everyone is a critic. all is quiet on the ukraine and greece front. headlines this hour. "foreign affairs" magazine looks at the domestic burden. good morning, everyone. this is "bloomberg surveillance ." we are live from new york. it is tuesday, february 24. joining me, olivia sterns and brendan greeley. we have breaking news on home depot. home depot, right now. >> we have home depot fourth-quarter net sales coming in at 19.1 6 billion the dollars -- $19.16 billion. sales are up 7.9%. >> wow. >> the big news here is that

they are also returning a lot more money to shareholders. $18 billion share buyout completed in 2014. they have upped the dividend in the fourth quarter. they boosted quarterly dividend by 26% for the fifth year in a row. >> better than good at home depot because brendan greeley is buying two by fours every weekend. [laughter] >> greece is one step closer to getting a four-month extension of its bailout. one european official says the new economic proposals seem to be in line with what euro area finance ministers are looking for. they will have a conference call and a couple of hours to discuss it. the current bailout is set to expire this saturday. foreign ministers from you crane -- ukraine, russia, and germany

are meeting to give talks another try. the russian foreign minister had harsh words. he implied that the u.s. is trying to use the u.n. to rubberstamp its decisions. >> do we want to see the security council as an effective instrument of maintaining peace or are we allowing it to turn into an arena for propagandistic -- propaganda? >> he accused the u.s. of proposing unconstitutional regime change in ukraine. >> the justice department is investigating at least 10 banks

into whether they rigged gold and silver prices. prosecutors are looking into whether interbank lending rates and currency markets were rigged. mitch mcconnell is trying to avoid a partial shutdown of the homeland security department. he is changing his strategy. he wants to separate the immigration issue from homeland security funding. republicans have been using the funding bill to block president obama's immigration action. >> to those in congress who may be contemplating kicking the can down the road, i must remind you that the consequences to this department if we remain on a continuing resolution are also severe. >> funding for homeland security expires on friday. >> alaska will become the third state where it is legal to smoke

some a grow, and possess marijuana. -- smoke, grow, and possess marijuana. there are still a lot of details to be worked out. they will have to determine what smoking in public means, which is banned under the law. finally "birdman" might have sorted the academy awards. i turned it off, did you? ratings plunged at the academy awards to the lowest since 2009. that is just one more sign that hollywood is out of touch with moviegoers. they also point out that about 5 million people have seen "birdman." versus 40 million americans who saw "american sniper." those are our top headlines.

we see equities turning. -- chruningurning. on to the next screen. the vix is showing a better than good market. two emerging-market currencies showing new weakness. the brazilian rio and indonesian rupiah. let's find out where janet yellen sits in history. here is the great moderation. the great disinflation. here is taking the punch bowl away a. here is taking the punch bowl away b. i guess the punch bowl is not been taken away. >> i think the idea that you

are saying this is a bout of responsibility and policy change. i am so used to talking about this as a great moderation. but that was not so long ago. there is no normal. keep talking about "the new normal." there are distinct periods, each of them lasting about 7-10 years. there is no historical normal we can look to in this. >> here the red sox were in last place, the red sox were in last place the red sox were in last place. >> here, the yankees were doing very well. >> thanks for pointing that out. [laughter] hans nichols remains calm in a frantic berlin. let's start with ukraine. who is telling the truth? >> potentially both. the rebels are saying that they

are not deploying new weapons. kiev is saying that there are ongoing attacks. it seems as though there is a pullback of heavy weapons from the front line. that is not to say that there are not still weapons tjhere. this will be a topic of conversation when foreign ministers meet in paris in a few hours. >> i have one more question on ukraine. what is the immediacy in berlin and in brussels on ukraine? what is the to do list today? >> atop the to do list is clarity on what is happening. then moving forward is a policy response. the immediate to do maybe in kiev so that they can get the next imf funding. there has not been a payment since september. they did just approve 17.5

billion euros, but that money has yet to be shifted over. the overall total was 40 billion euros. that money is not getting there and they are facing a solvency of liquidity, however you want to put it, a crisis in kiev. >> let's talk about that other country that is in the imf program, greece. we are looking at this graph from the greek finance minister. what does he ask? >> it may be enough? the whole goal was to keep grease inside the program. even if we get an agreement later on today you could have a same fight and relitigate the same thing in april. they need to continue with the

reforms that they're going to continue to get money from the institutions. the big fight is what you do about the size of greece's debt. that is going to be a may-june fight. it looks like they are keeping a lid on it right now. >> do you see anything in this proposal that makes you think we are not going to be exactly back here in four months? >> no. [laughter] the fact that they are negotiating every little bit of it and they are litigating, they are practically litigating verb tense. that suggests that we are going to have continued fights or conversations about what greece needs to do to continue to receive funds from the institution formerly known as the troika, the word we no longer say in athens anymore. >> we appreciate it. the ukrainian currency is weakening. on the u.s. economy, on our markets janet yellen's

