dimon and for you? dad, can i please borrow the car keys? alan mulally gives way to fields in dearborn, michigan. as is bloomberg "surveillance," live from our world headquarters in new york. it is tuesday, july 1. i am tom keene. joining me, scarlet fu. adam johnson has a busy morning for us. >> july 1. hard to believe. unemployment in europe is 11.6%. think of that. that is a lot of people. we are at 6.3%. they are at 11.6 percent. overall manufacturing has slowed. the purchasing of managers index having some problems. in europe, germany and u.k. were bright spots. in the u.s., several key indicators on manufacturing. 9:45, and ati at 10:00, construction spending and throughout the day vehicle sales throughout the month of june. two companies report earnings

today -- constellation brands, greenbrier -- that is train cars. a couple of items of note. california minimum wage rises to nine dollars an hour starting today. a couple of soccer matches. switzerland versus argentina at noon. coming -- are you coming echo >> i am going to try. >> the sony walkman turns 35. >> i cannot believe that. >> but does anybody have a walkman? i don't think so. july 1, a lot of movement here. >> it is hard to believe. we say it every year -- it flies by. >> the second half, finally. >> you are looking at equities bombs -- equities, bonds, currencies. futures up. the euro is stronger, the yen

stronger. the dollar weaker. nymex crude staying at $105. 11.57. the dollar index is a big deal. , breaking under 80. index, at the blended dx this is one year you can see the many months just in a range area that we roll with recent dollar weakness. range bound. >> how far have we been stuck? >> the second year. >> the name of your new dog, range bound. >> range bound, come here. >> our top front-page story, bnp paribas finally pleaded guilty and agrees to pay $9 billion for violating u.s. sanctions against

sudan, airtran, and cuba. shares up as much as -- against sudan, iran, and cuba. yesterdayted how there was talk and it is now confirmed that bnp will be barred from operations for one year for its gas commodity. , and itis not out there should be out there. they are going to do this without cutting the dividend. >> they will adapt the dividend pad2014 to match the 2013 of 115 euro or share. >> this is like when caterpillar went out and issue bonds so that it could maintain its dividends. it is incredible what companies are doing. with a growth rate of just under double digits. that is pretty good. take a listen to what u.s.

attorney general eric holder said when he announced these fines and the guilty plea. >> bnp engaged in a complex and pervasive scheme to illegally move billions through united states financial systems on behalf of sanctioned entities. these actions represent a serious breach of united states law. sanctions are a key tool in protecting united states national security interests, but they only work if they are strictly enforced. >> the authorities are choosing to enforce them now that the banks are healthier and can withstand the pain. minutesmore in a few with a terrific guest with a lot of perspective. let's get to the next story. is it generalist motors? another 8.5otors, million vehicles. that gives gm a dubious record because it now has the most

peoples ever recalled in the u.s. in a single year, 27.5 million. the previous record was held by four. g.m. in north america has recalled almost 29 million. 2011,al worldwide sales, 2012, 2013, 9.7 million -- i think that is 27 million vehicles. vehiclene every single you made in three years effectively got recalled. we have a serious production problem. further, thatep becomes a serious issue. >> the brand -- i am fascinated by this. farhe interesting thing, so auto sales at gm have not been affected. best saleshey had since august of 2008. >> the big summer party is a really wonderful event, and you

walked around and there was the auto booth photo and there was this gorgeous old code that -- gorgeous old corvette. that is the magic of general motors. will they lose it? >> they have not lost it yet. mary barra is trying to get out ahead of this. this did not happen on her watch. she is the new ceo. how about stepping into that? 's children were well mannered. oure also want to get to story on ukraine, once again attacking rebel forces after cease-fire ended. the president of view cain, ukraine,oshenko, -- of petro poroshenko, says that rebels -- map, and it deserves to be on the map. >> to use a word we have been

using a lot lately, such a cacophony of headlines. it is hard to know who is in charge. you just do not know. >> is the bottom line that putin backed off? >> the eu is threatening russia with more sanctions. we have heard this before. >> some of the separatists are wanting to align with russia. others want to be separate from both russia and the central government. >> those are front-page stories on this thursday morning -- on this tuesday morning. of you onhello to all global wall street, particularly france and europe. it will bews is mostly business as usual for air paribas.bnp they will retain dividend and get client losses. ryan -- robert albertson is a sandler o'neill banker specializing in none other than banks.

robert, thrilled to have you here this morning. your response to bnp paribas and what it means for their american operations. >> it means what it means. it is a modest restriction for a file, a narrow one, commodities only. presumablye is defendable based on the history of the action. maybe it is the first time regulators got in the act and said let's make these fines tied to something. in that sense you sort of feel better that we are finally maybe , chase theof this banks and punish them. the seem to deserve punishment. what i take away from it, what bothers me most thomas is that the french authorities -- what bothers me most, is the french authorities wanted to defend them. it tells me we have little international cooperation.

that kind of shocks me. himselfnce minister said we have looked at this stuff and it is perfectly ok. >> the word that comes up here is macro prudential regulation. is macro prudential, if you have internet seen work share? >> what we are talking about here domestically is another look at dodd frank and coming up with observations and changes in both directions. so i think the activist aggressive example would be who said wedeau need to raise the thresholds of size and all that. it sounds good. >> we are making the regulatory burden -- >> overkill. and then a month later he comes

up with this new speech and i strongly recommend that you get a hold of the lipton letter that gets into this -- it says that banks and their boards, they have to care about customers, about investors. they also have to care about the country, and macro policy, and they have to think about what they are doing and how it will affect that. it is really going another layer out in terms of responsibility. we all want to do the right thing for the country, but macro prudential in this case means whatever the fed is trying to do, whatever the politicians are trying to do. >> robert albertson will continue with us throughout the morning. >> we also have mike reagan, a stocks editor from "bloomberg news." the angst over all the financial regulation does not seem to be affecting the stock market if

you look at where the indexes are trading, but surely it is having some kind of sentiment-damping effect on investors. >> financials are one of the worst performers in the second quarter. really the second quarter is governed by energy companies. when will investors know that it is all clear? -- isthere something there such a thing as cell in july and go away? he puts on a flak jacket and a helmet. are down there and it is like a war zone, and the reality is it is a war zone. how boring is it in the war zone right now? >> i think it is 51 days without a move on the s&p 500 of more than 1%. 1995,s almost 20 years, where we had a stretch of quiet for that long. everything is low.

