-- there is fierce fighting overnight in eastern ukraine as rebels seek territory. the eu and united states consider tough new sanctions is glimmers of hope are dashed. olivia is off today, so it is two guys sitting around reading books. i got brendan "50 shades of mathematics." good morning. it is friday, the 13th. i am tom keene, jointly brendan greeley. olivia is off today. time now for top headlines with brendan. brendan: do i touch that? i think i don't. european leaders are on more sanctions against russia. they could include plans to blacklist more russian citizens and organizations full stop currently 132 people and 28 groups are barred from traveling to eu or accessing european bank accounts. german chancellor angela merkel is one of the biggest skeptics.

>> we have to try to take the peace process further. youukraine's president made clear this is the most important thing for his country but we are very aware it will take more effort. therefore we are open to all possible reactions. if it goes well, we will happily go forward with this process but if there are difficulties we are not ruling out additional sanctions. brendan: meanwhile more fierce fighting between separatists in ukraine. staying in europe, greek negotiators in the country's euro area are meeting in brussels today. the prime minister of alexis tsipras met with others. tom: greece's goal remains a six-month bridge agreement that could lead to a new deal with

euro-area authorities. a current aid program x wires this month. there are signs of life in the euro area economy this morning. new reports show momentum picked up at the end of last year as germany reasserted self as a driver of growth. it serves offset weakness in greece and italy. interesting numbers today. france with projection, euro-area gp increase almost .3% in the fourth quarter. a real jumble. the german economy expanded .7%. that is more than twice what was forecast to stop thanks, weak euro. to washington, the president visits silicon valley today. on the agenda, finding better ways to share information to enhance the nation's cyber security. it comes amid unprecedented data breaches and cyberattacks. not attending today's summit is a list of big shots --

facebook's mark zuckerberg, yahoo!'s marissa mayer, google's eric page and eric schmitt. they were all invited, they were busy sipping espresso or something else. out of egypt this morning, al jazeera television says a second journalist who was imprisoned has been set free. the release of baher mohamed calms. they spent more than 400 days behind bars. their third colleague, peter greste of australia, was deported three days ago. those are three journalists out of al jazeera free in egypt. that is certainly good news all around. let's look at the data check -- equities, bonds, currencies, commodities. green on the screen. it is an interesting friday sort of a non-news friday, still reacting off the news of greece. euro advances, crude oil, that is american crude, that is a

nice it. $52.02. edward morse joining us in the next hour from citigroup. 15 point 34 is a remarkable number over the last few weeks. recruit at 60. sterling we will get to in a minute. that is euros sterling. ukrainian currency doing a little better at the first sign of hope and a good a 72 hours for stop quickly to the monitor and brendan, this is euro sterling intense, and here is a long-term trend of sterling weakness. some like switzerland, some of the other currencies of great strength or almost at 1/10 deviation. >> what we are seeing is the value of the u.k. got one it created the euro. denmark got it, too. it is having a hard time old into its currency, but there is great value. the northern eurozone is --

tom: the backstory is sweden's central bank making original economic history with a negative interest rate. brendan: and also the promise of additional qe. they have been able to hold out after this and they are now joining that global currency war, but sweden is not immune to this. tom: reading over the weekend to get us interested in the economic than europe. we will call it the european union ballet. germany and greece have dance the dance in the past day as exhausted leaders turn from kiev, athens, maybe back to you. b-- back to kiev. angela merkel will consider 2/3 of whatever the promises were made the last 14 times you were in brussels. hans nichols what is the moment for a guy like you that has been

to brussels 18 times in the last three years. what is different this time? hans: right now they need to come up with a common denominator, since we are talking fractions, tom, and any do have another debate over the numerator. it can be taken care of in a political context, and that is monday. the technical talk in place of a seem to be progressing and they seem to be coming up with a common data set, and then they can have another set of arguments on just what the bailout program is going to look like. in the next two weeks in the next six months and in the next six years, seven years, next generation. brendan: hans, what happened in the last 24 hours? from where i said, it looks like will control look -- it looks like wolfgang surechaebler played good cop, and angela merkel played bad cop. hans: tengion's me of cold once

they figure out were the breaking points were, and after that we have personalities and chances for face-to-face meetings. there is some pessimism. jean-claude juncker is concerned, he is the euro finance group leader. he has expressed a fair amount of pessimism. most of the optimism seems to be coming from the goodwill by the out of that merkel-tsipras meeting, but it is hard to construct an agreement off a goodwill by. brendan: it feels like they took shots together. what are the concessions that germany is willing to grant? hans: the current bailout program that ends at the end of the month, germany has opened the idea that they will tweet and change some of the goals. not exact way clear where they will change that, but they are open to reopen up this package. what greece has set as they will keep about 60%, 70% of it, so

they need to have this debate, this discussion that could eventually be an all-night negotiation on the rest of it, on the 30%. tom: hans, i saw video overnight on youtube, the fierce fighting we read about in you. it was a stunning video of violence. can the cease-fire or the seas are to be -- or the cease-fire to be even make it to monday morning? hans: we will have to wait until fedora 15 when you click send. -- we will have to wait until february 15 when it clicks in. we have 24 hours to 48 hours when fighting is technically allowed in the macy's fire takes hold. that is when we willing to make adjustment on how real or enforceable it is. tom: hans nichols, thank you so much our expert in germany.

