Transcripts For BLOOMBERG Bloomberg Surveillance 20150304

Euro sterling. This is what Francine Lacqua looks at every morning. Further sterling strength versus the euro. Down at the bottom, 111. 24. This is the spread. This is great. This is the fiveyear 30. Good feeling ugly here is that fed induced sweetness and the curve. I dont hear many people signaling recession down here but this has sobered up the economists. I think the thing we are all trying to figure out. Is this no hope for the future . Or is this secular stagnation . They instituted a steep yield curve and the great distortion. Debt. The other thing to look out is see how narrow this is . This is janet yellen, mario draghi, and the rest. Thanks to john herman for that. I will still from anyone. I will steal from Brendan Greeley anytime i can. I try to do it every morning. What we try to do in washington is steal from mr. Cook. This most important case will center around todays arguments before the Supreme Court. Peter cook brings his wisdom and color commentary on what to look for this morning. Peter, you walked into the court today, what we you observe . I know i will have an obstructed view. Im told that my seat will be way in the back. It is like the Boston Garden in the old days. There will be a big pillar in my way but i can still listen and i expect to hear a fairly simple case. I know that is hard to believe because it is the u. S. Supreme court and there are all sorts of legal dynamics that can happen, but this case centers on four simple words. And the intent of congress when it set up the subsidies to help people pay for insurance under obamacare. Whether or not they really meant to limited only to those states that established their own exchanges because the language says that the subsidies are entitled to those states where exchanges were established by the states. We all know that a lot of the states handed this job to the federal government. The question is are the 7. 5 Million People eligible for subsidies in the 34 states that operate under the healthcare. Gov system do they somehow not have access to those subsidies . If it does happen, if that is the ruling there is a potential debt spiral for the health law overall. There are four people who are the plaintiffs for this case who want to prove that they were harmed. That is one of the legal wrinkles. You have to determine whether these people have standing. Therefore virginians. And they are four virginians. The could be an out for the justices not to answer the central question. If this is struck down later on seven point 5 Million People lose their Health Insurance. Does the government have a plan b . They would lose their subsidies and decide whether or not they would want to pay for the insurance on their own. The health and Human Services Department Says it does not have a plan b. Republicans, who supported this case they say they do have alternatives in the works that would essentially provide a bridge to what they hope will be an ultimate replacement for the health care law. Real questions about whether or not the republicans are ready for prime time when they come to that and whether what they are proposing could clear Congress Given that we have a certain number of democrats in the building. Lets look to the markets to look at Central Banks. Lets look at the interplay. Markets adapt, they adjust to each and every centralbank move. It is janet yellen and the fed. The ecb and cyprus tomorrow. Is it india . Is it banks adapting to signals from the market . We speak with frederick lane. He is now working with raymond james. What are you going to accomplish with Lane Generational . It is a wonderful name and it speaks to the angst of retirement. I think it also speaks to the angst of passing wealth on and teaching your family members about the responsibilities that go with the creation of wealth that has gone on in this country. Should we pay our kids cell phone bills . That would be a onehour conversation. There is a trust to that goes with money. Most of us who have been blessed with any kind of resources afterward knowledge the fact that no matter how talented we think we are, there is luck involved. I know olivia wants to dive into that later. Lets talk about Central Banks and the market. You have been a witness of this for over three decades. Are the markets adapting and adjusting to what these economies do . I think the Central Banks are looking at the Economic News and what toggle switches they can flip and they are basically saying we want to pile on the quantitative easing race to the bottom. I think it is very worrisome. We really have too much supply and insufficient demand. We need inflation. We need higher Interest Rates. Im not sure quantitative easing is doing the job. Amen. I also need a new car. We can just say that these are something we need, but how do we get it if not through the qe race to the bottom . We are going to get some wage expansion. We are going to get higher wages across the board. In this country and in the rest of the world. That is going to help area that is going to help drive inflation. I think the decision has already been made. I think it is going to be a couple of quarters before we see any bumps. I think a half a point is an insignificant bump. I think it will be good for the global economy. Great to have you here. It is a fascinating change that you went from Investment Banking to asset management. Fred, you are staying with us. We will be talking about russian sanctions. What sanctions . Why one oil giant is ignoring the penalties. This is bloomberg surveillance. Good morning. Good morning, everyone. Bloomberg surveillance. Brendan greeley has our top headline. The Supreme Court will hear a major challenge to obamacare this morning. The case could affect coverage for some 8 Million People. The white house says there was nothing new in Benjamin Netanyahus speech to congress. Also on the bloomberg terminal at least one confirmed death in an explosion at a ukraine coal mine. The mine is in the war zone. Prorussian rebels say they are not to blame. New details about how Hillary Clinton controlled her email as secretary of state. The Associated Press learned that she used a private computer server registered to her family home outside new york city, which gave for total control over access to her message archive. Headaches are on the horizon for judges of alabama, deciding whether to issue marriage licenses to gay couples. The state Supreme Court said that marriage ban would be illegal. The bid for rob fords tie is at 13,000. It could still be yours. Those are your latest top headlines. Exxon is taking a big bet on oil in russia. Exxon now has drilling rights to almost 64 million acres in russia, that is bigger than all of england. That is up 11 million acres from one year ago. Why does exxon seem so unfazed by the sanctions . They reached an agreement to buy this acreage back in 2011 and 2013. That was before the sanctions. In terms of the sanctions, you just cant drill. You can build a pipeline, you can explore, you just cant drill. This is really a longerterm bet on exxons portfolio. 