mr.ignificant earnings but lou, secretary of the treasury jack lew is in china. there is a lot to deal with with china. >> busy day. stocks, bonds, currencies and commodities. 1900 watch on the s&p. the dow 16,695. .levated nymex crude all on a risk on feel of the market. look at the yen. that is weaker yen coming off of any number of reasons. the equity markets going. a referendum that many took issue with. where are we with the record markets? going to the inflation-adjusted market, back to world war ii. the carter malaise, harmful to jimmy carter, not accurate. starting in the 60's, down we go. i do not have an opinion here, but we have decisively broken out to do inflation-adjusted strength. takendo not usually inflation-adjusted look at stocks but it is real. in other words, by definition. >> the retirement system of america and so many people not ready for retirement, price adjusted is the way to go. we scour the papers, look at the websites. >> starting with the developments in ukraine. rebels asking to join prussia. declaring itself a state with 90% of voters favoring breaking away from the ukraine. announcing a similar move. russia's foreign minister weighing in saying taking real action to meet with the separatists -- representatives of the separatist movement. i am beginning to see the word civil war a lot more. >> first uttered several weeks ago in kiev. the 90% number, that is what arectively these militants quoting. not necessarily what some of the more official data quoting. these are valid xerox pieces of paper. >> they were using elmer's glue to wrap them up. >> the you foreign minister impose more sanctions for the first time ever. freezing assets of companies, not just individuals anymore. the second front-page goes back to the markets. u.s. stocks at record highs. not just the dow industrials. the s&p 500 setting a new mark, up one percent to just under 1897. internet stocks are on sing back. the momentum stocks have now rebounded after being hammered last week. the dow jones is up three percent today. >> and on market. no after best since anywhere. >> volume is really light. like a lot of people did not want to get in on this. page, mna. at&t in advanced discussions to buy directv. a price tag of $50 billion. ofcast proposed purchase time warner cable has changed the landscape or the cable tv industry, internet industry. everyone is in a race of being bought or eating. >> trying to catch up to brian roberts, right? >> the content business altogether. everyone field if they do not have a little bit of that, they would miss out. also the latest on astrazeneca and pfizer. the $102 billion offer is good for the u.k. economy. we know the astros and will testify. >> live in london. >> we will continue to monitor this. checking in with hans nichols. the hoards of cash that they got out there. >> you are wearing blue. game seven tonight. >> scarlet fu will be half asleep tomorrow morning. very good. there is the front page this morning with the news. we will talk about ukraine again with a true expert. soviet union. the guest host us morning, richard claret jug, global strategic advisor. james lockhart joins us as well. a number of high-profile positions in housing, among others in washington. the vice chairman. what it comes down to, whether you've read the washington post or not, it is washington is not in the way. a different 2014. >> not doing anything at this point. looking at fannie mae and freddie mac reform. that seems to be dying at the moment. there is an action. lockdowns, nos or progress. >> congratulations on the new neutral. talking about it at link here in a bit. for washington, what is their new neutral? well, dok you said it no harm. this year everyone is focused on running election for the house and those that are not our positioning for 2016 the vikings them busy and not screwing up the economy. them busy.ps >> does pimco believe in this? >> there is a new neutral policy rate. much higher than previous cycles. there is an overhang of leverage in the global economy and the equilibrium. is thecritical point leverage is not in washington. a much in group budget deficit. >> you read it, fantastic. i want to try to understand, first there was a new normal. the way i thought about that is the new normal. now you have the new neutral. the global economy converging to a two percent rate. >> the new normal in 2009 was a two speed world. we are in a multi-speed world now. no longer recovering. that is key. >> the new neutral is worse than the new normal. it is better in those economies that do not have 10% unemployment. the convergence toward the trend. >> i would converge on the election and the idea that the new neutral or new normal, we do not know what the new normal is. to get your take on what is going on with freddie mac. they are loosing some of the mortgage lending rules, limiting the amount of mortgages that can be subject to put back. is this a good thing in terms of getting banks to extend more credit? >> whether it is good or not will depend how it is implemented. one of the problems is fannie were not putting back mortgages when they should have. at this point i think it makes sense to be loosening a little bit. the new director of the agency is giving a speech today, and i would expect as part of that that we will see overall loosening on fannie mae and freddie mac to support the housing market. >> james lockhart, richard claret jug. diving into the pimco new neutral here. >> begs the twitter question of the day, five years after the recession, what is your new normal? treat us. -- tweet us. >> not neutral. cloud it.not want to maybe your new normal is the new neutral richard is talking about. >> very good. company news. >> starting with first quarter profit almost doubling and airbus. the world's second-biggest airplane maker cutting costs involving the jumbo jet. they have an order backlog of more than 5000 planes and ramping up production of the most popular model. the ceo of jetblue may find out in the next few months, to longer he will be on the job. he will speak with the airline's board on whether to extend his contract. the contract runs out in february. the shares are up 30% in the past year. delco stock has doubled. considering ifs royal bank of scotland going public. filing an ipo in new york. it is banks -- based in rhode island. rbs was takeover to offers but did not yield anything substantial. >> i would kill to know what they think about that. they have been trying to figure out what to do. what do you do with citizens bank? and mystery for 30 years. yearsy for 30 years/ . >> an ipo. maybe a new neutral. very good. >> coming up, another media megamerger. we will talk about the players involved in what could be a 50 billion dollar he'll. we will be right back. bloomberg "surveillance." ♪ >> good morning, everyone. bloomberg "surveillance." i am fascinated by this interview. david karp has a lot of explaining to do about tom clark -- tumblr. i will be blunt, i do not get it. i do not know what they paid for. i do not know what it is worth for her. mayer's, first the transaction. we will be the destination. lex i would love for someone to tell me what the dog is worth. with me is scarlet fu and adam. transaction with there is no money involved. >> could be 50 billion dollars. at&t now in advanced discussions to buy directv. the deal could be reached within two weeks. this could be a cash and stock transaction. by using stock, at&t can limit the borrowing and protect the credit ratings. issues, the more it would have to pay out in dividends. comcast made the bid for time warner cable. still under regulatory review. that really changes up the landscape of the broadcast, tv and cable industry overall. everyone in a rush to create synergies and scale between , internet wireless and television. the more you can do that, the more scale you get, the better position you are in. >> richard claret jug with us from pimco. about free money or subdued animal spirits? clarida.rd >> i think it is all of the above. there is cheap money and the recognition that there are reports -- rewards to scale. all three are lining up. >> energy attentional come out wasthat the band that canceled? synergy potential. thank you nomura. be a good deal, if it is for at&t mostly a cash transaction. flow would have to be greater. >> there may be another distinction. time warner cable coming together with comcast, effectively bringing together to companies. at&t directv, it is different. imagine directv teaming up and now you can get the whole lineup on your phone. there is not a transaction yet, but amazing. >> i got a picture of jay-z on the elevator. >> imagine. this feelat make pretty exciting to me as a consumer. >> james lockhart with me. >> the regulators have made very .lear they want four players >> at&t, verizon, t-mobile -- in thee is washington discussion? >> i think washington will no doubt emerge at some point. i think they will have to look at both of those utilities. >> they are incredibly profitable. >> also, the market is pretty saturated. 90% of americans have some kind package.tv >> nice breeze. you did this about reading the assayrk post about the -- beyonce and jay-z. >> i do not want to go there. just reading. croissant up, chris he joins us. he will be the guest host to weigh in on the market at record highs. chris grisanti. ♪ >> good morning, everyone. bloomberg "surveillance." internationalbusy morning. adam johnson has the top headlines from new york. >> starting in india. changing of the guard. voters have reject that the congress party, which has ruled india for the past decade. the opposition leader has pledged to revive india's economy. results announced later this week. 536 separate elections. scientists warning that melting glaciers in antarctica have passed the point of no return. the reports say they contain enough water to raise sea levels by up to four feet. that could take centuries, but that is obviously significant. and donald sterling. this time has to do with the comment that magic johnson is not a good role model because he is hiv. mind-boggling. trying to force sterling to sell the team. mind-boggling. in the more interested in arctic. huge buzz last night on twitter. i read the article. whatever you believe on climate war, this is the real deal. this is ice versus bed rock. >> i think there will be surveillance on us. >> time for the morning must-read. >> catching up with the times. morning must listen. secretary timothy geithner on his book tour. stopping by charlie rose. it is called " stress test." vulnerableabsolutely . it's not in this country, other countries for the risk of major panic. it is inherit. you cannot eliminate it. a lot of things to reduce vulnerability to it. the reforms we put in place and dodd frank are a very powerful set of reforms abundant -- against the basic risk. >> basic risk is unpreventable is basically how he put it. >> james walker with us. us.ames lockhart with >> i think people read the back to see if their names are in it. some of the stuff is good. i have not read the book yet. i probably not until the summer. me read you the morning must-read. rules required under dodd frank have been written. many have been promulgated, diluted the law's intent. has made it easy for banks to lobby against tougher settlements. >>. frank was a mismatch of everything thrown together. something that were good and are bad. deserves to be watered down. they failed on the regulatory mismatch. have put together a lot of the agencies and they did not. instead they created more. bank -- one of the small banks have four regulators in it at the same time. just think about that. one is more than enough. >> acquisition of thanks as well. >> meetings every day with the regulators. you can watch timothy geithner, the full interview with charlie rose on bloomberg television tonight at 8:00 and 10:00 eastern time. twitter question of the day, five years after the great recession, what is your new normal? new neutral? how do you define it? us.t us == -- tweet ♪ >> good morning, everyone. bloomberg "surveillance." nowhere else where you can get a standard shots of the boom boom room. the meatpacking district. scarlet fu on this story. a huge deal. >> the photographs on the cover says it all with everyone's expression showing a different story. looks unflappable as always. >> this is bloomberg "surveillance." i am tom keene. a quick data check. a lot of economic data coming up. we continue the advance of futures we saw in the equity markets. you have gainers and losers. >> the one loser i want to highlight, he'll sire brand down three point two percent. what is interesting is they were up early in yesterday's trading on news they would by whole foods. another acquisition. i do not know if it signals anything that the shares declined. of bounds on twitter. maybe people think them in a rally has gotten suspended. the new normal. your new normal is the new neutral. no question about that. the secular outlook. growth rates. on or to have richard claret, professor of columbia university. -- richard clarida. how is the new neutral the front from the new normal? >> three key elements. we are in a multi speed world of countries converging to slower trend growth rates. number two, a world in which the economies face an overhang of leverage. we have had no deleveraging in the aggregate with a lot of budget deficits. number three, wallis he makers can and will recognize that. the destination will be a much lower rate than before. withoutferent meeting professor el-erian on. different with the new pimco strategy and new i