so many earnings out and the picture is not great. tom: an exceptionally slow day. the barclays story is important but super is the back drop in washington across the south this morning but we need to look at finance and investment. francine, what i am focused on more than anything is trying not to stay up too late to find out who won. francine: because you are expected to follow the market. breaking news out of the euro area. yesterday we had lower-than-expected inflation. today, unemployment overall is a little bit better than expected. that's just the latest in terms of breaking news. up,economy finances coming but first let's get straight to the first word news of caroline hyde. caroline: francine, thank you. presidential hopefuls -- the biggest day of the primary calendar. polls indicate that republican front-runner donald trump will win most of the contests -- the big fight is for second place between marco rubio and ted cruz. meanwhile, bernie sanders is hoping to win against hillary clinton in massachusetts, but clinton is heavily favored. syria is nowe in on for a fourth day in the u.n. want to take advantage by taking more humanitarian aid. there have been violations of the cease-fire into the next five days the yuan wants to distribute aid to thousands of people under siege. the united nations security council votes today on whether to impose more economic sanctions on north korea. it comes after kim jong-un's made more displays. global news 24 hours a day. i'm caroline hyde. tom: thank you so much. not much going on with equities and bonds in america but the curve is flattening in futures are up 10, euro-dollar a little bit weaker. -- has a little bit of lift a two-year yield important. it hasn't gone lower, that is a big deal and here is bikini number. 94 basis points -- the difference between the 10 year and the two-year is .94%. that gives one cause. chairman greenspan alluded to the economic slowdown in the united states, the one indicator of that. what do you have? francine: the japanese government got paid for the first time to borrow money, the first time in decades. this is the picture for the japanese yen. the auction was yesterday and european stocks are overall 9%ning, barclays was down and then i also wanted to show you yen, falling from the strongest level in three years. there is a little concern around china but we need to focus on barclays. lot,ts dropped by quite a and didn't interviewed the ceo said he would reduce his africa the dividend. here is what he said about restructuring. >> we have reduced our dividends to threepence. that is a very difficult decision to make, but it will allow us to accelerate the non-core business and illuminate the power of the core franchise so we can get back and paid a significant percentage of our earnings out in dividends. francine: stephen morris is in london and our guest for the hour is here. when you look at barclays figures -- they were worse than expected. that has justo gotten the job. how much more does he need to do? he has already announced cutting dividends. stephen: indeed. we found a lot more news about how barclays will save money today. of course, this comes on top of moves to trim the investment bank, seven countries across asia. the almost three months he has been in the job, they haven't done a lot. but as we can see, there are still a lot of questions left at the bank that investors need answered. one of the major ones is how confident is barclays in the earnings outside of africa, outside of the small investment banks? it appears that not many people are. francine: can you draw parallels to credit suisse? this is a bank under extreme pressure, that needs to shrink, but it is also doing it at a time when the world economy is not behind them. stephen: well, today the ceo warned that the first quarter investment banking would not be as good as last year. this seems to follow a trend of disappointing strategy updates from european bank ceos. we saw it happen at credit withe, at deutsche bank, double-digit share drops after the ceos unveiled their new plans. it shows the enormous difficulty of trying to downsize and functioning and profitable investment bank with the macro environment is just terrible. tom: stephen, i want to get to chairman greenspan and his thoughts on negative rates, but first, who does barclays compete with? we talked about lloyds the other day. i get what they do; i don't get where barclays fits in with the new banking world. where is that? stephen: barclays at the moment is being propped up by its incredibly profitable business, credit cards in the u.s. and u.k. -- and its consumer bank. what isn't clear is where it fits in the global investment banking landscape. is it a dealer like goldman sachs and morgan stanley? is a trying something more universal like jpmorgan are citigroup? i don't think we have had a greec decent answer. it doesn't seem to be big enough to compete with the latter, but is too big to limit itself to the former. tom: right. what an interesting conversation. yesterday with alan greenspan -- he will be 90 years old and five days. he was exceptionally vital, talking about the economy, the politics. and here he is on the topic of the moment -- negative rates. >> up to a point, negative interest rates have no effect. why? because people are willing to accept, essentially, a negative interest rate, to hold the coins of these particular countries. that is going to change if this goes on indefinitely, because somebody will start to move. we don't know what happens when that happens. t tomtom: we will have much morn this. stephen morris, barclays and other banks have to live with the global low rates, if not negative rates, in each country. how much of a hindrances that to reorganization? >> it's a huge hindrance at the they have to readjust how they approach their corporate clients, not wanting to take deposits. they are also just not able to get the same kind of spread that they may want, which is of course how earnings have evened out through the bad times and good times. they can't do that at the moment, so we are seeing bad performance turn into a lot more choppy and sentiment change on these institutions. francine: you can't talk about specific banks, but they have a vital role for the economy. there is a transmission mechanism by which people borrow and lend. are you concerned that because of world growth and negative rates, these banks can do their primary functions? >> it's important that you point that out, because banks are under pressure to change. you can sometimes forget the vital role they play for the economy. first of all i am glad you pointed that out,. everything that has been said before -- weak global growth doesn't help. there is a big restructuring going on in the banking sector. then of course we talk about negative interest rates, where banks are not supposed to pass on for the rest of the world. it is basically a texas banking system, so it doesn't make it easy. francine: are you worried about the side effects of negative rates? usually it is a club among central bankers -- they don't tell each other about their loans mark carney's words are pretty tough. >> it is not without reason. he talked about a two-tiered system for the ecb within the european banks, so i think there are some potential side effects, and we should be careful using this negative interest rate fo r too long. francine: thank you so much. harm will be back throughout the day. coming up, we will hear from these on's ceo -- from nissan's ceo. we will ask him about the impact of negative rates, especially in japan. this is bloomberg simplot 's "surveillance." ♪ francine: this is "surveillance." let's get straight to the bloomberg business flash with caroline hyde in london. caroline: thank you. an annual profit plunged 69% at glencore for the monetary traitor