jpmorgan cree releases. yields continued to plunge. markets on the move. it is the new volatility. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. it is tuesday, october 15, i am tom keene. joining me, scarlet fu and adam johnson. a set of top stories for you this morning. >> we begin with jpmorgan, comes up short and early release. missed analyst estimates. net income rose to 5.6 point dollars. set aside $1lso billion for legal expenses. the shares are down in premarket trade. later, ceo junie -- jamie dimon is expected to be on a call with analysts.

federal health officials rethinking the way they've been trying to stop the spread of ebola. the problem is, they don't know how a nurse in dallas became infected, even though she was wearing protective year. here is the cdc director. >> it doesn't change the fact it is possible to take care of ebola safely. but it does change substantially how we approach it. >> it looks like north korea has moved to quell all that .peculation about kim jong un photos published today show the 31-year-old north korean leader made his first public appearance in six weeks. he is seen walking with a cane. a south korean newspaper reported cam had been hospitalized after getting surgery on both ankles. for the third time in as many years, potential buyer has walked away from t-mobile. offer to buy majority stakes. t-mobile is the smallest of the four major u.s. wireless carriers. it is the fastest-growing of the

bunch. board members are divided over whether to sell. wereday when stocks falling, extending their selloff, seo chrysler made a successful debut on the new york stock exchange. >> it is a comeback story. we need to be here for a variety of reasons, to have access to the biggest capital market in the world, finance a lot of the plants we laid out, and it feels like being home. i think we're in the right place. >> very good. with the ipo, bill ackman having the trouble. >> in amsterdam. >> let's do a data check. bonds, bonds, bonds, currencies and commodities. futures up to bend. 2.20%. yield, just backup 2.19 earlier.

sterling under 160. nymex crude trying to make new lows. on to the next screen which shows more of the turmoil right now. look at the vix. the average is 20. to double over the last week, really speaks to the new volatility. >> and that is the highest the too. >> when i wrote this up in our have ago, these were different numbers. look at the two-year yield. the 30 year bond yield is absolutely stunning. >> is it under 3? >> 2.94%. the migration, they're down, this offer columbus day closed. we have some difference here. here's the 30 year bond back 10 years. at 3%, the blue line, how rare it is. this has to do with the world coming to end and washington.

this time is different. toare world really is going end. >> i don't know if it is going to end. >> this is a much more orderly drop. >> it is. down the go for economic reasons. this will be frontline with us through "bloomberg surveillance." not cap 5. what is our twitter question? >> what concerns you more? falling stock prices or bond yields matter more? please tweet us. rick reader from blackrock commented on that to your which of the time was trading at 51 basis points this morning. 38 this morning. institutional investors are betting on a higher rate and they are wrong. after another. >> no question about that. the idea of the yields down for white set of reasons. we can dive into this this

morning. what happened at 4:17 this morning was interesting. iag. scarlet fu just laughed. there was jpmorgan's earnings. >> it is supposed to come out at 7:00 a.m. and there like clockwork every quarter. there always release it at 7:00 a.m. there he came out at 4:00 in the morning. apparently, it was an early release. >> did they put it out or did someone inadvertently release it? our finance team suggest jpmorgan put it out a little too early. >> and the headline there was a $1 billion legal expenses. and missed consensus. how much fun is banking right now? >> this doesn't stop, does it? it is entertaining. you're watching the movie too fast. this is a slow economy, a very slow recovery.

everything is falling in place in terms of an clan. you have the loan cycle picking up, broadening as it should. the first thing i look at it of the morgan release is loan growth, 7%. that is not shabby. above nominal gdp. the issue is qqq. we are ending and everyone else is continuing. this is awkward. isthe twitter question brilliant. pros like you are looking at the bond market. what do those low yields in the brutal moves in low yields, for that matter, oil, signal to a pro-? >> the first of signals is something you don't want to accept, maybe we have to, that global growth is going to be much slower than we had anticipated. panic,ond issue is fear, concern. we have a lot of issues out there that are non-us related that drive people into treasuries while they are worried what is going to happen next.

there is uncertainty. the good news is, you kick up the volatility to little more normal and now you're seeing the trading results pick up. they just wanted picking up late september. talks halloween is coming up. i'm going a sheila bair this morning. i have my mask already. , eviled to go as a banker banker. we are your budget season. would you presume there will be further layoffs and firings? >> i think there might be, but i don't think it is going to be dramatic. i think this is a correction. how severe, we don't know. i don't think that changes the general thrust, which i think is still up. the ideal business is quite strong. >> especially after alibaba, many are wondering if that would slow down a little bit. we did see a couple of companies withdraw their plans for a listing. i want to get back to the idea of the slowing of macro economic environment. are we getting out of ourselves and worrying whether brakes are position for her rate environment? >> i think the banks or

opposition for higher rates,. the question is, when we get those heist -- those highs. >> is that priced in? in rightbeing priced now. the last several quarters, the stocks trade off after the earnings. we're getting this anticipatory overreaction. my guess is we're blowing the steam off the financials. financials usually leave the market up and down. >> as i look at jpmorgan and traits at under 10 times earning -- trades at 10 times under earnings. banksrom the money center , what do you see happening in the regionals? the bank of ohios, indianas etc.? were you have banks closer to those who need loans? >> it is quite remarkable. you'll see the loan moment him at the original community banks

-- momentum at the original community banks slightly ahead. this ton, don't expect be traumatic. it is just marginally moving up. >> meaning you have loan growth of what, 6%, 7%? now. is 6% the hotspot is in business spending and business lending, which is more like 11% or 12%. that is very good. if you pick your stocks carefully, there should be winners. >> how do have a one buddy dollar legal expense? -- $1 billion legal expense? >> you're of a currency problem, libor problem, i don't know what else. talks bring up the chart. jpmorgan. this is great to see mr. dimon making comments. welcome back, jamie dimon, after treatment for a difficult cancer. how do you build $1 billion? do they get a check?

do they get a bill? what is a, jimmy fallon in jamie dimon like this. >> it has been overkill othe legal side for a long, long time. the reality is, there are charges on legal and reserves for legal that have exceeded their loan losses for the last five years, including 2008. it exceeds the tarp. there has to be a stop to this. at the moment, the political winds are blowing more toward them. >> total net income for jpmorgan at $24 billion. >> they're sitting in the $30 billion range in terms of total reserves and cost. >> unbelievable. >> it takes capital out of the system. >> you give us such great scope. 30 billion dollars in losses. in our next hour, we will it get the banks and global warming.

