of baghdad. growth leads to sharp disagreement between the e.c.b. and germany. and here's a partial score. icahn over -- good morning, everyone. this is "bloomberg surveillance." we're live from our world headquarters in new york, it's friday, october 10. i'm tom keene. joining me olveya sterns and adam johnson and we need more. here's oliver sacks. draghi is resident in washington and pledging to ease monetary policy more if needed. the other hand the german prime minister schaeuble is at odds with him. >> there are some parallels here for europe.

we're also engaged in reform and recovery. in fact, we face the offense concern to that express. without reform there can be no recovery. in saying this, i must say the reform is better achieved in good times. i do not, however, find this argument particularly compelling. >> president obama is considering whether or not to close the prison camp at guantanamo bay in cuba. to do that he would have to override congressional octoberives and there's about 150 inmates contained and president obama pledged to close the guantanamo bay if a i will isty and john mccain has a message for turkey. you need to do more in the fight against the islamic state. a id have credit to create

buffer zone on the border of syria. >> what they want is what i want which is a buffer zone and no fly zone so i agree with the turks in that if you really want to change this momentum you have to have a buffer zone and no fly zone and that has been rejected by this president. >> mccain says eventually ground forces will have to be used because there is no other way to fight it. and the nobel peace prize has been awarded to two children's activists from pakistan and india. kailash satyarthi was sited for her peaceful protest against the exploitation of children and the other, malala yousafzai the 17-year-old pakistani girl who two years ago was shot in he head by the taliban and now fights for the educational rights of children and women. and the new version of the expeerya phones. sony has just 3% of the global

smartphone market. >> thank you, olivia. a check of bonds, currencies, commodities, we do that within the new volatility. and deteriorating negative seven we're now negative nine. the 10-year yield has come in 2.30. a huge deal. just from 5:30 this morning new york time, the euro churns and hydro car buttons are jaw-dropping. nymex crude down to 84.66, a 79 print there would be of global consequences. we go up to 18.76. today the two-year yield points to .4359. brent crude oil was certainly the headline and vladimir putin needs two tylenol this morning with the ruble. let's go to the mac monitor

find out why draghi and others are upset. >> the u.s. two-year yield, a negative yield in germany. you pay germany. here's the two-year yield. here we are coming in. but this is an elegant chart. we go along this average perfectly. it's a contained market. it's trying to get it going to some optimism but just can't get it going. investment officer of blackrock said as long as as the fed is able to anchor the 10-year. >> that will be something interesting to see as we go through this morning. let's begin this conversation on the markets. you witnessed it yesterday and let's also try to get my bow tie straight today, olivia? >> a little wobbley. >> maybe refill the punch bowl.

adam and i both have it today. it's friday. show some budget taxpayer discipline. just do something as markets gyrate and yields crater, do something. economists have seen this before in 1932 and the professor of "do something" at dartmouth is aclaimed for his classic wage curve. he does not like austerity and he joins us this morning as well. richard farley with us as well. we will talk. >> he has a practice in do something? >> yes. >> if you go back to the early 1930's the original quantitative easing was when roosevelt bought gold and it was like the assistant secretary of the treasury resigned and they brought in an unknown. >> there's a debate we see your work with the bank of england swharible. hi and

>> the mood music is moving towards investment spending. larry has joined the fight saying infrastructure spending is a free lunch. >> it's the free lunch no one can seem to get going. there's the desire to do it but not the will power. >> how do you get the congress to agree on anything? remember they had it tied to tax presm and the tax break to recreate the the money was going to recreate that. >> professor, you have been world class out front. on austerity on slow g.d.p. what else, olivia? >> the labor markets. >> yes. >> and wage inflation and dartmouth hockey. >> do something, do something. >> harvard does that. dartmouth doesn't. but seriously, what is the urgency right now? or are we going to get more yes, ma'amering? >> well, the fiscal policy is

still pushing down on growth and monetary policy is struggling. and europe is a really big problem. we have deflation. 10 countries are in deflation. so unless we do something in europe, i think contagion is really gaining strength. so look at the europe area as a big problem. and i think it's a really big problem, but we have been saying this for six years now. >> so what is going to change? draghi's speech was recovery versus reform. >> the way i characterize it. when i was at the bank of england we started to cut rates in october of 2008 2008 and realized you had to do qe and did it in about six months. six years in the e.c.b. still hasn't worked it out. it says something about the structure of that bank. a, how to do it let alone whether or not they should do it. >> or whether or not they have the way to do it.

>> but you've had six years to prepare for this day. there's no excuse to say we don't know how. >> is that the problem with a fractured banking system? >> well, the ability of the e.c.b. to respond to things quickly, you can't get enough translaters in the right place. so i think it's just an indicator of look at the markets. you have a firm that's flexible and one that isn't. that's what we're seeing. >> is it true americans watching this. we look at peting after meeting after meeting in europe and we're just waiting for that do something. within your reading of economic history, what will be the catalyst to get something going in europe? >> well, i think the catalyst we're starting to see now is what actually happens to germany? we've seen this very troubling day of exports and prediction. i think germany is really the catalyst.

>> are they in recession? >> looks to me that they are close to it. >> is that because of russia? >> partly because of russia but also because of what's happening to the countries around it that have been killed by this austerity. so we have overly -- monetary policy. >> and the question for olivia. the social maven you were in london, what is the knock effect on london right now? russia with a ruble well out over 40, what are you hearing? >> property prices in may fair in bell graveya are perhaps finally coming down a little bit. >> looks like they have turned. >> where's may fair? >> the fanciest part of london. lings 70th and fifth it's where all the foreign ole guards live. it's the $100 million-pound town homes, the top end of the market. >> so do they have a wood-burning fire place? >> at least a dozen. >> monetary policy is one size fits all.

london has a booming housing market and nowhere else in the country does and they don't know what to do about it. >> richard, with all this talk about weakening in europe, your wheelhouse is helping companies fund lbo's. is this emanating with the boom we've seen over the past few months? >> if the interest rates say stay low, that's a positive. if equity comes down that's -- if you look at this. it really is neutral/positive to lbo activity. >> neutral to positive? >> yes. >> even in what appears to be a melting europe? >> well, as equity comes down that's -- that is -- the regulatory issues on leverage have been the two, the goldman report from two weeks ago laid it out effectively. >> adam, you nailed this 20

minutes ago. let me do a redata check you will see this across bloomberg television all this morning and into the trading afternoon that the vicks at 18 and future is now negative 12. negative 12 on futures and a 2.2910-year. stay with us worldwide. "bloomberg surveillance" with our next hour coming up.

