the ukrainian currency depreciates. s&p 500 drives to a record high as well as of worry come tumbling down. the careful pricing of luxury is aspirational. america would not be caught dead without it. good morning. bloomberg "surveillance," live from new york city this wednesday, february 18. i'm tom keene. joining me, olivia sterns and brendan greeley. top headlines move this morning. olivia: greece could request a six month extension of its loan agreement as early as this morning. after the eu issued an ultimatum to ask for the extension by friday or leave the negotiating table. a step that could ease the standoff with greece's creditors over its future financing. prime minister alexis tsipras insists the status quo is acceptable. alexis tsipras: we do not compromise. we are working hard for a

mutually beneficial agreement. an agreement without austerity ended bailout agreement that has destroyed greece these past years. and without the toxic presence of the troika. everything else is not an agreement, but a surrender that would complete the euthanasia of our country. olivia: the devil is in the details. the two sides have to work on the conditions that may be attached to that extension. in ukraine, pro-russian separatists are in control of the town of debeltseve after a withdrawal by most of ukraine's forces. the white house condemned the fighting come issuing a statement saying rush's violations of the minsst -- the white house condemned the fighting, issuing a statement saying russia is violating the minsk agreement. here is president putin in budapest. vladimir putin: these weapons are already being delivered to

ukraine. i am sure that whoever delivers whatever kind of weapons, it is not going to deliver weapons to a conflict zone anyway. in this case, whoever delivers weapons, the number of victims can increase but the result will remain the same as it is today. olivia: the combat is eroding the latest effort to end 10 months of fighting that has killed 5600 people. brendan: in geneva, authorities raided the offices of hsbc's swiss private bank in connection to a fraud investigation after reports of the unit helping clients avoid taxes through money. snapchat on pace to become the federal most -- the third most viable venture capital ever appeared seeking funding that would value the company at 19 billion dollars. that would rank the mobile app only behind uber and xiaomi in the top three startups backed by venture capital.

tom: disgraced big-leaguer alex rodriguez says he is sorry. in the form of a handwritten letter. the 39-year-old sat out the 2014 season for drug policy valuations -- violations. the yankees offered him a chance to speak but rodriguez writing in long can script decided against a face-to-face approach. he wrote, "i take full responsible before the mistakes that led to my suspension." the yankees still owe rodriguez more money than god, $61 million. did the newspapers have fun with this? brendan: he wrote in cursive. which means he is old enough to have learned how to write cursive. which means he is 40 years old. olivia: he's probably not on snapchat. the snapchat generation cannot write cursive he does have 654 home runs. brendan: he does. olivia: as a yankees fan, i want

him back. brendan: the yankees are looking for him to get a 40-year-old's injury, get that $61 million back and then the thing is over. tom: it will be a distraction this spring. he wrote a nice letter. i will give him that. in cursive, we do the him back. brendan: data check. equities, bonds, currencies, commodities are coming off 2100 on the s&p. risk on the screen. euro pulls back a little and nymex crude churns. next screen. vix 15.80 equity markets. there is the s&p 500, closing at 2100. the ftse near a record high going back to 1999. i put in euro-swiss because i miss davos. weaker swissie over the last two or three weeks 1.07. let's go to a vanilla chart in the glimmer terminal. --

bloomberg terminal. looking at the moving averages i do not want to make much of this. this is an elegant chart of ever higher. brendan: this could easily be a chart from 1945 cap 1975. tom: bloomberg this is world war ii -- no, this is 2009 and up we go. a lot is folded into the punch bowl that janet yellen controls. howard wort is joining us in the next hour from tim cook. -- howard ward is joining us in the next hour from gamco. ukraine troops exit debeltseve. 80% was the number given by the ukrainian leadership. markets shrug it off. we need to focus on what this means for markets. geoffrey dennis, global head of emerging-market strategy at ubs. he does not ignore weak growth.

in celebration of fashion week mortimer singer. geoff dennis, we will talk about asia in the back side of this hour. right now, europe, what is the level of recession or depression in europe? >> we think europe is getting better. european growth has been week. tom: weak euro to the rescue. >> weak euro is helping, oil prices,, qe will help. there is a possibility growth numbers could be better than consensus. we are at 1.2. this is the euro area, not including emerging europe. things are getting marginally better. you have seen some slightly better data. things are improving in europe. brendan: you are not troubled at all by the inflation data coming out of the u.k.? >> i think there is no doubt that there are deflationary pressures across a big part of

europe which you have to worry about. that is exactly why the ecb has been moving to qe. the bank of england, pushed out any rate tightening in the u.k. until 2016. it's a slow growth. relatively slow growth relatively low inflation and varmint. we are not looking for global deflation at all. brendan: can i point out how strange this show is. in my first vision i have geoff dennis talking about inflation in the u.k., over here tom is looking at a pair of thigh high boots on somewhat. tom: fashion week. i am ready to go. brendan: the cognitive dissonance was too much to hang onto. olivia: tom was giving may look like really, really, thought habits? -- thigh high boots? how much is the conflict with russia and ukraine going to hurt the german market? >> russia is the best performing

emerging-market this year, up 22% in dollars. olivia: in dollars the ruble has collapsed. >> prices are up from below. we are nervous about russia and we actually think you have not even seen the really big impact of all of this crisis on the russian economy. you are going to see that. there is some potential impact on germany and other countries from the russian economy. the german economy is picking up. tom: geoff the money question. you have been through this before. how do our viewers and listeners disassociate from the news flow of greece ukraine, this that and the other thing and invest with confidence in emerging markets? >> is obviously very difficult. the news flow is so intense. our view is what investors have got to focus on its growth of these economies and growth in particular of corporate earnings. we think there is a good chance,