>> are they to blame? coming up, hong kong police used saws and chainsaws to clear protesters. we will go live to the business district, next. we will be right back with robert albertson. ♪

>> good morning. "bloomberg surveillance." tory birch, what a dynamo. a pretty good fashion statement and then the shoes came out. >> the flats. >> the ones with -- >> do they make them in your size? you can take the disc off the

shoe for the subway or whatever. >> if you get one pair, you need five pair. >> in every color. attory burch this afternoon 5:30. >> were going to talk about hong kong. tensions mounting as pro-democracy protests into a third week and police stood on barricades. or more we check in live in the business district in hong kong. you're standing on the streets of queensway were protesters have camped out for the last three weeks. has her been any sign of resistance, any conflict as the police toward on his barricades? we are definitely seeing some resistance, but it is very tame. right now i'm going to show you things are starting to fire up a little bit. a little more energy this evening karen hong kong. crowd,ers firing of the telling them to stay calm and do not retaliate and deftly do not react violently to what police are doing -- definitely do not

react filing to what please are doing. police are taking an aggressive approach when it comes down to taking on his barricades. they say they're taking back government property, taking back the city. that has been since of tepper 28 when they fired tear gas at protesters -- since they fired pepper spray and tear gas at protesters. they're clogging up a major artery right now. they are made progress. about 100 protesters were on this major artery a couple of hours ago. they were able to move them into a subdivision right here. i do want to mention these police officers are not in full riot gear, but they are carrying helmets and shields and case anything happens. you can see a pretty peaceful sit in. this is one of the main entrances into the main protest site. students are saying right now they're not moving and i'm not going to retreat, especially right now, until they achieve universal suffrage. >> they are still standing by

their goals. we see the two dozen policemen standing outside. top hong kong government officials went to china for economic development conference. what we know about the response of the government to these latest moves? we really have not heard much . he did speak up a couple of days ago saying he really is starting to get a little impatient by this. he is expected to make an atearance here on thursday the legislative council building here in the government center for a q&a session. the question is, will he appear here or will he try to avoid some of the student protesters? we're still sing a lot of activity here. police still saying they're not backing down. they have removed some of the barricades, but not all. some areas still not cleared up yet. it was touch and go in terms of where we will see the activity tomorrow. definitely we will be watching closely. >> thank you for joining us live

from hong kong. they tear down the barricade and the students come back at night and the said every thing up again. >> they tore them down with chainsaws, which is the headline that grabbed my attention. >> it seems aggressive, but so far, no signs of violence. us asert albertson with we look at markets. the headline this morning, the 30 year bond well below 3%. it plunged in the last hour. 2.95%. what is this linkage of our markets to hong kong into the global challenges out there? is it for took linkage or more ephemeral? >> i think more ephemeral. it is powerful. it hinges mostly on what happens in the foreign markets. if foreigners are concerned, if there is what looks to be a very severe slowdown in europe, issues that might interrupt asia , interest rates will stay lower longer than they should.

that is not good. i think it is the foreign side that is really driving the 30-year. >> adam, you been doing this for years. how do you ascribe a 2.21% 10 year to an economy growing in the last six months 3.4%? >> 4.6% for the second quarter. >> i don't believe i've ever seen this. >> let's assume it is temporary. they better be. if the long end states this low and we come around us time next your with the fed looking to move short rates, we're going to flatten out the yield curve, which would be -- >> it is already pretty flat. >> it is not exactly great now. >> and a stance by your banks, isn't it? >> except for one thing, you are banker and you get a pick between the tenure going up in the short end, you pick the short end because that will drive loan pricing. there is great improvement coming one way or another.

that seems --d >> we will keep you abreast of the markets this month. the next hour, the chief executive officer of sap out the new book will join us. it is a really interesting life story of his path to sap. this is "bloomberg surveillance." stay with us. markets on the move. ♪

>> good morning, "bloomberg surveillance." i am tom keene with scarlet fu and adam johnson. futures up five thing. you'll's are lower after the columbus day off for the bond market.

lower after the columbus day off for the bond market. buyer beware, cold snaps. what we do around the weather? i love this. if students visit a college on a cloudy day, they're more's likely to choose to enroll, purely overcast skies get them to focus on learning and education. and there is when you go to ithaca, new york, and it is liked him below zero when you visit. talks it is cloudy all the time. -- >> it is cloudy all the time. all go outcold, we and buy winter coats and we're all idiots. >> they sell the first quarter gdp numbers. >> do something serious. >> formerly of pimco, now the .hief economic advisor

how much has the fed distorted money for the market? >> what we have done as we have driven up certain prices dramatically, and we now probably have a housing bubble. we don't have a construction bubble. it is very committee week. >> where is the bubble? >> it is in home prices. their backup to about 40% of where they were. >> in equity prices as well? >> in stock prices. you also have that in the equity market. and the withdrawal of qe makes

people worry that violations the rates will eventually drive. we're back and return a normal face and everyone is scared of it. >> we want to ask you are twitter question of the day. which is more concerning? >> bond yields bother me more because it is just unreal at these levels. >> is any price discovery in the bond market? >> there is plenty. thursday will tell us something because we get another round of treasury ports on foreign buying, which has been a key driver of our 10 year. in july, it was negative. >> what is the pension plan to? --mit investing for 20 years somebody investing for 20 years, do you sell bonds or hedge your profits in bonds? >> it is the definition of a bubble. everybody knows it will end, and they don't know when, so they

stay in the bond until it is visible. >> how much downside in the tenure -- 10 year? >> it out to be trading closer to nominal gdp, which is about 4%. do the math. it doesn't necessarily go there immediately, but that is a big, big, big piece of inflation. >> one of the other groups, markets, commodities. oil has dropped 20% since june. where is that bottom? you just heard bob talk about risk in the bond market. we will talk about risk in the oil market next right here on "bloomberg surveillance." ♪

>> good morning, "bloomberg surveillance." i am tom keene with scarlet fu and adam johnson. here are some top headlines. >> activist investor bill ackman says he is buying a stake in a u.s. company and will announce the investment in the next couple of months. the news comes as one of his funds slumped as much as 12% in its dutch trading debut. $22 after having been price the night before a $25. this was obviously an ipo. abigail johnson gets the nod at fidelity's new ceo replacing her 84-year-old father who is been the company's chief executive since 1977. abigail johnson has worked for the company since 1988 and

started out as a stock analyst. today she is one of the world's richest women with a net worth of about $9 million. comcast nbc universal looks to capitalize on china's growing middle class. teaming up with chinese investors on a $3.3 billion theme park in beijing. the 1000 acre site will include attractions from other universal parks and will be the third universal park in asia. >> very good. a data check. futures up 6. right now, a little bit better markets. the two year yield is stunning. .50. we opened up .41. and now lower. help me out. talks it takes your breath away. the markets are shocking. >> can you pass the vodka? >> how about some hot water? >> oil is down about $.83 that puts wti at 84.91.

