in aars ago gunfire nameless man in tandem and square. good morning, everywhere. we are live from bloomberg world headquarters in new york. i am john kane. -- tom keene. joining a scarlet fu and adam johnson. here is adam johnson to begin your wednesday. >> overnight euro area services expanded the most in three years. a lot of data coming out. starting with the adp employment number. adp, the guys who processed 20% of the payrolls here in the country. when they are processing more it tells you people are hiring. >> we will see in the correlation of friday's report. >> not one-for-one but a good indicator. i asked them nonmanufacturing at 10:00. -- ism nonmanufacturing at 10:00. then the beige book.

liters, not the g-8 will meet in brussels. -- the g-7 leaders. morning president obama met the president-elect this morning. >> you wonder if they will talk about a small bank in paris having trouble in new york. a small fine. works out to 1.25 years of earnings. >> we will talk about that this morning. >> yes, we shall. the 25th anniversary of the square, including the photographer who took the iconic image. amazing. hard to believe 25 years ago. tonight there is a hockey game. i have heard of it, called the stanley cup idols.

new york rangers and los angeles kings. 8:00. >> what is your prediction? >> of course i want the rangers to win. i wanted to be six-game so they can win it on home ice. >> all about mr. lundqvist. just that simple. they can win. >> he was stellar in game six. >> yes, he was. >> a data check. futures negative four. a little bit off the mark yesterday. not record highs yesterday. 10 year yields accept. hydrocarbons 102. backup one dollar. under 12.ck 11 .8 seven. dollar spot, stronger dollar of backstory the past three days. for those of you traveling to brazil, weaker brazilian friday

raul. a comparison of the german yield in u.s. yield and how rare it is to see such a difference in yield between america and germany and back there again. here we are ready for the ecb meeting with a massive that on on a accommodative ecb. a rare event. >> very rare. as low as our rates, in germany the 10 year yield is 1.4%. >> calling it a priced to perfection. >> everyone focused on the ecb meeting. we will translate that for you with a number of our guests, dr.uding mark farber >> doom. >> getting to the front page. france is warning the u.s. against pushing ahead with the $10 billion fine against bnp

paribas. he has made the government's first public comment. he says the $10 million fine could hurt trans-atlantic trade talks. linking this to something larger. he says it would be completely unreasonable. the backstory is u.s. regulators want to find them for breaking sanctions. say u.s. regulators. is it true? is a washington regulators or new york city type regulators jacob there is a whole set of players in this. >> that is a good point. this is potentially $10 billion. five quarters worth of profit. 10,000,004 bnp paribas is a bigger percentage of its profit. makes 20eve jpmorgan i -- 25 billion per year, so

cap the years profit. this is one and a quarter. in other words, the french saved we understand why you are unhappy with what happened but why are you penalizing them this meeting g-seven leaders in brussels to consider additional sanctions on russia. tosident obama traveling brussels from poland. g-8 s supposed to be a meeting but decided to boycott sochi after the annexation of crimea and marge and kick russia out essentially. they too will be voted to economics, trade and climate change. day one will focus on russia. >> they are really loving it. crexendo's painful. lex i hope our morning meetings are not like that. president goes from

poland to brussels and then france in the normandy. >> third front page. >> a company story. alibaba considering august 8 for an ipo date. sounds like the number eight which is a lucky number. it is seen as auspicious by the cofounders. >> ba is 8. the management would like to as a ticker symbol, too. this depends on market conditions. whether the market will be stable enough for this to happen. there is a story that says fed officials are worried about the lack of volatility. maybe it is the calm before the storm. >> leslie pickler writing up on this. it all conflates into one story. jobs orut the ecb or

stew we'rethe summer going into. >> yes and the fact that everyone is trying to look at some or trends. looking for some kind of return. >> i want to stop the show for 30 seconds. square? >> then crackdown took place 25 years ago today. questions for how it is better off or if it is better off. others might question about the political reforms needed to continue that. >> within your travels in china, do the people of china know about this as we think we know? >> i think the younger generation does not know as much and people who question whether they want to know as much. they have lived a pretty good life. the quality of life is a lot better than their parents and do not need to jeopardize that. is china better off or worse

later? this is something we want to debate. >> there we go to again -- begin bloomberg "surveillance." >> technology is the role of the moment. rule one is close the sale. sale to listener and viewer in the readers. nowhere is a study more acute than the vets being made by mr. zuckerberg and the crew at twitter. brian wheezer number one in my book on leaking -- linking this into the advertising world. it has been extremely valuable in giving us perspective. are facebook and twitter getting this right. twitter is working out a pistol

have to figure it out. the second billion is the hardest. getting to a billion will not be a problem for them. what they are is not very well defined at this point in time. secondbook is beyond the mark. they have a confidence five years from now they will really cash register. >> they will not even pay taxes but will spit out cash flow for the next five years. google are the dominant players. not just in digital advertising but advertising globally. they are in a totally different ballpark. twitter has figure out what they are. >> i know exactly what twitter is. i am not an advertiser, simply a contributor and consumer. >> it does not matter in terms of by advertising shows up.

radio is a powerful medium but why does it not get as much advertising for every time or person using the medium ursus television? like twitter is to facebook what radio is to tv as an example. radio is a very different purpose for an advertiser. awareness. >> what does twitter do to change itself from a niche proposition to something more mass-market? >> they do not need to become anything more than a meese -- niche. >> they can make it just by becoming a niche? >> discuss it further. to company news headlines. executives at general motors say an internal review of a car recall will be good news for the ceo. timesell the new york they believe the investigation will clear her of any wrongdoing.

