in america's topsy-turvy housing market. and pfizer, will they push back against secretary jetblue? good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. i am tom keene with scarlet fu and adam johnson. a morning brief. >> overnight, ecb president mario draghi says a rising euro has contributed to economic slowing in europe. wonder how low he wants us to go? >> weakening this morning. >> as the dollar index rises to a four-year high. possibly making market manipulation a criminal offense. durable goods orders and capital good orders come out this morning. service sector purchasing index comes out at 9:45. the kansas city fed's take on the economy at 11:00.

reports -- >> that will be interesting. you see it everywhere. like fedex. >> in the numbers from the world cup will be in there. i actually bought a french jersey at the nike store. i wore it for the games. >> did you wear a jersey? >> my yankees jersey? >> no. >> mr. biden's meeting with the turkish president. ukraine's president poroshenko is speaking in about an hour. jeter on the brain, let's do a data check. s&p futures down fractionally. euro-dollar is a big story we will focus on in our 7:00 hour. 1.26. get a print of on to the next screen.

yen churning again. there is the euro. gold, a big deal, beginning to really push against the $1200 level. victor is helping out. june 2013. back to here's that $1200 support that we are going to break through. adam, this is a huge deal. 's over, the chart looks the same. the difference is, rather than $1200, it was $19. the concern is gold follows silver. >> this goes to the imf meetings . what will they do about a markdown to global gdp? we're going to give you front page. we start with syria. day three of our airstrikes on syria, u.s. and arab allies going after the source of islamic states money, which is oil, by bombing will refineries in the eastern part of syria.

in the dozen refineries oil smuggling operations. according to brookings, islamic state may be raising about $2 million a day from oil smuggling alone. >> different jets and drones, believe, was in the language. i'm presuming drones were used as well. i like the ideas of a series of attacks in far eastern syria. >> the british parliament is for prater vote tomorrow on whether to join the coalition. the prime minister david cameron called harlem it back just for this photo alone. the president of turkey is also going to be talking with joe biden today about what it can do. inthe netherlands coming with four jets and 250 pilots and service personnel. i believe that was yesterday. >> jordan, uae, saudi arabia would all provide jets, not just logistical support, but actual jets to drop bombs in syria. along with logistical support from bahrain and qatar.

story,second front-page the dollar index hitting a four-year high. speculation that a stronger u.s. economy is pushing the fed closer to raising interest rates. much is because the euro has been sliding, now at a 22-month low. traders join confidence in mario draghi, the ability to weaken the euro. all of the countries that one a exportsuro to make its more competitive. >> it is a correlation, moving together. equities are sort of over here. >> it also highlights the uss the place to go -- the u.s. says the place to go, u.s. stocks at an all-time highs bond yields are low. >> not just as a safe haven. they stumble by apple. debutm cook calling the the best lunch ever, but in the days since, we have learned the

new ios 8 operating system is glitchy and the fix released yesterday is causing people to lose cell phone service. if you got the big iphone 6 plus phone, it bins, apparently. pictures of this has gone viral. it is a gigantic phone. if you put it in your pocket, he tends to bend. apple sold more than 10 million iphones the first week. talks you put that thing in your back pocket, sit down, it only has to happen once. do you walk in the store and say, i want a new one? >> i will go with that. what i find fascinating, the dem ex between the 6 and 6 plus. how many did they sell? >> 10 million in the first week in alone. plus.illion of them are 6 some point, people get drunk and sit on their phone. have you got the call yet,

"dad, i bent my phone"? >> leading with syria, in his speech, the president appealed to the world community, join the fight against extremist groups such as the islamic state and also outlined a more forceful u.s. foreign-policy. peter cook has noted each and every word, each and every syllable, and joins us right now. the president will fly back to washington today. how will he be greeted? >> he is going to be greeted as the president who articulated much more muscular foreign-policy than the president who left here just a few days ago. the speech he delivered yesterday at the united nations, a strong speech with a kind tone that we have not really heard from him and quite some time. the speech itself is getting a lot of talk, not just in washington, but in capitals around the world because of the way he articulated, the way he challenged the muslim community to do more to deal with the

cancer of violent extremism. there were even some echoes here in washington that this president sounded an awful lot like his predecessor in terms of tone, if not policy. there were some echoes to george w. bush in his speech. thehis always plays to polls. nothing like a muscular president to advance the ratings. i'm going to suggest this has nothing to do with domestic politics. am i right or wrong on that? >> i don't think it has a lot to do it makes a difference when members of congress come back here in december and have a larger discussion about an authorization for the use of force, a new vote. it could affect that. this is really a speech intended for the international audience that was in the room will stop the world leaders gathered at the yuan general assembly and those who did not make the trip, vladimir putin, for example, you can sure he is listening carefully to the section on russia. more tough words. this was a very carefully crafted speech for an international community, a

speech that a year ago at the yuan general sibley, president telling america the world was sending back world war footing. >> you see this on the cover of "washington post." grim footage of the french beheading and also german hostages as well, giving an international feel. >> france has not participated in the coalition. peter, you drop a parallel between president obama yesterday and george bush. when george bush use the word " evil axis" he was criticized and president obama used the word "evil close but yesterday. has there been any criticism or rave reviews? >> i'm sure there is criticism, hasi think what he has described, i think a lot of americans and people around the world look at what they're seeing from the is like state theaverage -- have reached same conclusion.

