is the story. Jonathan and i discussed the danish situation. They had a negative deposit rate and it did not make any difference in terms of the economy and lending. Scarlet, i apologize for getting the script you only had to watch the first period and overtime really. The same ism report also indicated rising Inflationary Pressure. If that is the case, why is everyone so worked up and worried about this inflation . I think mostly disinflation in europe. I dont think there is a disinflation problem in the United States. Shelter prices, rental prices are going up three you talk about higher input prices. A problem is that versus higher labor costs . Sector ande service its wages. Concert oft be too the input prices are going up . No, it is a squeeze on corporate profits for manufacturing firms. We want to fold in the ecb to all of that. Coming up in the next hour on surveillance, full coverage of the ecb rate decision. At 7 45 eastern time, mr. Draghi will hold a News Conference. His is bloomberg surveillance from Bloomberg Television. Good morning, everyone. Bloomberg surveillance. Tom keene with scarlet fu and adam johnson. Here is mr. Johnson with top headlines. Some 4000 protesters marched on sao paulo last night. They are calling on the government to provide more low income housing. The Homeless Workers Movement organized the march. It was carried out in a peaceful manner. House Speaker John Boehner anything but peaceful on this issue calling on the president to do much more to fix the department of Veterans Affairs. He sent a letter to the president asking him to support legislation that would give the secretary of Veterans Affairs more authority to fire people at the agency and give people facing delays to see doctors in ability to go elsewhere for care. And the l. A. Kings take one in the stanley cup finals, defeating the rangers 32 in overtime. Game two of the bestofseven National HockeyLeague Series is set for june 7. And then the series moves to new york, to Madison Square garden for the next two games. Those are the top or bottom, if you prefer headlines. They got off to a good start with a 20 lead. The next golda shorthanded. They can play out of the kings. A busy morning, but you have an interesting morning. Spain is moving on as well because juan carlos, the king, abdicated. Charles powell, a biographer of juan carlos, writes that abdication is his final gift. I thought it was a nice take on what the abdication means and the significance of it going forward. Jonathan ferro joins us from our London Office. What is the difference between royalty in the United Kingdom and royalty in spain . There is a sense of National Pride in the u. K. You have to look at the quality background. The king at the height of austerity in spain, guess what he was doing he was on a safari hunting elephants. How do you think that went down . Not very good. You have the monarchies with all this wealth and the rest of the people struggling. Is he beloved by the spanish people . Elizabeth as an generalization of being worshiped by the rich people. What about in spain . Has changed. K. It somewhat. I know you are a big fan of will and kate, and that has certainly helped the monarchy. Have you hugged maybe george . I have not met baby george. We are going to reach out and ay to book baby george as guest host. Coming up, hockey fans rejoice. We will show you how to watch the stanley cup finals in style. Coming up next on bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. It is that time in brussels. Somebody is missing. It is like sesame street. What is that song . . Ho is missing this is the g7 meeting about an hour and a half ago with someone not they recut all the patches on their bloom blazers on their blue blazers. G7. They crossed it out with a big sharpie. That brings us to our twitter question of the day. What should be the top of president obamas twodo list todo list in europe . It is bloomberg surveillance. Im tom keene. We diverge. Here is scarlet fu with the most important story of the day. Back in the day, scoring luxury box of sweets for a big game was all it took to satisfy a client. Now tickets to the game are just part of the experience. Has securedan sports event packages for 20 years. The one he likes for accounting, a trip to london for his family. Tickets to goldmedal games. Price tag 350,000 dollars, which includes the 18 commission that his company pocketed. What kind of access can he get to this stanley cup finals . I have my basic wish list prime seats, hang out from some of the champs of the 1994 champion rangers team. But it has been 20 years since the rangers made the finals and i want more. Can i go into the locker room . Very possible. Can i ride on the zamboni between the first and Second Period . Definitely. Can i get mark messier to skate with my kids and give them shooting tips . Dayf you want to do it next or prior, absolutely. He stumbled on the business two years out of college while selling ads for a sports magazine. Extras were all that mattered. The easiest part of his job is getting tickets. Designing and fulfilling the rest of the experience, that is the value added. Even with best access, some things are just offlimits. Can i hitch a ride with the day of the game . Probably not. That is a difficult one. He has his routine and i am sure there is no money in the world that will keep him from winning the stanley cup. Prizes nsolation dr. Does mr. Lundqvist have protection from you . I am all good. Bam. Want this bam, bam, man who cans is the hook you up, robert tuchman. I want you to demystify the whole Retail Prices here. The l. A. Kings home games are a little bit cheaper than the new york rangers home games. When is the best time to pick up a ticket for the series . Good question. Right now if you go to los angeles, you are looking at half the price of the ticket. The reason is the kings were just in the cup two years ago, so a lot of people have already gone to the rangers. Ticket, i would say definitely do it right before the game, meaning hours before. Most tickets these days are emails, so you can to get up a couple hours before. That is when prices tend to drop. Tell us where you get your inventory from. Are you buying up these tickets hours before the game as well . Yes. First off, we go to many different sources. We go to basically players, coaches, teams, individuals. Most of the people who have access to tickets, they can easily put them on the secondary market. We look for all different places. You mentioned 15,000 to 20,000 per game