Transcripts For BLOOMBERG Bloomberg Surveillance 20150202

No. Its not that we dont need the money. We are desperate because of certain commitments and liabilities that we have. They are promising to stick by financial obligations. The president will unveil his budget today. He wants a minimum 19 tax on future foreign earnings of usbased companies in addition to a 14 tax on 2 trillion in a stockpiled offs our offshore pilots. That is according to the near times. The Ukraine Forces have had recent setbacks. Nato is asking the United States for weapons and equipment. John kerry will visit the country on a thursday. Refineries are dealing with the biggest strike since 1980. They stop work sunday at nine sites after failing to agree on a labor contract. They had no choice. They rejected five contract offers made by royal dutch shell. After to exempt talking, they finally plate played and it was a big game. It ended with a late interception as the patriots won their fourth super bowl title. They barely beat the seattle seahawks. It couldve gone either way. They rallied from a 10 point deficit to do it. Tom brady, was m. V. P. How about the tight end. Those are your top headlines. Katy perry, how did your household take the halftime show . I was alone at a bar, the fitzpatrick. This is what i thought looking at this. She wrote it on a mechanical tiger that was being pushed by ninjas. I thought how can we not be people in the economy. Given the ethos of this, what does this mean about america . She has more followers than the president. None of those songs were new. Dancing sharks. There was a surprise appearance i missy elliott. What was great was the demographic reach. For those of you younger, that was a guitar that mr. Kravitz was holding. Lenny kravitz used to be a singer. We talk about the to eat tui americas two americas in the economy. She is a symbol of the effervescence of america. It looked like the opening ceremonies of the electrics. May i point out who sang the national anthem. Addendum and zell. The house came to a complete stop. Congratulations to nbc on many hours of broadcasting. Futures are up three. Oil put it on friday. It is somewhat getting it back. It is just under 50. That is a big deal. We should make note of that. The fix is 29. 7. Weve gotten better. Lets look at the ruble as a proxy for gloom. This is the real groom. Gloom. Here is the big move, if you copy this and move along it, we barely made the tremor. We have barely reached the tremor of 1998. Look at the motion on this. This is the slow burn. This is the actual real economy. We are looking at a different thing. We may yet get there. Credits wiese is an 82. I am eyeballing it. It is an odd market. We have really ugly headlines out of ukraine. This is a jobs report week. We have the chairman of market field asset management. The resiliency of equities, he likes gold in a time of geopolitics. America diverges from the worlds mediocrity. Ukraine is at war. The ruble is weakening. Michael, wonderful to have you. Howd you bring that into your mix as you start the week . I think its much more geopolitical than financial. The ruble is something you would keep an i on. Its tied to whats going on in oil more and more. It does have some spillover effects of the places like the turkish economy. Gold is up. You like gold. Is it up like a new gold market . . I think the bear market hung around for three and a half years and did damage to people. It might be over. Gold looks to be back in a genuine bull market. These negative yields we are seeing out of europe, what are these consequences of that . It makes gold more attractive. The cost of owning it is zero. Negative yields that affect us. We are not managing money in europe where we have those positions. Im not sure what it really means longerterm for Financial Markets. One of the consequences is that Central Banks now hate cash. They feel a political need to earn a return on their nations capital. I think one of the reasons why bond yields are where they are is centralbank money. They are going to open the floodgates into u. S. Treasuries. I noticed that you point out Central Banks are no longer concerned about volatility. They dont see that as part of their mission. Should they . Yes. I think they went too far down that road. Centralbank started to not care about what mark did the summer of 2008. Europe went through something similar. I think face bait stayed too long and horse. You want Central Banks that are beholden to the bond market. They understood that if they let it go to hell in a handbasket, there wouldnt be anything. We are already into february. Where did january go . Is that cosmic . It does tell you the enthusiasm got ahead of itself in the end of last year. It doesnt tell us what happens in the next 11 months. By the end of december, i think the average investors enthusiasm was ahead of reality in the market. Do see this rally continuing . Yes. We have a lot more volatility attached. A lot more. Is there trading strategy around that . Or is it unpredictable volatility . You will see concerns build around a certain ideas whether its low Energy Prices being a problem or strong dollar been a problem. Later this year, the Federal Reserve could be a problem. The Federal Reserve is a problem . We assume they are on track to raise rates. That gives the market Something Else to Pay Attention to. Mr. Bullard was hugely respectful of what markets are saying about this inflation. Muhammad