Third time in six months. It is raising limits of what thanks can pay savers. Both imports and exports fell last month. Investors appeared to like the move. Chinese stocks rose by the most in two weeks. Air forces across europe are grounding all Airbus Military transports after a crash. The airbus a400m crashed saturday minutes after a test flight. Four people were killed, those two others injured. A german magazine says one of the survivors told investigators the plane has multiple had multiple engine failures after takeoff. Shares are down almost 3 this morning. It may be a sign of saudi arabias frustration with u. S. Policy over iran. The new saudi king is skipping this weeks summit for persian gulf countries. A number of issues will prevent the king from attending. The saudis and other gulf countries are concerned with the u. S. Is being too accommodating toward iran. On mothers day, president obama called up some moms phoning several mothers who had written him recently. He ran into a bit of disbelief when he was telling one of them who he was. Hi, yes. President obama hey, this is barack obama. No way. President obama i decided on mothers day i should call up some letter writers moms to say thank you for being a great mom. That is amazing. Can you account for your movements yesterday . Tom it is killing me. Brendan, did you survive mothers day . Brendan vonnie made a jerky boys reference. I love that. I tom lets do a data check. We look at equities, currencies commodities. S p 500, 2100 with futures a little light. We look for new Economic Data to drive the markets. On to the next screen, if you would. The vix there is where we begin the week within 100 points of the daily close on the dow high. A little backup over the last 24 to 48 hours of trading area big news over the weekend in china. This is their target rate adjusted for inflation. Here is zero. The u. S. Is here, the known world is here. China is up here at 4 . Here is our massive accommodations over crisis rumor, they will react that remember they were way out front on accommodating. Brendan i found a prescient note friday by Deutsche Bank describing the peoples bank of china and how it operates. Too many insurance chasing too many objectives. When i look at this, i scratch my head. I cannot figure out what, why, and when. Deutsche banks theory is we are going to professionalize this. Tom we will talk throughout bloomberg surveillance on this. Part of attention with china is with greece, monday in may. Greece is front and center again. Nobody knows the true urgency and the immediacy for athens and berlin. Our Bloomberg News reporter tom mckenzie is in brussels and joins us. You have been to brussels 47 times. What is different on this monday. Many people might be saying that again but in this case greece faces some deadlines on debt repayment. Most people think they will make the newest payment but there are others coming up. One Million Euros in june, and in july and august, 1. 8 6 billion euros. This admin heartening tensions this amid heartening tensions. Hardening tensions. If the statement doesnt come through, the ecb may be forced to reduce emergency liquidity to brinks to greece banks. Brendan walk me through the difference between the payments that greece has coming up. The imf is next. Is that a more or less implement payment than the one due to the eu later on . Tom mckenzie it is a good question, brendan. It is a more important payment. The greeks want to make sure they are paying. There have been some in the government insert reza, who suggests they be we should default, that we are serious, sticking to the red lines when it comes to maintaining labor market reforms and maintaining some element of prosperity in greece and some element of a tear back amid the austerity message. The ecb, there are some in the greek government who say maybe we should default on that, but the imf is the senior creditor. They will get paid in all likelihood tomorrow. And then they have payments again in june and our divisions between the ecb and the imf on this and those tensions may come to the fotrre in the coming days and weeks. Brendan from my reading, they have a payment due to the imf, the they have a month to the imf to report it, then three months to look like it is in arrears. Is there any sense from where you are standing in brussels that they will try to run that out a little bit this extra month and next three months . Tom mckenzie the sense is they certainly will do that. That is what we have seen the last few months and years. This brinksmanship is going down to the line. They are going to do that. They are going to wait, it looks like, until the last moment because they can keep pushing back on this. The comes a port there comes a point when the end of these deals comes in june, the 7. 2 billion euros. The ecb will tighten the screws if there is any positivity out of this. A lot of big questions. Tom tom mckenzie is in brussels belgium, this morning. After the jobs report and surging equity markets, has the calculus changed for janet yellen . Jerry before the u. S. Economy, brendan has this great business week chart from years ago. Help me here brendan. What has changed . Brendan nothing has changed. Already two years ago when i was at business week, we were so tired of writing about it. There is an article in the economics section, an interview with jan us verify this tom but i am bored. When does this get fixed . The euro was a mistake to begin with. As many people have pointed out, sometimes a divorce is more painful than the marriage, so the marriage keeps going on. Lets call it quite two years ago when this was going up one other time. That is the euro is at 110 and not 140. Here is the irony of this. A strengthening euro is a risk to german Northern European exporters. Pershing pushing greece out strengthens the euro. It is easier to do now than it was several years ago. Tom the weekend was amazing. The consumption of mothers day a known of mothers day alone was enough to boost the economy. After the jobs report, the equity market friday was surreal to see that come on. What was the Oppenheimer Funds take, the synthesis of what we learned friday . What we learned friday is what was driving equity markets and the economy for what is now six years, pretty much this pretty good but we think this is going to be the longest cycle in history. So the cycle continues. There is no reason for Central Banks to interrupted. It is not great, but it is not producing excesses either. What we learned friday was more of the same. The market is light likes more percent, and that is what the market response was friday. Brendan our guests in the next hour will talk about budgets. One way to look at it in the u. S. Is that it has accidentally been good, that despite the dysfunction we write about, the state is ok. Jerry equity markets really like loose Monetary Policy and tight fiscal policy. Remember, we went through our own version of austerity in the u. S. Between 2000 and tom for oppenheimer phones for Oppenheimer Funds you have a Great International franchise there. What is the till that you are advising your pulled folio managers of international versus United States . Jerry we think there is a little bit of a rotation going on. Oppenheimer funds is focused on companies, not countries. There have been a couple of macro things that matter a lot in europe the weaker euro, easier Monetary Policy, and so forth, it has been a boost for some european companies. We think the great european multinationals and exporters get a boost from what happens. Tom brendan . Brendan i quotes jerry webman of opera tyner of Oppenheimer Funds. Coming up, we asked his china headed for a hard landing . There are hard landing a fish and ottos and soft lander us bsurveillance. Good morning. Tom good morning, everyone. Bloomberg surveillance. Im tom keene with Brendan