>> is your job in jeopardy? >> all the traders at the big banks. in your world -- >> rip it up. robert albertson, will there be trading debts on wall street? >> there already have been. the other big change in regulation is the re-focus on trading levels, and it has gone way past high-frequency trading. not all of it is bad. it is not all bad. >> robert albertson is here. he does not want to talk to michael. >> he will talk to michael reagan. >> we will be talking about mark fields, taking the reins today as the new head of ford. this is bloomberg "surveillance ," on bloomberg television, also stream on your tablet, your phone, and bloomberg.com. ♪

>> could morning, everyone. bloomberg "surveillance." us, thursday, -- this is one interesting person, david rubenstein. you may know him as the chief executive office of -- the chief executive officer of carlisle. i know him as the greatest american citizen. he goes out with many millions and acquires cool things for the benefit of the nation. 10:00 a.m.stein, this morning on "market makers." four, dow futures up 42 as well. >> lots going on in detroit, but we want to start with the news another, gm recalling

eight point 5 million vehicles, bringing the total number in north america to almost 29 million. we go to jamie butters. this has become a festering thing -- the more you look, the more you find. gm's intraday at stock chart yesterday, it was up in the morning as feinberg demonstrated gm's commitment to trying to do the right thing, to include as many people as should be included in the compensation program. then they halted trading and came out and said six more recalls, 8 million more vehicles, 7.5 million just in the u.s. including admissions. ignitions.g less than one standard deviation is sort of a typical day at the

office for gm. both were pretty well expected. mr. feinberg's pattern is pretty well laid out. saidhen mary barra had they are wrapping up a bunch of investigations, trying to get them done by the end of the second quarter, which was yesterday, so they wanted to get those out and they did. if this keeps coming at 5 million a month, that is going to be a real problem. around,is wrapping up maybe they are putting it around the. >> when will this affect monthly sales? it has not so far. >> we will see in june -- we will see june results today. gm is down but it is in line with their pricing. they have been disciplined on pricing, and it was taken as a sign of their strength and how well they are handling this. >> when does this begin to affect the brand.

has an article in the new york times this morning. when does it affect that named marquis back to sloan in the 20's. when does it affect gm? >> it seems that there are more fatalities that are caused by this kind of negligence, neglect on the part of the whole company . that is the stuff that really tarnishes them. we have seen the recalls in the last couple of years. ford and toyota have ramped up their recall machine to grab everything out there, and it is not hurting them, it is helping them in the market. by volume of numbers, probably not that bad, but if there are , and now that they , it hurts.to sell

if you are a chevy person come you think of chevy but they do not necessarily associate with this company, gm, in detroit. >> the other key question, do you drive a ford truck or a gm truck? mark fields has taken over at ford for alan mulally. as i look at the bloomberg terminal, earnings are forecast to decline by 18%. what does mark fields need to do with ford starting today? >> the reason earnings are down is because they are spending so much on new vehicles, especially the f 150 with the aluminum body. that is the dreamliner for alan mulally. it helped them launch this innovative, lightweight, fuel-efficient truck, but it is hard to make and they have to deliver on that. that is the most important thing for mark fields as well as the other 20 some launches around the world. >> jamie butters, thank you so much.

coming up in the next hour, michelle palouse so will be our guest host. this is bloomberg "surveillance," gaming on your tablet, your phone, and bloomberg.com. ♪

good morning, everyone. bloomberg "surveillance." this place will stop at 4:00 this afternoon, the nation transfixed by the world cup. i think things will end at 4:00 p.m. johnson will be on 69th street. scarlet fu will be north of the city. i may join adam johnson at our favorite french restaurant.

69th street. this is bloomberg "surveillance. i am tom keene with scarlet fu and adam johnson. time for morning must read. henry winter is writing for the "telegraph." i was in a little french place choirsnd the american chanting "i believe that we will win" simply reflects the rise of the sport in their country and that they are now a respected force in the global game. i think that captures some of the enthusiasm here today. we go to michael reagan of bloomberg news. the equity market just shuts down for it -- just shuts down. of year forlow time

stock trading, but definitely some -- the bloomberg mouse slows down? >> it gets a little rowdy. uncharacteristically rowdy. albertson, does it stop for today? >> for today only. >> anything that has any affiliation with belgium -- waffle house has made it clear that they do not serve belgian waffles. they say we do not serve belgian waffles, we have sweet bread. germany, algeria -- it looks like the simpsons. midfield moving the ball around. what won'tou what, be the simpsons is germany-france. that is july 4.

are a sophisticate. >> i am not sophisticated, i am just trying to get into it. -- maybe at charlotte they will give me a plate of french fries. will you keep watching the world cup if the u.s. loses? tweet us. >> that will be a good one. you kind of wonder whether it will last. we will look at how the markets a line with global data coming up on "surveillance." ♪

>> good morning, everyone. bloomberg "surveillance." good morning from new york city. tom keene, scarlet fu, adam johnson. adam johnson has top headlines.

>> six people are dead after sunni insurgents hit a mosque with mortar shells. the attack on the shrine in 2006 triggered years of violence. the shrine is more than 1000 years old, and the united nations says more than 2400 iraqis were killed in june, the country's deadliest month this year. israel carried out a series of airstrikes in gaza. leaders see that leaders say they will invade if that is what it takes to stop rocket fire. three teenagers from israel were found near the west bank town. israel suspects they were kidnapped by hamas. the u.k. president says he is ending the truce with pro-russian rebels, sending troops again to fight them. president poroshenko says he's talks with russia and european leaders have failed. .t could escalate the fighting i wish there was something positive in that, tom.

>> some tough headlines this morning. , 11.57. who thought we would be at 19.58 on s&p futures? the answer is a lot of strategists. the equity markets nailed it. not so, the bond market. way away from consensus. nymex crude at 105.82. rose.ing utilities not boring, the return of the s&p 500. michael regan is with us for the hour. he scours every research report written on wall street. what are the pros telling you about how to make money in the second half? >> i was reading a note from oppenheimer, andrew berkeley, and one of the things that is concerning a lot of people is the bull market is so old now, about 5.25 years old.