the life insurance expanding to a faster growing u.s. market in japan. agreed to pay 5.7 billion dollars to buy profit light from alabama. representing a 34% premium over closing price. the biggest foreign acquisition ever by japanese insurers. may use the state own development angst to help siemens bid. competing with general electric to acquire energy assets according to people familiar with the matter. they would buy a stake in the siemens bid if it succeeds. that is this morning's company news. >> quite the story. this one will does not go away. penalizeer, you will pnb. bob anyone to buy? up, we have the past two hours. terminal two at heathrow getting a major makeover. will it help the airport get

approval for expansion plans? we go live to opening day of terminal two right after this. ♪

>> good morning, everyone. bloomberg "surveillance." futures negative three, dow futures -21. lewis woolf tom owner of the oakland athletics the crash the yankees last night. look for that at 10:00 eastern time. good morning. three busy days toward the jobs report. scarlet fu and adam johnson. >> heathrow's terminal to opening today in london. a huge gamble trying to get approval for the third crucial runway.

passenger traffic hitting a record high in the u.k.. olivia sterns at heathrow. i think the first flight will be united coming in from chicago. itt does this look like? >> is beautiful. so far everything going very smoothly. very unlike the launch of terminal five attended up costing millions of dollars. so far everything seems to be going smoothly. only going at 10% capacity. the bigger point essentially what is going on is an arms race among air ports and amenities are the artillery. what you have as of $4 billion facelift, the so-called queen elizabeth terminal because she opened in 1955. 30 three new shops including john lewis. 17 new restaurants including one and the chefal behind fat duck, very popular

restaurant in england. he has opened up a new café. they are trained to get all the customers, compete domestically to try to win the next third big runway. trying to compete globally with airports who have just opened up and trying to be the key stuff -- stopoff oink. >> the backdrop is air passenger traffic has been soaring. global gdp into inflation-adjusted gdp. you can see they have really moved in tandem with passenger traffic recovering much faster. right now traffic rose seven percent, moving far about global gdp. >> how much more volatile passenger traffic is. that is what is real fascinating. right now i'ming passenger traffic versus gdp. you have been in london for the

past month covering for francine buchwald. laqua.cine how does the activity among didn't compare to activity in new york? >> think about the about of resource and investment the government is putting into the airport. this is an 11 billion pounds investment. they think of it as a national asset. compare that to jfk. jfk frequently the but of jokes or many economists. tom friedman often cracks jokes about it. jfk is falling apart. they are investing in infrastructure and airports because they see this as a key artery vital for the economy going forward. >> we miss you terribly. what are you wearing this morning? are you wearing vivienne westwood? i wearing the new was her

very trench. very.hing is about mold you can get the liquid nitrogen frozen ice cream. they give these hot pink jackets away. i expect to see it on the runway neck season. >> london catching up with trish. i think she wore that 30 days ago. thank you so much. reporting from heathrow. i still have luggage lost in heathrow lost from years ago. >> terminal five opened and a total disaster. part of the difference is to get the logistics right. thelways a tricky one on first day. we have gloom gloom and doom editor mark farber joining us on bloomberg television and radio. cannot wait to speak to them

about emerging markets. this is bloomberg "surveillance." ♪

lex good morning, everyone. -- >> good morning, everyone. >> president obama wrapping up his trip in poland today meeting with the new president of the ukraine. elected last month and the ukraine says it is now deploying heavy weapons and armored vehicles to stop an influx of pro-russian forces. a live shot of president obama. on his way to brussels in the normandy for the seven unit -- 70th anniversary of d-day. kashkari pick

to square off against governor brown in the primary. it sends the top two vote getters in an election to square off against each other. the king new york rangers. owner is making money. estimated it means an extra million forsg -- 37 msg. primes new york time hours. >> those are your top headlines. >> getting to our morning must listen. >> my morning must listen is from goldman sachs chairman and ceo lloyd going fine his that bloomberg television. a part of an exclusive

conversation they had the stephanie ruhle. here is what lloyd blankfein says motivates him to go to work every day. job, when say my things are going well, there is nothing more fun and could never imagine leaving it. badly, mys are going sense of responsibility takes over and i cannot imagine leaving it. it is a very hard thing to do. i love what i do because it gets me a lot of exposure to great and whend influence things are bad, my sense of obligations takeover. >> a heavy sense of obligation in 2007 and 2009. >> the sense of technology we have seen on wall street. brian wheezer joins us. i was thunderstruck at the twitter conference call. change howgoing to

people like lloyd blankfein to mutate with shareholders? so. do not think i think it will still be too much of a niche. i thought of any company would have, twitter had the opportunity to say he will not have a conventional conference call. >> they sort of did that. they are there. you are usually based on the west coast. the same question that went to lloyd going fine, what do they do to get to work? i love what i do. i genuinely love studying and trying to understand why the advertising economy works, why it doesn't work. i have been inre the public. basically like an extended phd. >> are we overwhelmed with the

general stuff? >> we get used to it. it is like stepping into warm water with the temperature goes up slightly. i would say we can tolerate a fair amount of it. >> we are very adaptable that way. >> a lot of noise out there. >> we will continue the conversation. digitaldiscuss how advertising is growing. brian wheezer will explain the contradiction to us. ♪