have been in nine of these. i think the process has worked well. i want to emphasize the difference on our plates. we use robust and free flowing discussion. both robust and very free-flowing. at the end of the three days we ended up with an organic sense of this. we feel very confident about it. >> what does this mean for the central banks of the world? >> they will have to tread very carefully once they begin to hike. for example, over the next 3-5 years the fed and bank of england will start to hike rates. our view is they will do it at a very slow paced. they will not get the policy rates up to four percent that they expect. new investor pull from yesterday. neutralhan what the new would suggest. >> i want to get your take on bubbles. are they more likely to occur or less likely to occur? >> that is a great point. in essence of monetary policy is to keep the game going, to keep the global economy growing at whatever pace it is. i think policy makers in general feel the way to deal with pockets in the credit market is through a macro credential onroach not by raising rates everyone in the economy. janet yellen when she was vice chair set the preference is not to hike to deal with bubbles but to use credential tools. i think that will be the first course of action. ofrates going up at the end 2015. john hot cia says that is too early, middle of the year. hatzius says that it's too early. focused onis inflation. actual inflation. the forecasting has not been very good, neither has mind, but they get paid to do it. until we see inflation approaching the two percent target, they will be very wary of hiking rates. we will be focusing on inflation. >> what is so cool about this is what is not in the conversation is the word slack. focusing on jobs. of the world's major players, the u.s. is in the best shape. we have the best policy to deal with the aftermath of the crisis and the closest to the potential for the economy. if you look at europe, the good news is that europe is not in the mode of the crisis, it will grow at 1.5% this year. look at china. three years ago china was growing at 12, then nine, then seven. we think it will be tough to keep it in the six-seven percent range because they have a huge shadow banking system. globally or is slack. >> credit we will stop to show right here. are you predicting 6.5% china growth rate? >> we think it will be very tough in the next five years. withlot of it has to do the property market. must read is from george magnus. he writes about activity levels weakening further. responding not with traditional criminal programs but unlikely to hold. a new monetary easing. i want to get your take on the property market. what would a chinese property market bursting look like? do we have any idea of that? >> very tough because it is a very big market and spread out to different parts. there will be parts that burst, no doubt about it. still very flat. it could be very bad for the world economy. >> are the effects the same? >> our view on china is they have a problem with thinking. they have the will. our focus is on the execution risk. probleme a $1 trillion with the $1 trillion inc. account. they can handle the cost. how big is it now relative to the real banking system? >> good question. the overall shadow in china is about 1.7 trillion in u.s. dollars. i do not have the numbers off the top of my head. overallthird of their banking system. china still dominated by the big traditional banks. dovetail with the work on senator conrad and the failed system. -- retirement the way i read it, continues financial repression and retirees and savers do not get you inflation. >> as usual, you hit the nail on the head. what research shows is when countries go through financial some sorty revert to of repression. you keep interest rates below the rate of inflation. that is part of the recovery process. if you are a saver, not a great place to be, but that is the reality. >> going to the heart of the present work. >> a big problem. a long-term problem. saving has come down for the past 40 years. not just interest rates but they do encourage people to spend or borrow rather than to save. we need to turn it around. the bipartisan group i am working with has to come up with legislative proposals over the next year to increase savings. >> fundamental. james lockhart. in a bit.uch on that twitter question goes back to bill gross. five years after the recession, what is your new normal echo maybe new neutral or new optimism? we need to hear from you. do that. richarduest host is clarinets of pimco. jim lockhart. they will be with us for the hour. coming up, their take on the gender pay gap in the united states. single best chart that will illustrates the stark differences between what men and women make as they get through the earnings years. this is bloomberg "surveillance." ♪ wore neutral today. my neutral look. ♪ >> good morning, everyone. with me, scarlet fu and adam johnson. an international morning on the news flow or. floor. >> more problems for ukraine. russia state owned gas facility turning up the heat or not. it must pay for next month gas supplied by june 2. if not, the gas will be shut off. gas fromets half its russia. the overseer of fannie mae and freddie mac wants to make it easier to get home loans. unveiling a series of steps today that would force things to buy back billions in home loans. that has made lenders hesitant to make loans to people with less than perfect credit. a group of students at harvard university canceled plans to hold a set can make black mass on campus. more than 60,000 people signed petitions irving harvard -- urging harvard to stop it. it has been moved off campus. top headlines. thehat had to do with medical school at harvard with internships. >> just bizarre. why would you do that? you were chairman of the economics department at columbia . help us out. >> the kids these days. i have a son at harvard. are listening this morning, shape up. >> matthew is a good boy. not involved. single best chart this morning. a rate chart. >> i gender pay chart. it is not actually the base pay. it is from pay scale. men's wage growth. we will unveil it to show women's pay growth. initially the yellow line outpaces the white wine. on average for women, age 30 $960,000 per year. for men, a peak set 48. >> that is a really cool chart. >> log fridays. >> special day. everyone is looking at ways to close the gap, to change the pay gap, especially the at age 30. if you are a woman who wants to have a family, something to consider. >> you are living it. a big challenge. >> day in and day out. >> i caught one of them watching beyoncé. >> they do not watch that. they were watching the playoffs. talking about other trends in the labor market in the next hour when we speak with jodi miller, residence ceo of