this president is only speaking to the reality of what is on the ground. several countries agree with him and are lining up. you mentioned the united arab emirates, the saudi's, but jordanians joining in, dropping bombs in iraq and syria right alongside the united states. i think the president has detailed something on the ground that everyone in the region already knows. he is getting some credit for being direct about it. in the past. than >> peter cook, thank you. we look at the american economy now, the mix a back and forth. >> inflicting dead and housing this week whether you look at existing home sales or new home sales. data on housing this week whether you look at existing home sales or new home sales. i want to get to some company news headlines first. we need to start with air france, backing down in a battle with its pilots. reporting to drop local subsidiary outside its french

and dutch home bases. 10 day strike. management called a destructive. solid returns of your stock market for citizens financial, shares up more than 7% closing on the nyse. the unit raised $3 billion in an ipo earlier this week. 140 million shares were sold. ford makes good on a pledge. the automakers have three years ago it would hire 12,000 workers by 2015. harding has topped 14,000 since 2011. the latest edition was at the kansas city assembly plant. that is today's company news. >> that is a granularity of job formation. for september,rt october 3, one week from this friday. >> know who's going to lose their jobs soon? out of choice. derek jeter.

tom is rolling his eyes at me. >> what present to do give him? >> i'm not going to the game tonight because it might get rained out. that is a problem. tonight is the big goodbye. he is never actually played a home game in which the yankees were out of playoff contention. he typically sits out those games. he is supposed to make his grand appearance tonight because this will be his last final home game at yankee stadium. >> keith olbermann making a splash on espn. you were in tears when he watched it. >> i have heard all the criticisms. i can see how anti-yankee fans, people who aren't yankee fans, would feel that way. i can understand where it comes from. for new yorkers, especially those who have never seen another generation of yankees win the world series, he is a special guy. >> he has been wonderfully

consistent. he has been a rock. ability, thet tough skin to whether the new york critics. which counts for a lot here. one group that is not saying no to anything, the pharmaceutical companies pursuing mergers, even though the government says you cannot invert. we will discuss it. ♪

>> good morning, "bloomberg surveillance." jonathan miller will join us on commercial real estate, particularly his expertise on this make a buildings going up in many cities. jonathan miller on the state of real estate.

our twitter question for the day -- the age-old question. .e need your responses >> let's get to u.s. companies concluding big pharma. they're not letting treasury get in her way. pfizer reportedly still eyeing overseas acquisitions. working moving ahead -- are working moving ahead. even after the obama administration tightened rules. sam, bloomberg data showed glowed m&a involving pharma totaled 350 billion dollars, the most out of any one sector. equivalent to about 11% of all global deals announced. is happening structurally within the farm industry that favor so much transnational consolidation? all,od morning, first of to all of you. i think one of the key things the industry has to deal with

now having come out of what we -europe, istent cliff to look at their pipelines and deal with the dearth of products coming on the market. everyone is looking to growth. you're not going to get growth with new products coming to market. i think that is what is driving some of the strategic deals we have seen. of course, the tax limit that is looking better, is a big driver. it is difficult to deny that. >> which companies need to do a deal for strategic and economic reasons versus those who are doing it mainly for the tax purposes? >> that is a very interesting question. none of the companies would claim the only reason they're doing a deal is because of the tax benefits. but if you look at -- i'll take the examples that are like today -- abvie is a monumental drug a significant part of

its percentage of sales going forward. it is today. they need to deal with that. the problem they have is, it is such a big drug that even if we don't believe or we do believe similar copies will have to come in the next three years are not going to make a big impact, it is still a big risk. the company needs to diversify with from that. sam, with your expertise from london, i'm fascinated by the simple question, the secretary-treasurer of the united states of america just crucify the pharmaceutical business in 24 hours, immediately pushed back. were you surprised by that? >> humans in terms of share price push back? >> no, they said to the secretary-treasurer, we're still going to do these deals. therethe end of the day, is no law in place of prevents the stills happening. they're doing every thing within the letter of the law. and for that long to come, i think our analysis from our washington team suggests it will

have to happen after the elections and it is going to have to be a proper law put in place. that is not in place. >> but this is critical. the illusion was the secretary treasury has stopped these measures. you're telling me that is wrong. by the law.to go today's law allows company's to do this. i think -- not suggesting the decision of the treasury's the wrong thing to do, but today's law allows these inversions to take place. what is so important in this conversation, the expert is telling us the hyperbole of 48 hours ago. >> correct. which is a direct affront to the obama administration, which put forth a big firm on the other issue, and here's what i'm so concerned about, you look back a couple of months ago at the delaware pfizer wanted to come deal-- you look at the where pfizer wanted to come over to the u.k. was told effectively, we don't want you to relocate here. what is happening on the ground in u.k. in response to the

secretary lew and mr. obama saying, we're cracking down on inversions? >> if you follow the shareholder prices, you can tell yesterday for the day before, share prices had a big reaction, 6% down each, then they recovered since. i think this uncertainty will continue to go on. shiar has agreed to deal with abbvie. is difficult to tell if it astrazeneca did not want to be bought by pfizer. it clearly tells you that people are still thinking that is a potential target for pfizer. pfizer does need to do something. if you look at the future pipeline coming, they do have new drugs. none of them at the moment are looking ready for market or significant new additional

angles for the drugs. they do need to do something. >> thank you so much. >> we mentioned on the front page, apple and the iphone's and the bent iphones. this is fascinating. from the next web, they went to apple support because they bent their phone. this report is, you can get your iphone that is bent replaced. >> with another one that will bend? apple will start replacing them. the distinction is, i guess they can tell if you did it in your pocket versus you did it on purpose. >> you could just go in there and say you did it in your pocket. >> i want to be careful. this is well sourced, but from a number of sources -- >> here's the thing. if you recall in the iphone 4 came out, there's a problem. they fixed it.

i want to know, are they going to fix it, not just give unit iphone 6? >> apples to replacing bent iphones. that is from -- >> tom is all over this story. >> i'm bent over this issue. a president obama taking strident tone at the united nations, comparison to a certain predecessor george w. bush. we will discuss, next, on "surveillance." ♪

>> good morning, "bloomberg surveillance." i am tom keene with scarlet fu and adam johnson. let's look at housing. brent hunter with us.