Greeley. Here is vonnie quinn. Helicopters had to rescue people from flash flooding. A tornado injured 20 people and destroyed a number of homes. Jimmy carter is back home in georgia after falling ill during a south american trip. He was monitoring the election in he on a indian in guyana. The former is 90 years old. In golf, Rickie Fowler made an improbable comeback to win the players championship. He made this putt on the third hole for the title. He had been five shots behind the leader with six holes to play over the greatest finish in the tournaments 34year history. He was trying to send one back to his peers. There was a Sports Illustrated survey the said he was most overrated player, so that was one for the guys. Tom very good. Coming up on bloomberg surveillance, we will look forward to the united kingdom. Francine lacqua will move the story forward. Tony blair out this weekend, a little bit testy about labor, and a look ahead to 2016. This is on the politics of the moment. An interesting poll. Front and center, makes a column on the new year on the New York Times today, the saudi snub. Brendan . Brendan chinese shares rallied for the most in two weeks after the european the central bank made a cut. Both were cut by a quarter percentage point. We often turn to Michael Holland on china. Michael holland actually goes there. We have him on the phone right now. Michael, you say you expected this latest cut but not this soon. When were you expecting it . Michael rather than myself, the experts i listen to expected it. In another month or two. The numbers that came out over the weekend indicated continuing slowing of the economy over there. This was forecast well by the companies that we invest in for the past several quarters. First principles here the government at its base has no interest in seeing joblessness so what they do whenever it gets dicey, they have done things, as they have done in the last six months, to forestall the economy getting too slow. That has been the problem with hard landing aficionados. They have been talking about a hard landing in the last nine years, and it has not occurred. They still have real rates, so they have tools they can use in contrast to the rest of the world. Brendan michael do you agree with the Deutsche Bank report . They basically said too many tools chasing too many objectives. The bank of china is becoming more slowly a central bank then we think of it. Michael they are describing a set of facts, how you interpret them. It is a wonderful problem that they have tools. What does janet yellen have that she can do . What do the germans have left that they can go once you that they can do want to have negative Interest Rates yak up people should look at what they have done since 2008 and say that is not a bad playbook. They had a stimulus back in 2000 a were they took 5 of gdp and created jobs, created so much that they heated up the economy. Tom what is the best way for an american to invest in china . Michael probably find a good manager on the ground over there at the mutual fund. They can do it for a separate account. Tom second question that rangers or capitals, game seven . Michael rangers. What a game yesterday. Tom for those of you globally, we have on the east coast here a great hockey game coming up on tuesday. Brennan brendan we are sticking with this question this morning, our twitter question of the day. You heard michael talk about hard landing and soft landing. He believes china will take care of it. If you are a heartland or, let us know. Tweet us bsurveillance. Tom good morning, everyone. Bloomberg surveillance. Brendan greeley here this morning. Dow futures down 14. We will look at our morning mustread. It is a global an american story quality immigration and the hypocrisy handed out by too many. Inequality, immigration, and popper c. The inequality debate has focused so intensely on domestic inequality that the larger issue of Global Inequality has been overshadowed. Rich countries can make a difference. Brendan i have a trouble with that we of thinking because it is obviously right, there is gross inequality among countries. That is one of the things trade is supposed to do. It evens out those inequalities. The problem is that trades can also create inequality within a country. It is not enough to say people in india it will raise their salaries. Tom jerry webman is with the Oppenheimer Funds. Jerry it is a great point, but now it is very selective who it helps. It will help those of us who are a knowledgebased business that can trade globally. Obviously it will not help if i am a mass producer of something. So trade no one could argue that trade is not going to equalize or increase wealth all over the place because it will create some inefficiencies. But we also know that it does not make everybody richer and i think countries that want to remain stable and move ahead politically and be able to do the right things are going to have to find ways to compensate for that. Tom where are we on distrust, particularly the asians . Brendan there is not trust, that if we sign this trade deal with vietnam, for example, that those gains will be distributed equally. That trust is not there, and that is where you see the democrats not on board this with their own president. Jerry it has been the history. The Traditional Democratic constituency has not been helped mostly by expanding trade. Cost of living has gone down you could argue. It has not been good for People Living paycheck to paycheck but it creates real complication in the world. Brendan that is why the economists have to talk to politicians. We know that trade works. People make decisions based on the disruptions. Jerry government has got to play a role ins moving out in smoothing out those inefficiencies. I would argue that nafta seems successful. It has been successful. Mexico probably has a stronger, more stable government than it did 25 years ago. Economically nafta has to be a part of that. It is not a good thing for the u. S. To have a week partner across the border. Tom the week after the jobs report a little lighter on the Economic Data. Coming up, one of our most popular guests Richard Sharma of Morgan Stanley on the economy super cycle. Tom good morning, everyone. Bloomberg surveillance. Tom keene and Brendan Greeley getting your week started. Here are top headlines with vonnie quinn. Funny hoping to see some signs from greece from todays meeting in brussels. The government of Prime MinisterAlexis Tsipras expects the eurogroup to a knowledge that greece is moving in the right direction. Greece is running out of money. Tomorrow it has to pay 840 million to the imf. In moscow, russias president , Vladimir Putin and germanys chancellor Angela Merkel met for the First Time Since january, paying tribute to victims of world war ii. She urged Vladimir Putin to encourage prorussian rebels in ukraine to live up to the terms of the ceasefire. I appreciate the work of the organization for security and collaboration, and now we must do everything. I think the russian president has also influence on the separatists so that we will succeed in implementing at least a ceasefire and that the political processes will also start. Vonnie for his part, pollutantputin encouraged Angela Merkel to lift economic sections on russia. John kerry will visit russia to talk about the situation in ukraine. He will meet with Foreign Ministers tomorrow. The uaw is considering a plan to allow automakers to pay new bluecollar workers. The jobs would not pay much only 10 to 15 an hour. Entrylevel Assembly Workers make 19 an hour. The record drought in california is hitting starbucks. The company will no longer use water from the state for its water brand. Starbucks will move production to pennsylvania and look for a new supplier. In the nba playoffs, lebron james nailed a jump shot at the buzzer to give the kings and cavaliers the