our guest host, you have essentially done a world tour but what is original about europe right now away from the headlines we see everyday? >> in moscow, for example, you see lots of concern about foreign-currency debt, you see concern about sanctions, oil and you see this all over europe. you have questions about how far behind western europe is in terms of catching up to the u.s. business cycle, and the efficacy of monetary policy. tom: brendan, we saw the headline, socgen pulling 1500 people at leave out of russia. i do not want to use the four citigroup, but is the basic idea that western finance good move out of russia? steven: there are plenty of questions as to sort of what the long game is versus the short game. what the impact of the oil price is on the economy in these areas, and then you see different regions of the world. you see in the middle east, for

example, a focus just on the oil price, and in other parts of the world, you see folks thinking about the aftermath. what it takes to make the oil price higher. what does it do to these economies? you see a different focus sometimes about the same front metals in different parts of the world. brendan: steven we are watching as journalists all the steps, all the powers that went to minsk. you take a step back at the -- as a macro analyst. how much attention do you play to the blow-by-blow of these negotiations, or do you just wait for the outcome? steven: you have to sort of put some limits here and say no matter how bad it goes in the case of greece, you do not have anyone in the periphery of europe who wants to follow this down that road, so you can have some parameters here that things could go very badly for one small part of the eurozone, but they have done just a time to come back from where they were a few years ago. brendan: for you there are

limits to the contagion. steven: the backdrop of the ecb easing must like the fed had done when they raise rates, the backdrop is different. tom: i want to bring into what we look at here at "bloomberg surveillance," this is the flow that jon ferro in london uses this jumble of data points out of europe, we translate into what is going on in europe. steve wieting help us, is europe in recession? steven: europe is not a recession, neither is japan. in the u.s. we reported as 1.2% -- tom: i knew you where you are going because you're so good at this post up report the math differently than we do. steven: we report in annualized rate. they report quarter to quarter. tom: this drives me nuts and drives alan greenspan nuts.

nobody is devious and here, it is just apples and oranges. brendan: i will make a note, control room, it drives me nuts, and drives adam green's -- alan greenspan nuts only tom keene can say that. tom: thank you for making this up, it is not as gloomy. steven: we are given data all the time that misleads folks. what happened in the first order of last year with the -- first quarter of last year with u.s. economy there are statistical anomalies. we make a big deal out of things sometimes. tom: did you guys not to be valentine's day memo? this is the bro show -- brendan: i and wearing red, i wore a tie! coming up, president obama heads to a summit on cyber security. who will show up iago we will discuss. this is "bloomberg surveillance."'on bloomberg television, streaming on your

tablet, your phone, and bloomberg.com. ♪

tom: good morning, everyone. "bloomberg surveillance." i am tom keene, olivia sterns is off today for stop let's get to our top headlines from around the world. here is brendan greeley. brendan: united nations with a dire warning on yemen. it is "collapsing before our eyes." we closed embassies admit unrest. nearly half the country's provinces have been taken over by rebels. teargas rocks and rubber bullets filled the air as friends and foes of venezuela's socialist

government staged a doing marshes on the anniversary of last year's bloody protest movement. protests also took place in caracas. in south africa unprecedented walkout. armed police remove the freedom fighters party after they interrupted zuma's speech. members of the opposition party then walked out in protest. zuma upgraded his private home with funds. tom: i love when you do these stories. i have no idea what the eef is about. i am not up to speed. brendan: there's a great economist piece on south africa that says this is how you dismantle a democracy step-by-step slowly. tom: we should stop the show and say congratulations to all of the -- this is really cool. she takes over, the previous guy goes somewhere else. brendan: somewhere else, we are

not sure how he is shuffled off. she is next ordinary and well-known economicst. tom: chances are she wrote every word of it. brendan: at the beginning of the financial crisis, i asked her -- how bad is it, what should we do? moving to the u.s. west coast, president obama is that stanford today for sup you will host a summit on cyber security. here is what he says he wants to do -- president obama: it is going to bring everybody together tech law-enforcement, consumer and prophecy act of it -- consumer and privacy. brendan: it is only a summit of the most import of people decided to show up. that is not happening. peter cook is our men and washington. peter, the president is going to be a little lonely on the west coast. peter: there are some important

people showing up at the summer including tim cook of apple, arguably the most important tech ceo of the country. other business leaders, brian monahan at bank of america, the head of semantics, but you do not have other big names that were invited and declined for a variety of reasons. brendan: peter, i do to interrupt you here, this is coming with him in the post office in san jose. let me show you this -- peter: that is right, missing in action. some of the biggest names in tech, including mark zuckerberg of facebook. you see the others here. they will not take part. some of them said it is a security summit, we are sending our top cyber security people, but we know there are tensions between the white house and the tech community, and some of the reasons these folks may not be showing up are these tensions and they do not necessarily want to be seen with the president of the united states working on

issues over government surveillance programs. it is a real issue the president going to have to try to deal with while he is out there though it is not on the specific agenda of this. summit brendan: are they personally angry at the president and not want to do with this, or is it bad for them to be seen with the president right now? ppeter: the sense i get from talking to go in the tech industry and in the white house as well is there is a real reason why their top security people would be going to this event, first of all. this is an "in the weeds" type of conversation. secondly, these companies to have a real issue with the white house. being seen with the president right now, i'm not sure if it is the optics as much of the message they are sinning to washington that they have a problem with the surveillance debates still come and it is hurt their businesses, and they want to some a real message to washington that this is an issue on their agenda that is not being dealt with. tom: peter, if you and i were

going to enjoy the cigar bar choice in the lobby of the willard hotel this morning which hunk of washington is going to get the cyber security issue? is it a pentagon military hunk, or is it something else? peter: tom, this is an issue that goes beyond the defense sector, as important as it is there. that is a big moneymaker. these are big contracts. what is most reported about the summit is what has changed is the sony hack has changed the conversation in washington. there is a lot more focus on it. you will hear big talk today about the payment system, for example, banks are represented pretty significantly at this congress and that gives you an indication of how brought a base this is in the economy right now and the threat to the economy. the white house wants better sharing between the government and the private sector. that is the focus of this conversation, but it will not have one with legislation. we may be closer to that after the summit and later this series of what happened at sony and

amp up. brendan: all right, peter cook in washington thank you, peter. tom: you have done great work on this for "bloomberg businessweek ." brendan: i wrote a piece about d.c. were i found three members of congress who could describe to me how the internet works. that has changed. so much legislation action, the sony hack as peter pointed out that really a lot more people in congress understand what is going on and how important it is. our twitter question of the day is on a can really different subject -- commodities. are we heading for $20 oil? tweet us @bsurveillance. this is "bloomberg surveillance." ♪

tom: good morning, everyone.