business challenge group. joining us in new york this morning. >> i think we need photographs. what do you think? let's do it. number three, the world's biggest election underway in india. election workers using hot wax from a candle to create an electronic voting the sheen. >> you mention 500 million people within the democracy. this is the non--gunned party. non--gone handi party. lower caste, upper caste metric here. a lot going on. >> over 500 separate elections. >> a lot going on in the selection. >> a man performs on a horse at a festival at the forbidden city in beijing. >> lunchtime entertainment. tony christens the. >> president of turkmenistan delivered a speech next to china's president at this event. >> what is interesting is the language map. having a large russian language proportion. not as great as ukraine, but nevertheless, get your attention. >> i was inner mongolia about three years ago. to documentlm crew commodities within china. we were in commodities -- coal mines. there is a confluence of people, russians, who have come down and married chinese. that is just part of it. >> how come he gets all the cool number one photograph of the day, john ms' wax. >> see that out at bloomberg video. was the movie any good? >> have you heard anything about it? >> is he a cardinal fan? >> he is a bigger blues fan. total nhl fan. i know everything there is to know about john hanms. and find the india next pitcher. an agent who basically has lost all his good players. he says i will go to india and find the next great pitcher. jerry maguire. >> could be pitching scripts. documentation. >> he is up from newport beach. comingming up -- >> up, do you plan to retire comfortably? looking atg to be the challenges ahead for the u.s. retirement system coming up next on bloomberg "surveillance." ♪ >> this is bloomberg "surveillance." getting you company news from the files a bloomberg west. china's government five years ago. now they may open a field office . according to a person familiar with the matter. facebook sells ads to chinese companies that want to reach international users but does so out of hong kong. apple booth the mobile phone market in japan. apple has 37% of the japanese market in the year that ended in march, up 25% from a year ago. the big reason, the largest wireless carrier started selling iphones. someone on twitter you would like to hear from bless you can now view them. they will not know you have muted them. that is today's company news. anyone you want to mute on twitter? >> i occasionally block people. >> block is different than mute. this is after the train wreck a couple of years ago about they try to change the blocking feature. they are not changing the blocking feature here. them butn still follow do not want to get messages from them. >> i think you weren't the one going nuts. like tyrants, pirates. i am like stop that. >> social security going to run out of money by 2031 according to the cbo. only half of americans surveyed by gallup believe they will have enough money to retire. our cohost leading a bipartisan commission trying to find a solution. so many programs. why are they falling short? it is confusion out there. so many programs and they keep getting created. a lot of people just do not understand them. we are also in this bending culture at this point instead of a savings culture, and that is a problem. we need to turn it around. that is what we're working on at the moment as you can see in the chart. on in and show the chart on the mac's monitor. that is the savings rate. you took it back to world war ii? >> 1940, when i began working. >> that is the problem, the savings rate is 3.8%. a secular decline, but what can we do? partially just education. have to encourage the younger generation to save and think the extra andding start to save money for their kids college and their retirement. columbia come a we have all dealt with the failure of employment retirement. you and senator conrad say it is time to do something. something as large and as big vision or tweak at the edges? >> we are trying to come up with a comprehensive package that covers retirement and disability. the disability trust fund will run out of money in two years. it is a big problem and we need a comprehensive solution. up withto come proposals around retirement savings, social security and disability. >> 81% are not ready for retirement. my generationk of and how i do not believe social security will be there by the time i have to retire and it will be bankrupt and will not get any money from it. >> there will be money there because it is a pay-as-you-go system. there will be 70% of what you expected or something like that. right now social security is paying out more than it is getting in and payroll taxes already so the decline has already started. we have a trust fund and it is ious from the u.s. government. what if we did something like instead of capping an out of 200?00 it is 100 50,000 or you know? >> there are a variety of ways .o tweak it it hurt some people very much. a variety of ways to do taxes. raise it overall. the other thing is investments. i was at a sovereign wealth conference in london last week. a lots of the countries are funding social security systems. that is something we should be thinking about as well. >> thank you. public service on yours and minds retirement. new movie will be out before july. the forex report. yen is what i am focused on. falling hard. the bank prepared to support significant stimulus. ♪ >> make a more russian union in some form. stock market surges to record highs. it is just unseemly, an american firm wants to acquire a british drug company. the british pushed back. is tuesday, may 13, i'm tom keene. scarlet fu and adam johnson. our guests comes from capital management. >> we are starting in china with economic slowdown is the evening. investment as well as retail sales. the u.s., were in have data of our own. at 8:30, retail sales. are we spending money? import prices also at 7:30. stay tuned for all that. no significant earnings today. treasury secretary jack lew in china. let's start with more consolidation among tv, internet and wireless providers. att is now in direct talks to buy directv. deal would give at&t the country's largest satellite tv provider. it already offers phone, wireless and broadband service. pfizer is good for the country's economy. lawmakers are concerned that pfizer will cut jobs and shut down facilities. general eric holder is pressing for a guilty plea. it could cost credit suisse penalties of $1.6 billion or more. those are our company news headlines. republicnetsk people's after a referendum of questionable sorts. eastern ukraine, in some form they would like to join russia. he is written the definitive biography on boris yeltsin. as vladimir putin