and broker run by either wasn't bird. berg.an gloss anen the company has scrapped its dividends. there may be a bidding war for the london stock exchange. the owner of th new yorke stock exchange may make a bid. they are exploring a counter offer that would scuttle the london exchanges. industry.he casino gambling revenue fell for the 21st straight months, but the 1/10 of 1% decrease of the smallest since islam began. an increase in the number of tourists helped. that is the bloomberg business flash. francine: thank you. let's get back to our chief u.s. economist of unicredit. we were talking about the fact that you are concerned that we can't quantify the side effects of negative rates. are you concerned that it is central banks picking up all the slack? we are seeing little growth around the world and we don't know at the end game is. >> yes. we had the g 20 meeting, and there was some cause for more fiscal stimulus. it seems like there is not really a consensus, so it's all up to central banks, and central banks have shown some willingness to pick up the slack, but once you show your willingness and stay there, you have to clean up all the time. but there are absolutely limits to what central banks can do, and i think they are almost all in. you look at the major central banks outside of the u.s. -- they seem to compete a little bit about weaker currency against each other, then you have a race to the bottom, and what is the endgame? they should point, acknowledge that there is a limit to what they can do. francine: and then we can talk about correlation with oil. in the meantime, in geneva, the automotive industry is coming together to promote the latest innovations of the car industry. let's hear from ryan chilcote, joined by the nissan ceo. over to you. ryan: good morning, francine. one of the big topics here is, of course, the diesel scandal, vw's involvement in it, and that is where i want to start. thank you for joining me. wirelessunveiled a charging platform here in geneva. you have been at the forefront of the whole movement in electric cars. the question is -- does what we have seen with vw, the holy diesel emissions scandal, add new urgency to the push into electric cars? >> without any doubt. in fact, it attracts the attention to the fact that even though regulators are trying to do their best, in order to say what is acceptable and not acceptable in terms of emissions, there will always be conditions where they cannot regulate. if you really worry about emissions, the only solution is an electric car. you have zero omissions and nothing to measure. has led tohis, cop21 the conclusion that we cannot afford more than two degrees of heating of the planet, 20 or 30 years down the road. this means more and more electric cars. ryan: i'm not digesting your predatory all, but does this present you with an opportunity? and what is it? >> without any doubt. ryan: they will be strapped for cash with these fines. >> i don't want to make comments on competitors. what i am saying is the fact that emissions become something of concern of many people, and a lot of people don't understand what's going on, this creates a space for electric cars. ryan: let's talk iran. your country has said you guys want to capture a se fifth of the market share there. you have about one thir-- what e you going to do? >> we are in iran. we don't have to sign -- we already have a capacity of 200,000 cars, which is installed in iran. we are just activating it now, now that the sanctions have been lifted. what you are negotiating is to go beyond 200,000 cars. we have plenty of opportunities to develop in iran now that the sanctions -- ryan: for the outsider like myself, you want to focus on what vehicles in iran? this is an upscale market, a value market? >> we have three cars, all based on existing cars, which are being sold, the logan and two variations. this is the m0 platform. they're midrange. ryan: only a a few seconds -- talk to me about your concerns of china. overstated? >> overstated, yes. volatility is not overstated, but concern about growth is overstated. i think we will end up with 5% growth this year for the automotive market in china. even though it will stay at 10% in others. ryan: what do you see for you guys in china? >> growth for both. ryan: back to you, francine. francine: thank you. an interesting interview, especially when we know the president of iran has decided to focus on the economy, which will probably open his companies to a lot more foreign investment. super tuesday continues in the u.s. we will hear more from the former head chair, coming up next. ♪ francine: i'm francine lacqua in new york; tom keene is an d.c. for super tuesday. it is time for my morning must-read. is farartin writes, "it too easy for those of a liberal persuasion to be swoozy about popular entertainment and those in it." he makes the point that no matter what his policies are, donald trump is the product of reality tv, and that is why he is so good at what he is doing. tom: it is amazing, away from the horseracing will cover here and johnmark halperin heilemann -- what i find is theting,, francin francine, new media, the distributive force of the message in 2016. what gets me, francine, is it is radically different from 2012, let alone 1996. it's amazing how things have changed in four years. francine: and i wonder whether that is because of communication. when you look at the economy, it is not doing too badly in the u.s. that plays outt the reality tv star. are angry anders frustrated. it is across the spectrum . somewhere in the white house and others blame congress. they are looking for more extreme views, even when they won't tell us. they are looking for nonestablishment guys. and they have somebody who is appealing to the masses. francine: what does that mean for stock markets? is there any piece of research you rely on to tell us what happens next, if there was a trump win? >> that would be great. francine: [laughter] >> i mean, without any claim for causality, over the past decade, we have had the highest stock market returns and we had a democratic president with a republican house. it may not be too bad. tom: there's a great summary of the different gaming of the polls. what' so importants is the important oven in the landslide, not only to the democrats, widely presumed for secretary clinton, but even for mr. trump. landslide may be the word of the day. how will markets take that? markets don't like uncertainty; i believe the landslide helps with uncertainty, doesn't it? >> i think it does, as crazy as it sounds. particularly for europeans and is hard to picture mr. trump in the white house, but the latest poll shows that he now gets 50% in national polls. there are more and more americans warming up to the idea that trump is becoming the nominee. let's face it -- every other poll is indicating that hillary clinton is still the big favorite, not only to clinch a party's nomination but to become the next president. -- how do youkly perceive a threat to the federal reserve system by a clinton presidency or a trump presidency? >> i think there is zero threat by clinton presidency. mr. trump -- i'm not sure. he has not told us many positions. he has not mentioned the federal reserve, so i do not think he wants to do too much. tom: yeah. our next hour, an important conversation. somehow, i don't think we will be talking politics. president of the the chairman's consulate economic advisers. we will talk to him about the american political economy. chairman greenspan cautions on the way forward. jason furman, i would suggest, would speak against that. alan greenspan and jason furman. stay with us. this is "surveillance." ♪ hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. when it comes to the fithings you love,. you want more. love romance? get lost in every embrace. into