ukraine. jobs day is friday. month after month, we create 200,000 plus jobs. mbas need not work for general the entrepreneurial urge beckons. this is bloomberg "surveillance," live from new york. tuesday, september 2. i am tom keene. joining me, scarlet fu. he is back -- adam. he was up all night with a puppy. the beast is here. mcallen, she is the color of scotch. i have aged five years in two days. ad eight week old puppy and one bedroom apartment. >> the next two weeks will be crucial. manufacturing in asia and europe weekend, one of the things i noticed. trying to plug back in.

at 9:45, a read on manufacturing. iso members and construction spending at 10:00. expected to be up 1%. earnings, we are not really in earnings -- >> it was a three-day weekend and we have to get plug back in. >> alibaba has decided to push back by one week, to next week, its road show ahead of the ipo. thought tohey have start a roadshow on a four-day week? president obama traveling to estonia tonight, that is a former soviet republic. ahead of the nato meetings later in the week. >> as you are picking up the the officialesota, "surveillance" beast. >> we need a picture. >> i don't know if i'm going to

survive. ofwe will give you a lot perspective. equities, bonds, currencies, commodities. futures lift over 2000. weaker, australia tuesday morning. churning oil. vix, 11.98, a good close friday. dow above 17,000. michael holland joining us to explain why you need to be in the market. 7.58., 3 some boris yeltsin like stability. 1998.s a crisis of

it has been ugly, we go through the ruble weakness at 35 here. an immovable force. litmus paper. >> your dollar buys 37 rubles today. years ago, it was two. >> this is a record low for the ruble. >> prime minister david cameron talking about the balance between what can we do economically versus on the military side. next hour, a great geopolitical perspective. we have looked at the front pages, here scarlet fu. >> we start with what you left off with, the ruble. 'sraine warns the country situation is getting worse. the defense minister warns on facebook they will take on rush's invasion. the president heading to estonia estonia,ith leaders of

latvia, and lithuania -- for mer soviet republics now part of nato. no de-escalation. 4000 troops ready to deploy, a rapid response force for eastern europe. never really been tested. it was created to go against this of the union and the cold war. all of the sudden, really? >> i will put on twitter and facebook my conversation with stavridis,mes former supreme commander of nato. >> what was his take away? this completely pushes away

the islamic state debate, israel-gaza. >> we will check in with hans nichols. i want to get to our second front-page story. atad might make another run t-mobile. in talks with private equity firms about teaming up to make an improved offer for t-mobile. >> this will not go away. indicated it is going to negotiate if an offer is for at least 35 dollars a share. t-mobile rejected iliad's offer of $33 a share -- $15 billion for a 57% stake. >> back and forth with the fourth-largest carrier. so much smaller than verizon and at&t. >> the regulators in the u.s. are determined to keep that 4 p layer telecom operator. they wouldn't let sprint and t-mobile combine. >> isn't the major question

here who is iliad? >> fairpoint. >> shareholders are pushing for this to go through as well. on apple'sttack icloud has led to an exposure of of hollywood stars. apple and the f b i are investigating. hackers posted photos of actress jennifer lawrence, kim rihanna, selena gomez. apple has fixed a bug in its find my icloud software that might have allowed hackers into celebrity accounts. >> i understand this and socialism. this is a ginormous deal. our learningls of that jpmorgan and other banks were hacked into by what, presumably, could be russian

hackers. >> there are pictures of me without a boat that -- there are pictures of me without a bow tie on. >> shocking! hacked!could be the president will travel to wales for the nato summit. first, 1800 miles further east to estonia to reassure the baltic state of america's commitment. chancellor angela merkel questions the ability of russia to change borders without consequences. more thanls is uniquely qualified to speak of this and joins us from berlin. >> within this world that we live this weekend, what stood out for you. what do viewers need to know that has changed since friday? >> nato has prepared a rapid response force. 4000 troops that can be deployed

anywhere in europe clear, they are talking eastern europe. not ukraine, it is not a nato member, 4000 troops within 48 hours. land, sea, special forces. they want to let russia know that they can respond to anything within nato countries. that is the last 12 hours. >> the president will travel to estonia. he grew up in new jersey and upenn.o columbia and yo of thees the president usa to latvia, lithuania, and estonia? >> all he has to do is land the plane. the symbolism of landing air force one in a former soviet republic. yes, obama will give a speech. the substance so far is the very fact that they changed the schedule and tacked on this trip to estonia. they are letting the russians

know that nato and the u.s. will defend nato countries. >> you and others have reported on the intimate relationship -- argues that were deliberately -- between angela merkel and vladimir putin. she speaks russian, they speak regularly. what has happened to that relationship over the past couple weeks? and itas deteriorated has been slow. listen to angela merkel's language, she says russia is the aggressor here. she has not gone as far as to call what russia has done in ukrainian invasion. nato seems to be in this incursion language, obama seems to be more indeed this is a little bit of an escalation. a note about angela merkel and speaker.e is a russian in high school, she won a contest to go study in russia. putin spent all the time as a kgb officer in germany, their preferred language is german.

that is what they speak, i don't know how friendly those conversations are. >> hans nichols, chief international correspondent, from berlin. with us to get you started after your summer off, christopher, chief financial economist at bank of tokyo-mr. vichy. also joining us, cofounder and chief executive officer of mba's across america. as all the mba's wander back to class. congratulations on your optimism. aeing it with jobs in minute. i want to talk about economic sanctions -- incursion, invasion. by definition, the aggregate supply curve moves to the left, this move to the right. it means recession or slowdown in europe, doesn't it? >> seems like this is the fourth year. we had the european sovereign

debt crisis. it is coming in in a different way. probablyck and it was march this year for the first headline between the tensions between russia and ukraine/ that brought down treasury yields. when they get down to 2.30%, it is due to geopolitical risks and ukraine. scripts, youp the call for higher interest rates. why has everyone been wrong for 9, 10, 11 months? >> i do not like the term, being wrong. >> i do not mean to disparage anyone. >> i am being tongue-in-cheek. the lateperiod in 1970's -- at 2.3% treasury yield, why is it there? yield is, your real tiny. there can only be something that people are afraid of outside our borders.