mainly because of lower oil prices and the impact they will have on countries around the world, especially asia corporate earnings should improve. that is the long-term case for emerging-market you have to try to ignore short-term noise. brendan: you focus on growth. one of the things we have been wondering is how much does governance matter? compare india to brazil. are you looking at that or just economic fundamentals? >> you have to look at governance. the best short-term is structural reform and you have seen reforms in india. the corporate sector is doing well and governing is good. in brazil you have problems on corporate governance. you have huge problems in terms of the size of the public sector, which affects the environment in which companies -- brendan: you have the metaphor of petrobras. tom: once you make all your money in the emerging markets you have got to do something. thigh high boots is the way to go. mortimer singer is with us in television of fashion week. lovely boots. this is all the rage.

how does this happen? how do you guys pick what she needs to buy a month later? how does that work? >> what ends up happening is that all the designers tend to go traveling. they tend to get inspiration. they find seems that a pickup in society, seems that they pick up in various cities around the globe. they use that inspiration to also go in a certain direction. then they end up finding a kernel of truth. tom: is that the kernel of the truth? you need a pair of boots? tom: i was -- olivia: i was informed that i need a suede jacket. these are boots from a company that coach just bought. tom: is it a boring fashion week? is it boring? or is there a pop? >> particularly new york fashion

week everybody is excited. america is back. we were saying in the industry that is the united states of luxury. all the european brands are looking to the united states as well for the market. very buoyant. the consumer is in a good place, particularly at the luxury end. tom: is the market here or is it people visiting to jfk that is the "market"? >> coming back to the russian question. the russian tourist has effectively gone away. it has affected dubai, paris and london negatively because of them being more cautious. america has loosened, particularly their stance on chinese tourists. that has helped new york city. tom: he molds it right into geoff's world. >> as currencies go up and down, you get businesses coming in or going out. you could move on 5th avenue. olivia: i am trying to plan a

trip to japan, it correlates to the yen. tom: olivia, i see you in a pair of suede boots. brendan: i am planning a weekend in dublin. olivia: if you are buying, i am wearing. tom: what else? olivia: a few words in the standoff between greece and the eurogroup. this is bloomberg "surveillance," streaming on bloomberg.com. good wednesday morning. ♪

tom: good morning. bloomberg "surveillance." top headlines from around the world. here's brendan greeley. brendan: violence in afghanistan has reached a new high. a human report says -- eight u -- a u.n. report says the number

of civilians killed has reached a five-year high. more than 10,500 casualties includes 3700 civilian deaths. the violence continued on tuesday, taliban suicide bombers in kabul killed at least 20 people. a war of worlds between australia and indonesia tied to the debate of two australian heroine smugglers. indonesia plans to execute them. australian prime minister tony abbott says his nation would be grievously let down should the executions per cp indonesia warning that no one responds well to threats. in china residents in beijing and elsewhere celebrating the final day of the year of the horse. ready to bring in the year of the ram. urging people to like you are as dozens of cities fight a battle against toxic air pollution. those are the top headlines. tom: holland, merkel putin,

poroshenko to speak by phone. brendan: perhaps if the ukrainian troops are out of debeltseve that is it. tom: hope in the financial markets over greece. did alexis tsipras the group prime minister blink or will wolfgang schaeuble, the german finance minister, soften his stance? here to help us figure it out is david powell. he joins us from london. great to see you. it looked like after monday's talks fell apart that greece and germany were once again on a collision course. is it fair to say that greece swerved first? david: greece certainly had to make the first move in terms of requesting another meeting before friday. if there were no meetings, things would fall apart. you could say they have blinked first in that sense but they have not given in if you look at the wording day requested. olivia: the wording is controversial. what is the difference between

an extension of the bailout and completion of it? david: with the greeks semantics matter. the government came to power promising to get rid of the troika. they do not like they were troika. the eurogroup has stopped using it. instead they say the ecb imf. they do not like the work program. they requested an extension of the current loan agreement. there is not a program there. when the talks broke down on monday, it was really over the use of the work program. are we going to complete it or not. brendan: is the fight any more specific? are we just talking about the use of the word program. is there anything about the primary surplus greece is going to hold onto? david: that is one issue. the imf in the troika wanted them to have a primary surplus of 4% to 4.5%. the greeks do not want to do that. if you look at the draft

statement turned down earlier in the week they did make reference to maintaining that. in the press conference, the finance minister did not really touch on that as one of the issues that led to the breakdown. he focused on the use of the word program that they refused to successfully complete the program as the draft statement indicated. brendan: we have sitting with us geoff from ubs. he has been nodding as you talk about semantics. david: we are talking about extending the bailout or extending the program in the short term but we are not talking yet. isn't that right, about what the troika will want from greece in the long-term. our view is that they can reduce the yield on the debt, they can soften the primary surplus target going forward. but the long-term agreement is still going to be worked out. is that right customer david: certainly in the long-term, an agreement has to be worked out.