>> good morning, everyone. bloomberg "surveillance." i am tom keene. with me is adam johnson and scarlet fu. today's and -- two days in a

row. the jobs report. ten-year yields accept. under 250. the euro terms but dollar stronger. but dollar stronger. >> digital advertisements sending going to rise 18% for .he second year in a row apparently not fast enough for investors. companies like millennia edf, anything but rocket fuel. this company has been cut in half. brian wheezer interlaces the companies that pivotal research. cut through the noise. , how many ofhese these will be able to survive over the next couple of years? >> a least a few but there are dozens of companies that are at least as big as these that are private. most investors are completely unaware of them.

the problem is people are unaware of how competitive the space is. are there any real business plans? >> absolutely. this is the infrastructure. buying and selling digital advertising is expensive. the labor involved is really hard. there is a lot of opportunity to make it easier. >> i agree that our attention span has diminished. a 32nd commercial seems to be just about done. where will we be in five years? am i going to enjoy a five second message in 2020? >> i think if it is strong enough, yaks. -- vines that tell you a story. >> what is dead on madison avenue? what is most dead? >> most dead is sprint.

radio is treading water. you can look at traditional media other than tv is mostly treading water or dead. radio as theout one media thing that won't die. >> stunned i the resilience of advertisers. the niche is the key thing. to your morning must rate, niche is what is it out. >> this will be fine. the wall street journal is still a marquee place. >> my morning must rate comes from your research report. he managed to read through of 4:00. we expect tender -- twitter will generate one point 8 million.

-- one point 2 billion. how do you grow four times in five years? >> a lot of advertisement sales. twitter expands globally. you pointed out a market that is really focused on should it change the strategy for the different markets? it has been proven that consumers are willing to pay more for the consumers service. >> they may take up totally different model in some countries. has been theat most successful outside advertising model? >> just advertising frankly. facebook usagey going down. i observe domestic going down. you keep telling me and others tell me facebook is doing great. i observe less facebook. the more and facebook?

>> everyone still uses some facebook. the tonnage is still massive. it overwhelms everything else. the second piece is advertisement product. small businesses, new advertisement products for them. >> what is a new advertisement product? >> you take a small business and say you use to reach people organically without paying us but now you will have to pay us. to come up with the product and process to buy the ads. >> i urge you to keep writing on this because i do not get it. i do not understand where it will be in five years. >> the new tech company has you puzzled. >> clobbered. >> going to tech companies. fromparate the market stocks to businesses.

many of them are real businesses. they are in a hyper competitive space. rocket fuel, i like the management team but a competitively challenge space. blue-chip?t you can now own a piece of apple history. the rainbow apple signs are up for sales. estimated the signs will bring up to $15,000. they were taken off the building back in 1997, given to a longtime employee. it is actually the company second logo. the first one? isaac newton sitting under a tree with a dangling apple. >> the apple mocked him on the head. that is where they got the name. >> i would think these are worth a lot more than $50,000. i think mr. cook needs it over the living room. >> this is like urban myth or urban legend.

apple is likee adam and eve taking a bite out of apple? >> i do not know the story behind it but i have a great idea. and buffetttt by it in tim cook and they throw in the sign. show the sign again, please. four quarter of a million dollars. a great charity event. twitter, i am reasonably confident they will be. >> within the advertisement business and the turmoil everyday, what do we must get wrong in the analysis when we talk to advertising, talk to sir martin sorrell and others, what

are we getting wrong in the transition? >> i think we focus too much on the consumer. budgetswhy advertising go places can be independent of users. it is a mantra that advertisers and people in the industry say it is all about the user, consumers. my observation suggest otherwise. it makes a lot of sense when you start from the premise of how organizations make decisions to allocate budgets. it is a corporate business. >> in your world a zero sum game? toer choices moving over facebook and google? >> that is another big point most people miss. as long as the economy produces new brands to differentiate themselves on the awareness of different attributes, you will have tv growing and big brand

dollars growing. as long as the small advertisers have tools to advertise, you get growth run them. >> the pie is growing in other words. brian wheezer joining us as the guest host. 20 five years to the day after the square crackdown, the photographer who captured the iconic hank man next. is china better off or worse off 25 years off to -- 20 years after? tweet us. ♪

>> good morning, everyone. bloomberg "surveillance." good morning worldwide. this past monday elizabeth the second celebrating her 61st year of the coronation of 1953. she opens her parliament here. this is bloomberg pageantrynce." the and the united kingdom. exceeded only by the pageantry of ladies wfu. >> i like these titles. for the top photographs. >> we have a special edition today because it is june 4, 2000

14. only one photograph, the iconic image of the square crackdown that forever changed how we view china. captured by jeff weidner. he joins us now by phone. he joins us from hong kong. give us the backstory. as i recall you almost did not get the shot. you have to have someone smuggle it out to the u.s. embassy in order to get the photograph content. that is correct. so many things could have gone wrong. amazing it managed to get out to the rest of the world. >> lisa lynn writes she showed your tank man autograph to 100 college students in the beijing area in the past year. only 13 identified the picture from beijing in 1989. what does that tell you? obviously the beijing

government is doing a pretty good job of censoring the image. >> they certainly have. >> the day you took the photograph it was june 5, not feeling well. you are battling the flu and had suffered a concussion by getting hit in the face by a rock. give us a sense of what was happening in the moments leading up to your taking the photograph and what happened after so we can get a sense of the continue on. >> the rock that hit me the night of june 4 really rattled me pretty good. i guess i was pretty spaced out for the remaining time in beijing. in the morning i got an e-mail message from " the associated press" that they wanted one of us in the office to photograph the square. i drew the short straw and it was my job to go to the hotel

the closest vantage point. you had secret police using electric cattle prods on the journalists. i had to smuggle my camera gear to photograph the occupied square. fortunately there was an american kid there and i pretended to be a roommate of his. he allowed me to the room where i photograph the tank man. his underwear. he could not find the ap office and went to the u.s. embassy and fortunately was smart enough to do that and get it relates back to the office. i/o a lot to him because he really risked his life. streets were the randomly shooting people. he warned me 10 minutes before i arrived at the hotel that a truckload of soldiers had opened fire and shot several tourists in the lobby. hidingly escaped by behind a taxi.