this happened during the asian financial crisis. global financial markets crisis, august,default, 1998 duringwant to buy bonds these events. the stock market rejected these stories from the ukraine. they went down one friday and shot up -- >> what you have is a tension between the pessimistic bond traders in the optimistic equity traders. fit in with mba's job prospects? >>. excited about entering the market. to they, it gets entrepreneurial energy. the idea that everything is in flux. not just in america but when you talk about russia, asia, latin america. rising business

leaders are excited to work. gdp? you need 3% or 4% could your entrepreneurial vision work in a 2% america? >> the question is not about gdp. the question is about to why have the resources to thrive? ton you talk about access capital and access to talent and being able to sell your goods and services to false in your community --to folks in your community. casey, with us for the hour. coming up on "surveillance," beijing refuses to give hong kong the right to choose its leaders. what does it mean for hong kong's status as the financial center in asia? ♪

>> good morning, bloomberg "surveillance peer for an interesting moment in our 9:00 hour. steve miller, aig chairman, "in the loop" with betty liu. mosche did. this is bloomberg "surveillance," with me, scarlet fu and adam johnson. showsna's ruling democracy in hong kong has limits. china will effectively select which leadership candidate people in hong kong can vote for. joining us from hong kong is anson chan's the city's former chief secretary. you are known as hong kong's conscience. you are the top civil servant concern that people

might feel cornered into taking extreme action after this ruling. the risk of massive unrest. >> i'm afraid we are seeing a prolonged period of straight protests --civil disobedience will take place. there will be a period of noncooperation with this government. the framework is extremely rigid. ofwhat does it mean in terms hong kong's role as a trading center in a financial hub? what risks does it create for doing business in hong kong? haso the extent that china to the on its promise people of hong kong, to give us universal suffrage. the inability to elect the chief executive to affect policy and to implement one country, two systems, there will the an the independence of the judiciary and the

maintenance of the role of law. all that should matter to business people. >> the legal system, certainly. for more than a year, pro-democracy groups threatened to disrupt business by staging a sit in protest in the central business district. where are we on that effort? ] the numbers are contradictory. >> the occupy central organizers are hoping to mobilize and persuade at least 100,000 people to the sit in. in the light of the decision, maybe the light numbers will be larger. >> what is the goal of beijing? to make hong kong like shanghai in 10 or 20 years? >> i think their goal is to assert increasing control and power over hong kong. they're no longer very concerned about whether they are seen to be faithfully implementing one

country, two systems. it is rapidly becoming one country, one system. the issue of the white paper by the state council is yet another piece of evidence that beijing is tightening its grip on hong kong. >> what do people outside of beijing get around the most about the relationship between hong kong and beijing? outside, firstle of all, and a lot of them probably don't pay too much attention to hong kong. kongo they see why hong should matter. we are in international city, we have agreements with many countries. if china does not honor its international treaty obligations to hong kong, what does it say about china's commitment to its treaty obligations with all other countries? you for chan, thank your perspective. former chief secretary of hong kong and joining us by phone in the wake of the ruling from beijing. >> dollar general is upping its

bid for family dollar to $80, the previous bid was $78.50, that was rejected on august the first. in favor of the lower bid from dollar tree. for about $74.50. dollar general upping its bid for family dollar to $80. while i was on vacation, the stock closed, family dollar closed at $79.83 friday. the market was anticipating an increase bid. >> no end in this battle. >> in an effort to take on walmart, tightening its grip on how cheaply it can get the cost of goods. >> one of the curious sub stories here, it would divest 1500 stores, up from 700. it is trying to get bigger, it is going to have to -- >> much more on the next hour on dollar general. >> we will take a quick break,

you are watching tom, scarlet, and me -- i am happy to be here. we will be right back on bloomberg "surveillance." ♪

>> good morning, bloomberg "surveillance." our world headquarters in midtown, new york city. i am tom keene. with me, scarlet fu. adam johnson is back. he went to get a dog. >> i did. i don't know if i'm going to survive. i have not slept since she arrived. >> morning must reads so adam kinzinger is. -- so adam can snooze. formerkraine, by the

ambassador to azerbaijan. call putin's bluff, he won't cut off gas. his take away is that europe can do without russian gas, it is moscow that cannot afford to carry through the threat. european leaders need to remember this as they try to carry out their response to russia's aggression in ukraine. >> this is not the escalating. tradersit right, bond orhing yields to 2.30%, stock traders, who keep making new highs? things workhese themselves out. but after listening to all your remarks and your reporting, i would be concerned. let's see what happens over the

next couple days. maybe yields come back down on treasuries. >> that's the story as i come back from vacation. we will take a quick right. we want to talk about hacking. the big story over the weekend, icloud getting hacked. our twitter question of the day, is there a company you trust with your data? .weet us vix @bsurveillance >> can't trust jpmorgan, apple, target. >> tim cook has to talk. >> tweet us @bsurveillance. ♪

once in a decade you get a summer like we have had in new york city. it was spectacular. a little hot yesterday, we greet september with shorter days in new york city. what a perfect summer it has been. that is the east river to the left as we look south from our world headquarters. good morning, bloomberg on september 2. i am tom keene with scarlet fu and adam johnson. top headlines -- a's government says it has dealt a setback to rebels. they thought in the -- they fought in the golan heights, the u.n. peacekeepers

were abducted. willfood workers say they use civil disobedience. beingzers say sit and are considered, even at the risk of arrest. they want pay raises to $15 an hour, that is roughly double the current federal minimum wage at seven dollars $.75. former house leader has a new home, eric cantor signs on with a wall street investment bank. >> surprise, surprise. >> the former majority leader will be a vice-chairman at molis in company. he lost his congressional seat in the june primary. >> he will open the washington office, based in new york first. he will help it compete for business according to "wall street journal." >> speaking of washington. writing foral hunt

bloomberg view in washington says "republicans had a tail wind." i think that is an insightful point. then "the washington post," same tone. it is only nine weeks away. >> the markets have shrugged off ay potential impact that midterm election would have. it is amazing. >> i will do a massive read this, mark halperin and john -- >> is this a shameless plug? >> i am reading a book, it is fantastic. >> it's thick. on.hris, go >> we were talking about the