ali said it had something to do with oil. Which is it . What does that signal with janet yellin . The bond market is crazy right now. I think there is no sign of cpi. I would not look at inflation and say it tells me anything about the economy. Michael is with us for the hour. I want to mention to everybody that on surveillance, it is junk condition february. Have you created a website yet . I get an executive deal. For the First Time Since 1980, oil workers are on a major strike. We will tell you how it could affect the Energy Industry when we come back to this is boomer surveillance or go good morning. Good morning. Futures are up seven. The ruble was ugly and hour ago but doing better in the last hour. Sadness and anger in japan after another hostage was beheaded by the islamic state. The video surfaced over the weekend. His wife said she was devastated but proud of her husband. The Prime Minister called it heinous. He vowed to hold the terrorist account will. An australian spent more than one year behind bars. He was whisked away. To have his eye leagues colleagues remain jailed. The losing streaks continue at the gambling have. It was down 17 in january. It slumped four and eight straight month. The government of china is cracking down. The casinos lost 73 billion in market value last year. Those are your top headlines. On the japanese tragedy in horror, i dont think we can empathize enough. It took over any dialogue in japan. It played such a huge role in the attempt to redefine how it is that japan approaches the world. Its going to be a huge part of that going forward. It does fold into their defining their future with an expansion of military. These are extremely sensitive issues. Maybe this is the catalyst. They did say that they asked for the amount of money that they had pledged to fight islamic extremism. That was not an accident. This is from the university of tokyo, the cruelty has made japan see a harsh new reality. We realize we face the same dangers as other countries do. Lets continue with the discussion on oil. West texas intermediate popped above 50 a barrel for the first time in quite a while. Now another headache, workers are on strike as of today. The United Steelworkers Union began a strike at nine sites. This is the biggest walkout since 1980. This represents 10 of refining capacity. The union wants to double pay rises. There has been a spread between two crude. Refineries have been making a lot of money. You can see that in the share prices. Now they are feeling the squeeze. They dont have the same kind of leverage. They struck at a time when management was in a position of strength. This time, they are in a different negotiating position. Management is in a position of weakness. They cant have this strike right now. Are you worried about the strike . I havent started thinking about it yet. I let these things take place and that everybody do the hard initial work. We dont have any positions in energy. I can take time off. If you look at the valuations how do you avoid the siren call . I think thats an important question. You tried to get involved in things that are difficult to understand. We are macro guys, not energy experts. Its time for legitimate experts to step in and say which side they want to be on. My concern with energy is it looks like Everything Else does in the early stages of a long and difficult. I am curious about your process. When does the news become important for you to think about . You say you dont have to think about it yet. When you have to make a decision as to mark . Where your polio portfolio is to begin with. Just because the media deems it important, it doesnt need to be your issue. I cant concentrate. Are you thinking about katy perry . Doug flutie hasnt aged the year. How do they do that. Its less brutal in canada. Thats probably true. I thought that was a good ad. It worked. He as an age to year. He looks like hes 42. Im serious. How to katie couric bmw ad . I love that. It was hilarious. It was very good. Thats where our head is. Brennan keeps going to where did you go to . It was all about dads. It was all about making me cry and weep for my children. Poppies. Will be back. We will be back. Its bloomberg surveillance there cap. Good morning. How about ecuador . Good morning, everyone. We are in new york city. Futures are up seven. Dow futures are up 64. We had a fistfight over who won. I wanted to do missy elliott. Mine comes from a Bloomberg View contributor. The texas to isnt working as it should. The u. S. Stacked tax structure doesnt motivate people to do it up with their money. The president is going to outline his budget. As you know, one of the things he was to figure out is how to get money to pay taxes on their foreign cash. We have a chart that shows the percentage of foreign cash. This comes from a bloomberg data. It is stunning. They are shoveling it back to shareholders. The problem is the tax code doesnt incentivize. They want to tax holiday. They want to repatriate at a lower rate. This is not going to work out. There were conciliatory remarks from this on owen at orrin hatch. He is usually the first one who says that will never happen. This time he said we will look at details. We actually got some Corporate Tax reform, how big of a stimulus would that be . Hes already got it earmarked for infrastructure spending. That is always popular with his voter base. The you agree with mr. Gabelli that foreign money could show