for all access. Exec they what access did Steve Ballmer by . I think he overpaid by probably 1 billion for that. At the end of the day, the really is toe got become part of that exclusive club, and he always wanted an nba team. Except he does not have the stadium or the television deal. Throughst buying a team he is, and in all honesty i think he wants to be part of the league,. Youhe end of the day if look at it with the clippers story, i was shocked even being in the business how much he ended up paying. Wouldve Steve Ballmer looks at what youre doing and decides that the clippers can come up with their own package for fans. Is that a threat from the league . Most leagues are looking. So easy to watch sports on tv. It is comfortable. They need to create experiences added value, meeting players. They do not do that, they will lose those fans. The experience of john silvia from wells fargo it is a community urinal. These places were barebones. There is a culture with my Boston Red Sox versus the culture of l. A. Or new york. Which city gets the best . I worked at fenway park during my summer when i went to school in boston. Until they found out i was a yankees fan, and i literally had to quit because i was getting harassed. Your client two tickets to go to the game and maybe you would buy them a hot dog and that was good enough. Then starting in the early 1990s, when i started my First Business in the mid1990s, this whole client entertaining, keep upping it one step at a time, really came into play. It used to be two tickets and it was good enough. Not anymore. Forgive my ignorance, but what is the difference in effect between scalping, which has a negative connotation and what you do . You know what, at the end of the day there really is not much difference. But 20 years ago when i would talk to teens or two teams or individuals, where are you getting that ticket . You are scalping. Then came stub hub and ebay. Then everybody was doing it. This is fun, making twice as much money when i am selling my ticket. At the end of the day, what we do right now, we like to think we created an entire experience and there is hotel and transportation, but not much. That is the key. A lot of people can scalp, but tickets are not the issue. Tickets are the experience. It is that package. That is what is changing. It used to be back in the day getting the ticket was the issue. I had times where i was sweating waiting to get a ticket. Scarlet, excuse me longer lager beer . What is in it for them . Do they rely on getting paid as part of their income . A lot of the players and a lot of the guys once they step off the Playing Field and are looking to what am i going to do, how am i going to take time out of the house this is how they make their money. Time, to10,000 at a sit next to you at a hockey game. I can get them cheap, much cheaper than his brother. Thank you very much. Did you have fun doing this . You bet. Actually, going to the game would have been even better. For scarlet, i might have to make it happen. We will see. Way back. And i go we went to high school together. Talk about access, right . Thank you so much, robert. Coming up, you might be surprised, there are concerns about chinas economy. The chinese economy is doing just fine. On yourlance streaming tablet, your television, and bloomberg. Com. Good morning, everyone. Bloomberg surveillance. Stay with us for the European Central bank decision, and later on, Bloomberg Television and radio, the draghi press conference. Tom keene with scarlet fu and adam johnson. Other headlines with adam. French president francois the u. S. S the authorities are seeking 10 billion to settle allegations that bnp transferred funds for violation of trade sanctions. President hollande plans to raise the issue when he dines with president obama in paris. 4000 protesters marched in sao paulo, on the stadium that will host the world cup opening next week. They were calling on the government to provide more low income housing. The Homeless Workers Movement organized the march, which was carried out in a peaceful manner. Slammed into a Southern California neighborhood, exploded into flames. Amazingly, no one was hurt but the gist but the jet destroyed two homes. The pilot was able to bailout and landed in a nearby field and was taken to a hospital for evaluation and released. Those are the headlines. To get to our single best chart. The takeaway from the single best chart is that the Chinese Communist party is thriving, showing how recruitment levels of University Students are at an alltime high. These bars track the number of students who are members. The yellow line shows the upcent of students that make total membership. The enthusiasm dropped off after 1989, but the party made a big comeback in the mid1990s. A number of College Students in of collegee number students in china has skyrocketed. This chart is from the economist. Blank areas where they do not have data from the communist party. But the question is, why are they so bullish on the commonest Party Membership . It has less to do with politics with jobto do possibilities. What do you get when you join the communist party . Do you get a decoder ring or swag . Im serious. When i travel around china for 10 days with a film crew 2. 5 years ago, i was told there was effectively a twotiered price structure. If you had a connection to the commonest party there was one price, and if you did not there was another. This is anecdotal. Look at who has done really well in the country overall. People with connections to top officials. They are presumably members of the communist party. I was reading a book over the weekend, the peoples republic of amnesia. She pointed out that the communist party in china has 85 million members. That would make it the 15th most populous country in the world. Selective because it rejects six new members for everyone it accepts, and it is a fairly young group of people. How do you fail out getting into the communist party . Buy risk scandals. You have to have really good grades to get in, apparently, if you are a university student. This is fascinating. Do you have to know about lenin and marx . I dont know if there is that much emphasis as there used to be. But the idea of being part of the commonest party in order to get a job is fascinating. There is such a focus on making money. Everyone wants to make money, so it is not like we are going to share all this stuff. It is like be a communist and make money. That is capitalism. Lets go to photos. Top photos. We are going to keep it with china for a moment. The number three photo, able in hong kong commemorating the 25th anniversary of what happened in tiananmen square. This was the only remembrance on chinese soil. Mainland china, they were not remembering it, it was just in hong kong. It was just in hong kong, which is part of mainland china, but it has gotten more divisive over the years. The softbank chief executive officer shakes hands with a tepper robot called called pepper. 