midterm elections and what it might mean for treasury yields and whatnot. --re is some concern here the fed has become very political under janet yellen. there is some risk that they do not normalize policy more quickly and they are putting their independence into play here. republicans already want to, rewrite some of that legislation they did in 1977. i'm a little bit afraid that the fed is on the rock side of the fence. >> let me do a quick data check on a tuesday morning. futures improve, up 2. euro,carefully, new lows, 1.3117. politics of washington and the economics of washington. jobs they is friday. america is creating jobs. "it does not get any better than

this," why are we so miserable? resolute optimist. why is so much of america miserable? >> media comes from the top. maybe it is the head of the fed. two months of 288,000 jobs in one month, 10 year treasury yields go up to 2.7% and come back down. this week i'm looking for 2.25%. are yields going up? i don't know, we have created jobs. summer withaking to stanley fischer, the vice chairman of the fed. a long treaties in support of yellen economics. get wrong.scher >> if you're the vice-chairman, you back the chair 1000%. theylked about, it's as if

think we're in the wake of a financial crisis six years later. i see business capital investment, stanley fischer talk about not enough business capital investment. it looks like it is at record highs with durable goods. >> a key distinction and one of the debates we have on " surveillance," where is capex. >> spending dropped for the first time in six months in july. spend on experiences rather than stuff. how much of your data captures that? >> you would bring that up. nowhere spending went in july. >> was that a one-off?

>> i hope it is. 2.5%.ed my number back to we arehe debate that not creating quality jobs? 200 something thousand -- ca sey, what is the quality of the part-time job? >> that is the story. you talk about the optimism of a jobs report. >> he's talking about it. >> it misses the point, all across the country people are hurting. there are people unemployed and we have wages that have not risen. we have to talk about it. there's great work team done in oakland, let's fund good jobs, not just jobs. >> how do you respond, you disagree? >> i try to stay away from the

politics. the unemployment rate is falling. washington does not need to continue to stimulate the economy. that is as good as it gets. come fromot going to washington. entrepreneurs, small business owners are driving this on the ground. corporate profits when you look at gdp are driving the whole story. we've got to look past the corporate profits number. thisu will talk about later, is this a republican or democratic policy you are espousing? >> this is a policy that i think created the divide. from my generation's standpoint, what we have today is unacceptable. we ought to do better. >> the word "unacceptable," we still have -- we have created 5 million or 6 million jobs, but we haven't made up for population growth. if full unemployment and price stability are the two minutes of the fed, we are nowhere near

that. >> you have to weigh it. the full employment zone for unemployment is 5.2% to 5.6%, we are 6.2% now. wait, by the middle of next year, unemployment, the total number of unemployed out there will be down in the 5's. at that factor. the chart on unemployment as we go to jobs day. he trendline in improved unemployment. some would say managed by the government over 15 years or so. there's the ugliness, anybody under 28 or so has never known a normal market. there is the recovery. 6.1%.re at your, as you build out business to help small business owners across the country, not just on the west coast or the east coast, what are you

hearing? >> i hear a few stories. i hear a story of optimism. places like detroit, yuou would think it is all doom and gloom. people are getting to work and starting businesses and solving problems on the ground. there is often a zone. that folksge is are disconnected from resources. 70% of all venture capital goes to three states. >> which 3? >> new york, texas, california. >> seven- zero? >>70%. boil that down to boston, new york, and silicon valley. >> 70%. my stat of the week. say it again! >> 70% of all venture capitalism is basically going to 3 metropolitan areas. >> the red sox, yankees.

>> and the dallas cowboys. >> forget piketty, that's the stat. >> should the u.s. do more to solve the worlds problems? >> surprising things about what americans think and how that has shifted over the past year. ♪

>> good morning, bloomberg "surveillance." welcome, september 2. scarlet fu and adam johnson. adam has top headlines. >> detroit's leaders and lawyers in court starting this morning. telling a judge how the city's $18 billion debt could be settled. the hearing will determine if the plan is fair and reasonable. the municipal bankruptcy is the nation's largest ever. another house of cards in atlantic city, the rebel casino closing for a few hours. it closed a few hours ago. the $2.5 billion complex opened two years ago, amazing. the second of three casino closings in two weeks. do we have one more?

dollar general -- raising its bid to takeover a rival. the company says it would pay $80 a share for family dollar, $1.50 higher than its previous offer. it would divest 1500 stores to clear the deal with regulators. right now, family dollar is still favoring the lower bid from dollar tree, $74.50. >> somebody put them out of their misery. single best chart on tuesday morning. are weetorical question, an isolationist or interventionist america? should we do more to solve the worlds problems? according to a pew research study, the share saying u.s. is doing too much is dropping. last year, the majority felt we were overextending. 51%. november 2014, it is 39%. that is a big move. those who believe we are doing too little or not doing enough,

31% from 17%. in terms of the right amount, pretty stable over the past year. i focus on the move to we are not doing enough, 17% in november 2013, 31% in november 2014. >> is in the correlation here to our soldiers in harm's way. get our courage back. >> so much of what we are doing has to do with leadership at the executive branch. >> the president will travel to estonia today, this afternoon. >> he will be attending the nato summit. does that link into photos? >> some pretty dramatic stuff happening. number three, protesters are holding up their cell phones during the occupy central love in honge protest kong. >> this has been a big source of debate -- is it 10,000 people,

hundreds of thousands? 5000? >> go back to the anniversary of -- >> hong kong's return to chinese rule -- >> .5 million. it's fuzzy. how do we go from half a million to -- >> there's a sense of resignation that beijing has ruled on this. never going to be a case that beijing would have allowed for elections. >> do you believe this is a tipping point? >> insofar as the message it sends to macau and taiwan. >> another protest, pakistan. used to that is being who with protesters there sharif, theawaz

prime minister, to resign over corruption and potential fraud. >> the "ft" with this. tokyo.ith bank of sharif. upset at mr. the military has been driving growth for many years. recently, defense spending in the economy here has slowed a bit. would say this has a huge knock on effect for mr. modi's victory in india. >> talking about protests. it is a protest of a different sort. a volcano erupting in public -- a volcano erupting in papua new guinea. it destroyed a city where a

number of world war ii battles were faught. the world, and volcano -- i thought it was kind of metaphorical. >> two volcanoes. >> we will take a quick break. >> is there a volcano near us? >> wall street. >> washington. >> students heading back to school across the country. entrepreneurs are using their education to follow a different career path. you are watching everyone's bang," streaming on your -- you're watching bloomberg "surveillance.' >>