>> coming up in the next hour of "bloomberg surveillance," the author of "give and take" is the youngest tenured professor. we will continue our -- adam grant at the wharton school of business.

we would love to hear your thoughts. tweet us at "bloomberg surveillance." >> i'm olivia sterns here with tom keene and adam johnson. >> carl icahn is going after apple yet again in an open letter to tim cook he argues that apple should trade at $300. >> another letter coming this morning. he still wants more money. imagine that. 2, the went to $30 g.d.p. of argentinea but he forges on. >> what a good plan. >> ok. i tell you what, let's have a little bit of fun with this. this is carl icahn speaking with trish regan yesterday on bloomberg. >> we have a very good relationship. he obviously can't tell me things he can't tell the other shareholders. but yes, i do think he is a very great listener, and look, i just -- you know, i have

criticized many c.e.o.'s and boards and i do believe one of e problems of the country is you have a problem with the system and but there's good c.e.o.'s and he's one of them. >> i understand he wants more money sand trying to manipulate mr. cook of trying to do that. but does he run the risk of manipulating markets with this? >> i'm looking at this live and i don't see how sending an activist and sending a letter as activists do is a manipulation. >> wishful thinking, right? i'd like my holdings to get higher, so i'm going to go out and buy stock and get in a bully pulpit and try to get him to do something? >> and the real issue is the bully pulpit to use television

and one way so get a pushback. this is a matt lavin, absolutely brilliant if you're in global wall street it's must-read. the market will move faster than apple and the market doesn't have to hold board meetings or consult its lawyers so by the time it acts on this, it disappears. the most interesting thing in his essay, adam, is the letter should have been private. he should have just sent it to mr. cook. >> also to blanchflower's point. >> shannon cross says look the market prices are puffy. at 101. she is at $163 in x number of years. so this is -- >> his view is that it's an ecosystem. so he said it's not as if you

own a buick one day and you're going to want to buy a chrysler. >> this is animal spirits. this is about animal spirit. >> how come you bring canes into everything? we need shark to paint the iconic picture here. apple, this is non-log just a regular old chart and up it goes, professor blanchflower, and up there in the stratosphere somewhere is a target that's $203, right? >> that's where he would like to see it go and currently apple is trading at 16 times earnings and earnings are growing at 12%. >> this comes back to corporate governance and that the board has already established a growth policy and they are going to buy back some shares so do thy need to do one thing to -- >> i think the law says no. the board has wide discretion to enact its corporate policy

and take whatever actions they feel are in the best interest of the shareholders. so they are under no fiduciary obligations to act otherwise. >> fund managers are going to be with it and all the big money managers should be buying it up? >> yes. matt lavin. brilliant. really like it should be an essay in the sea of -- it nails the prisoners delemya. >> the crucial thing is the talk it didn't seem to respond. perhaps they bought a line of it but they didn't believe a word of it. >> well, it works for the first few lines. >> away from the innovation of the shareholder activism, coming up an interview with elon music the chairman of a small car company, tesla. look for that "in the loop" elon music trotting out.

elon musk. $75,000. >> bargain for tesla. ♪

>> good morning, everyone. bloomberg, "surveillance." the i.m.f. world bank meetings continue. a lot going on there particularly with attention on the markets which are on the improve. we'll keep you abreast of that

all throughout "surveillance" this morning. olivia stern and adam johnson with us this morning. let's get to our morning must-read. the president has been busy. >> blogging. medium is the site for the twitter cofounder he wrote an op-ed on medium. it's a tribute to the new american economy and directed right to millennials. he said this new economy driven by highly -- higher-wage workers, technologies that didn't exist 20 years ago support millions of jobs today. it's a controversial idea because a lot of the labor economists we have been having on the show say technology is disrupting the economy and displacing jobs. >> so replacing workers at ford. >> and from dartmouth college,

to olivia's point. you say it's supposed to demrip over to a benefit. can you give us a month and year when that happen seasons? >> no. >> it's that hard? >> it's that hard. it will take a considerable time to borrow a phrase. >> to borrow a phrase. i mean, we're seeing absolutely no improvement in labor share. we're seeing no evidence of wage growth anywhere around the world, period. none. >> one of the real trouble spots with the labor economy is the underemployment rate. do you think advancements in technology has been driving that? >> no. i think it's a lack of de3457bd. standard canes and response people are struggling with their wages. they don't -- to stick with the job they are in but would like more hours. >> so it means i would like more hours because my pay is so low. if there were more demands from

firms that would go away. it's simple. >> and by the way all the low rates in the world won't necessarily stism late people buy stuff. >> absolutely. because my view is well known. monetary policy is having to fight with fiscal policy around the world, especially in europe. both of them are actually pushing down on demand. no evidence anywhere of pressure for wages. none. >> there's certainly a lot of pressure in europe. this thing is a brick. peggy noonan. pick that up. like any of us have time to read that. peggy noonan in the "wall street journal" going after him saying is worthy fights really worthy? answering a problem of which? mindless be partisanship. in pennetta's book you mostly

see spleen. >> you really have a a soft spot for peggy noonan. >> remember, she was ronald regan's speech writer, and i certainly have a soft spot in my heart for ronald regan. >> setting himself up to serve secretary clinton if she should win the election. >> perhaps that's an argument. on the show last week he wasn't so sure because he said mr. pennetta is -- >> ok. might sell books. coming up in our next hour. vincent rinehart of morgan stanley. ♪

>> good morning, everyone. "bloomberg surveillance." i'm going to do a quick data check. down futures negative 102 off the carnage of negative 300. we're watching. oil really front and center moving, nymex continues. let's get to top headlines this morning. here's adam johnson. >> well, the winners of the 2014 nobel peace prize. the award will be shared by malala yousafzai of pakistan and kailash satyarthi of india. they were cited by the

norwegian nobel company for the work they did on the .uppression of young children dairy queen says the data card company they used has been compromised and the breech admit i'm not sure why anyone would leave visa card on file at dairy queen, but we do have a diabetes crisis in this country. of ow accusing the u.s. illegally hash terms against aig. and ben bernanke said they were trying to bail them out without having them reap a windfall.