should come back to shareholders . Youve paid a fee based on that money belonging to the corporation. And can come back to shareholders and get taxed on its way through the door. That is a good thing for his voter base. Is that a good thing for you . Is infrastructure need what we need as a stimulus . I hate it when you see these big federal programs. You do build some nice infrastructure. Im talking about changing the tax incentive so when Mark Zuckerberg says hes been spending a lot of money his stock price doesnt get punished. Our tax code should be Incentivizing Development in r d. Is there any chance of this passing . I dont know. I think we are about to find out if the tone has changed. I know we talk about this all the time. There are some things the president has suggested that in theory should be compatible or negotiable with republicans. What we will find out is if everybody is willing to deal. The Nissan Nascar driving ad was a train wreck. You can be a bad dad so long as you drive a nissan. What was your favorite Super Bowl Ad . How does that stuff get made . Good morning, everyone. Lets get to the top headlines. You may have noticed a winter storm brought its fury to the Northeast Area we have canceled flights in dangerous conditions. That storm dropped eight inches on much of the midwest. Accumulations of up to 16 inches are expected in boston. In boston, everybody is too drunk to dig out. The Justice Department is looking into whether moody inflated ratings during the housing boom. They are looking at this for five and a half years. The government is expected to wrap up the case. Italy has elected a new head of state. He is the 12 president. He garnered two thirds of the votes. The 73yearold is a Constitutional Court judge and former minister. The role is very ceremonial. I read it as a big win for renzi. You were in rome a few years ago is it is not productive as the stereotype . If you want a real career in italy, you have to go to a lot. Were you as unproductive . I was studying. I would walk out of churches and do sketches. What a racket. Ok. It was a runaway Freight Train and the train was led with commodities. Commodities were in demand. That has changed in the new volatility. Central banks are grappling with inflation. He has been outstanding on caution with commodities. How beat up have you been with the drop in commodities . Did you avoid it . We were on the wrong side of the first leg of it. Certainly it was painful. We missed that its a supply story and him demand story. The demand is relatively ok. There has been this massive over policy. If we are talking about oversupply, the problem is australia and not china. They have gone on a Business Plan of reducing as much as they can regardless what the end of prices. You have enough exploration and you found enough thes its of low price commodities, the margin of profitability is in arms. Now there is a battle to the death where the suppliers are willing to sell one dollar above their costs. We had banks cut rates last week. This looks like a fullfledged currency war. Why are we not seen a bigger pop and gold . You are, if you look outside u. S. Dollars. It is up 25 in canadian dollars. It is up in most international currencies. That is a good pop. In u. S. Dollars, gold is up midsingle digits. Thats a real pop. You just have to look at the right currency to see it. I find it interesting that youre not talking about china. You dont see a drawback in demand . There has been a lack of growth in china. There hasnt been a lack of chinese imports. There has been a deleveraging in china. To the extent that people use commodities as collateral for lending, that has been part of what happened on the back end of 2014. China hasnt stopped buying iron ore. It stopped buying at a suit price that suited everybody else. How easy is it for the miners to clear that oversupply. They got over it in years. Can they cleared out in a matter of quarters . Everybodys assuring shareholders that they will be profitable where they are. I would rather hear people say we are not going to dig this stuff out of the ground right now. I do think anybody has the ability to do it. Olivia, the baker hughes transaction earlier this year goes to what we might see. We expect this will precipitate a flurry of consolidation in the energy sector. We are watching out for xm arrington in 00. I have a chart about the drop at baker hughes. That is stunning. To my point earlier, that is brilliant. Can that go faster than the market thinks to clear out the supply . , it can. From what im told, 20 of the rigs in this country produce 80 of the oil. I think you have started the process whereby supply starts to come under attack. Its a long and nasty cycle. The end of a long and nasty winter storm argue the 1 . You may think you are not. You might be. We are talking about the growing disparity between haves and havenots, a new study tells you how much you need to qualify as a 1 or. This, everyone up. This is a lovely tape to start the week. Dow futures are up. This is fantastic. This is our single best chart. You likely think you are in the middle class. Most of us do. Perhaps you believe you are uppermiddleclass here if you live in alabama and earn 228,000, you are a member of the 1 . This is our single best map. This is from the Economic Policy Institute Area they look through demographic information statebystate. They figured out what the threshold is for 1 . At the bottom, that