>> this is bloomberg "surveillance," i am scarlet fu with tom keene and adam johnson. the band is back together. china giving microsoft less than to answer antitrust charges. pressuring the company about windows and office programs. the problem centers on a bundling of software. a chinese official claims microsoft is not cooperating post. alibaba going public under unusual business structure. advisers telling foreigners who

want to invest in the company about an entity that allows the company to sell stocks. uber has a legal roadblock in germany. a court says the company is breaking laws that require cabdrivers to have special licenses. it could lead to a dam across germany. -- they could lead to a ban across germany. >> uber does not handle -- portland, oregon. no uber. i was stunned. the one city i thought would have it. >> rent a car. >> i don't drive! i have to take a horse. i use uber. not just germany, this bears watching >> speaking of startups -- teach

for america, now there is mbas across america. helping entrepreneurs start towns.ses anin rural casey has brought one of the success stories, sarah of red ant pants. a quick beat, casey, how is it that you convince mbas who have got debt to join you and give back rather than go to google and goldman and try to make money? >> what we have found in the past 1.5 years, there's a spiritual hunger on the part of rising business leaders. not just to make a buck, but to make a difference. what we have been doing is to say clearly that in our lifetime business leaders are going to have to be a force for progress. the best way to do that is to baptize them in the spirit of america, to find more entrepreneurs like sarah. s> tell us about red ant pant

and how the business is going. and spentup on a farm a lot of time in the country. i needed a pair of pants that fit. at the time, no pants were designed for women. so i decided to start a company making some. the usa,g is made in we are based in montana and founded in 2006. we're still cranking along and it is going really well. it's a 900% ranching town. >>-- a 900-percent ranching town. >> what does it mean to have access to mbas? >> you get so involved in the yous as an entrepreneur and do not have time to be proactive and put yourself out to look at your business. then you have a team of four really enthusiastic business students to help work on your business with you. having a fresh set of eyes is

fantastic. >> you bought a copy of the "how to start a small business for youres," and wrote business plan off of that. what do the mbas tell you that is different? >> there is the book and then what i learned on the ground before i even met them, there is the real-life entrepreneurship. much goes into it personally and professionally. these folks have learned to the books, they can apply that knowledge. -- i known you'er in when you're in the field. they apply the professional levels on the really up to date on everything processes. >> you were with patagonia? >> i was reading that book. sellingump over and are

in ands pants to hipsters brooklyn. how do you cross over and get scarlet fu to wear red ants pants? question. a lot of people, including men, are wearing them. >> you want me to wear girls pants? do they look good on my butt? to get sarahs not in brooklyn, it is to realize what she has done in montana. a town of 900 people and it has revitalized the community. something out of nothing. that is what is bringing us out of the recession. sarah, congratulations and nice to meet you. >> let's do a forex report. casey, thank you so much, chris, thank you. forex, euro weaker, ruble

37.45, worse than in the last hour or so. >> in the next hour of bloomberg "surveillance," michael holland joins us on investment and geopolitics. ♪ . .

>> this is "bloomberg surveillance." security situation has

changed. the president will travel to estonia before critical meetings in wales. nato plans 4000 additional troops for eastern europe. summer is done. the great old market -- well, it is not. and a conversation with angelo mozillo. he is proud of his track record. good morning, everyone. this is "bloomberg surveillance." i am tom keene. joining me scarlet fu, adam johnson has returned with a brand-new dog. we just put the dog out on social media. our guest host is mr. holland, chairman of holland and company, and we are serious to bring you and her score of core analytic -- to bring you and core of core analytic.

>> we learned manufacturing in both asia and europe was weaker than expected, and we are to get our own read on u.s. manufacturing starting at 9:45 followed by construction spending for july. that is expected up 1%. nothing toeally speak of today, but we should point out a couple of items of note. pushing back its roadshow. president obama is traveling today to europe. he is action going to estonia, former soviet republic. and then he attends the nato summit in wales. there is your morning brief. think of the significance of that. >> this is huge. >> scarlet, what do you have with company news? raises its bidal for family dollar. the company says it will now pay $80 a share for its smaller 1.50 higher than

previously. dollar general said it would divest 5000 stores to satisfy regulators. we will see how this all plays out. on itsas not given up plan to purchase t-mobile 's u.s. unit. $15 billion offer was rejected a month ago. and the fbi is investigating allegations about photos and showing celebrities in the new, but apple says the bug hackers used to get them is already fixed. pictures of actress jennifer lawrence and other stars were posted sunday. the images were stored in their icloud accounts. >> front and center of the icloud debate. we will discuss that on "surveillance" this morning. ukraine -- a crisis festers, the president will travel to wales for a most important nato summit. first, he will travel to estonia

to reassure the baltic states of america's. all of this as chancellor merkel questions the ability of russia to change borders without consequences. anders core is with us, michael holland as well, a terrific host to have this morning to discuss these issues. anders, what is different this time? i am really taken aback by how unique this is. this is other tensions with russia. what is different this time? >> well, unfortunately what is the same is that we are looking the similar situation as 1930's and 1940's when you had a couple of dictatorships that were combined and coordinating to expand territorially and to theden and deepen dictatorship. it is great obama is going to the baltics or visiting the ol

baltics, but what we really need are permanent nato ground troops. a problem with your microphone, so we are going to try to deal with that in the interim. >> scarlet, review this for us because we did not get to this this morning as we get dr. corr's microphone fixed up . >> he is meeting with others as well -- >> latvia and lithuania. >> yes. and what kind of pushed the u.s. will give here as we try to come up with appropriate response. of estonia, het wears a bow tie, which means wha-- >> does he? >> that is a special place in your heart. >> this is more than symbolism,

dr. corr. >> i would argue that it is simply not enough. the baltic states have been asking very clearly for permanent nato troops. there is a worry that russia territorially. if russia invades the baltics, what would europe do gekko do you think they're going to mobilize an army very quickly -- >> would nato even be willing to straight? >> exactly. >> "foreign affairs magazine" says basically does the u.s.' fault that putin is in this position. two very stark views of this moment. defend the u.s. projection now. depends -- defend what we are going to do any next number of days and weeks. we should do is to move those forces in.