Cleveland Cavaliers a win over the chicago bulls. These can conference semifinals series is now tied at 22. Those are your top headlines. Tom it is the monday after a weekend of analysis of a pending paralysis. Britain confronts the union over the desire for independence by the english. David cameron must tread delicately as he turns to europe. Francine lacqua is still counting votes and joins us. What did you learn over the weekend . Coverage was great. Your coverage was great, and edwards in front of westminster. What did you take away from weekend reading . Francine this of course is the day after the night before, so at the weekend we start to have a lot of these leaders, the only real opposition left for the moment is labour, and we still heard from the other party leader. Were talking about referenda. We think at this moment anything can change and can change quickly. But we think of the moment the question of referendum, although the chances have increased, that is being put to rest at least for the moment. What she wants is much more power. Tom i am fascinated with the english one. Scotts, scotts, scotts is the conversation. What do the english one . Francine it is a democratic election. The fact of the matter is there is the united kingdom. Scotland is part of it. There was overwhelming not the majority, i would say almost wiped out because they want the Scottish National party to fight for themselves and fight to get more power to scotland. The english probably do not want to do with the skys but frankly they do not have a choice. With the scots but frankly they do not want have a choice. Brendan what is going to happen . Francine we heard from tony blair, who was putting a very, i would say, interesting point together, that labor has a problem now of leadership, but that leadership goes to the crux of what labor is he wants a labour party that is seen is fighting for the people, it at the same time is a fighter in the world economy. He seems to suggest that really when you think of was a Labour Party Stands for, and a lot of Senior Party Officials seem to think the same thing, but we do not really know who will emerge as victorious in this labour. This is what tony blair did when he called new labour. It is starting over from a party that could at least push something or make the tories change or give them a good fight, which we have not seen thursday. Brendan the best that i got over the weekend was that new new, new labour is like new labour. Francine we had this rather bizarre election results. She is a very liked figure. She is considered very authoritative. So you have 650 seats in parliament. 58 of those seats are now to the Scottish National party. The english and the scots i will say westminster and the Scottish National party, will have to find a way to work together. Tom francine lacqua, thank you so much. Jerry webman is with us from Oppenheimer Funds. It is a new britain. We have all this history where things got shattered, didnt they . Jerry the debate in labour going back to the early 1960s, there was a book in the early 1960s that argued if labour party does not move to the center, it will lose elections. It could be ideologically pure which is sort of the direction that it has always been a fight between what was a more orthodox socialist view, more centralist socalled renew labor. Tom can you bring those lessons over to the United States as we move into 2016 . Jerry i dont think the language is meaningful here. Compared to the rest of the world, we do not get very far to the left. If you look at how many policies, each of these parties state that used to be somebody elses policy, whether it is free trade among the democrats or it is a part d medicare for the republicans you know, using the earned Income Credit something that came out of the right. Now the left supports it. Our parties are very close together. Brendan i would argue that the democrats have the same problem that labour does. It was clear afterwards that the democrats really did not know what they stood for what they wanted to run on. We have an election in 2016. What they are running on is hillary clinton. We will see how likable she is in our next lock. That is the subject of our single best chart. This is bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Im tom keene. With me, and rent in greeley. He has the single best chart, which tilts toward november of 2016. Brendan we are not months away from the vote in New Hampshire. According to a Bloomberg Politics poll 86 have a favorable opinion of hillary clinton. It is news because recent news talked about her favorability. This is the single best chart. This is a year before the election for every cycle since 2000. No matter what, she is still likable. There was a joke in the last campaign, barack obama said you are likable enough, but it turns out she is likable. More so than gore more so than clinton, more than herself last time around. Phil mattingly will join us from washington. You are traveling all over this great country watching all kinds of election coverage in the next year and a half. I do not in the your life, but i want to understand, is hillary likable enough . Phil i will try to undercut tom, who is skeptical of the news value of this poll. Here is why the numbers actually matter. This goes to your point. It has been a rough month to month and a half for hillary clinton, based on the stories about the foundation. Her net favorable around general election in the same poll dropped eight points since february. Her ability to maintain high numbers with democrats is important primarily because one challenger has entered the race and another is likely to. In governor Martin Omalley and the next two to three weeks. Nobody is going to come in and in hinge on her ability to lock up this nomination. That is valuable at this early stage. Tom what is their strategy right now . Brendan and i like the British Elections where they start 10 days before the election. What this she do day today day to day to keep the energy going . Philco she is focusing on local issues, meeting with diners in New Hampshire, iowa, South Carolina. They do not care about the national media. They are not trying to reach general election voters in a big way. The issue is getting it on the ground locally, making it look like she has to work for the nomination. Brendan this is not necessarily a coronation, phil but the queens meeting with the commoners. Is that what is happening right now . Phil i do not think that is how they pull it necessarily that how they put it necessarily, brendan. If you are going into a general election, it looks like it is being handed to you. It will hurt you in a general election, it will hurt you among independents and among your own party. You need to act like you are working. There is recognition of that in the campaign. Brendan phil mattingly, thank you. We will have a conversation with tom keene about taking everything with you seriously. Number 3, 13 years worth of satellite imagery has been compiled into one map until the dow average until the average cloud cover across the world dark blue areas remain mean dark clouds, crew mean dark blue areas mean no clouds white areas mean cloud coverage. Jerry webman point tell you can see california, too. Number two, new york. This is expected to fetch a lot of money today. That would break the record for the highest price ever paid for a sculpture at an auction. Tom i think it is such a statement to the middle 20th century. Coming out of world war ii. Jerry i would rather have brendan can we just keep talking art with jerry webman . Number one is video. Chris cryer scored two goals for the washington capitals. Tom this is the heart of the playoffs right now. The rangers capitals at montreal, tampa bay, then go on to another round after that. Game to game is totally frantic and crazy. The goaltenders have been