"bloomberg surveillance." a better screen today, a friday screen, the 10-year yield at 2%. there is peace relative with peace on earth. our time today -- let's do a morning must-read out of boston. they are buried in 18 feet of snow. eight unspoken rules of celebrate valentine's day at work. she once heard a coworker was gifted laundry at work. this is probably a bad idea, along with anything overly noisy or obnoxious like one of those singing cards or a man dressed up in a gorilla suit. this is brilliant work by justine hofherr. what is the citigroup strategy steven wieting? steven: i do not have a valentine's day strategy. [laughter] tom: do they have memos? i know the kids have memos at school now where everybody is treated equally. brendan: oh, yeah, and you cannot send in baked goods.

steven: if there was a memo, i missed it. brendan: every year my wife says i do not care about valentine's day, do nothing, and i explain this at work in all the women i work with they do not believe her, get her something, and i trust them and get her something and she says "honey, i told you not to give me anything." tom: do not do this stupid restaurant thing. do not do the stupid restaurant thing. in our next hour, we are looking forward to speaking with robert about euro parity. stay with us. friday the 13th. ♪

tom: oil, $52 a barrel. really looking forward to that. let's get to our top headlines this morning. here is brendan greeley. brendan: the governor -- john kitzhaber is under investigation by the attorney general on the influence peddling allegation surround him and is the onset. he is been abandoned by his party's leadership, three senior democrats called on the four

term governor to step down. and raleigh, north atlantic, where the fbi is launching an inquiry into the murder of three young muslims gunned down inside a chapel hill apartment. authorities are trying to determine whether religious or ethnic hatred or motivating factors. last night, more than 5000 evil attended the funeral of the victims. the suspect is facing first-degree murder charges. new york times media's columnist david carr has died. he collapsed in his office thursday. just hours after he moderated a conversation with edward snowden and to others about an upcoming document a film. he attend a memoir about his fight with drug addition. he was 58 years old. tom: we read him religiously in new york magazine, the atlantic and "the new york times." there was no weakness, every article, he could slat -- it off.

every article had volume. brendan: he was incredibly important voice. we have all been through this. i watched this. i watched the media institution collapse and nobody chronicled that better than david carr. you can be quick you can be elegant, and you can be good, he was all three. that is very hard to do as a writer. tom: david carr, aged 58 tragically at age 58. on matters of economics finance, and investment, it is true that all the gains have gone to corporate america, with little for labor. he is global chief strategist at citi private bank he owns the franchise on linking earnings to the american economy, and we speak to him about our american

economic experiment on this friday. it has been a friday the 13th for a decade for labor. it has been ugly for labor, when does it change. steven: i think it has. they are not tight and the bargaining power of american labor is powerful. the trajectory of improvement is impressive. the unemployment rate has fallen 1% per year. unfilled job openings are at an all-time high. that tells you a lot. tom: the vectors are moving in the right direction, you buy the idea that wage inflation is a lagging indicator? or is this time different, where the fed will have to act differently? steven: supply a and demand for labor it will still impact labor. we are coming from a low broad inflation rate. you have some sort of inflation that should move up wages by itself. wages are coming from a real low

point, giving the slack we had early on starting this recovery from a 10% unemployment. being far out there. there is an important issue when we look at employment rope points every month, look at the commentary we saw in the month of december. there is a falling wages in the united states. she anywhere, a rising wages. these month-to-month statistics are heavily revised and they do not tell you the story in a month. brendan: has technology changed the way we think about labor in? you have better technology that can better manage people's hours and when you look at hours worked, they dropped toward the end of the recession. steven: i would give you a problem, even what we really know about technology in labor markets, is that well measured -- is not well measured. tom: are the three of us guilty of ignoring people that work at mcdonald's? i get this feeling, we were

talking about david carr, are we navelgazing everybody over $80,000 a year and forgetting a huge chunk of america that struggles at mcdonald's or any other company? steven: this is a reasonable thing to talk about, but you have to look at all the segments. why don't we look at skilled workers? we defined skill as whatever is in short supply. look at different segments and not one or the other. it is an argument that, everything is ok or everything is terrible. there are lots of shades of gray. brendan: i take tom's point. one of the best pieces of economic writing was an article in the "new york times" talking about how hard it was, even if you had a job at starbucks, to get 40 predictable hours so that you can live a life and planned childcare and tom is right, it is very easy to sit up here and talk about labor in this

abstract way and not see. steven: a lot has changed in terms of labor security. a great deal has changed in terms of the pretty debility of benefits and wages. the idea of long careers. if all sorts of things you can plan for has all changed. it preceded the financial crisis. tom: in economics, people say there are people migrating from part-time to full-time. i would personally push against that and say they are migrating on part-time to some kind of sort of, kind of like, full-time. steven: it is both. part-time jobs. there was a discussion 10 years ago about how part-time jobs or something that people really sought out. people who had childcare responsibilities wanted that part-time job because of the flexibility. issues like that.

now, it is totally different. there are different issues driving that. health care benefits, all these things. there is turmoil in labor markets. brendan: it is to be part-timers and high school students at mcdonald's, not it is full timers that are trying to support a family. tom: coming out of college everybody used to kill for city level -- citigroup entry-level analyst positions. it is gone. that path is gone. steven: i do not think so. if you get a story of nba students -- mba students coming out of college, a median wage is certainly out there. that may be different from the fast food worker, that we are going to find that there has been dramatic improvements for education in the labor market. brendan: what is something that could make tom cry? tom: a tearjerker. brendan: rare books make tom

cry. we are joined by rebecca romney, she will bring us a $2000 book later this hour. -- a $200,000 book later this hour. tom: 50 shades of grey the matter. -- 50 shades of grey mathematics. ♪

tom: good morning, bloomberg

"surveillance." good valentine eave. we need a good single best chart. brendan: in europe, the coffee is better, the cheese is better, the health care is cheaper. you know what is not better, the vaccination rate for measles. that is the subject for today's and go best chart. -- single best chart. here we go. the chart sells itself. tom: it is blue, that is stunning. the yellow is the united states and the blue is the european union. the yellow gets better -- worse i should say, more measles cases . the blue shows the still agony of vaccinations across europe. brendan: the distinction in europe is it is not mandatory.