is alabama. Higher is 506,000 in new york. Connecticut is six and 78,000. I think this is interesting. I know you have to stay awake for this. It used to be do that survey data to figure out the distinctions between upper and lower class. This is an approach that was pioneered at the university of berkeley. They are looking at real administrative data. This is a change in method which is change the way we look at the world. They are applied on a statebystate level. Its fascinating to look at the map. We think about middle class economics, that means something very different on the coasts that it does any center of the country. There was a story about republicans in the blue states. They can do better just because of the demographics about who lives where and how much they make. I look at maryland. It surrounds washington, d. C. Its feeding at the trough of the lobbying industrial content complex. The threshold is much higher than almost anywhere else. Its 418,000. Its lower than it new york and connecticut. Thats a good deal higher than the median. That is all federal money. What is middleclass . 40,000 . It does depend on where you live. We are having a parlor game of this. Nationally . 100,000. I would say 65. Median is between 50 and 70. For a couple, 65. In your united kingdom, its even more. There is london and edinburgh and then theres Everything Else. There are a couple of cities that are doing that her. Income inequality is worse in the u. K. They have a hereditary monarchy. Why you say that . Its measured. They are worse. We talked about it extensively. Ive seen measures that the wealth of your parents is a tighter correlation in the United States that it is in the u. K. The u. K. And italy have worse social mobility than the United States. Lets get to some photos. Let me bring up the fistfight. Number three. This is a pro democracy protest in hong kong. They carried yellow umbrellas and chanted they want true democracy. The reforms of the 2017 election dont go far enough. This is the first major rally since lease cleared protesters in december. The occupy strategy is not successful. Eventually they have to clear you out. These marches can have an effect. Number two, helen mirren was spotted on the subway. She took the train and was praised for her perfect etiquette. She placed her bag on her lap. What bag is that . I want to say its a tote. Its huge. Its what you call a shopper. I met her, she is very small. I think i own a pair of those. That is just a random shot. This is not a shot for a movie. This is just awkward. Everything that she does is elegant and worthy of a movie, this is just a random thing happened on the subway. Number one, tom brady celebrates after winning the super bowl again. What a final minute. His three yard touchdown sealed the victory. He celebrated his third super bowl win at the age of 37. Does he retire on top . Hes nowhere near retirement. No. I think its a beautiful story of someone who wasnt even drafted. This is his fourth super bowl win. He was a late round draft pick. Be final minute was an amazing game. The game broke out. Both olivia and i are right. The u. S. Is worse than the u. K. On the genie coefficient. We are to document this later. Who was the real winner of last nights super bowl . Doesnt even know. He is too busy thinking about katy perry. That is our twitter question of the day. What was your favorite Super Bowl Ad . Katie couric was my favorite. The fiat commercial was my favorite. It was the only one i was aware of. Good morning, everyone. Good morning worldwide. Bloomberg surveillance. There was a tough january. We are going to get to world news right now. Lower oil prices could bite into bottom line. Airlines can cut ticket prices that can trigger price wars between the carriers. Profit for this fiscal year will be 950 million. That is higher then previously forecast area switzerlands thirdlargest wealth manager plans to eliminate 200 jobs and cut costs by 108 million. The cuts represent 4 of the workforce. He is appearing before a french judge over his alleged role in an International Roster to ring. He is one of 14 men and women on trial. He resigned as rector of the imf in 2011 while in jail for sexually assaulting a New York Hotel made. That case was dropped. Thank you for watching. He agrees strongly. He agrees on a gold market. Thats good to hear. He is with us. It is february 2. That means a movie made in 1993 bears continued watching. Here is bill murray. But short little hand in mine there ate no hill or mountain we cant climb. That is groundhog day. To michael, its a different day. This is the day that you came to this nation. It was very cold. I got off the plane with my english winter coat. It was frigid. It was sunny. It stayed cold for many weeks. What is your biggest observation . I think its a fantastic place to live. Im a big fan. Congratulations on 22 years of our much colder weather. I was living in germany when groundhog day came out. The title was every day the varmint says hello. That was a perfect segue. We have a winner. Americas dads were the winners of last nights super bowl. He has been to 14 super bowls. We have a picture of him. This is not your first rodeo. This is you with broadway joe. Gays on the magnificence of that. Why are americas companies trying to make me feel bad as a dad . I think they are idealizing the american dad. Love it or hate it there have been mixed reviews. The mcdonalds commercial did a