Rate decision. I was talking to michael mckee, the gdp report dovetailed with the fed. Interesting as we get to the jobs report on friday. Big economic day. Earnings before the bell, time warner. After the bell we have yelped and carlyle. Dotheres the brief, let me the data check before we get to a busy front page. Features negative two, future nothing, nymex crude 100. 34, douth. South. 1300, renminbi currency,er chinese exporting deflation out of china something to watch into may. An incredibly busy morning. Look at the front pages. Heres scarlet fu. Top our front page. Prosecutors considering charges against Credit Suisse and bnp paribas according to people familiar with the situation. Credit suisse big investigated over whether it helped americans as a taxes. Prosecutors trying to figure out whether bnp broke the law by doing business with iran, cuba, sudan, countries we have sanctions with. These are criminal. It could result in the first guilty plea from a major bank in 20 years. These are two different cases. Credit suisse is about moving american money. You did that . I might have tried in a previous life. It is individual versus sufferance. That is the it is individual versus sovereigns. That is why the bnp paribas issue is concerning, you are helping sovereigns move money across borders. And the new york times, there is the idea of a, do they go after the bank criminally, do they go after a subsidiary criminally . Banks in europe respond . We will talk about that. We have seen shares plunge. The banks say they have not set enough money to cover whatever financial penalty they might have to pay. We will cover this and will be speaking with Chris Wheeler later. For a european perspective, that is very important. Perspective on twitter, this is our second frontpage story. Results, shares plunging in the premarket about 12 . It is not you who did not sweet enough, there are not enough new people tweeting. People outside the world of media or marketing. Membership growth is the issue. Slowing down, still doubledigit percentages, 25 . 30 , the deceleration has people concerned. Twitter has been trying to move to image and video sharing and printing it can monetize off the mainstream user base. Still questions about whether it is a niche product. Worth highlighting the drop in shares. Think about how tough it is to be a Public Company and grow at business when. 5 is not good enough. When 25 is not good enough, welcome to wall street. Do you think the owners regrettable and public . It is tough. The third story is how will la clippers owner don sterling respond to the nba . Adam silver imposed a lifetime ban for sterlings racist remarks and fined him 2. 5 million. Silver announced another step i will urge the board of governors to exercise its authority to force a sale of the team. And i will do everything in my power to ensure that that happens. Speculation sterling could file an antitrust suit against the leak. It could get litigious. Thewhile, the court, clippers beat golden state in game 5, 113103. Important point, i was wrong. I thought it would be a big deal. Is a huge deal. I get some things right, somethings wrong. Important. , it is a huge deal. At this point, you have almost got to root for the clippers. They have chris paul. I am ready to go out and buy a clippers tshirt. You know, these guys are making it happen against the odds. Root for them. We will talk to them, we will bring you bloomberg sports. Up to speed. This brings us to our twitter question of the day, who should buy the la clippers . Magic johnson has expressed interest. David geffen, the media mogul. Ustrieste, tweet bsurveillance. Breaking news, the volume of exelontions, m a deals, looking to buy pepco for about 27. 25 in cash. Exelon looking to make a bid for pepco for 27. 25 in cash, 5. 4 billion. The mergers and acquisition show. The apple deal yesterday is an example. Bond sale. Needed to geteld it done for less amount of money. Compared to what it would have been five years or 10 years ago, it is a giveaway. Theeres the stunner of day. The a. J. Stunner of the day, utilities up 13. 5 because of the Interest Rate issue. Lower for longer. Douglas ramsey was on surveillance was quite radio yesterday. He says it is a mystery. He says it does not look normal that utilities are on such a run. You almost wonder is it reflects the notion that the fed was going to raise rates sooner than expected and all the sudden janet yellen says no, we will keep low rates for longer. That is good for utilities. We will monitor this story with exelon and pepco. Wants to monitor. There is a fed meeting this afternoon, slack is the word of the moment for fed economics. Chair yellen used the word 14 times in her recent speech at the Economic Club of new york. Others say stagnation. Any economist at Brown University. His situation was with a guy named krugman, bernanke, michael woodford. I dont know anyone who had a trial by fire like you did against those three heavyweight. How do you define stagnation and slot . The question up until now has this mightsing drag on for longer. Indeed it may. That is a lot of possibility. You studied with Michael Woodward when heated interest no one reads it but everyone loves it. As any modern economics and woodfords book or krugmans book . Are we on original territory . Do you mean the Current Situation we are facing now . Is it a textbook meeting the fed has today or are they on original ground . If we find ourselves in the situation for much longer it might pose challenges we did not anticipate in the book of. Oodford in 2003 we have some answers during that time with japan. There were certainly Solutions People provided at that time. Perhaps it is time to take a closer look at those. If we dig into the data ahead of the fed, we might get a sense for what they are going to say. I will show two charts. Gary langerom research, 20 of americans think the economy is getting better, not good. 36 say is getting worse. 