nothing short of a miracle. Mr. Cryer goes down fast fast, fast, just seconds into the game. Brendan you missed your calling. You should call hockey games. Tom Joe Micheletti i am no Joe Micheletti. Brendan you would be so happy calling the games. Coming up next, congressman mike turner. He has a lot to say about unrest in the middle east. This is bloomberg surveillance. We are on Bloomberg Television streaming on your tablet and phone, and at bloomberg. Com. Tom good morning, everyone. Bloomberg surveillance. That get to top headlines with vonnie quinn. Vonnie four suspects will be in court today in mississippi, accused of gunning down does go. The officers were shot and killed during a traffic stop late saturday. It is the first time in three decades that a Hattiesburg Police officer had been killed. Thousands of gallons of oil at a power plant in new york city are pouring into the hudson river. A fire occurred because of this saturday night at it will be weeks before the affected unit is restarted. Disneys avengers sequel keeps overpowering competition. The age of ultron grossed 77 million over the weekend. It has taken more than 300 million here, and another 375 million worldwide. Tuesday, the avengers opens to the second movie market, china. I know you are more about frozen than avengers. Tom mothers day, that is what she wanted to do, so we went to see avengers. Ruchir sharma will join us. Looking at Morgan Stanley and emerging markets. We go to geopolitics later in the hour, and of course the summit this thursday at camp david. Then douglas will join us, the former director of the congressional budget office. We will talk to him about the good news about america has budget and some of the challenges to come as well. Brendan the new saudi king is skipping president obamas summit for persian gulf countries at camp david. He says he has Something Better than to do. Joining me, commerce and michael turner. You have been watching the middle east your entire career. Are we looking at a new architecture of diplomacy in the middle east . Roep. Turner it has shifted. We are not giving a clear path to our allies or those in the middle east understand where the United States will be and what direction we will take. That has caused a significant amount of splintering and has left people adrift. Brendan are you encouraged by the saudis taking their own airstrikes against the insurgency in yemen, taking more responsibility in the region . Rep. Turner you end up having these isolated oneoffs of conflicts. We need a global strategy and acorn aided effort. Brendan the strategy in the middle east have to come from the potomac . Rep. Turner we understand with our significant military capability what is occurring in the area, and having the ability to share intelligence and strategy can make a difference. Tom you are from ohio. At any of the republican president ial candidates actually called you up and said you are our republican effort our republican expert on Foreign Policy . They do not care about Foreign Policy, do that . That is not part of the campaign debate, is it . Rep. Turner it is not now, but when you look at the weakness of what we are putting forward, certainly the American Public is talking about it. Main streets of usa are worried about not only the effects of isis, the diminishing influence of the United States, the threat of a new aggressive russia. People are seeing that the United States needs to take a stronger role. Brendan i am going to play you something that all men security secretary David Johnson said this week. He said we have encountered a new phase in how we Contact Global terrorism. Definitely a new phase in the global terrorist threat, where the socalled lone wolf can strike at any moment, which is why the fbi, in my judgment, come in protecting those who commit over acts with support to terrorism brendan are our domestic agencies on top of rep. Turner if you look at the 9 11 Commission Report it gave a warning in chapter 12 that said if we look at the threat of al qaeda or Osama Bin Laden, we will miss the overall effects of terrorism, and we will be facing basically on our homefront these types of threats. We need a global strategy and a strategy that looks down into the activities going on in the United States. Brendan i find the 9 11 Commission Report still makes for interesting reading. Have we carried out faithfully what it asks us to do . Rep. Turner i would commend everyone to reread chapter 12. This administration after they went after Osama Bin Laden and al qaeda basically pulled back. The 9 11 Commission Report said if you do not have a global strategy, you will face exactly what we have today. Tom mr. James through the basketball through the hoop yesterday. Is lebron james a democrat or republican . Rep. Turner who cares, right . Tom you look at the spirit of ohio and secretary clinton, i think folks in New Hampshire the single best chart what is the polls in ohio for november of 2016 . Rep. Turner people are looking for a change. They want america to once again have a strong voice, both in the economy and internationally. People are worried. Tom the Economy Today is better than it was quantrill years ago. Rep. Turner it is improving but not fast enough. If you look at what he has accomplished in the states, he has the resume to step forward as an incredible president ial candidate and say i have turned the state around. Tom someone who actually has job experience . Brendan that sounded like an endorsement. Tom it is not an endorsement or just heaven for for bid that we have a polished just heaven forbid that we have someone who can do the job. Commerce and, thank you so much. Jerry webman, thank you as always. Lebron what a shot that was. How about a report on the choir to Economic Data. Euroyen comes in stronger. The dollareuro distant from that. Please stay with us. Another hour of bloomberg surveillance. Good morning. Announcer this is bloomberg surveillance. Tom we three kings will not attend the summit at camp david. The white house massages the message. China staggers. They cut their target rates. Next, will the people enjoy a beijing cramdown . The Vice President considers americas rusting bridges and potholes roads. The morning, everyone. This is bloomberg surveillance , live from our World Headquarters in new york. Im tom keene p rejoining me brendan im time keen. Im tom keene. Rejoining me, Brendan Greeley. Brendan it is about a quarter inch thick on the minivan right now, the greeley household. Im really excited about talking to eric spiegel, the ceo of siemens usa. We cannot figure out how to spend money or where to get it. The problem is, they have the same problem in germany. German roads are very bad. Tom heres chairman of the ford theater society, which is very cool. He is very much involved with the Abraham Lincoln effort. Lets go to top headlines. Vonnie there is another showdown today between greece and the emergency finance ministers need for under the gun to come up with a list of economic reforms. The next hurdle comes tomorrow when it has to pay 840 million to the International Monetary fund. Chinas government is trying to jumpstart the economy. The central bank is cutting Interest Rates for the third time in six months. It is also increasing what banks can pay savers. Both imports and exports fell last month. Investors appeared to like the move. Chinese stocks scored their biggest gains in two weeks today. Air forces across europe are grounding all airport are grounding all airbus flights of a certain model after a crash this weekend. A german magazine quotes a survivor as saying the plane has multiple engine failures shortly after takeoff. Shares of airbus are down more than 3 this morning. It may be a sign of saudi arabias frustration with the iranian policy. The saudi king is skipping the summit to persian gulf countries this week at camp david. Saudi