from america. merkel and hollande announced they will go to kiev. forget nonfarm payrolls, tepid payrolls is front and center. and the changing of the grandchildren guard. time marches on for the royal family. good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is thursday, february 5. i am tom keene. joining me olivia sterns and brendan greeley, an amazing morning in europe. oliva: we begin this morning in ukraine where intense discussions are about to begin. german chancellor angela merkel and french president francois hollande are heading to kiev. john kerry is heading over there. the main topic -- whether nato and the u.s. should provide lethal weapons to fight pro-russian separatists rebels. ukraine central-bank raised its key discount rate by 5.5 percentage points to 19.5.

ukrainian currency has been battered. and a surprising move from the ecb, which announced it is cutting off a key lifeline to greece's banks. the ecb says it will restrict loans. shares of greece bank plummeted. finance minister yanis varoufakis is in berlin where he will meet one of his main antagonists. brendan: bad news is at them is your health insurer. hackers of stolen data. that data includes names birthdays, and social security numbers. no word on how the breach occurred or when it was discovered. the fbi is investigating. one investigation to another. ubs is again under federal investigation. the u.s. is looking into whether the bank helped americans and evade taxes.

the probe reportedly centers on bearer securities that can be used by catch. ubs solved a separate case with the justice department six years ago, tom. tom: in the soap opera known as radioshack, the bankruptcy can be coming in hours. the beleaguered retailer reported in an agreement to have brendan greeley make one more radio with transistors, not semiconductors. brendan: i made a robot, and it did not work. tom: the deal calls for radioshack to sell stores to sprint and remember, amazon was rumored for some of those stores will of the remaining 2000 out little be expected to be closed. brendan: this is a sad moment when what used to be a company becomes a real estate play. tom: absolutely.

a moving data check, i literally had to rewrite it twice. euro advances of all the news in eastern europe. nymex crude, you saw the pullback yesterday $49.27 on american oil. the fix, 18.33, and there is the doubt, really resilient, that number -- the vix $1, and there is the8.33 dow really resilient. and a stronger ruble this morning. let's go to the bloomberg terminal with those headlines. this is where we were. we are eighth under the desk and then 16 and in this morning with the news, brendan, up we go to 19. we were there when we wrote the first data check. olivia, you know, did the -- got this all worked up, and they were doing my makeup. brendan: and also read her notes. tom: yes, but i was --

olivia: the hryvnia is on the move. 19.5%. ukraine is seeing it will do whatever the imf wants. it definitely needs aid. tom: desperation is the right word. brendan: you see this abrupt rise in the key rate. this is what moscow did about a month ago, and that should induce capital to come to the country and what it ends up doing a signaling panic in desperation. olivia: they can smell the blood. "bloomberg surveillance. tom: john kerry is greeted in kiev. you saw a genetic headline, the president of france saying it has moved on to the national bank. that is their central-bank in ukraine. they agreed to any and all imf demands as olivia mentioned. we are lucky this morning, and from london, gilles moec who

olivia has interviewed twice a time, joins us from bank of america, merrill lynch. gilles, your reaction. you are not an emerging market economist, but your reaction to the carryover of this into other nations into america. there is a knockdown effect, isn't there? gilles: from the decisions and ukraine, one was extremely central, what this idea that because of the crisis in russia, we had a very deep drop for infants in german exports, and one of the reasons why we had this small slump in the spring/summer of last year was clearly related to the situation in russia and ukraine. since then, things have stopped to be absorbed a little bit better, and we've not seen any major changes in western europe. tom: why now? gilles: the decision is probably

motivated primarily by the discussion with the imf. the problem with a country like this is that first of all, they were not in the best of shape before the crisis started, and as long as the difficult situation remains tense, it is extraordinarily difficult for them to come up with decent micromanagement. "bloomberg surveillancebrendan: here is the headline, -- tom: here is the headline, it weakens them i think it is a plunge. brendan: you are an ecb watcher. what i'm trying to figure out is the decision to no longer accept greek sovereign debt and part of their ongoing liquidity operations. it sounds like a dry thing to do, but it feels political. is that right? gilles: the ecb is doing what it

always said it would do and the reason why greek bonds were accepted as collateral was that they were going to be in a program. the greek government has told ecb and everyone else in the world we do not want the program. it is the timing. brendan: yeah, they did not have to do it now. olivia: the point is they were operating under a waiver. it does not look like mario draghi is getting political, choosing to lift it now/ gilles: in the sense of what the ecb has been trying to do for years now, is not to be seen as the ultimate decider in europe. it is not their job. they are not an elected body. the message repeatedly from the ecb is do not count on us to make decisions. what they need from the government is a deal, once they

have a deal, then ecb can do their job. tom: the combined gdp of greece and ukraine, we are talking $417 billion. i am fascinated, olivia, how these are two rounding errors. olivia: now the concern is political contagion, but either way, gilles bloomberg is reporting that greece could run out of money by february 25. are we going to get a deal before greece runs out of money? gilles: first, what the ecb has done yesterday liquidity for banks, it is absolutely central that this is understood. they have basically told greek banks we will continue to refinance you, the difference is that the risk will stay at the greek central bank, and you will have to pay a next her price -- an extra price for this. there is no change -- the only difference is the cost. i do not think there is a material difference. tom: the headline here for our

viewers is we came in, we had a cup of coffee, we had kerry, hollande, and merkel in kiev and then the roadshow moves to moscow. tom: we have had a lot of -- brendan: we have had a lot of roadshows. gilles: i love the way you have framed this. it essentially said you had get in a room right now, you has out, i cannot do it for you. gilles: one of the reasons why the decision came out last night, first of all, you do it once market closes. tom: yes, of course. gilles: they had a normal scheduled meeting to do this roughly for two weeks, three weeks now. it was from their own point of view the right moment to do it. tom: and we have been looking at the president of france speaking before he travels with ms. merkel to ukraine.

josh wright with us as well from bloomberg intelligence. josh, tell us how this fold over. i do not see the 10-year yield moving. it is really discrete photo lineup by that of my history books. josh: the ecb did this before in 2012, to my question for gilles: is what will be different this time? in 2012 it is all about the euro breaking up. greece is not trying to leave the euro zone at this point, so it is a different kind of game. gilles: greece is not want to leave the euro zone it has said so time and time again. it is a welcome change, the reason why there is so little reaction is basically because one we have qe, a situation where we have a structural by an system that will make sure that no one will take their risk of trying to attack the market on account of what is going on in

greece. that is the major difference. tom: and media bloomberg headlines out as well. we've also seen a titlist greece. explain the sartorial presentation. brendan: i am "bloomberg surveillance" chief titlist? tom: how do we look? brendan: this is alexis tsipras. can i get the camera on me? he is casual, he cannot be bothered to buy a tie. this is yanis varoufakis one extra button and the jacket off. i am on television with two buttons down right now. that is happening. olivia: yeah i would button it up. brendan: it is deadly serious -- should the u.s. army crying, should i put my tie back on? -- should the u.s. arm ukraine?

