Kind of quiet on the earnings front. It will get busier as the week goes on. Davos is one week away. I will be in zurich. Lets do a data check. Were looking at stocks and bonds and commodities. The yield is 2. 85 . Crude goes nowhere. Where did the vix close on friday . Nicely under 13. That is interesting. It speaks volumes about a sluggish jobs report. We will talk about that today. 6. 04. Inese yuan, that is a shop for anybody on the asia watch. Were blowing through to east stronger yuan. A good morning to all of you watching in canada as well. It is a twisted weekend. She sort of dressed like tina fey this morning. Scarlet fu with the front page. Were working on that. Page story, the Iran Nuclear Deal will take effect starting next monday. They will stop producing weapons Grade Nuclear fuel. Theeturn, remember that u. S. Will temporarily suspend the economic sanctions. Relief will be worth about 7 billion. It is a step. What size step would you give it . It is a first up. It is the initial step. This could be part of a six to 12 month timetable. The president is already saying that he will veto any new sanctions. It is a crucial step. Were not actually putting a number on it. The other front page that were looking at is the north American Auto show. It opens in the motor city. They will unveil new aluminum versions of their trucks. Christina is amazed by this. I do not understand what america is doing. What are they telling towing . I can see you in a pickup truck. I have no worries about driving a truck. What is the flatbed for . Children. You would have to get the wooden blocks on the pedals. They make those. I have plenty of things that would do the trick or it we will talk more about the Detroit Auto Show. There is a story about how automakers are making more on this is a celebration auto show. 50 Million Units in the United States. Our third story is a big win for the big tanks. Regulators have watered down new rules related to banks and debt. Their winning concessions and leverage ratios. They also eased requirements under derivatives and repurchasing agreements. This comes as Global Economy gets better as well. The lobbyists have been working overtime. The rules are hard to understand. It will employ a lot of technocrats of the bank. Lawyers. Compliance will be huge. Bozo from page stories. Lets talk about this right now. It does involve everyone in america. Rington Holding Companies his volume is a required read. Chris whalen, that was all the buzz five years ago. Boston red sox would be macro prudential. Theres furnishes industry lobbying. The industry rose up and told the crew that we will not do this. If you really impose the capital rules that they proposed over the last couple of years, the europeans would never get there. The outcome would return to 2005. The shadow banking that was there in the last decade. We have had a huge reaction to the misbehavior before 2008. How do we finetune this regime so that we can see growth in the economy . If you do not have credit growth, which we do not, credit is shanking. The fed is trying to slow it down. We are restructuring. The leverage is very low. To make, those are the issues that i look at. That is the growth driver. Why is it so hard to come up with a common definition for this . We do not have common accounting. You cannot have a common banking regulatory. The definition of a default, that is the foreign concept. We need jargon. What is basel besides a city in switzerland . It is an attempt to have common capital rules the goes back to the 1980s. Have the fdic chairman they have said the large sophisticated banks will find a way to get around these. They always do. What you are talking about is an incremental push back or it overall, the regime is very strict and restrictive on credit. We basically shut down a lot of the Asset Securitization market. That has not come back at. The changes made by fdic you argue that this will make banks more like utilities. Why is that a bad thing . The thing i worry about with the volcker rule is that we told the banks they cannot trade for their own account. We sequester that capital in the bank. If you want to go down that road, lets divide the bank. One only we are. We are not charging them. We are paying them. You are charging them more than you used to. It is punitive for a bank to make a mortgage and hold a portfolio. I want to get in front of a number of pundits. Can you predict this year or next year the Goldman Sachs will be different . Their strength is that they change quickly. The other brokerdealers have to will they stay a bank . Is ultimately a legal and financial decision. Dodd frank says they will stay a bank. The question is will they have time . Willatering down this have Material Impact on earnings . It already is. Thanks can take a dollar of capital and put it behind a Single Family home loan. Or you can buy four dollars what will they do . They will buy those securities. That capital will support the private loans. That is how works. It is punitive for the banks. This is an important conversation. We want to make you smarter about the banks. Jpmorgan and wells fargo. Was the location of all of the major banks in europe . Lets get the company news. We have a story on ubs. It puts an end to speculation they are not considering putting off their Investment Banking business. Volkswagen passes General Motors in china. They are selling 3. 