>> the 30 year bond lower. i failed at the data check. >> no, you didn't. >> they were moving. >> you are for clint. we'll traders are for clint with a 21% decline in the price of oil since june. instead of cutting back production to stabilize price, the saudi's are actual producing an additional 200,000 barrels per day. it is a must as if they're pushing oil lower. our guest explains. francisco, what is going on here? do the saudi's want to push oil lower? >> it is pretty clear by the data, they do. whether it is a market share issue or an issue around their borders with the islamic state growing stronger, clearly, the saudi's have decided to bring global prices lower right here, right now. >> the islamic religions are

trying to capture production in iraq. that is how they have been funding themselves. is it that simple? the islamic state probably controls around 30,000 to 40,000 barrels a day. the most effective way to deal with that has been to use military means to damage the installations, rather than act like targeting the price. i think it has more to do with the fact that we do have a coalition trying to help out fight the islamic state. back in june, prices were $115 per barrel for brent. we were all scared about $130 oil. the saudi's have turned the market around and allow the interest to build on a precautionary basis and allow the price to come up. >> i want to go to the chart which shows the second derivative has been ugly, ugly, ugly. i want to go back to 1986, which

is not on that chart. you remember the threat to the cartel. the saudi's learned a time there. what is different this time in the opec cartel as they see this rate of change? share is market actually very high in the cartel. clearly, there are some long-term threats coming from shale oil in the u.s.. we will certainly see the saudis trying to regain some of that space. but i think the real issue is the world cannot afford to have $100-100 $20es, oil. a middle east war. >> where is the bottom on this? oil --an afford $40 and $40 in oil?

kuwait, the uae are in a different category all by themselves. they are small countries with huge wealth. the saudis need $85 to $90 oil. i think as prices slipped down, they will start curtailing. i would expect coming even though they're upping it now. seasonalember, we have aspect going into winter. it always gets cold going into january. >> "surveillance" exclusive. down, theces come prices will rebound. will help the market aarted clear around $85 an barrel for brent. the issue is around pipelines. i don't think it is the intention of the saudis to bring

it lower. >> the opec structure has started to change. >> it is been changing since 2011 when the cartel broke away from country quotas. there is a production ceiling, no country quota. each country does what it once individually. there will be a big debate november 27. i'm not sure you will get a lot out of it. >> opec members are not agreeing. and long terms of brent, is looking into how often it falls into bear markets. we're in a bear market right now. if you go back to last couple of years, we only have entered a bear market in 2013 and 2009. in each of those other years, we have fallen at least 20%. fundamentally, are we in better shape now than in the previous years when europe seem to be falling apart? >> that is exactly right. i don't think it is an ambition as it is supply issue. haven't done it. we can only speculate as to why they're doing it this time

around. like i said, i think those two main reasons, the islamic state and market share, or the u.s. revolution, our corporate of the argument. there's also the issue that lower oil prices do hurt russia, and that is something that europe and the u.s. have been -- >> and robert alberson's world, what are the ramifications of down tempers and from here? $75 west to call it texas intermediate. what does that mean? >> it means you're going to start slowing down. get down to 75 dollars. it means some of the countries that produce oil, mainly russia, iran and venezuela, are going to be really hurting because they very high break even crisis -- prices. >> does our state department want putin to squirm a $75 oil? >> i don't know. >> our still requires how much? $50 and $75between

a barrel. of god, i canfiat finally get out of that car and get into a bigger vehicle -- i've got, i can finally get out of that car and get a bigger vehicle. as it the word "clear" markets clear. there's a price you balance for you to shut off supply versus increasing demand. what is that number four wti? >> it is hard to say because you have these biplanes coming up but i think $70 to $75 a barrel is a number you can start to see the market clearing out pretty nicely. it is kind of a contained market. debbie ti --wti is landlocked. can't get to the world markets. it is a little hard to say but i think $75 is a good level. >> fabulous. thank you for your research. smart, smart, smart. with bank ofnch is

america. >> kicking into high gear with jpmorgan releasing his results early. which industry or industries confronting the most of the overall net income? we will show you in our single best chart, next. ♪

>> good morning, "bloomberg

surveillance." markets and to moral -- markets in turmoil, new york isn't. gorgeous. the yankees are in the playoffs. wait, they are not. sorry. got that wrong. >> the jets aren't going to the playoffs, either. >> the orioles, the royals, the giants and the cardinals. nevertheless, it is beautiful in new york. scarlet, yes some breaking news. this is a big announcement. >> russia's finance history has canceled its bond option. the ruble has continued to weaken. it is at a record low against the dollar. for perspective, three month ago, it was at 34 and now at 40.7. >> migrating higher as the chinese currency gets stronger. a little bit of the asian backstory there this morning. earnings -- >> it is earnings season. >> wells fargo and citigroup later. maybe they will get the release

time right. >> jpmorgan released at 4:00 a.m. our time. three war -- the results were mixed. our single best chart shows the net income contribution of each of sector to the s&p 500 and how it has evolved over the last four decades. it is from goldman sachs. highlight three sectors. financials are green. tech is blue. each contribute 19% of total earnings. almostr, they make up 40%. in 2000 or in the tech bubble, i to comedies generated 16% of the s&p 500 earnings. -- i.t. companies generated 16% of the s&p 500 earnings. financials made up 31% of earnings back in 2007. it has shrunk to 19%. energy at one point made up 26% in the early 1980's, now 11%. >> this is fun. robert alberson, let's do a clinic for our viewers worldwide.

the e.s the p and they move around. the presidents around, the share of earnings move around. what are you focused on within the dynamics of the p and the e. >> i am focused on the e because i think the financials did not belong at 31% of -- >> back in the day. 19, it may have shrunk, but it is holding. we're back to somewhat normal of financials. >> so is normal trading right around book value? >> it is not book, it is earnings. the price of earnings has recovered virtually in every category of the banking sector. we are back to where we used to be pre-recession. >> bring up that chart again. in the middle of it is consumer discretionary. it is a big, ugly, blue, like the san jose sharks jersey. it is big and wide way back.