should i put my tie back on? tweet us @bsurveillance. ♪

tom: good morning, everyone. "bloomberg surveillance." i am tom keene. with me olivia sterns and brendan greeley. olivia: we begin with taiwan the final moments of train a nasia the plane clipped a taxi before plunging into a river. at least 31 people were killed, the pilot and copilot among them, 15 other passengers survived, as did the taxi driver. a dozen other passengers or remain unaccounted for. ebola -- new cases last week in

the three nations ravaged by the virus. it is the first time that has happened this year. the world health organization said sierra leone had 81 confirmed cases last week, up from 65 case of the week before. getty and liberia also saw an uptick. -- guinea and liberia also saw an uptick. and $550 million, the court once batista's boat and airplane also. but these that went on trial in rio de janeiro accused of insider trading and market manipulations. tom: very good. something special this week. i spoke with peter g peterson. he has spent a lifetime in politics with success on wall street, became a good life for mr. peterson, also a dedication to educating americano debt and deficit. i sat down with mr. peterson on his new book, steering clear.

we hearken back to 1986, ronald reagan, and tip o'neill. peter: we can have a world where what we leave to our children is very solid and where we take care of the very poor without a lot of sacrifice, but politically we made the solution to the problem and possible. tom: do we need more tip o'neills? do we need more people cut from a different time and place and fabric? peter: i love what he and ronald reagan did. m how -- tom: how to we get that back? peter: very few of that mode and it is exactly what we need in which politicians sit down with one another, and they have solutions that are practical, and both sides give something. tom: do you feel like america

now is losing its shared experience? peter: when i was brought up in nebraska, i remember my greek immigrant parents coming over without a penny, and without a word of english, and early on when they opened up their diner, and i went to work there, they were thinking about their future. and i was going to get the best education, as my dad used to put it, that money could buy so there was a commitment here to the future. and what is missing to quite an extent, and what i am trying to get people focused on these long-term debts, is we are spending almost no time on the long-term. we are forgetting the long-term. the long-term is going to be there. the current path is simply impossible. tom: pete peterson, obviously a very fragile pete peterson, but out with a wonderful book.

josh right, i was thunderstruck at the quality of the book. -- josh wright i was thunderstruck at the quality of the book. what has changed in our deficit debate? josh: what has changes we have gotten more and more polarization. that is based on issues at the political liveevel fragmentation at the media, and really what you are seeing is a failure of divided government. olivia: olivia -- tom: olivia, the structure of the book is now is the time. olivia: the obama administration would point out that the deficit is shrinking. brendan: i have to say, what josh wright just that is important, when tebow meal and the gipper uses it down and have scott, we want that time to return but josh was just talking about structural issues

that america is different from the early 1980's when they were cutting those deals. tom: gilles moec with us from london. i remember traveling around the world, and everybody was in up roar about america's fiscal crisis. that is not true anymore, is it? should pete peterson take a victory lap? gilles: the u.s. has been able to reengineer growth very quickly after the late president -- great recession of 2009. this extremely slow growth, stagnation, has been going on for six years, seven years, there is no amount of fiscal austerity that he debt off the table. tom: tom: pete peterson was adamant growth alone will not solve this. olivia: what do you feel that the u.s. got right in response to the recovery that europe got wrong? gilles: it was quicker to recognize that first and foremost you need to solve every banking setctor.

there was a sense of emergency lacking in europe. the view was ok, it is going on in u.s., we do not need to solve. it took four years or five years to really get banks. then we have i think very -- a very ill-timed approach to austerity. we discovered after two years or three years it was becoming self defeating. the speed of the response was obvious the a problem. tom: gilles moec with us of bank of america, but merrill lynch. coming up, we will continue become a station on america's success and failure. stay with us this morning. dan clifton will join us from the strategas partners. ♪

tom: good morning, everyone. "bloomberg surveillance." again, major headline of the day, merkel and hollande will travel to kiev and then moscow. morning mustard with -- morning must-read with olivia sterns. olivia: the world's biggest manchester united term, the former head of goldman sachs asset management, jim o'neill he says olivia: as you can see on the

top, the title of the article is "two cheers for the new normal." he is not getting the idea that the global economy is going to hell in a hand ask it since 2007, and he says we should not be disparaging, maybe china and russian ruble have been -- we have a reason to be optimistic. gilles moec, do you agree with jim o'neill that we should be more optimistic about the economy? gilles: the drop in oil prices obviously is a net positive. you are taking money out of big sabers, and used in that money to big consumers, so in any case it is a net positive. the issue we have right now is that at the same time as we have had those factors, there is quite a lot of noise, and i think this is the issue that the market needs to deal with.

at the same time as we have this sense of finally some exit from the wallowing and stagnation, we have realignment of currencies which act very quickly. there is a reaction to the flesh very forces -- tom: is it a currency war? gilles: basically what is happening is everyone is reacting to a surprised shock on oil in a situation where inflation was -- olivia: with competitive devaluation, which you can say is a currency war. still to come, changing of the guard in saudi arabia. we will go live. this is "bloomberg surveillance." ♪

tom: good morning and welcome worldwide, particularly welcome in europe this morning. brendan greeley and i looking like well, the new greek government. we are tired of all of the drama

in eastern europe. a tieless brendan greeley. brendan: this is not my idea. investigators are analyzing train recorders to try to re-create final moments before the commuter train slammed into an suv on the track. the suv moved nearly 1000 feet before coming to a stop. the third rail went through the suv before piercing the car of the train. the suv's driver and five train passengers were killed. it is the deadliest accident and the railroad's 32-year history. bill gates is donating more to his money. the microsoft cofounder gave 31 shares of his company back to the foundation. he shares have a value of $1.5 billion. it decreases his stake in microsoft to 3%. his organization works to fight olio, eight, malaria, among other initiatives. -- to fight polio aids malaria, among others.