4. 1 , that sounds good, trailing gdp. If you look over the past 50 years, it is way below trend. Are we in a new, permanent slowdown . This is nominal gdp, topline gdp that speaks to the disinflation, deflation question. Professor eggertson, this is a Crucial Point right now. Should janet yellen be worried about disinflation and what we see in europe deflation . She should be concerned about it. Eere concretely, we may not s renormalization anytime soon. The discussion at the fed has been too focused on an exit as opposed to planning for this. Episodes wee last saw this kind in the u. S. Was Interest Rates collapsing in you begin your new paper in 1938, is that what we are living . Interest rates do not start rising again until 1947 after world war ii, when we saw a massive expansion in government due to the war effort. It is a long period. In japan, Interest Rates started falling in the mid90s and are still at zero. The assumption this will start improving one or two years out may not be warranted. You what is said to be more active, you say it is passive and waiting for things to happen. To create action through communication. Is this a new paradigm for the central bank . Is time for it to look at what ben bernanke said in 1999 when he was analyzing the bank of japan. On theested they may err upside and allow for access inflation, 3 4 inflation. At the beginning of the crisis people or putting these options on the table and people push them out, thinking they were not good options because they do not on credibilityrd on inflation. I was under the perception this would be a short run thing. Maybe it is time to put other options seven years on. Gautti eggertson with us. Stellingr user growth and sending the stock stumbling yesterday. What ares firstquarter earnings. This is bloomberg surveillance, streaming on your tablet, your phone, and bloomberg. Com. Good morning, i am tom keene. Futures 3, dow futures 8. Aybe it was not a failed dick costolo on Market Makers at 11 00 a. M. Some sporting charts on the migration of users at twitter he will discuss on Market Makers this morning. Lets stay with the idea of twitter, the number of users increased last quarter by 25 , sounds great. Not good enough for investors. In the fourth quarter, twitter grew its Membership Base by 30 . The deceleration has everyone concerned. Membership and twitter overall, 250 5 million monthly active users. That sounds pretty impressive but it is 1 5 the size of facebooks base. It has a long way to go to print it is a mainstream school. Twitter needs to prove it is more than a niche product. Mainstreaml for users and can gain mass appeal and turn it into an advertising powerhouse. Theres the first derivative. That is a great chart. The declining rate of growth. That says it all. Business insider had two great charts on this. You mentioned brian wheezer this morning. He is pivotal. He made some interesting see user whenever you growth slowing look at the emerging markets. Makes the point that longterm monetization and twitter depends on countries ts,h more robust media marke the u. S. And u. K. You cannot have growth in indonesia make up for the fact that growth is slowing down in the u. S. You are talking equities more than i am. Is there a buzz on these stocks . This trades at 13,000 times earnings. 19. 3 times sales, that is the concern. Dissension between twitter and facebook, twitter is a fifth the size of facebook, but cannot monetize . What did we learn on the conference call. The company is focused on mobile, 80 of mobile mobile 80 of its makes up total revenue. Twitter has always done very well. It is whether it can get the monthly active user number back up in the director investors want to see. 7 buys on twitter versus 14 holds and 13 sells. Hold and sell is the word. , economicsggertson professor at Brown University, do you use twitter . I dont. Thats the problem. Why not . It never caught on with me. They need to get mainstream is not exactly mainstream. He is the intellectual elite. Guys like those who have not really caught on to twitter. In this world of facebook, twitter, and other innovation ps speech in switzerland, he said we are waiting for that new new. Atm where you said, looking railroads in 1880 or steel in 1930, is this the new new . Or is it people playing in Silicon Valley . Changing how it is people communicate. I do use facebook. In fact, i know people who ive started using it you use facebook to throw your childrens pictures around. I am passing into a a lot of Different Things than i was before. The information circles we will get you on twitter before the hour is over. Gautti eggertson of Brown University. Coming up on the next hour of onrveillance, betting leather recliners and dine in movie theaters. Has the strategy worked . Speaking with the ceo in the next hour of bloomberg surveillance. Streaming on your tablet, smartphone, and bloomberg. Com. Good morning, bloomberg surveillance. I am tom keene. With me as scarlet fu and adam johnson. Headlines in ukraine. They will form a special police force for the eastern part of ukraine. Evolveory continues to with headlines, stay with us all day as we give you the news in an evening in ukraine. Here are the top headlines. A warning from vladimir putin, he says further economic sanctions with that denies u. S. And eus role in energy industry. Couldnt putin says he is prepared to retaliate. Authorities now say at least 30 people died in two days of tornadoes in the southeast. More than 200 were injured. Arkansas and mississippi were the hardest hit, 27 people in those two states alone were killed. The Los Angeles Clippers made the news off the court. Beat the golden state warriors, 113103 in game five of the playoffs. The win came hours after the nba band Donald