tremendous job touching the heartstrings of american moms. It played at the ideas you can pay with love and call your mom and tell her that you love her and get a free big mac. I think its a smart strategy to do that. Mcdonalds product has been doing so well. I didnt get the mcdonalds ad. I didnt get the nationwide ad. I got the always add. I got puffy and budweiser. How do bad ads get made . Frequently and Corporate America, people do not like to say to their boss or to their client, this isnt a good idea. Check this out. This is on twitter afterwards. This is the kid from the loser nationwide ad. That was great. Lets play that Nissan Nascar driving ad. That made me angry. This is a guy who goes through an entire lifetime ignoring his son. Somehow, its ok that hes been a bad dad. Its ok because hes been an absent father. How does it get made . The bigger question is some of the questions you see from firsttime advertisers. I thought wix did a remarkable job. They used x nfl players who had remarkable super bowl performances. At felt like a somber set of commercials. Is pulling heartstrings more successful than humor . Humor usually works. Dogs, horses kids people who are disabled challenged that. Peoples heartstrings. The commercial that stood out was this go daddy ad. This jujitsu move where they had this tasteless ad and then they go to their actual ad. The actual ad they ran was just a guy sitting at a computer working really hard. It had nothing to do with all of their weird, sexy, awkward ads in the past. I think the other commercial they had planned wasnt going to make it on air. They just went in the other direction. In your experience, who green lights garbage ads . Does the ceo say this is the ad i want an overwrite the advertising people . Is this a 24 euros kid who doesnt get how america thinks . Hes serious because he has the glasses off. Creatives takeover frequently. It comes down to an idea that resonates against the target audience. Its not always about production values and expense. Did you see anything new in the ads . Its funny. I really thought that going back to wix, i thought blocking and tackling. I like the Kim Kardashian one for tmobile. The tone was as if it was a charity added. Instead, it was about needing more data points. One of the metrics you look for the night of and the next day to show empirically what worked . I wanted to see what people who were on nfl. Com were voting as well as the people in the u. S. A. Today theater. To do Proper Research and understand if you were able to impact the brand the way you wanted, are you most closely associated associate with the nfl, they spent 4. 5 million on advertising but not enough on research. The ruble is way weaker and the dow is doing better. We have another hour of bloomberg surveillance. Stay with us. Ukraine at war. Violent sex relates of violence violence escalates. Gisele is going to. This is bloomberg surveillance. Groundhog day, february 2. Lets get to top headlines. The new Prime Minister of greece is going to rome followed by paris and brussels to make his case. The new finance minister says greece wants a new deal. Greece will not take any more aid under it six is doing bailout term. Do i believe greece should be taking another bunch of loans . No. It is not that we do not need the money, we are desperate because of commitments and liabilities that we have. President obama unveiling Budget Proposal today. He wants to change Corporate Taxes. He wants a minimum 19 tax in addition to a mandatory 14 tax on about 2 trillion. Forces are fighting prorussian separatists in eastern ukraine. Ukrainian forces have suffered setbacks. Natos military commander supports the idea to help bolster ukrainian forces. John kerry will visit kiev on thursday. The biggest oil strike since 1980. More than 200 refineries stopped work after failing to agree on a labor contract. It rejected five contract offers. A football game. They played the big game in arizona. It ended with a crucial late game interception. The patriots won their fourth super bowl title. They defeated the seahawks 2824. They rally from a 10 point deficit. Tom earned most valuable player honors. We have given away our full knowledge of football here. How about katy perry . She won the super bowl. Look at this. She rode in on a robotic tiger with ninjas moving the pausews along. They had Lenny Kravitz and missy elliott. This was like the Opening Ceremony for an olympics. Rarely really a spectacle. Had a you tell your mom, i am in the super bowl i am wearing the shark suit. How do you explain that we are covering this . Everyone on the radio is driving if you missed it last night katy perry danced in front of dancing beach balls and dancing sharks. We just did the whole visual super bowl thing. All you need to know is green on the screen. Greek leaders on the hunt for the new finance minister. Joe is back from a reporting trip to greece. Do you think they are going to find any sympathy or support . They will find some sympathy. There is some desire to see some sort of counterweight to the german led german austerity. Some hopes that europe can go in a different direction. It is possible they will get some wiggle room. This is something we should talk about. That is the danger. It is not just greece renegotiating. Greece is a microcosm in many ways. There is the economic stagnation, the debt what is happening in greece is not an isolated issue. Are they backing off a little