this is a real difference. in the u.s., in all states, vaccinations are mandatory, what is changing is whether or not you can get an extension or religious reasons, medical reasons. in europe, it is entirely voluntary. in france, you have a rate of 67%, that is lower than iraq. tom: the worst cases in california are 85 80. it is way below what you see in the california geographies. i thought the interview we did with dr. cortez a week ago was fabulous, it is not just measles , but the knock on infections and illnesses that can cause risk to other people. brendan: this is what we are learning over the last year. this is not a medical issue this is a moral issue. a medical issue we used to take for granted.

there are moral applications of whether or not you get your child vaccinated. we see in these places, particularly martin county, where very small areas will decide -- low vaccination rates the cluster can allow measles to fester and spread. tom: thanks for your many e-mails we will stay on this. let's go to the photo. ring that to me if you would. the number three photo, it has been 70 years since the bombing of dresden world war ii. brendan: this is in dresden appeared shortly after the war you can see cattle grazing. i was there in 1992, it was still -- it still looked like that. you could walk over the rubble. there are places where the top of the building had collapsed, and 50 years in east germany, they had built offices in the lower floors which had collapsed. it has been rebuilt and they did an extraordinary job he see the

stones they tacked them, stone by stone, figured out where they fit in as many original stones made it into the reconstruction. it is gorgeous. tom: our second photo from amsterdam. this haunting photograph, a turkish photographer one 2 awards, the winning want to fix a wounded girl during clashes in istanbul in march of last year. the antigovernment slogans were spoken's -- spoken,. brendan: so much has happened in turkey in the last year. tom: what a year for astronomy. our number one photo nasa releasing a five-year time lapse of the sun condensed into three minutes. i do not know if you have seen this but it is an extraordinary lesson. brendan: the spacex loss we saw

yesterday, what it was shooting up there is a space climate observatory. looking at solar flares. this is what we are seeing, to catch them and monitor them before they reach the earth. tom: our unmanned effort does not get the credit it should. it has been a decade -- a great decade for unmanned search and space. we will take you on a tour through rare books coming up. i visited a rare book store on madison avenue and came away moved at the antiquity that you can buy. let's listen. i e-mail you and i say, money means nothing to me, give me the most important stuff in the store to impress my family and friends, show me be book. coming up next, stay with us bloomberg "surveillance." ♪

tom: good morning everyone. arguably the interview of the week. edward morris will be with us in the next hour. they parachute in on what you need to know about $20 a barrel oil.

that will be in our next hour, looking forward to that as we have a citigroup focus today. this go to our top headlines from around the world and world news. a former korean air executive was sentenced to a prison term for forcing a plane back to the gate over a bag of nuts. she will appeal. attorneys for her announce their plans earlier today. she was found guilty of violating aviation safety laws and other charges. sheen -- he achieved notoriety when she threw a tantrum after being served macadamia nuts in a bag instead of in a dish. we move mainland to beijing, the son of jackie chan has been released from jail, he was set free after completing a six-month sentence, he was jailed for allowing people to smoke marijuana in his apartment. his arrest came amid a crackdown on illegal narcotics in the

chinese capital. police seized more than three ounces of pot from his beijing apartment in august. we stay with china, it wanted soldiers to be lean and fit, we don't want that in america, says a new military policy unveiled today. all armed forces personnel will be required to meet weight limits and promotions will be linked to fitness. the issue has become an increasing concern in china. members of the public have joked that potbelly tv anchors, no generals are being suited for buffets more than battlefields. those are some of the top stories this morning. this is fun. we hope you like this for valentine's day. to make time stand still, every day people throw, after-tax, disposable income at rare books. it is a booming business putting a rare shakespeare and less rare hemingway on bookshelves. we know there are fakes, there

are forgeries. rebecca romney's gallery manager at bauman rare books, she has the most dangerous store on madison avenue. it was such a pleasure to visit with you the other day. what i came away with is your job is really hard. there is so much to learn, for example, brendan greeley, with his love for sailing, tell me about rare books for sailing. what would you do for mr. greeley walking the store? rebecca: i would go to books on famous yachts. brendan: so stormy weather, they -- one of the famous wooden boat build. brendan:tom: see how she did that? brendan: do you have an original

joshua slocum? rebecca: no, but i can get you one. tom: tell us about this deeply american book. rebecca: this is a 1788 first edition of the federalist papers in book form. tom: do we believe james madison held that? rebecca: he printed only 500 copies of this book in 1780. brendan: where was this published? rebecca: new york, because that is where they were fighting the ratification debate. tom: yesterday, they found a magna carta in kent, england which i read about. the guy had the white gloves on from 1250, you are not wearing white gloves, why not?

rebecca: for a book it is not necessary. when you are looking at the binding, you are more likely to tear a page or drop a book that if you handle the book with clean hands. brendan: how do you taste change? the books are always oh, but the rare books must change that people are looking for? rebecca: shakespeare will not go out of style. the federalist tapirs are a good example -- the federalist papers are a good example. a continues to have an impact today. brendan: i have my own grandfather's copy of the federalist papers with newspaper articles shop in it. tom: this one is a quarter of a million dollars. how does -- how do we start in this business with a little less than a quarter of a million dollars? steven: the books that listeners

are interested in? rebecca: the first edition "wealth of nations" you're looking at $175,000. brendan: i would have thought more. tom: what about john maynard came -- kane? rebecca: about $18,000. when you are looking for rare books and you decide you want to get into this, the first thing to consider is what do you love? what gets you excited, what matters to you, has had a turning point in your life. that is what you should collect. that's why i brought a variety. we have the federalist papers this is important work, gets them excited, a huge part of american history. the next, this is something

completely different, very quizzical. -- very quizzical. an original drawing of snoopy. charles schultz peanuts, this covers the first 2.5 years of his comics and that drawing was done by schultz. it was done for a specific person. this one, because of the snoopy drawing, it is $5,800. you have a big rains, snoopy is the most desirable. -- a big range. i brought hemingway. this is "for whom the bell tolls." it is a first edition. a little tidbit for you, the rest jacket is one of the keys. you have this photo of hemingway on the back. there is no credit for the