what is the spirit right now of builders nationwide? feeling a little better. it goes down to the consumer and home buyer. they are feeling a bit more optimistic about their jobs, arer incomes, and retirees starting to come back onto the market and buy homes as well. greenever want to buy bananas. >> you say this is not happening in certain areas. where is this energy, spirit, not occurring right now? lacking --is still lagging. >> really? >> blasted. >> what about new york? >> new york has held up extremely well, kind of like florida. >> have we seen a slow down in those markets? there is been a slowdown in phoenix all year. vegas alliod in las

year. >> what about new york and florida? >> in florida, a bit of a mixed back. most of florida is doing well. orlando slowdown recently because they are starting to push prices again. pushing them too far. >> we will push into this next hour. >> our twitter question of the day -- would a millenial say versus what a boomer would say? good question. ♪

>> the president will return from new york city to washington, d.c., looking at the mystic and foreign issues -- domestic and foreign issues. let's get the top headlines. >> the mass shooting at newtown in 2012, an average of more than 16 such incidents between 2000 7-2013, an increase of 10 annually compared to the six year. ending and 20,007. it is killed 486 people in mass shootings in the last 13 years. china's import/export sector is riddled with fraud. $10program uncovered nearly

million worth of fraudulent trading. china's currency regulators say the use of phony documents is widespread. an app is replacing the repo man. the use of starter interrupted devices is increasing. the gadget lets lenders remotely shut down a borrower's car when payment is late. reports as it is frequently used on subprime customers. >> i have to wonder, there has to be a lot of mistakes. think of all the times you have gotten a letter in the mail saying you did not pain you are like, i did pay for this. >> i'm 17 and i'm parking with the girl and my dad trips the switch. >> right. >> when i'm not home at midnight. >> the government -- >> there is a call from the girls mother or father, where's my daughter? >> you are hanging out with

17-year-old girls? >> no, i was reliving my childhood. let's look at our second screen. deal, weakered euro, stronger dollar and gold really getting on the $1200 watch. there is your data check. did i do ok? >> excellent. one thing everyone has been talking about and reading about, president obama's speech yesterday at the u.n. my morning must-read comes from the atlantic jeffrey goldberg writing in "the atlantic."

he is getting very high marks, as peter cook told us earlier. >> is this over on the 2.0? he is not speaking to republicans and not necessarily to american voters, but to -- >> the world at large. it comes as polls have been effectively showing president obama at all-time approval lows, like 41%. >> let's show you exactly how obama sounds versus, say, george w. bush. lethalave faced a more and ideological brand of terrorist who have perverted one of the world great religions. thehat nno place in religious faith, no sump the come and should have no friend in this chamber. >> 11 your difference, yet remarkable in terms of the strident tone he is taken on. also, george bush

was criticized for using the word "evil" and president obama using the same word yesterday -- >> it has become -- >> acting presidential. we saw that with traffic jams and the first lady lady in town. because back to washington. brett hunter with us. we look at our domestic economy and the housing market. you need a good american economy for your housing economy. do you have it? >> we think things are getting better. we are expecting a good 2015 relative to 2014. housing starts are only up to percent or 3% annually this year, probably going to be up 15%, 17%. we need rising income to make your world go. you don't have that, do you? >> slowly. we're seeing better jobs numbers.

consumer confidence improves. that starts to increase. are part of the key. we are seeing them -- >> or lack thereof. >> the household information rates have an extremely low. the latest recent census number came out showing 480,000, or 1.4 million is normal. are moving out of their parents basements or spare bedrooms. unfortunately, instead of forming new households, they're just getting roommates and renting somewhere. >> typically, they follow progression, right? you rent for little bit and then by your own home. how is that being disrupted? to delayedback families. people are having children later. i think what happens is, sooner or later, the millenials to get married and have children and at that point, the suburbs start to become appealing to them. >> your specialty is to get into

a pickup truck and look at the cul-de-sac. the cul-de-sac used of los angeles, will they ever be filled again? >> absolutely. >> how can you say absolutely? >> it is early happening. the i-15 corridor is very hot. builders can hardly find lots. lot prices are going up. >> what is the value from the price point of riverside county? 290,000 to 500,000, something like that. >> as opposed to the 320 foot in new york. existing home cells are still down from 2005. cells down 60%. how can we describe the housing market is good when we're still that far off the highs? >> let's go back to 2013. the first half was booming.

frothy. we talked about that term. the second half was called the pause. it stayed pretty dead, and gradually coming back. i think this number yesterday was a bit of a wild swing and probably not reliable but i think the overall trend is slightly upward. it is a mixed bag. atlanta is up, phoenix is still down. >> to your point, tom, is why brad is good. he goes locally in the pickup truck. >> do you use case schiller? >> yeah, we like to watch their price indices and one of the things we're seeing is, the first half of 2013, builders raising a price at 20% annualized rate. low single digits now. probably will remain pretty low going forward because now there's more product coming to the market and builders are adding more communities. they're pushing prices in some markets.

hunter, glad you're with us for the hour. >> coming up, our single best chart is all about derek jeter, getting ready first final home game. we will take a look like at his paychecks. >> can we do a fair and balanced show here? >> we will be right back. ♪

morning, everyone. it is the empire state building in the distance. a traffic jam. yesterday was not the best day for. a little gloomy. >> the president is leaving town, so things get a little back to normal. >> is it safe to say we're getting biblical rains today? >> that is what is being advertised on my yahoo! weather. do with thell bronx. a lot of people will be making their way out. it depends on whether they will be able to stay for the game. answer on that one yet. arsenal best chart this morning is on derek jeter. the yankee wraps up his 20 year career here and our chart tracks

is in all salary for each of his 20 seasons. that is the blue line and compares it to one of his offensive production measures, in this case, the hits per game. the red line. his salary peaked at 22.6 million the year after his hits per game peaked at 1.39. keep in mind, in his first year in the major leaks, baseball, he played less than 20 games and that was the same case lasted because of injuries. fairly tightly correlated, which i guess you would expect. it is funny to think about a guy who is making less this year than he made two years ago. just counterintuitive to me. >> people were not sure whether he was going to retire previously. he finally got this one-year contract. >> what is the distinction between mr. jeter retiring and mr. rivera? you are at the game. >> i was at the game. jeter embodies the new york anchors. rivera was much -- he is a star,