85 ofk owns about sprint, which in theory a 30 billion handle . Phone bills go up, is that the summary here . They are going to say it is not. They want to compete with verizon and at t. We will see. Doing what i am not sure yet. It is a little disconcerting having a robot dollar. This is part of the whole American Labor market not dilemma, but fear that is raging out there, that all the jobs will be automated. John silvia with us from wells fargo. I dont buy it. Only in dangerous situations. The media loves these stories and images, but i dont see it. Job, no, but yours i am not so sure. Thank you. President obama staying at the Marriott Hotel in warsaw. He was caught pumping iron in the private gym. There he goes with the clinch. Look at his expression i think he is having a little fun with this. You would not see Richard Nixon doing that. The guy is in shape. That is solid. Lowing off a little steam. Can you imagine the level of timeout from the secret service this morning, letting this happen . By the way, he is the president of the United States. Not a slam against marriott, it is a fine hotel trade but you would think he would be at the palace hotel or something. He is a regular american guy. The white house should turn that into a workout america obesity thing. America, get moving. Our twitter question of the day what should be at the top of president obamas to do list while he is in europe . There are a lot of possibilities on that one. Heis in transit, and then will be dining with french president hollande tonight. You and the french. Coming up, tomorrow is job day in the United States of america. Mobilee will discuss the Talent Shortage and what that means for employers. This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. This morning an important issue on Technological Progress and a word i hate so much, innovation. It is their annual global tech issue. It on your newsstands tomorrow as well. An important issue on an important part of america. This is bloomberg surveillance. Scarlet fu with tom keene and adam johnson. You company news. Facebook, google, microsoft the h Companies Represented two weeks after the house of representatives passed a bill to end parts of the government buy program. The bill came up a little bit short. Chinas government is serving a blow to microsoft by telling officials in one province not to use windows 8 software. That marked an escalation with a dispute with the u. S. Over spying and hacking allegations. After getting a government aftercation, this comes prosecutors charged five Chinese Military officers for allegedly hacking into the computers of u. S. Companies. Chinas government last month said it will that Technology Companies operating in the country. And amazon is taking on apple. The company is planning on introducing a smartphone, according to a person with knowledge of the matter. Amazon tweeted it is holding an event in seattle hosted by jeff bezos for a product unveiling. A smartphone from amazon would ramp up its rivalry with apple as they go headtohead on devices and web services. I am glad you brought that up. I saw that yesterday. What is taking them so long . We have been waiting a long time for that. There it is. We will see and amazon phone. Lets go back to what we see this morning and tomorrow. Economists are focused on a tightening in parts of the labor market. They are listening especially to Jeffrey Gerace emmett the not only at the lower wage Service Sector jobs at critically higher wage skilled labor. Also joining us, john silvia of wells fargo. Jeffrey gerace, let me start with you. What has changed with your research and manpower in the last 90 days . Things. Where are the job shortages and what is going on, that is critical as ever. On top of what we are seeing in the lack of participation in the labor market and employment coming down, you would start to think it would be Wage Inflation, and we will talk about this in a few seconds, but we are not quite seeing that yet. We are getting mixed signals in the market. At the same time, we are not seeing the Wage Inflation. What will it take to see Wage Inflation . You have to look at what is happening with a true growth perspective. We are seeing a lumpy gdp, and that is what is causing the employers to say, you know what, i am going to be very cautious. No anticipatory hiring but solid plans. But they keep trying to stretch them out. Gdp growth, weat will not see Wage Inflation. Labor,mobility of parsing of labor are we one america, or is there a subset that manpower works so much that some are doing better but others are still struggling . It is subsets all the way. When you look at this the at the labor statistics number, they have a table on hourly average earnings. Those are significantly different by subsets. John, i am intrigued by the conclusion of your report that manpower. Com top five reasons u. S. Employers are having difficulty filling open positions number one is lack of technical competency. 47 . How do Companies Deal with that . It is very challenging. You are seeing in the top 10 toughest jobs, the skills of engineers come it is competence. Companies are in a conundrum about how much of the training do they put forward are there is a theory that says if companies were training more they would be able to bring those people into the workforce, but the margins are thinner. Companies are putting more money into training, but they are asking for more ready kinds of people and the market is not delivering that to them. John, how do we deal with that . Market . What is the are we talking about college education, Technical Institutes . The other issue is i know a lot of German Companies in the United States try to get young people as technicians working as an apprenticeship in a Journeyman Program over time. Maybe colleges and Technical Institutes can respond better to what the market needs, but also companies themselves can bring people in. Jeffrey joerres, thank you. He is in milwaukee. Forjohn silvia, thank you joining us today, with wells fargo. You will continue with us for the next hour, Jonathan Ferro . I am excited. Do a big forex report for you now, showing that before this meeting, the eurodollar, 1. 