testimony -- resilience is the order of the day. market volatility gives everyone to climb on board this strange bull market. the underpinning is an audit and strange u.s. economy -- an odd and strange u.s. economy. julian, let me get to you and the markets in a second. dr. silvia, what to the equity markets mean for janet yellen? >> it gives her a positive background. it allows her to change policy, raise the federal fund rates a little bit. >> the markets are always looking out forward. they are always looking out forward and that is a massive bellwether. >> absolutely discounting optimism. continued economic growth. >> i will bring it over to you,

julian. has ubs changed its outlook anyway? >> we have been rather consistent. we think this is the year that 2014 could have been if we did not have the weather issues. >> is at a double-digit year? >> it could be. >> help me out. [laughter] >> the fact is, you lead this morning with the largest home improvement store returning cash to shareholders, increasing dividend increasing by back. those are the kind of things that we are seeing all across corporate america and that could get us -- >> within this conversation everybody told us three months ago, share buybacks would die down and dividend growth would die down and they would not matter and here is home depot this morning. >> they have been up 26%. the bull market is about to enter its seventh year. are your clients revising

expectations? >> no, i think consistent. the one thing that surprises us if europe can actually get us right there is a chance that european a cooties could upside in the u.s. it is a lot of the sentiment that is in play there in terms of the international perspective. >> interesting to see that the stocks are back up near all-time records this morning. speaking of janet yellen, this brings us -- i should say, coming up, wall street had high expectations for earnings from home depot. we will take a look at how they managed to hit it out of the park. this is "bloomberg surveillance." good morning. ♪

>> good morning, everyone. "bloomberg surveillance." futures are flat as we await janet yellen's testimony. let's get to our headlines. >> two stories we are watching closely. greece eyes a four-month bailout extension. an new list with economic proposals looks to be in line with what euro area finance ministers want. ukraine says a peace accord is not working. foreign ministers are meeting in paris. let's take a look at other stories. robert mcdonald is apologizing for falsely stating that he served in u.s. special forces. he issued a statement calling the claim and accurate. the white house accepts his explanation that he never meant to misrepresent his service record.

shrinking audiences and ad sales for viacom. viacom employed about 9900 people at the end of fiscal 2014. job cuts or imminent. -- are imminent. a 10 foot plunge was captured by surveillance cameras. investigators are looking at what exactly caused the sidewalk to collapse. >> what a headline on home depot. >> it is the fifth year in a row that home depot has increased dividend in the fourth quarter. a big beat on the bottom line net income up 36% in the fourth quarter.

the average adjustment from analysts was for $.89 per share and they made one dollar per share. americans are spending more and more money to improve homes. the return on investment is staggering. they are on track to raise it to 27%. they are returning more money to shareholders. i have a couple sell side notes. how hard was home depot hit by the port shutdown on the west coast? also, the cost of the data breach. >> 12.9% over the last 10 years. i'm so sick and tired of people telling me that you can't make money in equities. i shouldn't have equities. >> this is not any old retailer right? they are directly tied into the

new housing starts. people need to buy things to put in their houses and sheet rock to hang. this is tied to the economy, right? >> it is, but i think it is the existing home sales, people getting a little bit more affluent, but not moving to buy a new home, but rather renovating the existing home. i think you are seeing a lot more of that. we are pretty happy with the house let's just fix up what we have. >> another piece that is interesting is that e-commerce operation. you think this is a place where they are going to help you figure everything out in store. >> julian, i have found with the cardboard boxes at home depot that the tape never sticks. [laughter] what have you found? >> i think we need a new product

to go on "shark tank." i think the thing to take from the report is another aspect, as well. this wailing and gnashing of teeth that a strong dollar is going to negatively impact the corporate america in total, but the fact is that you take a company like home depot and there is plenty of strength, thank you very much. >> we buy and sell to ourselves. >> absolutely. >> i am trying to check the breakdown of revenue. 89% of the revenue comes from the u.s. >> anybody go to home depot this weekend? >> i did. i had to buy something to chip away the ice on the front walk. i proved once again that they have product placement within the store down to a science. i challenge you to leave home depot without spending $100.