sports? follow every pitch, every play and every win. change the way you experience tv with x1 from xfinity. tom: this is not the first tuesday of november; it is the first tuesday of march. inat means francine is new york and i am in washington as we begin our super tuesday coverage across all of our bloomberg news platforms. look for bloomberg politics later tonight, with their expert analysis on the horserace. right now, we go to our first word news in london. caroline: thank you. it's super tuesday -- a chance for donald trump and hillary clinton to put some distance between themselves and their rivals. trump is favored in most primaries and caucuses, being held in more than a dozen states and territories. marco rubio and ted cruz are in a battle for second place. hillary clinton is expected to extend her lead; roughly a quarter of the nation has voted today. the state department has released a final batch of e-mails she kept on a private server will secretary of state. amid 52,000 pages of messages released, republicans spent several years investigating them. a campaign called it political. a new study has found strong evidence that the zika virus can lead to temporary paralysis. had zikants studied like symptoms before the paralysis saet in. pulled its foreign exchange clients and found that most believe the u.k. would vote to stay in the european union. of clients say voters in the june's referendum will stick. the pound has fallen more than 3% against the dollar. global news, 24 hours a day. i'm caroline hyde. tom: thanks. 70, 20 yearswas ago. alan greenspan will celebrate his 90th birthday on march 6. i believe he will be playing tennis. it was 20 years ago that michael mckee began to follow him. we had the privilege of speaking with him. we will get to that in a moment. he is older, but very vital. i spent years following the man around, trying to decipher what he was saying. now he speaks very clearly about what he thinks about the u.s. and global economy, and i have to tell you, in 20 years i haven't seen in this downbeat. it's not that he thinks things are terrible, it's that he really doesn't know what is going to happen. tom: the uncertainty -- it is a different uncertainty than what we heard from stanley fischer a number of weeks ago. describe the greenspan uncertainty. michael: there are a lot of moving pieces to the economy, he said. china, oil, politics. he was particularly worried about politics although he wouldn't go into detail. tom: he said, no, we're not going there! michael: and he doesn't know how any of these things will play out, and that makes it hard for somebody who made his living forecasting to forecast. tom: those were wonderful conversations, and we begin with the two topics of the moment. here is alan greenspan on negative interest rate and productivity. >> up to a point, negative interest rates have no effect. why? he goes people are willing to accept, essentially, a negative interest rate to hold the claims of these particular countries. thisis going to change if goes on indefinitely, but things will start to move. we don't know what happens when that happens. michael: is a dangerous, do you think? a dangerous experiment for some reason for banks to be doing this? does it called to mind the beggar thy neighbor policies of the 1930's? >> i don't know if the word dangerous -- but it is clearly nonproductive. to have this type of situation big distortion of a argument about excessive low interest rates for a long period of time. it works the investment pattern on real investment, and clearly, if you have negative interest rates, that -- people can raise funds with negative interest rates. the oir investment -- their capital investment projects will be worked. tom: the corporations you followed with your data analysis -- are they acting in an unhealthy or improper manner, because they have a free lunch from low interest rates? >> well, the problem -- i'm sure they are doing it, because you can tell as the qe's opened up signals whichng are distorted, because interest rates are too low. people are investing in long-term assets when they do invest in long-term asset. under the mistaken view of what the rates of return have to be. that means you'll get this use of capital. michael: the markets these days seem to be telling us that we are in trouble. are we? >> yep. we're in trouble because productivity is down. michael: we aren't even getting low productivity. why is that? where has it gone? >> well, productivity -- i will put it this way. output per hour is driven essentially by capital investment. the data are clear on that. way capital investment is below average. why? are -- this is people because business people are uncertain about the future. tom: would you advocate government policy to spur investment in the united states? >> every time you try to spur it , it turns out wrong. tom: it went beyond that, talking about a government policy. his caution to american economies was scrupulous -- not talking about monetary policy. what did you glean from the policy description the chairman had? michael: he did say central banks seem to be tapped out which would put the onus on fiscal authorities, although he doesn't have a lot of confidence in fiscal authorities either to do the right thing. he seems uncertain about the path forward. he's looking for somebody to step up with some ideas, and doesn't see it. even extends, he it to global central banks, including mark carney and the bank of england. that he made very clear his uncertainty extends to austerity as well. he is not certain where to go with that. francine: a lot of central bankers in the past have spoken less about what other nations are doing but are now voicing their concern that goes back to negative rates. --ave a pretty amazing chart the japanese government got paid to borrow money for a decade for the first time. -0.024%.nese 10 year do you see the fed ever going into negative territory? this is something we have read a lot about in the last couple weeks, but when you look at the side effects, it seems unlikely. michael: i don't know if we would ever go there, but i do think we have to understand that all the talk about negative they havehe u.s. -- asked chair yellen all these questions, and she responded. she did not raise the topic at all in her testimony. all the headlines were about negative interest rates. in this cycle -- in the short term, there is no risk for risk. francine: chair greenspan was extremely cautious. it was a great interview -- ive rates working investment behavior. >> sure. the prices are distorted. the interest rates are low because of a liquidity. it's hard to find out which investments are productive when measure of risk is not market-driven. tom: harm, tell me about productivity. you write wonderful research notes terry the stuff apart. where is our mystery in productivity? is it our use of capital? is it yusor nonuse of labor? is it something else? >> i think we're a little bit spoiled because of the productivity booms we have had. in the 1960's and 1970's and again in the 1990's. it's what mr. gordon has written about. these big inventions have not been there lately, and that is why we don't see a similar bounce in productivity. i think the u.s. could do better in terms of overall education, and of course we also have seen a cutback in capital deepening, in capital spending. all this combined create this bleak picture for productivity growth. but as i said, we were a little bit spoiled and we must not compare the current situation. says robert, he chairman we talked to greenspan about this controversial work about the end of american growth. give us the nuance of what alan greenspan said about that. michael: his view is that the big inventions have been made. electricity, running water. a lot of people have said you can't improve on