64 million acres in russia, 14 million in the u. S. It is huge. It is an enormous bet on the future of one of the biggest oil and gas reserves in the world. What are they going to do with all of the money that they do have . How are they going to keep making money at oil prices at 50 . Exxon needs 85 per barrel to cover its capex and dividends before any buybacks. He sees cash flow shortfalls in excess of 9 billion this year and next year and that is pretty significant. The stock is down 15 from a high. It is essentially a bank running an oil company. Can they sustain the dividend . Can they sustained doubledigit Dividend Growth . That is the money question. I have heard no one say they would cut their dividend. The reason why you on these companies is for the dividend. This is a trap for boards and managers. It is the problem and a commodity business. When you are tied to commodity pricing, you are stuck. You are tied to appeasing shareholders. You are absolutely right and they are going to have to balance and the dividend. They may not grow the dividend but they will maintain it. It is a great option play on a spike in oil prices or a reversal in oil prices. You are getting paid by the dividend in the interim. You also have to look at the correlation between big oil and oil prices over the last year. Net income has risen what is the correlation mark . 51 increase where sexual oil prices are up 300 . Where as actual oil prices are up 300 . Lets assume Oil Prices Continue to go down. The numbers you told us are stunning. We are only looking at 1. 5 million acres does any of the shale acreage look attractive as the price goes down and Drilling Companies opened their fold . Exxon did not have a great track record when they bought natural gas in the u. S. However, they do have 5 billion in cash. There are areas where the do not have huge exposure. I dont know where they are going to go. I dont think anyone knows were they are going to go. That is one of the questions. Bp is spinning off one of their shale assets in to a company in the u. S. Bp has had a tough time in russia. Bp has had a tough time across the board. That is a whole separate issue. Alix steel, thank you for joining us. She will be covering exxon for us. Richard haass will join us in our next hour. We will speak to him about europe and Economic Data about a weaker euro. This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. From new york city. Im going to weigh out in front. This is possibly my first nominee for the oped of the year. This is exquisite. This is dead on. David brooks. Of the New York Times. This is a mustread. Leaving and cleaving. Instant communication creates a new sort of challenge. This is twitter. This is facebook. We have forgotten how to move on. It is a brilliant essay. I have to greet i have to disagree with you. Welcome to 2005. This is not a new issue. Finisher point so i can disagree. [laughter] go ahead, please. Here she makes a series of minute by minute decisions to not text, to not email, or call. It is so true. This is at the top of the pile. I was thinking exboyfriends. [laughter] olivia is a pro on this. We know that we can only keep a number of friends that we are willing to interact with. One of the things that facebook does is it forces you to hold on to people you would have appropriately forgotten. I literally do not go to College Reunions as much as i would because i feel a cano exactly what people are up to because of facebook and instagram. Everybody can follow you on or you can follow other people. They have got to get on top of this. I met with a senior Facebook Official who said that this is front and center for facebook senior management, stocking and all the rest of it. Not even just stalking, but even the graceful idea of how much how do you move on gracefully in a Facebook World . You have been married for too long. We leave posted notes for each other online. There are reports that the royal bank of scotland could cut up to 14,000 jobs. We will discuss in the Investment Banking days glory being gone. Good morning, everyone. Bloomberg surveillance. Im tom keene. Here is olivia with the top headlines. The debate about president obamas Affordable Care act will be up to the Supreme Court again. Only 16 states built their own insurance exchanges. The rest use the federal healthcare. Gov system. The court is expected to rule by june. Benjamin netanyahu did not change president obamas mind on iran. He spoke for 51 minutes yesterday, blasting the u. S. Efforts but president obama not impressed by the speech. I did not have a chance to watch the speech. I was on a videoconference with our European Partners with respect to ukraine. I did have a chance to take a look at the transcript. As far as i can tell, there was nothing new. Nancy pelosi called the speech an insult to the intelligence of the United States. House Speaker John Boehner defined conservatives in his own party and let the house vote to Fund Homeland Security through september that averted a partial shutdown of the agency. Former cia director david petronius has omitted to sharing classified documents with his mistress. He entered a guilty plea to avoid prison. Target is getting ready to cut jobs. It will get rid of several thousand positions. Most will come from their headquarters in minneapolis. There will also be job cuts at the royal bank of scotland. They will eliminate as many as 14,000 Investment Banking jobs. A large proportion of the cuts will be in the u. S. And asia. Coffee may actually be good for your health. A new study says that drinking three to five cups of coffee per day can reduce signs of blocked arteries. We are on top of every new piece of coffee news at bloomberg surveillance. I would call that correlation, not causation. I would imagine the people drinking three to five cups of coffee per day are little more active, like Brendan Greeley. Cheers to you. Rbs is cutting up to 14,000 jobs. It is the latest in a long list of global lenders to make moves. At the same time, paying for Investment Bankers is shrinking and Asset Managers are making nearly as much as Investment Bankers. Fred lane spent 30 years in the trenches. He has crossed the chinese wall to asset management. Is this the end of the willful wall street wolf of wall street era . That has been in decline for a long time. This is an industry that is even more highly regulated. We used to be able to travel back and meet with a Research Analyst and there was a sense of responsibility to our clients. We knew where the chinese wall was. We did not have to be reminded of it. We were involved in banking transactions where we were principal. That is the management of a conflict. I think wall street has really changed. The best and the brightest no longer go into the business. There is more money to be made in the Investment Management business. We live in a world with tremendous corporate liquidity. Issuance is down. The fix is down. Interest rates are