but he doesn't embody the yankees quite the same way. here's another look at the ticket prices. the secondary market prices for the last home game, tonight's game. ap earlier a few days ago, but have since come down because of this -- axis?t is $700 on the y is that a seat in the dugout? >> this is average price. if you want a seat in the dugout, and the legends of sweet or -- >> i and/or derek jeter. -- i adore derek jeter. they would have to pay me to go to this. >> no one is asking you to go this. derek jeter's final home game tonight at yankee stadium, if the weather holds up. watching -- there's no charge to walk into the ainsworth. i will be there at 6:30. >> you are going to watch the

game? >> yeah. this is way too much a qs talk, but does mr. a-rod go to spring training? >> i think he is supposed to. he is under contract. >> the soap opera continues. thank you for this briefing. may we do it once every -- >> we'll do it again to mark, don't worry. >> with some pretty interesting stuff today. this is a police officer in washington, d.c. wearing the new body camera. you can see that across her chest. the camera is mounted to the body so it can document exactly what is happening. there are google glasses to go with this thing the whole perspective in theory helps clarify what exactly is happening when officers confront criminals or even just day-to-day. >> so there's no more he said/she said incident. >> number two, we actually have

-- we're going to double barrel this. lego sculptures. the first one is called "yellow." a tight opening of his chest and the latest filling out. i'm sure there's something there. >> five is the lack of luxor the little ones? >> little ones. >> a look like the carrot chip with cepheid at halloween. >> look at this one. likeis is not constructive an 11-year-old. >> the artist has created 80 sculptures all out of legos. this exhibition is in london. video -- we will and footage photo of the iphone 6 been in. can we say that? >> this is the 6 plus. >> which i describe as the ipad mini.

you questioned whether the thing that are someone joining us on bloomberg was yesterday bending it. >> that hantuchova honestly tablet phones? 500 pickup on the tablet phones? >> prana biotechnology with the old-school method. landscaper >> he would have thought they .ot announced by iphone 4 then, let's test it.

>> welcome back to "bloomberg surveillance." twitter question of the day --

>> this is "bloomberg surveillance." get you some company news from the files of bloomberg west samsung getting a jump on apple in china, start selling its galaxy note4 smartphone this month as apple iphone 6 and iphone 6 plus a with government approval. it will follow a friday release in south korea. 850s priced at about dollars. google is undertaking an effort to improve its workforce diversity. the coveted plants are shops to make its workshops more open to women and minorities. eric schmidt says culture is key to creativity. he appeared yesterday on bloomberg market makers. it is about innovation and impact. in the employees believe that. when we started, our goal was to systematize innovation, to make innovation occur over and over again. you'll notice it has been not

just in search, but other platforms as well as applications and youtube and now google apps. >> he thinks the competition between apple and google benefits billions of consumers worldwide. goldman sachs led group, instant messaging service. a buyout could come as soon as next week. it is viewed as a possible rival to the owner of this network. that is the latest company news from the files of bloomberg west. >> syria. degrade and destroy, that is the president's message to america. the netherlands and the united kingdom climb on board. france considers. does the nation have a long-term strategy in the middle east? brian katulis is at the center for american progress and has seen countless lines in the sand avoided or stepped over. let's start with our soldiers,

sailors, and pilots at risk. are these attacks effective? >> these attacks are initially effective. these groups like isis and nusra scurry like rats when hit from the air. it is a good first step, but you need some follow-on action on the ground. a bigs where i think is challenge, especially in syria, where there really isn't yet a cohesive opposition force. >> what have you learned about the quality and character and a cohesiveness of this coalition in the last one in four hours, particularly, in new york city? >> it is moving quite well considering the circumstances. we talked about this before. don'tarabia and qatar really like or trust one another, but they are fighting with us, at least for now. i think the discussions at the u.n. are encouraging.

the resolution on foreign fighters and the steps, i think, are very essential steps but they are only early steps in this broader campaign. >> and the broader campaign chose the dynamics. france bombing in iraq, but not in syria after the september 19 attack on isis. will they join the netherlands and the united kingdom? >> and a debate where the defense minister has as strikes are on the table where france plus president has says, absolutely not. how would you characterize the strength of the coalition? it is a lot stronger than i anticipated, but still in very early stages. one of the key things to watch, especially with the middle east allies that are part of this coalition, is many of them want us to strike the al-assad regime in syria, not just the islamic state. if you recall the year ago, or threwbia really had

a fit about us not doing the strike in syria against al-assad. at some point in the next few weeks, i dissipate these tensions will resurface. >> the key question, brian katulis, and i mentioned this yesterday, the united states assisting these arab nations in a sectarian war. are we in the middle of a religious war or is it something different? >> we are in the middle of a couple of religious wars. there is the shia-sunni war between saudi arabia and iran, and that is been the centerpiece for iraq for more than a decade. there is also this intro sunni war between countries like turkey and qatar and saudi arabia and the emirates on the other. coalition so far, just a few days after these airstrikes, has held together. we can't anticipate these countries probably won't agree

as things move forward when it comes to building ground troops in syria, when it comes to counter propaganda and other measures. >> what is the next app? >> what is the next up? nextdoes it show us our step, the pentagon's next step should be? >> it is not just the pentagon, but all of our agencies. the next that everybody is taking and we should all be worried about is the potential for countermeasures and strikes frontsom isis and nusra and other groups. this is why our homeland security and intelligence agencies are as important as the military. we have to play defense while going on the offense. these groups will likely try to strike back. at least, try to retaliate with counter propaganda. i would suspect we will see some more of these horrific videos, unfortunately, in the next couple of days, the beheadings and things like that. >> brian katulis, greatly appreciate it. >> brad hunter, your final

thoughts as we wrap up this hour with you. housing. we talked about housing, nevada. where are you most enthusiastic? >> atlanta has made a big , up 60%in the last year by our count. we're seeing a lot of activity in nashville. we did a ton of market studies last year. builders are adding communities in these areas. ,harlotte, north carolina especially the south carolina part of that market, is doing really well. we expect for them to increase and move out of the more peripheral locations. next brad hunter, thank you so much. our twitter question of the day -- tweet as. in the next hour, sarat sethi talking to us about equities. >> the dynamics we see in gold and foreign exchange.