creating a post-yeltsin soviet union? if you look to your studies of russia and when you look at the events that we see in 2014, what elements of a soviet union can you bring forward? well, i think it is the idea that you could control domestic politics, especially foreign-policy orientation of the so-called national republics , which is what they were called during the soviet days. does not want to re-create the entire soviet heon territorially, but certainly does want to create a situation where russia has total foreign-policye economic orientation and olicies of those countries. >> you have a wonderful widelytive on putin, considered definitive on his path from kgb to where he is now. what are we getting wrong in our coverage? what do we need to know about mr. putin that we are not reading today? >> my book is not a biography of ro it is a prelude to putin, explaining how the soviet union collapsed. you have to understand that president putin does have an agenda. he does feel that russia has been treated unfairly in the fall of soviet russia. he wants to create it -- re-created as a great power, but largely in opposition to the so-called west, to the united states. i think that is his goal. he wants to re-create, as i said, a russia that controls, not necessarily owns, but controls the post soviet states. >> dr. aaron, you own the high ground on a study of harvard putin. president putin. what can he emulate about those times where russia moved away from communism? >> oh, my goodness. i could rattle off a number of things. for example, under yeltsin, the parliament was a real parliament. it was an independent body. they even tried to impeach him. the press is absolutely free, television was absolutely free. by the way, people forget that yeltsin in 1998 concluded the treaty with ukraine, which, for recognizedime reco ukraine as a separate territory and made several concessions. all of that is gone now. >> this is crucial, the secret -- a sequence from gorbachev to tin. >> we don't know where the people in donetsk want to go. the people don't necessarily want to be associated with russia, but they don't trust tf. you might have a separate republic within ukraine. a tougher stance in east ukraine. let's get some surveillance perspective on these markets. the dow jones is up someone hundred 48% since the fear, the blood, the gore of february 2009. it was easier then. how can anyone stay the market now or even add capital to this historic run? thiso you develop at 16,006with the dow hundred 95? >> it was easier now than it was last year. last year it was the least volatile year. now things are not going straight up. they're up, they're down, there's ukraine. there's more opportunity to find pockets. we made more investments in the first quarter than we had made in the first three years. was that because of this selloff? downward -- the dow was down a thousand points in the first week of the new year, but, there are opportunities here. yes, we are at new highs area don't forget, over the last six or seven years we are back where we started. is getting closer to securing some sort of guilty plea from credit suisse. not losing sleep over the financials. i think there are better places for your money right now. we put a lot of money into financials in 2009 and 2010. we made an awful lot of money through 2013. we will continue to reduce if they had higher prices. move away from fixed income and the reliance in an investment banking, others like our clays are trying out as well. this is the roadmap to better profit growth down the road? or is it just a way to get through the malaise of the moment? >> morgan stanley is exception to us. we think they're becoming more of an asset manager and moving away from trading revenue. he will be a will to return capital to shareholders. but sharinghat one others because regulatory headwinds seem to mean lower mild multiples -- lower multiples. ironic, he is now putting money into the u.s. because he says there is this industrial renaissance happening here. what is your take? >> we're huge believers in that. we think he's absolutely right. we think oil, natural gas, thatparency, regulations are tough, but everybody has to obey them and there's not as much corruption as it is all over the world. with the jobs are coming back to the united dates. low energy cost it was a traffic tailwind. >> how much of this industrial is energy as opposed to something else? >> i think labor and management relations have gotten a lot more realistic. you have for making a lot of money domestically, europe general motors making record domestic profits. it is not just energy, but energy is certainly one of the bigger tailwinds. to dive into the equity markets through this hour. the vix at 1250, that is a wow statistic. the new neutral, five years after the recession, what is your new normal? we look back of the concept that a lot of people grabbed onto. let me do a data check for you. we get into four days a big economic data. futures continue to advance as we get your 1900. 10 year yield turns here. 2.65 versus where we were. news of the bundesbank and nymex 70 as well.1.2 we're going to know a lot more about the american economy friday at noon. the euro is really taking a dive in the last hour on that. coming up on surveillance, here's a number that put things into context. 19%. that is a percent drop of the number in new york finance jobs since 2007, before the crisis. we will talk about why als are rejecting banks. ♪ >> i'm tom keene. he looks for value. thinking bernard farouk from ages ago. the management is out. it to the guy out the door over online and the charge card tobacco. it just about target or was it about the whole retail sector? >> it was just about target. we saw this as an opportunity. everyone is talking about the credit breech. everything is a went to canada and it has been a disaster. we think they can turn that around. it will all go to the bottom line. a turnaround? it is a tactical process that makes you want to acquire shares? >> is more the concept that we have faith in the management team, the governance of the board of directors. the second level of management is quite firm at target. they can either turn canada, and ,hat will take two years probably. our listeners, viewers are at home. they want to buy a blue chip stock, whether it is target or dupont. what is a process grisanti capital goes through? >> first thing we look at is the downside. looking atot bloomberg news to decide whether to buy shares? >> oh, we're looking for the event, which you tell us. if then we say, what credit breech goes on? what is the downside for the equity holder? then we assess that heard it is not too great first is what we see is the intended upside over -- over a 2-3 yearur wei wait. some of our best investments have been stocks. we waited for target and then an event has happened. general motors was a better example. we bought it, the recall happened, we use it as an example to really help our position. >> interior confidence. does have a say? retail sales are poor, people start to flee, the market goes down, that might be an opportunity for us. we know, as you do, that is a cyclical thing. to love the mergers and acquisitions fever, right? yes. >> coming up, we're going to look at at&t and direct to be. with -- we're thrilled to bring you craig moffett. good morning. ♪ >> it is a good question of the day here on bloomberg "surveillance. co what is adam johnson's new normal? 