Sterling for life over his racist remarks. We will touch on this later. The future of the team is up for grabs. Who might own it, a lot of commentary. Must read, adam johnson will get us started. A friend of the show, Ambassador Richard haas, the president of council on foreign relations. American Foreign Policy is in trouble in disarray. His point is we are not sending a clear message. Defined what it is we stand for and what it is we need to do. From his book as well, he has pushed on this. Gautti eggertson with us from Brown University on the value of economic growth. As you read the world economy, what the imf said at the spring meetings, is the rest of the world going to catch up with the United States . Maybe not the old normal but at least in this sense . To we need to get used to a subpar Global Economy . Guess that is the base scenario we are worried about. The normal might be one in which we see low Interest Rates and aggregate demand. Europe is not looking great. There is concern in asia. On everyone. Ing the scenario that we might be in for a while. Scarlet, as we go to the fed meeting this afternoon, it is remarkable how the caution buttresses up against optimistic notes. Especially economists saying unemployment will fall to six. 3 . A big story this morning, u. S. Regulators probing into Credit Suisse and bnp paribas. Good morning. Surveillance breaksclusive, rain nonstop until may. That is a cool picture. Like something out of a movie. From the top of our world headquarters. That residential building is going to be ginormous, the orange on the right side. You can barely see it. It is going up quickly, i walk by it everyday. Good morning, bloomberg surveillance. I am tom keene with their lives who and adam johnson. Lets do a quick get a check. Ill get through this bit 1. 3830, a churn as we wait for that fed meeting. Gainers in twitter. I will put another one in, gainer, spring up 11. 3 to 8. 27, biggest gain since july, boosting the forecast after firstquarter earnings topped estimates. At t and verizon control over half the market. A loser . Coach. You are not buying enough him andbags. Or shoes. Why is coach stumbling . Michael kors has been doing pretty well, kate spade as well. Sales down 21 . They were expected to fall 21 . Michael kors is hot. Hot, hot. I agree with that analysis. It is our top story this morning. Attention on new york city criminal charges might be filed against european banks bnp paribas and Credit Suisse. Their worries are not mario draghi or christine lagarde, but prosecutors in new york. We go to Christopher Wheeler in geton with medio banco to a european perspective. Was this a surprise to see criminal charges rumored against bnp paribas Credit Suisse . Morning. I suppose the answer is we have been there before. In 2009 there were criminal ahead of thest gbs famous john doe summons. I think we have heard noise ofterday, noise coming out politicians about their concern about certain things being exempted from fines or settlements as a result of peration with a 30s. If banks have been found to do long, rather than allowing them to settle, they should be brought to trial. News coverage there is a real new york band. For the global audience, this does have a european banks respond. Do they go to washington . It is difficult. We saw how Standard Chartered and hsbc responded when they were accused of overseas money laundering. They quickly settled. Given the importance of new york to most global banks, it is not in your best interest to do anything other than try and put whatever the issue is behind you as quickly as possible. Credit suisse has been the target since 2011 of a u. S. Criminal probe into whether it helped americans evade taxes. Shouldnt this be priced in and expected by the banks ceo . I think it is, they took another 425 million against this matter in their plea 13 accounts. They clearly are close to some settlement. On, there are 12 or 13 swiss banks also involved. They want to put it behind them, reputational he it is bad. Is there a chance this goes to trial or gets settled . Settling obviously makes more sense but it is very expensive. One has to ask, what the talks going on between the eu and the whether the du will say hold on, what is going on here . Money beingot of extracted by regulators and we want to be clear this is fair. It is also calculated appropriately. It is dealt with in a way that does not appear to be untoward in terms of losing banking licenses. Can you try to translate a number for us, what it will cost banks individually . Billions more dollars, that is the point. What we are seeing here is the u. S. Swiss tax issue. And something specific on money laundering. We have the whole libor and forex story to pan out. Our americanfor viewers, tell us in europe the way Credit Suisse and bnp paribas perceived . How are these banks different to european viewers . I think Credit Suisse is one of the biggest Wealth Managers in the world. It has looked it is looked at as a sound institution but it has been caught in a position, the same as para ball they are leading players but we must be clear. The u. S. And new york are vitally important and they want to make sure they continue to operate there. Chris, Jacob Frenkel said a criminal indictment could close the bank. Do you agree . Thats a dangerous thing to say. That costs an awful lot of jobs. That is very extreme but this is some of the rhetoric we have heard coming out of your site of the atlantic on these matters in the last four years. Christopher wheeler, thank you so much. With mediobanca. By thescinated, adam, importance of this almost pneumatically. Almost diplomatically. Right. Are this is, at the white house level, president hollande level. A National Institution like bnp paribas. Gautti eggertson with us from Brown University. I think of john charles roget in france and his work on banki