it is more important looking at the next year. greece needs 21 billion euros over the next year. it is finding financing for that sum. tom: there is soon to be two conversations. people like geoff looking for a workout. which institution will provide leadership in getting to a long-term debt workout? david: good question. i think the long-term of all of this is not really on the table right now. in the sense that what the greek s are most concerned about is the amount of the budget that currently has to be spent on servicing debt. as long as they can reduce debt servicing costs, extend and pretend. they do not want to be paying a huge amount to service debt. >> if this is correct, greece has blinked, not the europeans. olivia: david powell, our chief

euro area economist. tom: looking at the equity markets. howard will join us with gamco. a persistent bull. in our next hour here on bloomberg "surveillance." futures flat as we look at the beatitude of mid-february in new york. ♪

tom: good morning from new york city. bloomberg "surveillance." i am tom keene. time for a morning must-read. avec olivia. olivia: an explicit debate going

on and friends about whether or not you should be able to shop on sunday. a day i knew you go shopping . a quote from prime minister manual valls, quoted by afp. "do we want millions of tourists to go do their shopping in london on a sunday?" essential to what is going on with economic reforms in france. yesterday, manuel valls and his finance minister a menu out marcon pushed a bill to liberalize the retail market and open more stores on sunday. now they face a confidence vote as soon as tomorrow and the country is up in arms. onset is mortimer singer who is a french citizen. why is it so controversial that one should be able to shop on sunday? >> this is the european equivalent of whether or not

people should be allowed to shop on thanksgiving day. olivia: but it is once a week. >> it is a family values issue. i think it is an amazingly good thing. this happened in spain, germany, italy. they always want to shut down on sundays. in france they are trying to keep the tourists in paris. it is the most visited city in europe. something that can help drive the economy, which is sluggish. olivia: it is not even about the french consumers, as mr. valls said. it is about tourists. it is so polemic that macron has received death threats. >> people will find ways to shop on sunday. in germany there was a law you could only shop if you were traveling on a sunday so gas stations became emporiums and soda train stations. -- so did train stations. >> a few years ago, german

shops closed on saturday except for once a month. brendan: you cannot go to the butcher on a monday. olivia: this is the structural reform everyone is banging the drum for in europe. shows how difficult it is to pass in terms of domestic politics. i want to ask our twitter question of the day. what do you think snapchat is worth? could it be worth $19 billion? tweet us. this is bloomberg "surveillance," streaming on your tablet, your phone, and bloomberg.com. ♪

tom: good morning, everyone. our top headlines. olivia: go pro gained 12% after investors moved in. the end of the restrictions on employees and insider sales put 76 million shares on the market. they closed below $51 in new york. last year at $24 per sale. the oracle of omaha is bailing on oil.

berkshire held more than 41 million shares of axon. buffett eliminated a similar holding. crude has fallen by about 50% since june. >> indonesia has cut its key interest rate. indicators down for the country, except for this one. geoff dennis was in charge of the emerging market. equities jumped last year with the election of the president for indonesia. is this what we are looking at? is that the effect? geoff: i think he has done well. he has taken the tough decision to abolish fuel subsidies.

the price did not fall as it would have. what they are doing with the money is trying to expand the economy through infrastructure spending, health care. markets had a good run. it has a current account deficit. indonesia is a market that is vulnerable. >> where are they on this path to vibrant consumer economy? geoff: consumer spending a strong and will continue to be strong. it is a fairly strong economy. tom: compare and contrast their low base. this is when i think is

indonesia, we do not understand how big it is. isn't it ahead of china? geoff: i do not think it is ahead of china. they are doing things on different parallels. the chinese growth story is driven by government edict. now, it is trying to reform and bring through more consumer spending. olivia says -- olivia: there are a lot of foreign mining companies that have gone in there and had a hard time with corruption. geoff: and there are issues. it is a good growth story where the growth story -- it is a good

growth story. there are problems in a lot of these emerging markets. he is not the establishment. it was the former government beholden more. brendan: you talked about spending the fuel subsidy on infrastructure. can that structure grow with it? one thing we learned in the airasia crash was indonesian traffic control was not up to emerging markets. geoff: that is the challenge these countries have. a lot of these markets, population growth is rapid. infrastructure can be poor. massive pollution problems. indonesia is trying to free up results to improve the story. one hopes it does get better. brendan: what is the timeline joko widodo has to redeem

himself? geoff: if you do not start to see improvement in the first couple of years, people will doubt the program. he has a program. he started well. indonesia is vulnerable to capital outflows. tom: take us away from stereotypes of another time and place. geoff: it is a completely different indonesia. it does not alter the fact there are governance issues. there is an establishment that would like to be in power. for a while it looks like he was not going to be able to form a government. it is a different situation from family driven dictatorships. brendan said it had to change to allow him to come into power.

geoff: they have had a free election, and we have to see whether he does deliver the structural reforms which will reduce the dependence on foreign capital get growth going and improve conditions on which growth can operate in the country. brendan: coming up, snapchat on the verge of another round. we are going to take a look at very large numbers. tom has his answer. tom: i got some snapchat. o.j. simpson is chloe's dad. brendan: is it worth $19 billion? tweet us.