what we will do is more talk. talk is not going to stop putin. we are not even agreed on syria's sanctions against --ssia's financial wor >> will we see sections by friday? >> i doubt it. >> new russia? is new russia a thing on this ?uesday morning ech >> new russia is a major public relations campaign of putin's timeline. he is going into ukraine. it was expanded to all of southern ukraine. putin is not just want some of ukraine. he wants all of ukraine. he wants all of the former soviet republic. that includes nato members. it is an extremely dangerous

time. he also has his eye on the arctic seas. that will put him in direct conflict with the united states and canada. has been one of the one countries who has really taken there. >> is there a chance for putin to overreach? a 61% of russians are against land invasion in ukraine. there was a july poll that showed that. so that is one of putin's achilles heels. that is one of the places -- if we nip this in the bud and if we take on putin, however we can do needs to goe cia into ukraine and seriously support the ukrainian military in stopping putin. we need to leave putin a way out. we need to leave him a measure to get out of ukraine. but we need to take --

excellent point, a face-saving measure would notest de-escalation, necessarily using nato. how do we give him a way out without necessarily looking as though we, the u.s. and nato, are accelerating? >> we need to give him a way out and also clobber him a little bit. we need to clobber him in ukraine. we frankly need some serious military fatalities in ukraine to upset the russian people to show that we are serious, to show that we have resolve, and we give him a way out by doing that. the cia or perhaps with some other forces that are not attributable to nato, so that he has a way out, so that he says ok -- because he says he is not in ukraine, right? so that gives him away at with the russian people. >> michael holland our other guest host of the hour with holiday company, does this new

wants, does this caution, this giving putin a way out matter when the stock is trading at record highs? course,tters, of scarlet, but i think the market has taken a much different view than anders was talking about this morning. throughout asia and then through europe have all these up in the face of unpleasant, awful headlines. what the whispers would be would be that putin sent in his troops thelast few days because ukraine army was doing a pretty good job for a wall there, and they decided to go in -- it is an invasion -- and turn the tide so that he could sit down with ukraine president to say now we can have peace. by the way, i'm going to have a straight highway to crimea, so i will get what i want, you will safeguard my people in eastern

ukraine. that is what the markets are saying that they will do something in the next couple of days. that is what the markets are whispering. you are smiling. >> give the guy in inch, he will take a mile. he is not just looking at southern ukraine. he is looking at war. he has got flight, military flights going into airspace, three of them in the last couple of weeks. >> a level of coast guard incursions. anders corr and michael holland with us. we will continue on these important topics. >> coming up, we will discuss hacking and our twitter question of the day has to do with that. is there a company you trust with your data? tweet us @bsurveillance ♪

>> good morning, everyone. "bloomberg surveillance." keene, four day work week. i am tom keene and scarlet fu. for the hour,ost michael holland of holiday company, director of the china fund. we also have with us anders corr of corr analytics. mike, what is the business impact on china on hong kong? you'll be heading to the chinese city in two weeks. >> it is not good.

that is an understatement. if it gets to be several hundred thousand protesters in the streets in the next few weeks, that will be more than unpleasant. it will be disruptive for the central government in beijing. they have lots of things to consider including that they have given -- anders' description of putin before issuing his chops. he is absolutely a strong guy and he is showing the hong kong people if you think you are going to do the stuff, it is not going to happen because we cannot have that in beijing. >> we cannot have a set a precedent for what is happening in macau and taiwan as well. >> precisely. >> china will solely try to get these protesters to go away. they will not do another tiananmen square. they are in it for the long game, but this hong kong democracy pill may be more than china can swallow long-term. >> the idea of the long game, we move from chris patten to sans e, what is-- to sanje

different for somebody who is not been back in a decade? thrivedlace has ironically, it has done much better. they have been thriving, so the one system is actually working, and that is where they are going in the longer term, and that is what sanders is saying because the city is thriving. >> remember that made for tv movie? it was either him or richard chamberlain. dashing, a question -- >> a very long-term, democracies do not fight democracies, so if

we can help china develop toward democracy, that is in the long-term interest of the united states. >> well put. anders corr, of core analytics, our guest host for the hour along with michael holland of holland and company. >> an important conversation for those of you back from summer -- are they cooling on u.s. equities? at this very great bull market. stay with us worldwide. onoomberg surveillance" television and radio. good morning. ♪

>> good morning, everyone. "bloomberg surveillance." thrill to you are with us. i am tom keene. scarlet fu, adam jansen used all my -- adam johnson used all my vacation days. is it going ok? >> i am a little slow today. i took a third espresso. i usually have two. inand you have a new puppy the house, so you're not getting any sleep. all night long.

>> welcome to parenthood, adam johnson. >> we will get to our top headlines. fighting worsens in ukraine, president obama is heading to europe for a talk with nato allies. the alliance is a spectator to announce a -- is expected to assuree a force to russia's neighbors who are unnerved right now. potentially 4000 troops were nato will be moved into position. fast food workers meanwhile are seeking raises. they say they will risk civil disobedience to try to prove their point. demonstrations are expected thursday in about 150 u.s. cities. citizens are being considered even at the risk of arrest. they want pay raised to $15 an rrentfrom the cu minimum wage of $7.75. serena williams and novak djokovic have not dropped a set.