that is the america we know. colgate toothpaste. does the rest of the market we focus on every day of industrials, kobe toothpaste and the rest of it, are they still a value because they are so small now? >> i think there's a big swing and our structure of economy away from the consumption, more toward industry. you see it in the fixed investment. that is what is driving our economy at the moment. fixed investment in the industry is as large year-over-year as consumer spending year-over-year. that is the first time that is happened in modern times. where going back to somewhat of an industrial state. you will see that consumer share stay or shrink. you see materials, industrials, slowly start expanding for the next 10 years. that is what you have to focus on if you are investing. >> who came up with a single best chart? who on our team figured -- rachel.

yes. well done. awesome chart. everyone on the team has names. she is rockwell. >> top photos. we're going to have some fun with the first one. we're talking about kim jong un reappearing in theory for the first time in six weeks. according to officials in north korea, this is him yesterday. we don't know if it was really taken yesterday. photoshop in. does anyone trust these photographs? >> this is what they give us. you have to go with what they've got. >> i want you to focus on him. how old do you think he is? >> 30's? >> 31. living.some hard >> he has only diseases like diabetes, gout. >> eating a pound of swiss cheese every day? >> this is hard living.

>> i'm making light of it but the fact is, there are hundreds of thousands of people who are under his autocratic regime and living very hard -- >> and suffering. >> number two, protesters burning down state building in mexico to manning the release of 43 students who went missing last month -- demanding the release of 43 students who went missing last month, this is saying they're still alive. nobody knows what happened to them. >> is this south of mexico city? >> significantly. photo, dr. martin luther king in soma, alabama 50 years ago today that he won the nobel peace prize. he was 35, the youngest ever to win. isn't it fascinating? i was with the governor of alabama about two months ago when i was down there and he said that montgomery, alabama --

this was in selma -- but madonna, alabama, -- but montgomery, alabama. i believe this is where ms. parks try to ride the bus. i believe i have a correctly. it is also where he made the stand and said this is not acceptable. >> we have tensions today. i remember the tensions in the dual assassinations in 1968. it was really difficult. >> i was in washington this past weekend and it is incredible to be there. you think about when he gave that speech, and you look down the mall and the millions of people. it is incredible. it is an awesome sensation to think that is what happened. he moved so many people. >> let's recap some breaking news from earlier on russia's finance ministry canceling the ruble bond auction for tomorrow. the 10 year yield on russia's bond, 9.9%. the highest since 2009.

>> 9.9 percent. that is what happens when you get shut out by the world. >> are twitter question of the day -- tweet us. we want to hear from you. we will be right back. ♪

>> good morning. washington waking now. for 5:00 p.m. tonight. someone will be skewered. washington rises. they rise to the most amazing bond market. we will get to that in a moment. we need to look at corporations away from the banks. here is our company news from the files of bloomberg west. quite netflix boosting its monthly prices for streaming ultimate high definition television and movies. it now costs $11 $.90 a month. -- $11.99 a month. roughly four times the resolution of current high definition television. for the third time in three years, the potential buyer walks away from t-mobile. france's iliad has scrapped its

offer. t-mobile is the smallest of the quarter major u.s. wireless carriers -- four major u.s. wireless carriers that the fastest-growing. google expands its online shopping and delivery service as a battles amazon for customers. chicago, boston, and washington, d.c. of the latest additions to the google express service. the company says more than 70 people in the surgeries -- 70 million people. >> very good. let's have a smart conversation on where we are. our global slowdown, this inflation, modest currency skirmish. and markets enjoying dividend growth, iconic share buybacks. all good feeling. the good feeling has ended abruptly. a modest correction. just modest. and a fed where jenna yellen must consider the double --

janet yellen must consider the global ramifications. we're honored to bring you robert albertson. it is dynamic. we have been doing this a long time. you and i know the balances between anna terry and fiscal. forget about that. who do you blame for this cacophony we're in right now? >> i blame the government. who doesn't? look, i think the central banks have deliver too much and we have a lot of distortions that we have to work out. what we have not done is driven our employment the way we should. the unemployed at right is meaningless at this point. if you look at the labor force, we are back to zero growth. the last time we had that was 2009. we are not generating the momentum in the psychology to get people back to work. and we're supposed to be the leader out of this mess. >> i want you to explain if we all understand the distortion of central banks, why should i be in the market?

how can i participate in the equity markets knowing the central banks have created an artificial space? >> you have to assume overtime that interest rates go up and you have to put that in your calculation. when i look at the financials, i to normal,e's back not above normal. so i am comfortable if i focus on that kind of value. but if you are in the technology sector and you're used to -- incidentally, tech is a more sensitive sector than financials. >> why? >> because the valuations are so high relative to earnings that once you get a change in ambient rates, that equation hits the high pe comedies more. comfortable.ably the answered your question is, where else are you going to go? speaking of where else would you go, i want to bring in my morning must-read. he writes --

you talked about the u.s. having its last decade when it comes to wages. japan had its own. what have we learned from japan, what not to do? apparently, nothing. we're still focused on monetary rather than fiscal policy. i don't get it. i appreciate everyone has to push that button when there is not a button to push mud but i think it is a failure of government to get out of the way or at least do things helpful to get economies working worldwide. >> that is the same case in europe and japan. >> europe, is the more frightening one because it seems to be going down and down. the flipside to this is what the 10 year and 30 year are telling us, we're going back to the global downturn. i hope that is not true. >> robert albertson, honored to

have you here on a busy day. let me do the for report. ex new strength in chinese. >> in the next hour, bill cohen will be joining us to talk about the big banks. ♪ . .

>> this is "bloomberg surveillance."

>> america confronts the ebola virus. aen one infection is on separable. jpmorgan prereleases at 7:00 a.m. earnings release. the check is in the mail for $1 billion of legal expense and everyone is on board the cloud. wait a minute, there will have to be some cloud losers. good morning, everyone. this is "bloomberg surveillance." we are live from our world had orders in new york. it is tuesday, october 14. i am tom keene, joining me a scarlet "her head is spinning" fu. adam johnson and william cohan join us. 4:17 a.m. this morning and in 6:51 we did it again. >> jpmorgan did it early that >> i hope with a healthy jamie dimon that is screaming right now.