>> what stunned me yesterday richard was chairman bernanke testifying that there was no basis sis for determining the 14% interest rate on aig and that was the crux of the complaint. >> well this is -- going to what we were discussing earlier. walter badge et. what would he think of all this? >> goodness, me. we've been here before. i think is what they would think. >> and i got a wonderful note yesterday from a viewer and listener. on this. we see bernanke and paulson and geithner on the stand. as an attorney is that appropriate to drag ancient history out and put them up on the stand? obviously mr. greenberg deserves a day in court. >> well, the federal court claims that used to having senior officials come in and testify. that's not unusual. >> very good.

what are we going to learn from these people? does ben bernanke talk his book? i mean, is it like perry mason or is it like -- >> well, he did sort of drop a bombshell on the stand, yesterday, didn't he? a 'liveya, perry mason was television show, may be on netflix. >> well that's a compliment because -- >> what? there is talk that with the nobel peace prize on monday he could win? >> that's possible for him to be a contender. >> still didn't get nominated. but could you imagine? punt until monday when you're on the stand. >> we don't have time to get to monday. david blanch flouffer and john pharaoh has given us terrific

perspective from london. how are the london markets taking the squabble between mr. draghi and mr. schaeuble of germany? >> not well. al markets not taking it well at all on the realization of bad news is bad news. when we talk about the squabble between wolfgang schaeuble and mario draghi, i think they are speaking from the same sheet. getting reform through the likes of italy and they want to see an effort. it's not happening and the question mark of the e.c.b. to stimulate this economy is also at the forefront. >> what are we looking for through the weekend? are we looking for comments to stabilize the markets? what will we search for as we try to get to monday? >> i don't think the i.m.f. is going to stabilize the markets. the only people with the ability to stabilize the market

within europe is one, the european central bank and two, german politicians. the e.c.b. have already indicated they are getting close to the end of the road. as for german politicians and the government, what is it going to take for them to change course? will it be a recession? is that a catalyst for a change in approach? you've got blanchflower next to you, why would a government on the brink of recession be balancing the books? >> good question. >> well, you see the fiscal policy there. thank you. greatly appreciate that. on the fiscal policy of germany, do they have to do infrastructure and create deficit? well, the message i have is lagarde, blanchard, lenten and others are really going down the road of infrastructure spending that you have to do something. but there's a need to impact the other side.

the s takin' them -- worry is what is the catalyst? >> is the catalyst bank failure in europe? >> we were talking about this. i've got an under -- .88% german and the banks don't survive on that, do they? >> the banks don't survive on that. in my mind italy is the front and center. >> why is that? >> well, what does it do? big country, huge levels of unemployment. the banks are in trouble so i don't know what alternative they have other 2457b leaving. >> the labor reformings they passed this week making it a little easier to fire people. >> the evidence is reforming the labor market has nothing to do with anything. it's about reforming the product market and trying to get demand up. y0 give labor more flexibility. great. i think it's hard to see. we should be seeing movement upwards in fiscal policy.

>> so they need to spend more? >> when you say germany has to do something, define it. >> well germany is going to have to increase spending and go down the infrastructure road. >> schaeuble doesn't want to do it. >> well, they should have done it yesterday and six years ago yesterday so the worry is how does europe survive unless -- >> so what is it going to take to get schaeuble to change his tune? >> well. >> my experience is the bank system. i would look toward the financial -- >> how about the german bank? that's precisely right. you go down from the deutsche banks, too big to fail. like lloyd's and rbs is a different group. >> there have been bank rescues. they have not hit the headlines because e.c.b. has stepped in. i think the unintended bank failure is the problem and

tom's right. something happens too quickly to stop. >> in observing all this it's like all these years and we're still talking about banks yet it's people on main street that are hurting. >> the u.s. cleared the system not perfectly, imperfectly with this litigation. futures, olivia negative 11 and negative 12. >> still a lot to come. next on "surveillance" more students are trying to expand their options why applying to multiple schools. this is "bloomberg surveillance." ♪

>> it is ooh non-volatile view. on this perfect friday morning. it has been a beautiful autumn here so far in new york city. we welcome all of you worldwide to new york city and "bloomberg surveillance." let's get to our single best chart on the pain and agony of tuition. tuition. here's olivia. >> the bottom line tom is students are price shopping. the today's single best price is students are applying to a record number of schools but

it's creating a big headache for the colleges and universities. the bars show the number of college applications that students are filing. this matters because the entire u.s. hiring education sector is facing tremendous challenging. so the number of students that applied to five or more colleges is picking up significantly. >> that's 70%. this is because of computers, right? adam, when you and i did this we had a quill. we had to dip the quill in ink. i really want to go to your school. paper on a mainframe. >> i can remember doing it on cards. >> what are you seeing at dartmouth in terms of the freshmen coming in. what's the new trend? >> the new trend actually is to

go to three majors. i call them prewealth, prelaw and premed. the economics department that i'm in as the same number of majors as the entire human taxpayers division. >> have you read this new book? >> if you're paying $65,000 a year you're going to maximize the rate of return. prewealth, prelaw and premed. >> but premed is not prewealth. >> but at the same time it's -- why is his place boosming and your place isn't? >> well, because corporate america and corporate worldwide has decided to become very bottom-line driven in terms of legal services. >> with that and the micro economics of the billing of law. do the law schools need to become more rigorous? i mean, how do they make a proposition to getting a law degree? >> i think the markets have to