pretty dangerous stuff. >> an incredible story. when you have an opportunity to create something that virtually the entire world knows, doesn't honk your ability to go out and look for the next photograph because there is such an expectation? >> tank man has taken over things. as an artist you would like to be remembered for your body of work but seems i am always in the shadow of tank man. i have a love-hate relationship. i finally aced the fact that i will probably be remembered from this image but does not stop me from focusing on my other work as well. >> and fortin work over three decades. you are in hong kong for the 25th anniversary. what do you presume to experience today? >> i am hoping to get out in the streets. i am hoping to get out of care photograph this

going on. it has been quite an interesting experience. i feel like a rockstar. i have a small exhibit of some of my images. it has been quite amazing the reaction i have been getting from everyone. >> the only part of china you can talk about it. >> this photographer behind the iconic hank man. verys have changed actively. >> for him to have an exhibit in hong kong. >> that is incredible. >> rings at stewart twitter question of the day, is china better off or worse off 25 years after the square cracked down? tweet us. better off or worse off and how? we want to know. ♪

>> this is bloomberg "surveillance." fu here with tom keene and adam johnson. the department of justice will review rules covering songwriter fees covered by pandora. songwriters and publishers have been seeking higher royalty rates. a federal judge has requested a

request torejected a pay more. tesla motors will not decide where it will build the battery. elon musk said they may hold battery factories in three states. he said his goal of selling lower-priced electric cars depends on making his own batteries. ibm and china's lenovo seeking more time for national security review of the server deal. this is a porno to a person familiar with the matter. that is this morning's company news. >> the basic idea is ibm is not trying too lose. extricate themselves from the non--club world. >> it a software company. the transition of old tech. going back to china.

tanks rolled into the square in beijing to drive out student led protesters. as people get ready to commemorate the bloody crackdown him officials are on high alert. for more on the lasting legacy, the professor from cornell university. how much of what we take for granted is economic growth? the steadfast hold on power and the growing nationalism stems from the events 25 years ago? >> good morning. i think a lot of it is reaction to what happened 25 years ago. in many the square was ways a serious bump in the road between society and the state. this state in china had a social contract based on economic development if people stayed out people demanded

less political liberalization they were then rewarded with economic development. that was the social contract. reminded people of the fact that if they stayed off course the government would crack down. as a result there was a real deepening of economic reform a few years after the events. and callscal dissent for political liberalization really went underground. as far as nationalism is concerned, i think that is also something that is a huge part of trying to gloss over that part of history is substituting another type of emotional event for one the government would neither -- rather not talk about. how successful has the government been in distracting people from issues at home by using nationalism? >> when you look at any type of news stories

, the thing to keep in mind is the domestic audience. events ins play to which china acts or behaves or response to in ways that do not necessarily make sense to the outside looking in, it is important to understand that they care far less about the world thinks and far more about what the domestic audience thinks. that is one of the ways in which nationalism,d particularly in recent years. the search for modern china has always been the rig fired read. classicere to read this

today, what would you say about china and domestic politics? well, i think my approach to understanding china is through institutions and the rocker c. -- bureaucracy. challenge or explanation to understand what china is doing at any point in time you have to look at institutions. one thing i find is that institutions in china are from what we see on the outside looking in, particularly of the machine is a lot of bureaucracies that do not necessarily get along well with each other. in the systemks for which people can take advantage, whether within the government or outside of it. >> thank you for giving us your

perspective. the latest on the 25th anniversary of the beijing square crackdown. brian wheezer the guest host for the hour. you look at advertising and technology companies. you point out something interesting when advertising company moving into china right after this. after heldee years its first board meeting in china after the square. this is incredibly bold in the long-term sense. that paid off. far and away the biggest advertising company in china and one of the biggest plays of any company in china. >> how to use -- do you respond to facebook being in china at? do the upturn of its go in or cannot be that discourse in this china? >> there is no chinese

business for twitter or facebook . >> can there be an alternative to go >> domestic alternatives, sure. >> do they have any spark or like? >> my mandarin is a little rusty. the visual layout is a little bit rusty, too. >> they have huge businesses. google one of the biggest players in nano tech and china. >> brian wheezer is adding from the west coast. looking at the four x report this morning. the euro backs up. 1.35 handle a couple of days ago. the dollar stronger. for those of you getting ready to travel to brazil am a weaker brazilian currency this morning. the next hour, gloom, boom, and doom editor mark bob or join us.

why he thinks you should get out of u.s. stocks and invest in the u.s. market. this is bloomberg "surveillance." we will be right back. ♪

>> this is surveillance.