laurene jobs' fortune jumps $1 billion in a day as disney shares soar. she is of course the widow of the late steve jobs. tom: just out on bloomberg business, you can see on our brand-new website, this is the new leadership of greece. one way greece can keep their banks alive, we have josh wright with us with his view of international economics. it is really simple -- when in doubt, capital controls. this goes back to 1998 and mondale out of world war ii, which is flows matter, get a hold of your flows. what can greece do? josh: the way you can look at this when you are greece is you have to use whatever tools you have at your disposal, and the reality is their hands are tied. they rely on the european

central bank to control interest rates and exchanges, so they have to look at what options they do have, and capital controls is one of those options. tom: what can the imf do? olivia said the headline is we will do anything at all that the imf says, what is the last resort? josh: the imf -- it is a kralev political game. they are responding to the politics. it will all be about in consultation with the other members. it is not what christine lagarde wants. olivia: what cyprus did two years ago, the point is hereto, what, by more time? josh: it is not clear -- olivia: this is a quote from an economist in brussels, a well-regarded economic commentator, who is suggesting that this is one way cyprus can buy some time because it looks like the ecb is testing greece by pulling this waiver. they have to go tap these emergency funds from the greek national bank. brendan: this is something

daniel gross has been talking about for a while. i talked to him two years ago about all of the flows of german money that went to greece a couple of decades ago and he said these are things the germans are not aware of. they are not aware that it was their capital that went to greece that became part of this problem, so we look at greece as a problem child. we are ignoring the flows of capital north and south within the european union that contributed that problem. that is one thing that yanis varoufakis has been very loud about. josh: it is a great shakeout in terms of what are the policy options, what are the different cars the different players have to play. tom: you did the brilliant thing earlier, you showed your one chest hair -- brendan: i am not going to do that again. [laughter] tom: seriously, you know this guy in greece. i do not know anything. how is he received in germany? is he able phone? =-- is he a buffoon? brendan: no, yanis varoufakis

was very outspoken. i interviewed him, you interviewed him because he has a way of giving interesting quotes. olivia: i am sorry, brendan, you will have to cut your hair -- he self identifies as a libertarian marxist, true or false? true. tom: but he works for the establishment. he worked for the george washington family of greece. josh: exactly, he was working in previous administration for a number of years. brendan: he actually tried to start a phd program in economics at the university of athens. he had to go to ut because he lost funding for that program. his whole point was -- models are not sufficient to understand the world. you have to look at economic history. that is his of session, economic history matters. josh: he is a dissident policymaker. before he was an advisor -- olivia: i definitely think i

would like to grab a scotch with him. he looks like he is a fun guy to drink with. i do not think mario draghi feels that way. do not forget that cyprus remember, he recently went to a world war ii sites, he is doing provocative things austerity -- he called austerity "fiscal waterboarding." josh: it is not a question of gravitas. he changes his clothing, he talks about being a libertarian marxist, that is all very good negotiating strategy. tom: as the only adult on the set with a tie on is to explain why i care about this and america. we have an american audience and audience in the united kingdom. greece is over there, ukraine is over there, i do not buy that idea. discuss. josh: we care about this because of the large reason of why the 10-year deal on the u.s. treasury note is because of what is going on in europe, ukraine in greece, in brussels, frankfurt. brendan: you have written about

this. it's something we are starting to see in factory orders in the u.s. this problem is coming back to us. josh: exactly. consumer goods have been down factory orders are down, and a lot of that has to do with demand abroad. one city i did not mention his berlin, and that is where the question of what is going on in europe and russia and ukraine is coming together. tom: quickly, you lived in germany. how unprecedented is it that france and german leadership will go to kiev and moscow? brendan: everybody looks to those two countries make policies for europe. hollande has such a terrible relationship. they make policies. olivia: people look for germany and france to act in lockstep. years ago, we were questioning what the use of nato was, now all of a sudden we are setting up command centers across the eastern front against russia, poland, lithuania, latvia --brendan: we are going to take a hard right turn here.

joss you take your tie off. meanwhile, if you happen to have a lot of urban sitting in a cask somewhere, it has been -- a lot bourbon sitting in a cask somewhere, it has been a good year for you. this is "bloomberg surveillance." ♪

tom: good morning, everyone.

"bloomberg surveillance" from new york city. we need to digress here right now. it feels good with all that is going on internationally. let's get to our single best chart -- here is brendan greeley. brendan: tom and i are not wearing ties in solidarity with greece. josh wright is here a bloomberg intelligence will stop americans are fine with whiskey, but whiskey is not with the comment that is the subject of today's single best chart. bourbon beats scotch. we know people are buying more whiskey, but if you look at the different segments within whiskey, you are looking at a huge boost. the red bar is the fancy stuff. single malt of scott used to be the fancy stuff. the cheapest single malt's got is down by 13%, so the growth is not uniform across whiskey. by the way, i have to think nina

melendez -- i wanted much more complex charts. see semper fi this for us -- she simplified this for us. if you happen to own casks of very old bourbon, which there was no demand for, all of a sudden you are about to get very rich. you can off on aged bourbon for love or money right now. josh wright still wearing a tie, do you drink whiskey? josh: i do. brendan: do you drink the good stuff? josh: i think it is good post up that is why i drink it. i like the single malt scotches actually -- i like the single malt scotches, actually. tom: right is not bourbon. brendan: bourbon is a mix of corn, rye -- tom: and sugar. brendan: and wheat.

jack daniels has a little more rye. scotch has no corn in it. tom: good to know that. brendan: now we are getting so deep into the weeds. tom: what is rye? brendan: rye is a grain. tom: we had whistle pig on from lake champlain. olivia: people are drinking up. brendan: whiskey was being made at the same distillery, so a bunch of different brands coming from the same couple of distilleries. now we have many smaller distilleries working on this stuff. tom: olivia, last night you were at one of your $700 dinners that you go to. what whiskey do you drink? olivia: glenn fidditch. tom: which is a scotch. brendan: i have had some of the

new, local whiskey. i am partial to blended irish whiskey. that category up 59%. olivia: i was at the hennessy factory in dublin -- tom: we can never top her. [laughs] olivia: it was like shades of gasoline. tom: can we have your life? josh: you don't have to go to a bar. just go to upstate new york and there's some wonderful artisan ohal -- brendan: that is true. they have not been doing it long enough to age well. olivia: i say the best present for a newborn is to buy a case of scotch that they can drink on her 21st birthday. brendan: allison, we are going to ireland. tom: photos. olivia: in boston, tens of thousands cheered at the pats super bowl victory parade that featured a 25 boats with the

champions and their families, i am sure gisele tom, and their group were in there. fans battle freezing temperatures. patriots claimed their fourth super bowl win against the seahawks last sunday. brendan: where is tom brady's m.v.p. truck? olivia: i don't know. he gave it away. nasa's new horizon captured photos of pluto for the first time in nine years. the photo was taken 126 million miles away from the very important here former planet. the spacecraft traveled at speeds of 31,000 miles per hour over the next few months, new horizons will take hundreds of photos of the planet and its moon. it will pass by pluto on july 14. tom: when i was a kid, that is a photo of saturn. that was what saturn looked like a million years ago, and now with a satellite, that is pluto. that is amazing. you never saw pluto.

olivia: number one photo -- why do these two guys not have ties on? because they are trying to be like alexis tsipras without a tie the newly appointed prime minister of greece is now having conversations with francois hollande, he is greece's youngest thai minister. he was also called tiele -- youngest prime minister for the view was also called tieless. there you can see tsipras again. the real jackson hound here, though is varoufakis. brendan: this is the empties stage where varoufakis and wolfgang sure but -- wolfgang sureschaeuble is saying right now, "nein, nein nein."