2 million vehicles last year. They edged a gm. This marks the first time in nine years doubleclick an out sold gm in china. It put them closer to being the worlds biggest carmaker by 2018. In hewlettpackard plans to renominate its entire board of directors. This is an effort to build stability after years of turnover. The interim chairman could the renominated as part of this plan. That is todays company news. Are they an emerging are they in the acquisition game that has been what were reading and hoping for. To be honest, it is a huge company. Will you deal . You have to sell. 2014 . T is the report in it is a private company. It is hard to tell what is going on. We know that they wanted to take an enormous amount of cost out of the company. You could probably bet that theyre doing that right now. You talk about cost. Chris whalen, it does not do better than that. Also, automakers show off new vehicles that generate buzz. But this could mean for cars this year. That is coming up. If you missed any of our interviews, you cannot now watch them on apple tv. This is bloomberg surveillance. Good morning. A busy monday morning. Alan mulally will join us in the 9 00 hour. He is staying at ford. He announced that last week. Matt miller is in detroit at the north American Auto show. A lot to talk about. It has always been an important part of our manufacturing economy. Good morning. Scarlet fu and Cristina Alesci are with me. It is not the Detroit Auto Show. I meant to ask you. You look tired today . Did you watch all of the Golden Globes . Tina, heartthrob. She looked awesome. Jennifer lawrences dress was a risk. People to twitter of themselves wearing the same dress. I was going to wear that this morning. The north American International auto show is known as the Detroit Auto Show. It kicks off today. Expect dramatic changes that could set the stage for the Auto Industry. It is not just the u. S. Automakers. It is not just gm and chrysler. The asian brands will have major unveiling. Matt miller will report live in the next hour from the Detroit Auto Show. We will have more details on those up before cast forecasts. Folks like and has outsold General Motors in china for the first time. 20 million unit china. Versus 60 million here. ,hey pulled 16 thanks to audi the topselling luxury brand in china. The automakers really have to get china right. Not just a cousin is a huge market, but because regulations in the country are actually limiting the amount of cars that can be sold. There is concern over air pollution. This is a major market that the Car Manufacturers have to get right. It is not in him limited growth story. The government can come in and put restrictions. What is interesting is that audi and bolts like and are pushing worldwide. Talk to a mercedes dealer here. Chris whalen with carrington investments does that mean we need International Banks . Our jamie dimon and Michael Corbett right . Do we need International Finance for the Auto Industry . Of course. What kind of returns will you get and what kind of volatility will you have in your model . Big banks cannot ignore their performance. They have destroyed themselves. It is a regulatory regime. There is syncopation between the tanks and their behavior. Weto bring it back to autos, love to show fancy cars. Our viewers like to buy them. It is about a pickup. We want to get her a 250. Is that right . I dont know what that is. The ford 150 is lighter than the old model. Back to the original way. It starts at 25,000. 25,000 . It is an affordable vehicle. It is a great vehicle. It will do anything you needed to do. For those of you worldwide, does that pickup truck that dashboard is not like a pickup truck. It looks like a lincoln car. It does. That is part of innovation. That model that Sticker Price is just the beginning. If you go up to 50,000, when you add on the extras General Motors is jumping in here too. Tough market considering that toyota has owned the market for so long. It seems like gm is grasping. Isnt it interesting that you are saying that . Toyota is now mature enough . Citigroup is out with increased exposure. Even they are doing better with european autos. There is a real statement about what america used to be. To their credit, i was there doing the blue years. It was really gloomy. We are on the heels of 50 Million Units. They have very small hybrid cards. Theyre getting a lot of attention. Matt miller will be there in the next hour, reporting live. He will speak with bill ford in the next hour from the Detroit Auto Show. He is the executive chairman of ford. That is coming up on bloomberg surveillance in the next hour. Also, our twitter question of the day. What was your favorite Golden Globes moment and why . Tweet us. Did you watch . I was sleeping. Youre kidding. We will fill you in. Tweet us. Good monday morning. I am tom keene. Garlic doing Cristina Alesci are with me. Scarlet fu has the top headlines. We start in thailand. Protesters are trying to shut down bangkok. They have close to major roads and intersections. They vowed to keep the blockade in place until they delay an election. Protesters want a special counsel before any elections are held. Universals lone survivor is taking the number one spot at the box office. It is a film about a navy seal operation in afghanistan. It took in 38 million in ticket sales. And Alex Rodriguez says he is confident that his 150 two game suspension will be overturned. In an email statement, he said that the deck had been stacked against him since day one. The suspension was reduced in a ruling over the weekend. I am not a test. Scarlet fu is the yankees fan. Can he come back and play . I do not know about the yankees, but he can play in general. He does not lose all of his money. N if its a disability he loses his base salary for 2014. He also misses onus is. Bonuses. I do not care what people berman thinks about this. What do you think . Did he get his day in court . I think you did. It makes me sad. He is a great player. You are set for him . Are you kidding . It is a sad situation. Why . Athletes make decisions. This is not the first megacrisis that we have had with a household name. Think about the scandal around chris