>> the ecb announcement of the jobs report. we are joined in this hour. there is a quiet on wall street and we look at the exodus from big banks. ago, gunfire at a man. this is surveillance from world headquarters in new york. it is june 4. i am tom keene. in this hour, the chief a busyve officer on wednesday. >> overnight, we learned that services are expanding by the most in almost three years and in the united states, we have economic data today. adp and when it comes out. employment comes out and the beige book.

the g-7 leaders will be gathering in brussels today. theident obama met ukrainian president-elect for the first time. it is the 25th anniversary of tiananmen square. that, i am rooting for the new yorker rangers. -- the new york rangers. >> exactly. >> we have breaking news about switzerland. >> it is about private equities. they are considering to make ds for cement makers. remember that those two companies are trying to win regulatory approval for their merger. they need to divest of assets and the capital partners may be looking into it. somewhere around $6.8 billion. >> 69,000 people.

>> yes. guy stuff. manly stuff. >> facebook garbage. this is real stuff. >> from the old economy to another old economy. let's start with another executive from general motors. they say that it will be good news for the ceo. they believe that the ceo will be cleared of any wrongdoing. the report will name those responsible for recall delay that is responsible for at least 13 deaths. alibaba is looking for a trading debut in the united states. that could signify fortune. it is a significant number. the eighth day of the eighth month maybe extra lucky. warning the united states to not go ahead with the fine against the french bank.

the french minister said that the fine could have consequences for transatlantic trade talks. they may get punished for breaking sanctions against iran, and cuba. >> the lead story is a very big problem, so says the foreign minister of the french republic. u.s. prosecutors are negotiating with the french banking giant in what is being tested as a reach. should they and can they reach? could paris turnaround and punish american banks? we are joined now. this is serious and is becoming more serious. what are you listening for from officials and from the french bank? >> it appears, from everything that has been in the press, that law andre violations of

violations of rules. thato, it is imperative the regulatory authorities respond and respond strongly to that. i think the interests have to be balanced. importantly, we do not want to put companies in jeopardy will put companies out of business based on the actions of what will turn out to be a limited number of people within that institution. time, we have to balance the desire on the part of the public and regulators to make sure that we are, in fact, responding to events that are not within the law. >> who do you and your colleagues looked to to create the balance here? they want to go out and get the bad guy. who will provide the balance that you are seeking?

will, hopefully, occur behind the scenes in an fromligent escutcheon regulatory and governmental officials in both countries. i do think that it is important -- from a regulatory point of they do not pass without some meaningful punishment. >> from your experience in democratic politics, do you look at secretary kerry and need representatives of the president to step in? >> i do not think that you typically see governmental officials who are outside of the stream of regulatory authority intervening in a conscious, meaningful, or direct way. uncommonk it is not for officials to express policy concerns. they are careful not to intervene in the legal or regulatory actions.

>> help us read the tea leaves here. we are looking at a fine and less than one year's worth. is $13 billion. less than one year of total net income. it is like 1.25 years. the fines are getting bigger and a lot bigger. what is changing? of the is a window comparative problem of europe versus the united states. in 2009, when we had the stress test, our banks raise equity capital in 6-9 months and nothing of that sort has happened. our banks are strongly capitalized and ready to lend. europe is still meandering and struggling. the issue is not the numerator, as much as it is the denominator. neararnings are nowhere

what jpmorgan's are. banks to raise more capital into recapitalize to have a more extraneous stress test? the other way around. the more strenuous stress test are going to encourage & potato a new round of equity. .e have seen that if we're sitting a year from now, we're are talking about a fair amount of equity. but the heart of this matter is intention. this is 5-7 years on and a large part of america still wants to higher guys like you and go get wall street. that is the american town. that has not translated over to europe. do you see the same a motion in europe to get the bad guys?

whether it is jpmorgan or others. europe, you have more concentrated banking systems and, so, there is a little bit more protectiveness on the part of the government towards financial institutions because there are a limited number of them. in the united states -- i'm not an expert in how the populace feels. the main street reaction that we have in this country is not that different in europe. >> do you or people like you believe that there will be orifications on mr. dimon mr. blake fine if we screw up fein if we-- blank screw up this mess?

want is at thing we global regulatory and legal competition to get after the large financial institutions. as a general matter, not only in the united states, but globally, these institutions conduct themselves in an ethical and responsible way. you have to look at the amount of people involved in those firms in the last few years and you would feel pretty good. >> is this the moment right now? are we at a trade war question mark >> i don't think that will happen. seeing is the residue -- what we are seeing is the residue of the cleanup of the events that happened 4-6 years ago and, at some point, and i will believe that to be

relatively soon, that the pendulum will swing in a different direction and we will realize that our banking system is well capitalized and the leaders of those institutions and the institutions themselves are doing the best to behave themselves in a responsible way. the mystery about this in the next couple of days is huge. >> going after the bankers is a popular theme and it is not in the election jargon. >> not yet. he will tell us why he is running away from equities.

>> let's go to our guest host. he is a president of mergers and acquisitions and they are busting out all over because money is very cheap. this is a nascent era. here we are, deals are getting done. >> what is different now? two things are different. number one, we are now in the

fifth year of a recovery in mergers and acquisitions and that recovery, like the recovery in the economy has been flat. globallook at productivity, it was between $2.35 million -- trillion dollars and 2.47. it looks like it is very flat. roughlyt five months, $800 billion in activity. this year $1.4 trillion of activity. you cannot analyze five months. it seems that we are seeing a pickup in the dollar volume and, very importantly, and the number of deals. that.tainly, we have seen when you look at mergers and acquisitions, do you correlate with higher rates? if we get higher rates or inflation, will that slow down

the deals? it will.t think normally, recoveries last 5-8 years and successive high in activity is higher than the previous high. we are nowhere near the previous high. so, i would expect 2-3 years of a pretty decent uptick in activity, provided we do not have any events that diminish the confidence. >> one of those events will be international money coming in. the brazilians have an operation going that involves transactions . how important is the transnational money? >> the global capital markets are incredibly liquid and fluid. that is not a new phenomenon. it has been accelerating. most large that investors and large institutional and individual investors, which some of the

investors are, search the globe for the best investment opportunities. i would expect that that is a permanent phenomenon. >> speaking of other leaders on wall street, a conversation yesterday with lloyd blankfein i and and michael bloomberg. we will have that for you here. stay with us.