tom: the new slow this morning, if you are just joining us and waking up to this in the united states, the news flow this morning and the headlines from bloomberg are just extraordinary. very quickly, olivia, putin will visit with merkel and åland hollande in moscow. olivia: secretary john kerry has chased his itinerary. he is now going to kiev and moscow. brendan: coming up, we are going to discuss what costs to contain an outbreak. this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your phone, and bloomberg.com. ♪

tom: good morning, everyone. tom:"bloomberg surveillance." we are watching the markets in europe. let's get to our world news headlines. here is olivia. olivia: the premise or japan wants to amend his country's pacifist constitution. he reportedly wants to end the

restriction on you the use of armed force in place since world war ii. two japanese citizens were killed by a sonic militants. russia is taking the lead on the financial fight against islamic state. the resolution targets the extremist group's main source of revenue -- illegal oil exports, the sale of antiquities, and ransom from hostagetaking. russia rarely writes security council resolution but is concerned about radicals from chechnya joining islamic state in syria and iraq. an interesting theory from a pentagon think tank -- russian president vladimir putin has as burgers -- has as burgers centrum -- asperger's syndrome. they fade effects all of his decisions. that is a look at top headlines. tom: a headline over in europe saying ukraine becoming

unusually dangerous. brendan: we will head back to the u.s. in 2004, took public health officials $142,052 to contain a single case of measles in iowa. there are now 102 cases in 14 states. that is a common problem because we all eventually pay for them. dr. peter hotez runs the texas children's hospital. dr. hotez, we have been talking about this as a moral trade-off, but it also burdens public health system. do we have any sense of what the current outbreak is going to cost? dr. hotez: you are absolutely right, this is not only one of the leading killers in the world before we started spreading -- practicing widespread vaccination in the united states, we were looking at 500 deaths annually and 50,000 hospitalizations was that he could do the math -- that is a lot of dollars as well. measles will have not only a significant public health impact but also a significant economic

impact. the other economic factor we have to consider is remember if you are a young mother or parent living in california or living in orange county california you have to be very fearful about bringing young baby that is not old enough to get immunized against measles out in public. she is going to remain shuttered, he is going to remain shuttered in the house. this is going to be a big deal. olivia: dr. hotez, yesterday our twitter was in the day isn't sure the government be able to force you to vaccinate your children. we got a stunning response, far more responsive than we ever get, and he just of the critics is why should you care if i do not get my kids vaccinated if you get your kids vaccinated? we are trying to keep our opinions out of this, but how would you respond to that? dr. hotez: i am of the opinion that we should not allow unvaccinated children into our schools. it is too dangerous to the other children in the school. people talk about this as a

civil liberties issue. i flipped that around the other way. when thomas jefferson wrote the declaration of independence, he talked about the right to liberty and happiness and mothers and parents of children in these affected counties cannot go outside. they have their rights to private as well. tom: dr. hotez, you are too humble. you have dealt directly with this with your family. correct me if i'm wrong, but you provided leadership on autism from your home, from your personal experience. you more than anyone in this nation can discuss this madness linking your medicine to your family's struggle with autism. no one can speak like peter hotez. dr. hotez: wwell, thanks for that. it is more my wife who has borne the brunt of bats, but our youngest daughter is an adult now, has severe autism and other development all disabilities and for more than a decade now

has been going out in public and saying autism is very tough on families and it is brutal, but guess what, it is not related to vaccines. this is genetic or epigenetic and disease, a spectrum of disorders, and the idea that a vaccine can cause autism is not even plausible scientifically. it is only slowly now that people are coming around to this. brendan: dr. hotez, one of the things we are learning about this debate is it is coming to reasonable the debate over global warming in which one side says we have peer-reviewed science on our side, and the other says i do not care. let me read you something from a bloomberg news story yesterday a quote from a public health official. if you insult people or disrespect people, you can harden their perspective. you have been talking to the anti-vaccination movement for a long time. what is the right way to have this debate? dr. hotez: well that is a great question for stop the important point to point out is these are deadly diseases for stop is

not diseases we can try for with or mess with. having 100 cases of measles is very scary. we are going to reach the points and where we will start seeing some deaths from measles of young children. that is a very sobering lesson to have to let it go this far. this is an entirely preventable outbreak. olivia: i want to try your attention to an op ed written by dr. frieden olivia: i believe the official number stands just above 100 confirmed cases in the u.s. do you think we are at a tipping point where this becomes a broader epidemic? dr. hotez: if you remember, you had me on the show a couple of

months ago, and i planed to you why i do not think ebola will take off in the united states. i do not think ebola will ever take off in the united states come i have every reason to believe measles well. this is more than a dozen times more infectious. it is also a disease where you become infectious he for you are symptomatically, so you can have someone at that is perfectly normal, and they are shedding measles virus into the environment will stop us as one of the most transmissible and infectious agents that we know about, and it spreads like wildfire. until we vaccinate the u.s. population, this was one of the great killers of children in the united states. brendan: we have learned that clusters are very dangerous, even a small cluster of parents that do not vaccinate can help the disease incubate full stop how do you approach that clustering problem in the public health debate issue? dr. hotez: the only ways to get that public vaccinated, get them into the pediatrician and get them dozes of the measles vaccination. brendan: ok, dr. hotez and i have a sinking feeling we will have to talk to you very soon in the future. but thank you.

tom: very good, the forex report, no question about it ukrainian currency from six to 19 to 24.50. they are in crisis was up ♪

>> this is "bloomberg surveillance." tom: ukraine devalues the currency. a panic mood sets in. the jobs report is tomorrow could forget nonfarm payrolls. tepid wage growth is front and center. and well that cable tv provider you hate? consider the wire in your house. did may be a utility good good morning, everyone. this is "bloomberg surveillance ." i am tom keene. joining me, olivia sterns, brendan greeley. let's begin with our top headlines. olivia: we begin in ukraine, were intense international discussions are about to begin. german chancellor angela merkel and french president francois hollande are heading to kiev today. the main topic on their agenda whether nato and the u.s. should start providing weapons to ukraine to fight pro-russian separatist rebels.

they will meet with vladimir pugin in moscow tomorrow could ukraine's central bank raised the key discount rate by 5.5 percentage points to 19.5. it has been battered as government troops continue to fight with pro-russian separatists. a surprising move from the ecb overnight, which announce it is coming off a lifeline to greece's thanks good it will restrict loans to the financial system. shares of greek banks plummeted on the news. the finance minister -- there he is without a tie -- is in berlin today, where he will meet with one of his main antagonists and german counterpart, wolfgang short blood. brendan: hackers have stolen data on tens of millions of current and former customers and employees. that data includes names, birth dates, and social security numbers. the fbi is investigating. moving from one investigation to another ubs is under federal

scrutiny. they are invested in whether they helped americans evade taxes. the program reportedly centers on what are called their securities. they can be used like cash. ubs result a separate case with the justice department six years ago. tom: enough about katy perry, that is old news. radioshack is new news. the bankruptcy filing could come within hours. the retailer is reportedly close to an agreement with creditors and other parties. the deal calls for radioshack to sell leases on -- i can't believe they have as many stores -- to sprint. its largest shareholder, the remaining 2000 and let's are expected to close. brendan: one will remain open under a new name and management, the radioshack near m.i.t. is amazing kid they still have the huge backroom full of transistors and cables and all

the things you need to build a helicopter. tom: stuff with m.i.t. people -- brendan: when you used to do with radioshack. olivia sterns has been counting the number of rate lowerings we have seen. olivia: we are about 15 central banks who have cut their key rates since the start of the year and it is only february 5. the question was always going to be with her mark on your would be the first to raise rates and everybody in the u.k. #20 or janet yellen will be the first -- whether mark carney or janet yellen would be the first raise rates to die someone economist early economist earlier this month a 2016. tom: the ukrainian currency implodes, moving 32% by one report as they flow the currency waiting for the imf.