we have gone more than two years without a correction and a 10% drop, so that is making people nervous. berkeley is saying it is an old bull market, but that does not mean that you cannot make money. energy companies which led the rally in the last quarter. technology and industrials. part of the rationale is everyone expects to improve eventually. -- can anyonerds get behind materials? >> one of the worst performers in the second quarter right now. wasnd last year i think it the worst performer. >> such a will -- such a bad performer. really a diverse group, not -- >> looking at the bull market, robert albertson with us from sandler o'neill as well. robert albertson with his

definitive note on the linkage with economics and energy mark -- and equity markets. was this a janet yellen chart? i think in total $20 trillion more in central banks around the world since monetary ease began. you have a very strong argument today in the journal. it is very clear this has left us with a lot of things that are not good, one of which is too much money diverted into asities and other risks opposed to the balance that you would want. it is going to correct. >> robert albertson, one of the best things about your work is your charge and you're dampening, the way you get out of the trend. do you presume that given the bull market, michael regan identifies, that we can get out of this in a controlled and smooths manner, or will we have

ugly days in equity markets? >> i don't know. i assume the volatility will change. it is a big thing that has to be reversed over time carefully. the biggest issue is the addiction everyone now has to low rates. that if it is not there, nothing works anymore. that is not good. that has corroded an awful lot of our economy. that is the part that people have to get dehitched from. maybe housing finally gets going in the way that it should, but this rate thing is too long in the tooth. >> mike, you have the challenge of having to write a column every single day on u.s. stocks, ad what has been described as boring market. what is the common theme that keeps popping up every time you talk to people and you try to write a column that addresses something new? >> everyone assumes a correction is inevitable. is -- the big

worry is him of the lack of what to worry about. we have had so many acute crises, from the europe debt crisis, to the u.s. credit rating problem and near government shutdowns. you almost get more concerns when you cannot identify the next biggest worry. right now we are basically flat for the last few weeks, so really everyone is waiting for the next day. we have earnings starting next week, and gdp in july. >> corporate profit growth and some of the big ones. what you and i care about as opposed to some gdp -- brazil particularly. >> 55%. ian a screen yesterday, 50 -- ran a screen yesterday, 55%

earnings growth. brazil. >> you have a synthesis of strategist like robert albertson writing every day. have we changed our behavior to where we think a down market is down?n or 8% we are not psychologically prepared for 18% there market -- for an 18% there market -- an market. obviously everyone considers it a healthy mini correction, if you will. if we get a genuine 10% correction, i think people will take it a lot harder than they have in the past. >> you mentioned the earnings season coming up. what are you hearing in terms of the preannouncement? it does not feel like there has been a lot? >> there has been no real spike in estimates guiding lower. it is pretty much flat as far as

companies guiding up and companies guiding lower. from the first quarter, we saw lower guidance. as a whole, adults are looking growth, closer to 10% later in the year. if all things go well, about 5%. >> robert albertson, which chart in your note is the most interesting about the equity markets? >> the one you did not picture. the one that shows corporate business investment. isiness spending outstripping, almost outstripping consumer spending, even though it is a small fraction of the size. that is where the epicenter of the country is -- you factoring, industrialization, commerce, trade. it is happening. commerce is back, and that will drive that area of the market, whether it is a financial institution servicing it or

anything related to it. ,> and you talk about capex are you talking about companies spending on software, or are you talking about machines? >> buying real things. number one is energy, number two is agriculture, number three is manufacturing. mining.id not mention >> that goes with energy. flat, nots fairly remarkable by any stretch of the imagination. >> what are they doing? still believing in a slow, steady grind upward. slow steadye be a pull toward the end of the year? >> the consensus has a going up simply because the market has

gone up. -- flat liners are still there are still a couple of strategists that expect a flat year. as a whole, it has gone up a little bit following the price. >> michael regan with us for the hour, along with robert albertson. i have worked with him before. today's single best chart shows the end of an era in consumer spending compared to how much we get paid. robert opportunist sandler o'neill will explain it to us after the break. ♪

>> good morning, everyone. bloomberg "surveillance." with me, scarlet fu in adam johnson. >> the single best chart from sandlerlbertson, from o'neill. it shows the end of an era in consumer spending, and specifically because spending is at a record. explain the chart to us. personal consumption is the white line. you can see the dip in the recovery, we have not gone back to the levels from the early 2000's. personal income wage and salary disbursement has continued to trend higher. it has five a bit over the last couple of years, but on the whole it has recovered from the early 2000's.

at our economy, 70% of it is defined by the consumer. this tumor growth is at four, down to three in recent years -- consumer growth is at four, down to three in recent years. >> is it structural? >> it has to be structural, and you can trace it back to the demographics of our country. the white line shows the rate of change is not accelerating, it is going down lower. .he yellow line is the ratio it says how much of spending relative to wages do we do. we always spend more than our wages. we have other sources of income. but the ratio keeps going up. it did not go down during the recession. it shows a consumer stretching as best they can to spend. they just do not have the income growth. although they have less leverage, they still have less income to do this kind of spending. >> what does that mean for gdp

growth? >> that means gdp is not a three anymore, it is a two. it is the new growth rate of our economy, so they will look at that, look at the parts that are growing, more on the commercial side, the business side. >> when you talk about demographic shift, is that the fact that we are getting people retiring older? >> number two is fewer women moving into the workforce. isber three, basically there a social safety net that has gotten too big and too solid. so people say it is better that i do not work for my family, i can do better for them. >> is there statistical data supporting that? if so, it is concerning. >> it is concerning. it could change. immigration policy might change, but we had dropped down in terms of momentum and the desire to work to get their bank and we are looking for other things. , and we areere

looking for other things. >> on consumption, robert albertson, sandler o'neill. with aill start difficult photo. we are going to israel. israelis holding a vigil in the second largest city after the announcement of the bodies of three missing israeli teenagers were finally discovered, disappeared back on june 12 and the concern is that they were kidnapped by hamas. >> and there are airstrikes going on now as a result. >> you keep hoping for some sort of breakthrough. theory thatalks in were going to be brokered by the pope, but year after year, he don't seem to get any progress. number two, hobby lobby supporters reacting to the u.s. supreme court decision yesterday, ruling 5-4 in favor of hobby lobby, in effect saying

some private companies do not have to pay for contraception. a very hotly debated issue in a 5-4 ruling. >> i wonder how many other countries -- companies will jump in on this because of this loophole. and is it a religious issue? is it a paring back of the health care laws issue? is it companies saying we do not want to pay for what is arguably an elective form of -- >> you wonder how it will play out in 2016 as well. >> our number one photo, emanuel -- ofte he of the jury nigeria scoring a goal but is disqualified. france moves forward, nigeria is out. france will face germany on july 4. ice inides, it is like

hockey. you need to have a drink in your hand to explain it. some teams are offsides a lot. put a blue line on the turf. >> say stay behind. >> my greeting, how do you define soccer? don't you have daughters who play soccer? >> i do. i define it as -- if you don't want your kids getting hurt playing football -- >> don't you slice oranges? >> i do slice oranges. and you get the ones with the wrong peals and you get yelled at. i played football for 13 years, i never got a concussion, never had a major injury. >> hunter? >> no. i am down to 162. i used to weigh 205.