work its wonders. if you have graduates not getting jobs -- >> interesting to think of lawyers as overhead rather than as a profit center. that's exactly your point. >> what's the acceptance rate at dartmouth? 25 years, i can't remember anything from 25 years ago. >> one in 14. >> that's you have to get in. >> it's a dartmouth bubble. let's go to our twitter question. is technology creating or destroying jobs? in the legal business is technology creating or destroying jobs? >> well, it certainly made it more efficient and it's made us expected to be and in fact available 24/7. if you've got a hand held device you're expected to have it on. people can reach you at all

times. used to be when i waa young lawyer when you have got a markup of -- you would have a day or two to turn it around and then you would send it by federal express to people who didn't have a fax and you would fax and get a period of time to sort of not worry about that document. these days you send it by an email. it's marked automatically and you will get a return in 20 minutes. >> when i first started to do consulting in london the guy on the motor bike would come around and you would hand it to him and he would shoot off. > we used to have closings where people actually showed up. >> yes. and the lecture notes in a red, leather brief case? >> it's a british thing. >> still keep the quill. >> higher in overnight staff the w it's down to

fundamental change. >> do you need fewer people in the launch to get the same job done? >> i think that's probably right as far as ancillary services. >> lawyers do more in terms of, you know, their own processing, their own -- again, they are just not going to pay for it. it's not what makes your life easier it's about what reduces the cost to the client and it poses an ongoing and continuous struggle. >> coming up on bloomberg television this afternoon with all due respect our new multitalented, multifaceted take on politics. ♪

>> good morning, everyone. "bloomberg surveillance." in the next hour our chief washington correspondent. peter cook our conversation with timothy adams from the international institute of finance. they will discuss the fragile european banks in our next hour and on bloomberg radio and television.

right now our company news is strong. from the files of bloomberg west. here's olivia sterns. >> uncomfortably walking back after a comment about women and pay raises. he told people at his tech conference that women should put their faith in the system and not ask for raises and later amended his statement that said women who think they deserve a raise should just ask for one. >> and "the new york times" says the company has received an f from the organization. the lowest possible rating. the grade is based on more than 90 customer complaints over the last three years. most are about the surge proprietorsing. and amazon ambulance a brick-and-mortar building here in new york city. that's according to the "wall street journal" and it might be motivated by a simple fact. most shopping still happens in stores. tom, that is the latest company news from the files of bloomberg west.

but while we are on the subject of amazon. interesting question facing the supreme court this week. the question is are workers the new coal miners. that's what the justices are looking at. they said miners should be paid for the time it takes to travel up and down the mine shaft but now they are saying they should be paid for the time it takes to go through security. so the question is whether or not your time should be paid for the time you're on the premises. richard, this is your field. bag in the 1940's the government was on the side of the miners, but the obama administration is siding with amazon. what's the argument? >> well, i don't know too much about the case. but i think it is the analogy sounds reasonably apt. and we will have to see. the supreme court is going to

hand down a decision and we will all eagerly await it. >> let's get back to what is more in your wheelhouse. what about the case david is making? >> it's a little outside of my -- >> ok. no. it's important to identify the skill sets that are involved here. i want to go on to friday, i know you're going to join us at the top of the next hour as well. i would suggest to all of our viewers that they are in shock over their lives or what they perceive to be a broad part of america's lives. if we have two americas as john edwards coined, what is the path on that in the election debate? is it going to be different than 2008 or 2004? i mean, is there something new this time to the debate of two americas? >> i think it's about standards of living. people understood when we went into the deep crisis that

everybody was in it together. it seems to me relative things really matter. the median votes and the median wager is still struggling and they still see some groups as doing quite well. i think that is going to be the big question. you can say, ha ha, we can do much better than you. but we've already had a round of that. and in the u.k. >> at heart the issue is, is plutocracy? i mean olivia lives it every weekend atburg dorff goodman, right? >> no. >> but there's a struggle here. >> there's an absolute struggle. share with everyone what you told me during the break about increased productivity. >> one of the things we have to deal with is we've seen a rise in inequality in every

occupation but the reason for it is if you think of the productivity distribution, the productivity distribution has become more unequal and pay reflects more of that. so the top 99th% i'll person -- >> so technology has left people at the top making more and so -- >> in a sense any move to deal with that has to effectively fight against this productivity chase and our issue for society. somehow or another you have to get productivity up and then pay will go up. >> how do you do that? >> this is the story about we have to improv investment and spend now, if you like spend our debt on investment rather than consumption. >> it's more so today than it's ever been. >> but if you go back to when the internal combustion engine 257bd farm track -- in the

1920's. you had massive unemployment during the otherwise -- in the farms in the country and that again became a major factory in terms of the banking crisis and that was totally technology driven. >> but that was particularly in manufacturing in those days. my view is it's completely across the whole of the -- >> but we had a massive internal migration from the south and the west and principally for the war and economy but it takes time for that labor, and that's your area. >> it takes time. what are we waiting for? the politicians don't have the luxury of time. they have got to get real. >> well, look back at where we are. the fed is still doing quantitative easing which is what they started at the end of 2008. so we're nowhere near the normal. so when we say we have become impatient. the fed is still holding up the

system. >> but the other side by keeping rates low is it actually creating inefficiencies in the system? >> no. it's creating, it's raising risk levels and doing disstorgses but the alternatives are all worth it. >> but there's a disconnect in the system. we stay there's a disconnect but is there? how many of the congressional seats are competitive? maybe 8% and how many senate seats are? and the popularity of congress is lower than miley cyrus and about equal with serial killers, about 6%. >> and president obama, a new low, 40%. >> really? >> yes. 40%. >> you know what the french president's is? about 13%. > and the u.k. today had two

elections, one whose only policy was to say we hate europe. >> thank you so much. we will have much more. it's "bloomberg surveillance." good morning. here's the report sterling 160.58. ♪