24.50. rubel a little bit stronger. olivia, what do you have? olivia: pfizer is going to bite us bureau for $90 a share. -- hospira for $90 a share. but nice premium there. obviously, there is been a lot of interest in m&a. they failed to take over astrazeneca earlier this summer and everybody wanted what they would do with all the cash and looks like a finally pulled the trigger. brendan: one more step in a long-term trend. the big pharma companies have been pulling back on their own r&d and acquisitions to make up for the investment costs. tom: more on this today on bloomberg television and radio. david wilson will cover that on bloomberg radio and this morning. the chief international economist at deutsche bank. dental clifton's head of policy research at strategic is research partners. they are here to discuss as we shift from the international economy to the u.s. economy. how quiet how call ms.

washington right now -- calm is washington right now guest: it is in a. of calm because no one is paying attention but we will see radical change. the government shutdown in 2013. now we are in a situation where the republicans have to get there see the next, we will say and they will have to do with a number of issues and it will be hard for john boehner to find the votes. tom: part of this is the amazing transfer the market economy. you watch our economy. is it 3.5% american economy or 2.5% sluggish american economy? guest: what is intriguing is that washington being called around -- calm around capitol hill and the federal reserve more broadly and things are heating up. we have growth within the last

six or nine months and is that going to get the fed into action ? the improvement we are seeing because of lower oil prices and higher consumer confidence will be important for the economic picture. brendan: we have been talking about what is happening in washington. the assumptions that came out in the president's budget -- long-term we're looking at 2.3% inflation. can we get there? does their political will to stay there once we do? torsten obviously, the federal reserve is in a difficult situation and financial markets are pricing that we will not have that level of inflation anytime in the next 10 years. but this options in the federal reserve is that we will see a slow move up towards the 2% mark on inflation. but that is the disconnect we have in markets at the moment. phd economics expert that the fed is using is quite different -- phd economics textbook that the fed is using is quite different from the markets of the moment. olivia: want to bring you what is happening with sprint earnings. even document in at $1 billion

versus estimates of $69 million. the ceo is doing every thing he can to return some subscriber growth. sprint is offering to cut people's bills in half. brendan: it turns out it is still possible to run a cell phone business in the u.s.. sprint and t-mobile have been looking to be acquired, looking to get out of the business somehow. if you keep four companies in the market four companies can survive. tom: we are talking the market economy and policy. torsten we are talking about wage growth, but as we go to the jobs report tomorrow, away from wage growth, what are you watching for? torsten: headline on nonfarm payrolls is an important number. there is an important debate over whether the unemployment rate is a true measure of slack in the economy. in other words come all the people that left the labor force during the last few years will

they be coming back and holding wages down, or is the rate currently at 5.6 the best measure of slack in the labor market we have? brendan: i used to think, now i just look at torsten slok's charts that show up in my inbox. you are looking at capacity utilization. not the unemployed and great. -- not the unemployment rate. torsten: a very important indicator of whether inflation is coming is whether committees are producing at full capacity. if the comedy can produce 1 -- company can produce 100 units, countries will be incentivized to raise prices. given that capacity utilization is close to the level it was in 2005 and 2006, given that it is closer than it has been for several years, all that suggest that something is brewing, and that is why the debate must be around these issues. are we going to see higher wage and consumer price inflation later this year? brendan: we are getting eight not from dan clifton on this. daniel: usually when we get to

1.5 of the on employment rate come that is when you see the wages collected first time ever in -- the wages go up. low interest rates, you put all that together and you are seeing much star u.s. consumer. olivia: that is the reason my the fed, janet yellen included included "international development" for the first time. how hard is it for you want hike rates given the currency wars -- four yellen to hike rates given the currency wars? torsten: first quarter effective a higher dollar and the first-order effect of the global oil price and inflation by all means is under a lot of pressure because of that could put how to quantify that immediate impact relative to the second round effect that the labor market -- all of that suggests we have some over your saying there should be down or pressure that we should have a very long structural tend suggesting that inflation should be going up

and that is what is behind the stock chart, that they are saying we have it in our forecast this idea that there are temporary forces holding inflation down -- olivia: we have to look at the five-year. if you could pull that up while brandon asks his question. -- brendan asks his question. tom: karen, see if you can put the five-year chart and we will have it on bloomberg radio as well. brendan: are which conditions going to improve? daniel: that's right. you are studying his seat small businesses get better confidence and once they get that confidence becaus data becomes self-dealing. brendan: we will talk about the fcc i am excited.

tom: good morning, everyone. i am tom keene. with me, olivia sterns and brendan greeley. matt levine is brilliant. this essay had 10 footnotes. all it is about is we're going to relive what brendan greeley remembered from 2006.

tom: and he walks through in a convoluted way adding a fixed income coupon into the credit default swap. we are repeating what we have done. brendan: i'm dealing with of the fact that evidently you believe i was a mortgage broker in 2006. [laughter] tom: weren't we all? brendan: sadly, i was just in public radio. one of the things matt levine does so well is the way things get renamed on wall street. it is amazing as an analyst watch. it is always the same thing, but summit comes up with a new name for the same thing and often it works. daniel: you also see that in politics as well. the estate tax, the death tax. working it to your advantage. brendan: oh, it is called a new name it is called the inheritance tax! we don't like inheritance. tom: i know you can't speak on deutsche bank and regulate white matters, but you can speak on

risk shifting. that is the great shell game of finance back to biblical times. torsten: we have had an improving banking sector the last several years and that is important when the recovery is getting better and better and better. slow improvement continues and this is a very important part of why the recovery has continued. tom: remember cdo square? i remember looking at that one in thinking, what is cdo squared? it was invented to shift a very real risk into some form of fictitious aaa rating credit. olivia: do you think s&p got off easy? tom: he is not going to comment. olivia: come on. brendan: we can go to dan. do you believe we got it right in terms of all the regular tory changes that needed to be made -- regular tory changes that needed to be made after the meltdown? daniel: policy makers to the best with what they have in front of them but we are always

going with the last crisis. and there were things in dodd-frank that were dealing with sarbanes-oxley from 2002. the concern is that maybe we are stifling liquidity and some of the financial markets. time will tell if that is the case that they did the best that they had available. tom: very good. we will continue this conversation this morning. on street smart, the chief investment strategist at blackrock. good morning, this is "bloomberg surveillance.