arabia says the king will be busy with a scheduled ceasefire against the in the fight against rebels in yemen. Other gulf countries are not happy about nuclear talks, saying the u. S. Is giving in too much. President obama some moms on mothers day, telling several mothers who had written to him. Yes . President obama this is barack obama. No way. President obama way. I decided on mothers day i should call up some letter writers moms and say thank you for being great moms. That is amazing. Tom i dont think so. It just says jimmy fallon skit. Vonnie thank you. You wonder where it will be in six months or a month as a conservative majority tries to figure out with some form of austerity or nonausterity into the future. Data check quiet markets. Futures negative one. On this monday, greece and the bizarreness of their negotiations with creditors is at front and center. It is truly a mystery when greece will run out of money. After the greek drama, one of greece . Ruchir sharma is the correct person to speak to. He is with Morgan Stanley. He writes important books on emerging markets, including is usually including his hugely successful breakout nations. Your book just sets out like a sore thumb. Do you write about greece in your book . Were they ever a breakout nation . Ruchir they were never a breakout nation. Im going to flip to greece as an investor in brendan this is fascinating, the fact that greece might miss the imf payment. The imf developed economies still do this, but maybe that is not what greece is. Ruchir there were all these conversations about how the imf should shut down because the world is doing well. Coming back to greece, there is ample scope for rings midship or for an accident to take place out there, but one thing has kept me balanced as far as greece is concerned. 80 of greeks want to remain within the euro. I find it quite fascinating, with all the talk about austerity 80 of the greeks still want to remain in the euro. Tom emerging markets are restructuring their debt, and it is not happening here. What will be the catalyst that the Morgan StanleyEconomic Team sees that will get europe and greece to a restructuring . Ruchir they have cut labor costs. Getting some of the rich people to start paying taxes. That leads to a backlash of people suffering from pain and austerity. I would really say that lets overlook the extent of the adjustments that greece has made great they have cut labor costs quite a bit. The adjustment to the fiscal account has been very severe. It has been one of the harshest adjustments of any country in recent times. Brendan greece is insolvent not a liquid not illiquid. Ruchir if you look at the past episodes of debt forgiveness, every country that goes through such a debt crisis, about 20 of debt is typically written off. That is what will have to happen in greece to some extent. Tom you are better at this than i am. They have 700 some could julian now. Brendan it is completely unsustainable, and they are taking money from the eu countries to pay off the imf. If you think the greeks wanted to stay in the euro as being hopeful how is this going to happen . Ruchir there is some scope for some accident, but in the end there will be a deal which will satisfy the germans and the negotiators at eu. Every time the government takes a hardline stance, their popularity goes down in greece. It is in the governments incentive in greece to get this done. That is the key thing. Tom lets rip up the script and go right to china. Your reaction is this a moment of desperation for china to try to jump start the economy . Ruchir that is the perfect word, desperation. Tom you are down 4 to 5 gdp. Ruchir the economy is growing very slowly, and this is the last gambit. Tom what happens next . Ruchir if you look at the stock market, it is up 100 over the last year. Marginal lending in china has flourished. The amount of margin in the chinese stock market today, as the u. S. Stock market bubbles in 2000 and 2007 as a share of the market cap, this is a fascinating story. It is in the stock market has not the real economy and not the real economy. Brendan on friday, if you look at the percentage of credit that goes to private and state owned enterprises, it has taken off since 2007. Is that a healthy adjustment toward the private sector, or is that a credit bubble . Ruchir it is a complete credit bubble. There are only two outcomes either a Major Economic slowdown or a financial crisis. I think that what we are seeing now is the classic label, a massive slowdown in china. Tom desperation in china does beijing control the levers around the country . Ruchir i think it controls a lot because that is where they can avoid a financial crisis. Lets be clear today the system today is clogged with debt, so the capacity for our wars is quite limited for borrowers is quite limited. More than one third of the chinese debt is going to of the chinese new debt is going to reap old debt. There is a classic data bubble something that we are in other countries. Tom there is a headline there 4 5 debt is a huge deal. Breakout nations. There it is. On to our twitter question of the day. We have talked about it for years. Is china heading for a hard landing . We need you to discuss that bsurveillance. With us for the entire hour, Ruchir Sharma of Morgan Stanley. Good morning. It is bloomberg surveillance. Tom good morning, everyone. From new york city, bloomberg surveillance. Tom keene, Brendan Greeley. Mr. Greeley, the morning read . Brendan edward luce reminds us that we are not. He economic animals. Were that the case, we would longer go we would long ago have lowered transaction costs. This is Thomas Friedmans idea that two countries with mcdonalds could never go to war. Is that assumption over . Ruchir there was something called the globalization, which is that before 2007 it was all about globalization, about the world getting much more integrated. What we are seeing in the last decade is deglobalization. Capital flows are moving much more slowly than they used to. What they are seeing now is much more regionalization and localization and he globalization. This is a train that is here to stay. Brendan this is a developed economy issue, too. Do economists need to take developing economies more seriously . Ruchir yes. The other buzzword i am hearing is in this expansion of democracies that took place in 2006 2007, the latest findings are showing that the last four to five years, there is a retreat on that front. Tom who are the discontents right now . I do not see screaming about labor arbitrage in the u. S. And asia. Who are the discontents as we go into 2015 . Ruchir the wage differential between the u. S. And china, jobs are moving to vietnam, bangladesh. Commodities exploding countries ours in brazil russia, south Africa Brendan we will get to that when we talk about chile. You just came back from there. The anon bangladesh, indonesia is that where i should be headed right now . Ruchir there is opportunity out there because they have not been discovered. There are lots of countries on that front. The last 12 to 18 months, it has been pakistan. The world order of the last decade is being turned on its head. Tom world order would be a good title for a book. Brendan back to the u. S. Is there a stalemate in congress . Coming up, we discuss balancing america upon budget. Bloomberg surveillance. Good morning. Tom good monday morning. Bloomberg surveillance. Here at top headlines with vonnie quinn. Vonnie a dramatic rescue in north texas. Helicopters flew in to save people trapped by flash floods. Storms dumped up to seven inches of rain, and that was not the only weather worry. A tornado injured at least 20 people and destroyed homes per jimmy carter is home in georgia after falling ill during his South African trip. He was his Nonprofit Organization said only that he was feeling under the weather. The former