serena cruise into quarterfinals win a 6-3, 65 and three over her counterpart from estonia. i will not even attempt to pronounce her name. she has won the open five times, ms. williams. novak djokovic chol so in the quarterfinals. he has been to eight grand slam tournaments. >> you mentioned the previous story on income. important really article last week on the middle class of this country, highlighting a new study that really bears some scrutiny. i think he did a great job. >> forgive me, i was on vacation. >> rolling over. the fact of the matter is incomes are rolling over for a broad part of america. >> we kind of invented middle-class, and other country's middle classes are doing better than ours. >> for the umpteenth time, nato

is reinventing itself. now as russia invades you crane, nato must respond, but who is nato, who are they responding to, and can sanctions alter mr. putin? on her score is -- anders corr is founder of cours corr analyt. is the united states for any source of conversation nato? >> the united states is not great at. nato includes all of europe and europe is walking on at shells with putin. they are looking very weak, as is the nine states. the united states is following european lead here and they are looking week. 4000 troops come of the newest proposal, it is in the right direction, but 4000 troops located in europe that can supposedly fly in -- >> parachute in in two days. >> putin can put 40,000 troops in the baltics in three days. it is a joke. 4000 troops -- what are they going to do, fly in on

commercial airline? commandermer supreme of nato, he is an american. he is out of annapolis. are americans running 80? is it like the imf where we sort of, kind of run it, but when decisions are tough, we really run it? >> unfortunate, the united states is not showing leadership and nato or almost anywhere else in the world are now. the united states needs to show leadership. they need to step up to the plate, and they need to show putin and president xi, as you pointed out, that we mean business. we are not going to let dictatorships expand into democracies worldwide. anders, i have five pages of notes you provided us, and at the very top, global overview, cacophony. how responsible is the u.s. for global cacophony? all, i will give credit to tom keene for that word. >> thank you.

that and two dollars will give me the cheapest cup of coffee at starbucks. >> the united states is absolutely responsible for this cacophony because we are not stepping up to the plate. everyone takes that as a carte blanche to go for it. riding such a are bright line around nato -- >> a bright line? >> we are bright lining nato saying we will defend nato countries, period. because we say that so often, that tells putin hey, every thing else is fair game. >> from david brooks in the "new york times," really emotionally looking back 50 years, the bad -- the good guys looked tired. we will see if there is a leader who will step outside the crush of events and explain how fundamental the threat to the rules of civilization now is.

we did this 50 years, 60 years ago. leadership and diplomacy. why are we so tentative now? toi believe that obama wants refocus on domestic policy issues, and he is doing that. but you don't need to just focus -- you have to also use your mind. we have the strength to stop putin. militaryto russia spending ratio, and this is key, is 11 to one. we have way more power, way more military technology than russia does, but we are not using it. we need to use it, we need to be willing to use it, we need to be willing to take that risk, and he is going to back down. it is like a game of chicken. if you have got a mac truck and on the other side is a little mg sports car, that is what putin is driving, by the way, the sports car is going to swerve out of the way every time. >> update as the president travels to estonia. ," coming up on "surveillance

his firm cost bank of america six the $6 billion in fines. max abelson of bloomberg news spoke with angelo mozilo. i conversation coming up. good morning, everyone. ♪

♪

>> this is "bloomberg surveillance." i am scarlet fu here with tom keene and adam johnson. let's get you some company news. we start with the biggest maker of solar panels in the u.s. accusing china of stealing its secrets. solar world america wants commerce department to investigate. the company wants tougher terrorists on chinese solar panels. a vision issue leads to change at the world's biggest eyewear maker. is steppingoup ceo down. the company founder said they did not see eye to eye. and it was a not so hot summer for movie blockbusters. disney's "guardians of the galaxy" was a hit, but the season's box office totals were down about 16% from the same time last year.

that is today's company news. >> this matters now to our guest host -- michael holland, this bull market survive another summer. at the bears have sundry reasons why you should exit. michael holland says forget inut sell in may -- buy september. once again, the gloom crew is wrong. we have that are economy, better employment, i am lost. continue to bens at least ok if not attractive, and if you look at the major equities in the country, exxon mobil, the intel, the johnson ,nd johnsons, even the disney's which is getting excessive, they are still not crazy expensive. you have got equities that have got low price to earnings and valuations and also high current returns relative to the treasury market, so you are forced to take a look at them. >> the assumption is prices are

higher, it is dumb to buy back shares, yet in the first quarter that was a surprise. share buybacks continue. do they continue into october november?ry o >> great question. >> my only good one. >> companies are scaling back their buybacks. companies tend to buy most of their shares at the top. they are no better than the odd lot investor. there is no way to divine anything there. in terms of a supply demand a back what he's a situation, it is obviously good and it .ontinues to be the same - announcements that are 20%, 25% above the market, the private value market of these companies, trading in the marketplace today and still attractive to the companies. when they buy other companies. >> to our viewers and listeners, when they acquire shares in a company or even etf or mutual fund, how much down is normal?

>> once again, that is so important for people who have been risk-averse because the two bear markets of the last 15 years, 10 percent to 20%, if you spend $100 on a company and it goes down to $90 or $85, you should have some cash and buy some more because it does not mean there is anything wrong, but that is the sort of volatility you should expect. >> the framework of an efficient portfolio, whatever the numbers are, noted cares about this baloney. >> i do. >> you care about this baloney, but the bottom line is 18% is a bear market, and those are normal event's. we have lost that, haven't we ? >> quite normal, and we have not had it for the last several years due to the volatility, and that is disastrous. the hedge fund, mutual fund managers look at the numbers euro today. 80% of the straight equity

managers and mutual funds have underperformed the index. >> that is right where i want to go. when you come back from asia, i want to have you back on "bloomberg surveillance" to defend active management. >> oh, i can't. [laughter] issuet is a very serious right now. scarlett, that is a from michael holland. >> all right, tom. adam, futures have been peaking, and they were up by as much as .25%, but we have more gains steadily, and we are barely up with futures up by almost two points. >> understandably so as anders corr joining us and talking about effectively the need for nato to step up and nato even saying it made a ploy 4000 troops. that is a little scary. that is cold war talk. it soanders puts eloquently, 4000 is nothing compared to -- >> 40,000. but still, i go away for a week, we are at new highs, stocks continue to trade higher, bonds, meanwhile, the yield still low,

$2.35. there is a strange tension between bonds and stocks. >> we will continue to get impressions from michael holland, our guest host for the hour. nymex crude falling to $95.11 on this day after labor day. this is "bloomberg surveillance." we are on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. i am scarlet fu here with tom keene and adam johnson. our guest host for the hour -- michael holland, chairman of holland and company. >> countrywide financial ceo and founder angelo mozilo became the poster child for lax lending standards in the housing crisis. his firm cost bank of america six the $6 billion in fines, yet in an exclusive interview with our very own reporter max abelson of bloomberg news, he said he "did nothing wrong." -- is he playing defense or a theater believer he did nothing wrong?