>> jpmorgan comes up short. in an early release, the world's biggest bank posted earnings amid analysts' estimates. the bank also said aside $1 billion for legal expenses, but shares are down in the premarket dot earlier on "surveillance," robert alverson of samuel o'neill says you have to look beyond the headline number. >> we're watching a movie too fast. this is a slow economy and a slow recovery and everything is falling in place. you have the loan cycle picking up broadening as it should dot the first thing i look that was long growth, 7% -- that is not shabby. >> later on, we are expecting to hear from ceo jamie dimon. falling. of oil keeps west texas intermediate down 1%, the sixth the decline. wti is down more than 20% entering a bear market since june.

the international agency predicting oil will expand at the slowest pace since 2009. in hong kong, police used chainsaws who dared on barricades in the city's business district. go torge protesters to the main protest site. the chief executive says he cannot let these demonstrations last much longer. one opposition politician told bloomberg she hopes china gets a different message. >> beijing should listen to us. what do we want? --tin a craddick elections just democratic elections. it is not a revolution. >> breccia try to avoid further sections over ukraine that more than 17,000 soldiers will return to their basis. meanwhile, number if the number of executives to reach a nflion of dollars to the

want their money back because the "walking dead" drew more than 17 million viewers, and in 49 coveted 18 to demographic, it beat nbc's sunday night football. so zombies can perhaps be as much of a draw as life sports. >> i have no clue about the "walking dead." >> you know about the nfl, though. >> sort of. 17 million? >> and i was just watching it on the day off, so can you imagine how may people are watching on later on dvr? >> good morning, everyone. check, equities, bonds, currencies, commodities -- oil has just broken down. $88ent crude moments ago .79. in the bond market, just and theping, 2.12%,

10-year yield blows through 3%, there is your data check. bring on the second part, 7:00 hour, bonus here, and you can see the dow, 16,320 one. we will monitor this on radio and television through the morning. our guest house for the hour, bloomberg intruding editor william cohan, and erik schatzker joining us as well. how important is jamie dimon being there? >> he is the leader, so him not being healthy -- anyone trying to confront a serious illness, one gets concerned, but to have him back feeling better is huge for that place, not only for his leadership ability for the morrell point of you. the details know better than i do, how many lawyers develop a $1 billion expense? [laughter] >> i do not know.

>> do you know in house and outhouse how many they retain? >> i do not know. >> does bill? >> it's on like a how many people does it take to put in a lightbulb kind of joke, but they have a lot of lawyers. >> expense also counts for what you set aside, so it is not just paying legal fees. >> they are setting aside $1 billion. important topic because for all of the pain that jpmorgan and other banks have suffered settling with the justice department and other regulators over alleged infractions and sales of mortgage-backed securities, alleged of course, but probable given everything that we have seen and learned -- >> they have settled -- >> we have yet to enter the phase of negotiation and settlement over the fixing of libor, the fixing of foreign exchange rates, the fixing of gold, and the benchmarks.

now, i think you can draw the conclusion based on what jpmorgan is doing this morning that we are not there yet because if we were, it is probable, likely, that that number would be higher. >> we will see a lot of interesting quarters were everything is thrown in. yet how coldclear global jpmorgan individually is relative to the other banks, british banks, german banks, swiss banks, but jpmorgan is among those that contributed libor rates, for example. it is certainly a very active player in foreign exchange. 40 change in merging markets has been the driving factor behind these small increase and fixed income trading revenue. a very large henan every potential market globally. >> gold and silver, there is no question. >> if you a 2% growth on fixed income trading, which has been a big profit for jpmorgan, you have layoffs.

bill? >> yes, there are always layoffs on wall street. you would think that they would for thesepensation people who are not performing, and that is probably going to come too. compensation is down across the board on wall street. still higher than they could get doing almost anything else. as we saw with deutsche bank, if you don't conform to their new policies about behavior, those people will leave the bank, and the head of investment bank and deutsche bank figures this. we welcome there to partner. lots of change going on. >> sure. goldman sachs is probably leading the industry as far as rationalizing and automating as much as possible. remember, the banks, jpmorgan, goldman sachs and others complained about the regulations that regulars have imposed around them, making it difficult to make markets. if you can't make markets, you

don't and people -- you don't need people. you become a flow business, flow requires fewer folks, the computerization to fixed income trading business is happening, and if that is the future, there is no question you will need fewer people and you want pay them as much. years ago talking on a utility banks, are we back to a chemical bank -- >> they would love to be chemical bank -- >> bill, the money question is can they be both? back to daysre not where somebody like jpmorgan chase is many heading or chemical, even though that is part of their dna. they will do lending, yes, but they will do other things. i've said before on the show, we have entered a new golden age on wall street for these firms. it is not going to be the same that it has been. maybe you do not make as much money if you are a traitor or a

banker, but these firms are going to start minting money again as the economy improves gets jpmorgan's draper to be there at agent -- >> and there is less -- there is no competition anymore. players, global reach, you know, where are you going to go if you want a corporate loan these days? >> except somebody has to start charging more and that has not happened yet because the demand is not there. look at the future -- there is no revenue growth. >> but there will be, erik, as the economy improves. >> there is the underlying assumption, that economy improves and the pricing power returns to the bank so they can charge more for their services. >> they are a cartel, so when you are a cartel, data's my word, not theirs, i think they will have a lot of pricing power soon.

>> erik, you will be listening on the conference call, what we be listening for? >> everyone was to hear from jamie dimon. he was at the conference in washington over the weekend talking about having to spend much more on technology live in the data breach that they suffered, but more importantly the trading environment, the extraordinary volatility that we've seen over the past few days, the banks may not be as big in trading as the use be because of these capital requirements, but they still see a lot. everybody listening to jpmorgan, citigroup in particular. >> all right, erik schatzker, coanchor of "market makers," covering the banking earnings. we will be back with more. >> phil mcdermott, ceo of sap just closed the largest cloud deal. ♪

>> can morning, everyone. coming up, the chief financial johner of wells fargo, shrewsbury will be on "street smart." from new york city, it is "bloomberg surveillance." i am tom keene, scarlet fu and adam johnson with me this morning, bill cohan with us as we look at the banks and compensation. bill, a bank and just wrote out a check for tuition or two and

they got a delayed compensation. they are not only miserable, they are livid. where is the new compensation on wall street banks? >> first of all, it is lower, but it is not sufficiently low, it is still very high in other words -- >> everyone is enjoying their alternative minimum tax. >> everybody without risking any of their own capital gets paid what these guys get paid, nobody can get paid wit like that. if you want to risk your own capital, you can make more money elsewhere. >> is the compensation coming from down the income statement in some form of profits, or is it a general statement to a revenue-based? >> come on, the days of sharing and profit are gone. it is all revenue driven. they will generate a lot of revenue by trading this or doing that big merger and then i will hightail my butt down to the

corner office and start telling the guy in the corner office -- >> here is what i made. >> you pay me 12%. >> no. the bottom line is what bill is saying nothing has changed. we are number six in m&a. if we do not get to number four , we are dead. >> you have written about addressing bankrate. -- banker pay. >> bankers, traders take some of their compensation in dead, and a was done in credit suisse and they made a bonanza because of the value, so i do not know whether that is such a great idea. it is sort of interesting. there are thoughts about culture, believe it or not, and andintegrity and honesty setting a good tone at the top -- that i thought was actually very meaningful and a different

thing rather than suggestions, but accountability, yes, has to be a part of this, and it just has not been. i mean, there needs to be a form of accountability, even though we are in a public company setting and it is not a private partnership. >> does accountability mean all of these lawsuits against the banks, people should be prosecuted? >> you know how i feel about that, adam. absolutely. >> coming up, and election of peers. tonight 5:00 p.m.. ♪