.> you were a bloated tick >> i was like mr. big neck. those are the olden days. twitter question -- will you keep watching the world cup if the u.s. loses? bsurveillance. >> we really would like to hear from you on this. >> coming up on "surveillance," our guest host robert albertson says interest rates will rise faster than you expect. what does that mean for financials and the state of your portfolio? ♪

>> this is bloomberg "surveillance." let's get you some company news from the files of bloomberg west. twitter making a move to strengthen its reach. textompany is acquiring commerce. paying almost 100 million dollars for the company. become a fixture in american classrooms. next week it will introduce a

tool that allows teachers to use ipads to shape their students courses. for itunesrade is view. a news service- goes robotic. the associated press will use software from automated insights to write earnings reports. the process will eventually turn out 4400 earnings stories per quarter. the ap says no jobs will be lost. that is company news. >> ipads for textbooks -- do you believe it? i don't buy it for a minute. where is the budget? it has to help the poor kids. the rich kids have ipads already. >> they will use computers to write earnings stories, ap. bloomberg does that in a small way with some stockmarket reports, don't they? >> we have some automatically generated reports. to gomputer will be able into an earnings release and

pull out the eps, pull out the revenue. ofcompany earnings are kind straightforward. >> that will put me out of a job . >> but there is no interpretation, so it is purely factual. >> the way i look at it, there is enough earnings these days -- >> we know that the news flow is getting greater every day. seven years on from the crisis, how quaint -- after the financial crisis, after dodd frank and the billions and billions in fines, our nation's banks might actually care about what interest rates do. they care, and the rates directly affect you. is that we will finally get to higher rates, robert albertson? >> in full disclosure, i have been saying this for four years. what you learn from being wrong is hopefully why, and that has been the constant resurfacing of

rabbits out of the hat, buying our treasury bills and keeping their rates lower. obviously the fed has been one of those rabbits or if have done it three times. they are leading. foreign buyers have been far bigger than we have been in general, buying. they are dropping out. the belgians were buying it like crazy. it was not the belgians, it was the russian oligarchs. that has come off. but we are running out of rabbits on the long end. on the short end, if you look at the tales, the fed has come up with the reverse repo. why do they need that? when they want to raise the short end, they just raise the policy rate. no, this allows them to raise it before without getting attention of the politicians and the general public. >> i want to look at the 10 year yield on july 1 i'm a going back to the normalcy of 4%.

from 2007, even into 2008, the middle of the chart -- when we go back, the key thing is that once we get going we're are going to go. critically, will this be a fed with a gradualist greenspan approach, quarter-point, quarter-point, quarter-point? will they get this thing boosted up to get it done rapidly? >> the short end is not as powerful as the long end on what it will do to fixed income and trading markets. you look at where we are now, 2.55 on the 10 year -- it is close to gdp. if you look at us versus a sustainer in italy, we are paying more already. we are beginning to show the supply-demand imbalance. ending with abnormal for a longer poem to of time, the sooner is better.

it will do good for that population that is retired and trying to spend some money. >> and has note of it and income right now. >> i am glad that you brought in europe because i am looking at a piece by brad delong, saying that the u.s. much -- must manage the global economy for the collective common good or else confront a world in which global macroeconomic management results from raise to the bottom national policy struggles." >> i guess they can go back down lower. is there any real proof that other than in a crisis monetary ease generates economic growth? it does not show. strongerf the economies happens to be, cyclically, the u.k. we will be in the middle. >> robert albertson, thank you

so much. michael regan, go home. you have three more hours until you come in again with bloomberg news. the euro is longer. that is what we see today. the euro is simply stronger. stay with us. another hour of numbered -- of bloomberg "surveillance." ♪ . .

is tuesday, it must be

belgium. where will you be at 4:00 p.m. this afternoon? all of retail knows you live by your mobile phone. and dad, can i please borrow the car keys? good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is tuesday, july 1. i'm tom keene, joining me scarlet fu, adam johnson. our guest host for the hour, we double barrel you with michelle peluso and robert kaplan of harvard business school, he springthe curve in the term. adam, get us started on our morning briefing, giving us a quality see to start with. >> yes, you are. we will start in europe where unemployment hold steady -- 11.6% unemployment in europe. manufacturing slow according to purchasing index. germany and u.k. were two of the

bright spots. here in the u.s., we will get our own indicators. at 10:00.nufacturing also a 10:00, construction spending. throughout the day, vehicle sales for the month of june. >> i was going to say 16 million u.s. -- that is pretty cool. >> that is cool. >> none of them recalled. >> well, stay tuned, right, because gm does up to recalled by -- earningsnies reporting overnight. the green bar, that would be -- constellation brands and greenbrier. toifornia minimum wage rises nine dollars per hour. president obama is an washington, d.c. secretary kerry is in panama . and world cup, yeah, there is soccer today. switzerland facing argentina, 12

and u.s. and belgium. briefyou have a not so break. scarlett, what do you have for company news/ >> the crisis is deepening at general motors. gm recalling 8.5 million new cars. faulty ignition switches. gm has recalled more than 20 million cars, more than last year's recalls by all automakers. chrysler is expanding an earlier .ecall a major food industry deal is tabled. in a cool foods is now scrapping hiresale to hills brand, which clears the way for tyson foods. hillshire makes jimmy dean sausage is an ballpark hotdogs. the supreme court turns way google's bid to avoid wiretapping allegations.

the justices refused to hear googles appeal. a lawsuit against google said the company illegally collected e-mail, passwords, and other personal information. the case now goes back to a lower court. google says people were transmitting data on their home wi-fi an network, which is not governed by wiretapping laws. morning, worldwide, particularly europe and france, as well as bloomberg radio and bloomberg television. it is an $8.9 billion find. the real news is it will be mostly business as usual for france's bnp paribas. they retain the dividend. will limit client losses. they will look beyond the 2014. robert kaplan, a senior associate dean at hbs, a former vice-chairman at goldman sachs international is with us this morning. also with us, michelle colusa from gilt group.