low. Volatility is low. You cant make any money on wall street. The phrase coverage. Coverage plans. The delusion is that any given bank can get out of the game and sort of stay in the game with coverage in the netherlands were coverage in florida. I have found over the years that that is absolute, total hogwash. I totally agree with you. You do not do coverage in the game of trust in banking. You are no more thing the quality of your people. You are either growing your business and creating opportunity for your people. Sending a 28yearold to show up and make sure you get the fruit basket at christmas, it is delusional. What is driving this . Is it economics or the Regulatory Environment . One way to look at this is that the money is in private equity and venture capital. I think that is true. Public companies are also being taken private. We have hedge fund compensation. Lets not confuse hedging the market versus hedge fund compensation. But there are better ways to make money. That is the truth. The margin squeeze and the volume shrank in the business. Those things combine. There is just too much capacity. There are too many Investment Bankers. Do you think that doddfrank has succeeded in taking risk out of the system . No. Not really. Not really. Do you think it is getting banks to do leverage . It may be doing that, but it also has a Chilling Effect on lending. Very quick, i want to get this in. This is in the New York Times today. 81 percent of americans cannot retire. What are we going to do about this . What are we going to do . One of the things we have to do is a jacket the public that there is something called deferred gratification. We have to educate them on financial literacy. There are number of schools that are trying to do this. Ultimately, there are two things. Investment managers are charging too much for fees for substandard performance. A good percentage of the population does need passive index investing. It does not mean that that is the only approach that makes sense. The other side is that people have to be responsible and think ahead and learn how to plan. Youve simply got to put aside more money. You have to put aside more money. Can i just say quickly that Goldman Sachs put out stacks numbers thing that millenials will inherit 30 trillion in Financial Aid and nonfinancial assets. There were amazing presentations by Goldman Sachs trying to get a piece of that money. We are going to find misery in a different way. It is being in a country where unemployment and inflation are high. The most miserable economy to live and work in. It is coming up on the single best chart. This is bloomberg television. Good morning, everyone. Bloomberg surveillance. It is a miserable day. This is not about the boston red sox. In a normal country, the basic idea behind central banking is that you raise the inflation rate or you do the opposite. Some countries get inflation and unemployment. That is the subject of the single best chart. Bloomberg keeps a misery index. This is not a new idea. You have the Unemployment Rate to the annual changes to the Consumer Price index and venezuela wins by a furlong. Venezuela alone changes the scale of the chart. You can figure out what the problems are in the countries. Ukraine just raise its benchmark rate to 19 point 5 . Venezuela outpaces everyone on the chart. That is the single best chart i have seen of the discontinuity. Russia is not so bad. Nothing to worry about with russia. I was surprised to see south africa so high on the list. They are considering lowering their benchmark rate. Gas prices may have helped them. This is the time of year were strikes pick up annually. They have a lot of issues. They have had consistent currency depreciation. Fred lang, you were not about south africa. It is because of the high Unemployment Rate. You look at misery. We could have a new misery index in the challenge the fed has. There was a whole other america that has a unique misery. Maybe there is a case for no longer using media numbers. We are looking forward to jobs stay on friday. We will give you perspective in the headline numbers and really delve into the wage inflation. Lets get to our top photos. We have a fistfight at 5 00 a. M. Over the photos. Brendan greeley one with this emotional photo. 15 tons of elephant ivory was destroyed by the kenyan president. It represented 1500 slaughtered elephants. The president vowed to destroy the entire stockpile to crack down on poaching. In the 1970s, there were 1. 3 million elephants in africa. There are less than 500,000. We had actually made some progress over the last three decades. What is driving this is wealth in china. There is so much money going into africa for exactly that. Im up to speed on this because one of the little ones did this for her school class. Tanzania. [laughter] anyways, that is the focal country. Elephants are evaporating. They are trying to smuggle them in as allegedly mammoth tasks is one way to get them into china right now. The worlds oldest person told 117 years old today. She was burn in 1898. Born in 1898. She is also the third person ever to reach the age of 117. I was told on Great Authority that this is due to green tea. I dont like green tea. I have to jump in with some surveillance background. We wish mrs. Okawa many more years of happiness. The toymaker tonka and ford motors teamed up to make a big toy truck. It can haul over 17,000 pounds. It will be exhibited later today at the world truck show in indianapolis. It is a promotional item so it is not for sale and they are not producing any more, but i have heard you can actually drive it. That is awesome. But that is not our twitter question of the day. It is not about trucks at all. I lost that argument. What will be the Biggest Issue for 2016 . There is an election, you might have heard. This is bloomberg surveillance. Good morning, everyone. Bloomberg surveillance. Friends and foes of obamacare are closely watching the Supreme Court this morning. They will hear a major challenge to president obamas signature legislative achievement. The point of complaint is federal subsidies. The case could affect coverage for some 7. 