>> the kurds may run out of ammunition in defending kobani. this is the islamic state. they are making inroads into an bar province to the west of baghdad. and sharp disagreement between the ecb and germany. the imf moderates. musk and the cheap -- unveils the cheaper tesla. we have a selection of top stories this morning. here is olivia sterns. mario draghi is at odds with the germany finance minister over what to do with the economy. the imf is pledging to ee's monetary policy if needed. monetary --ease

monetary policy is needed. just 2/10apple rose of 1% last -- yesterday. earlier this year, apple boosted both the buyback and the dividend after pressure from carl icahn. trishke yesterday to regan. >> every time they sell a phone, it's an annuity. certainly a better multiple than an sep, not a worse one. it should be going at 20 times earnings. i like to look at things simply. >> and it is asia's favorite guessing game. where is kim jong-un? he was apparently a no-show at today's ceremony honoring his father and grandfather. he has not been seen in public for 37 days. earlier this year, he was seen limping, and the north korean official made a rare admission that he had an unspecified

physical discomfort. there was an earlier report that he had a leg injury. the nobel was awarded to malala yousafzai, the pakistani girl who two years ago was shot in the head by the taliban. she now campaigns for education rights. and the other was kailash saty children'sworks for rights. musk unveils a new tesla with two motors. risen 71%tesla have this year and there is plenty of skepticism about the stock. he spoke to our own eddie lou. -- eddie lou. -- he spoke to our own betty liu. short-term, some

fluctuation. at for a company that had billion dollars in revenue last year to have a 30 plus market cap is on the high side. those are your top headlines. >> this is what matters right now and the headline is in the last 20 minutes. the markets are actually a little better. now -10.p futures are at 229.at 231 and now lower yields in the last hour. currently not in play. as you saw yesterday, the second derivative on once texas intermediate is stunning. crude, it shows the interconnectedness in the market.

a moment on this. but first, scarlet fu on the new volatility. nice to see you. >> i was on an in-house assignment. >> you look rested. >> i am. with yesterday's selloff, a lot of people were be rolled her. many are scratching the -- were be wilderness. were bepeople wildered. >> i would also argue that the finance minister of germany was we're not going to put money into this. this has been the big backer of stimulus and now you take that away. >> and many say this is just touching up with the bond market. we did not really see a violent reaction in stocks until yesterday. having said that, i was checking in with the chief global strategist now trawl -- now at

charles schwab and he saying this is a more attractive place to be. >> what is going on with the price of oil? in missed tom keene earlier the 5:00 a.m. meeting. he came in the screaming yet not seen a second derivative like this on the price of oil since 1979. expressedner, is that because it is dollar-based? >> the world economy is a risky place. we are much more concern about global expansion and it is dollar-denominated. and -- mr.er, reinhardt, chief economist at morgan stanley. let me take you over to world,or blanchard to which is the world of labor economy. have you ever seen an american labor economy like this one in 2014? is acreasing in quality

serious problem. the employment gains in the last couple of years have been at the low end. it's not generating a lot of income and people are nervous. consumption is relative -- is slow relative to disposable income. do you have a confidence that the fed is out front of the , andrch dialogue on slack on forward guidance, the timing of it all? >> i certainly think they are. obviously, there are dissenters within the fed. but i'm pretty confident. if you look at what janet yellen has been saying, the focus pretty much has to be on wages. it's nine -- it's fine to have a 19 variable scoreboard, but when seven are up and seven are down or flat, it is critical for wages. >> you did not live under a regime of polkadots, did you? >> i promise you that alan greenspan had a lot of of media.

is anou should look at early manifestation of the slack in the road, i.e. kostin wage pressures. i don't sit there. -- the cost in wage pressures. i don't see it there. >> are the dots the issue? the problem is they are obstructed in and secure way, each individual participant saying what they would do if they were emperor. it is opposed to the appropriate policy, not the main outcome they expect. the fomc could be assuming that theirlleagues -- colleagues are idiots and that the path does not correspond to what they think. but it is conditional to all kinds of stuff. the reason why this is also compensated -- complicated is indicator of good what was happening in the market before was the unemployed men

rate. today, it isn't. >> is that because it is at a low since the 1970's? >> the numbers fell on the jobs report, but the participation rate fell as well. the wages remain flat. this is something never happened before. very good indicator of slack. that is what the problem is. >> and the long-term for dissipation rate is the reason we are seeing sagging wages. rages rise fast in some areas. there are pockets. >> -- manufacturing wages rise fast in some areas. there are pockets. >> some bids will be growing fast and some will not. you pick something at the 99th percentile and says it's doing fine. i could pick something at the other end. says indicator at the mean nothing is going on. >> for investors, the message seems pretty clear, that the fed will be accommodative for as

long as necessary. and even with what is going on in europe, that might herald better news for what is going on in the emerging markets. >> i was just reading the fed minutes again. they are saying, there is nothing set in stone and we will follow the data. because it's so complicated, and we don't exactly know what is going on. >> a report this morning from douglas cash, worried about the market. the question for you is, what does the oil shock mean for opec echo if you look at microeconomics, the supply and demand of oil, are the saudi's at risk? >> the amount of supply and demand is going down there. they have budget issues already. overextended. the mideast is overextended in general when you think about how risky a place it is. and put on that list a very important country, russia, as

well. >> the only thing down in the russian economy is the price of oil. a note from you, you have this thesis about the peter pan policy of the fed. does that mean it's burying its head in the sand? >> they can't raise rates until they have a mechanism in place, how to raise rates. it's a dysfunctional committee that has put out guidance i can be met. >> does mario draghi have a peter pan policy? also open thei is audience applauds so that tinkerbell can fly. it's important, that expectation. >> thank you so much. stay with us. it's "bloomberg surveillance." ♪

>> this is "bloomberg surveillance" and i'm adam johnson with olivia sterns and tom keene. if you want to succeed in life -- in life, really simple, start giving back to others. that is the topic of a bestseller called "give-and-take " by adam grant. he is the youngest tenured professor at wharton, and he joins us.