tearara suit in, what you -- you parachute in, would you tell everybody at bnp paribas? >> from the outset, it looks like a cultural problem. they have been warned about this. they still had money laundering, and i cannot figure out why, so there is a compliance issue, and maybe a leadership problem. there is a cultural problem. >> how do you define air errort? you have to teach against, rather, at hbs. how do you manage a normal human condition? >> we try not to teach arrogance at hbs, but the truth is, people follow what they think senior management wants, and obviously there was a culture in this thisny that even though was the law, they felt that they did not need to follow it. i do not really understand from the outside wide. >> the idea of the government is saying it is not what bmp did,

it was that they kept doing it, even when we told them maybe this was not the thing to do. >> it speaks to belligerence. i'm not sure that deciding to maintain a given when a years worth of profits will be handed over to the government -- that is not belligerence, but it certainly speaks to something. what is your take of maintaining a dividend when literally an entire yours profit is yanked out? >> that is the right thing to do. if i run into this big right now, you want to create a stability and look to the future and move forward. i think you can be given and what the right decision. they will does not have any other capital return other than that. according to the sp and people familiar with the situation, a couple of senior executive will be forced to leave the np. we've all heard how regulators are going after individuals are not just the bank itself. how does a bank like bnp then attract more talent and make sure there is not a brain drain? convince people

that they are serious about following the law and this will be a great place to work. there is a culture where they are going to follow the law and it is a place you can thrive. >> there is a theory, modigliani and miller, a corporate finance perfect model that we learn and then forget. let me ask a dumb question of in day -- who pays this fine the end? >> shareholders. >> equity shareholders take this on the. >> you bet. >> you would suggest that the institution does not pay a dime of this. >> the shareholders, the owners of this company, are the ones paying be fine. there's no question about that. >> so the stopper be closer to, i don't know, in the 60's, high 50's if it were not for this. >> as i hear you say it, it is not found there. do you not penalize the company but instead go after the individuals? and prosecute them criminally?

>> i think they have done that here, but they doing it in a way that is not failed the future of the government. french government does not -- it is a very importing company to france. always ultimately pay. >> what does this do for the competitive landscape out there for other wall street banks and boutique investment bank? bank knowsll street that the regulatory oversight and scrutiny is at a historic high on money-laundering and everything else, and it just reminds everyone we had better make sure we have good processes because if we are found to have violated the law, we are going to get a tough penalty. >> michelle colusa with us from gilt groupe as well. peluso with us as well. respect your awareness of citigroup.

as a ceo, how do you control the 187rols whether you are at employee bank, how many employees does gilt groupe have? >> over 1000. >> how you do this? >> is a clear to the organization what matters, is it clear what the consequences are, certain actions? secondly, part of the problem ish the big global banks their complex operations, so complexity used to create a lot of value for sure, but think now when you think technology needed for controls, simplicity -- >> this is a huge issue. do you agree complexity is the bane of jamie dimon and others? just complex systems get into trouble? >> yes. the top has tone at never been more important, but complexity in that every business has its own pressures. you have got to get into it and

talk about it, discuss it. >> i had a ceo on the show tell me i guess the last two weeks he does not say the message five times a day, he has failed. do you do that? do you say the single gilt groupe message five times a day? >> it is critical for a team to -- i do not know if i repeat of five times a day. we talked about for things over the past 18 months. one is accelerating consumer revenue growth come under big help many and -- understanding the customer. and then spending more and innovation, which is critical. third is about a more indispensable to our brand partners. and forth is about being the most awesome place to work. --minus i cannot find that mine is that i cannot find that rep dress. >> you have got a lovely lady to buy a dress for. question, robert, how do

you at harvard business school teach aspiring ceo's to do that sort of thing? >> i like what michelle to set. i would color vision, priorities, and alignment. you have got to over communicate. your is our aspiration, here is how we add value, here are our priorities, and you're on the ethics and the values we believe in. you have got to talk about it over and over and over. and then as a leader, you have got to model it. >> speaking of leaders, we will talk about american apparel. coming up, we will discuss this corporate showdown taking place. this is "bloomberg surveillance." we are on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. \ ♪ ♪

>> this is "bloomberg surveillance." good morning, everyone. i am tom keene. our guest host, michelle peluso, it's a chief executive officer at the gilt groupe. ignoress any retailer mobile at their peril. the shift was predicted, but it has happened far more rapidly than crop tops will go out of fashion. you have got the fashion swings and all that. i will not wear a crop top. changed yourt has world. >> absolutely. >> where we be in one year with

mobile phone? sales come of our from mobile and that is growing every month. they thinking about mobile is it can be added -- you know, if you have a compelling mobile strategy, a capela strategy, it can drive a consumer to make an incremental visit. that is really phenomenal for retailers. >> all of the focus is on amazon and bricks and mortars. others will say it is amazon against people like yourself was up there going into fashion i believe. how do you defend against amazon going into your world? >> amazon is the most amazing company when you need something. i am addicted. foron is my go to stop diapers, etc., but fashion is different. it is about duration and wants and i think we do a phenomenal job. to compete with amazon, you have to pick a place where you can do something differently. >> a lot of the digerati are talking about where gilt groupe and others will go. do you recalibrate?

>> you're always thinking about it. the market, the company's performance, you are always observing the market and the company. >> i look at retailers, ralph lauren stock rolling over, michael kors -- what does that signal to you when you see retail equities flat to rolling over yo? >> it has been an interesting year. but you know, great companies continue to prosper and do well. >> what will move in the fall? i need to know in july will move in september. >> by now we are already well into holiday planning. this will be a record holiday season. especially for mobile devices. last year of course there is no predicting over 50% growth in mobile sales this holiday season, so if you are not thinking now about what your mobile strategy, what is your tablet strategy, how is it a different image work, price point, things will drive incremental -- >> what is your single inventory -- black dresses, cocktail

dresses, shoes? >> we move a turn much bigger than traditional retailers because we are putting up new sales everyday, so we tend to turn much more quickly in general. we always want to be clear through of summer inventory by july so we can turn to fall. >> michelle, interesting company battling the giant known as amazon. speaking of that, team usa will battle soccer giant belgium at 4:00 p.m. it is our twitter question of the day. will you keep watching the world cup if the u.s. loses? ♪

>> the morning, everyone. "bloomberg surveillance." i am tom keene. host this hour, michelle peluso, ceo of gilt groupe. fromt kaplan with us harvard business school. adam johnson has our top headlines this morning. >> tom, shiites attacked once again. six are dead after sunni insurgents hit a mosque with

mortar shells. than 1000 is more years old. united nations says more than in0 iraq his were killed june, the country both the deadliest month of this year. and a series of airstrikes in gaza. leaders say they will invade if that is what it takes to stop rocket fire. israelis held an emergency meeting about the deaths of three teenagers. their bodies were found near a west bank town. they have been missing for two weeks. israel suspect they were kidnapped by hamas. ukraine's president says he is ending the truce with pro-russian rebels. he is sending troops again to fight them. he says peace talks with russia and european leaders have failed. it could escalate the fighting that has already claimed the lines of more than 400 people in the past five to six weeks along. those are the top headlines. -- there it is. four hundred people. >> violence flares up once