>> good morning. it is bloomberg surveillance and it is the anniversary of the tnm ienanmenre -- tn square anniversary. this is bloomberg surveillance and i am tom keene.

jonathan has the top headlines. >> president obama is wrapping up his trip to poland and meeting with the president. hewas elected last month and is committed to a peaceful process and his country. in california, voters selected a bailout chief to face jerry brown. he finished second to jerry brown that sends the top two vote getters to the general election. game one of the stanley cup finals. it has been an incredible postseason for the rangers and the owner, madison square garden, is benefiting. that is what the series is doing for the bottom line. >> the goalie for the rangers is important. who else would you watch?

>> the passing of his mother was the thing that triggered the turnaround in their playoff run. they were down against pittsburgh and almost got finished off. >> a single a motion. you wonder. let's move on to the conversation of the ecb coverage. we will have full coverage on bloomberg television and radio. the early morning press conference announcement in new york could be very important and, we will have a press conference at 8:30. there is a lack of action and a volatility. it may be disrupted by a series of events tomorrow with the european central bank and mario draghi. what is key for germany may be key for the philippines. mark popper joins us by televangelist -- telephone. he is in vancouver this morning.

advised important what mario draghi does? why is that important to what it does to emerging markets? >> i don't think it is that important. it is more important for europe demand for emerging economies. teases -- eases, the euro weakens and if there is not the euro continues to strengthen and the european economy continues to struggle. europe,n the quiet of there is economic growth and is inflation. to apeople are looking concept of a new neutral and a dampening of gdp. when you look at emerging

markets, are they part of a new neutral? >> what has happened is that we have, with the opening of china growth.00, very strong emerging economies, including china, had a significant setback and it recovered after 2009. 10-2011, there has been a slowdown in economic activity and ask parts -- exports are not growing. growthhat, we had slower going forward. some countries may have accelerated growth, like vietnam and india. growthy still have less

and a slowdown in economic activity. >> the thing i cannot understand and maybe you can help us figure , why would anyone loan the french government money at that interest rate? >> that is a good question. i own u.s. treasuries and the yield was at three percent. at the time, many people asked if i was crazy. . said, maybe it is part of the overall portfolio to have diversification into an asset that is not correlate with equities. buyny event, the people who a french government bonds at a low yield is betting on a strengthening of the euro. >> right. .et me bring in ralph

do you have a question? >> i would ask a quick question. if you were mario, what would you do tomorrow to signal that you are after inflation and wanted to stimulate growth while keeping your powder dry? >> it is a good question. it is tactical. wouldas a central bank, i squeeze the system like a lemon and bring inflation down to deflation. advantagesas some for the majority of people. for the majority of people, it is great if you have a strong currency and week commodity prices.

they can buy energy and transportation at a lower cost. >> thank you so much. >> we will be right back with more surveillance. including a conversation with martin.

>> first. bloomberg. liveu are looking at a shot of hong kong's victoria park if -- where thousands, if not hundreds of thousands are gathering to commemorate the kinnaman square crackdown. it is a candlelight vigil.

victoria park, hong kong. this is "bloomberg surveillance." tom keeneet fu with and adam johnson. >> hard to believe that was 25 years ago, but is china better or worse off 25 years after tiananmen square. >> economically, it has taken off. lloyd blankfein was here to chat with mike bloomberg yesterday, , theounder of bloomberg lp parent company of bloomberg toevision, in a conversation talk about the personal experiences and eight look back. it was anchored by stephanie ruhle. she is with us. >> lucky day for me. we sat down and talked about their careers because they were celebrating the small business, giving grants to people across

the country, really across the world. they did not come from a mckinsey consultant background. lloyd blankfein was a lawyer who could not get a job on wall street. -- mike bloomberg gets fired from salomon brothers, starts a tech company with four guys in a room, does not convey customer for four years -- two years, and look at them. i asked lloyd blankfein, you're no longer in the trenches, what gets him going benchmark where does he get fired in his belly -- going? where does he get the fire in the belly? >> when my job gets going, things are not more fun. i cannot imagine leaving it. when things are going badly, my sense of responsibility takes over and i could not imagine leaving it. i either love what i do because

it has given me a lot of exposure to great people and influence, and when things are bad, i sense -- my obligations takeover. >> lloyd blankfein likes his job, mike loves his, but i had to ask about what he thinks about the future of wall street. the populist opinion seems to be dogging on the financial industry. mike says no way. it is making a comeback. >> wall street will come back because if it does not we will not have a future and wall street is made up of people that think there is opportunity and want to work hard. that is part of the ethnic. there will always be use it. there will always be bad apples. city of 60,000 people will somebody get arrested every day? the school system is double the size.