>> have you ever lost your children in home depot? >> i attach them to me. >> they put in orange apron on mine. they are still there. [laughter] dr. harris from bank of america merrill lynch will be with us. we will talk about janet yellen. futures are flat. good morning. ♪

>> where were you in january 1977? that was the coldest month since time began.

this is a gorgeous view, but frigid 2 degrees above zero in a frigid new york city. we have to get warmed up here in a morning must-read from brendan greeley. >> in february 1977, i was three years old living in twentynine palms, california at a marine corps air base. >> i was closing bars at three in the morning, trust me, it was cold. [laughter] >> olivia sterns for the win. [laughter] we turn to paul krugman for this morning's must-read. you are not just the house economist at wells fargo, john silvia. is there a policy fix for income inequality? >> not at the monetary policy

level, no. >> let's say fewer king of america. >> i think it is education that really matters. making sure young people finish high school and study the right things. >>'s point in the essay was that if you look at masters degrees and phd holders, if you account for inflation those wages would remain stagnant as well. >> what are you studying? what are you studying. that is absolutely key. >> within the heart of this, the idea that we need better education, we are not going to do this over five years or 10 years, we have to do this now. what is the prescription for growth? it is a simplistic statement to say that the government is out of the way.

>> productivity depends on innovation. going back to the e-commerce argument you have to allow for that. >> we scour these inequality statistics and there is a huge correlation between wealth and education and what you are seeing is that the wealthy armed their kids to the teeth with education and that yields yet more inequality. that is the connection. still to come, a spicy twitter question of the day. janet yellen faces congress later today. should we audit the fed? ♪

>> good morning, everyone. your weather report for new york, the nation's capital, 12 degrees above zero. >> there is even greater

transparency right now to the dome. there is scaffolding holding up our nation's government. >> we begin with olivia sterns. >> what a visual metaphor. greece is waiting to see if their new proposal will keep the bailout coming. one european official tells "the wall street journal," that the greek proposals appear to be in line with what euro finance ministers are looking for. the ukrainian government says the cease-fire is not working. ukrainians say they will not pull back heavy weapons from the combat zone until the truce holds for at least two days. foreign ministers from ukraine, russia, germany, and france are meeting in paris today to give diplomacy another try. >> janet yellen heads to capitol

hill. she begins two days of testimony before congress. lawmakers are demanding more transparency from the fed. americans flocked to home depot. they posted quarterly earnings moments ago showing it beat estimates. rising home prices have spurred consumers to spend more on their houses. shares of home depot are up as much is 2% in premarket trading. >> to football, no, that football. the 2022 world cup teams will probably not have to worry about the heat. a task force recommended november and december to avoid sizzling temperatures. the world cup has traditionally been played in june and july.

we go immediately to greeley, our expert on football. >> this is deeply insane. if you have to move it back to december, but that completely interrupts the leagues. >> and we now get back to our top headlines after that interruption from the fired up b greeley. [laughter] the academy awards show will not be winning any prizes. the audience fell 15%. some are blaming the movies. about 5 million people have seen "birdman." 40 million americans have seen another nominee, "american sniper." those are your top headlines. >> i think this year it was an oscar awards for newcomers. everyone was a newcomer who won an award.

it was never supposed to be an awards show that validated pop culture. it is supposed to celebrate artistic accomplishment. >> it was the detached hollywood elite that produced "american sniper." >> that is my point. >> i urine for gregory pack -- yearn for gregory peck. >> you are upset at did not win. >> moving on. [laughter] >> janet yellen begins two days of testimony on capitol hill. forward guidance is dead replaced by data dependency. no one is more data dependent than peter cook. let's cut through the fireworks. what should we expect? >> we should expect some more

hostile environment for janet yellen. a republican-controlled congress is now in charge. it is not going to be impolite but she is going to face tougher questions, particularly in the area of auditing the fed, more oversight. that is probably a sideshow. they are probably talking about more governance changes from congress. what guidance issued going to give us with regard to the lift off for interest rates? i would not expect a crystal-clear message from janet yellen. a lot discussion about her as a regulator, as well today. >> richard shelby is saying that he is most concerned about the fed's balance sheet. >> it is sort of an old line of attack for richard shelby. he has been very worried about quantitative easing and the expansion of the balance sheet. the fed is essentially

exercising too much power in his mind. he wants new oversight. he is not necessarily a backer of auditing the fed. he said, i don't want to be a member of the fomc, but i do think that congress needs greater oversight over the bond buying and what the fed is going to do to get rid of all of that bond buying on its balance sheet . he wants greater oversight, but i don't think he is right there with the audit the fed rand paul. >> which side will she face more pressure from? >> i think on the regulatory front and this oversight question, the republicans. i expect democrats to perhaps pressure her most on the issue of interest rates. some democrats, i would watch chuck schumer in particular, push her to hold off on moving too quickly. there have been real concerns within the democratic ranks that may be the economy has not quite turned the corner that everyone thinks. i would expect her to get