president is 90 years old. An amazing finish in one of the years biggest alternatives. Rickie fowler drained a putt on the third hole when it was the biggest comeback in the tournaments 34 year history. Tom we look at china. Ruchir sharma is with us from Morgan Stanley. We look at the idea of a hard landing in china, and then we go to america, repairing america important infrastructure with rice president biden, and we will focus with Vice President biden, and we will focus on the need to fix those any worsening bridges. And then the end of the commodity surplus cycle super cycle. To americas apprise, the budget of america trending better than good. Over the weekend, Brendan Greeley read budgetary and economic outcomes in the past for federal revenues spending in the conference report in the 2016 budget resolution for it the summary is someone should take a victory lap. Maybe that would be douglas, the president of the American Action forum. We will talk to him about the budget as well. You are the only one i know who would read a report like that summary. What is the state of americas budget right now . Douglas right now it is manageable over the next 10 years, and it will become unmanageable if we do not change direction. Spending is cost traded in federal health and retirement programs. I think the major challenge is to make sure those programs survive. Tom you supported republican politics. Can you give the president of victory lap here . Doug not in the long term. It has come down in the near term, but we have not touched the core problem. The core problem is socalled mandatory spending. Everything done in washington is on the discretionary side. Caps on defense and nondefense spending. The caps were already showing wear and tear. We have to go where the problem is. Brendan to fix that, could you contemplate any sort of tax increase to fix mandatory longterm or discretionary . Doug you have to get to tax reform. Ramping up the tax reform is a mistake. The issues the u. S. Should address is entitlement reform and tax reform. Brendan economist on both sides make sense. On both sides say it makes sense. Why is it so hard to get it passed in d. C. . Doug it is always hard. It is tough. The reality is any good bipartisan idea gets held hostage. Someone wants to fix something that they want to get through on that, and it slows down the process. Tom will your world be part of the president ial election debate, or are things so good now that all of the debate will wait for 2017 . Doug i think if you are running for president in 2016, you have to look at 2024, when you will be still in office in your plans and recognize that at that point we are starting to enter a debt spiral. That is why interest is 80 of the federal deficit. You have to make plans for that, you have to warn the American People that we will change direction, and this has to start showing up in electoral politics this cycle, certainly the next. Brendan after two years of showdowns, budgetary showdowns we end up with Discretionary Spending that is kind of a mess kind of hobbled on purpose. The economy has recovered despite that. Would you advocate just sticking with what we have right now, all these temporary solutions that do not seem to because a problem ashton do not seem to be solving that do not seem to be solving problems . Doug this has been an addition by subtraction. I would like to think we could do better than that, that we could actually come to some bipartisan agreements, as we did with the government stocks and we did the medicare reforms and things like that. Not huge changes, but steady bipartisan incremental reform that relieves unnecessary pressure on the discretionary budget, puts it where it belongs, and make sense of it. Tom how many pages is doddfrank, and have you read them all . Doug i do not know, and i have not read them all. Tom what gets your attention . Doug in terms of specific provisions, i am deeply concerned about the f sock. I am not sure i like where they came down on insurance companies. It has a monetary authority, so the f sock was in substance in a process something that is quite troubling right now. Tom Douglas Holtz eakin, thank you so much. Brendan i know that i had said this is going to be a mess. All right, later this morning the Vice President will sit on stage with siemens ceo eric spiegel. Eric segal. Eric segal is joining us on surveillance. This is not just a u. S. Problem, it is a global problem u. S. Bridges. We are on Bloomberg TelevisionBloomberg Radio, and streaming on your tablet and phone on bloomberg. Com. Tom coburn good morning, everyone. What did you be focused on today . Greece, though question about it. Lets go to the bloomberg terminal and look at an important series. This is an important inflation or someone say disinflation adjustment. National stimulus pushing the rate down to 0 . The limitations and constraints one of them is the real rate of 4 . Brendan as we get these anecdotal reports, the possibility of a slowdown in china, confronting the possibility of less than 7 , it is an amazing number. Their response Ruchir Sharma you are here with us from Morgan Stanley has been mostly in the last several months, monetary and not fiscal. Ruchir a lot of the credit allocation data is done in quantitative terms, which is not priced off Interest Rate but actually bank lending direct to new york. This is one part of the story, but not the full story. The whole issue is, launching a massive stimulus like they did in 2008, 2000 9 tom the word here is beijing cramdown. Is there ruchir that is what the great story is. A lot of people keep speaking about what if we had more infrastructure out here . If china tried that strategy in 2008 in 2009 without massive infrastructure, the real problem is huge overcapacity and massive amounts of unproductive for structure, which is come up in china. Brendan do you agree with the dojo bank line Deutsche Bank line which is too many tools . Ruchir they want to have a reserve currency status. They want to slow down slowdowns too much. The key thing here is that after such a big debt room, theres really no way out. You have to pay back for that. Tom we will continue this discussion. Right now on this monday, your top headlines. Here is vonnie quinn. Vonnie they are hoping for some sign of progress from greece today. They will meet oneonone with germanys in less than an hour. Ministers are meeting in brussels about the debt crisis. They will not give more bailout money until the greeks come up with more economic reforms. They want the ministers to a knowledge that greece is moving in the right direction. Greece is quickly running out of money. Tomorrow, it must pay the imf about a hundred 40 million. Vladimir putin will meet in america for the first time. He was in moscow to honor the victims of world war ii. On july merkel Angela Merkel were urging her the craniums to have a ceasefire. Now, we must do everything. I think the russian president has also influenced the separatists. We will succeed in implementing at least a ceasefire and that the political processes will also start. Vonnie meanwhile, there is where that secretary of state john kerry will travel to russia for talks on ukraine. Carrie will meet with the Russian Foreign minister tomorrow. Breaking this morning volvo plans to build its first plants in north america. It is an attempt to revive u. S. Sales which have dropped by more than 50 in the last decade. The South Carolina plant will employ 4000 people and is expected opened in 2018. The record drought in california is hitting starbucks. The company will no longer use water from the state. It will look for a new supplier. California has imposed its first ever mandatory water cuts of 25 . Lebron james comes to the rescue for the cavaliers. He hit a jumper at the buzzer to give cleveland a twopoint win over the chicago bulls. The each the teams each have two wins and the eastern conference semifinals. Those are your headlines. Tom what a shot by mr. James there to keep the cavaliers in it versus the bowls. Let us do a data check. Currencies and commodities have been boring. Now they are hired. That is an exclusive. The 30 year bond beginning tamari great test to migrate. The 30 year bond beginning to migrate. The daily close is within 100 points. The dollar at 6. 