3:30 is getting up at a.m.. >> we welcome you to bloomberg "surveillance. grisanti.st is chris on the wisdom and courage of staying in the markets. let's get the top headlines. here is adam johnson. >> voters have rejected the congress party which has ruled india for the last decade. results will be announced later this week. the nba has rebuked los angeles clippers owner donald sterling. this time it had to do with his comments that pro basketball legend magic johnson is not a "because model he has hiv. " havesays the glaciers enough water to raise was by four feet. those are your headlines. a greatce magazine did job. it is about the white ice getting back to the dark red rock. went to get back to the dark, it is tough to remake the glacier. it is just that simple. movie calleda "frozen water. so they put cameras on the glaciers and you saw them just shrank. >> it will be fascinating to see how the anti-climate will warm me through response to not one but two research reports third their blood to do with measuring the ice. gas, here's as of ruler, here's what we saw. normal in the new environment. is something we have to adapt to. speaking of the new normal, there is new normal in the labor market. the best and the brightest are ditching their 90 hour work weeks. significant move from banking jobs to tech startups. jodi miller has seen it all. she is the ceo of his missed out independencejairus for start up based work. people are making the choice on the run. >> it shows people are finally waking up. they recognize that life and professional success is not about 90 hour weeks turning on spreadsheets. you saw goldman sachs several months ago announced that weekend work was no longer going to be the norm. i think companies are realizing and investment banks are realizing that people want different relationships between work and the rest of their lives. >> going to silicon valley doesn't mean you get away from the 90 hour work week. you're still the hold to the job. as a convergence between going to a tech startup job and carving out a career as a consultant for hire? >> absolutely. the skills you learn -- you learn at an early stage company absolutely prepare you any way that no investment bank analyst job could, to be able to add value as an independent person for the rest of your life. you asn't convey to thousands of people get ready for the cfa exam, how much you disagree with what goldman sachs is doing. the answer is, by definition if you enter this business, you work 70, 80, 90 hours. i would say what has changed as compensation. i see with my kids. .hey're not getting paid the glide path to better pay has permanently changed. employers are recognizing if they want to keep the best people they have got to have a different path to leadership heard it differently to structure work very is not impossible. >> i hundred percent agree with you that the path to leadership is not there. what thef it is millennia us possibly have, fewer jobs as scarlet pointed out, to think is more because they want to go somewhere else or are they being for somewhere else to go >> i think they want to go. the folks who get these jobs are cream of the crop. they have options. do not options. they're looking at a world where the average job tenure is a little over four years. they will have to constantly stay on the cutting edge and they recognize the skills and training that they will get an early stage entrepreneurial company are going to be more valuable than the skills they about,>> you're talking ironically, one percent of the graduates. what the hell is a ruined house going to do? everyone else is going to have to keep your skills fresh. coming faster is and faster more fluid. they will have to keep themselves educated and at the cutting edge of whatever it is, whether it is mobile or big it or whatever the next thing is so that they are employable. >> we're talking about the younger generation. ?hat about tom keene spears do they prefer being an independent professional? >> we survey them, they say the same thing over and over again. a like being independent because he liked to control what they were gone and who they work with. provide a project based for them that they can rely on, they will pick independent every day of the week. are you going independent, tom? >> i'm going independent tomorrow. >> we could each be in our -- >> thesehairs are huge topics. we could do literally hours of this. >> it is only going to become a bigger issue. we will be right back. upping its bid to takeover britain's astrazeneca. more when we return. ♪ >> good morning, everyone. you can see the steam. jay-z and beyonce, help me here is scarlet fu, they are married, right? >> she was kind of trouble for jay-z in an elevator. scarlet fu will have more on this on bloomberg television and radio. our gossip columnist as well. it is a beautiful view. a gorgeous day yesterday. .> i am scarlet fu i am here with tom keene and adam johnson. the world's second-biggest airplane maker cut costs involving its eight 380 super jumbo jet. they have an order backlog of more than 5000 planes. they're ramping up production of their most popular model, the a320. -- wall street journal barger's contract runs out in february. meanwhile, delta stock has doubled. there's a pretty big discrepancy. of the royalidiary bank of scotland is going public. the bank is based in rhode island and has branches in the northeast and midwest. rbs have been open to takeover offers, but said talks to not yield anything substantial. that is today's company news. >> mergers and acquisitions continue. american telephone and telegraph , at&t, is in advanced talks to acquire direct tv. about $50 billion. if completed, it would give at&t control of the largest satellite television provider. craig moffett will speak to that head of directv later this week at the confab. mr. moffett joins us now. i guess the first question, tom, is really a question for at&t. that is, what is the real reason you're doing this transaction? for mark whited make sense. you have a -- for michael white it makes sense. why is now a good time to enter the satellite business? are they just