that, you can't improve on electricity. the chairman says he thinks we will still see productivity gains, but gordon is too pessimistic, although he agrees it will be hard to top the productivity numbers we have seen. tom: are you excited about super tuesday? michael: a little worried. tom: [laughter] michael: american samoa be voting as well. there's your advice -- don't stay up late. francine: [laughter] tom: that's great. michael mckee and i will be here for five ours, with further comments from alan greenspan. super tuesday -- this will be interesting across all our platforms. marty schenker and our government team in washington, distributed around the nation, as we look at the results. mark halperin and john heilemann, our coverage. this morning, he's the great international investor. update,n important confident on the future of japan. from new york, from washington, bloomberg's "surveillance." ♪ francine: this is "surveillance." tuesday, but we also have a lot of news out of glencore and barclays. we were talking to chair greenspan, michael mckee and tom keene, saying he is less confident. bill dudley says he is less confident on inflation. let's get back to our guest host. when you look at inflation and the fact that central banks are throwing everything they have -- we mentioned negative rates -- how do they spur inflation? do they need to abandon that mandate and go for growth? >> i think that growth is the main challenge. we see it very clearly in the u.s. -- the u.s. is ahead of europe in terms of the business cycle. we have close to full employment, and what we are seeing is that core inflation is taking up. -- is ticking up. i understand the concerns of central bankers, because they have the responsibility, but if we look at all the data, the core measures all tell us that core inflation is at 2%. my concern about the fed right now is that they are too concerned about things that may happen instead of what is going on. when you are always worried about what could happen you never move. francine: of course, but the u.s. is not insular. you have possible more inflation dampening expectations because of china, you have possible devaluation of the yuan. inflation was terrible yesterday, below what economists thought. what is it going forward? >> two different situations in the business cycle. in the u.s., we have had good deflation from the decade. this china story is not really new, so what is driving the oil price level? it's mostly geared toward the domestic economy, and the domestic economy is not doing so badly. to your point, growth is the main transition channel. will you look at how we spent our oil dividend? i guess we have an oil dividend. i assume for the rich people, the 1%, no big deal. what does it mean for everybody else that is enjoying not filling up and $80 gas tank? >> were they enjoying it? not everything has been saved yet. it has traded up by almost 1%, but we are seeing consumer spending has been growing at 3% between the end of 2014 and third quarter of 2015. there was a sizable increase in consumer spending, in part thanks to the oil dividend. one problem is that the benefit, this dividend, is being spent a bit more slowly. the savings rate went up, whereas the dreck hit pretty rapidly. we talk about oil investment, down 60%. it was a big drag on the economy, so we saw the negatives and positives more spread out. tom: if you look at the oil savings, the backdrop is good disinflation, even some elements of deflation, maybe the better technology we have in our cell phones. again, serious service sector inflation. how does that overlay in the people of america as we confront super tuesday? >> well, the problem is always when we talk about inflation expectations much of the good spending is done out of pocket while much service spending is done on payments from your checking account that you don't do every month. the feeling is that inflation rates are lower because of gasoline, because of food. why we have a decline in expectations, but overall, it should be positive. consumers should feel good. tom: right. francine, i think that is an incredibly important observation as a good part of america goes to the polls. a disinflation, low-inflation, but the reality out of people's checkbook says you get hammered in the service sector, whether it is tuition or accountants or lawyers or whatever it is. it's an interesting dichotomy as we go to the polls, between goods producing and service sector inflation. francine: you're right. it's something you also see in europe. because of inflation, people should feel richer, but that they are upset about the system.l class tom: we have a lot going on here. francine lacqua. in our next hour, this is a completely twisted guest. we are thrilled to bring udall stresyou donald stressas sheim. we will talk about how the chinese perceive america as so much of the nation goes to the polls. ♪ francine: i'm francine lacqua in new york; tom keene is in new d.c. let's get to ryan chilcote at the geneva motor show with the ceo of maserati. ryan? ryan: hey, francine. as you say, i am talking to the boss of maserati, unveiling the new model. that is exactly where we are. he's the ceo. take it away -- tell us about it. >> this is our new baby. the first ever suv. why -- the answer is always this. we produce a maserati first and foremost, 100% maserati. ryan: this has got a v6? >> yeah, we start with a v6. 130 horsepower, 0 to 60 -- ryan: i could get one if iw want? >> maybe later. ryan: 0 to 60 in -- ? >> 5.2 ryan: let's check it out. i guess the main thing here -- when you think about your family, what does this do? not everybody knows -- you are part of the chrysler family. what you trying to do with these cars? nobody is in these sectors. our entry-level pricing -- we haven't decided that we will announce it around march 20. ryan: that has to be only $70,000. >> it won't be beyond $70,000. you get the best of both worlds. functionality, luxury, performance, breathtaking style, and it has an infinite amount of customization. ryan: and best of luck to you with it. francine, back to you. francine: there you go. if you want a maserati, you know where to look. the world you look at of growth and expectations, and you look at central banks, you find we are a little too gloomy. >> i think we are. we can also look at the imf -- the imf has been very gloomy about everything for the past five years, but they forecast above average global growth for the next five years. maybe the risks are bigger to the downside, below we have seen so far is decent. i think the talk is to negative. -- is too negative. francine: i want to get tom and the conversation. many ceos are too optimistic but not spending enough. this underlying uneasiness, you see in markets and in ceos, is symptomatic of something. is there not a possibility that we are looking at something that we can't quantify, but is the next shock? >> it's always possible. the longer this sentiment continues, the bigger the risk that it eventually spreads to the real economy. is what we have seen so far that sentiment indicators have started to deteriorate, and economic growth has been holding up pretty well. i think we must keep that in mind whe before we put too much emphasis on it. tom: it is super tuesday in america, which means it is a southern election. help us with the democratic changes and the manufacturing changes of america. we have known for 40, 50 years that you ship from the north to the south. does unicredit think that will continue, and will the southern states gain ever more power? >> i think what is going to continue is that the manufacturing sector in the whole will shrink. i don't know if the southern states would get more power. i would hope that the country, in terms of use, will grow together. otherwise, my biggest conviction is that the service sector