tom: good morning, everyone. "bloomberg surveillance." i am tom keene good with me olivia sterns, brendan greeley. let's get to top headlines around the world. here is libya. olivia: we begin in taiwan with new details on the final moments of transasia airways flight 235. the plane clipped a taxi before plunging into a river. at least 31 people were killed

the pilot and copilot among them. 15 others survived, as did the taxi driver. dozens of the passengers remain unaccounted for. hints of any pull a resurgence in west africa. -- ebola resurgence in west africa. it is the first time that is happen this year. the world health organization says sierra leone had 80 confirmed case last week, up from 65 cases the previous week. ginny and liberia also saw an uptick. a judge in brazil has ordered the seizure of like batista's assets. the court also wants his vote -- boat and airplane. have requested information on his bank account. he went on trial in november in rio de janeiro could he's accused of market manipulation. tom: it is the conversation of the morning. this is in germany as we speak. the finance minister of germany and of greece meeting.

brendan greeley, jump in here. this is a big deal. brendan: huge deal. these other people who needed to talk to most. we have had so many conversations between different heads of state and wolfgang schaeuble and yanis varoufakis needed to talk to he said yet intensive talks and there is room for compromise. tom: what is the distinction between schaeuble's relationship with the german people and chancellor merkel's relationship with the german people? torsten: generally, of course, greases and difficult spot where they have to do a lot of different things and that is why when we are going to see in this press conference is going to be important. we will get some idea of if greece is moving in the right direction getting closer to germany, germany getting closer degrees -- to greece? olivia: greece is rapidly

running out of money and all the seven at 9:00 p.m. the ecb decided to lift of the wafer and cut off the key lifeline to the greek banks. the greek banks need to tap emergency funds from the greek central bank. tsipras needs to cut a deal before greece runs out of money. tom: germany must have understanding for greek woes. what does that mean across the fabric of 50 years? torsten: he reflects that there are tough talks going on at the moment could as we see in the press conference, there are difficult issues. there are difficult issues that the rest of europe needs to deal with. they need to come together and come up with solutions. brendan: several years ago helmet call longtime chancellor of germany and angela merkel's mentor wrote an op-ed saying that it is a shame what are you still do we need to stick with them because this is a political project. torsten: i think it is fair to say that this is a political project. now we are dusting off all the reasons why greece would not

leave the eu but it is getting complicated by the fact that we have this difficult situation. tom: we have a wistfulness here for our former leaders. does germany look at merkel and say schaeuble and say where is conrad adenauer? torsten: i think markets try to look at the facts of the agreement. is the troika going to get involved -- tom: looking at the mechanism. brendan: but to answer your question, i think it may be true in the future that they will look wistfully get angela merkel. it is hard to think of a more impressive and popular postwar chancellor of germany then angela merkel. tom: washington is as far removed from this is possible. daniel: in one sense we want europe to solve their own problems. in another sense, you have that splitting away with the 25% on implement rate increase versus

5% in germany. they have to figure out how they keep themselves unified. tom: olivia, the headline, greece belongs in the euro. olivia: we are worried about the political contagion. we are worried that the anti-austerity party in spain is going to get riled up, we are worried that instead of -- it is going to feed into the nationalist parties and we will see a breakup. brendan: and torsten, this idea of greece belongs to the rock my very simple statement, very political statement. -- belongs to the euro, a very simple statement, very political statement. torsten: i think it is safe to say that this is what we are witnessing in the moment, the process of integration continuing. tom: the data screens on bloomberg -- futures up 14, 10 year yield like a rock the euro barely moves. this tells what the view that the punch bowl is going to go on

and on. we are to have an accommodative stance around all of politics whether it is greece or ukraine. yellen keeps the party going. daniel: exactly right. if you want greece in the euro, they will figure out how to do it and the u.s. will provide monetary support to be able to get there. that being said, you also have the ukraine issues hitting at the same time. you have both ukraine and reese -- ukraine and greece could ukraine on geopolitical events greece on economic events will stop -- greece on economic events. tom: in the control room, would you please banner this? schaeuble varoufakis, agree to disagree. sounds like martin mull from a million years ago. torsten: when you ask for structural reform it is always

difficult. that is why the process of treasury report is always national -- olivia: greece running out of money, ukraine already running out of money. our twitter question of the day

tom: good morning, everyone. i am tom keene. we need to get your top headlines. here is olivia sterns. olivia: we begin with the fatal metro-north accident in the subways of new york city. they are trying to re-create a final moments before the

commuter train slammed into the suv on the track. the electrified third rail went through the suv before piercing the first car of the train. the essen -- suv's driver and five train passengers were killed. bill gates is donating more of his money. the microsoft cofounder gave 31 million shares of his company stock to his foundation in november. the shares have a value of $1.5 billion. the transfer decreases the state in microsoft to just 3%. his organization fights to efforts to fight aids polio -- his organization works to fight aids, polio, among other initiatives. walt disney stock soared to a record high. jobs owns 31 million shares nearly 8% of the company. that makes her the largest shareholder. she, of course, is the widow of apple cofounder steve jobs. brendan: at long last the

chairman of the federal communication's commission has decided that internet access is in a natural monopoly like roads and train lines. the question is whether this regulatory approach will chill investment. we turn to dan clifton. he has spent his career looking at the effect of public policy on capital markets. verizon, at&t, and comcast have said for use during this discussion that you and i have both follow that if the fcc treats them like utilities, they will stop investing in new wires. do you buy that argument? daniel: depends how it is going to be structured. if you get into rate regulations -- telecommunications service is going to be a regulated utility. if you get into rate regulation, it is also possible for them to invest the same way they have been investing the last few years. we want to be careful. if you want open internet, you have to make sure you have the investment and how they structure it will be critical. brendan: if i understand it quickly, the fcc has decided this, but the known unknown is the fcc has decided -- has

granted themselves huge discussion on what to do in the future. daniel: and you are opening up pandora's box here. there is something called forbearance -- we're not going to raise your rates but you are opening in up to regulation down the road you put those price controls in place and this could be very negative for u.s. involvement in broadband. brendan: dan, let me ask you a question about this. torsten, i hate to bring you into this, but during the break you said you had to look up what net neutrality was. i don't think that is an accident. the fight over net neutrality doesn't really exist in other countries. torsten: well, daniel: well, i would just say in the u.s. we don't want to have large chanting for bandwidth use. google and netflix engaged in a strong lobbying effort to keep themselves in a priority position. olivia: what about the argument that the broadband providers are