♪

tom: good morning. ukrainian curis c to a new record weakness. time for a single dose chart. brendan: tom downloaded snapchat. flood gates are open.

snapchat seeking a new round of funding that would value the company as high as $19 billion. money flowing in as venture capital. that is our single best chart. 2000, the year of silliness. the geoff: -- geoff: that looks like 1999. brendan: we cannot treat silicon value -- silicon valley as an emerging market. tom: i am looking at the daily mail. twitter feud turns toxic. amber rose brands kim kardashian a w----.

that is the kind of content you consume. geoff: that is -- olivia: it is fascinating, all of those big brands. they are all creating original content. the advertising is going to disappear like the messages. tom: howard is all over this. this is a big deal. brendan: you do not know how long you have with the growth of this network. facebook has recognized that in order to keep going, it has to

make new acquisitions of new networks. what is the shot clock until teenagers think this is not what we are looking for. tom: they are getting $465 million in a new round of financing. we are extrapolating out the percentage investments into a value. his 19 billion a valid statistic or a guesstimate of where they are going? is it marketing or finance? howard: it is probably marketing in order to obtain finance. tom: thank you. brendan: it is hope and dreams realized as money. are we looking at investments or are we looking at unicorns? this is the last several years

of funding. can anyone tell me what fisk orar does? ok. olivia: over car -- uber does something for you. brendan: buber does stuff. shall me -- xiaomi makes things. tom: what do they do you sent me a snapchat.

olivia: you still haven't opened it. brendan: i just received a text from my wife. we have not even moved to snapchat. howard: we have moved to this market before, particularly in the 1990's. they are pushing hugely to get millennial's. we are all too old. tom: wrap this up right now. brendan: we are going to escort you offset. olivia: i went to undergrad with -- younger brother. let's look at photos making

news. in beijing artists performing during a spring festival. it begins on the first day of the chinese lunar calendar and last almost half a month. the holiday is over 4000 years old and celebrates family reunion. the number two photo of the day, after the large wave of snow the city of ithaca gave up. on their website, a pop-up suggests people visit key west instead. it was zero degrees fahrenheit in ithaca. brendan: this is genius marketing. when you have got nothing, do something. olivia: our number one photo of the day. miss p one of the westminster kennel club dog show.

she is a 4 --year-old -- she is a four-year-old beagle. there is no cash prize for winning, but she will enjoy a state dinner. -- a tsteak dinner. brendan: a voice whispered in my ear that she is having lunch with donald trump. there is no way that is true. tom: best in show. this is a big upset. the beagle was a big upset. it is the child, daughter -- brendan: that is my dog. he is a lab/idiot mix.

dogs are too much work for practical jokes. olivia: we're going to markets finance and economics. we have an expert on luxury onset. kate spade, just as luxurious as a birkin bag? we are streaming on your television phone. we will be back in a moment. ♪

tom: good morning. michelle meyer will join us with her expertise. we will talk to her about the minutes of a central bank coming out later today. look for that. right now, we need to get to our top headlines from around the world. brendan: the united states is ready to send help to rebels in syria. they will get radios to call in u.s. airstrikes. trainers will set up shop in jordan with the hope of training

rebels. hong kong's unpopular leader calling on residents to embrace chinese new year and be more like mild and gentle sheep. he made his appeal in the lunar message to usher in the year of the sheep. he is trying to ease tensions when protesters occupied streets for 11 weeks. one dark suit with monogram pinstripes bearing the name of india's prime minister. he wore the suit when president obama visited last month. it is now up for bid. proceeds will be used to clean up an important river. olivia: americans know how to sell themselves. designers have made fortunes

marketing their lifestyle brands. they have bulldozed their way into the luxury market dominated by french and american fashion houses. are american designers killing these labels? mortimer: as far as lifestyle brands go, they are best in class. ralph lauren has many lines below the collection line. they paved the way. michael kors kate spade, they came along to take the whole business and bring it down one level maybe even two levels to provide aspirational luxury which brought a broader customer into the lifestyle.

olivia: are the diffusion brands no longer relevant? mortimer: i think many of them dolce and cub on i got rid of dn g. they are taking a more elastic approach to price point. there is a does using -- a diffusing of the high brand. europeans they are taking their price points to the tory burch's of the world. olivia: they are lowing prices. mortimer: if you look at vuitton prada, they have to lower prices. olivia: there are different tiers of luxury. there are the absolute luxury brands and then there are the brands like gucci and prada

luxury labels for the masses. they go on wholesale and they go on sale. what is the distinction between the two categories? mortimer: the price points are on the same level. the waiting in them is lower, so you are able to get a broader customer. some brands are above the brands listed on that page, like a chanel. more limited distribution and have a higher price point. brendan: help me out with someone who is dimly aware with who or what tory burch is. she provides an architecture under the lowest price point to make it aspirational. what does that mean?

mortimer: any brand that has a sense of luxury is aspirational. chanel is aspirational. they are using the word to allow a more a customer that cannot typically afford the higher price point brand to come into that way of life. rendon says step into the shop and buy a scarf. mortimer: you can also buy a handbag that may cost $700. it may feel the same, but not be the same quality. to the layperson, they get the feeling of being part of the story. it is about marketing, making people feel better. what martin used to say, it is retail theater. they have infused theater into consumerism. that is what it is. that is what michael kors has done to create a billion-dollar company in a short amount of time.

olivia: within the luxury brand, is it still fair to say the more you raise your prices, the more exclusive the perception becomes? we have this chart that shows the inflation of a chanel bag. it is incredible how much they have gone up. it seems to be working. mortimer: they limit their distribution. they do not open a store in every city. effectively, the supply and demand is there. the supply is limited. they can push their prices. that is why they are doing well. brendan: we call this conspicuous consumption. mortimer: it becomes a virtuous cycle.

just as the error of expansion for all of these brands is asia. tom: thank you so much. stay with us. ♪