360. We will have full coverage in the next hour of surveillance. We will be right back. This is bloomberg surveillance. Actions speak louder than words, mario draghi and the ecb attempted to fight off deflation. If you care about needs president hollande to speak to president obama about the damage billion fine. I and video content. This is bloomberg surveillance, live from new york. Joining me is, scarlet fu when adam johnson. Our guest post, managing director at Westwood Capital. Age ofk, the oversupply. Before the ecb decision, lets get to our morning brief. German factory orders rebounded in april after the biggest plunge in more than a year. Signaling growth in europes largest economy remaining on track. Aboutcision comes out in 45 minutes. In the u. S. , 8 30, initial jobless claims. Households change in net worth. A couple earnings guidance. Prada just came out. S on top and bottom line, net income of 103. 5 million euros. Both numbers are lower than the most bearish estimates. Continues the retail story. Even on the height end. Results in 13 years, 13 years. And a decision, not out of frankfurt. Out of the u. K. , it is keeping its benchmark Interest Rate at. 5 . And keeping its asset Purchase Plan at 375 million pounds, no change. 7 45. Cal point is take rates toht negative territory, that is the forecast. After the bell, a couple more earnings including joseph a banks. Off tonightls kick between the miami heat and the san antonio spurs. It is the 10th anniversary of Ronald Reagans passing. The president began his day in brussels and will travel around noon eastern time to paris to have dinner with francois hollande. Have dinner, obama will a separate dinner with mr. Putin. Francois hollande is like a bad marriage. Two dinners. Or three. Awkward is the correct word. Maybe we need awkward company news. Sprint is not awkward, getting closer to an agreement on the price and structure of an acquisition of tmobile u. S. , according to people familiar with the matter. It would value tmobile at 21 million, leaving deutsche stake in thea 15 combined company. Gm will reveal findings of its investigation into why it took more than a decade to recall vehicles with defects linked to 13 deaths. Mary bharat will be holding a meeting with employees at 9 00 a newsstern followed by conference. Tensions at the empty part about s tensions at bnp pariba sparking a debate over whether the chairman should step down. Straining relations between u. S. And france. Francois hollande set to confront president obama at a paris dinner. In 45 minutes, mario draghi will make history with some form of accommodation to avoid deflation and jumpstart growth. There will be a press conference at 8 30. Headlines in the vicinity of 10 inutes to 9 00 a. M. Daniel will say oh, that is what they did. He has seen this before and is author of age of oversupply. Joining us as well, we talk about vimeo. I turn to you. Let me start with Martin Feldstein yesterday saying mario draghi will disappoint. Do you suggest we will be disappointed at 9 00 a. M. . It is not odd he would say that, his view is inflation is understated. He believes that about the u. S. And europe. He is assuming that the central bank in europe is feeling the same way. I do not. You disagree with feldstein . Absolutely, we had a conversation recently and it comes down to the issue of whether or not to believe the data. John herman at mitsubishi, one of the best people i know with the granularity of the data. He made a seachange call yesterday. We worry that expectations have anden lofty for 2014 possibly 2015. We cut our forecast to a dan 3. 5 . Like 2. 4 from the optimists got crushed. Look what is happening in the bond market. I sat here january 6 and said the bond market was oversold. Of course, the trading range moves down 50 basis points over the year. That is a reflection of the global macro situation, not micro markets and country issues like in europe. You can make a story about germany sometimes, not all the time. A great story about germany. There are 17 countries in the eurozone. What is important is is is not just about europe. This ecb announcement really. In to the u. S. Can we have a u. S. 10 year at about 2. 58 with france down to 1. 82 . You have sufficient capital chasing some sort of feel, not high yield. We have a levels of economic nations. In advanced one thing people are not pointing to but they will later is the devaluation in the rmb. China is a fighting slowness. The living currency. Manip ulating currency downward. That is not a new story. It has only been about a 4 5 devaluation, if that goes to 10 it is a new ballgame. The ecb is not discreet from fed action. U. S. Companies, ceo of vimeo, the video sharing site. We will get to vimeo. We areyour take on all talking about. The ecb decision on Interest Rates, what means for treasuries. To treasury yields affect you, help you or hurt you to have such a low bar . Are notnet businesses frequent users of the debt theet, particularly not great debt markets. We are exclusively equity backed businesses. Vimeo is no exception, we are a held company within a public company. Entirely funded by iac. Itm a borrowing perspective does not affect us directly. The a macro perspective, Macro Economic environment is something we operate within like any other company. The growth of Internet Services like ours are still in the grand scheme in the infancy. Defy overall tapin this and economic growth. However, we are a paying service so we want the Macro Economic picture to brighten. For so many people, they think of vimeo as a free service. You do have a premium model. For the majority of our users, we have about 170 million total viewers per month, most of them are watching free video. It is a premium subscription model where the upload or of the video purchases upgraded a year. For 60 or 200 is your goal to capture cable cutters . We are moving in that direction, the core of vimeo was a tool set for creators. We have evolved into allowing the creators to earn revenue by charging for video. They are offering the video to viewers and we are seeing great uptake in terms of viewers buying from these creators. Vimeo, with that large audience of 170 million, is a global content creator. Is youtube your friend . We arelso really think doing something different. I sort level we compete. Video Upload Service but the environment is different. ,ith the analogies works youtube is similar to a broadcast television environment. Free content, ad supported. Is akin to a premium cable environment. Generally Higher Quality and it has premium content with no advertising that you pay for. It is curated. It is. It is a cleaner, less cluttered experience. Dan . Similar on a clearinghouse level to other businesses that have moved through the internet space. You are trying to attract buyers of videos and watchers of videos. If you become that central clearinghouse, that gives you premium value. That is right. It is the clearinghouse environment and model. Kerry trainor of vimeo. To the ecbas we get decision. A data check. On s pchurn, unch futures. Euro dollar, 1. 