book is both practical and highly personal. what motivated it? >> actually, i was watching a sign -- seinfeld episode where givingays, he wants a person because he's a taking person. it got me thinking. >> you also have a section called "actions for impact." number five, embrace the five-minute favor. walk us through that. >> most of us feel like we have to be mother theresa or gandhi and it's not sustainable for most of us mere mortals -- mere mortals. so every week, find small ways to had value to peoples lives. make a couple of introductions, give the benefit to strangers knowing each other. go out of your way for someone. is like altruism, but also

the fundamental capitalism, because it is driving good things for your job. >> yes, but not if that is your motivation. >> highlight for all of us why you admire and yet think ultimately bill gates is more effective than steve jobs. >> the started with a conversation with malcolm gladwell who said in 50 years, apple will be around, but microsoft won't. -- that bill gates will be that steve jobs will be forgotten and bill great -- bill gates will be remembered. right, we will remembered dates for his terrible counter missions. >> in other words, the bill gates foundation impacting us more ultimately than self suffering -- self serving iphones. >> why do you rate emotional intelligence highly echo it's what i can tell tom keene is feeling fragile because the bruins lost. >> and then you can help them

manage that emotion and get in a better mood. most people think it is about influence and empathy. it's about whether you can recognize and understand and manage your emotions. and that is useful in jobs that are emotionally intense. >> our twitter question of the day is, is technology creating or destroying jobs? tweet us. ♪

>> good morning. get to our top headlines this morning. >> the winners of the 2014 nobel peace prize have been announced in oslo. the award is shared by malala yousafzai in pakistan and kayla in india.arthi they were cited for their mutual

work against the oppression of children and working for their education. gitmo has 149 inmates. the president of -- pledged to close the facility during his first campaign. is testifyingke in a lawsuit accusing the u.s. of imposing illegally harsh terms in the bailout of aig. yesterday, bernanke defended the government, saying its actions were meant to prevent aig's collapse while keeping shareholders a windfall. i'm still stunned. the testimony yesterday he effectively said, mr. bernanke, we had no basis of coming up with that 14% interest rate. but that was exactly the line that they were looking for. >> that is exactly what they were looking for, yes.

>> let's get over to the details of the all-new model as. -- model s. i hear this new tesla can actually make it through the wind, the fog, and the snow. but that's right. it is a souped-up version of an already souped-up model s. yes, i'm up early and we were out late last night. i don't know if there is some video of the big party that elon musk posted last night where he unveiled the new pad five -- p 85 version of the model s. it goes from zero to 60 in three .2 seconds. it rivals some of the fastest store cards -- sports cards. -- sports cars. it has dual wheel drive. that is something that drivers in the northeast had wanted.

they kept away from it because they didn't think it would do well in the snow and in the weather. for one is selling $120,000. elon musk has been talking about making electric cars for the masses. with this new model, he has gone up the other way into a more expensive model. but he's really using this to showcase some of the new technology at tesla, including autopilot. that was also a new feature that he unveiled yesterday. he demonstrated it to me where we both got into the car and he was showing me that you could change lanes automatically. it sped up and it slowed down. essentially, without any hands. that was very cool about this car. i want to tell you a little bit more about the autopilot, what he said to me about the difference between the autopilot ly autonomous car. but i think very important to

differentiate between -- >> i think it is very important to differentiate between autopilot and autonomous driving. autopilot, there will still be a pilot. if the onus is on the pilot to make sure the autopilot is doing the right thing, we are not yet at a stage or you can go to sleep and wake up at your destination. it -- wee to call would call it autonomous instead of autopilot if that were the case. >> elon firmly believe that will happen. and he says in the near future. he thinks we are about five to seven years away from autonomous cars. it.ooking forward to thank you so much for waking up so early and being out late in the night with elon musk. now to our twitter question of the day. is technology creating or destroying jobs? it is interesting to think about whether tesla and elon musk is

creating or destroying jobs. he talked about driverless cars. wordcan't stand the "innovation" with an amazing passion. into the logical progress. we have a technological marvel in the tesla. where will the investment come teslas?four more >> that is a good question. it will start out that the high end and the goal will be whether people want to follow that. >> that is the conundrum of our economy. me x fed president said to in2007 -- said this to me 2007. it still hasn't clicked in, has it? help, you get a higher real way. if it is a substitute, then --

and i >> you are with alan krueger that there is a two-part economy, the winners and losers. technological progress and globalization. and that is associated with declining labor force participation. if you have the low-end, your space is limited. at the high-end, people are working longer and accumulating more well. also, more skewed incomes and more skewed labor share of incomes going down. >> what do we need to do to be the kind of economy that would jobs?te >> a two-year plan, six-month plan. >> do you have a two-year plan? >> not a chance. >> the politicians are looking for a four-week plan. but that is typical. -- >> that is typical. why do we need a four-year college education? you are a professor. >> at an opening when actually need one. it's an opportunity to broaden

your horizons and develop problem-solving skills and it's an opportunity to do that over a longer time. >> fair enough. >> futures have improved slightly. later this morning, a conversation with elon musk in the loop. look for that on bloomberg television. ♪

>> good morning. i'm olivia sterns. let's get straight to some company news. the very same hackers who attacked jpmorgan's computers may have done the same to fidelity investment. that is, according to people close with the case. jpmorgan is dealing with the breach of 76 households in the u.s.. and very clean says customer payment card data has been compromised. -- and dairy queen says customer payment card data has been compromised. it systems include customer names, card numbers, and expiration dates. and sony hopes its booming playstation the this can help sell smartphones. it has teamed up with verizon to

stream video games. of the smartphone market. >> our guest host, vincent reinhart, chief economist at morgan stanley. there has been a peter pan , but with hook as peter out on the plane. frame the peter pan policy that we have. the fed mostly about can start raising interest rates until it has the mechanics in place to raise and restraint. it wants to keep a very large balance sheet and a lot of reserves in the banking system, but still communicate to the policy and fed fund rates. that will not work. there is no reason to trade them privately. the fund market will just blow up and disappear. >> many people have been very critical of the strategy and the outcome. is the outcome in outcome -- an outcome of managed stability and

control? or would you suggest there is variability? it could be ugly. >> there are two answers. with the outcome of our banks, more than ever before. you can't go back. they have consultative balance sheet. they have shown they can use them. but the other part of it is, what can central banks actually deliver? is actually pretty limited. it is something about the market, wealth creation, but they cannot change the big issues. income inequality, wealth inequality, and he could make some of those worse. >> has morgan stanley readjusted your growth outlook for the u.s., for europe, all for the rest of the world based on what i've observed in the last two weeks starting with oil? do you have to bring everything down? valuation thatar

has to do with soft commodity prices because they are denominated in dollars. the rest of the world looks like a much scarier place. europeansout disinflation, and concerns about policy to offset that. the u.s. seems to have a bit more momentum and the world is asking the u.s. to share some of its weakness. that is what dollar appreciation is about. comfortablemore with our main policy call, which is the fed going be on the sidelines all next year. -- the fed being on the sidelines all next year. american savers are getting absolutely crushed. all gross says it is decade-long phenomenon. are going to have to wait 10 years to make money from the savings account? >> may be longer. when rate start writing -- rising a lot of banks will keep the deposit rate pretty low.