>> war continues in ukraine as

kiev evacuates some 80% of soldiers appeared the ukraine currency further depreciates to record weakness. the s&p 500 drives to a record high. they manufacture -- good morning, everyone. this is "bloomberg surveillance ." it is wednesday, february 18. let's get to our top headlines. >> brees could officially request a six-month extension of its loan agreement as early as is morning -- greece could officially request a six-month extension. it is a step that could ease the standoff with the prime minister -- insisting the status quo is unacceptable. >> we are not hurrying and we do

not compromise. we are working hard for a honorable and we truly -- mutually beneficial agreement. an agreement without austerity. everything else is not an agreement but a surrender that would complete the euthanasia of our country. >> the devil is in the details. the decide to work out the conditions that may be attached to that extension. per russian separatists are in control of the crossroads this morning. the white house condemned the violence saying russia's violation will come with higher costs. vladimir putin suggesting the u.s. is already providing arms to ukraine's government. >> first of all according to our information, these weapons are already being delivered to ukraine.

there is nothing unusual. i'm absolutely sure that whoever delivers whatever kind of weapons, it is not good to deliver weapons to a conflict zone anyway. in this case, whoever delivers weapons, the number of victims can increase in the result will remain the same as it is today. >> the fighting is eroding the latest effort to end the 10 months of conflict that have killed more than 5600 people. >> authorities in geneva rating the offices -- connected to a fraud investigation. the probe was opened after recent reports about the health of the unit, helping clients avoid taxes through money-laundering. snap chat on pace -- seeking a new round of funding valium the company at $19 billion --

valuing the company at $19 billion. >> the talk of new york city. alex rodriguez says he is sorry in the form of a handwritten letter -- he sat out the 2014 14 season for drug policy violations. he wrote "i take full responsibility for the mistakes that have led to my suspension." they still over rodriguez and $61 million over the next three seasons. what a distraction. >> i was impressed with his penmanship. glad that he could write cursive. >> let's get a data check right now. 2100, down fractionally. oil turns here.

you can troops surrender -- rebels seem to have the upper hand. you and i saw the ukrainian currency go to record weakness. a bankrupt ukraine, isn't it? >> it really is it we need to talk about that because we have been knee-deep in foreign policy. the ukrainian currency has been -- the economy is getting crushed. it sets up a quite difficult discussion twin one of the big creditors russia. there is a clause, if ukrainian debt crosses 60% russia can recall that that early. we have talked about clashes between troops. it is heating up when it comes to the economics. >> is the cease-fire over? >> it seems that way.

i look at the headlines coming through -- a lot of people talk about the cease-fire still holding, but on this particular transport hub. for most of the frontline, it looks like it is holding. i spoke to the finance minister last week. the illegal occupation of crimea is still a difficulty for them. she said the war is making it very difficult for her to collect data and get a read on how bad this economy is. things are dying down a little bit but you cannot say the economics -- >> the premised are of greece did blink in this showdown with the germans. what is next? >> they have not actually voiced an official writing to go forward and ask for this extension.

i would contest the point that this is all about words. greece wants the rest of europe to ease up. greece still wants europe to and demands for austerity. greece wants europe -- this program has not lowered the debt. if you listen to the b -- >> thank you so much. i am bored stiff by the greece debate. i cannot figure out who is doing what and when. how long is this going to go on? >> the luminary negotiation -- greece does not want to accept the program. the starting point is the existing agreement. they want a new loan, new conditions, new everything. you start with a program which is what germany wants, you're are starting from negotiating

point that is already very close to home. you never get to an adult conversation with greece. this will never be over. >> more clarity from you then anybody else i've heard today. with us, michelle meyer. howard ward with us as well. this morning the bears hibernate as the s&p moves higher. why can't we get a correction? >> we had one, a 5% correction. i have to go back -- i'm ready to write off a rod and greece. >> what does that mean? >> say goodbye. the yankees made a horrible deal with a rod. he's toxic and should not be around. unload him. greece come i'm sorry, this is a bad marriage. and it.

-- end it. let's been get involved. -- let spain get involved. cut them off, disciplinede them, set them free. >> going through 1999 highs. why? >> worldwide interest rates have never been lower. the hurdle rate for stocks globally has never been lower. the present value has never been lower. >> fine. >> jargon alert. >> explain to our viewers and listeners why they should get in now with a real equity reality that jenny ellen will raise rates -- janet yellen will raise rates. >> that will bump up the short end of the yield curve.

because of the world wiwide growth problem, it won't have any impact -- >> not at record highs in housing, but a genuine recovery. is it a single digit future for american housing? >> when it comes to home price appreciation, that is probably right. 4-5% appreciation this year. maybe a bit softer than that. looking ahead, i'm worried about a slowdown to flatlining for appreciation. they are overvalued compared to the trend in income. >> looking at long-term single-digit growth what will hamstring that and keep it from growing faster gekk? >> the fact that you don't have

credit availability were coming to the level that it previously was or anything close to that. if you have a tight mortgage environment and it limits the availability of credit, people should be consuming housing close to the pace of their income growth. >> you want to put your money in housing? >> it has to depend on what i rates are rising. if they are raising that's rising because the u.s. economy is strong, housing is a fair place to put it. >> we will continue the conversation about housing. is the burden of student debt stopping millennial's from buying housing? ♪