photographer. they forgot to credit the photographer, so they had to reissue the jacket. if you have one with that error it is part of the first --. brendan: you really recognize that at the time, hemingway was already larger than life. what sells the book is this picture of him hard at work at his typewriter. tom: what is the number one rookie mistake? rebecca: i would say not doing enough research. as i said, someone might say they have a first edition, that that does not mean it is a first state with the dust jacket. that is a huge difference. tom:this one is also signed. there you go. hemingway's signature. tom: thank you so much, rebecca rahman with bauman books. what a week has been in foreign exchange. robert sinche with us in the

next hour. stronger sterling, weaker euro abenomics cannot get back. stay with us, another hour of bloomberg "surveillance." ♪

tom: greece must hold to two

thirds of a bailout promise, germany must sign a new contract all of the eu searching for a quote. fears fighting in eastern ukraine as rebels seek territory . the eu, the united states consider tough new sanctions. if glimmers of hope are dashed. 60% decline in the price of oil. a conversation with edward morse of citigroup. this is bloomberg "surveillance" live from our world headquarters. friday the 13th i am tom keene joining the brendan greeley, olivia sterns is off today. let's get to our top headlines. brendan: european union is planning sanctions against russia, that could include blacklisting russian citizens and organizations. 132 people are in 20 groups are barred from traveling to the year -- you.

angela merkel was one of the brokers of the minsk peace deal she is one of its biggest skeptics. she addressed the new accord in brussels. >> we have to try to take the process further. ukraine's president made clear that this is the most important thing for his country. we are very aware that it will take a lot of effort. therefore we are open to all possible reactions. if it goes well, we will happily go forward with this process. if there are difficulties, we are not ruling out additional sanctions. brendan: fears fighting between government forces and pro-russian forces in eastern ukraine. eight soldiers were killed and 34 wounded overnight. you have headlines. tom: reports of schilling -- schilling on the coast of russia and crimea -- shelling. brendan: prime minister with his

european union peers for the first time on thursday. greece is pushing for a new contract on how to continue its bailout. hints of a compromise are in the air. the goal of greece is a agreement to a new deal with euro area authorities. there are signs of life in the euro area economy this morning. new report showing momentum picked up as germany reasserted itself as the driver of growth. it offset weaknesses in greece and italy. france slowed in line with projections. euro area gdp increased 3/10 of a percent in the fourth quarter. that top analyst rejections. -- analysts projections. tom: president obama will travel to silicon valley on the agenda finding better ways to share information to enhance the nation's cyber security. the gathering comes amid an unprecedented number of global data breaches.

not attending are the biggest names in tech, zuckerberg, no. meyer, no. page, no. schmidt, i have lunch, i cannot make it. they declined the invitation. this is important, breaking news out of egypt, al jazeera television says a second journalist who was in prison has been set free. that makes three. the release comes hours after his colleague, canadian, was allowed to post bail. a were reunited with their families today. they spent more than 400 days behind bars. previously, their colleague, was deported two weeks ago. those are our top headlines. a data check, i will call it, a friday the 13th feel. we will call it the eu valley. we go to brussels, belgium, where hans nichols is with exhausted leaders. let me rip up the script. how exhausted are they?

how is chancellor merkel holding up? hans: last night, we shouted a question at her, are you exhausted? she turned around and gave a sly smile and did not answer it. she is tired. francois hollande may have taken a nap in the meeting. everyone is exhausted, but that is what eu summits are about. they go through the night. the first night it went past midnight. can decisions be made clearly when everyone is that tired, and the answer might be yes because they are forced to make a deadline because everyone wants to get home. brendan: bloomberg news had a negative out of berlin, that the german government might be willing to make concessions on the terms of the bailout. what they demand for the loans specifically the austerity they have imposed on greece, what is

that specifically? hans: it has to do with privatization and what acts best you do privatize -- aspects you privatize. in some ways, it will strengthen -- when his finances minister has this discussion. it is a debate about austerity, what you need to do to revive the greek economy. throughout the week we heard some prime ministers, finance ministers, talk about how greece's economy under the bailout program, is improving. that is no longer the case. they have another data point on their side. tom: thank you so much, in brussels, we will be with hans nichols throughout the day. this is a special treat, edward morse of citigroup joins us. we will talk about euro. through the air, but we will discuss this later, $20 a barrel

oil, what has been the response of the opec and non-opec nations to your call for a visit to $20 a barrel and the saudi arabian -- have saudi arabian leader spoke to you. >> some of the people are skeptical. it may be too much unanimity of -- in the anonymity -- analytical community. tom: what a week. the major thing i see here, is a resiliency it is ugly, but somehow europe gets through it. do have an optimism they can get to the other side of negotiations? >> europe then's but do not break. we are seeing another episode now, both in terms of ukrainian situation and the greek situation. i think they want to keep this process moving forward. a want to find common ground,

the question is, politically can the greeks back off from recent election promises. it will take a while. we will not get an agreement this weekend. we have another finance minister meeting friday. it looks like they are willing to give ground on both sides. that sets the stage for messy but potential compromise as we go forward. the strength of the german economy and the weakness of the greek economy in the fourth quarter plays into that compromise issue. brendan: these negotiations are interesting to watch when you are deep in them. every time they are about to go over the cliff, the tap on the brakes and it works. should we assume that the euro will keep in greece? >> it is a political union. the weakest member is greece. if they are able to cover might enough to keep greece in, i think there is no doubt that

everybody else will stay. tom: there is a headline across the bloomberg terminal. gas private reiterates ukraine gas transit risk at "critical level" give us a council on foreign relations briefing on those pipelines threading out of europe. >> the main one goes through ukraine. at has been -- it has been a mild winter. this is not a season where threats work. tom: why weren't those pipelines bombed? they are a sitting target. >> the consequences of blowing it up are two great. russia wants to be perceived as a reliable supplier. d craney and officials are afraid that -- the ukrainian officials are afraid that. brendan: no matter what happens on either side, there is a lot