>> you have just defined a plutocracy. you and i are flying business class sitting around. we are not the rest of america. >> it depends on the distance form. >> that may be true. plutocracydea is a when most of saving america is at a negative rate. >> what i was director of monetary affairs, you get more letters when you cut interest rates than when the fed raise rates and they all came from florida. that is, retirees on fixed incomes reinvesting at lower rates and a see a pinch. that is certainly the case. but we've also created a lot more well. they also own equity indirectly. a second give you order of affect. they do better in the equity markets. here,eadline right florida angry perhaps at janet yellen. >> the futures of the s&p are firmly in the red. the u.s. 10 year yield falling.

the nymex crude trading below $85 per barrel. it is the return of volatility. the vix stacking up -- spiking up 19. good morning, this is bloomberg surveillance. i'm olivia sterns with tom keene and adam johnson. the factt to focus on that the institute of international finance is meeting today in conjunction with the ins meeting. peter cook will be there. he also joins us now. with him tim adams. >> i'm joined by tim adams, the head of the institute of financial -- of international finance. feeling the thunder with your all-star lineup today. tell me about the mood. you have the top people in

finance arriving here in washington. there does seem to be a fear about global growth right now. >> and rightly so. europe is teetering on the balance of truth -- of contraction. japan is still struggling. there is a lot to worry about. your vices in the gulf and ebola in west africa. -- you have isis in the gulf and ebola in west africa. impressive some economist on panels, some folks from central banks around the world as well as finance ministers. tell me about europe specifically and whether there's a consensus about what needs to happen. >> it the three-pronged attack. the ecb needs to follow through on the promises mario draghi has made. he has had tremendous progress in the last two years when he said he would do whatever it takes. enormous credibility. but they have to reach some conclusion on fiscal issues. >> we had wolfgang yesterday

pitching a separate angle altogether. >> that is a challenge coming out of berlin. we need to see more to simulate growth in germany, and structural reforms. minister prime yesterday in rome, but we need to see that throughout europe. we just got in france and italy and spain. >> -- we need to see that in france and italy and spain. >> what is your sense of the risk happening overseas humming back home and harming financial institutions here? financial institutions here? >> we have seen it in markets already. we saw the market selloff yesterday. we are in an interconnected world. what happens overseas matters here. brian moore added, jamie dimon haddad, a bunch of ceo's from big banks added. added, bunch of ceo's from big banks here.

>> in a quiet time, we will see interest rates pick up next year, we think. and getting a different interest rate margin will help institutions. they have cut costs, leaner, meaner, focused. a little bit of trading will be helpful. >> is the fed sending the right message that they are communicating adequately on these issues not only to the your member institutions, but the global market as a whole? >> i think janet yellen has done a fantastic job indicating they are willing to be accommodated as long as is necessary. rightk that is the policy. >> what about on the regulatory front? that is a big part of your agenda through the course of the weekend, big fight about whether the u.s. is being more aggressive than its foreign counterparts in terms of capital standards and so on. what is your sense of the tension around the world between regulators? >> the u.s. has traditionally

been more aggressive in its regulatory cycle. i think we will see something coming out of the g 20 summit next month, some sort of declaration, conclusion of this regulatory climate established in 2009. system a stress testing that is pretty robust. some regulators are not happy and want to keep going. >> will the stress tests in europe amount to much? are they tough enough? >> i think they are. this needs to be credible. in just a few weeks it will show that there are holes to be filled, but they are fillable. >> a couple of busy day for you here. the sideliness on of the gathering. back to you in new york. >> thank you, peter cook. a lot happening. i will be in washington myself. it's crowded. >> and it extends into saturday as well, particularly at the

world bank. >> overdid to pick up a copy of business week. ♪

>> welcome back. we are at live pictures right now of admiralty square in hong kong. here's why the leader of the protest has asked people to come into the square starting at 7:30 a.m. and it is right now about 7:45 a.m. local time -- 7:45 p.m. local time. he made this plea because government officials had called off talks with the student and he said, no, that's not acceptable. >> it is friday evening there and it is a mystery. where do we go from here? >> exactly, we don't know how the government will respond. comelearly, people have back into the streets. and it begs the question -- where are the police? we don't see them yet. between hong kong, the imf meeting, and what we are seeing in syria and israel, we will talk about that. >> have you heard of a blogging

site called medium? >> yes, of course. >> it is a message to millenial, officially people born after 1980. millenial's,ma to why i'm betting on you. over the back 55 month, he points out that businesses have created 10.3 million new jobs, the longest uninterrupted stretch of five it sector job creation in america. >> it's interesting, the parallel to the railroads in the 1880's. failed and then they finally worked. we had the internet in 2000 and now we've got now. is it finally working? the same thing for harnessing electricity, the way factories are laid out. let me say to millenial, i'm because youou, too,

will have to generate income to pay for my pension and health-care costs, and all your parents. >> that is actually funny. >> i was not being funny. >> social security runs out of money in 2033 and medicare sooner than that. >> is much more scary. -- is much more scary. care is much more scary. >> i got the envelope you get from social security that basically says "you're an old pfart." and the good news is, i'm never going to retire and you will never have to bailey out on social security. is still the roulette wheel of waiting. she wasther had me when much older, so that meant i was still a nice, the time she

qualified for medicare. the government started sending me, olivia sterns, $600 a month despite the fact that i was enrolled in private score in new york city. >> what did you spend it on? >> i spent on clothing. straight from social security. >> our twitter question of the is technology creating or destroying jobs? side of on the"d" that. stay with us. ♪

>> good morning, everyone. we thank you on this friday and for your support and many notes. particularly, your opinions on equities, the bonds, oil markets. but everything seems to be going down versus -- >> everything seems to be going down versus the vix, which is going up for the >> here is olivia sterns multiplex talking about women and pay raises. he told his audience at a phoenix tech caught up -- conference for women that they raises within the

system. he amended his statement later to say that those who think they need a raise should just ask for one. thenew york times says company has received a lowest possible rating. it is based on 90 customer complaints in the last three years, most about goobers pricing. -- uber's pricing. and in a letter to apple ceo, carl icahn said that apple sell twice as much stock. >> i'm looking for my wonderful lastge from over -- uber night. they charge me 0.00. >> y? -- y? >> because i complained.