3608, weaker in last 24 hours. Yesterday, people pulled back from draghi drama. At 7 45 we will see. The drama began weeks ago when he promised he would come to a decision. We will talk more about vimeo, Kerry Trainor is with us. Good morning, bloomberg surveillance. I am tom keene. This matters now to daniel , author of the age of oversupply. There has been an oversupply of analysis. Navelgazing and rewriting of history by the former secretary of history tim geithner. A study of the past is important, there is value in looking back. What does mr. Gardner get right . Ofhe got right the necessity stopping the bleeding in the Banking System. When he got wrong was housed do that. One, he took a victory lap on the issue of tarp, the bailouts up banks. He goes into this discourse about how this was the best of all possible bailouts given long regulation. I believe he was wrong on both counts. The victory lap was certainly the wrong thing to say. The banks paid back tarp, which they have, it comes at absolutely no connection to the efficacy of the policy itself. The bottom line is the fed has been pumping over 70 trillion of lending into the Banking System during that period. Trillion of lending into the Banking System during that period. As we look to the next crisis, we still have to deal with multiple institutions and multiple people in the room. Tim geithner is only one voice. It is a powerful voice during time in the obama administration. By the time Larry Summers left in, he was the only Economic Voice and he is not an economist. He was very close to the president. A president who does not have a of economic theory. He was pushing him interactions, some of those directions involved the week programs. Crisis, we have a phd in economics or someone like an eclectic with background. What is your to do list for the next crisis . We had a go by, the savings and loan crisis. I remember talking to you about the seven years ago. We look back at that period and realize we were out of the soup by 19 94. Having plowed through bad assets. The minute of this crisis was far greater. We didntop up need to prop up the banks that the notion of doing a transfer from savers to investors of huge amounts of money on that scale, i am part of a study that has determined this will go on for a long time. The age oft, oversupply. Sprint and tmobile close to a deal. Bloomberg surveillance, good morning. Good morning, bloomberg surveillance. A busy day. Our twitter question has to do with the president what should be on his todo list as he travels across europe . I think he is on his way to paris . Presumably, he flies to paris and then well have dinner tonight with with 14 people. They canent along, talk about ge trying to buy alstom, bnp paribas. That is our twitter question of the day. bsurveillance. Good morning come i am tom keene. 28 minutes away from the ecb decision. Lets go to top headlines. House Speaker John Boehner is doling for the president to more than fix the department of Veterans Affairs. Asking the president to support legislation that would give the secretary of Veterans Affairs more authority to fire people and give veterans the ability to go elsewhere for care. Protesters marched in sao paulo on the stadium that will host the world cup opening match next week. Calling on the government to provide low income housing. The Homeless Workers Movement organized the march, which, like protests before it, was carried out in a peaceful manner. The la kings take game one of the stanley cup final, defeating the rangers in overtime. The bestofseven series game two is set for saturday. Then the series comes to Madison Square garden for the next two games, i think that is saturday night. Figure out where youre going to watch the game. The rangers have established they can play with these games. Goals in the first. It looked great until the very end. Not bad. Turnovers, we have got to fix our turnovers. There are the top headlines. We will be watching that game, coming up. Content is king, people pay for it. S kerry the bet vimeo trainor is aching. Investing 10 million in licensing deals to bring clips to his website. Hbo, hulu, netflix has content. How do you compete against these guys . Vimeo has a unique position. Has established itself as the quality video sharing platform. Where it fits among those ervices, youtube is an open platform, so is vimeo. Premium, ad free environment of the other Services Like netflix or hbo. We view ourselves as the combination of premium, ad free environment with the openness of the internet. Any creator can upload content anywhere in the world and offer it to any viewer at a price they choose. Revenue. Ake 10 of the we think we offer the most premium environment and the most control in the greatest economics for creators. Are you willing to spend to get big name talent to use your platform the way netflix did with kevin spacey . It is early. Is absolutely very similar. As i mentioned, with the benefit of being open, not only can we and with established globally recognized names, we are a service to any creator who wants to upload. Your world is all the rage. Vimeo this, vimeo that. Charts on the reality of what is going on. What keeps you up at night . Said people watch tv and movies, what keeps you up at night . For vimeo, we are in the position of we have a vision for what we want to build and we have to build it first. Do people want that vision . See from these you creative community, think about the explosion of independently uploaded video do i want to watch that, i cannot get there. Expansion of viewing habits is something that is pretty shocking. Even from the 1950s to today, the expansion of the number of hours of video your average consumer watches daily is pretty staggering. And the diversity of the Consumption Habits continues to expand. Think about the analog of