whalen. If you look at arbitration, you want to know, is arbitration appropriate here . Should he have a day in court . You can always appeal in arbitration matter or it which is what he is doing. It is useful tool. There are aspects of it that i do not like. We need more disclosure. Otherwise, it is good for both parties. You get a decision quicker. Scarlet fu has one for us. This is china and north korea. The china policy in north korea has been a failed one so far. The fall fromthat power is the latest in a long succession of failures in the country. North korea as a buffer state, used to inflate it insulated from american pressure. But the reverse is true. This is a big theme in 2014. How the balance of power changes. We have already seen that kim jong un is willing to take extreme steps. How does that play out . The murders that we have just had. He got rid of family members. They were trying to launch a coup. There are a lot of things going on. We should do crystal ball gazing. Shocks could be around northern asia. China and japan as well. There is more confidence in china, then there was 60 days ago. You see that. We will see how this plays out. What we are also keeping an eye on this week is Bank Earnings. Chris whalens wheelhouse. Jpmorgan will report tomorrow. Coming up. Monday jobs report. Lets get to the data check. Stocks, bonds, currencies, and commodities. The 10 year yield comes in a little bit higher. 91. 92 on crude. It is a sluggish data check. It was stunning. Know once all the jobs report coming. The lowest estimate was not close to what we got. Earnings season will get underway. The big banks will have a frenzied four days. Jpmorgan will kick things off tomorrow. The theme is mortgage weakness. Big legal expenses. You want to look past the Fourth Quarter to forget some the year ahead. She is known for highly detailed reports. Ratio upon ratio. Stretches to the horizon. She is optimistic about american banking. It is banking in need of higher returns. Good to have you here. When you look at banking, what i want to know is how is the job coverage going to be . They need higher returns on equity. How many jobs will out the door in the next two to five years . We think we will see a little contraction, but not as much as we have been seeing. When you do it the roe. It has more to do with the employment of capital. Explain why the return on equity is important. It is important to shareholders. Goes up, your evaluations go up. Valuations go out. There has been pressure for Goldman Sachs to set a target on equity. Why is that important . I think what you are hearing is that they are interested in seeing what they think they can generate. The precrisis era had them putting a number that was about 20 . Investors want to see them have a level of conviction to, with a target. Wouldnt that require them to take on more risk . Not necessarily. The answer is a function of regulation. We do not have all of the rules yet. We had a step or word over the weekend. We do not have all of the rules out there yet. I want to ask about quality of earnings. These do not represent operational strength. Is the quality earnings . Wins. Steeper euro curve is costcutting still the big driver . This quarter, we think the big driver will be how provisions go. Reserve really slows down. You will get a lot of noise around that. Onget a little better nym the outlook. There were a lot of jargon points there. There were a lot of reserve givebacks. Will they really make money . Not this time around. They will. Reserve release is a function of better housing prices. Do you agree . What they are saying is that the probability of default and value of collateral are improving. We will rip up the script. . Ou mentioned the basel board will they stare down International Regulation and play by american rulebooks . Accord is ahe basel victory for the economy. For borrowers. For growth in the economy. And less so for the banks . Banks are a function of the economy. I look at this, but the, and what is the single best by . Which management has a win behind them . Voice on five institutions. In particular, bank of america. When is there a reduction of expenses . Morgan, is ap. Function of increasing capital return. That is a 12 month outlook. I would love to get your thoughts on my morning mustread. It is out of sanford. She said conglomerates have become large and complex. Conglomerates become inefficiently large and complex. Sometimes they break as a result of market forces. Do not hold your breath for the same to happen in banking. We appeared doomed to continue living with an unhealthy system. Do you agree . Make a loters do not of sense in economic terms. You remember i used to turn look at analytics. You do not agree with that . The Community Banks had doubledigit returns. You have a more optimistic assessment. Yes. I respectfully have a different point of view. We like that. Look, i think the banks are the size that they are because of the customers they serve. Do you want to go back to Agrarian Society . Then lets talk about that. Lets rip up the script. Thats he test is on chris whalens book. This is the silliness of the media and a good part of america. You suggest that we yearn for a jacksonian america. Actually, reading alexander i thinks biography even the concept that a jacksonian utopia did not exist back in either. Lets bring it to obama america. That is where we live. We talked about management. What about strategy . The banks are differentiating themselves. Who is best positioned in 2014 . I do like the money centers. We also like regions financial. We have a buy on bb t. Mainly because of the inflection in the mortgage business. A lot of viewers will not know regions financial. What is distinction distinctive . Southeast financial institution. The sunbelt