chasing brian roberts? >> certainly, the comcast deal influences everything that is going on in the space right now. you do get the sense of this transaction, at least for at&t, that this is a deal that is born of necessity, rather than opportunity. there've have looked at all the possible options, they looked at buying vodafone, it is reasonable to think they have looked at buying dish network, and it seems like strategy by process of elimination rather process of figuring out what assets you need in order to compete. makes isy point craig effectively that at&t on its heels needs to do something. >> we love the deal. i think craig is asking the right questions. --g, do you think the top the comcast time warner deal goes through? >> i think it probably goes through, but is certainly has another complication, as is the ongoing net neutrality debate. as we did is grown up into a much more complicated and as ittious issue again did in 2010. that will affect the comcast deal as well. >> i think the irony is that if it doesn't go through, always in the deals will be done in reaction to it. they will happen. with a different landscape than it was when you started. i am not sure. if comcast doesn't go through, that is still the easiest one to approve of any of these. if comcast doesn't go through, i'm not sure this one would go through, either. >> crag, you have written about directv and how well it is. how much synergy as possible from at&t's perspective if it absorbs directv that has done in a credible job of her dissing expenses? >> the answer is, not that much. let's assume for a second that they can buy programming from disney and viacom on directv's contracts rather than at&t's. five or 6 for the million customers that at&t has on its universe platform, it will save some money. million aobably $400 year. outside of that, it is really hard to see any real synergies in this deal. you so much.nk i want everybody to remember this conversation 24 months from now. that will be a dumb conversation. it is about easy money, it is just mergers to do mergers. grisanti is making out like a bandit. >> you are right. .> let's get to a data check we have retail sales coming out at 8:30 a.m.. >> good morning, everyone. media.r a digital bloomberg video, bloomberg radio plus, been a huge success. we are honored by your attendance there. i am tom keene. with me, adam johnson and scarlet fu. saidve christopher guice -- grisanti for perspective. theht now, news across a pond pond. >> hans nichols joins us from london. hans, we knew that the stakes were high and that lawmakers are not happy. they're worried about jobs and guarantees. what happened when mr. reid actually went into parliament? corrects well, he was facing a hostile audience from the very beginning, a skeptical audience, adam and tom. it is a general sign that your hearing it not going off well at the chair of the hearing starts off by calling you a shark that needs to be fed, a leopard, or a praying mantis. all three pejoratives thrown up in ahead of this committee, who by a court of the system, guy, is a labor mp. labor is tried to stop us from going through. they're using this as a political issue. pfizer's bid for taking over astrazeneca has suffered numerous setbacks today. the question is, did they suffer any corporate or business contracts. politically, and rhetorically, pfizer had a difficult morning here in london. hans, we understand that jobs are front and center. of the otherme questions, like pfizer moving to london for tax purposes or effectively the u.k. losing its crown jewel of drug development, what about those issues? >> i finally get to shop my latin here. what we're essentially trying to get at is the state of mind inside of pfizer. what parliamentarians here are rationing is their intent. is the intent actually to use this as a tax haven and have a lower effective tax rate, or is their intent to invest and create jobs. ? is that just because you want the lower effective tax rate? withbeen defending himself one hand tied behind his back. he can't give away too much of the strategy, otherwise he would drive up the price of astrazeneca. he incredibly difficult day for ian read here in front of parliament. i'm not sure he had any converts. will anything come out of this hearing that would convince you to want to buy shares of pfizer? we are actually astrazeneca holders. we think that now may be a good time to lighten up on astrazeneca, simply because it seems to be a huge headwind of resentment. britain, we are troubled. >> let me go to the money question. how does this differ from what ge did in paris? >> ge was in contact with the om thement -- with alst whole time. lstom want this arrangement. it is pretty obvious that astrazeneca does not want this to happen. it has been a remarkable morning here, i have to tell you. >> can you give us a more latin? >> caveat emptor. hahaha. this is really just a play for the tax benefits here in the u.k.. the headquarters in the u.k., operational in the u.s.. if that is the case, when you're buying a drug company, you're buying a future and its research. you're buying more than just the text property. it is always a bet, right? that is why your cohost is always looking at what kind of drugs people have in the pipeline. no one knows where the next wonder drug is going to be. margin for the drugs his lower. you have to read and phrases out of me, tom. >> well done, hans nichols. luribus unum. >> i'm tom keene with me scarlet fu. the rangers play game seven tonight. she will retire tomorrow morning. adam johnson's is with us -- adam johnson is with us. >> more problems for the ukraine. gazprom has warned the ukrainian government it must pay for its gas by june two. 2nd. if not, its gas will be turned off. fah faa's melvin weiss is unveiling a series of offers today. that is made lenders hesitant to make new loans to people with less than perfect credit. finally, a student group at is going to cancel the black mass they were going to hold. this like rocky horror picture show? >> why would anyone hold a -- there are some people who think that way. >> english majors. >> what happens off-campus days off campus. your plate is on today? you all are radio personalities, big radio personalities on bloomberg radio. the ceobe talking with of a radio station. he is transforming the entire company. pender andthreat of spotify. what is it that allows radio to survive in this new digital world? with thet has to do black tom keene, radio personalities. asked -- i've the durability of radio. >> is not just tom keene's personality, but as long as people have to commute there will be radio. >> really don't care. that he was on radio at 12 noon. >> thank you so much. let's get to tim geithner or who is on his book tour right now. he shows up on charlie rose last night talking about his memoir stress test. listen to what he said about the for -- the future of financial vulnerability. are absolutely vulnerable to major panics. it is inherent in the financial systems. you can't eliminated or ban it. you can do a lot of things to reduce your vulnerability to it, and their forms into place, however messy imperfect, there are powerful set of reforms risk. t that basic wris >> when an investor says i need stability, we think lower our ods. 