>> our twitter question of the day -- do falling stock prices or falling bond yields matter more? adam, $2.19. >> let me wrap my head around that. yesterday.m $2.28

>> this is critical. we are looking at the bloomberg terminal and we cannot even believe the numbers we are looking at. >> anyway, tweet us @bsurveillance. this is "bloomberg surveillance." i am scarlet here with tom keene and adam johnson. >> hewlett and ebay both spinning off businesses, symantec might split into, yet software provider sap, the largest software provider in the world is about to get even bigger, closing the largest cloud deal ever in november, $8.3 billion to buy concur. it is an amazing situation that we will discuss with the ceo, phil mcdermott. i realize we all say we are going to the cloud. there is so much i do not understand. can you explain what is driving this move that you would want to get bigger into the cloud as others are effectively downsizing? >> concur first of all, if you talk to any business traveler, one of their biggest complaints

is i cannot stand traveling and i cannot stand my travel and expense application, and a lasting and a lasting a lot to do with my time is still out expense reports, so with concur you take ground, air, food, entertainment, and all of the open trading on the internet and you have a business network where all of the interaction takes place in a frictionless way, so the business traveler never has to fill out an expense report again and the cfo gets all of the excesses updated in the erp system, everybody wins. >> this is one of apple of how you can streamline technology, apply it on and, concur, and then in the back it gets stored cheaply in the cloud. is this a press as for other deals? the businessea is network, adam. companies have focused on streamline their operations within their four walls, but they have not necessarily focused on the transactions between companies, so i believe

strongly that the business network is the next frontier in computing. that is why with arriba we have a $600 billion u.s. network for individual materials they get traded every day. that is why for contingent labor, the fastest growing labor force in the world, is to every workers. you have to manage that any network in that we have taken the travel and entertainment business and put it in a network. that framework is a $1.2 trillion u.s. framework just in travel and entertainment alone. this is a huge market. >> bill, how will you get shareholder returns for the last 10 years? i understand it has been very good recently, but how do you jumpstarted to the return that institutional investors want? concur's revenues come from the u.s., at the same time only 30% of the travel extensive in the world are in the united states. we are going to get a by globalizing concur. we have the most global business software company in the world

with a direct sales force and a huge network of 2.1 million people that actually represent the sap brand everyday. once we globalize concur command lights up. >> tell me about your competitors. >> oracle. >> the ibm's of the world. everybody wants to be in the same patch. >> ginny and ibm is an example, great partners of sap because they want to standardize -- >> he could run for office. [laughter] beat. oes not miss a >> you and ibm are partners? >> of course. they work with our platform to manage huge amounts of data. we do not have a competitor in the space of concur. this is greenfield opportunity. this is why we focus on this acquisition. >> amazon is trying to make money out the front door by selling products.

word is really making profits is to provide the plumbing behind the scenes. >> that is not what i want to do. it is clearly the amazon model. others really are focusing on infrastructure as a service. that is a lower margin profile business then we participate in. we will have our own cloud but we will also partner with amazon, microphone, ibm in there cloud so our memory platform and the sap business suite is to medium,and every small, and large business get to run sap, that is our goal -- business software. >> our contributing editor, bill cohan, has a question. >> if i am a businessman, do i not have to fill out a travel report anymore? does my administered of assistant have to fill that out gekko does it directly go from american airlines to the cfo's spreadsheet?

>> exactly. >> when ie doubts, as long as i use the corporate charge card, it all shows up without me having to do anything? >> exactly. >> you are kidding. >> i am not getting. let's say you like window seats. you put a request into get a window seat. you may not know until one minute before the plane actually starts boarding that your see became available. you will get notified on your iphone -- this is your new seat, you are now, bill, any seat that you want by the window. the same iv also true -- >> ok, i am buying it, i'm loving it, but here is the problem -- you look at some of these companies putting a because they get better valuations if you are separate businesses. if you love it altogether, you may not get the premium -- >> adam, we are going to focus on the business network as a category. you have a good point. this is a good frontier, we will have a good leader on this, we will run as concur and focus on this as a business imperative. this will be one of the

biggest businesses and business software ever done like >> we will be back on this. also flogging today, winners dream, this is the day of his book release, a wonderful, emotional book. we will do that next. stay with us. ♪

>> this is "bloomberg surveillance." with tom keene and adam johnson. let's get you some company news. nowtart with 27 fatalities connected to gm's a mission defect according to the latest data from a victim compensation fund. the current total is more than double the automaker's initial estimates. at least 151 other fatalities are under review. fiat made a successful debut on the new york stock exchange. share of the automaker gained almost 2%. the ceo host to increase the

mpany's vehicle sales by him was 60%. abigail johnson gets the nod as fidelity's new ceo and will replace her father, edward, who has been the ceo since 1977. abigail johnson has worked for the company since 1988. today she is one of the world richest women with a network of about $9 billion. that is today's company news. >> this matters now come if you like tony bennett's new effort with lady gaga, you will like this book "inspired," with us now bill madonna -- bill mcdermott, the author of "winners dream," about the loss, faith, if if any, and the motion of being optimistic or failing on the noble path. for bill mcdermott, it started as the rocks. -- at xerox. it was david carnes and what it

did do for you? >> i was reading the xerox annual report and i go to the top of the sixes in manhattan and i have all of these great candidates, very good pedigrees, linedam lineup a month -- up among them and i remembered x thatwrote into xero day, and it was to be the next david kearns. >> all of the disaster, he came in. >> exactly, and yet this passion for quality, and i said i want to be like that guy. >> one of the great things about studying industrial history as you see all of the train wrecks. others to rebound, within your industry and others, there is so much to malt -- tumult, how to you take "winners dream" and the emotion and bring it to modern practices? >> all leaders have to give their followers a vision and a strategy. the only way to keep people

inspired is to make sure you are looking around corners for the next of elements, particularly in information technology, so when i became co-ceo five years ago, we knew we were the number one business software and analytics company in the world but the world was going mobile with the device, it was going to the cloud, and all of this big data would have to be stored in memory. now the big eyed it was moving the will to the business network. commerce and connectivity is the big idea. that inspires people. >> you grew up in queens and flushing, you did not watch bloombergtv then. a lot of viewers and listeners whose kids have every advantage you did not have. how do you bring "winners dream" and motivate fancy kids with what you learn the tough way? >> back to the beginning of this book. i talk about my house burning down, being on a street corner with my mom, my mother, my brother, my sister, and her popping us with optimism and confidence that it was possible that all of the good days --