making that this will this in sunrise private investment dish is will this incentivize --this bill disincentivize broadband investment? daniel: this is the trade-off the very real trade-off we're looking at that there is less incentive if you're monopoly power is reduced to continue investing, but there was much greater incentive to charge less. brendan: you are watching the way the wind is shifting in washington. one of the reasons this is happening right now is that there are new powers there that are shipping this debate. daniel: that is exactly right. isp's are going to be heard by this, content providers will help it the president has designated a speeding up your broadband lines. there tried to regulate you make that investment. he is joined to incentivize local governments to build broadband networks to compete with the actual broadband

providers. we are moving away from private sector use and trying to balance that out. brendan: dan clifton just brought up municipal broadband. i'm having the best time this morning! olivia: i'm happy for you. my question is is my bill going to go down? daniel: they will regulate you but your service will actually suffer on the street price controls have never worked in history. brendan: are they going to do price controls? daniel: i think that is eventually where we're going with this. tom: what is the sweat factor of the major cable providers? this is like a craig moffett question -- olivia: what is the factor? tom: the sweat factor is i am watching able to be less and i'm sitting there with my changer at home and i'm thinking what is the most i'm watching? daniel: i have no idea. olivia: you deserve that. you deserve that. [laughter] tom: only one thing that matters

-- euro-dollar up and currencies in emerging markets weaker. ukrainian crisis, no question about that. u.s. futures are improving, up 14. good morning, everyone. "bloomberg surveillance." i am tom keene. with me, olivia sterns and brendan greeley. olivia: ukraine devalued its currency by more than 15% and announces emergency measures. panic mood is in the market this morning according to the governor of the national bank of ukraine. this is the backup for secretary kerry's trip to kiev. joining us is out chief washington correspondent peter cook it are we going to see nato start arming the ukraine? peter: i think it is pretty clear that the decision has not been made in terms of the united states.

the obama administration up to this point has provided some defensive weapons to the ukraine, about $118 million worth and there has been an intense debate on capitol hill. we heard it from the new defense secretary nominee ash carter yesterday about whether lethal aid should be provided. a number of members of congress republicans and the press, would like to see that so far. ash carter said he was inclined to provide additional military equipment to the ukrainians but he wouldn't specify exactly what it was because he is not in the job yet. they are hoping that this puts more pressure on russia, even though that the u.s. might start arming ukraine. tom: we have headlines speculate in that secretary of state terri will go to moscow. -- secretary of state kerry will go to moscow. brendan: that is the quotation from the kremlin today -- "very concerned." peter, help us understand about the diplomat effort right now.

how important is it to the what has that this becomes a nato action if it becomes anything at all? peter: it is obviously important to the united states that nato remains unified over this and the united states and europeans are on the same page, both in terms of economic sanctions on russia but also the overall message. the united states encouraged by the prospect of president åland and chancellor merkel -- president hollande and chancellor merkel going to russia and perhaps making some progress in turning down the tensions. things are deteriorating. that picture is pretty clear from the united states and european view. things are not good. setting needs to change to help the ukrainian economy as well as stabilize the situation was the violence in eastern ukraine. this is an indication, the fact that john kerry is there in person and will meet with his russian counterpart in munich. you also have a vice president joe biden having to munich as well. olivia: what should we make of the fact that secretary kerry

changed his itinerary? it is going to kiev and it is unclear if use going to moscow. what should we read from that? peter: they would rather have the europeans take a lead and they don't think much would be accomplished if you were to head to moscow. that could change but the plant at the moment is for him to meet with sergei lavrov while he is in munich. he also has a meeting with the iranian foreign minister talking about the nuclear talks as well. there is a lot on john kerry's played without going to moscow in the first place. i wouldn't read too much into it at this point. olivia: of course, brendan we have to keep in mind that the u.s. needs russia on its side for action in iran. brendan: i have to say, my level of anxiety reading these doing headlines is very high. the people you talk to in the executive branch do they seem more frantic than normal about this? i'm a little scared right now. peter: i think it has moved back on the radar screen.

the islamic state, what has happened in the last couple of days with the jordanians that has been more of a fever pitch in washington. but i think the conversation is changing. everyone knows how serious the ukrainian situation is both from the military standpoint and from the financial standpoint right now. i think the fact that you see john kerry there and you have this big near meeting -- big nato meeting, they realize this is a very dangerous situation. it has moved higher on the radar screen but i would not suggest it is at fever pitch. olivia: it certainly does look like a very dangerous situation indeed. we are watching tanks reasonably rolling in ukraine. thank you so much, peter cook our chief washington correspondent from d.c. tom: hollande, merkel. when does the president get directly involved? brendan: it is such a huge signal for the president to travel anywhere. so much more so than angela merkel. tom: i agree. brendan: healing goes to moscow or ukraine when something is

hammered out and in place an agreed-upon, if at all. tom: i should point out, wrubel strengthens. olivia: well, this conversation brings us to our twitter question of the day.

olivia: good morning, this is

"bloomberg surveillance." i am olivia sterns come with tom keene and brendan greeley. pfizer buying hospira in a deal with $17 billion. betty liu joins us with more. what is your take on the deal? is this a consolation prize because pfizer couldn't get astrazeneca? betty: possibly. my takeaways simple. m&a will continue for the foreseeable future. though interest rates, a growing economy, stronger dollar, a stock market that continues to rise, all that spells more deals. we saw staples and office depot, that $5.7 billion deal. my question for you guys is who is really running corporate america these days? who are shareholders really paying to run these companies? i would argue that there is five guys running corporate america -- bill ackman, dan loeb, carl icahn, jack smith, and nelson

faults. they are the guys running corporate america. these deals are being prompted by activist investors. brendan: you know, earlier, we were talking about this pfizer acquisition, the idea that the big pharma companies are turning to acquisitions two feet their r&d pipe -- to feed their r&d pipeline, and dan clifton, you are nodding your head at this. daniel: if you look at earnings calls in the last two weeks, most of these are reporting earnings pressure from pricing pressure on their drugs. there is more competition, particularly in hepatitis c. we are seeing consolidation in the industry, in addition to everything that betty -- tom: what hospira, and i have no idea what that means -- i think it was a social disease. this is the products division of the venerable abbott labs. in market pharmaceuticals are going out and buying stuff -- am i right that pharmaceuticals are going out and buying stuff

because stuff is where it will be in the future? daniel: that is exactly right. in addition to the aging population. that is where the activist investors coming in. you have the confluence of factors. the one thing i would say is not so much in the health care for the antitrust reviews are getting much tougher across all industries. olivia: we have seen a couple of deals unwind or not transpire. t-mobile and sprint. or on hold -- betty: one of the biggest ones, directv and at&t, still on hold. we are waiting on a decision from regulars on that. olivia: activists on washington's radar -- bill ackman seems to be in contact with the regulators from herbalife. are they worried about the activists? daniel: no, because it is a different have of activism. it is not trying to do something with public policy goals per se good as long as it is unlocking value commodity any people mind what they are doing. betty: shareholders least of all.