television. You go from four broadcast networks to hundreds. The internet is one more outlet. Contentcombination of that is now accessible on peoples terms. An explosion of content people were not getting access to before. High maintenance, it has been a huge hit. Part miniseries, each one is six minutes or 13 minutes about a drug dealer in new york. People love this thing. The first 13 episodes are three, the next six, you will charge for. Why are you sure people are going to pay . High maintenance is a wonderful example of native web created the. To put outvimeo their story. We were fans and now we are business partners. They built a really exciting following on the vimeo platform. They represent a creator that loves the idea of building a business but theyre not comfortable with advertising. We are the perfect fit. We know where theres an audience and we think there will be demand to support by career. Kerry trainor, ceo of vimeo. Coming up on bloomberg surveillance, lenders are loosening their grip on credit. We have seen it with home loans and home equity lines of credit. Maybe they are going back to risky practices. Is that good or bad for consumers . Explore with will the ceo of lending tree. This is bloomberg surveillance, streaming on bloomberg. Com. Say bloomberg surveillance. I am scarlet fu with tom keene adam johnson. Headlines. Y news increased tensions over franks biggest bank, bnp paribas. Hollande says a 10 billion fine could threaten the stability of frances financial sector. President obama this evening. A noncasht record impairment charge if operating results continue to decline. Sales dropped 2 . J. Crew is considering an initial Public Offering for later on this year. Glaxosmithkline will shell out 105 million to settle claims it is legally promoted as the and antideep present antidepressant it i llegally promoted asthma and antidepressant drugs. In the New York Times, Craig Moffett wants to spoil the party. Formally with sanford bernstein. , forget about it. He joins us on the telephone. In the New York Times this morning theres a 10 likelihood washington will say no. Why . Good morning. Think everybody is racing to get their deals in front of the doj and the fcc. Time, the doj and sec are reviewing comcast and Time Warner Cable and not at t and directv. At t and directv. They think they have a better chance regulatory lead to have all these deals considered at once. If you think about the politics of this, it will be very hard or doj to the fcc approve all three deals, it look like they were asleep at the switch. Or reject all three, they will look obstructionist. They will have to pick and choose. It looks likely the odd man out will be sprinttmobile. Craig moffett, explain why my cable tv bill or phone bill will not go up. Sprint ands of tmobile, they are trying to make a relatively novel argument. Which is that they will be a super maverick. Hyper aggressive with price cutting. Sell toa very difficult the department of justice. Thank you. Andvery bit of history microeconomic theory will tell you that more concentration leads to higher prices, not lower prices. Explained the difference. AirwaysAmerican Airlines was going to the doj and said we need to combine in order to compete with united and delta. What is the difference between that, going from 423. From 4 to 3. Softbank and tmobile coming together to compete against at t and verizon. It was not truly four to thre you have southwest and jetblue. You really have to look in that case at individual city pairs. Got right down to it and said ok individuals city pairs, are we going to win that , it is difficult they are say it is called to say ony are foreclosing individual city pairs. So they eventually settled. In the wireless market you have a truly national market. The idea somebody can emerge in a local market to provide competition is not credible. Hold, how do, you play this . In the case of tmobile, i dont think theres that much related toe stock that much deal. Our calculations say theres a relatively small premium and a small expectation that this deal will close. In sprint, verizon huge expectation this deal will successfully close, with huge upside. Sprint will be very overvalued and tmobile looks to be pretty attractively valued. It is a very funny distinction being made. Thank you so much, Craig Moffett, we appreciate that, with muffin nathanson. 15 minutes away from the ecbs announcement. That is the one everyone has been looking ahead to. 1. 3606. Futures not moving that much, everything is waiting. Year yield, this is where we havent seen the impact of anticipation of the rate cut impact ofthe anticipation of the rate cut. Crude oil down to 102. 32 a barrell. A barrel. Good morning, bloomberg surveillance. We welcome you worldwide. Alpert of dan Westwood Capital and author of the age of oversupply. A massively rave review. Cutting through the clutter of the debate. Part of the debate is mario draghi. We will get to that. Lenders are loosening their grip on credit to consumers. Whether for homes or cars. Our lenders reverting to the mean raise the industry returning to bad habits . Doug lebda is chairman and ceo of lending tree. Loans, smalldent business loans, tuc a loosening of credit . Is it interesting thing is not necessarily coming from banks. It is coming from alternative lending platform. Startups putting credit to consumers and taking Balance Sheet risk. Or coming from institutional investors. What are some examples . What you just said is an earth shattering statement. That is shadow banking. Likeat is, companies prosper and others taking money from institutions and putting it in the hands of consumers where they can get lower rates than high interest credit cards. It is across the credit spectrum. Moreave people lending to subprime customers. I think it is appropriate, the pendulum is swinging back. Pendulum ofhe same 2005 and 2006 . I weave repeating history . We just create an open exchange and try to make sure people have access to credit. Last time, it was governmentbacked home loans dan alpert, jump in. The big difference is volume. He is providing a clearinghouse function and getting money that needs to go out into the hands of consumers. We have 13 trillion in outstanding household that it is country, that is not even scratching the surface. If you compare it to what is going on during the bubble it is apples and oranges. Sector the private Mortgage Market alone, you are talking about 2. 