again. >> let's go to corporate news here. pressure mounting an american apparel. the retailer has adopted a poison pill plan. a similar story is playing out at lululemon with its founder, chip wilson. we want to bring in our guest host, robert kaplan, professor of management at harvard business school. one common theme is that you have founder ceo's who still own a substantial portion of the company's shares, 27% in both cases. or other shareholders treated as fairly when you have got a founder/ceo with such a big stake? >> they put in the pill to make sure he cannot accumulate, he or related parties -- >> doug turney here. >> yeah. the second thing they did was they changed the bylaws. for a sample, one of the changes they made is you cannot remove a director or it is for cause, and less all shareholders vote. they did some things that were smart, but this is the issue, normally companies are very

carefully but there is a big inside holder to treat other shareholders fairly. the board had to act over the weekend to make sure that happened. >> and full disclosure, you were chairman of an investment firm that has a financial position in american apparel. >> yep. knowo founder/ceo's no better? but the issue is they have to play by the same rules as everyone else and if they act inappropriately, if they do not act in the best interest of all shareholders, if they -- in this case, doug charney, if the act inappropriately with employees and other things, which is really outrageous, the board has got to act and discipline him like any other ceo's. >> just a correction, doug charney has increased his holding to 43%. it was 27%. what does that mean for american apparel? now is theyy part put in a pill to make sure -- i

think he has 27% and two other related parties have another 10% and 12%. he by their bylaws could actually remove directors, could have moved the directors if he had 51%. they are trying to prevent that, but this is close, and they may have waited too long to put the pill and. >> this looks like it was in a filing that was released late yesterday when a lot of people had not noticed. he acquired 27 point formally and shares on june 27. shares on june 27. >> they have got to stop him, but they need time to do that, and they cannot allow him to take control of the company. you run gilteluso, groupe, a private company so you do not have to deal with this. either way, a lot of people would love to see an ipo. are we going to see that? >> at some point, i am sure. >> how do you protect minority views within the company? >> first of all, the vast majority of founder/chairman

situations work really well. we had that a gilt with kevin ryan, the founder, who did a phenomenal job. so this is a unique situation in a really tragic situation, frankly, for employees and customers. the board of directors is there to add counsel, advice, to challenge your assumptions, and that is dynamic when it is healthy and phenomenally good company and shareholders. >> is this a company that should never have gone public? ceo's -- aegos of privatelly their companies that go public to cash them but they do not want the response ability of a public company. >> a lot of emerging companies need to go public so they can track capital. they may need it for their growth. at the moment he started acting in a way that was inappropriate, which might have been years ago if not months ago. >> absolutely. >> the board needed to act then.

it probably waited too long and let this turn into a real mess. andoesn't is also argue, michelle, weigh in here, for the separation of ceo from chairman of the board? >> i think that is often a really good structure, but it goes beyond that. in this situation, it feels like on the outside of course -- there were violation after violation. i do not understand why the board did not act sooner. what message are you sending to employees? what message are you saying to employees at the board of directors if this is coming up over and over and no action is taken. that is the tragedy. >> i think it is the end of this era of an imperial ceo. you are now in an era of shareholders. >> i agree with michelle -- most founders are very effective, but i think the era of imperial ceo ended 10 years ago. i think this is an aberration that we are seeing with doug

charney right now. i thought right, the aberration at american apparel. gm recalls another 8.5 million vehicles. we will discuss when "surveillance" returns. we will see if mary barbara survivera survives a fallout. ♪

>> this is "bloomberg surveillance." tom scarlet fu here with keene and adam johnson. let's get you some company news headlines. we start with 7-eleven. it hopes customers will buy big watch on new snacks because tomorrow 7-eleven

will offer a doritos-inspired construction. on social media they are already being called inside out nachos. >> this is news? >> big news. a four pack will cost you $1.99. >> we know why there is an obesity problem in this country. >> and four's f-150 is the top truck built in america. 50 is the top f-1 vehicles sold in america. era,outhwest have a new most of the new destinations are in the caribbean. that is this morning's company news. >> i am awaiting -- and maybe it is a story for next year -- new airlines to come in with lower fares. >> airfares are crazy high. >> you will be waiting for a while. >> i don't know. >> i know i've said this four times in the past month, jeff

misys told me for the first time in decades we are running the airlines like businesses. we are holding planes back, we are filling seats -- >> let's talk about the world cup fever. team usa scheduled to take on the bel belgium red devils. soccer fanatic joins us with a look at the odds and the games theory involving penalty kicks, but before penalty kicks, there is a whole overtime. >> you've got the 90 minutes of regular time, then you have the two 15 minutes of extra time. you play the 30 mess like was on yesterday's game, there was a goal, but not anymore. you saw a goal early, but then they play out the entirety of the tourney to see what happens, so we actually saw three goals in that 30 minutes period. it is only if their tight at the end of 30 that we go into penalty kicks, but you can be tied at 0-0, 1-1, any score is

possible. >> what are the odds that belgium-u.s. will be tight after overtime? that they according will even go to overtime, and then it is a 15% chance of it will remain tight angle to penalty kicks. that is really the u.s.' best shot at winning because belgium the much better team on field, so they can get the penalty kicks, than it is about a 50/50. it is almost random and penalty kicks. you have a chance if you are not the better team to sneak a win and that is the opportunity. >> do they scout which way to go on a penalty shot? >> they actually do. >> do they know player number 42 for germany goes to the left? >> they do. there has been a lot of economic game theory research on this exact topic. there are thousands of penalty kicks in the database. there is one particular professor from spain who works at lse. suffragist.ue

he gave the game to the netherlands and the 2010 world cup so they could beat spain. it did not work out. >> this is your day job? this is what you do? i did not know what chemi did. he is down on the fourth floor. >> this is frightening. what is the success rate on a penalty kick? >> 75% to 80%. if you go lower, the rate goes down. >> explain what you mean by that -- the more kicks you make the less likely -- >> five kicks per team, so there is a different player for each kick, so you usually send out a really strong kicker on the first one, and then the last one because you need that clutch kick at the very end, but that rate tends to go down throughout because the pressure goes up. >> what does fifa want? a silent organization that has to do with people that white people. i get all of that. bite people.e that

>> they are a western european location. >> but we are the big market with a big but. >> w they make plenty of money without the u.s. , germany is like los angeles and san francisco. >> exactly. that is what they want. the rest will definitely be siding with belgium. belgium is the better team anyway. >> has the right thing been better? >> compared to soccer -- the bar is so low. iton "surveillance," we call football. like so, please, there is only one football. let's be honest here for crying out loud. >> it is really interesting because the best place to kick it tends to be right in the middle because the goalie is jumping left and right. just kick in the middle because he is going to jump somewhere. >> love it. that is brilliant. just knock them right between the eyes. our order question of the day -- will you keep watching the world cup if the u.s. loses? please tweet us.