bit . They issued a statement they got off to a rough start. Everyone relax. We are eager to make a deal. Are their European Opportunities in mergers and acquisitions when you see the kind of drama we see in greece . You saw jeff making presentations before the French National assembly. And they were really talking tough. Do you think they are bluffing . I would say it is negotiating. I think it is a legitimate sand. I think the hope is to compromise in some way. Isnt everyone kind of bluffing . Germans have a great interest in seeing that german states that greece take something and it works out. A lot of people in greece the majority want to stay in the euro zone there is a lot of inclination to keep the status quo. This is the tear any of the week. When you negotiate anything there is a saying, if you only 100 and i cannot pay you, i have a problem. Iou 100 50 million and i cannot pay you, you have a problem. It reminds me of argentina. Your trip to athens, what did you observe . In his left, not like what europe is used to. It is a centerleft social democratic left. They have a deep root in the communist party the expectation that they are caving or bluffing, i do not think it gets to the root or the power structure of the party. He describes himself as a libertarian marcus marxist. That has to make Angela Markel worried. Are we going to take the next tranche . No. Greece did not have a liquidity problem. It was created it was created as a liquidity problem. You never hear politicians or finance ministers in some ways, you read you reap what you soow. Thank you so much. Coming up, more on ukraine. We will speak to a russian experts. Bloomberg surveillance. A morning must read. Frank at nails this in the New York Times over the weekend. The disneyland measles and madness. It is clear we are vaccinating all the children who can be so that the ones who cannot be, for medical reasons, are protected. I have never met a medical professional who was anything but livid over this debate. We were alarmed when we went to new york and we went to a pediatrician who asked us what our vaccine schedule was. If you are not willing to get vaccinated do not come to our pediatric practice. We are old enough to remember little pink rocks. Little peek drops little pink drops. I did some of that stuff. I gave and i god. I also think if you reach a certain point in a Conspiracy Theory, it is hard to debunk a Conspiracy Theory and fact. You can say they are wrong, but there has been a lot of work debunking this. The problem keeps getting worse. We are essentially waiting the first upscale should die for measles. The head of the cdc went on abc this week to talk about it. Vaccines only work if everyone does it. I think we will see more of this. At least 102 ordered cases in 14 states. Coming up, Maya Mcguiness on the president and taxes. Stay with us. The futures up seven. Good morning. Do not forget, job day. We will have complete coverage. We will do that friday. Lets get to world news. Anger in japan after another japanese hostage was he headed. A city should a video showing the murder over the weekend. His wife was devastated, but proud of her husband. A reporter has been released from prison. He spent more than a year behind bars and was deported and with away on a flight to cyprus. They were arrested in 2014 for their coverage on the countdown of protests. The Chinese Government continues to crack down with a slowing economy. The casino turned out 73 billion in market value. You spoke to the new egyptian president. I am going to suggest 35, 40 people have been killed. These journalists were covering protests by islamists. This is a secular government. We are going to move north and east to russia. William pomerantz says it will not be enough. He has spent decades advising real companies. He joins us from d. C. What is the state right now . The russian economy is poised to fall at least three to 5 . It is going to last at least a year, if not longer. Is any of this fixable . The number for the u. S. Economy is 48 . Can any of that be fixed . It is the sector most compromised and is most subject to corruption. Interest rates are 15 and they cannot get credit. I loved your note saying that Vladimir Putin is offering bread and vodka to whether the vices. Will that work . It could work in the short term. Bread, week the price of vodka remains low. There have been more attempts this weekend to make sure the price remains low. This is addressing the symptoms of the problem, not the underlying problems. They can keep people from happy for a wild, but if the economy continues to tumble, as a continues to fall. You said this is vodkan omics. He has a Different Group of people to please. He has to make his oligarchs happy. He has a lot he has to keep happy. In doing so, it is difficult in light of the current economic crisis. His popularity was based on the fact that during his first term he produced an economic miracle with strong economic growth. That will not happen this time around, so he has to find an alternative. Moments ago on twitter history seen backwards does not equal history lived forwards. When Vladimir Putin looks backwards, what does he look to . He is cherry picking different parts of russias history. The experience was so severe and strong that you cannot go back and pick out maps. There was such a major break in russias history during the soviet period. A lot of people could say that how does this play out