5 trillion of debt. Scarlet, a surveillance brick schools o scarlet, a surveillance breaksclusive. I want to ask about home equity lines of credit, up but only for those with pristine lines of credit. Heloc, we are still very early. As long asgood consumers use it appropriately it can be a good way to pay down other debt and access what is inappropriate . Heloc and out of going on vacation. [laughter] what is heloc . Using your cash as a using your house as a piggy bank. Are we going to go through this again . I dont think we are, lenders are more appropriate. The place you could if we have a credit cycle and we have another recession, people are going to lose money. That is what makes a market. What area of concern is subprime auto loans . During theoing well recession but it looks like delinquencies are higher, especially in the subprime category. What does that signal . People felt that auto loans would be the first thing people did not pay. Turns out it was the last thing. As the car gets older, sling was he rises. Delinquency rises. At the end of the day, there is access to credit across the spectrum. Rates are going to be higher, there is more risk and more delinquencies. Ceo of lebda, thank you, lending tree. This is exciting. A big event coming up. Potentially Interest Rates in europe going negative. 10 basis points would be the deposit rate at the European Central bank. Does that mean we go through a junket to lets do it. How much is priced in, markets are anticipating a move. Stay tuned for full coverage of the ecb decision at 7 40 five and the News Conference at 8 30. Good morning. Coming up on Bloomberg Xiaomi rising, bloomberg west, 1 00 and 6 00 p. M. This afternoon and evening. Bloomberg surveillance, good particularly in europe. Tom keene, scarlet fu, and adam johnson. Scarlet fu has host of bring in the the 8 00 hour, in the loop begins at 8 00. With mario compete draghi. Awaiting the ecb announcement. We have a power our. Have the former Nbc Universal executive and former ceo of Martha Stewart living. Talking about everything from Online Education to retailing. Sallie krawcheck is joining us as well. She announced the other day that not only is she changing the name of her firm to elevate, she is starting a womenfocus fund. Putting her mone would hurt putting her money in her mouth is. 85 rods is a take on the fact goldman used to be at 85 broad street. Will take place during the mario draghi press conference. The ecbts away from decision. Typically less than two minutes, not exactly at 7 45. Dan alpert with us. Also with us, jon ferro from our London Office who covers so much of the ecb. Of euro what is the bet the market as because of this . Expectscase is everyone a rate cut. We if we do not get a rate cut, forget it. What . Then you need best Case Scenario and we look for every little piece. You look at the forecast for inflation two years down. It is not just the news we get in five minutes. The difference is that the news in five minutes, this has been draghi rhetoric. Give me draghi action. Tothis will be an exercise see whether the germans are truly controlling the European Central bank. Deflation is a huge risk in europe. The thought that they will not cut i have no idea whats going happen. Before the ecb announcement, in, growthweigh unemployment. The headline will be a face at the priory was Something Else than that. Surprising support coming from Wolfgang Schaeuble of germany who says the ecb always makes the right decision. Was that germany was not on board for negative Interest Rates. But what is the right decision . Are individual governments relying too much on the ecb . That is what is so unique right now is because of this decision. Moving from rhetoric to action. Crushed in the2, last couple moments. The ecb decision, lets go to Jonathan Ferro. First headline coming out. I am just waiting for the never to come through. 0. 25 , there we go. 0. 15 , 10 basis points. Lowering the benchmark to 0. 15 , does this make a difference for the eurozone . Im waiting for the call on the deposit rate. Is thats negative consensus. They have lowered the marginal lending facility, forget that. The big one will be the deposit rate. They will be going negative on the deposit rate i 10 basis points. The theory here, understand the theory. The idea is this helps banks lend. There is not a lot of money in the deposit vicinity of the ecb. This is not just about getting bank lending fell in. This is about tapping the euro, you see the spike there . All over the place. Heres where we were, near 1. 36, up, giant spike, then we go back down as the headlines come out. Then we come back up here with an elevated euro in the last couple minutes. The headline to meet within the confusion of the euro, the clarity of the u. S. The idea of three different Interest Rates. Lets go to guy johnson in frankfurt as he parses three different Interest Rates and a negative deposit rate. Guy . They have cut the deposit is draghi isstion going to make a claim as to why he has done it and what he thinks the consequences are. And how the banks are going to react are they going to suck it up . That will affect their capital and be a problem because european banks have a shortage of capital. Hes got to explain that. Get itsaid, we need to to the press conference. Are we going to get anymore . Are we going to get more liquidity and is he going to talk about asset purchases down the road . Those are the Big Questions now. He has delivered enough now to keep the markets of vaguely stable and needs to deliver more to get the euro down. Guy johnson, thank you. Very quickly, jon, the churn, 1. 3591. One headline the ecb will announce further policy decisions later. A 30 press conference at a. M. Euro weaker versus the dollar at 1. 3588. Good morning, bloomberg surveillance. We come to you after a historic decision, a negative Interest Rate by the European Central bank. Seen this from the Federal Reserve or the bank of england. Daniel alpert, the age of oversupply. Also with us, Jonathan Ferro from london. The euro crushed, 1. 3578. That is what mario draghi wants. He has got his weaker euro. 1. 