5 Million People. The white house says there was nothing new in Benjamin Netanyahus speech to congress. Nuclear talks are a mistake according to israel. The mystery surrounds the identity of that homeless man who was fatally shot by los angeles officers. French Authorities Say he stole an identity years ago. He had served a prison term for bank robbery. The justice Department Says blacks in ferguson are unfairly being targeted. City Officials Say they are reviewing. Settlements have been reached in lawsuits stemming from the crash of a jet two years ago. 72 passengers agreed to terms with the carrier. Three people died and 200 were hurt when the plane crash landed in san francisco. Here is how james bond would drive his kids to soccer practice. It is Aston Martins crossover that would seek for people. The Company Wants to expand its appeal beyond sports cars. Those are your top headlines. Where does the gear bag go if you were going to take your kids to soccer practice . I dont think they thought this through. Maybe there is a second car following. If you have an aston martin. [laughter] lets look at Something Else in the luxury area. Some of us are of a certain vintage to recall the thursday night decision. On to napa valley. All the rage is exclusive wine for exclusive people. Timothy martin presents truly beautiful california wines to the wellheeled. He joins us now. I have a great wine guy. I know nothing. He will go by the super tuscan. It is a california wine. It is a california wine. We produce the wine in napa valley. The idea behind it was to create something exquisite. Everything is done, it is handmade, the process is different than most wineries. The care that we put into it the care of our vineyards to each bottle to how we process it. The only thing i know it little bit about a champagne. The grapes from hillsides and france very. Where do you get your grapes . We have seven different vineyards and five appellations. The idea was to give our master craftsman and partner all the tools to create a masterpiece. He is like picasso. I said, painted a masterpiece. What this allowed him to do was to pull the best fruit from these amazing appellations and create something beautiful. The real innovation is what you have done with the structure of how you sell the wine, right . I think that what we have done is a little bit different from most wineries. We are a private group. We celebrate the woolly mammoth and the reason we do is that the woolly mammoth is the modern patriarch or matriarch to elephants, which are very emotional and passionate and familybased and connected for life. Our model is that everyone is connected. We are a small family. Everyones connected to one of its owners by two degrees. It is a small make group. Cork or screwtop . This is a big deal. Court. I talked to a french guy who says there is a lot of intelligence to a good screwtop. I think there is. From the one making standpoint. There is something romantic about the popping of the court. Cork. This is an organic products. Cork is just one of the elements along with the grapes themselves and the process by which wine is made. Me personally, im not a huge fan of the screwtop. Is it organic . A lot of our farms and vineyards are organic. But it would not be classified as an organic wine. But the one making process is an organic products. One of the things that we have done is try to create something beautiful. Every bottle is hand etched. The label as lenin and letter pressed on a machine from the 1600s. I could go on and on. It is a beautiful bottle. We would have a sip if it was not 6 50 in the morning. We had to spend a week deciding. How much is that bottle and who is buying it . We so predominantly to our private membership group. We have been very blessed. It is about 400 per bottle. I am fascinated by the idea that you can make money by selling a product to people you know and people they know and that is about it. How else could this model be adapted . This is a terrible business model. This is a passion model. We are converting about 10 on yield. We make about 10 times as much juice and we then pull the best of the best that goes into task. The rest goes into really good wines that im not allowed to talk about. Is that the difference between fine wine and expensive wine . It is in the details absolutely. They are not good for a business model, but they are great for wine. Marketing is very important. You have to create a sense of exclusivity and that is part of the model, right . Yes. Well may make 150 cases. The scarcity is not fabricated. Lets bring it back to the real world. I am out of wine. Where will the wine store be in 10 years . In your experience in the Wine Industry where will the classic american upscale wine store be . Where will it be . That is a good question. I think we are continuing to rise as the country. We have the largest consuming country of wine in the world. It is still an experience to have that conversation. Let me get to a forex report. Thank you so much. The euro is what my attention is on. A weaker euro this morning. Stay with us. Phone europe confronts recession tom curley your conference recession. Millions of americans will be directly affected by an interpretation of five words established by the state. Change established by the state. Good morning, everyone. Im tom keene. Joining me Olivia Sterns and Brendan Greeley. There is a libya. Olivia here is olivia. Olivia only 16 states build their own insurance exchanges. The rest use the federal health care system. The language does not actually allow for people in those 34 states to use the government exchange. Sprint corp. Will not issue their ruling the Supreme Court will not issue a ruling until june. The president said the israeli Prime Ministers address had nothing new when it came to iran and its nuclear program. The president said his negotiations are on the right path. President obama when i can guarantee is that if its deal i have signed off on, i will be a group that its the best way to get a nuclear deal with iran stop for us with iran. For us to pass up on that opportunity would be a great take. Olivia netanyahu says the u. S. Should demand tougher conditions for a deal. And the indiana central bank has cut Interest Rates to counter what it calls weakness in the economy. The reserve bank cut a benchmark Interest Rate by a quarter of a percent just days after the government agreed to stimulus. Brendan job cuts are on the way at target. In minneapolis it has 13,000 employees at headquarters. Rbs will cut 14,000. Large portions of the cuts will be in the u. S. And asia. Opening arguments are set for today in the Boston Marathon bombing case. As a guard john i have Dzhokhar Tsarnaev is facing many charges. Prosecution is seeking the death penalty. 120 million americans are bracing for no to utah to be maine to boston. A storm system has already hit the great plains and upper midwest will sleep into new england today. Good morning, boston. Those are your headlines. Tom some difficult data out of europe. We are not near that parity call yet, but directionally, the euro is ever weaker. The Supreme Court will not issue a decision on the Affordable Care act until about june. In the meantime, the case will center around the arguments before the court, the nuance in carbon. Peter cook brings wisdom from washington. A quick update as we go to these hearings what do these judges do in the arguments . How do they respond . Do they sit like cement blocks or engage with the two attorneys . Peter they engage unless youre Clarence Thomas and dont ask any questions. There is direct level of engagement. There are direct west. The they cut them off. And these are experienced attorneys. Theyve been there before and know what to expect. What is one thing to expect watched the body language. Brendan they tailor their arguments to individual justices. They know what can be one with individual arguments. Peter i think