in moscow . Putin has accused nato of being in ukraine and orchestrating the response to the current offensive by the rebels. We are looking at the nato reconsidering. Thank you. We appreciate your time. Still to come, washington, d. C. Next for the president s budget. Groundhogs day and i am sorry to say that Punxsutawney Phil did see his shadow. We are bracing for six more weeks of winter. Lets talk about the snowstorm. A storm has brought theory to the northeast, causing canceled flights and damage. Accumulations of nine to 16 inches. The Justice Department wants to know if movies inflated ratings is in the housing boom. The government is expected to wrap up a case against the competitors as soon as this week. Sarah jo has been elected as the president. He is a Constitutional Court judging court judge and former defense minister. Mr. Sonnenschein knows 2015. M a caught up. It is normally very correlated. We saw it starting strong create a pipeline of con bennys of companies that dust off their strategy books. I do not want to get into the various things that is written in the times is mine. There is lot about the Media Companies we could talk about. Time warner, is that an m a candidate . Rupert made a i do not want to say an overthetop it for the company, he fell short of that. He said i want to buy your company and the company said go away and he did. Most of these Holding Companies tend to be Holding Companies. If the company is thriving, it has piece parts. When it is not doing well, that is when you get into trouble. What about away from Star Properties . That usually tells me silly stuff starts happening. You have masterstroke, large media deals. There is still a little bit of fuzz over that. There are questions about Liberty Media in europe and whether it should merge. One about down the food chain . This is a serious time. What are we waiting for . I think the missing elements was a lack of confidence and some notion of growth. Mn day is not riding the tape and saying i want to make a bet on the momentum. I do not think you will disappear quickly. There is some fraying at the edges. We will continue this discussion. Lets check where the markets are trading. U. S. Futures are trading higher. We saw the biggest monthly drop for u. S. Equities in over a year for january. The euro is slightly firmer against the dollar. Nymex traded just low of 49 per barrel. Good morning, everyone. The president outlining the budget. Increases in Discretionary Spending and higher taxes on the wealthy. Were joined by our correspondent from washington. The president is on offense. It includes a host of things we heard in the state of the union. Big tax increases on the wealthy. The deficit would be 474 billion next year. It would not necessarily improved that much in the course of the 10 year budget window. We have turned the page and made progress. We will see what republicans have to say. He wants to use the budget as a political tool. Republicans they may think this is a political statement is a winning hand in at a minimum, it puts the president in a position of better leverage. This new focus, is it dead on arrival . The budget is dead on arrival. The particular position is the most interesting in here. He has put meat to the bones. He made a much bigger hit to Companies Like ge. Not the 6. 5 that some republicans have been talking about. This is a big deal. This is a big deal in Corporate America. Some will oppose this and some will be supportive. You are an experienced tea leaf reader in washington. Instead of absolutely no, no way, he says i need to look at the details. This that mean anything . It means a lot. He is the most important person in the senate in terms of this proposal. There is room to maneuver here. There is room for compromise. They are not totally out of the realm of left field here. These numbers are going to change, but the outline of the tradeoff paid for by Corporate America and a lower tax rate. It is something in the realm of reason. Marshall, you advised all sorts of mn day types. I would like to see clarity on the tax code. I think there are two big horsemen of the tax law right now. The third is carried interest. We have a two to 3 trillion private equity industry. Why are we not coming back to that . What was your favorite ad from the super bowl . This is bloomberg surveillance. It is time for earnings. Exxon is going to import in less than 20 minutes. This comes on the heel of conoco and world dutch shell cutting spending on the outlook. That is what we want to know is going to be in the forecast. Look for potential m a talk. Ubs may see a reduction in price target. It implies double digit. They have less cash abroad been upside. Can we have a moment of silence for big oil . I am not into moments of silence. They got it right. I have a perfect segue. This is philip. He says there is such a thing that is too much information. Evidence that a High Frequency of reporting lowers the cost of capital but is offset by the drain on management time. Is this something you are sympathetic to . Should companies when there is significant rules report . You are supposed to report what is material. I think there is some truth to this. I have to work hard to figure out what matters. It is a phonebook. I am interested in how Financial Markets are or are not rational. People do not know what is really relevant. They mistake volume of information for quality of knowledge. Did you just take a shot at