euro-dollar punches 1.26 earlier this morning. week hydrocarbons, weaker as well. stay with us. ♪

>> this is "bloomberg

surveillance." >> the coalition expands. prime minister cameron calls parliament back to london. gold continues its descent. the only place to be is equities. the new york city skyline. it is starting to look like dubai. good morning, everyone. this is "bloomberg surveillance." i'm tom keene. joining me, scarlet fu and adam johnson. us as we host joins look at housing and the equity markets today. ecb president mario draghi says a rising euro has contributed to economic slowing in europe. we have several key economic data reports in the u.s. today.

service sector purchasing. kansas city fed. nike and micron earnings. withdent obama is meeting ethiopia and egypt today. vice president biden. ukraine's president poroshenko is speaking right now. >> let's do a quick data check. futures are flat. dow futures are up three. really watching gold. gold is the story today. nearing $1200. let's get to company news. has pulled an update for its new iphone operating system after it causes lost cellular service. it rolled out the latest version of its ios 8 system yesterday.

some customers say the iphone 6 plus will band if it is -- bend on.t is saatat france yields to its pilots. ford makes good on its pledge. it said it would hire 12,000 workers by 2015. hiring has topped 14,000 since 2011. added at itse kansas city plant most recently. >> away from the traffic jams in new york and the united nations, we need to look at syria. a conversation now. peter cook joins us from washington. the president has been on the road looking at the different options. what will be the options in washington? >> the president is coming back

here having set this more muscular foreign policy tone at this speech in new york and now he has an election coming up. he needs to go on the road for democrats. he will not be able to go on the road as much because he will be tied up with all of these foreign-policy issues. he still has to sell this to members of congress who are skeptical about the use of force. they want to be able to vote on it and give him the green light themselves. you will get a lot more focus on that vote in the lame-duck session of congress. >> as you look at the international relations of met -- america, what would you advise the president as best practices in the remaining week? week,hink this remaining he has got to do a better job of selling this to congress. onyou saw the vote last week the support for this. opposition, it was actually quite split and not along republican -- in support of this

syrian opposition, it was actually quite split and not along republican-democrat lines. he has to empower people in his own team, people like general john allen. they have to be able to actually move quickly and swiftly, quicker than we have seen this administration go. >> the relationship between the suits and ties and the pentagon is key right now. what is the president and white house need to do to let the pentagon know they have got their back? >> they have taken steps in the right direction. last week, president obama went down to central command down in tampa. you cannot run the set of the oval office or the west wing. this is a dynamic battle. there are actions that are probably going to be taken outside of iraq and syria.

thateed to have the forces have most contact with the region to be able to move with dexterity. >> one thing that would help with the united states could get turkey on board to the extent that they could use that air base in turkey to stage some of these airstrikes. it would make the military's life easier if turkey is on board to that extent. >> we are focused on airstrikes. that thecommented sunni countries are not likely to send forces on the ground. as president obama takes a much harder line here, what would happen were he to propose u.s. troops on the ground? whole would get a different conversation and they are not going there at this point i'm a at least not yet. not yet.nt, at least it is just a line in the sand right now.

it is not something a lot in this town want to see right now. they just don't see right now -- it making sense right now. i don't see it happening in the short term. get martin dempsey and other officers over in the pentagon suggesting to the president that they have special forces people on the ground, then that conversation is going to start to happen. i don't see that happening before the november election. >> i want to bring in our guest host for the hour. broaden this out a little bit for us. the weakness we saw an equities, the strength in the dollar. does this have to do with the uncertainty in syria and iraq? >> there is a lot of global uncertainty. russia-ukraine has settled down. capital flows to where it is most safest. the dollar gets stronger and

that has an effect on the macro. >> the dollar is the place to go. gold is clearly not. u.s. stocks? >> they will take a breather. we have had such a great run. people are coming back to safety. people are not sure what is going on the middle east. oil prices have still not reacted. >> is there a risk to oil supply? is not. historically, whenever we have had action in the middle east, oil has spiked. an emotional trade. the dollar gets stronger. all commodities are priced in u.s. dollars. >> it has to fall to maintain parity. --the turkish resident president will be meeting with vice president joe biden today. who was her most unreliable ally? is hard to say.

turkey has been playing it on both sides for the last couple of years because they wanted to see president assad removed in syria. they number of these radical jihadist elements. a number of these radical jihadist elements. talkingorces is a point. the reality is that we do have boots on the ground. the president ordered more troops into iraq. there are 1600 forces there. there is this fiction of noncombat. and iraq, there really is no noncombat. the second thing is that it would be foolish to think that even if we had tens of thousands of troops in iraq that we would make that much of a difference. inember the period back 2006-2007, we really could not control the civil war. we need to have a measured view on this.