its it to say the most important player in this, as with the health care law, chief Justice Roberts. He was the deciding vote. They got to be targeting him because he was the potential swing vote. Hes on the fence, at a minimum. The key question here as we talked about earlier, these four words in the law did congress truly mean that only people who established statebased exchanges, that only they would be available eligible for coverage . The question is, will a literal interpretation of the statute, will the justices side with what the words actually say as opposed to the larger intent of congress . Tom peter, thank you. With us this hour richard hass and Mark Halperin with us as well. America has to get its house in order to have a Foreign Policy. This is one more example that we do not have our act together. We cannot figure out how to do mayors to do medicine in america, can we . Richard Public Opinion is still divided. Mark Public Opinion is still divided. Whatever they rule here Public Opinion will be against the Affordable Care act. Tom take us back to the sweat of that signing. I remember the anger, the tension as the president s that sat there with Speaker Pelosi and others. Is it fair to say that they rammed this thing through . Mark well they did. He didnt because republicans would not meet him where he wanted to head, evening compromise. They have posted then and they oppose it now. You see republican of proposals have a lot of elements that are along the lines of the Affordable Care act. The law itself the notional subsidies come of the individual mandate, corporate mandate business mandate the law itself has a lot of those components, the notion of subsidies individual mandate corporate mandate, business mandate, they dont like those. They will have to have a plan b and it will involve negotiating with republicans in congress. But for now, they have a chance to win the Supreme Court of they are betting it all. Tom when you were serving in government, you were clearly associated with republican politics. It wasnt like this a number of years ago. Richard it is arguably worse. It is never quite as good as people think and nostalgia tends to be overdone. But the fact is, the dysfunction over what we saw every so and Homeland Security debate it has real Foreign Policy consequences. Not only do people want to not emulate us, but they increasingly feel they cannot rely on us. Brendan , help me out. This seems purely political. It seems that they went out and found some plaintiffs to argue the case they wanted argued. Mark they had to find someone with standing to argue the case. But this is not a silly debate. The language of the statute is pretty clear. Both sites have an argument. In the end, they may well be bailed out by of all people, the irs. The court will often show discretion when the law is ambiguous, and the law is ambiguous, and the irs is interpreting it in the way the white house wanted interpreted. Olivia what are the consequences . Mark the law will be standing in one way or another. In the democratic nominee will say, lets keep the afford care act, but fix it. In the country will finally have the debate that we didnt have in times past or when the president was running. Thom colin is Justice Roberts a republican or democrat . Tom is Justice Roberts a republican or democrat . Mark he is a conservative republican that also wants to keep the court from seeming overly pretty overly politicized. Brendan i was not at all confused about whether john roberts was a republican or democrat. Tom but he is taking assumptions away from his appointment. Mark i think hes about to if i were getting command i dont read on the court very often i think hes about to say that gay marriage should be legal and he will strike down the subsidy. Olivia how bad a week is john boehner having . Mark horrible. We have a number of votes coming up on these big, fiscal issues on health care, desk etc. He will have to debt, etc. He will have to get something passed as speaker. Richard i think he actually gave this the president a bit of room to operate. Olivia what do you think will be the Biggest Issue for the 2016 election . Tom good morning, everyone. Here is the morning mustread. Olivia peter ortzag, the former manager of the office of management and budget, he writes here, capital has not written as has not risen as a share of the economy. He is calling for an address of inequality. This dispute thomas the kitties analyses thomas pakettys analysis. Tom he was really out front on althoff and on optimizing in on opting in for the 401 k . Should we tax lands . That is a different idea. Richard anything peter ortzag writes is tom thoughtprovoking. Richard absolutely. Tom cole and secretary clinton on iowa tom secretary clinton iowa, where are we in the middle class debate . Mark anyone can make a rhetorical mistake and end up not where they want to be on this issue, including her. But the fact is that its a matter of both fairness and driving the economic engine. There has to be economic equality in this country and better rising household incomes. Everyone is trying to figure out the way to do that consistently their beliefs of the way the markets work. Richard i dont think Anyone Running for president should focus on economic equality. Economic inequality seems to fade if everyone is participating on growth. Particularly republicans ought to focus on that. Brendan but they, too have made this in this amazing rhetorical move where they say the inequality is growing. How did they drag that into the election . Richard the state a generations old problem that has not been remedied. Household incomes need to go up. People need to figure out a way to afford college, etc. No one of the last three president s have thought about it. Tom Mark Halperin, are you using your emails on the bloomberg system or are you off the grid . Mark i just use twitter. Tom hes already in trouble. Olivia a man was gunned down practically on the door of the kremlin. Will it finally affect the popularity of putin . Tom good morning, everyone. Brendan greeley has our top headlines. Brendan the Supreme Court will hear a major challenge to obamacare this morning to stop the point of contention, federal subsidies. The complaint is that people who do not have their own health and Church Health insurance exchanges should not get coverage. The white house said there was nothing new in Benjamin Netanyahus speech to congress. President obama says there are no plans to change negotiations. Also crossing the bloomberg terminal this morning, new details about how Hillary Clinton controls or emails as secretary of state. The second the Associated Press learned she used a private computer server. That gave her total control over access to her message archives. Federal rules call for all to be preserved. Janet yellen says the fed works hard to avoid what she calls regulatory capture. We dont have to put that in quotations. Those are qualities those are commented commonly accepted terms. She says concerns must be addressed. The Chinese