of trade between russia and europe. >> there is a strong economic link and i think that is what is driving the european response. the economy -- the russian economy is in recession. it is weakening hard right now. they both have an incentive to keep things stable and moving forward. tom: bob, you and i have aged watching the euro, $.82 and up he goes to $1.40 and then comes down again. all i can think is, this will be a boom economy for germany. if we get the. or beyond there is no downside to germany. where am i wrong? >> a boom economy by european standards. germany in particular is in a much better situation. they are a big export economy the currency has come down. we talk about deflation, good deflation and that deflation. this is good evasion for germany

with energy prices coming down. the last reading on wages, they are growing about 3.8%, 3.9% in nominal terms in germany. you put that against the zero inflation rate, you have wages growing at about 4% in germany. tom: better than america? >> this is wage and salary income. if you take that same number in the u.s. as north of 5%, but everybody is getting good wage growth. tom: what a terrific lineup for you this hour. our twitter question of the day. are we headed for $20 oil, we want your considered opinion. this is bloomberg "surveillance ." ♪

tom: it is a beautiful washington this morning appeared the day after abraham lincoln's birthday. the president travels silicon valley to speak of cyber security. we say good morning from new york city. olivia sterns the mandate something about tomorrow demanded the day off. brendan: she is skiing, she is in a better place. my morning must-read is mark gilbert for bloomberg. we go to zero rates and then we

think of more things we never thought of before. currency war is pushed to the brink of a nuclear option of rate cuts and currency market intervention is do not do the job. capital controls may creep higher up the agenda of increasingly desperate central banks. you have a sense of the sweep of the history of this. are we to telling towards bretton woods? >> capital controls are poor countries losing capital. we have the opposite problem. we have governments fighting too much capital coming in. that was the swiss problem, the danish public, that may be the u.s. problem. we are going through these gyrations seeing extremes in monetary policy. the biggest development is maybe we are seeing governments realizing the qe isn't all that effective. tom: you see that in sweden.

a negative interest rate for a central bank? >> negative interest rates are becoming the norm across europe. you really have to wonder as the ecb goes into this qe process whether it does a whole lot for economies. in the u.s., the biggest impacts around asset markets and on the dollar. that is what we are seeing around the world. countries that adopt qe, the biggest impact is on their currencies. brendan: denmark has this take to the euro and they have a credibility problem. they say, we are taking care of it we have been doing this for a decade and nobody believes them. robert: basically denmark is in a swiss situation. the feeling is, if the swiss could not deal with this, denmark is less prepared. currencies, we have seen historically, currencies, when

they move, they over adjust. that is what they are worried about. tom: i need a friday the 13th primer, denmark does not use the euro. they have their own currency. brendan: yes, denmark and u.k. opted out. tom: we will speak with dr. morse on oil. coming up, robert dold on the kurds to be in the equity market. stay with us. ♪

tom: this is fun and this morning. we say good morning. from 59th and lexington in new york city. let's get to the top headlines from the ground -- around the greater world. brendan: metal stents -- middleton -- militants in pakistan. more than 40 wounded. the taliban have claimed responsibility for the assault. the united nations has a dire

warning on yemen. the arab world's poorest country is collapsing before our eyes. earlier this week, the u.s. britain, and france closed their embassies amid growing unrest. shiite rebels have taken over the central government and half of the country's provinces. in south africa, an unprecedented protest in parliament. opposition parties take a walk out during the president's annual state of the nation address. police removed member of the economic freedom fighters party after they repeatedly interrupt the speech. members of the opposition party walked out in protest. yet the members are upset over him using state funds to improve his home. i am going to quote something, it is impossible to call a bottom. this year, those words could only report -- refer to oil. add morse is sitting with us. you went ahead and called the

bottom, that bottom is $20, i will give you the floor in a second after saying one word bold. edward: $20 is who knows. they are most there in terms of crude oil. you have a limited number of ships to put any oil on. you can get the price going down steeply. as storage cost go up you get to the point where the best way to store is to shut down production. tom: what i see now is a rationalization of finding a bid. as you look through the industry searching for a bid on oil, what is the thing you are researching each and every day? edward: we are looking at the supply side closely. we are looking at the rest of the world. at venezuela russia -- we think oil will keep coming out at a much slower rate. tom: link bob's world to your

world. what gets you to $40, $235, down to $20 oil? edward: it goes to the cost of storage. we can measure the u.s. -- we have crude oil inventories at the highest level since davis started. since the 1930's. we do not know what it is like in the rest of the world. you see the nigerians fight it difficult to sell crude, that is because the buyers have no place to put it. brendan: when i read other research about oil, what i keep hearing is the fervent hope for the return of yesterday. when you talk about the shape of the curve, is it you, is it a v you are saying it will jump at the bottom. edward: it will jump at the bottom. when prices do go up quickly, they will come down again because the nature of the u.s.

shale revolution that you have more and more oil coming out of the ground when the prices go up. brendan: if the u.s. is a swing producer, what that means is, we will get volatility, but it will always be at a lower level. edward: it depends on what level you are comparing it to. tom: i want to bring this over to bob's world. this is west texas intermediate down to $20, a 60% moved out. what does that do to the financial system, to dollar dynamics and the knock on effect to other commodities? robert: as we continue to get prices down, you will have a big winners and big losers. europe is a winner. not a big producer. edward: i agree, europe is a winner. robert: not a big producer significant consumer. if you look at the citigroup

economic surprise index, over the last few weeks, they have turned decidedly higher for the eurozone. tom: was that a shameless plug for citigroup? brendan: this whole show has been a shameless plug for citigroup. we took a tour around the world for cities built on oil. at what point in the price of oil, long-term, do these places start to say, it's not coming back, we need to figure out a different way to running our economy? edward: what's interesting about this cycle, we look at economic cycles and oil prices and it was demand driven. recessions come, production slows down demand goes down prices go down. this one is more difficult for analyst to deal with. this is a supply issue. supply dynamics can take just as long as demand dynamics to adjust. tom: the president travels to silicon valley, maybe he will

travel to the dakotas. i saw headlines yesterday of 100,000 bodies out the door on oil. your scenario is that another 100,000. you have a working number? robert: it will be a big bounce up. the oil world is waiting for the bounce up. they are not cutting back drastically. tom: when will we see those tough decisions made? edward: if oil goes down and stays, by the summer we will have a tough time. brendan: let's revisit a question we had -- is that it for opec? edward: people called for the death of opec many times, but this time it is for real. the saudi's have nobody to talk to. who in the nigeria or iran or iraq or libya was there to really make a decision? this is a next essential crisis foresight radio.