>> my answer is yes. >> now i have actually gotten into it in a weird kind of way. i don't understand it, but i am enjoying it. >> all right, let's get a quick data check. futures up just slightly, up almost five points. 10 year yield $2.55. >> "bloomberg surveillance," we are on bloomberg television, bloomberg radio, our digital media everywhere, apple tv plus, an endless stream of digital excellence from our bloomberg media project also i am tom keene. adam johnson is recalling here. what are we recalling this morning? >> i mean, it is absolutely amazing. , andcidents, 13 deaths obviously one very embattled ceo -- g.m.'s mary barra. we are now at 29 million and counting recalls. jamie butters joins us from our detroit bureau.

how does mary barra survive? >> she has got to take care of things at gm. they have got to get the cars fixed in a have got to get -- they have got to be straight about it. so far they have had a pretty good start. it seems like they have had a cerro investigation of bob lucas, they put kenneth feinberg out to reconcile things with the victims and the families of the deceased. there will be more than 13 because he is using a much broader, apparently more fair and accurate measure it's been gm was using in a very narrow engineering definition. they were looking only at the front seat passengers and things like that. it will be a bigger number. hery barra has to leadin t company through, show stability and show they are fixing it, and then take the company beyond it and help them be a better cup and quit looking in the past in dealing with their old problems and try to get onto some new stuff. >> understandably so. , if your phone rings

and it is mary barra on the other line, what do you tell her? >> that she is doing a good job. i think she has got to do these recalls now. if there is a problem, now is the time to do with that, not a year from now, two years from now. i could cost her her job. she has got to get the ideas out, deal with the problems -- she has got to get the bad news out, deal with the problems now. >> starting with tylenol, beginning with johnson & johnson and tylenol, is there almost too much medication now about you being a company in a given set of problems -- have we almost got into sophisticated in our relations with the public? the transference and scrutiny is greater than it has ever been. >> so you have got to just put it out. >> correct. nothing is going to be hidden. everything will eventually come out. i think she is doing a very good job in a very tough situation, and use headset -- and you have said embattled -- these are not

her problems. if they happened two years from now, they are her problems. she is dealing with the past and getting a clean slate. >> jamie butters, again come out in our detroit bureau, you talk to people on the ground at gm. what are they telling you about? what is happening behind the scenes? such a large company. even though it is much smaller now after it has been through the banker to come us on off its thets division -- bankruptcy, spun off its parts division. even my friends and engineering, product development kind of stuff, this affects so few people, we are talking about 50 people lost their jobs, a few dozen probably interviewed. most of them not affected. they are really hurt by it and they wanted the company to move on, they want the company to have a good reputation. they feel like they worked really hard to try to be a better company, to have a better product, safer products, better factories and all of that. they don't want to be in the

news for making cars that kill people or that have to keep being recalled. monthant to be like last with jd power where they had the most cars that one in their categories. butters,uickly, jamie we will be getting auto sales throughout the day from gm and other auto companies. will we see another record? >> we are not expecting as strong of a month as last month. are some seasonal factors with the way the weekends fell. we are expecting total sales to be down a little from last year, but the annualized rate to be up from last year. still a strong year, not as strong as may was. >> all right, jamie butters and our detroit bureau, thank you has always, jamie. >> you bet. >> coming up in "bloomberg surveillance," we will talk about airbnb. is it illegal? >> i don't think it is illegal, but think it is weird. >> it is thriving right now in

brazil. >> i wonder where we will be in five years. >> all of this we will discuss on "bloomberg surveillance," on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. ♪

>> good morning, everyone. "bloomberg surveillance."

will00 p.m., the city stop, usa-belgium today. i am tom keene, with me today, scarlet "go usa" fu. usa" johnson with us as well. >> of the owners of hobby lobby celebrating corporate tree today. meanwhile, it seems the case has settled, but the issue has not. the course of some companies with religious objections do not have to provide contraception covered for the women they employee. the obama administration is looking at how the ruling affects the new health care law. and this may be a short work day for soccer fans nationwide. u.s. team takes on belgium this afternoon, 4:00. meanwhile, there is a game at 12:00 noon. that is switzerland versus? help me. switzerland -- >> argentina. >> honestly. messy -- lionel messi.

>> my son had to correct me. square.ere or be here is a fun 1 -- i don't know what to make of this. when it comes to cocktail that 30,000 feet, airlines are starting to feel like they need a bouncer. they are pushing for stronger international laws regarding passengers who have had too much to drink. airlines want on rowley passengers to be charged in a country where the plane lands according to the international air transport association. by the way, airlines have reported 8000 incidents of unruly passengers. >> this is a huge deal. >> it actually is. >> i have witnessed one of these ones. >> what happened? >> i witnessed drunkenness back in code. >> you fly coach? >> no, no. [laughter] i am looking back, the guy is drunk. i am sorry, it is bad enough for a flight attendant bouncing around -- this is a big deal. >> i have never actually seen it happen.

i'm glad i have not. ugly. don't drink -- well, you can have a drink. just do not drink too much. whether on an airplane or not. your moral ism. --20th now is "in the loop" joining us now is "in the loop" ancho betty liu. >> we will have sea shawn matthews. he's is still hiring. he says while other wall street firms, morgan stanley, goldman sachs, citigroup -- as they are laying off workers, he is hiring, he is expanding his trading depth of us we will find out what is going on there. itthe way, world cup fever, means in macau, gambling records have gone down, if people are betting on a world cup, not going to macau and gambling. we were there a few months ago and we look at how this can see industry is booming.

ho,alked to laure lawrence son of casino magnate stanley ho. >> people do not make bets on the world cup in macau? >> i guess not. loop"ty liu, "in the starts at 8:00 a.m. the akamai discuss agenda, which brings us to a reporters question of the day, will you keep watching it if u.s. loses? ♪