the industry is many times that size. there will always be something stupid or venal. it is thess, willingness of people to put their capital up to add their expertise, which gives us the ability to grow. >> mike says this will always be an industry that people can flourish in. millenials at say they do not want to work for the man, those that come in on saturday, those that have the fire in the belly, they will win, and those two prove it. >> they are elder statesman, and also in it. ralph, what motivates you? you founded evercore partners. >> i am motivated to work with people that can retain, develop the very best people, and

second, serving clients. our business is 100% outward focused. we have no proprietary activities. we have no balance sheet of any consequence. we are focused 100% on the client. >> give us a case study -- you just took stu francis from barclays. >> it was a long-term effort. >> did you offer him rangers tickets? he said he is a he -- he might be a kings fan. the way we got him was he embraced the a record of the model which is to have senior bankers go out there, when the business, and serve the client over the long term, and that is what is winning right now. >> thank you to stephanie ruhle for coming in. my job. .et's get you a data check

in terms of economic data, not a lot out there. we have ism services later in the morning. the yield is edging lower. >> good morning, everyone. we have all of our interviews out on our digital media with bloomberg plus and bloomberg tv plus. our guest host, ralph schlosstein, chief executive officer and president of evercore partners. there were whispers want to go, the idea that disinflation would and and inflation would increase. politemoved beyond conversation. no one has been more critical of than martintionists

feldstein. you grilled janet yellen. you said there was no other topic. does she understand your concerns over inflation? >> i was happy with what i heard because the fed had been saying nothing about inflation other than their desire to get it up from less than 2% to two percent , and my question was what happens if inflation gets above 2% and is rising, and she gave the right answer. answers.ve coaching does it meet the concerns of martin feldstein, charles plosser? >> she said the right thing. the question is whether they will do it. my sense is the fed statements indicate they will respond too w eakly, too slowly.

>> there is research that shows the central bank is always behind. what indications do you see that give you immediate concern? >> the fed talks about inflation. therefore it is -- their focus has increased, but if you look more recently, you see that it 2%, so ising over think we are already had a point where inflation is close to the target. >> i want to get a question from ralph schlosstein. you would have built him if he spoke at the economic club of new york, wouldn't you. a question, please. >> i recently read a piece that you wrote about the economy, and you predicted a bit of a strengthening in the economy due to the restoration of consumer balance sheets. you talked about the asset side of the balance sheet.

i also looked at the liability side of the balance sheet and consumer debt as a percentage -- percentage of personal income has come down substantially. factor into a pickup in consumer activity? >> it does. the cost of carrying the debt is much lower because interest rates are so low. what i talked about in the piece that you read is the total net worth household and liability were up and that is bound to show up in higher consumer spending. personal consumption expenditure was rising and 4% in the last three months. there are a that mere 25 basis points in assets reform -- reserved. when the bankse

say 25 basis point is not the -- good enough? what they see more -- >> they start saying more good lending opportunities, lower risk, profitable loans. ubs, writing this week, drew matus, saying exactly what you are saying, we are beginning to see the animal spirit. convey his fischer perspective to the fed to get them out in front on this debate? stan will work closely with janet. there is a question on whether they see the need to get the fed funds rate or overnight raid on excess reserves up fast enough. >> martin feldstein with us on the issue of the moment, and certainly, adam, i would say the issue after labor day, a better economy that would include inflation.

>> today marks the 25th anniversary of the tiananmen square crackdown. we will discuss its legacy. this is "bloomberg surveillance." live on bloomberg television and streaming on your phone, tablet, and on bloomberg.com. ♪

good morning, everyone. "bloomberg surveillance."

i am tom keene. johnson, theyam with me this morning. >> we are 10 minutes away from 8:00 a.m., let's bring in betty liu. what do you have for us? companies,ocused on and there is a company called and they take experiences, like a big part in the next " star wars movie," or if you want a date with george clooney, you get to bid and have this kind of experience. the founders will be on august. home notice -- who knows, maybe they can win a date with tom keene. >> their worst nightmare. >> thank you, that a new. -- betty liu. is china better off 25 years after the tiananmen square

crackdown, or worse off. tweet us. >> good morning, everyone. "bloomberg surveillance." ralph schlosstein and martin feldstein. a disconnect seen within economics and our finance? i came back from europe, and everyone says they are going to leave it to mario draghi. >> what you think we will see to thew, paying respect institution? activist,, to be an do something to stimulate the , get the price index

away from an inflation weight -- inflation rate of .5%. he needs to do something dramatic and i do not think he needs -- he will do it. >> the agreement there'll be significant potential for volatility? >> we are not drifting apart on purpose. a problem of rising inflation. they are facing a problem where they could slide from an inflation rate of .5% into negative territory. we are not drifting apart in terms of what each of us is trying to do. >> quickly, you said you doubt mario draghi will act tomorrow. what will be the market reaction . >> he will act, the question is how -- if it will be strong

enough. >> what would the reaction be? >> if he does not do something dramatic, we will not see significant improvement. >> are negative interest rates dramatic enough? >> that is really not clear. that is the main thing he will try to do but if the idea is to give a boost to the european economies, i do not think that is enough. >> aren't posting, thank you ford -- martin feldstein, thank you for joining us. we will be right back. ♪

>> coming up tomorrow on "bloomberg surveillance," the viveo ceo will join us. this is "bloomberg surveillance ." i am scarlet fu with tom keene and adam johnson. is ralph host schlosstein. martin feldstein is also with us. the justice department will review songwriter is. a federal judge has rejected a request that pandora pay the songwriters more than it currently does.