>> what was your complaint? >> i had three drivers and they all backed out. but how do you get in touch with them? i've tried before. here.m, help us carl icahn going after mr. cook for a second time saying "share the wealth." you advise companies on give and take. in other words, you've got to give something to take something. icahn seems like a taker. >> i don't know if he is a taker, or just trying to look out for what is best for shareholders at the discount of all other groups. >> he being one of them. is there a point at which an activist oversteps his bounds and goes too far? >> i think so. ourl have to think about shareholder groups, but perhaps he's a near -- a bit narrow in

that focus. >> the heart of give and take is at charitable contribution. what did you learn about charity in the hands of america? >> it turns out that the people who have more actually give less. they give more in absolute dollars, but a smaller and smaller proportion to their well. >> how can you advance -- to their wealth. >> how can you advance that forward? there is a lot being done with the giving place right now. it's a good model and we need more of it. >> is boring -- is warren buffett giving enough? >> you need to give enough that you have an impact. >> what you are really getting at his legacy and how you preserve a legacy and make a difference beyond when you're living. >> let's talk about part of america that is not worried about charitable contributions. at the break we were talking about social security and how the poor of america are forced

to take a lower amount of social security. >> yes, you are making the observation that waiting until 80 is actually pretty good -- i >> 72. a low-income, low skilled household getting to that first date, 62, it looks pretty attractive. what that means is you are not just impairing this year, but later. i was at a conference with bill a decade ago and he took my head off over this. or advanced distribution variable of welling retire is not just about intellectual calculation on bloomberg surveillance. is, though, we can fix social security if we link the retirement age. it's just wrong. it's people who have jobs like us i can work longer into our careers. but if you're a ditch digger or car printer like my father -- or

car printer like my father tomorrow you put on elevator doors, that doesn't work. retirement age has been raised in france as well. is that a mistake? >> it has to be targeted to the ability of the household to work into the career. >> is the european labor model something we can bring over here? can we actually bring over elements of the german employment miracle of the last six years? or is that a fiction? pick a point of growth and fairness. what you don't want to do is put a safety net below that makes the market less dynamic. tos always been our ability generate those excess returns. the u.s. is historically a volatility play. think about our education system. it's terrible and it's great. the high variance means there is

a portion of exceptional outcomes that we can pick from. >> do you see the haves pulling over? >> probably not in the short-term term, but maybe in the long term. >> you are the youngest tenured professor at university of pennsylvania. from a labour point of view, what is the responsibility, or is there one for a corporation to look after its own? >> i think there is a huge responsibility. most of us spend our waking hours, the majority of them come at work. it is a great tragedy to not have some semblance of meaning and happiness at your job. >> can you hard code that into corporate egos? s? etho corporations are there to make money, not to provide for people. >> if you look at the fortune 100 best companies to work for, happiness has a huge monetary return. but it does not always sure of right away. it shows up in terms of

attracting great talent, keeping people motivated both of you don't necessarily see that tomorrow. it takes time. >> our twitter question of the day, we asked, his technology creating or destroying jobs, and here are some answers. technology constantly improves productivity. erotic a policy sex job -- it is the policies that eradicate jobs. adam, did you ever expect in your studies that we would be working 70 or 80 hours a week? >> not a chance. i would've expected it to go down. >> your colleague at the university once that on the runway at dulles and watch people hyperventilating because they could not get off the air -- off the ground in the airplane. all this technology -- >> we are tethered to our smart

phones. when is the downtime? >> no downtime. these on snapchat into the wee hours of the night. >> i'm not using snapchat. those at the top are able to work harder and make more. to ourthird answer twitter question. innovative technology will but it isnsform jobs, open to competition. that is the whole point. you need growth, but also fairness and protection for those who fall below. we have not gotten the mix right. >> which is adam grants world. if you could give corporations one piece of advice about protecting their people? what is it? just i were forced to do one, try to figure out why people join your organization the first place and then design the jobs around those skills and

interests. >> "give and take" is the book. all right, friday's agenda. >> do you want to go first? >> i'm looking at syria. the washington post did a great job on this this morning. very important. it's not just about turkey and syria. the islamic state is working in the end bar province west of baghdad. we have a two front battle. this is way below the radar. >> i love the story. chinese leaders are meeting with angela merkel today. she wants the leaders to try to help her influence vladimir putin. normally, they have a unique tête-à-tête. they are hoping to get some of the scraps of the business germany has lost because of sanctions. --nfl, here is why did dell

roger goodell, his approval rating has dropped to 12%. commissioner caddell -- roger goodell. and eagles take on the giants. >> stay tuned across bloomberg television and radio through the morning. ♪

>> good morning. friday, october 10 p.m. to live from bloomberg's world headquarters. you are "in the loop." matt miller in for betty liu.

be joining us, do not change the channel. stocks are plunging globally. continuing yesterday's selloff were the dow gave up more than 300 points. we will stay all over the markets. the gloom, boom, and a doom report. betty liu sat down with elon musk as he unveiled his new announcement. we bring you are the details. plus, our interview with the ceo of linkedin. here's a look at our top headlines. yesterday's selloff may be followed by another big one. futures indicate stocks in the u.s. will be down at the open. the s&p 500 coming off its worst performance since april. 4 point last, its biggest since february.