will keep growing. tom: well, this is something chairman greenspan stepped around. let me ask you directly. are we in a goods producing recession? >> mr. greenspan stepped around it, so i should answer? i -- i think we scrape by. if you look at industrial production, that is the best indicator. it has been basically flat. if you look at recession definition, it will probably ask for declined and we have not seen them. we have just avoided the goods producing recession. tom: harm, thank you so much. greatly appreciate it. appreciate how you jumped around the political question. he will not be confirming. we will speak to him in the next hour. donald straszheim will be with us on china, and on their perception of an america going to the polls today. ♪ tom: it is the morning of super tuesday. greet the dayump with momentum. the republican establishment do not want to get out of bed this morning. the chairman is cautious on the american political economy. in this hour, alan greenspan at 90. and beijing between a rock and a hard place. a guest on the struggles of beijing. this is "bloomberg surveillance ," live from washington and new york. i am tom keene. with me, francine lacqua. i do not even know where to begin on super tuesday. it truly gets lost in translation. francine: it does. you are looking at the strange new world of politics. i looking at the fact that the japanese government got paid to borrow money for a decade. it is a strange new world. tom: the political economic backdrop into super tuesday is unique. we are thrilled to bring the perspective of of alan greenspan , donald stress i'm -- right now, to washington with our first word news with caroline hyde. more than a dozen states and territories will be holding primaries and caucuses today. polls indicate donald trump will when most of the contest. the big fight is in second place between marco rubio and ted cruz. clinton is heavily favored in the southern states that are holding primaries. oneurt case similar to the involving the san bernardino terrorist attacks. a federal judge has ruled a government cannot use a two centuries old rule. the case involves drugs. the government is using a similar argument in the san bernardino case. the united nations security council votes whether to impose more economic sanctions on north korea. the move comes early two months after kim jong-un carried out an underground nuclear test. the cease-fire in syria is in its fourth day, and the yuan takes advantage by delivering more humanitarian aid. both sides have reported violations of the cease-fire. in the next five days, the u.n. will distribute aid to 150,000 people in an area the siege to buy government and rebel forces. the wall street journal says there was more money than previously reported in accounts for the 2013 election. the investigation has cleared najib of wrongdoing. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, i am caroline hyde. tom? tom: good morning. let's go through equities, bonds, currencies, commodities. not much going on. quiet to the market. onto the jobs report. futures elevate, oil elevates. brent, 36. nymex crude, american oil, 34.18. on to the next screen. with the backup yesterday, within the 20 level. the german two-year yield, the curve flattening an hour ago to 94 basis points. for the steepness of the yield curve, better in the last hour, but still, 96 basis points is stunning on its own. francine? francine: i want to show you european stocks. the banks are telling the story. our clays down 8.9%. we are concerned how this bank will restructure itself. this is a bank that wants to be diversified. i want to show you the 10-year bond option results. the yen falling from the strongest level in almost three years against the euro. tom: very good. let's continue thoughts from alan greenspan, 90 here on march 6, ready to play tennis on his birthday. we talked about a wide number of topics. on china was most fascinating. he talked not about dave urges and a foreign policy that she talked not about -- he talked not about divergence and foreign policy. here is what he talked about. an: i think that what is happening is as china's productivity goes ever closer to the united states, the gap ability to close the gap is more and more difficult, it which means that you are going to get a convergence between productivity in the united states and productivity in china, much more closely. that means it is going to be a big slowdown in china. tom: alan greenspan on china. right now, joining us and following the political economics and those of china over the many decades of alan greenspan's services. evercore isi'sof research team. i guess it is an easy idea that americans here, and china -- that america is here, and china is up here. do you have confidence that we will successfully converge across the pacific? donald: i am confident that this is going to happen. is potential he maybe 2% per year, 1% productivity. is risingoductivity but ever slower. this means their growth rate is going to come down relative to hours. everybody knows that, including beijing officialdom. not a surprise, not worrisome, unrest.use for social tom: how are they doing in transferring government over ownership ofnment concerns and banking over to a private enterprise system? donald: not well. the problem is, xi's perspective is improved over state management. that is his phrase, not mine. rather, let's teach this state enterprises in china a competitiveness and efficiency lesson. i think this process is going to take much longer than western investors think. that part is not good news. at the end of the day, you need to choose whether you believe the authorities in china or you do not. donald: not a devaluation. , i dopreciation over time not believe it. their currency is going to weaken over time. they lost 45 percent, 50% competitiveness over europe and japan over the last decade. they told us on august 11 that is over and their currency is going down. francine: but the currency is going down as the communication error. they are trying to understand how safe they are on that market. their communication is not precise, but neither is whatever it takes out of ecb, or data dependent out of the fed. they are going to manage their economy growth, inflation, currency in what they think is in their own best interest. as a sovereign nation, we understand that. tom: help me with their own best interest. chart look at a renminbi -- michael mckee this morning suggesting the idea of a domestic you want versus -- a uan versus a foreign indicator. if we take into consideration the recent depreciation, getting , the yellown yuan circle, it is not that big of a deal. where does the leadership want their currency to be? know inthey do not terms of a level. they know in terms of a direction. in 2005 they revalued the -- i'm sorry,8.28 from 8.28 to 8.11. over the next decade, it went from 8.11 to 6.11. now it is about 6.50. it is headed back, we think to 6.80 by the end of the year, but nobody knows. we have confidence in the direction but not in the level, and that is the case for them as well. tom: how does that fold into their theoretical and original possible trinity? if they have different flow dynamics, thanking challenges, private that challenges, how does that currency -- banking challenges, private debt challenges, how does that currency sit in? not very well. you will see increasing capital controls out of china, not decreasing. precisely the opposite of what western investors thought, ,asically the china-imf deal nine or 12 months ago. want most of all economic growth, and they want to manage the currency and what they think is in their best interest. i think that means more capital controls, not less. tom: interesting. donald straszheim with us through the hour. the former senator from new hampshire will join us later on. i