>> good morning, everyone. brendan has the morning must-read for us. >> the woman who went to france to learn how to raise her child by not worrying too much about it she wrote an op-ed in the new york times yesterday. she writes --

i thought it was a beautiful essay. there is this obsession with getting rid of things in your life. i go out on the weekends and i buy your plastic containers and organize my stuff and put it in the basement. it does not fill the empty hole inside of me because we are still barraged by these e-mails facebook, the clutter of stuff we have to do. physical clutter is not enough. >> i look at this and quit doing voicemail for-five years ago. i once spent 45 minutes getting through three phone lines. when do i quit doing e-mail? i'm serious. >> i don't know. when will, quit writing e-mails? -- tom quit writing e-mails? >> we are overwhelmed by this digital noise. >> some people have quit e-mail. not because of the overwhelming

nuisance but because of the liability associated with what you might say. >> which is why snapshot is worth $90 million -- $19 billion. >> you have the pressure of doing research notes, the old-fashioned way. >> not like cursive. that would take a long time. word documents? my issue is the mass distribution of e-mail. that happens on a personal basis . the amount of information is overwhelming. >> i get stressed by mass pr e-mails. i don't mind when they e-mailed me one-on-one but if i'm on their distribution list, it has no meaning. >> don't make me go to another meeting. >> the standup meeting no

chairs in the room has a certain value. a moynahan thing. >> the trading floor. >> there we are on clutter. futures flat. stay with us. this is "bloomberg surveillance ." ♪

>> good morning, everyone. let's get to our cap headlines from around the world. >> q1 report out today says the number of civilians killed or wounded -- a five-year peak piers morgan 10,500 documented casualties including -- a

five-year peak. the rhetoric is tied -- indonesia plans to execute the heroin smugglers. indonesia is warning australia that no one responds well to threats. in china, residents in beijing and elsewhere celebrate the final day of the year of the horse. authorities are urging people to light fewer fireworks. those are your top headlines from around the world. >> millennial's are saddled with debt, putting off hopes of ever owning their own homes. the percentage of student loans and delete with the rose to 11 .3%.

nearly tripled since 2005. michelle meyer is still with us. last week we learned that millennial's are finally moving out of their parents houses. does this mean they can afford to buy a home? >> there is two steps. the first one is to be able to move out of your parents house and live independently. the second is to potentially buy a home versus rent it. the increase is going to be supportive of the rental market. in time, supportive of homeownership. we are not quite there yet. >> look at the longer-term historical trend, it crept up a bit last year, but still well below the historical averages.

they are betting the slower rate is the new normal. >> i could sympathize with the view that we've had some structural decline. i don't think this is all we are able to achieve when it comes to formation. the millennial generation is a large -- sickly looking at the population is significant. in time if you have a strong enough economic backdrop, you will see -- we have not had structural increase. >> the new york fed agrees with michelle meyer. they put out a paper that was tied -- new household formation is tied to the economic cycle. the problem with millennial's buying houses is the student debt overhang. >> perhaps they don't buy but doesn't mean they don't rent. >> buying a house requires capital.

the banks have made it difficult to get mortgages. less than a year ago, ben bernanke you could not refinance. -- ben bernanke could not refinance. >> i get tons of mail on this. are we going to get back to the leniency of 2004 or is that forever gone? >> i would very much doubt that we will and i don't think we should. the spectrum has swung too much where mortgage and credit is too tight and we need to see some loosening. the returns to the levels we had during the housing bubble is not reasonable. >> do you think that is part of the credit cycle? >> it is the reaction to the last crisis. dodd frank and everything with the 2008 crash. the banks became enemies and they are told to build capital

and make loans, but not really. banks are between a rock and a hard place. >> what does cheap oil do for the housing market? >> cheap oil is supported for the consumer. particularly if you are a budget constrained individual. i'm not sure it has a direct link into the housing market because it's not enough savings to use that towards a down payment or to afford a home. it supports consumer spending and the economic cycle. >> where are you want gdp right now? >> we are tracking a bit below 3%. >> that is not a normal american economy. under certain age, 32, people have never seen a normal economy. my right? -- am i right?

>> they may have seen it but were not aware of what's going on in the economy. you are seeing a bit of a disconnect between what the labor market numbers are saying versus gdp. the labor market statistics are very strong. average job growth of 336,000. implement rate hovering close to -- gdp is not quite adding up to quite as good a picture. >> one of the most indicators -- most important indicators for you? >> you want to follow the existing home sales, new home sales. these are really volatile figures. one must change is hard to interpret. you want to look at the underlying trend. -- a one-month change is hard to interpret.

not only are mortgage rates the premiums have been cut. if you are a low income individual you will see a 100 basis point reduction. >> "bloomberg surveillance" will be back in a moment. ♪