>> what do you say about the fancy kid that went to some fancy school and has every advantage and he is looking at you and you want to punch him? >> you want it more. that day, i went into the interview or the day it went into promotion and management, what was the discerning factor? i had a plan, passion, and i wanted it more. put yourself in the underdog position like you are fighting against everything. >> bill mcdermott, "winners dream," a fabulous -- if you do not believe me, believe tony bennett. we have breaking news. cutermany's government has its gdp forecast for 2014 this year and next year. now looking for 1.2% growth this year. -- toy 15, 1 .3%, down from 1.3%.15,

>> money is going to be cheap because you have the 10-year in germany trading at .5 basis points and you have negative two-year yield in europe in multiple companies, germany, switzerland, the netherlands, etc. negative yields. quick data check, our futures off the high certainly, up only 2. >> this is "bloomberg surveillance." i am scarlet fu here with tom keene and adam johnson. our guest toes, cohan bill cohan , -- our guest host, bill cohan. >> a federal health officials are rethinking how they can stop the spread of ebola. they do not know if the nurse in dallas became infective necessarily, they do not know when. the 26-year-old became infected while treating thomas eric duncan. workers were cleaning her home yesterday. kong, police use chainsaws to tear down barricades in the city's business district and urged the demonstrators to go to the main protest site where the

barricades remain intact for now. hong kong's tak chief executive says he cannot let the dimmest ration's last much longer. there are now protests against the protests. and there has been a jim kong on a- a jim young own -- g-un and af kim jon visit to a new residential area. sparkedod of seclusion speculation about his power. he has not been seen since september 3. those are the top headlines that >> for those of you on bloomberg radio and bloomberg television worldwide, markets are on the move. here is the 10-year yield on bloomberg radio. scarlet, here is the columbus day lag down, and then with the german news, we go down another, and i am seeing it in oil as well. >> and we saw the low 2.18% on the 10-year yield.

you and i have seen this before in that you get the sequential and nonsequential shots and they begin to su mup to something -- sum up to something. >> it is october, tom. >> banner that, please. >> germany's government cut its economic growth outlook for 2014 and when he 15. -- and 2015. >> you wonder on a blended races as that officially it's all of the eu back into recession. serious moves in the market now, 0676. leg down, yen $1. really begins to show some of moves.found down 7% about equities since the highs that we saw two weeks ago. >> you want to get this to a correction today.

>> yesterday, the 200 day, that upward trend. >> i saw the "wall street journal" catching up with you today. >> now we have a little bit of volatility back in the markets. this should be good news for the banks. >> it is good for their capital markets business. the question is -- what kind of bet did they make about the interest rate? down, prices upcoming yield down, it surprises them because mr. albertson said he expects rates to go up, as many people do. >> bill, you have this strange phrase, dennisintermediation -- disintermediation. how can you re-bet with space like this? >> if you bet with volatility, then you can make space with these markets.

we had the spirit until two weeks ago where everybody was talking about the death of volatility. now you have volatility back and traders like it. once they figure out how to make money in most markets, i'm sure they will figure this out soon. >> just to add to the headlines, germany economy minister says domestic demand is holding up and adam, to your points, he says germany needs to invest more in infrastructure. >> as do so many of us. >> are we willing to say that at this moment germany is truly and finally on the edge of a japan yield structure? we have a plunge in german yields from .90 to .84. you and i have never seen that. >> correct, nor of we seen negative yield in three countries, germany, the netherlands, and switzerland, negative. you are paying the government to take your money. >> output question this morning -- our twitter question this

morning. >> do falling stock prices or falling bond yields matter more? we have seen record low 10 year yields and they continue to fall. >> a new low this morning. >> tweet us @bsurveillance. we want to get from you. ♪

>> you are watching "bloomberg surveillance." i am adam johnson with of course tom keene and scarlet fu. a clip of the new mcdonald's campaign called "we know people have questions. -- have questions." betty liu is joining us now to discuss this. >> the question that has dogged mcdonald's since "supersize me." >> dogged? i would not feed that to my dog. >> be careful with your words this morning on mcdonald's, right? an overhang at mcdonald's, does this food make me fat? i think we have answered that question -- >> yes we have -- >> and yes it does. >> now the question is -- is mcdonald's food real? >> real? as opposed to fake?

>> as opposed to what is this pink slime i see -- chicken?nuggets really >> the answer for mcdonald's is 100% yes, so they have now launched this social media campaign -- by the way, do you think their food is real? >> welcome it is not necessarily something healthy that you want to eat, but it is real. it had better be food. >> yes. >> a lot of people worry what kenneth chemicals, additives are being put into my food, so they have launched a social media campaign where thereafter and people around the world, particularly in the u.s. here, give me any question that you want and we will answer it, and they have hired this man who is the former host of "mythbusters." hired to break some of these myths. number one, top of the list, he answers the question that came

in from hundreds and thousands of mcdonald's customers, which is this beef real, so they went to cargo and they found a yes, it israel. >> it has a little bit of "ask a jimmy" feel to it. that did not work out too well. >> you know hospital row on the side of new york city, there are like six major -- there is a mcdonald's over there that is jammed with medical people, buri ed in this stuff. >> it tastes good. >> mcdonald's has to do something because you look at earnings, they have declined 4%, so mcdonald's has got to do something. >> they have had three quarters -- >> the number two value meal, hold the ketchup. >> that is exactly what they want to hear. they are hoping they will change

people's minds with this social media campaign. by the way, very clever because they are trying to get younger people into their restaurants. >> like me. thank you, betty liu. >> "in the loop" comes out at 8:00 a.m. >> oil breaking down as well. >> just to recap those headlines from earlier, germany's economy minister reducing his growth forecasts for the economy. 1.2 percent for this year, 1.3% for next year. ♪