35 does not get it done. At the end of the day, he has done the right thing, thank god. Beents really would have very disturbed otherwise. What is going on right now is the deflationary pressures bearing down on europe are in part two to internal austerity and in part to international factors. There is no transmission mechanism. Thanks are not going to be able to flood europe with new lending that is going to increase economic activity. We see the chart of the euro, jon ferro, one headline, ecb will announce further policy measures later today. Up we go, bam, we turn right around. Forget rate cuts, it is what hes going to save the press conference, that is why the euro is heading down. The transmission mechanism this is key. How do you get low Interest Rates into the real economy . This is what we could see. People talking about funding for lending program, some kind of funding program. Getting banks to lend to small to Mediumsize Enterprises will be key. Within this, adam, i think this is so important. Gold and equity markets correlate off that key announcement from the ecb, futures were flat, up 4. 1242. Oes to we will get further details later today. The ecb has been sterilizing its purchases of security. It goes out to buy sovereign bonds, and it puts money into the system. It has been buying back cash through slots. If it stops doing that, it increases the money supply. There might be details of security purchases, we dont know. You talk about the securities boughtprogram, they spanish debt. They have been trying to sterilize their purchases for the last six weeks or seven weeks but have not been able to take the 160 billion euros out of the market. Is it a game changer . Maybe or maybe not. Plan, that up a kiwqe matters. Oversupply of rhetoric. Plenty of rhetoric. He wouldrted by saying do whatever it takes to safeguard the euro. Dan alpert, when we talk about further policy measures the ecb will announce, i think that to the ltro the ecb intr oduced. It was supposed to help bank liquidity, to help think lending did it help bank lending . You have intervention in every advanced nation, it is having a diminishing effect. We talk about transmission mechanisms. Lets say we were able to get cash to people who could put out. Where is the loan demand . Mario draghi delivered a speech a couple weeks ago. He is not worried about long demand now but in the next six months, the second half of this years. If the demand is taking up and supplies not there you have a bigger problem. Into the air 00 hour, dan alpert, i want you to summarize what this means for americans. Year confusion, half of america is flat on their back, chair yellen is doing the best she can, mario draghi is doing the best he can. There is abenomics, china, this. Synthesize what these actions mean for americans. Fighting the last were we are going to have to fight after the crisis, the war against this inflation, deflation, low inflation, i dont care what you call it. There is way too much global production,ril, capacity, and capital and not enough demand. Prices are falling on an excellent rated basis in europe. They are still low, inflation is low in the u. S. It is propped up by two sectors. Stop growing, housing is the biggest one, we will see inflation fall to further lows. Moving to the real economy, is this bill gross new neutral . Are we into a time of subdued expectations that mario draghi and janet yellen have to deal with . It could be more like common elerians new normal. You are going to pull it back to new normal. Lets hear from Paul Mcculley on this. Between wallence street and main street. There is a slowdown at home. New highs on wall street. Whenever you have a situation where consumers are taking on debt through Student Loans and auto loans and what have you and even with a substantial down payment and revolving credit, you have to look to wages. We do not have wage growth. Austerity. O, that is a british word. Is austerity dead . He has been trying to put pressure on the governments to reform. His back is against the wall. He is doing something even the fed and bank of japan have not done, negative deposit rate. He is desperate. This is amazing. The bundesbank got crushed. Init is all going to change 36 minutes when mario draghi hosts his News Conference at 8 30 a. M. Our agenda,et to looking at the stories shaping the day. Staying with europe. Critically important. About the ecb announcement. It is also about bnp paribas, this will be interesting to see how they address it with all the different news organizations. Even new york post, got involved. French financial politics. I am watching president hollande and president obama. We asked everyone, what should be on the top of obamas to do list in europe . Here are some answers. Putin. Th mr. Dragh he is not meeting with putin tonight . The question is whether there will be a handshake in normandy. For the russian soldiers, millions that died for the allies. Hollande and putin tonight, no obama and putin. Eastwest dialogue. , in references to the video someone took. Very nice. I do not do lunges. You to waits. I do. I do my paleo. The president looked good in that video. He was not wearing a bowtie, i wear a bowtie in the weight room. Lunges onu are doing the way to your radio to continue bloomberg surveillance. Aj and i will get to our agendas. Jobless claims at 8 30 a. M. A lead up to the jobs report tomorrow, the consensus is for 215,000 added. Dan alpert, how much better is the u. S. Economy than the european economy . It is better but the question is whether or not it is sustainable. We have gone through microcycles, sending signals that confuse people. The data is confusing. The second half of the year is up in the air. Heres what is on my agenda, the sprinttmobile, are we going to get a bid . Suggesting that that might not happen until july. What did Masayoshi Son of softbank, which owns 80 of getint, what did he do to u. S. Regulators to a point where he might be able to make a bid . He is convinced he can make his case and persuade regulators to shrink the industry down to three players. We want to say thank you so much to dan alpert for joining us. And Jonathan Ferro of Bloomberg Television london, so fortuitous for you to be here. You will be on top of the News Conference taking place in about 33 minutes. Surveillance on radio continues. In the loop is up next. M. , mario draghi speaks. Good morning. We are live from bloomberg headquarters. Your loop a. You are in the loop. A power hour ahead. My guest host is the cofounder of oxygen media. By sally, whoned is rebranding as elevate network. First, heres a look at our top headlines this morning. Juste cut announced moments ago, lowering Interest Rates to 0. 15 , almost nothing. Ecbill hear more from president mario draghi. Out, apple. There is a new smartphone coming. It is from amazon. Retailerst online planning to introduce the device later this month, according to a person with knowledge of the matter. , general hour from now motors will announce a finding of whyo