Ecommerce Company alibaba fell almost 3 yesterday. There is concern sales growth may be slowing. One reason, betterthanexpected earnings from one of its rivals j. D. Com jd. Com. And former mayor of toronto rob ford, your remember him. He admitted using crack cocaine. As of this morning, that bid on these things reached almost 13,000. His tie and other memorabilia, including sweatshirts, jackets photos, the bidding wont end until later today. Tom i think this is sad. I dont think its funny at all. I dont know the case or the details. Brennan i think it is extraordinary more than sad. Olivia extraordinarily sad. Brendan larger than life is a cliche, but sometimes appropriate to use. Always, that guy was beyond the bounds of any politician we had experienced. Richard in washington and new york, people in washington think the fed is too cozy with the banks we are regulating. They say they spent 75 of their time dealing with regulators and dont do banking. The disconnect is stunning. Brendan richards on the great divide. I was near tears during the present speech the president the Prime Ministers speech. Those are not my words. It is the minority leader of the house. Mark halperin sits and watches the crystals form driven by drug every day drip by drip every day. What is the legislative action on this next month . Mark like the president with the state of the union, netanyahu had a lot of attention yesterday. My sense is theres not going to be a deal. And if theres not a deal i think both the pentagon and the Israeli Military do not see a great military option. And i think you will see netanyahu and obama once again jointed saying tougher sanctions , and whether there continued to be negotiations or not it does not matter. It is tougher sanctions that trying to keep europeans on board will stop this is a great onboard. This is a great moment for netanyahu, but i dont think it matter moving toward. Olivia what does what do the hardliners achieve . Richard i think the odds may be slightly it against the deal. But what matters most is what emerges and what can attest to rehab . Olivia but we lose and what kind of tabs do we have . Olivia but we lose accountability. Richard not necessarily. Tom discuss what the president said about what the Prime Minister said. Richard some Nuclear Infrastructure is now acceptable. Now we are in the range of how much is not too much. He against the time limit. I think thats a good point. He says inspections are not foolproof. But he did not say they are useless. I think the president actually has quite a bit of flexibility. The one play that i thought netanyahu wins on his the idea that a time limited agreement is a real problem. If i were john kerry, i would say we go basically down the path that we are, but without a fixed duration. Brandon one thing that stuck out in yesterdays speech is the enemy of our enemy is still our enemy and he is referring to the offensive in tikrit. Is he right about that . Richard absolutely. Just because we are so against isis, dont assume that iran is a strategic bedfellow. Tom we have covered this for two days. Is there a difference from 1967 or 1987 . What is the special relationship . Mark it is still an extraordinarily Important Community in the United States politically and internationally. Aipac, 16,000 people at their event to hear benjamin netanyahu. But their influence is not when it was 10 or 15 years ago. It is still quite high, but been diluted by other groups. Olivia as we head into the break, it is our twitter question of the day. What do you think will be the Biggest Issue of the 2016 elections . Tweets us. Tom good morning, everyone. Lets look at the bloomberg terminal and income in america. This is my chart of the last year, which is rising adjusted income from the 1960s just after lbj and nixon, and up we go, and then something changed and we are back to where we were late clinton. Brendan Mark Halperin, we watched this idea of stagnant wages creep into this course in the last five years or so. With republican is the farthest ahead in wrapping this into a platform . Mark jeb bush and marco rubio two guys from florida. They have not just ideas, but they have a way of talking about it that is compelling to stop that is compelling. Tom how do they do that to the trenches in the iowa caucus to people who do not want to your the establishment message . Mark you have to understand what people are going through and provide real solutions. The real issue is concrete ideas of how to address it. Tom lets rip up the script. Is there any ability of a republican to establish foreignpolicy experience . Richard certainly, but there will be a tremendous focus on foreignpolicy. Look at the world, look at the backdrop to the election. The middle east is going through its version of a 30 years war. Russia will probably expand what it doing in ukraine stop who knows his asia will remain stable and venezuela will likely unravel. Tom and i feel like wings world and the way waynes world and the roadway to understanding is the Foreign Affairs magazine. Olivia reading, that the part where you goway cool. Brendan party on, tom. Olivia a few hours from now, justices will be hearing argument that could block insurance subsidies. Only in states with their own insurance subsidies and the rest use the federal system. Opponents say the obamacare does not really permit subsidies in those 34 states for those who use the government exchange. The court is expected to rule on this june. And netanyahu was pleased by the outcome of his speech on iran. The current proposal, he said would lead to a deal. But president obama said his speech did not change anything for him. Obama i did not have a chance to watches speech. I was on a videoconference with European Partners with respect to ukraine. I did have a chance to take a look at the transcript. As far as i can tell, there was nothing new. Olivia nancy pelosi called netanyahus speech and insulting the intelligence of the u. S. And house Speaker John Boehner to five conservatives in his own party and let the house vote to Fund Homeland Security through september. All without touching obamas executive orders on immigration. Brendan david a trace will not be going to jail. He hasnt been to sharing classified documents with his mistress David Petraeus will not be going to jail. He has admitted to sharing classified documents with his mistress. Big job cuts on the way at the royal bank of scotland. Rbs will eliminate as many as 14,000 jobs. You heard that right. That is two thirds of the workforce. The largest portion will be the u. S. And asia. It will get rid of several thousand and target said it will get rid of several thousand physicians positions. It turns out, copy may be good for your health. A new study coffee may be good for your health. A new study says three to five cups of coffee per day may help reduce signs of blocked arteries. Those who drank the most and the least had more calcium in the arteries than those who drank a moderate amount, much like tom keene. Tom is it good with got . What is a moderate amount . Five to seven cups . Brendan i think, three to five. Tom im lost on this. Equities bounce, currencies and commodities, the euro at 10 hundred one are denied. The euro at 1. 