>> good morning. this is "bloomberg surveillance ." a big bump for go pro. gaining 12% as investors moved in after the expiration of an employee share lockup. big an additional 76 million shares on the market for the first time. the company went public last june at $24 per share. the oracle of omaha is bailing on exxon mobil. any $3.7 billion investment -- ending a $3.7 million investment. buffett eliminated a smaller

hold in conoco phillips. a big surprise at the westminster kennel club were a beagle became america's top dog by winning best in show. today, she will meet with none other than donald trump and make her broadway debut with a walk-on part in the hit musical "kinky boots." she will be getting a steak dinner. >> very good. to howard ward, chief investment officer. he has been rewarded with patients on apple -- patience on apple you had a believe in the persistence of their product. >> the financial success made

possible by the product success. the iphone has exceeded all expectations. this is a stock that is now up 100% over the last two years. two years ago, it was being criticized for lack of innovation and tim cook was being criticized for not being steve jobs now we see a company that is flourishing. the iphone six and six plus, huge success. revenues of $200 billion. iphone 60% of the revenue. >> is a blue-chip stock brendan greeley's mother can buy? >> i think so. >> what does a bright guy like you do? you were encouraged to buy in 2009. what is a protein now? -- does a

protein now? >> the stock will get up in the one 40's. close to a market multiple next year's earnings. -- 140's. i'm concerned about the comparisons next year. >> things are great to 100 -- 2100. do you lighten up? >> the economy is doing very well. the last three months of payroll gains have been the strongest in 17 years. we generated 3 million jobs last year. consumer confidence survey -- the michigan at an 11 year high. the others at seven-year highs. trendlines growth is 3.3. >> word is howard ward need courage and guts? >> the important thing is to be

invested. you would need to look for better values in more economically sensitive areas of the market because the staples and health care -- >> warren buffett selling exxon mobil today. does howard ward buy? >> i'm not search warrant buffett sold at or if one of his lieutenants sold that. they did not own it all that long. i have three oil holdings. i would rather be a buyer today. they should reflect the theoretical average price of crude over the next 10-20 years. it will be higher. >> howard ward on where to find value. >> let's take a quick data check pretty was futures little changed after the s&p did close at a record high yesterday.

keep an eye out for those fed minutes due out at 2:00 p.m. eastern. the dollar -- the euro a bit weaker against the dollar. >> you was oil drillers and retreat -- u.s. oil drillers in retreat. that does not mean that oil production will follow. the man we turn to when we get confused about oil -- your work and the estimates you are looking at show that shall production -- shale oil prices will not fall. just growing more slowly. >> when we think about what we have seen in the gas market as an indicator of what we could see in the oil market -- if you years ago it was considered one of the higher cost place in the

united states. we have seen the peak in february of 2011 160 rigs. fast-forward to today it is a quarter of that peak level in the output is over -- the rate count came down much more viably. >> we had an interview with the head of the world's largest trader of oil and he says he does not care that much >> the relationship has a complete disconnect. riggs themselves are much more efficient. they are able to drill faster. the wells themselves being drilled are much more prolific. the way the operators are designing the well programs designing them in batches. more wells within that rug. -- rig.

>> have we seen increased efficiencies out there in the american west? are they already starting to figure out how to get the price even lower? >> in general, what we have seen is the price peak in june, adding 780,000 barrels of output since that june peak. yet, we are down over 15% -- 50% on price. they have been reducing that breakeven point and there are cost concessions. >> it is through driving down the people selling to them. >> as these wells become more prolific, you are driving the creative cost down. >> comment on edward morris at $20 a barrel. do you agree with those models?

>> anything is possible. we have reduced the price over 50%. we have come off 50% yet added roughly 780,000 barrels per day since that price peak. crude inventories at 80 your highs -- yourear highs. >> who was the marginal buyer of oil? is it howard ward? >> there are many value centric investors that may take an opportunity to look at the actual commodity and the underlying equities themselves. >> how much do you think hedge fund speculators are driving the current price of oil right now? >> i don't know about that. you think about your today, the e&p equity index is up 16%. in q1 -- part of it is seasonal

too. >> it is not just about exxon mobil. >> the most volatile part is the ep sector -- e&p sector. expiration and production. unlike the big integrators that have the refinery and the production from the e&p company so have much in the way of dividend yields. i think this is important. there's so much focus on the forecasting of the price of oil. wall street collectively entirely missed -- did not get, did not expect the price of crude to go anywhere as near as low as it went. nobody was talking about 50 or 60 -- >> he caught it.

>> please answer our twitter question of the day. do you think snapshot is worth $19 billion? this is "bloomberg surveillance ." ♪

>> good morning, everyone.

olivia gets us started. >> wilbur ross making his next big investment in europe. >> he is such a quite billionaire. he makes these egg bold -- rig big, bold bets. wilbur ross invested $1.8 billion in euro bank. one of the biggest shareholders in this creek bank. -- greek bank. sticking to his guns there. they have more branches in russia then they have in cyprus -- that stock has gone down 17% in just the last year. bank of ireland he was one of

the first foreign investors in ireland after the crisis back in 2011. he tripled his investment there. >> he was cheerleading for ireland for a while. with bill clinton, shaking pom-poms for making investments in ireland. >> a little self-serving because he wanted to put some big money into ireland. we will see -- he was steadfast at the time saying when people were calling for a real possibility of a breakup of the eurozone cummings said i don't think this is going to happen. -- eurozone, he said i don't think this is going to happen. it has paid off in some areas. tbd and others. >> you say cut greece loose. >> after a bit of a transition

to a new currency yes absolutely. >> there are two issues here. the euro crisis and cyprus banks, the russia exposure. how worried is he about the ongoing conflict in ukraine? >> he is worried. this is hitting his pocketbook. we will get his opinions at this point. prior, he seemed to believe the sanctions were going to work. they were going to be able to find a way to broker some sort of agreement between russia and ukraine. turmoil for that region, but we could absorb that kind of impact. so far, we seem to be. we seem to be humming along volatility is still quite low. we will get housing numbers at a: 30. -- 8:30.