2 . China lowered its rate. We have what ruchir is desperation being the proper word to use. Brendan this is bloomberg surveillance. Im Brendan Greeley with tom keene. Hours later, Vice President joe biden will talk about infrastructure. Planes, trains, and automobiles. We have eric spiegel. He will be on that panel later on this morning. He is in d. C. Mr. Spiegel, help me out here. Infrastructure is a subject that is both intensely important and intensely boring. Get me excited. Why do i need to care g . Eric if you look at all the studies we have done and put in more rails and roads and put in more intelligent infrastructure and buildings if you upgrade the infrastructure around manufacturing, you are going to track a lot of investment. We finished a big study with economic develop Research Group that shows that for example in salt lake, the new light rail line drove hundreds of millions of dollars in growth and created new jobs in a short time. Under this another story at the university of louisville was the same story. It dries investment, growth, and jobs. It is a growth story. Infrastructure is a part of that. Brendan to get that multiplayer, you need to spend the money. That is what we cant agree on. What money to spend on this . You will be on that panel was the Vice President in an hour or so. Are you suggesting him to get a tax hike . Eric we have not increased the gas tax in real terms since the 1990s. That one may be difficult. Theyre looking at different things. I think Congress Needs to come up with a scheme pretty quickly here. We need not just an extension but we need multiyour funding to get certainty and understand what investments need to be made. These Infrastructure Investments take multiple years. That is one of the things that we are seeing. We are not getting enough time for people to put the bigger plans in place that are really going to drive a lot of development. Tom you came out of youngstown. You went to harvard and played tackle. And then you went on to talk. At dartmouth, Jose Fernandez came out of touch. He has done a lot of thinking on why u. S. Companies are so far behind on the infrastructure. What are germans doing better than our companies . Eric i think in germany at siemens, we take a longterm view of things. We dont take a shortterm view. We understand infrastructure is an important part of that. For example, we have invested in several brandnew manufacturing plants here in the u. S. In the last four or five years. Every one of those, we either need to upgrade rails or roads and put in other types of infrastructure around water, electricity, etc. When you look at adding things like manufacturing, you look very hard at the structure because you need to be able to move products within the country and be able to export. Germany is an export story and that is because they spend money on the sharks are. Brendan i would disagree there. You spent a lot of time at the headquarters in germany, but one of the things that we hear from germany is that they themselves are having trouble spending money on infrastructure. The Smaller Companies in germany are complaining about the roads in germany are not where they should be. Why is this so difficult . It is something economist like but politicians have trouble with. Eric im not sure of the german story. I know they need to increase spending as well. Over here, i think it is all about the revenue and where we generate the revenue from. I think there is bipartisan agreement here and the u. S. About what we need to do. But finding the money is the big issue. One of the new things that we are seeing is private investment. For example, we are part of a project that is going to be a higher speed rail project from miami to orlando. That is privately owned and funded to be built over the next couple of years. That is the story we need to see more of here in the u. S. Tom what is your single message to the Vice President . Eric he needs to work with congress. The administration is stored with congress to find this funding and get more investment. But also, we would like to see more mobility investment. The u. S. Is lyric lagging in terms of highspeed rail for the u. S. Print we are the only developed country in the world that does not have highspeed. There is a lot of money out here in the lungs. We like to spend some of that money on a mobility. Brendan eric spiegel, thank you so much. Coming up next, boom and bust in july. Tom good morning. Im tom keene. I am paris scoping with Brendan Greeley. What do we have . Brendan Erik Schatzker is onset to talk hockey with you. That is not why he is here. He is here because you have dick parsons on today. He left espn and is coming straight to you to tell us that there is no money left in Sports Television . Erik first, let me mention that just like the jeffersons Stephanie Ruhle and i are moving on up. We are moving on up to 8 00 and betty liu is moving into noon. It is Market Makers from it 00 to 10 00. 8 00 to 10 cut. 10 00. Dick parsons and is coming on dick parsons is coming on. I want to start with bill simmons leaving espn and going where . Who would have a better idea . Tom who is bill simmons . Erik perhaps the most red sports commentator of all time. Tom i dont know. Erik grant land does anyone know . Brendan it is perhaps or was an amazing magazine. Erik a blog. We can call a digital destination. Brendan i knew writers who wrote there and it was a dream. Erik bill simmons makes like 5 million a year at espn. Espn and him have had differences and cannot come to terms on a new contract. Where is he going to go . Does he going to go to another traditional media property like fox for example . Four might he find some private Equity Capital backing from a firm like providence equity, who is big in media were dick parsons happens to be a Senior Advisor to create a digital property on his own . He will monetize his notoriety perhaps. Brendan there was this assumption that for television and for digital news that at the very least that at the very least there was going to be money and sports. Sports happens in real time. You cannot timeshift it. Is that still true . Erik why do you think it is not sure . Brendan im wondering about Live Streaming disruptions of the unbelievable money machine that is televised sports. Erik i think youd have a hard time doing monday night football on periscope quite honestly. Brendan yes. Erik Live Streaming is going to change something but i dont think it is going to change college football. I dont pick it is going to change live broadcast of the nba. Brendan let us go back to bill simmons. He famously got into a fight with espn over what he was and was not allowed to say publicly. Erik about Roger Goodell in particular. Brendan if he goes on to a new project, will he be able to be free to say what he wants . Erik depends on who is working for. Brendan is he going to find in the credible platform like you has been . Like espn . Erik we will see. Im excited. Brendan dick parsons will join Market Makers on a new time for Erik Schatzker and Stephanie Ruhle. This is still bloomberg surveillance. Tom good morning. Let us get right to the top headlines. Here is vonnie quinn. Vonnie suspects will be in a Mississippi Court today accused of killing two police officers. They were fatally shot late saturday during a traffic stop in hattiesburg. They were the first hattiesburg officers killed on duty in three decades. Yours governor once the help health hazards. His