>> good morning, everyone. "bloomberg surveillance." bnp paribas -- tomorrow, or perspective. guest our most popular hosts, real straight talk on a big banks, thomas michaud. that is on television, and radio tomorrow morning at 7:00 a.m. >> looking forward to it. this is "bloomberg surveillance." i am scarlet fu here with tom keene and adam johnson. our guest host, michelle peluso of gilt groupe and robert kaplan businessd school. twitter making a move. the company says it is acquiring a startup that focuses on

advertising tailored to smart phone apps. people familiar say twitter is paying almost $100 million for the company. tap, three targets advertised -- targets advertised. teachers can use ipads to shape their students courses. apple wants to replace textbooks with its tablets. in a new service goes robotic. the associated press says it will use software from automated insights to write earnings reports. editors will read articles before they are published was up the process will eventually turn out 4400 earnings stories per quarter. the ap says no jobs will be lost. that is this morning's company news from the files of "bloomberg west." >> one of the big winners in the world cup that got nothing to do with soccer. we're talking about airbnb. here's what a company has used the world cup to grab a bigger brazil. in

not running into any opposition or pushback from the hotel industry because there is a shortage of hotel rooms are now in brazil. the company happy to have airbnb pick up a little slack. there are a lot of small apartment, fyi, for $100 a day. there is even a house owned by a former brazilian soccer star. the daily rate for that one however, $15,000. tom keene -- >> it wasn't big enough. >> the house? yeah. [laughter] seriously, would you ever do an airbnb? >> no. >> i'm not sure. i think it is kind of weird. oh, it is not weird? i am being told by our producers that it is not weird. >> we talked about this before. let's get through this -- our new service sector digital juggernauts. changing.ame technological progress has come to the service sector with upstarts like uber and airbnb.

of creative destruction regulation. robert kaplan thinks about this for harvard business school. michelle peluso does this for gilt groupe as well. we are honored to have both of you to talk about this. i guess i would go to her almos t -- to uber almost. totally and devastatingly game changing. >> i think airbnb is capitalizing on this trend of hospitality person to person, the world is more social, you want to be able to connect with different people, and for sure they have to think about consistency if they're going to break into the business loyaltyarket or points. or customers, a give them an alternative. it is a most to shop around and see what you can do. where else could you live for the week? i think they have done a nice chuckle sub is more than transactional -- it is about hospitality. >> i would say, robert kaplan, it is generational as well. you're in a classroom with a bunch of young -- can you pick the next uber person out?

can you say you up in row three, you are the one? >> no, but you can see with a group of 900 students you have got a high percentage of them at harvard business school and out in the world who are coming up with very insightful ideas. many of them will not work, but a number of them will, and they are tapping into what michelle is talking about. >> what is the best practice of one that will work? what is the dissension a makes for an uber? >> the key is -- does it fill a need? and these ideas -- young people are coming up with these ideas everyday, and there is capital to fund them. >> adam, say something, i have got to put that out on foot or. >> david brooks, columnist and the "new york times," says something else is going on -- the evolution of trust.

again, this is my morning mustard from the "new york times." rob, how do you interpret that? because we are going online, where it can all be traceable that reputation is now going to the forefront and government regulation may be -- do you buy that? >> not quite. i think it is ironic. even though there are these new ideas that are disrupting old ones, brands are as important as they have ever been, and trusting brands is as important -- ,> but isn't that the important you do not need the government to do that, michelle? >> the flipside is you may want to rent out your apartment in new york city, and you probably have the right to think about that, but what about your neighbors? is it ok for your neighbors to have people coming in and out of their apartment? is it ok if you have young children to know that there is sort of a constantly evolving neighbor next-door that you don't know anything about? i do think there are these important questions that the government has to step in. >> i agree. there is a role for making sure

that there are some standards that are met, and so i think innovation is more likely to flourish -- >> i have got to make some money. we have got alibaba coming out in the fall? >> maybe this summer. >> have that money already been made? >> well, they have made a lot of money so far, and there is probably a little more to be made, but the stock is so fully valued now in a private market. >> thank you. >> i want to go back to government regulation for a moment. do they need to be more innovative in thinking about how to integrate these sharing economy companies? it will only be the future. it is not going away. >> i think this is true across all different sectors. you just think back to financial services and the consumer, the and how do you get ahead of the new players and financial services? and you can't as an organization like that constantly know about

the landscape and be ahead, but how do you at least create a path for innovative thinking from a regulatory perspective? i think that is the critical question. can there be portions of the agenda that are about scanning the future, thinking ahead, and maybe partnering, setting guidelines? if you set some guidelines, innovation can flourish. >> all right, let's get to the agenda. tom, you are fixated on the fact that we are now in the second half. >> that put this out on our good morning, 12 months trailing a 22%. i do not think that is a single digit world. the gloom crew has been just completely vanquished by this first six months. on market totally wrong. equity market did better, but where are we on 70,000 out, when we get to 18,000? -- but where are we on 17,000 dow, when we at 218,000? there are a few bowls.

clearly been has up. >> but there is silence about where we go. >> on my agenda, auto sales. with chrysler reporting about five minutes from now. chrysler is expected to report the biggest increase along with nissan, but sales for general motors and ford are excited to decline. >> mine is really simple -- we have a big soccer game at 4:00, usa versus belgium, 24.4% that the u.s. wins that soccer game. i will be watching that thing. i am all over it. ask they are the red devils, what are we? just the americans? >> i think of us as the eagles. but i am a former rugby player, and we were the eagles. >> france looks good. >> france looks great. they go up against germany july 4. that will be an unbelievable game. he left them in 1982 in the world cup taken together, germany beat them, so it is a huge rivalry. >> time to answer our reporter question of the day. we ask you -- will you keep watching the world cup if the u.s. loses? team usa in any case.

some of the answers -- it takes the fun out of the game if the underdog team loses and only big teams are made. how about this 1 -- absolutely i will watch. this is a global tourney. >> i like that. time to cut the lawn route for the home team. team usa will win today. 4:00 p.m. -- what is the french restaurant you're going to? >> i'm going to raise a glass of rose in true french fashion. >> is gilt groupe into this? >> our team loves this. we have a young, global workforce, so 4:00, the cafeteria will shut down, the tv will be turned on. >> they will be wearing usa jerseys, too. >> this is an exclusive -- hotdogs at gilt groupe. i thought you would do tofu and blankets. >> we do whatever it takes.

>> where are you watching the game, rob kaplan? >> at the beach if i can make it there. >> lucky you. >> robert capa, thank you, michelle, thank you so much. >> "bloomberg surveillance" continues on radio. "in the loop" is up next with betty liu. ♪

is tuesday,ing, it july 1. you are "in the loop." i am betty liu. we have a lot to cover,

including what is next for wall street now that all humans being driven to but -- to drop off a cliff. cantoratthews, ceo of fitzgerald, is going to be joining us for a deep dive. bus revenue in mccloud drops for the first time in five years last month because the bettors are watching the world cup. we will bring you an exclusive interview with sheldon adelson, of ahead of our rise micallef special that airs next week. first, a look at our top headlines this morning, doug charney is turning up the heat, increasing his stake in the company to 43%. he is fighting the board's decision to fire him. record for general motors, gm has recalled another 8.5 million cars, most of them for those faulty ignition switches. for the year they have recalled almost 26 millio