's. r roe >> adam, what is your new normal? my normal is work, work, work, work. ♪ >> tune in to bloomberg television this evening. timothy geithner on charlie rose. about his new memoir, "stress test." they're talking about how you take a meeting in washington. there are fake meetings and real meetings. >> would've a say about fake meetings? street has its own version of that. it has a hold. right.greenberg has this no chairs in the room, short meeting. that athat to do surveillance. >> we do that. chris west coast is grisanti. let's get you some company news now from the files of bloomberg west. the social network may open an office in china. it currently does so out of hong kong. boosted its share of the mobile phone market in japan. it is up from 25% a year ago. the biggest reason is japan's largest wireless carrier started selling iphones. the new feature is expected to be rolled out in a few weeks. that is today's company news bloombergiles of west. >> other twitter platforms have a mute. so now, twitter has caught up. >> i use twitterrific. i use twitter as little as i can. let's talk about some initial institutional inertia. thanks accept deposits, to make loans, how quaint. ofmart is in the business garnering fees from a broad segment of the nation, a set -- a part of america can't possibly get to the next paycheck. i want to talk about the overall market. you and i have gotten old waiting for retail to get into banking. this finally going to work? >> no. i think what is happening at walmart, yet these branches that are exploiting a niche that is been exploited. the working poor who can't get credit elsewhere in the can't cash your checks. >> there is no new new here. >> you remember beneficial finance, household international. this is the same idea. >> full that over into the market. financials are up in moonshot. would you do with the too big to start saying> you that the government is looking for stability. roe's. y means low now, within this debate, you and i have never seen a four-year market like this centered on a great distortion. balance sheetsen this big. we have never seen highs in stocks where we are, and we have never seen growth is low. does that convergence actually collapse? >> i will tell you very one of two things is going to happen. we are seeing the best unemployment numbers would've seen since 2007. on the other hand, using that long bond going from three percent down to 2.65. months,ome on in six you are the long bond will be -- >> are you with the group that says no? >> i feel like charlie brown where lucy keeps pulling away the football. >> when scott was a kid, she -- >> i would say i prefer it here. we have higher growth in europe and markets would no growth. most exciting thing to happen in emerging markets is the election in india. for the first time in 20 years, equity money is coming to the united states. we talked about the manufacturing renaissance. this is our time in the sun. could that have defective slowing down the growth you're talking about? >> i think it is a market of stocks. we're looking at autos and airlines and refiners. these are american industrialist that are really having a comeback. we think we are halfway there and have more to go. they end up lending less. doing less lending overall, extending less credit. won't that have a larger effect? >> we just had jodie on and she's talking about all these .olks they're making midtier loans. there are a lot of were to get money out of the economy. the problem is, no one is lending. problem is that people don't feel confident enough to borrow. sounds, as only way to go. >> if you are afraid, that is the only path. >> it would be stupid if you put all your money and now and then it goes down a thousand points. three years from now when i come back, the economy will grow in two percent-three percent a year and we would be much better off now. 200% in cash. >> i want to focus on m&a. we will get an announcement today or tomorrow. at&t potentially to buy direct tv. that was certainly be a big deal he takes heat from the u.k. parliamentarians about whether to keep jobs. southwark they don't approve this deal. astrazeneca is up this morning about 1.5%, which begs the question, will someone come in and bid? onhave so much wiggle room your spreadsheets and analysis. i want to be smarter by friday onto 12 noon.y be we will do that with the economic data that is coming up very my agenda today's retail sales. one is that 8:30. always a dominant part of the american economy. very go right onto inflation and housing. we are a lot smarter about the second quarter by the time we get to the weekend, which i think is front and center on my agenda. >> on my agenda is deceiving. penguins.d i want the rangers. betterer plays working than it has been working before. they need to keep elian momentum. last night said that anything they move says a penguin on it or it you can't correct you can't get to the stanley cup in good position. mckeandwide with michael on bloomberg surveillance. bruins dyed in the wool fan, i am a canadiens fan. >> there's nothing in >> issional sports like -- watched last two minutes of ducks kings, it was like medieval warfare. for twitterave question? >> we asked everyone five years after the recession, what is your new normal, how do you define it? five years of qe has been totally paranormal based on an untried economic mechanism. >> there's nothing like getting smart people together. you may not agree with them... thank you, come back when you're conscious. i appreciate the optimism. chris grisanti with her son t capital management. keep talking, scarlet. >> how about that retail sales number at 8:30? that's if we can get that spring feeling we're talking about. coming up tomorrow on "bloomberg --veillance or co ♪ >> good morning. we are alive bloomberg headquarters. with a day for you today special focus of an entertainer in the midst of a shakeup. ceo bobbc universal wright will join us. at&t buys directv for $50 million. even with the surge in his screen, -- music streaming, radio continues to thrive. wilmott is on a mission to ban online gaming. here is a look first at our top headline this morning. to buy directvs for $50 billion. that would give them the nation passes biggest satellite provider 20 million subscribers in the u.s.. a ceo trying to sell --