1139. On to the next screen if you would. The fixed at 13. 86. Nyfix at 13 point the vix at 13. 86. And in particular the sterling. The 10 year yield at. 12 . Good morning. Im tom keene with Brendan Greeley and Olivia Sterns. Olivia the russian ruble is valued at one third what it was a year ago versus the dollar. Food inflation is through the roof, and there is a critical shortage of mozzarella in moscow. Despite all of this, the president Prime Minister prudence Prime Minister putin s Approval Rating is at 86 . Just yesterday, we saw thousands of mourners in freezing temperatures to pay tribute to the opposition leader, many of them blaming the kremlin for his death. Is this a Tipping Point in russia . Mark i wish i could say yes. But im going to tell you dealt. Russia is increasingly lawless at home. I think putin is more likely to expand the ground he controls in ukraine that give anything up. I think he will did build a land bridge between Eastern Ukraine and russia. Brendan all of these things that we see on television, those are allowed in moscow for the benefit of foreign news crews. But off but outside of moscow, the media environment is completely different. Richard absolutely the whether it is the internet or television, this is an increasingly controlled state. Make no illusions. Economically and politically, he has concentrated more power arguably than any leader since stalin. This is a centralized country. Tom im going to call it almost administration exhaustion creeps in. How exhausted are they being right on top of these issues whether it is russia or ukraine . Mark they are in part because the president has no relationship with putin. Even when the soviet union was an adversary of the first order reagan was able to establish a working relationship with the soviet leaders. This president has not established that. There is no leverage, and there is going on in the world. Brendan it is fair to say that mchale chuck is a different kind of leader Mikhail Gorbachev was a different kind of leader than putin. Olivia what does this do to the opposition . Does this reinvigorate or create a shadow of fear . Richard there is no place in the political market place for the opposition to go. Im not trying to reduce what theyre doing, but there isfor them right now. And there is no private sector. Even in china you have really successful Business People and a crackdown on corruption that is imperfect. You do not see that in russia. Tom in the early 1960s and the campaigns there, Mark Halperin richard haasss world was front and center. Is his world going to be represented in any way . Mark not by the political culture. The two leading candidates secretary clinton and governor bush are the closest to people who believe in that kind of bipartisanship and Foreign Policy. Tom does that give them an edge . Mark just the opposite, unfortunately. Brendan one of the most terrifying things ive read in the last week was from a dissident from moscow. She said that russia the kremlin, is not in control of lawless gangs that take their cues from the kremlin. Richard you see that increasingly throughout the country. I think increasingly he is prisoner of these forces he has released. As bad as putin is, there are now forces in russia that are even darker and i think he is worried about that. Olivia i have heard you say that before. My big take away is the astonishing damage that putin is doing to ukraine far outpaces whatever the sanctions are doing to russia. Tom march 11 seems to be a new date. Olivia i wonder if mitt romney is feeling good about all this. It seems like his prediction that russia is our biggest adversary is coming to be true. Tweet us for our twitter question of the day. Tom good morning, everyone. The euro 01. 11 26. 1. 1126. Writing brendan an airport is getting a facelift. It is not la guardia. It is not the airport that joe biden set is something you could find in a third world country. Tom la guardia is getting better. Brennan we are going to take that off the air. It will be newark. It will be new food. It is going to be amazing. Do i have to move to new jersey . Olivia come to new jersey. There is no problem with new jersey. Betty come to new jersey. There is no problem with new jersey. I cannot stand being at the airport. Theres nothing to do there. But i might actually arrive early when i see this. Can we show a picture of this renovation . Is a 120 million renovation. Theyve got a dumpling bar, a rahman car ramen bar 6000 ipads will be there. Brendan i have a very important question. Where will there be a bar bar . Betty yes, and you made that you may not actually ever leave the airport. Olivia how did new york beat la guardia to it . Betty the guardian is working on their own renovation. 20 Million People traveled through newark per year. Olivia this private money or public . Betty this is going to be private money, as far as i understand it. And the operators have operated several terminals around the country. Brendan you could call this the commissary of thomas theory of airports. I we doing something terribly wrong with Infrastructure Spending . Richard we spend 4 billion on a silly subway station here in new york. The state of infrastructure is a scandal. It is undermining american competitiveness. It is unnecessary. Infrastructure is one way. It is good for jobs and competitiveness. We are crazy not to invest. Tom i have seen the investment in infrastructure at in aviation at the chili dog stand. Mark and there is a great one. Tom but they do it better. That he the top terminals in the world are not in the United States. Olivia that makes sense. Brendan we are going to film an exclusive conference on just airports and when we get stuck in them. Betty and how much scott brady drinks. Olivia and how much scotch brendan drinks. Olivia we will be back in just a moment. Tom good morning, everyone. Futures deteriorate. A weaker euro this morning. Lets get to the top headlines. Olivia obamacare watching the spring court this morning. The Supreme Court this morning. The point of contention, federal subsidies. The argument being that people in states that do not have their own exchanges should not get the subsidy. That could affect up to 7. 