>> good morning, everyone, "bloomberg surveillance." rbc capital markets chief commodities strategist helima croft tomorrow on television and radio on "bloomberg surveillance ." we are thrilled to bring you dr. croft, particularly with her work on geopolitics, her tenure at the cia. we have important breaking news on a blue-chip stock. >> j&j has reported that adjustment earnings for last quarter topped the average analysts' estimate and boosted its four-year earnings per

share. >> not bad. that has turned around. >> is a curious when we have all of its headlines coming out of europe that bond yields are going negative on the two-year maturities and here earnings reasonably -- >> and future still up five. >> which is a little bit inexplicable, too. >> so are the kansas city royals. >> you wonder how long the u.s. can stay detached from the rest of europe. >> meantime, let's get you coming us from the files of "bloomberg west." we start with netlist, -- netflix, boosting its monthly were availablems at 899 a month -- $8.99 but now are $11.99 a month. for the first time in as many years, a potential buyer has walked away from t-mobile.

thebile is the smallest of four major u.s. wireless carriers but is the fastest-growing of the bunch. board members that deutsche telekom are divided over whether to sell. google expands its online shopping and delivery service as it battles amazon for customers. chicago, boston, and washington, d.c. are the latest additions to the google express service. more than seven people -- more than 79 people in those areas are able to use their service -- more than 7 million people in those areas are able to use the google express service. >> we have markets soggy this bond yield bonds, now 2.18 percent, american oil breaking down to new weakness, west texas intermediate on the bloomberg terminal, $87.49, that is a wow statistic. germany cut their gdp number after the imf caution of a week ago.

bloomberg's germany editor in berlin. have you seen any affect on the streets of berlin of the russian-german tensions? can you say russia has caused this gdp marked down? level,it is not that first of all. the problem is, and the german government has been thing this for some time, that this is the conflict of the ukraine that has weighed on the economy. there you have the russia factor , but of course it is also the rest of the eurozone, in other words important countries, necessarily the number two and three economies france and italy, which have not been putting -- pulling their weight according to germans. >> what will be the response of the merkel government to this announcement? >> we have an waiting for the other shoe to drop on that.

there has been a lot of advice and calls and pressure out there , especially from germany's european partners for germany to moneye, to allow more eu to be spent to pump up the euro area economy. there is growing pressure inside states from germany's balanced budget drive, the signature of chancellor angela merkel is crimping us. >> within that, tony, one final question, would you say that germany is still using austerity as an economic tool? course the germans deny that dot they deny that quite strong way. it is a matter of -- what is austerity? one thing we do know is that

merkel and her reelection campaign last year promised the germans a balanced budget. it is a psychologically important thing for germans, so yes, that is still in play. >> very good, tony, thank you so much. a summary from tony czuczka with bloomberg government. there is immediacy when you talk to those people. >> yes, there is, a crystal-clear immediacy in those numbers, 1.2% growth in germany this year, down from 2%. >> here is the other thing -- the investor confidence number came out before this reduced forecast. it already dropped to a two-year low. we are not at recession levels yet. us, bloombergwith and riveting editor and author of a number of wonderful books in the banking industry. i remember having an xl it sandwich at some diner in new york. all these fancy suits and ties want to be international banks. >> they are international banks. >> is it out there for them to

try to make revenues and make profits in? >> of course. it depends what lines of business but certainly when it comes to investment banking, fee business, raising capital all around the world, that is what they really want to do. that is great business for the, profitable business for them. they will raise the prices i suspect on those kinds of services. when it comes to trading, again, it is very hard to trade in this environment where you think interest rates should be going up and then you have a day like today. >> let's rip up the script -- what is the carnage right now? what is the hornets given the volley we see? , you the hedge fund world are having real pain today. hopefully on wall street if they are following the volcker rule, they are not allowed to think they take those positions like they used to, but they are in the client service business, so if their client wanted them to do that, now they are feeling pain, they will have to figure

out another way to make that money back. ex adam, it is not be london whale, it is the london guppy. >> you keep thinking rates are going to go up and then they go down. >> the fed keeps getting pushed back a little bit. let's bring in our twitter question of the day. we ask to this before we've heard about the german reduced forecast, but it seems more appropriate now. do falling stock prices or falling bond yields matter more? the extent fell often at woody's and of course the rally in bonds and those record low bond yields for so many countries. some answers -- i would initially go for stocks but would choose bond yields. at?%, is that where we are 18% because you have to round up. >> 10 basis points on the 10-year. >> second year -- sears driving stocks and bond yields down, buy stocks.

>> is the fear out there? >> it is not on the palms, but this might be a buying opportunity. if j&j has good earnings come a means jpmorgan is pretty good all things considered, $5.5 billion a quarter. rbc, nicelub at number. i cannot keep track of where everybody is. >> have you noticed how many guys like golub have gone to rbc? never had thehey banking problem we had and they can pay people because there is no tarp in canada. >> what else? >> final answer to our twitter question of the day -- bonds. we need to worry more about bonds and stop relying on that interest rate/qe would solve all of our problems. are excited with it, the risk is

being mispriced because you have -- >> i agree with that because the risk is being mispriced. you have the yield driving them to take improper risks in my mind and i think you still see that. this reinforces that. >> my agenda is still yields and i agree with adam, death by a thousand cuts, we are not there yet. stay with bloomberg television and bloomberg radio through the day as we monitor particularly as the equity markets quicken, adam, i would say 3:00 p.m. this afternoon. >> my agenda item is the bank because wells fargo and citigroup are reporting at the top of the next hour. >> maybe they will get them out of the right time. thislike jpmorgan at 4:15 morning. here is what is on my agenda -- after the close, cfx, the east coast base railroad is reporting. only 2% growth. i just wanted an excuse to show a cool train video. listen to that. last week, canadian pacific

bidding for it, and csx said no thank you. >> bill cohan, never a dill moment. >> "bloomberg surveillance" on radio contagion -- continues. ♪

good morning, it is tuesday, october 14 and we are live from bloomberg world headquarters and you are "in the loop."

markets remain at the core of what investors are focused on because it was another ugly day in europe with the economic forecast cut. 600 has a sixth day of losses. we've got a brain trust of global economic watchers to sort out the mess around the world and how it affects us here in the u.s.. at -- equity futures are rebounding. these are my guests over the next two hours. here is a look at our top stories. in then came up short third quarter, the biggest bank in the u.s. posted earnings that missed wall street estimates. aside $1 billion for legal costs and revenues came in higher than expected and so did revenue from fixed income