order came after a New York Times investigation of the industry. A new agency will check on them statewide. A big mothers day for the u. S. Women. U. S. Womens soccer team. Before taking the field, the players were surprised to learn that their moms were in Southern California for the game. U. S. Went on to win 30. Those are your top headlines. Brendan. Brendan 20 . That is the percentage of chillers gdp chiles gdp derived from copper. There is worse news. The political picture is equally bleak. The president has asked her cabinet to resign. You just want to chill a. Does chile. I hear that they have done everything right economically but it is still a proper economy . Ruchir this was a star economy in latin america for the last two decades. A dire focus has turned to income inequality. This is a big issue globally. But heres one commonly country dealing with income inequality. It is hitting the Economic Growth rate. It has fallen very sharply. It was down to 2 last year. That is a big deal to what has happened as they focus on one issue. Brendan what is the history of this . When did it happen and what were the policies . Ruchir income inequality has been an issue for a long time. When they reelected her and she came to power like a your go the entire focus was a very left wing focus that had to deal with income inequality. Cheers focused on that yes focused on that raising taxes, giving more Bargaining Power to the unions and she is focused on that. Her Economic Growth fell very sharply in chile focusing on one single issue. Brendan for me when you talk to economist about latin america, they say look at chile. They are doing the right thing. That is not necessarily true now . Ruchir it was true, but that is the rear window and after i met the former president out there there was a really interesting analogy for u. S. Policymakers. He said if you want to focus on some issue, use both sides of the scissor and not just one. When she is doing is using one side. Tom your great call was to say that come on done and you better get used to it. Bring us uptodate on your work to date with Morgan Stanley on what we will see with commodities. Will chile and the others call bottom at some point in the near future . Ruchir heres the unfortunate news. We looked at the 200 years of Commodity Prices and their two big conclusions. One is that the 200 year history shows that Commodity Prices over time do not go up. The second conclusion is that after a big ticket up, you two decades of drops. Tom did you by that forward that we would have a two decades slowdown . Ruchir it was done for a long period of time. It was in the last quarter of 2014. Tom does china have a lot of inventory . Do you know what you china has a margin . Ruchir we dont know without exact figures. What we can see is that it is really hard to turn off the task. Commodity china is really slowing down. I think we can expect Commodity Prices after the recent bounce to having a long stumble like they did in the 18 1980s and 1990s. Brendan china is looking at latin america in a new way. Theyre looking towards the more little rise, liberalized economy. That is where the growth is. Is that what you see happening . Ruchir there are very few write gross spots in latin america. Im not sure what theyre seeing if you look at growth in latin america this year, it is going to be low 1 for the entire continent. There are some signs of revival, but it is very slight. The former gross stars which used to grow by 6 are note now growing by 3 . I do not see many bright signs in latin america. Brendan can the economy not grow until brazil and argentina get together . Ruchir im not sure how they get going. Argentina is well after chile. The big story for their is the political change. They had political reform and october that argentina could come back from the brink as everyone had written them off. Brendan you brought the only good news from argentina and five years. Ruchir it is very conditional, but argentina could be back from the brink if you bring political change in october. Tom the honeymoon is over. How is he doing . Ruchir it is mix. He had a window of opportunity in the first months of his terms to make big reform. That window has seemed to be shut. He is trying this new model now to work in india to get growth. The window of opportunity for big bank reform in india seems to have been closed down. There were times in the first months where he could of done that. Brendan you cannot talk chile without talking commodities. You cannot talk about commodities without talking china. That is our twitter question. His twitter heading for a hard landing . The answer. No. They have the political clout to do anything. The next answer yes, it hurts the u. S. More than china. They help sustain our economy by students and tourism. Tom can we get your 4 or 5 china gdp what are your second round effects . Ruchir i think it is already happened. In the first quarter, chinas growth rate was on an annual basis. As the waste we here in the u. S. Measured it down 5. 5 . That is what we have seen with Commodity Prices and all factors exporting to china really suffering a lot. The markets are running at below 4 when china grows at 5 . We are seeing that. Brendan this is a beautiful metaphor. Imagine a bowling 747 jet trying to run on the runway. Good plane, to pilot good pilot . Ruchir yes. I still feel for them to grow at 7 that it will be extremely difficult. We are living at a world where chinas new normal is 5 and not 7 . Brendan that brings us to our agenda. Vonnie quinn is on the desk. What are you looking at . Ruchir vonnie im listening to the greek finance ministers press conference. They both adore each other. Tom is he wearing a tie . Brendan did you know that it is a new fashion in europe to wear your collar up . True story. Vonnie the point is that they say they are not going to miss any payments. They are threatening that they could default fight accident. By accident. Brendan theres something to write about the private conversations. [laughter] brendan thats the musical. Im looking out the u. K. What i really care about is poor labor. What is labor going to do . The most fascinating story of any election like a landslide like this is what the losing party does to restructure. There is opportunity for labor to change. What is the new new, new labour look like . My reading is that tony blair is making his presence felt within the party saying we got this right in the 1990s. We have a chance to do it right again. Tom the meeting is on thursday, but the royalty will not attend the camp david summit. This is something to watch as the saudi king decides to skip the summit. Some of the serious reasons were that the dialogue has not developed enough for king types to attend, but there it is. An interesting washington diplomat as well. Ruchir sharma thank you so much. Coming up, Erik Schatzker him Stephanie Ruhle getting through the economic morning. Dick parsons will join them. We are looking for Market Makers. We leave you with the data check of the yen at 191 below 120. The euro at 111. Market makers continuing on Bloomberg Television. We will keep you going on Bloomberg Radio worldwide. Good morning. T makers happening out a new time. Im Stephanie Ruhle. Erik obviously we have moved. You can see betty liu at noon eastern. It is part of our new coverage starting at 10 00. Stephanie she was with you for breakfast and now she is with you for lunch, but here we are. Hope you enjoy. Coming up in this hour, monday begins with a deal. Noble energy to bride by Rosetta Resources for whopping 2. 1 billion in stocks. Everyone is looking at the oil industry. There is more and and a to come. Tom another showdown over greece. Florence foreign Prime Ministers meeting over an accidental default. Stephanie and coming up, a former time warner chairman. The one and only dick parsons talking and and