>> no, i do not think i've ever spoken to a banker who said it is not only wrong but morally unfair. in hisalmost eloquent long defense. no one has really heard from him in quite some time, several years, and he just really poured forth this fury that he has been turned into a villain. >> one of the things that struck me as, honestly, kind of weird, he referred to himself in the third person. in other words, what has angelo mozilo done, he has done nothing , but wait, that is angelo referring to angelo. that is kind of weird, right? hasust be very idea that he been turned into one of the big villains of the crisis is something that he thinks is external, that happened to him. we talk about the financial crisis, which after all countrywide played a role in it, and you say to him to you understand why people see you as a villain? regulators, legislators, the public. you will have to ask what do you

have against angelo mozilo. he referred to himself as angelo and mozilo, but that is how strongly he feels about it. >> it is like he has stepped out of his body and still cannot understand the fury against him. tell us what he is doing right now because he has no job, but he has paid money, and we know that he collected almost half $1 billion from 1999 to 2008, so presumably he invests. where does he put his money ? >> that is right. this story did not come with me thinking i will go interview angelo mozilo. what it started out and said as i was going to interview his friends and do a simple story, what is life like for angelo mozilo inventory 14 especially because it looks like he will be in trouble again. bloomberg reported that a government task force is going to bring a civil suit against mozilo -- >> well, they had better hurry up because the statute of limitations runs out. >> we are all getting older. michael holland, is angelo

mozilo a bad guy? >> the facts would indicate he probably has done some really bad things and heard a lot of people. >> how would his lawyers have this conversation with you? >> we kept it very simple. you asked what he is up to right now, and that is a big part of our interview. a couple of things. number one, he is an investor and he still believes in real estate. this guy associated with the biggest collapse in real estate ever is a real estate believer. he talked about the tight going in and the tide going out. he co-owns a building in the arizona desert where there is a taco bell. he is building in a small town in california. he is building a very quaint almost like an old west main street building. is there isine here no remorse whatsoever. >> no. no. and when you talk to him, if he were here and now, he would say why should i be sorry? i ran a company, we give mortgages to minorities and -- he who needed them

sees himself as "a good person." bank of out a chart for america. for those on radio, i will spell it out later on bloomberg radio plus. >> just so everyone understands your point, it was bank of america that bought countrywide credit. >> are you don't find it by what mr. mozilo said? >> to be totally honest when you do an interview with someone, you are locked into a mode of talking to them, so it is more disconcerting to hear sort of fake remorse. if someone says to you look, i feel terrible about the financial crisis, but you can tell that they don't really mean it, sometimes that is worse. the fact that he was so p early on remorseful -- so purely unremorseful -- >> what is the worst that can be happened? >> it is a civil suit, and he can be sued for a lot of money come in he is a 75 euros man,

and would not be a good way to end his life. >> max double son, well done. >> -- max abelson, well done. >> coming up, is there a company you trust with your data? tweet us @bsurveillance. ♪

>> good morning, everyone.

"bloomberg surveillance." i am tom keene. me it isu has reminded tuesday. adam johnson with us as well. robert stepped down officially yesterday as the chief executive offers are of aig. to be blunt, he cleaned it up and he has passed on the reins to peter hancock. full disclosure -- i am a huge peter hancock fan. his qad is second to none. he will be the president and ceo. betty liu travel to croatia last month for a conversation with mr. ben moshe as he retires. forward?oving >> you share something in common, tom because ben a huge fan of peter hancock, hand picked him abroad

them into the insurance company and he was seen as the successor steps down.he >> michael holland, with the idea of executives and the heritage of a company, with hancock, they move from arguably thea guy best quantitative skills, maybe other than the crime panned it. >> i spoke with people who worked with him and they say he is a supreme. >> he is, indeed. this all leads into the interview that we did last week with bob benmosche at his bil villa in croatia. of course that was a time when he disclosed information about his health and how it worsened since the beginning of this year and that he was given this terrible diagnosis of nine months to 12 months to live from may, but in the mentum, it was business as usual for benmosche,

and during the time we were in croatia, he reflected a lot about his last five years at the company, and we got into some of the colorful, sow we say, theirts he made against he us officials in washington. he called lawmakers crazies, accused andrew cuomo of being a criminal for his actions against some of the employees. >> dennehy have disputes with the board of aig as well? >> he said it is either me or harvey gaal of, and harvey golub went. he was certainly a very colorful character. >> michael holland, the company is going to earn about half of 2006 hi,arned in the six point $9 billion, yet the stocks go down 9.6%. >> i think the hancock assumption of the leadership role is probably something you would say all things being equal yes. >> buy aig.

>> i do not own it, but if you ask me would you buy it or sell it, i would buy the stock, yes. what do you think? >> i cannot make any stock calls, michael, that is up for you. steve miller is the current chairman of aig. he will be on with us a little bit later on "in the loop." >> are right, looking forward to it. betty liu, "in the loop" at 8:00 a.m. coming up. is there a company you trust with your data? ♪

>> coming up tomorrow, michael wolff, a former yahoo! board member, will join us as guest host on bloomberg television and radio. that is tomorrow on "surveillance." this is "bloomberg surveillance." i am scarlet fu here with tom keene adam johnson. the band is back together again. our guest host is michael holland, chairman of holland and company, and anders corr of corr analytics. let's get you company news from the files of "bloomberg west." china giving microsoft less than three weeks to answer antitrust charges. regulators are pressuring the company about its windows and office programs.