believe he is part of the gop establishment. but coming up, this is a special treat -- an extended conversation with jason furman. thrilled to speak with jason furman on america's economic growth. ♪ francine: this is "bloomberg surveillance." it is super tuesday. let's get straight to the bloomberg business flash with caroline hyde. caroline: it may be a busy one for the london stock exchange. the new york stock exchange may make a bid. last week, there were merger talks with the london exchange. profit plunged a glencore. is trying to survive the collapse in commodity prices by lowering its debt. the company is selling assets and new shares. in london, trading and shares of barclays has halted after the stock fell 11%. the fourth-quarter profit fell 56%. that is the bloomberg business flash. francine? francine: we stick with barclays. great to have you on the program. you wrote a great piece. revamp ishe barclays unattractive because barclays wants to have big and diversified banks. that means it is more risky. that means investors will likely move. absolutely. if disappointment was the aim, we got it in spades today. people are hoping for even a possible exit through investment banking or a spinoff of the investment bank. barclays is still into investment banking. it wants to keep it, it wants to commit to it, and it wants to be global. investors do not want to hear this today. doncine: how does barclays -- it seems they are all facing the same problem, restructuring the investment bank in tough economic times. lionel: that is a really good point. barclays does have a pretty high cost to income ratio compared to rivals in its investment bank. but you're right, announcing the closure of an investment bank or something radical is something that can take five minutes, but in process it takes five years. you have to have sympathy for some of these ceo's. tom: what is the tactical execution not only for barclays but deutsche bank and the other 45 banks? how do you execute this and keep your best people? lionel: it is really hard. no one has a solution yet. compensation needs to come down, but at the same time regulation and compensation costs are sticky. banks that have other businesses to lean on, banks that have consumer divisions like barclays may be better off but are going to cross their fingers and hope that time and markets prove them right in the end. tom: what will barclays look like in 24 months? lionel: that is a great question. to bek that the ceo wants there in 24 months' time. wants it toically pay off. it is tough. if there is a single european capital market, if markets come around and interest rates stay low, and if there is still cheap debt, he could be proven right. but that is two years of uncertainty. the bank is already cheap and now it is 11% cheaper. francine: you also argue that selling the african business was a bad move because it generated a better return on equity that the -- than the investment bank last year. lionel: it is about timing and how they are going about it. trying to balance it out by saying it is the bottom of the cycle, so it will take time, two to three years maybe, to have this majority stake. there is so little clarity on who is going to buy it and how it is going to work. much,ne: thank you so lionel laurent there, from bloomberg gadfly. when you look at bank and morehares, they follow by of the indices. is that symptomatically of what is going on in the world economy? i think the problem is we have low growth all over the world, we have zero inflation or negative all over the world, and we had a massive change in who the real drivers are around the world. this is a terrible environment, and we have experimental, not unconventional, monetary policies. nobody knows how this is going to work out. this is not very good for the banking sector as the week commodity prices is a reflection of the weak environment as well. a long time to work this out. francine: experimental policy does not give anyone any confidence. this is the picture for a lot of these european stocks. i want to show you a lot of the banking stocks. laurent.to lionel look, we were talking about experimental policy with don straszheim. the government got paid to borrow money for a decade. this is "bloomberg surveillance ." we continue the conversation on politics, monetary policy, and finance. ♪ tom: good morning, everyone. "bloomberg surveillance." francine lacqua is excited to be in new york for the returns coming in tonight. tom keene, in washington. time to bring in one of my wonderful colleagues, marty shanker, spearheading all of our government coverage worldwide. he is in charge of all the headaches i do not have to deal with. you make my life easier, which means right now i want you to help me with super tuesday, because i do not get it. you know how good jonathan bernstein is about bringing in in 1972 there was a -- ow victory tom: that is a wonderful history from jonathan bernstein. that is not what is happening today, is it? not, and the conventional wisdom you have to throw out the window because nothing is happening the way it is supposed to happen. tom: bloomberg politics has a terrific summary of 4, 5, 6 people and what is going to happen tonight. the word's landslide democrats, landslide republicans. what does it signify? >> it is going to be a lot of spin control. donald trump and hillary clinton are poised to do externally well tonight, and both camps will say era ofve an inevitability. brooks inis david "the new york times." he is writing on the greater scheme of a movement. tom: trump -- is he a movement, or is he an oddity in critical thinking? marty: i do not think there is any doubt that he is a movement. with the advent of social media, the news cycle is in minutes rather than days as it used to be. tom: this is a totally different super tuesday than you have seen before? : i think donald trump has made it a fascinating super tuesday more so than at any time in the past. tom: mark hopper and an john heilemann -- are they -- mark halpern and john heilemann -- are they on speaking terms? marty: yes, they are. beijing look at the super tuesday in america? donald: i think they're watching this with mostly amusement, some interest, but quite frankly they have an economy of their own that is trouble and they will do whatever they can to try to fix it. whatever happens in washington, they will watch, listen politely, but do their own thing. you so much for coming in, particularly your .omments on china we will address the comments of chairman alan greenspan with jason furman. we are thrilled to have jason furman from the white house with us on the super tuesday moment in washington. stay with us. "bloomberg surveillance." ♪ tom: good morning, everyone. from washington, d.c., the super tuesday, i am tom keene. francine lacqua in new york this morning. really an extraordinary day. landslide seems to be in the air. francine: i cannot get enough of u.s. politics. it is a little bit like a reality tv show, but i am trying to figure it out so i can explain it to europeans. tom: it is a reality tv show. we see that on one side of the aisle at least. here is caroline hyde. caroline: it is super tuesday, a transfer donald trump and hillary clinton to put distance between themselves and their rivals. trump's favorite and most of the primaries and caucuses in more -- trump is states the favorite in most of the primaries and caucuses in more than a dozen states. roughly a quarter of the nation is voting today. german chancellor angela merkel disagreement over the refugees threatens the euro. a common currency will be very difficult. you leaders have a summit on immigration next monday. citigroup pulled its foreign exchange clients and found most believe the u.k. should stay in the european union. since the referendum was announced more than two weeks ago, the pound has fallen more than 3% against the dollar. a new study has found strong evidence that the zika virus can lead to temporary paralysis. 