the key thing is to get actors in the region to step up. >> to commit. that is a good point on the semantics. with joe biden meeting the turkish president, set us up for what the president will be doing today. >> another big day for the president in new york. he will meet with the prime minister of ethiopia. he has a prime minister -- private meeting with the president of egypt. 11:00, he is participating in ban ki-moon's big session on ebola. expect them to talk about what the u.s. has done and what the international community needs to do to deal with that crisis. >> thank you so much. we will continue. this focus on iran is not off the table. will the president meet with the leadership? takingpresident has been

heat from hardliners of iran. he has to deal with his own issues at home. >> will it be on the sidelines away from the cameras? >> does the alliance with so many sunni nations make it more difficult for iran? shop nears a coffee the jpmorgan library. they could meet there. >> don't tell anyone about it. no one is going to tweet anything. we have a lot more to come on this first hour. theng up, mixed signals for luxury apartment market in new york city. ♪

morning, everyone. "bloomberg surveillance." good morning from new york city. rain expected here today. adam johnson is with me. a medicated scarlet fu as mr. jeter faces one last game. >> that gatorade commercial made me cry. >> that was a wonderful commercial. anyway, in the stock market, worry is firmly in place. quiet.er brings a

it is a perfect time to worry. we need worry to go up. >> we absolutely do. sentiment is not very positive. i'veave investors saying, had a great run, i need to pull money out. the opportunities to find companies. within the market, there are sectors that are undervalued and will do well because it will not be based on expansion. it will be based on earnings and secular growth. >> within your long-term investment, what did you learn in the taper tantrum. what did you learn? happensirst thing that is companies that are momentum stocks will come back. valuation will come back.

tesla, netflix, amazon, facebook. if you have good underlying fundamentals and good secular topline growth, those of the companies you want to buy when those things happen. >> what is different between the small cap stumbling first is the taper tantrum? >> this is also an allocation play. the iwm is down 3% -- is down 3%. >> i'm talking about 2-3 years. people look at it is allocation. you will go back into value or you will cut back equity exposure because there is that imminent, well, rates are going to rise. you play defense because you do not want to be, and they do rise. -- want to be caught when they

do rise. where do you want to be? you want to be in companies that are going to grow. selective small caps are going to grow, but those are the ones that are going to get cut first. people will go to the procter & gamble's. >> thank you so much. coming up, the conversation with italian prime minister matteo renzi. draghi, on europe, and on syria. stay with us. ♪

>> good morning, everyone. "bloomberg surveillance." i'm tom keene. scarlet fu and adam johnson with me. right now, company news. here is scarlet fu. >> a solid stock market debut for citizens financial. shares were up 7%. unit raised $3 billion in its ipo earlier this week.

a company that was caught in the middle of the nfl domestic abuse scandal reports earnings today. nike's figures are expected after the bell. accusedeals with two players, ray rice and adrian peterson. nike weathered a storm a few years ago with tiger woods. a towing company scores a coup with girl toys. hasbro has score the rights for deals.or disney hasbro will be making the "frozen" toys. tom, "frozen." >> barbie "frozen." >> that is what this is. >> i think it is a required purchase. "frozen" still as hot as it was last year? >> yes.

age-specific. you are going to be going to the "frozen" this and the "frozen" that. >> we have not heard you sing "just say no" or "just give it up" or whatever it is called. >> "e." go." "let it scarlet, are you in there? it's 3 a.m. ♪ [laughter] in the luxury manhattan midtown apartment complex. have they priced it too high? is it out of range now?

the issue.really it is less about the demand side. it is the supply-side. they were very aggressive in pricing. i think they simply overshot the market. there have only been a handful of sales over the last year. >> i much pricing power does the developer have at the end? is that youegy priced at market initially and then you ramp up the price quickly if you were the only game in town. that is essentially what they did. it is common to see many price increases initially to foster urgency by the buyers with all the competition. that urgency is gone. >> there were four or six towers going up. how at risk are these developers? scarlet mentions the big hitters.

, doing a layup for them this construction? or do they accrue financial risk? >> it was risky two years ago. they are seeking out global demand. international investors are looking for these properties. they are really addressing the top 1% of the market. it is a narrow slice. this is the only property that can be built on manhattan. if you do the math, they have to sell at record prices to be able to build. >> what are the chinese doing right now? >> they're one of the most active investors in our market. they are near the top. europeans are dominating. the chinese are definitely very act of. >> and new penthouse goes on the market. $130 million. no apartment has ever gone for that much. what is the point of that? >> first of all, it is making a

statement. it gets a lot of eyeballs on the project. it is a big roger. -- project. it is about 30% below the record. >> now you sound like a broker. [laughter] >> you are supposed to be objective. >> i am. the highest priced sale was a couple of years ago. it was $13,000 per foot. the thing feels like the international market. people willve that want to go to these properties, to be in the bars? or is this all about foreign people coming through jfk to spend time in new york? clarify, i think that the implication is that foreign buyer is the only buyer is greatly exaggerated.

some projects have more of that than others. we have seen other booms in the midtown central business district. we had one in the 1980's. it is logical for someone coming in for a few weekends or a year and sharing an apartment with family to be in the thick of things. >> what is the fear of the potential luxury tax? >> there is a lot of concern. the biggest fear is that it is not defined. there is this big unknown hanging out there. londona similar thing in with the stamp duty that was levied on transactions initially over 2 million pounds. that effectively slow down the market dramatically. it is a concern. the new york plan, they are looking at it as being an annual tax rather than a one-time tax that purchase. >> that certainly changes the

calculus for a lot of investors. might haveo tim cook spoken too soon, calling for new iphone launch the best ever. now we find out the thing bends. we will discuss in a moment. ♪

>> this is "bloomberg surveillance." i'm scarlet fu with tom keene and adam johnson. >> the latest airstrikes against islamic state target its primary money source. bombedd allied warplanes oil refineries. newtown andoting in 2010 was part of a wider trend. than 16 such more

incidents between 2007 at 2013. that is an increase of 10 annually. mass shootings in the u.s. have killed 486 people in the past 15 years. china's import-export sector is riddled with fraud. 16t is in the finding of a month government investigation. china's currency regulator says the use of phony documents is widespread. i'm not sure that is necessarily new news. you think of the words of muddy waters. head of the central bank may step down. you wonder the integrity of the structures. >> as we watch alibaba, too. >> it is frightening. it is stunning. >> talking about taking a dive in china or rather in italy.