one chinese official claims might result is not operating. the softbank robot will be in stores in sprint named pepper. the company says it has gotten hundreds of inquiries. nd uber hits a legal road block in germany. banfinding could lead to a across germany. those are the latest company news headlines from the files of "bloomberg west." has now joined jpmorgan is the latest u.s. corporation to get hacked. thousands of icloud accounts breached it including some very private photos of one jennifer lawrence. we cannot show them on this air -- family network. >> to be clear here, these photos are out and public? >> she apparently had taken some photos of herself and stored them in the cloud and she was not wearing a whole lot, and it was hacked and they got shown to

the world. she was one of just about 30 actresses. i was sort of curious why people would take nude photos of themselves. nonetheless, michael holland of holland and company -- i can understand the risks to me as a asr of apple products or someone who has an account at j.p. morgan, but how do you quantify the risk of data breaches as an investment? >> can't quantify but just realize it is part of life today, it is part of the cost of leadership for companies. when jamie dimon had his recent experience, i as a customer of jpmorgan found no ripples whatsoever. >> in other words, when he recently revealed he has cancer -- >> no, i sorry come in the hacking thing. when they were announcing they had been invaded along with four other banks, that they in fact handled it extremely well, i think, so far. i think it is important to see

what apple has also done. they said they have cleaned it up. i know on both sides, jpmorgan and apple. of -- when target had its problem, when people have problems, leadership comes to the core in how they handle this. >> there is a distinction. target's stocks have not recovered. what did they do wrong for? >> they did not handle it very well. contrast that with jpmorgan and apples. >> i want to bring and anders corr. you look at geopolitics, you give us perspective on what is going on in the middle east and ukraine. howdy you call cyber attacks and cyber hacking because this is a growing area? >> the latest cyber hacking event really shows once again, i mean, we have cyber hacking events every few months. this one really shows again that we are not focused, that our military spending right now is not focused on the thing it should be focused on. in the last 13 years, we spent $1 trillion to $2 trillion on

afghanistan when you figure in everything, all right. in that time, we only spent about $40 billion on darpa's budget. these are the guys that brought us the internet. we need to really diverge military spending to technology sector to protect against hacking and to figure out what the next big thing is. the next bign win military -- >> may be tim cook will quit out in front of this. michael holland, does mr. cook me to come out today or maybe tomorrow and directly address this icloud issue? how can he bring out new products if everyone is focused on pictures of me without bowties? [laughter] quite the not sensation that jennifer lawrence is without her clothes on. [laughter] holland, save us. >> i think tim cook is handling

it just right. that is part of why the stock is doing so well relative to target, for example. he is showing leadership. right now it is required. i think they are handling -- as part of the cost of goods sold to have themselves as targets. pun intended. >> let's bring in our twitter question because we asked everyone about this. on the heels of the disclosure that apples icloud was hacked into, is there a company you trust with your data? google,the answer -- apple smart enough to come up with lockbox security. lock on file for mckee on gadgets. anders corr, you talk about the government spending on cyber security. michael holland, our companies spending enough on cyber security? >> the answer is yes. it does not mean they cannot be hacked, but it is how they protect themselves going into it, and in what happens after -- >> and they learn every step of the way. iterative process

and they learn from mistakes. >> trial and error is how we would put this. how about this answer -- no, but i do not have much choice. you does have to be aware in have to deal with it when it is hacked. and finally, the company i trust with my data is me, myself, and i, inc. >> of that does not work anymore. >> no, unfortunately that does not work. think about how much is on mine. think of all the passwords you have. x can you believe there are photographs of your new puppy already out in social space? >> she regrets that. >> for those of you on bloomberg radio, twitter, facebook, and instagram of adam johnson's new beast. >> yes, the beast that has kept me up tonight in a row. you are looking at a guy who are not slept for 48 hours. >> all right, let's get to our stories and shaking the day. tom, get us started. >> the president will have a

long trip to estonia. i cannot tell you the number of younger people this weekend that i said wait a minute, there is no other issue but ukraine and russia, of course, and the nato andit in wales is front center. quickly, one more -- what is the president's best outcome as he goes to wales? >> the president will be looking for the europeans to increase their defense spending. nato countries are supposed to spend at least 2% of their military budget on defense. a lot of the european countries are not spending anywhere near that. the united states spends about on defense gdp spending. now, european countries need to step up to the plate on that. that is a good>> -- >> that is a good talking point. >> we go to talent in estonia. >> i have been there. very cool.

i think it is the computer had for nato. it is one of the prettiest cities i have ever seen. >> i did not know that. something up i do not know but i will it 9:45 is u.s. manufacturing, the pmi data. today, 58 is the number we are looking for. that would be the highest we have seen since before the downturn back into thousand nine, and it is also significantly above what we saw over the weekend from both europe and asia. >> while w you were using my vacation days, we had a bout of incredible data on friday. >> part of what is driving the u.s. ahead in terms of the stock market in terms of the m&a, and my agenda, i have focused on dollar general, family dollar, dollar tree. bid $74 $.50 for family dollar, and family dollar preferred that over dollar general?

>> if we get a ukraine-russia another bout lower of interest rates, michael holland, every cfo has to refi? they just have to. >> there is a wave coming. the numbers this morning and yesterday out of europe would indicate that interest rates are going to be -- we are going to get the eu coming in with even stuff, somodative that is going to press down all of the interest rates. yet we have a record wide, once dollarguys, between the in terms of the interest rates, so you have a situation where we will get a wave. it is actually a good thing. >> because it is cheap money. in theory, able to withstand any other hiccups along the way. >> great for your balance sheet and you can buy some more stock. >> michael holland, thank you so much, particularly your

perspective on russia and ukraine. >> all right, "bloomberg surveillance" on radio continues. breaking down economic data along with construction spending. "in the loop" on bloomberg television is up next. steve miller will be her guest. ♪

>> good morning. it is tuesday, september 2. we are live from bloomberg headquarters. your "in the loop. i and betty liu.

temperatures already. we return with the flu. ukraine and the middle east and here at home, your own personal account. can any hacker access your icloud? we will bring you all the latest in a moment. steps ceo bob benmosche down. steve miller stood -- joins us in the next hour for what is to insurance giant. plus, he will not want to miss this. nfl 2014 kicks off. is joining me. up.e issues are piling first, a look at our top headlines. familygeneral boosted dollar nine point one billion dollars. dollar general says it will sell 1500 stores. it