-- annexes central prices for saudi arabia. tom: stay with us, futures up to, this is bloomberg "surveillance." ♪

>> this is bloomberg surveillance. let's get to our top headlines. the governor of oregon is being pressured to walk away from a decades long career in politics. he is under investigation. he has been abandoned by most of his party's leadership. north carolina is launching an investigation into the murders of three young muslims that were gunned down inside a chapel hill apartment. the fbi is trying to determine whether religious or ethnic hatred was among -- were amomngng

the motivations. renowned new york times columnist david carr has died. carr wrote the media equation column and penned a memoir about his fight with drug addiction. >> this matters now to our guest host, he knows that there is a massive chance of a stronger dollar against a weak euro. >> u.s. companies are facing some headwinds now. some companies have benefited from a weaker dollar. in the short run, it shows up in translation.

the initial effect really is a reporting effect. the second round effect will be on competitiveness. during the second half of this year, we may begin to see some shifts in competitiveness and production growth between the u.s. and the rest of the world. >> this is something that has been really squishy over the last 20 years. does a weaker currency solve political problems in any given nation? >> it makes the environment a little bit better in terms of growth which can improve the environment for solving political problems. >> we were always trained that a weaker currency is a bad thing. is that true? >> it depends. and a globally inflationary environment, a weaker currency is a bad thing because it exacerbates the rise in

inflation. if you are in a deflationary world it is not clear that a weaker currency is all that bad. the weaker currency was a big part of the u.s. rebound and it could potentially help in europe. >> what is the history to carry that forward that you have inflation, disinflation, and price decline deflation? when that reverses, the real fear is that there could be jump conditions to an ugly inflation. >> historically, that has been the case. i does think that will be the case this time around because of demographics. world populations are aging. aging populations tend to save more, they sit -- borrow less. one of the big monetary developments has been that even though central banks have poured an enormous amount of reserves into the banking system borrowing and loan demand have not been there.

i think the demographic factors are really going to keep a lid on inflation pressures this time around. >> do we get a strong dollar? >> i think we probably do continue to rise. historically, the big moves come early. >> you and i are not booking tee at the plaza hotel. >> i don't think we are going to get there. >> it is time for a quick data check. u.s. futures are up in little bit. no news is good news. the u.s. 10 year yield is up three basis points right now. the yield curve is pretty flat.

euro-dollar is the same. it has been about 1.14 for the past couple days. nymex crude. it is still at 51.8. >> good morning, everyone. this is "bloomberg surveillance." olivia sterns is on assignment on a ski slope somewhere. >> president barack obama is a new bff. paul ryan is the chair of the house ways and means committee. anything the president has a hope of passing passes underneath paul ryan's gavel. peter cook will set down with -- sit down with paul ryan. he is a powerful young republican who is not running for president. >> it gives him time to cut a deal with president obama and the administration on some of these big issues.

he is arguably the most important lawmaker in congress to president obama right now. he is the gatekeeper on big issues. tax reform trade. paul ryan will help decide whether or not there is a real prospect for deals on those issues. he still has so much credibly with rank-and-file republicans. he can compromise with this president and bring other republicans along. >> we were wondering whether we should think of this as a next and going to china moment. -- nixon going to china moment. >> he has the credibility and a lot of the republicans trust him. on the senate side, orrin hatch has the same role, but it is different. paul ryan is so critical. his body language and the tone

so far has been pretty positive even on the floor of the house yesterday, when he was fighting with democrats over a relatively modest tax bill, the tone was positive. they were talking about bipartisan compromise. that matters to paul ryan. >> what i find interesting here he has an impatience. his father died tragically young. his impatience has always been there. in his politics. what is he impatient about right now? >> he is a guy who has nervous energy all the time. he is a workout freak. that sort of thing. he has a lot on his agenda. he feels like serving in congress is a chance to get things done and he has said that he may not be around for much longer in congress. he wants to see if he can get something done.

maybe there are national ambitions down the road. the fact that he has a clock ticking is a good thing for president obama. he has a clock ticking as well. if he is going to get a legacy issue in the next two years it is going to be because he worked something out with paul ryan. >> he has also made a bit of a journey in the last two years or so. topics like poverty, income inequality. >> it is a change for him and for the republican leadership. it is an echo back to the jet cap side of the root -- jack kem,p side of the republican party. it is an effort to change the image of republicans across the country. whether he will be successful depends on what he can get done and whether he can work with the president. their ideas are not exactly into an. the idea that they will have

harmony on all of these issues is not exactly right. >> thank you. catch peter cook's interview with paul ryan at 3:00 p.m. eastern today. >> robbers cinch is with us. and morris, i believe we had an energy resolution. does washington just get in the way? >> it is a good thing that washington has no energy policy because it has allowed this revolution to unfold. we have one magical thing in the united states. you and i can own property rights. no other country in the world allows people to own property rights. the citizens who on the property rights can lease their land and get a royalty for oil production and that is a big incentive. >> we will continue to the

debate here. we have lots to talk about on the state of the american economic experiment. are we headed for $20 oil? output or question of the day. ♪

>> mrs. "bloomberg surveillance." after 16 years behind the best john stuart -- jon stewart broke our hearts this week. he said he is done with "the daily show." 's viacom closer to panic or is it full freak out? >> they would say closer to panic. maybe it is a freak out on the inside of fire,. -- viacom. without jon stewart, why even watch comedy central? what else is there to watch on this channel? a lot of the cable operators who carry comedy central are asking the same thing. >> the basic idea is that time

is marching on. >> there is no speculation. isn't this ironic? years ago, cbs and viacom split off. now, we are coming full circle. both are weakened by this disruption. might they be better together again? that is a conversation that is happening right now. >> "the daily show" was a franchise in the 1990's that was aimed at college students. jon stwewart turned it into an entire network and range of shows. that show is not just john stuart. -- jon stewart.