olivia: looking forward to it. thank you so much that he knew. -- thank you so much, betty liu. everybody watch "in the loop" with betty 15 minutes from now. in the meantime, please answer our twitter question of the day. ♪

tom: good morning, everyone. "bloomberg surveillance." surveillance. it is a european morning and we will look at fiscal policy in the united states could first, tablet lines from around the world. here is an and really cashiers brendan greeley. -- here is brendan. brendan: shinzo abe eight wants to end the restriction on the use of armed force in international disputes. last month two japanese citizens were killed by islamic state militants. a security council resolution has been drafted the targets extremist group's main sources of revenue. pressure rarely -- russia

really writes -- rarely writes resolutions but it is concerned about radicals from chechnya joining the islamic state. "usa today" quot a 2008 reportes by a contractor saying that vladimir putin's neurological development was impacted in infancy, resulting in an autistic order that affect solid decisions. tom: can we say that is decoration? -- that is speculation? brendan: wild speculation. tom: history being made at the moment. this said line -- this set of headlines is nothing short of i've never seen it before. olivia: varoufakis -- must prevent surface and from hatching. tom: it is like "game of thrones." brendan: what you see from

wolfgang schäuble is he is tried to turn this into a discussion of finance, and for varoufakis it is a discussion of politics good we have to stop this 1930's-style depression in order to prevent, as olivia points out, the surface egg from hatching. torsten: the problem is that the economics is what it is. the politics here is, of course the big unknown, and the tail risk that the market is focusing on. this town is is developing -- this tail risk is developing. tom: how will this be played by the german press? how will they play this? torsten: so i am not going to speculate on that, but generally speaking, the germans have a quite different view on where things need to get. this is the tug-of-war going on. a game of chicken here, or is someone going to give you that

or someone going to deviate --or is someone going to deviate? olivia: how do the germans intimate a headline like that -- we do cannot have a surface egg hatch? torsten: i think the greeks understand the germans in the germans understand the greeks. it is just humming together -- tom: brendan greeley, this is as much for you as for dr. slok. we go to deg gaulle and all that. is this a separate thing? brendan: european union comes together this swelling of brotherhood and they agree to do things. the structure is not there to do what they want to do. it is only in crisis that they actually build the architecture they need -- tom: where does leadership come from to shift that? torsten: behold group together has to figure out the rules of the game and that is moving as we speak. brendan: one of them a striking

pictures from the last two weeks in the greek election, torsten: is a picture in germany from a protest holding up a sign in english that reads "it starts in greece, it comes here." are you at all concerned about the greek-like election happening elsewhere in europe? in the u.k.? torsten: markets are focused on the contagion risk but generally speaking, i will say it is a political process and will hold together. it will go forward. we are in the process of integrating law and we have to move more in that direction. olivia: that is precisely the note that yanis varoufakis is trying to strike your it -- is try to strike at the risk was that there would be a run on spain and italy. now there is political contagion. we get syriza in spain -- tom: washington is watching the

washington capitals. washington is not focused on this conversation. daniel: it is political versus economic. you can have a problem politically and they come back to the table and fix it. olivia: what if we have elections like we have seen in scotland? daniel: spain france -- there is a real possibility of that happening. it is a matter of timing. tom, that is why the u.s. is saying that europe has to work this out. the last thing you want is americans getting involved in these types of disputes. torsten: if you look at what the lower europe does to the euro -- lower your adjusted the european economy, the yields -- potentially there is a significant economic boost coming this year. olivia: i've seen the latest forecast for european gdp is a whopping 1.3%. brendan: listening to the two of you talk dan had torsten:, one

of the drugs on the european economy is that they have a constitution and we don't need to renegotiate that. but in europe as they are trying to solve policy they need to create infrastructure at the same time. that is why institution building takes time, it takes time everywhere. this could take a decade. tom: let's shift as we look at greece. we have to look at ukraine. this is mr. poroshenko of ukraine with introductory comments to the visiting secretary of state of the united states. dan clifton, explain to us the support that secretary kerry has from republicans and never writes as he creates diplomacy. daniel: that is right, there is bipartisan support for helping ukraine. economically comes first, then we make a decision on whether he should be arming them with legal aid. -- lethal aid. bruton it -- putin is betting

that nato doesn't exist anymore and he is challenging that. olivia: i'm glad you said that because today what we are going to see his details of these command centers -- in lithuania, poland romania, nothing else could reinforce the dna of what nato is more. does the conversation in washington sound like it is the return of the cold war? daniel: it does. when this started in february people said it is not a cold war could it has been a discussion -- it has been escalating and now you have the discussion of cold war again. brendan: any economic leverage over russia -- are we discovering several months into these sanctions in europe live without russia and russia live without europe? torsten: they are so connected that it is difficult to imagine. from the market perspective what is peculiar is that the u.s. is doing well and all these other points around the tail risks we are studying, what are

the applications of this for the u.s. recovery? tom: torsten:, you and peter are meeting with chancellor merkel today. what is your question to the chancellor of germany? torsten: well, of course, she is fully aware of everything that is going on and she is completely on board from the german perspective. the germans and the greeks need to come together. tom: ok, he dodged that beautifully. [laughter] save us, olivia please. olivia: this is a good time to answer the twitter question of the day. you're awesome the answers we got. -- here are some of the answers we got. [laughter] olivia: think of what happened in south america and afghanistan for example. olivia: i don't know. brendan: but that is the right

question. we are not really arming proxies the way we did in afghanistan. it is worse. there are russian the times, russian divisions crossing -- russian battalions, russian divisions crossing the border. we are arming proxies who are fighting russians. daniel: that is correct. the whole idea that if putin was going to suffer a recession, which he double down or look for in a scrap? we have learned -- look for an exit ramp? we have learned that he is doubling down with the troops. tom: latest headline, brendan greeley, "ukraine faces extremely cynical aggression." brendan: dan clifton put it really well to explain what is going on. putin is betting that nato doesn't exist. daniel: you can't fund greece. how do you fund military for nato? olivia: we saw putin inviting tsipras to greece to tie it all

together. brendan: oh, my god. tom: i will wear a tie tomorrow. olivia: i'm very uncomfortable . tom: jobs they tomorrow. stay with us.

betty: good morning.

it is thursday, february 5. you are "in the loop" and i am betty liu. rate lineup for you this morning. he has been ceo of chrysler and home depot. bob nardelli joins us for a composition on taxes and the economy. and a conversation with one of the biggest names in the business, every course ceo ralph schloss -- a record evercore ceo ralph schloss dean. a governor who sustained cut the jobless rate to the lowest level in more than six years, governor terry mcauliffe of virginia a longtime operative in the clinton campaign, he will be with us as well. here's a look at our top stories this morning. the european central bank is turning up the heat on the greek government. the ecb has cut off a critical source of funds for