tesla motors will not decide until the end of the year where he will build it that every factory -- battery factory. elon musk says it could end up in three states. his goal depends on making his own batteries. lenovo arena's seeking more time for the review of their server deal. to buy the ibmed lower end server unit, but tensions over hacking mine complicate the -- might public at the review process. >> call it the new litigation -- accusations, threats, they damage to reputation -- jerry yang grand jury actions -- jerry and grand jury actions early to the press. ralph schlosstein is with evercore partners. martin feldstein is with harvard university. ralph, you have been involved in

many meetings in protecting against a squishy thing called insider trading. the upper over the weekend seems to have faded away. where do you think the up or will go in the coming weeks. ? i think it is on this -- >> i think it is a construct of that they get leaked to the press like that, and it is in two ways anyt damages long before facts are in front of anyone, the reputations of people, some of whom may have done illegal things, some of whom probably have not. second, it damages the investigation itself, the willingness of people to cooperate is undermined by these types of weeks. i think they are negative in every respect. >> it diminishes trust. your colleague benjamin friedman

has written an important book on this, "the moral consequences of economic growth." out of this crisis we are in search of a trust. insider trading allegations and the media frenzy about it, we cannot rebuild trust if we are spending our time worrying about leaks from grand juries, can we? >> agreed. we cannot. if you and professor friedman were having a cup of coffee with me about the underpinnings of trust that make for capitalism, we are a long way from getting back to that. >> that is a small part of the things that constitute trust in capitalism. some of our institutions do not leak. i think the federal reserve doing serious business but not leaking what will happen next. that is important. >> we do not see that like we did. phil mickelson is not playing golf with chair janet yellen.

, how can you teach integrity? >> it is not my agenda. hire a lot of other things to teach. we do not talk about this. >> you have to teach this in real time. what do you say to the troops? >> there are interesting studies, much too long to talk about here, but the basis is the one thing that consistently affect behavior and keeps people in the high integrity lane is constant reminder of the importance of integrity and and honesty -- integrity and honesty to the success of a business or their personal success. have some of us modest inclination to round the corners little bit given the opportunities. there is a lot of deep research on this -- behavioral research -- that suggests every day reminding people of the

obligations -- in college, the reminded of the honor code. in our business, the importance of integrity to the success of individual and our firm. >> to that end, our regulators helping or hurting the effort to rebuild trust? >> trust starts with the firms and institutions themselves. we have to do a better job of self-policing ourselves, but there is always a role for regulatory oversight, and i do not think any of us should suggest that that should not be strong. >> what do you do it ever core? partners --core what do you do it evercore partners? >> we do so much. we have individual and group ethics training. we have an ethics manual that we go through every year. it is required. everyone has to sign that they

have read it. i have a partners meeting every month. the first thing on the agenda every month since i have been there has been the firm's reputation for excellence and integrity. i call it the morning prayer. >> speaking of agendas, let's get to our agenda. >> my morning agenda is the morning prayer going on at madison square garden and on the west coast right now. this is fun, folks. the beginning of a stanley cup finals. all sorts of emotional baggage for the new york rangers, and for the los angeles kings for that matter, but this truly goes north american and worldwide, certainly over to europe. a magical moment in sports. it is particularly exciting for scarlet fu. ralph schlosstein, are you pumped up for the new york rangers? rex ryan from philadelphia, so the rangers are my -- >> i am from philadelphia, so the

rangers are my second team, but in my heart. spot >> one of the stories is dominic moore of harvard, who had to take a year off because his wife died of cancer. he has come back. >> it has been a cinderella story. to, you have to head back the radio station -- studios. adam, what is on your agenda? bnp paribas, the bank that come under screwed me for allegedly helping countries funnel, and now there is a potential $10 billion fine the u.s. wants to impose. runh schlosstein, you evercore partners, and advisory firm with mergers and acquisitions. the think there is jeopardy to the ge-alston transaction if this fine is imposed? >> good question.

>> i think it is on its own independent course, as it should be. >> even as france threatens disruption to trade between the two countries? >> i honestly cannot get into the head of the governmental officials that are speaking, but i think it is wise to take each one of these items on its own merits and not to link them. >> got you. my agenda is it is 25 years to the day after the tiananmen square crackdown and hundreds of thousands of people are gathering in hong kong, the only place in china where you can commemorate this event with a candlelight vigil. you have to asked the question -- to ask the question, is china better off, and let's look at some of the answers. this one is from one of our production assistance. economyird -- china's

is better off but country's air quality and food safety are worse. china has built on its strengths and it is better off, even though methods are controversial. china has always said it would go its own way in bringing about economic liberalization. country cannot even acknowledge what happened 25 years ago it cannot be measured as better. >> in fairness, there is an exhibit in hong kong where they are showing the man in front of the take. >> although they have limited the people's ability to visit. martin housing, have you been recently? >> i go to it three times a year, and is a -- and i was there a few months ago. >> is a better off? >> i first went to china in 1982. it is like a different planet. the quality of life is so much higher generally. >> mocon floods nine -- martin

feldstein, thank you. ralph schlosstein of evercore partners, thank you. as we look ahead to the ecb meeting, "bloomberg surveillance " on radio continues. "in the loop" with betty liu is up next year and have a great morning. ♪

>> good morning. it is wednesday, june 4. we are live from bloomberg world headquarters. you are "in the loop." i am betty liu. we have a great program. we always do. entrepreneurs that are picking

witheam -- when a date -- george clooney or a part in the new "star wars" movie. omaze will tell us how to do it. withsnapping pictures coworkers, but not with the public. we will find out if the services popular and at the same thing could happen to the likes of twitter. futures indicate stocks will open slightly lower. 15 minutes from now we will get the adp numbers, the private payrolls report. president obama wrapped up his with petro poroshenko. toncis warning the u.s. not push ahead with a fine on the french bank bnp paribas. it could endanger