unemployment is up to 12.5%. that is job number one for the prime minister matteo renzi. he was speaking with erik schatzker yesterday. this was a rare an awesome opportunity to find out what is happening in italy. >> without question an honor to be able to talk to prime minister renzi. in italy isuo unacceptable. that is why matteo renzi has brought his message of reform and change to the u.n. general assembly this week. invest in a to strategy, invest in a radical revolution in my country. i obtained 41% in austin elections. -- in the last elections. i will use all the consensus to change my country.

i am not a man who will spend a lot of words about the future. i began with a radical revolution of labor markets, of public administration, to change investment in the future. i will use the 41% to change the country and if i'm not able to change my country, i'm not able to continue with a political life. >> he is putting it in existential terms. this is a must for italy and for matteo renzi. or he needs to start, the labor market. it is just too difficult to fire people in italy. he needs the congress to work with him. he needs the unions to give way so that he can make that progress.

the moral authority it would give him to go to the european union and say, give me a little flexibility. >> he used the word radical three times. he is talking big-time change. he believes that. >> france also has a lot of work to do. mario draghi promised to do whatever it takes. there was always that implicit idea that the ecb would come in and help spain. spain has made some movement. >> renzi puts it in terms that we have discussed many times here. structural reform. there are three legs to progress. monetary stimulus. governments need to follow through with structural reform. that is the situation in japan. it is the same situation throughout europe. we have a number of different companies that must undertake those steps on the run. it'd clean has been talking a good game for 20 years and has been doing nothing.

unemployment, 12.6%. youth unemployment, 43%. >> erik schatzker with the prime minister of italy. a quick data check. futures are relatively flat. you can see crude is only up a quarter. >> this is "bloomberg surveillance." streaming on your tablet, your smart phone, and bloomberg.com. i'm scarlet fu with tom keene and adam johnson. adam has our top headlines. of the boston marathon bombing suspect will stay in massachusetts. lawyers for the suspect say that a fair jury could not be found there. the judge did agree that the trial will be delayed until january. the wildfire threatening thousands of california homes has cost of the state $50 million. the flames have spread into nevada.

speculation about the retirement of the china central bank governor, a champion of shifting the world's second-largest economy toward greater reliance on markets, that will be focusing attention on potential successors. >> the president will return to washington today. prime minister david cameron will return to london. he recalls parliament to vote on joining the u.s.-arab coalition. helped us so much on the scotland vote. he joins us from the united kingdom. how will prime minister cameron be greeted by the tories? how will he be greeted by labor? a lot of the tories have been supportive of the idea of taking action for some time. the debate in the u.k. is quite

nuanced now. there is a tory tradition of military action. there is another tory tradition of isolationism, much as you have within the u.s. mps whoe conservative will be voting against military this isecause they say a faraway problem. that is slightly less true now that isis have killed one british hostage and have another british hostage. a you can national interest case to be made. interest caseal to be made. that is the thing that has swung the labour party. againstthey voted action in syria. --sibly

>> we all raise remember the -- always remember the gift that lord north gave us in the colonies. i always have to go back to prime minister blair. iraq -- inories and iraq in support of david today?'s actions >> i don't think it is. i think most of the people who were thinking about tony blair on the labor side feel that this is an argument not to be made. their view is that we have been down this road before and it did not go terribly well. that is the reason why the labour party was so reluctant to intervene in syria last year. , think the interesting thing the promises to be made on both sides, the labour party leadership said they will support action.

no boots on the ground, very limited action, airstrikes only. limiting it to action in iraq and not serious. -- syria. iraq has requested action, which makes the legality quite straightforward. syria, in the british mind, is a trickier case. >> thank you so much. this really goes back to long-term relationships and fractious relationships. i think of the united kingdom and the united arab emirates. there is an interesting, complex relationship. >> i like the fact that you brought up tony blair. david cameron has to tread a careful line here trying to put some difference between himself and tony blair. it was blair said that supporting the u.s. little camilla milley cost him his position as prime minister --

that ultimately cost him his position as prime minister. >> what is a better buy, housing or stocks? ♪

>> good morning, everyone.

rain, clouds, missed. -- mist. jeter will put on the pinstripes for the final time. are we, 80% likelihood of rain? >> i think it is almost 100%. >> we will get to the storied career in just a moment. mr. jeter playing his final game at yankee stadium tonight. this will receive full coverage. " anty liu in the loop entire two hours on derek jeter. [laughter] >> the captain is retiring this year. are you yankees fans? >> are you kidding? >> there are just no pinstripes. [laughter] >> he is hopefully going to play his last home game tonight, weather permitting.

this is what i found so interesting. how important he is to the game of baseball, but to companies. his endorsements have been huge. he follows and michael jordan's footsteps. this is what is really interesting. he falls far behind other star what he rakes in for endorsements. him makes about $9 million per year. lebron james makes weimar at 40 million -- way more at $40 million. tiger woods, $33 million. guys? >> what is derek jeter doing wrong? >> it is more the idea that not isl is surprisingly global and attraction of some of these basketball and golf stars. basketball deals

that have been put together. forgive me for not knowing the names. >> $20 million, $30 million per year. are you going to head to the stadium tonight? >> i'm going to watch the game tonight with one of my sons. i took a pass. >> why? >> i have been to many games. the yankees are very lackluster this year. >> they were eliminated from the playoffs last night. people hate going into the stadiums. they like watching sports on tv. >> the odds are it is going to be late into the night. put the question to the mlb commissioner about trying to speed up the game? >> the rules are in place. was the chief operating officer of the red sox. the rules are in place.

they are at a massive tipping point right now with the youth of america. they are really aware of that. >> in a world of 140 characters. >> hockey is killing them. >> it is a four hour game with lots of interruptions. betty liu, thank you very much. .titans at the table" tonight that is coming up on bloomberg television tonight. ♪

is "bloomberg surveillance." i'm scarlet fu with tom keene and adam johnson. time for some company news from the files of "bloomberg --t pico samsung getting it "bloomberg west." samsung getting a jump on apple in china. device willreen arrive on friday in china following a release. leadsman sachs led group -- nears a deal to buy perzo.