90% of the patients studied say that they had sica-like -- that symptomszika-like before it set in. i am caroline hyde. tom? tom: thank you so much. what a wonderful moment yesterday, to speak with alan greenspan celebrating his 90th birthday in a few days. on thequite cautious american political economic experiment. chairman greenspan discussed china and his reticence about dodd-frank. alan: the problem is basically china itself. growthlowing down trader dramatically, and everyone who looks at the data will tell you they are not quite sure which data are real and which are not. i do think the 7.5% rate of annual growth is unachievable. i think that what is happening is as china's productivity edges ever closer to the united states, the gap closes and the ability to close the gap is more and more difficult, which means that you are going to get a convergence between productivity in the united states and productivity in china, much more closely. that means there is going to be a big slowdown in china. that divergence the renminbi and devaluation leading us to a dollar in the late 1990's? alan: i do not know the answer to that. i do say the united states, the u.s. dollar is unquestionably the firmest currency in the world, of major countries. it is hard to see where it goes from here. ,here are so many huge unknowns which, in my experience, i have never seen this many unknowns. michael: is there a real problem that we can put our finger on with dodd-frank right now, or is it also an unknown? an: the regulations are supposed to be making changes in addressing the problems leading up to 2008. it is not doing that. too big to fail was a critical ande back then and now, ,here is nothing in dodd-frank any of the changes that they have made, which actually addresses the issue. michael: are you optimistic going forward here? alan: no. i have not been for quite a while, and i will not be until we resolve the entitlement programs. nobody wants to touch it, but it is gradually crowding out capital investment. that is crowding out productivity. that is crowding out the standards of living. where do you want me to go from there? tom: where we want him to go from there, is for alan greenspan to talk to us longer. he was quite negative on dodd-frank and the new regulatory template of wall street in america. francine: when you look at world growth, it will be split into two caps are a lot of investors and ceo say that everything is signed. what chair greenspan was making clear is that he would be a lot more cautious in china. worry about devaluation and that they are trying to over stimulate the economy through banks. tom: not a lot of time for an important conversation. .arty shanker is joining me he knows that we are thrilled to bring jason furman in today. he is president and chairman, i should say, of the president's council on economics. he is the chairman of the president's council on economic advisers, and for years, with the brookings institute, with a phd from harvard. when i first met you, it was a book that you and i and everyone in washington should be reading today. the mystery of economic growth. tell us where the economic growth comes from, and are we able to obtain more economic growth in the coming years yeah times,on: in normal economic growth comes from supply. it comes from workers, from the machines that they use, and the training that they had. that is what determines the ceiling on how much you can produce. when you are in a recession or even coming out of it, growth is more determined by the demand side. it is how much of that people are using, how much they are spending, buying, how much you can justify using. right now we are transitioning. we have been determined by demand for a number of years. we are almost there at our potential. tom: that is where i wanted to go. i know it is inappropriate for you to talk about the politics of the moment, but i believe you can state that there is an unsettled anger out there. we look at median household income is one example of an america that has rolled over in terms of aspiration and spirit. that in the productivity alan greenspan and you talk about is the advantage? where are we going to get the high ground in america through better productivity? capital, labor, or are we waiting until the next numerical? jason: our productivity in the united states has been higher than any of the other g7 economies, but it has not been high enough. we have not had enough business investment in the last couple of years. i view that as a worldwide phenomenon. you see that across a wide range of economies. we will need more investment going forward to help drive that productivity. tom: marty, jump in here. thought taxe always reform was a key to unlocking some of that investment potential. when you have trillions of mped overseas and not being used in a productive way. do you agree with that? jason: business tax reform is one of the things we need to do for productivity growth. we should be cutting our rate down. the president has proposed a 28% rate. we should be broadening our base, and what you alluded to is currently the worst of all worlds. we do not collect enough revenue from it, and we still manage to impose substantial distortions on companies. we need to improve both of those. y: with the gridlock in washington, that seems to be a possibility -- that seems to be an impossibility. jason: the conversation has advanced since 2012. -- morevenience convergence is something that i hope will be something we can do in the country. francine: in europe we talk a lot about the wealth gap. could president obama have done more to combat this inequality on incomes? jason: you look at steps like the affordable care --, allowing taxes to be rates to go up for high-income households. a substantial tax cut for working families that he did in december of this year. those steps add up to the biggest change in inequality in a half-century. so he has done a lot, but certainly he would love to do more. take the minimum wage. that is something he has been proposing for years now. you see states and cities across the country do it. 8 million americans are getting a raise because of those steps. tens of millions more would get a raise of congress would act. me, ane: but explain to european, donald trump. why is there so much voter angst? jason: i am not a political scientist. the one person qualified to answer that is the one person who a year ago predicted he would be in this position today. good luck finding that person. think some of his theories are oversimplified. look at the measures i look at -- consumer confidence, consumer sentiment. in 2015 come those measures reached the highest they have been in over a decade. we had not seen consumers as optimistic as they were in 2015 since 2004. wages are rising fastest they have since the financial crisis. the unemployment rate is falling rapidly. so there are a lot of things going right in the u.s. economy. on: i want to quiz you something that i think i can be a political on. mr. sanders on the left, mr. trump somewhere in the vicinity of the right. i have seen scathing analysis from guys like you over what their hopes, their dreams, their .policy" would do to our budget what is the impact to americans when they hear this dialogue, this discourse, and they do not have the ability to synthesize like you do what the promise is? if i am elected free beer, what is the ramification on the sides? policies on both jason: deficits have a cost. if you are adding a lot to the deficit, you will slow the rate capital accumulation. i do not think it is something that happens overnight. i do not think you will ever see a fiscal crisis in this country, but you