5 Million People. The white house says there is nothing new in netanyahus speech to congress. President obama says there are no plans to change negotiation. Also on the bloomberg terminal this hour, at least two people have been confirmed that in an explosion at a ukraine . But the toll is expected to rise. 47 others are reportedly trapped. The mine is a war zone to love a prorussian separatists that are not to blame will stop but ukrainians tell a different story and say that they are blocking them from the site. First Public Comments on the death of nemtsov. According to reuters, several suspects have now been identified. And a probate judge in alabama will be deciding whether to issue samesex marriage license to issue marriage licenses to samesex couples. Its a federal court disagreed, that leaves probate judges in no mans land. The wall street journal says nbc plans to include original series like saturday night live and others. Tom with the democrats and a lameduck president and the republicans on capitol hill, any sense of plutonian compromise are virtually gone. It affects our confidence and economic wellbeing. Mark halperin is comanaging editor of bloomberg politics. He is with all due respect that is seen at 5 30 p. M. , and it should go to two hours long. Mark, we are 20 months away. I want to know what will be different on as we go 20 months to 18 month and so forth. What can we glean that will be different in this ballet . Mark i dont see a lot of mark i dont see a lot of macro trends that will be different. What is different is that historically, democrats are used to having an open fight. This time, they have one candidate. And their publicans have an obvious frontrunner, but in the wings they have 16 to 18 candidates. Tom and there is one misogynist shock to secretary clinton. Olivia theres not much debate within the party on who will be the candidate. And we are all waiting on secretary clinton to throwing her hat. Shes not quite ready to do so but here is what she had to say. Hillary clinton we want to see more women running for congress will follow in the footsteps of her ski and champion equal pay and of Barbara Mikulski and she of equal pay and people opportunity for women. And i think it is fair to say, dont you someday want to see a woman president of the United America . Olivia what is she waiting for . Mark i think she will get relative get it relatively soon. She has so much going for her but she agonizes over every issue. It is easier always for her to delay rather than go in. In last night speech, a lot of interesting pieces of rhetoric. She will have to be better than that to win. Tom her audience barbara lee and the crew, can she raise money like republicans will be . Mark i dont think that is something well have to worry about. She will race for the of money. Brendan why do we allow her to make this distinction about whether she is running or not . She has clearly been running. Its a rhetorical game. Mark because once your candidate, there are certain strictures involved. I think she had a lot of time to prepare for the speech and it was a big audience and it was not a compelling performance. Olivia what is the deal with the email . The secretary of state did not want to use the government system because like many others, it did not work well. She used her own account. How bruising will this be . Mark very bruising. As secretary of state she was in charge of making sure that they preserve the policy of preserving the records. Brendan and i would argue that she did not just use an email account because it was convenient. She set up a server and did all the stuff, and these are to make sure that google does not have access to your account. Mark and it opened up not just the narrative about clintons playing by their own rules. It opens up the narrative about what shes obligated to do. Tom there is a history in it that we glean from the records of the department. Would you suggest, ambassador that we not have that for the clinton tenure as secretary of state . Richard what we do not know if is if there is a differential between what was handed over and what exists. Lots have been handed over. There are many questions out there and there will be questions about the content on the emails, whether anything classified or official was on there that not that ought not to of been. And the question will remain whether everything was handed over that should have been. Tom and as a senior fellow they cannot do their work. Mark you are thinking longterm. The shortterm question is whether it will affect your chance that president. Richard cables gave you a diplomatic history. As someone who has written books on diplomatic history, those days are long gone. Olivia let me ask you about isis. What is going on in tikrit . Is this a good thing that the iranians are spending and heavy weapons . Richard it may help in game tactically, if you will but it will alienate the sunnis of iraq. It will push the sunnis in the direction of isis. The iranian role is counterproductive. Brendan the craziest coalition of ever seen, turkey from the north, iran coming in, jordan, assad. These are not parties that agree. Is this a coalition or just attacking from 1000 positions . Richard it is closer to the latter. And it does not have medium or long term stability. The middle east will turn and get worse. Tom Mark Halperin, who is the median candidate from the Republican Party . Is there and identify friend of the military that kicks out with the Republican Group . Mark all of them to some extent, but no one really who is there. The only one that is better and is rick perry. And all the others, i think, will be challenged to talk about policy in a substantive way that richard was sign off on. Would sign off on. But to be able to convey to the country and the military itself they understand the culture of the armed services, that is not there. Olivia now to our twitter question of the day. The first user, without a doubt, inequality. I see the gap between the rich and poor increasing. Tom i flat out dont agree. I think it is a beautiful topic and should be, but it wont be. Richard particularly if we keep creating 250,000 jobs every month. What it would mean is that Economic Issues will lose a little bit of their edge. Brendan the faster the pie is growing, but less of a distribution. Mark because everyone plays somewhat of a participation in the growth. Olivia more on the twitter question. Foreign policy and hegemony in the middle east. The third answer, can we get through 2015 first . Tom what are you and john doing in the next four weeks to continue to innovate forward . Mark there is a big debate and i was. Jeb bushs first trip to iowa as a possible candidate and in agricultural event an agricultural event that governor branstad is very big on. Tom thank you. Mark halperin starting his look with all due respect tonight. Stay with us. Betty good morning. It is wednesday, march 4. Youre in the loop and i am betty liu. We have a great show for you ahead. Roger altman, joining me on why he is still a big believer in the u. S. Economic recovery. His take on economic sanctions in russia. They will work. He says be patient. If you are a frequent flyer, you will like this. New york airport, undergoing a makeover that might make you it will make me want to stay at the airport. The guys behind the redesign David Rockwell and rich black stein. Heres a look at our top stories. Will the Supreme Court overturned a pillar of obamacare . The justices will hear a challenge to the Affordable Care act. The issue, federal subsidies. States that do not have their own Health Insurance exchanges. Coverage for some 8 Million People is at