he built the talent factory of people to follow him. >> stephen colbert. >> john oliver. larry wilmore. stephen colbert has done great and now he has moved on. john oliver, the same thing. do they have also a problem of keeping their talent on the platform? it is not big enough to hold these big egos. jon stewart was the last big ego at comedy central. >> there is no ego in broadcasting, betty. [laughter] what are you talking about? >> leo is someone to talk to about viacom and these older gentleman. time is marching on. >> time is marching on.

but the bundle package, jons t stewart might be the one to break the bundle. i would love to talk about big egos all day long. >> leo henry of the dreaded new york yankees he has scored all sorts of deals and media. a perfect day in new york. stay with us. ♪

>> good morning, everyone. it is a single digit new york. it is frigid out there. for those of you on bloomberg radio, nationwide, the theme is cold into next week. we want to get you properly dressed for monday morning. let's look at top headlines from around the world. >> the former korean air executive sentenced to prison over a bag of nuts will appeal. she was found guilty of

violating aviation safety law. friends and foes staged dueling marches and violent clashes happened. in china, they want the soldiers lean and fit. all armed forces personnel will be required to go through fitness training. those are some of your top headlines. >> >> boom and bust and bust and boom. it is the cycle of oil. oil was discovered in midland, texas in 19 73.

it is time for a bust. what did you learn from the boom bust cycles? >> what i learn is that oil prices don't keep going up forever and they don't keep going down forever. this is an industry that has had a cycle of overinvestment and underinvestment and the world is not ending now. >> that is wise like yoda. >> it is. will we clear the oil market again as we have before? or is it something different? >> i think it is something that is very different. shale is very different. shale is now with the world is looking at. they are looking at the call on shale rather than the call on opec. we know it can bounce back.

it is a great new balancer. >> your work on the classic curve and that. if you have an exhaustion a shock -- >> i am calling jargon alert. >> jargon friday. jargon alert. >> exhaustion us shock means just something that we did not expect to happen. >> is it enough to derail our investment and our confidence? >> certainly if you look at the momentum of investment over recent years, it has been relatively weak. we will see that be a bit of a dampening. we have talked about how europe is an unambiguous winner for

lower oil prices. russia is an unambiguous loser. the u.s. is somewhere in between. i think the u.s. economy is a net beneficiary, but there are certain sectors that will suffer and they will be suffering during the first half of this year. >> when we talk about capital expenditure did in the oil industry, we are usually talking about wells. there is also a lot of capital expenditure to support that. how do those cycles of the actual buildup of the boom towns around it track it itself? >> there is another part of this you have forgotten and that is low natural gas prices as part of this boom. low natural gas prices are encouraging investment of monumental proportion. we are becoming a monumental exporter of natural gas. we will become the largest

exporter of natural gas in the next decade. >> can we move natural gas back to europe? >> we certainly should be able to. that is why a lot of european utilities have a contract to buy at the end of 2015. >> can we take that hydrocarbon transformation infrastructure and use it for cheap oil? >> we had drilling moved to oil directional drilling. we still have an infrastructure built to go. we are going to be getting more exportable products, like propane. >> what do you observe in the spread market, the bond market about high-yield oil? are the fears justified? >> it is becoming very segmented between the beneficiaries and those who are hurt.

>> certainly the spreads in bank loans in particular are suffering as a result of what is going on and that is natural. >> i think we are going to have a nice rebound. i am optimistic about u.s. production growing at a decent clip. i think there is going to be a shakeout. the good companies are going to be there. >> we have some expertise on the desk in oil, but we also have interesting parties in the audience. are we headed for $20 oil? that was the prediction from ed morris. answer number one, it does not look like it because markets cannot take it. maybe years down the future. number two, not so long ago, gasoline was nine cents per gallon. who is this who is remembering this? not a chance this will return.

>> this is a consensus response. review how we can split the difference and get from $60 to $40 per barrel. >> we are moving into a very weak time of the year for the markets. demand is going to be down by users by the time we get to may. production keeps growing, refineries are going into maintenance. storage capacity is getting close to the top. >> how do you respond to the evil conspiracy that is going to mess up the market comment? the market is the market, right? >> the market is the market. you have to get a very low price to sweat out the supply. it depends on who you are talking to. >> we are talking about the power of history to shape the future. our last twitter answer.

this is predicting oil and it is a game. >> that was olivia sterns tweeting. >> she should not be doing that but she just sent in an e-mail. predicting oil is a mug's game. >> somebody has got to do it. [laughter] >> somebody has got to do it. we are looking at the stories shaping the day and the weekend. >> i'm going to start it was reading on ukraine. forget the politicians for the next two or three days. this is monitoring legitimate warfare, fierce fighting in ukraine. there are a lot of brave journalists following this. i am watching the military this weekend. >> my agenda is greece. negotiators met over the weekend. we have the possibility of a finance minister meeting where something of substance may happen.

my agenda is that i am looking forward to a day when my agenda is no longer in greece. >> it is valentine's day tomorrow. you have a next her bonus weekday to recover. bob, what are you doing for valentine's day? >> it is also my son's 30th birthday, so i think that is going to trump fallon penn state. >> we are having a low-key valentine's day. it is like everybody in school gets valentine's day. >> we are having dinner tonight and we are going to beat the rush. >> that is the way to go. >> stay warm through this weekend. edward morris, thank you so much for taking time out after that report that dropped like a thought on opec last week. thank you so much, bob, as we migrate toward euro parity.

bob is speaking the euro down to a 1.1 387. stay tuned on bloomberg television. the best in economics, finance, and investment. ♪

>> good morning. we are live from bloomberg world headquarters. we are 90 minutes away from the opening bell and we have a close eye on the markets.

up ahead, it is all the rage among global central banks. adding stimulus to their economies. we go through all the prices this year. we will talk with bob doll. leo hindery is my ghost this hour. he weighs in on the president's cyber security summit. why he think jeb bush has zero foreign-policy experience and whether viacom can survive without jon stewart. you have seen the ads, but why did they former google executive come crawling to become the ceo? you're is a look at our top stories. -- here is a look at our top stories. >>