steady as she goes in the economy. >> thank you so much. be sure to watch betty's interview with wilbur ross at 8:00. this is "bloomberg surveillance ." we will be back in just a moment. u.s. futures little changed after the s&p closed at a record high yesterday. ♪

>> we say good morning. a frigid new york city this morning. let's get to world news. >> the unite states is ready to send help to rebels in syria. the west will provide syrian fighters with machine gun mounted pickup trucks. radios to call in u.s. airstrikes. american trainers will set up shop next month in jordan with the hope of training rebels to hold their territory. hong kong's unpopular leader

calling on city residents to embrace the chinese new year and be more like mild and gentle sheep. the country's chief executive made his appeal in his new leader -- lunar new year message. thousands of pro-democracy protesters occupied the streets across asia's financial hub. headed for the auction block he wore the suit when president barack obama visited india last month. it is up for bids as of today along with hundreds of other gives received by the prime minister. proceeds will be used to clean up the heavily polluted river. >> it is part of the debate of the moment within securities analysis. old line technology -- ibm

oracle and others robbing from their futures to pair shareholders today. -- pay shareholders today. i will go to ibm and the idea of financial engineering. are the critics valid? >> they have had to resort to financial engineering. these are companies that briefly sold expensive hardware and expensive services. you have excess profit competition is taking two forms -- the cloud come if you were a corporate customer of ibm and you are using the cloud -- >> on purpose, there is a negative field to this. -- feel to this. >> there is a new wants here. if you are borrowing money to do a share buyback or pay a bigger dividend, i'm not in favor

of that. -- there is a nuance here. they can do all of this without borrowing money. >> apple borrowed money. >> apple is doing that because they have cash overseas and i cannot repatriate it. >> from the finance to the geekery. the competition cisco and oracle are getting are not from other companies that want to -- they want to make their products irrelevant. >> it goes beyond that as well. you have big technology copies today like amazon and google and intel you go to the parts bin

and build it yourself or you have the cloud pressuring demand and this phenomenon of do-it-yourself by the big guys. these companies like cisco are not doing very well. cisco has had no revenue growth in the last 12 months. i see john chambers talking about how well they are doing but if you have no revenue growth, i will not give you five stars. >> the software defined network -- cisco sells routers hardware. you have machines defining -- you cannot sell boxers and routers anymore. >> cisco's three-year dividend growth is 46.85%. i would call that financial engineering based on the revenue. >> cisco is -- >> this is the debate. >> cisco is bribing you as a

potential investor. >> is ibm doing that? >> yeah. >> said minutes coming out today -- fed minutes coming out today? >> they do. at 2:00. i'm not sure how interesting these minutes will be. we are in a bit of a hold. the fed kept to their standard line that low inflation was due to transitory effects. they continue to see improvement in the economy. they are monitoring international developers. there is a debate withe -- >> several, a few, some come a couple -- how do we get -- how

do we get to where we are parsing several or a few? >> it is horrible and very painful for us in terms of trying to read those minutes and interpret where the majority is or which lines you should be focusing on. the minutes should tell us an overall sense of where the debate is within the committee. it is hard to get a consensus view out of the minutes because you have some members believe this, others believe that. >> some. there you go. >> will we find out what international consideration means? >> they will. they will likely elaborate on what they're worried about. janet yellen could be more addressing -- >> we have to get to several twitter answers. >> the majority of answers, their answer was no.

is snap cap worth $19 billion -- snapchat worth $19 billion? eventually, when they figure out how to clearly monetize their product. yes for the next 10 seconds, it is. then, oh gosh, it's gone. >> it is very dangerous exercise. most venture capitalist investments fail. there are not many facebook. everybody wants the next facebook. there is only one facebook. >> if they did a terminal value of 465 million, they would have

trouble with their board and legal counsel. >> they would have a hard time making money. the assumptions you need to support some of these prices are outrageously optimistic. that is the problem. a fool is born every minute. some people t have money to throw around that stuff. some people by bitcoin. >> they are coming around to it. you have zero loyalty to the platform. something better came along, i would easily go somewhere else. time for the agenda. i'm trying to watch what's happening in greece. greece will submit a request to extend its loan tomorrow as greek officials tell us tomorrow is when they will go to eurogroup to ask for a six-month holiday.

what is the difference between an extension and completion of the loan? we have been asking guests all morning. will the finance minister of germany soften its stance? >> something a bit more tangible. ukraine is on my agenda. just watching this the news flow out of ukraine is just appalling. this bears the most careful scrutiny. >> an interesting story, we look at these developers in ukraine this has real consequences for real copies. carlsberg cells cheap beer in large volumes to western europe. they now get 30% of the revenue from russia. they now have a new ceo. >> the number one beer in russia. >> real consequences for the real economy of beer drinkers. >> i'm so glad you did that

agenda item. howard ward, thank you. michelle meyer, thank you so much as well. ♪

>> good morning. we are live from bloomberg world headquarters. we are 90 minutes away from the opening bell. a big guest with big bets. wilbur ross joining us.

looking for opportunity when others are fleeing. what is next on his radar in europe? $10 oil? that is what one economist says is a real possibility. gary shilling will join us and justify that call. first, here's a look at our top stories. snap chat may receive one of you -- may soon be one of the world's most valuable company spirit seeking a new round of funding that would value the company at $19 billion. only uber and xiaomi would be valued more than that. according to a greek government official, the greek government will ask for a six-month extension of its loan agreement tomorrow. the word yet if the terms of the