blackberry is back with a new phone. a little bit of attitude to go with it. it introduced its passport device for business customers yesterday. ceo john chen could not use an operant -- missed an opportunity to take a shot at apple. >> it is extremely well built. it is somewhat of a challenge. but you have to do it the same way. you have to put it in your pocket and see whether it bends or not. i would doubt it. >> it is the first major new device. >> don't drop it on your foot. scarlet has it right now. scarlet fu was holding the passport in his hand. it feels the weight of a brick. >> it is heavy and it is this weird square shape. >> i will hold up my iphone 5 next to the blackberry. >> it is a weight thing.

don't bend it. >> i think erik schatzker has an iphone from somebody. [laughter] >> this is about innovation. whenyou run a portfolio, you own apple, you want to be with the first mover. >> they had a great first week of sales. pr is negative. pr is pr. people are talking about apple again. the six?be looking at incredibleuilt this ecosystem, whether your ipad, your mac, your phone. everything is on the same software. >> they generate that historic cash. are you worried about unit dynamics or the price dynamics? >> $700? if the gross margin starts

coming down and that starts decreasing, the stock will sell off no matter how much cash you have. the long-term effect of selling a commodity. it happened to motorola and to blackberry. you can still have an ecosystem, but it is all about volume and not about margin. it is going to be a cash-rich company with a low margin. >> i make the joke about partial deferred nation september -- differentiation september. nobody doesn't like apple. >> apple has proven it does not want to give up on margin. you use mobile devices. would you use a 6 plus? >> i have one on the way. i ordered it online. i did not want to wait in the long lines around the block at every apple store. >> what about the bending problem? >> i don't really care about that.

i keep it in my jacket or shirt pocket. >> here is street easy. this is an apt. -- app. it is like zillow. there it is. there it is on the iphone. this toy has changed john miller's world. >> absolutely. i'm a big fan of toys, especially when the make my life easier. i do a lot of research on the road. replacingecessarily the broker and forcing the broker to charge lower commissions because you don't need a broker to look at the place. you look at your ipad. >> i think that is a dead argument. you definitely see a need for brokers. there are more psychologists now or financial advisors. the gatekeepers of information. the consumer has everything at their fingertips.

they know as much as the brokers do. they still need him. >> this idea of equities. you on real estate. what is the advantage you have now versus those investing in real estate? >> it is an allocation issue. we like real estate. you can get real estate with equities, you can get real estate on the side. we like apartment rates. we think it is a great inflation catch. especially as rates go up, rents go up. people are not buying as much. it is harder to get a mortgage. so you can buy companies like avalon bay and participate in the real estate sector and own direct real estate. >> you talk about housing. .ll the fees, all the taxes does the calculus of housing compete with what we have seen in the great bull market? >> one of the drivers of real estate has been a conversion to the financial market. you have people seeking out hard assets. >> is that a good investment

versus the reality that you calculate to three decimals? >> it appears to be. the problem is that real estate come a we just came out of a stock oriented real estate market where people viewed real estate incorrectly. now we are looking at it as a long-term play rather than a short-term play and that got us into trouble. >> i agree. i think you have to look at stocks that way. that is the issue that most traders look at and say, look at it over five or 10 years. you guys were doing this a couple of years ago. just look at the s&p index versus the hedge funds. the hedge funds were half as much. , treats docaying says if it was real estate where you can't get in and out of it. >> look at it based on allocation and valuation and entry points. the dollar cost averages. when you get in at one period of time, look at any period him a you do much better than sitting

in short-term treasuries or cash. >> this is great for our twitter question of the day. what is a smarter by right now, housing or stocks? the first answer. if you need shelter and a place to sleep, buy a house. >> you don't agree with that, do you? >> i don't. i think the investment side is overblown and misrepresented. if you look at dr. schiller. he did a 120 year chart tracking the price indexes. basically housing tracts with inflation. >> hang on. if you adjust for inflation and the cost of maintaining your home of the real return is about 0.8% per year. 60%-80%,ality is that people buy with leverage. it. is how you calculate >> this is critical. real estate is successful

because of that ultimate mortgage leverage. >> that is a huge reason why we are seeing the returns. >> and the ability of the sticking to paying your mortgage through downturns. >> we have an answer for john miller's can't. -- camp. stocks offering better returns and easier to get out of when the tide turns. >> you say the tide is not turning. >> we are long. the next 3-5 years, we will have fits and starts. >> does housing have a correction? >> i don't think so. >> not a big one. >> i think we are hyper focused on the superluxury market. the challenge facing housing right now is that we don't have normalized credit. from at have access historical perspective. the elder element -- other element is that it really is long-term. >> how is staten island doing?

we'll talk about 57th street. staten island? >> post superstorm sandy, sales activity was very low. is actually up fairly sharply from the lows after the storm to the point where they would have been if the storm never happened. >> let's get a final answer. it depends. if you want massive losses quickly, stocks are better. if you want losses that will return, housing is better. >> that is terrible. >> you don't go home every day and say, how does my -- how much is my house worth? a stock checker. it is a slow, inefficient transition with multiple parties working together. [laughter] >> are thanks to our guest hosts

for the hour. great discussion on the merits of housing versus equities. "bloomberg surveillance" continues on radio. in the loop" is up next. ♪

>> good morning. it is thursday, september 25. we are live. you are "in the loop." we have a great show.

apple had a rough day yesterday. 8 operatinge ios system. of the firstas one to highlight the fault in apple's operating system. he will join me in the next hour. tonight.er's last game the captain place tonight for his final home game. if it does not get rained out. willof nike earnings, we discuss how the largest sporting goods maker has benefited from the jeter brand. what a branded has been over the last few decades. here is a look at our top headlines. the u.s. and its arab allies have bombed islamic state oil refineries in syria. it is estimated that islamic state takes in up to $2 million per day from the illegal trade of oil. with phone companies on three continents may make a