can chip away the living standards. that is why if you live in the president's, he is cutting the deficit by a couple of trillion dollars over the next 10 years, bringing the debt down as a share of gdp. our budget is based on realistic economic assumptions, and it is important that you are doing that when you are putting together a budget. tom: i have seen that in the last 48 hours. we continue with jason furman. marty, thank you. a 20-hour day today? marty: yes, i will be up late tonight. part of the coverage will be with "with all due respect," a special edition. mark halperin and john heilemann will enjoy looking at the early returns and then move on with their perspective into the evening. this tuesday from new york and from washington, "bloomberg surveillance." ♪ francine: i am francine lacqua in new york. tom keene is in d.c. let's get to the morning movers. the biggest mover of the day is barclays, down 10% after we saw widening losses at barclays. the dividend got cut. the ceo telling bloomberg he is selling the african division. bank stocks in europe are pretty much flat. profit -- the ceo is: bottom for these falling oil and commodity prices, tom. tom: very good, francine. thank you so much. it is time to get a different view of the beleaguered republican establishment. there is a wonderful place to turn to on that. his name is judd gregg of new hampshire. that barely describes his public service to the nation, and also his public and private counsel to his republican party. , wonderful to speak to you. will the republican party be around in four years? it will be around, tom, tormenting you and everyone else. you onto congratulate your interview with alan greenspan. that was really superb. his talk on entitlements was critical. tom: thank you. it was a very cautious view of our political economy. is the negativity, the caution we heard from chairman greenspan, why bernie sanders and mr. trump are doing so well? >> absolutely. there is tremendous frustration with our government. people have gone beyond anger. they are basically just disgusted. they feel it is not working, not functioning. they look at their personal future and the nation's safety, their concern. most importantly, they look at what is being passed on to their children and are concerned and they are reaching out to people who are expressing that populist anger -- bernie sanders on the left and donald trump, not really on the right, has created his only here. they express that frustration. tom: your party has seen these shocks to its system. you're probably the only one i will talk to today who will 20 is.er what auh how is donald trump different from barry goldwater in 1964? sen. gregg: because barry goldwater really expressed an extremist view. his -- donald trump is not an extremist. he is a capitalist, which is great. he is also bringing into the political mainstream a lot of people who were not interested in politics. the problem is, he is superficial on the issues. he does not get into depth and he does not appear to have depth on the core issues that affect us, like our fiscal policy and national policy. rather thaner-outer a bringer-inner. francine: what has changed since 2012? why is 2016 so different? is there anything fundamentally different, or is it because donald trump is so good on camera? sen. gregg: i think it has a lot to do with the president, and he is not getting talked about much. he basically has run for the last eight years a presidency was has pushed the idea that we are a class society, that we are divided, separated, rather than being a president who has talked about an upright future with a city on the hill, opportunity. he has talked about the downside of various parts of our country and promoted other parts of the culture while pushing people down. i think it is starting to take root, and it is feeding itself right here in the form of bernie sanders, especially, but also donald trump. tom: you have switched your --egiance to miss a casing to mr. kasich of ohio. if mr. trump makes it through the convention, will you be able to support a trump effort to be president? sen. gregg: i will support the nominee. if it is donald trump, i will support donald trump. orope that it is john kasich marco rubio because i think they are the most rational people in the race. but i will support donald trump if he is the nominee. will take anp, we independent route. us come andill join where -- we are pleased to bring you william cohen. "bloomberg surveillance." ♪ good morning, everyone. a foreign exchange report on a quiet morning. francine lacqua in new york. i am tom keene in washington and away from super tuesday, no one is focused on foreign exchange. we will be. the stirling enjoys a three-day rebound -- the stirling enjoys a three-day rebound off the shock and awe of three days ago. francine: coming up, "bloomberg david westin and stephanie ruhle. you will have david haro on. david: he is a major owner of glencore and we will talk about that. we will also talk about valeant. day they postpone their guidance. there is reports of an sec investigation. will be talking with a guest about the uncertainties and the marketplace -- in the marketplace, particularly with the election, on the eve of super tuesday. that is all on "bloomberg ." tom: jason furman is with us. has tattooed to his brain are single best chart of the day. you know this very well. inflation-adjusted median household income and this is my chart of the year two years ago -- this is my chart of the year two years ago. time that for decades you and i knew, and then we have rolled over in the last decade? why did we roll over? that: this is something motivated president obama to run for office in the first place. we saw from 2001 to 2007 and economic recovery, decent gdp growth, but median household income actually fell over that period of time. then we get the body blow of the great recession layered on top of that. so you have a longer-term trend, a recession on top of that, and that is where we are today. to solve it, we need productivity growth, expand the pie. we have more of that pie going to the middle class, reducing equality, and we have also need more people working. have a society that pushes back against giving more to the middle class, to people clearly going nowhere fast. where did that begin? did you look at that as a new phenomenon, or is that part of the american eco-'s? -- is that part of the american ethos? have had an increase in concentration in many sectors the economy, a decline in wages, and that has shifted toward profits and it is a way to get ahead. i would not devalue the investments in productivity. we were talking about tax reform before. investing in research, investing in infrastructure, growing the economy faster. that would help all of these challenges. you so. fuhrman, thank much. jason furman continuing with us on radio. we continue our coverage from washington. they willerg ," continue the political and economic dialogue going forward on the super tuesday. we will speak with angus king of maine. he is an independent, and someone good to speak to on the super tuesday perch from new york and from washington, this is "bloomberg surveillance." ♪ . . stephanie: china pmi shows its economy is further slowing with the index slipping to the lowest point since 2008. embattled valeant pharmaceuticals is under fire again, this time from the fcc. shares are plunging. congress is taking up the apple fbi debate today. the former nsa director ways in an exclusive interview. in, in ans exclusive interview. ♪ stephanie: welcome, you are watching "bloomberg go." i'm stephanie ruhle, i'm here westin and jonathan. drop sinceiggest 2012. he's getting a lot of pushback on the corporate analyst. this stock price says the market does not believe your story. a lot of pushback. stephanie: brutal, maybe.