bloomberg surveillance . This idea that it should be driven by longterm strategies. There is no way to say we need to know what is going on every 90 days. There is a remedy. You can go private. If you want to be in the public market, you have to cater to the ir wishes. It was such a contentious deal. It is not a ringing endorsement by the shareholders. You are staying with us. Theres more bloomberg surveillance to come. Brendan greeley has our world news. Ryanair warning Lower Oil Prices could cut into its bottom line. The dublinbased airlines say the profits will be about 950 million. Shares of are surging after profit nearly doubled. The company said it plans to eliminate 200 jobs and cut costs by about 108 million. Is one of 14 people on trial in a carlton affair he resigned as managing director of imf in 2011 for allegedly assaulting a hotel maid. That case was later dropped. The denver post here. For those of you on radio, the mayor of whatever in pennsylvania, hugging the beast. For those of you on radio, it is the same film. I see bill murray on the left. Six more weeks of winter. I wish you could see the angry faces. When am i doing here, why are these men wearing these hats, what is happening, who are you . It is not a cuddly thing to hold in your arm. Technology is not just about ibm, intel. Engineering is changing everything across america. It is not just about tech mn day m a. Every category has a tech component. Manufacturing, we sold a company which is one of the Biggest Software companies in the world. It is about helping engineers change how they do stuff. This is a small deal no one knows about. This was a few hundred million dollars. 95 of mn day is below half 1 million. The headline deals are exciting to watch. Do the deals make sense . Does it make sense to buy what is that for 19 billion . That is a hell of a price for a company that is two years old. Whats app makes money. He has 1. 4 billion users. What i am curious about, you talk about these tech companies. These add values to machine tooling. Some of them are in paris, some of them are in new mexico. Another deal we did last year we sold a company, the world leader in surgical simulation. This is like the software for engineers. Someone has to stimulate and someone has to simulate and visualize what theyre going to do before they do it. We are seeing all kinds of processes in the automobile, in the home, that is now being monitored for efficiency. Companies Building Networks for this. If you can build broader networks, you can put things on cars. Exactly. When you talk tech m a, it is not a discrete piece of the puzzle. Brendan greeley cannot wait for his Kitchen Cabinet to tell him he does not need more pampers. I cannot even imagine. I can tell you which ill i was in in toys r us. I doubt you changed the majority of diapers. What a great time to change the topic. Time to answer our twitter question of the day. A screen went black and the pitches, each and watch tv in your car, a great reason to buy a truck. The ad i think got the most attention like a girl. Our third answer, the lost dog was precious. The puppy made its way back home. The horses burst out of the barn. I have seen the ad already. I know what theyre doing. When the horses save the puppy from the wolf, these are emotions that are so deep that i still want to weep. They bring the puppy home. The guy puts on his hat starts passing the puppy, starts patting the puppy, he is doing morning celebration. The conversation is can we get a dog and then it shifts to can we get a horse. The question is, hot chicks or puppies . We saw the balance tilts towards puppies. Tom, i know you follow Kim Kardashian. You saw the tmobile ad, what did you think . I did not see it. I think it worked. She is saying use up your data so you can see the pictures of me taking pictures of me. Was there a geico camel last night . I love the geico camel. They have a great pr run right now. I love the geico one with salt and pepper salt n pepa. It was a lot of fun last night. What a final minute of the game. Oh yeah, there was a game. Here is what is going on. Is in london now. Heres where he is not going, germany. Angela merkel is going to hungry. The conversation and needs to take place is not happening. I think the crane have lines are difficult across the bloomberg terminal. You link it back into russia and it will be a week where we see a lot of changes. Two great lessons. One is that austerity is not the right policy. It is so dam obvious. This is not the first time russia has economically imploded. You will have to come back tomorrow. Exxon in just under three minutes reporting their Fourth Quarter awning their Fourth Quarter earnings. Alix steel has gone upstream and downstream to look at exxon. Good morning. We are live from bloombergs world headquarters. We are 90 minutes from the opening bell. How much will it cost General Motors to settle claims . The deadline for filing was saturday. Were going to talk to the lawyer handling the payments. President obama sends his budget to congress that will set off a new battle over taxes and spending. Lets start with the new white house budget. President obama calling for higher taxes. He is also asking for Major Investments in infrastructure and education. Paul ryan saying a president is trying to exploit economics. The price of oil down more than 3 . Oil workers have walked off the job and nine sites. Suppliers are not going to cut back on oil