pressure from the democratic side, as much as anyone else. >> dr. silvia janet yellen has a tough task and it buttresses up against labor mandate. what is the responsibility of a fed chair or chairman with response to the american labor economy? is that written in stone? >> it is written in legislation to seek full employment. >> what is full employment? >> ah, that is the problem. [laughter] we think that about 5.5%, 5.7% is full employment in terms of the overall economy. you do see wages and salaries rising significantly and supporting the consumer spending you reported earlier at home depot. >> julian i look at this and i say, what is the ability of janet yellen today? what will you hope she does not say? >> pushback against senator

shelby who will probably prefer a more hawkish buyer, but in point of fact, she is probably going to toe the line with respect to the minutes. we do know that at some point we are going to get rates to rise this year. we may not find out more till the fomc meeting on the 18th, however. >> the employment mandate. once we get to what we assume to be the natural rate of unemployment that we are also waiting for the labor poor's -- force participation to rise. do we keep moving the goalposts? >> that seems to be the tendency. when i look at the wages and salary component it is consistent with what we see in the overall economy and the american consumer.

the economy is moving ahead and the american consumer is moving ahead. >> we are going to be coming back to janet yellen all morning long. coming up, we are talking about china's great urban meyer gratian. it is not as great as it used to be. this is "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." we look at single best chart. >> we are in one of china's golden weeks. this is important in a society where so many people have moved away from their hometowns. the great urban migration is the subject of today's single best chart courtesy of cardinal weinberg -- carl weinberg. we are looking in a slight change to the story we are used to. 20 million chinese per year moving from the country to the cities. that rate of change is slowly coming down. the absolute numbers is still at 2.4% over year. but the growth is not as much as it used to be.

we were talking in little bit about this during the break and this is something ubs has been writing about, as well. >> as you see those two converge , you had this great migration in the 2000s into the cities to help the industrialization take hold. we have gotten there for the most part. the chinese economy is adjusting. for the first time in this century, the percentage of consumption relative to industrial investment -- >> what is the trigger? is it air pollution? >> that is one of the things we were theorizing about. john silvia, we can always talk about larry summers. his whole theory is that we are going to see a reversion to the mean because we have to. the single best argument against that is because there are still lots and lots of people living

in rural areas ready to move but the cities are not as attractive. >> reversion to the mean is a long way away. maybe 10-20 years of above average world economic growth is still to come in china. i think the restructuring of the economy goes on, consumer spending continues to increase. there is a lot of migration and a lot of changes going on. >> in são paulo, a shell of a car is seen in the reservoir near so apollo -- são paulo. the reservoir is only at 5% capacity. that is so severe the drought is. it is experiencing the lowest rainfall level since 1930. >> this is a problem that is all over são paulo state. there is also hideous

mismanagement. people talk about brazil as the saudi arabia of water. the problem is how do you make sure that the water gets to the places where people needed? >> are they telling people to stop watering their lawns? >> i think it is far more drastic. it is a real problem all over the state. >> it does look dire. apple is rolling out multicultural him a geez -- emojis. emoji skins will be modifiable into six different skin tones. same-sex couples will also be included in the family category. i like it. eomjmojis getting with the times. >> santa claus, princesses, and

construction workers. that is what olivia and i are going as for halloween this year. [laughter] >> in the netherlands, a ct scan of a buddhist statue reveals a 1000-year-old monk inside of it. an actual human skeleton inside of a statue. the mummy was identified as a buddhist master. the mummy had its organs replaced with ancient chinese scrolls. he was likely between the ages of 30-50. the statue will be on display at the hungarian natural history museum. >> we identified who that guy was and we said, it is that guy, definitely. >> i think we knew what category. extraordinary. extraordinary. >> that is amazing. >> i wonder if he was sacrificed. [laughter] >> peacefully and at one with

himself. >> probably watching the oscars. [laughter] >> i am going to cut both of you off. we discuss racial disparity in america next on "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." >> we are tracking greece and russia at this hour. according to a draft obtained by bloomberg less than an hour ago commitments include maintaining state asset sales consolidating pension funds, and revamping tax collection. a peace accord with russia is not working, according to ukraine. they say pro-russian separatists are not pulling back weaponry. foreign ministers are meeting in paris today. let's take a look at other stories we are watching. your odds of being audited by the irs are at a 10 year low.

investigations of individual returns have dropped more than 20% since 2005. the irs is losing agents to budget cuts. commuters are still dealing with traffic issues after a tanker truck carrying 8000 gallons of fuel overturned on monday in southern new jersey. the jive or escaped. nearby homes were evacuated. -- the driver escaped. nearby homes were evacuated. the road will be inspected today . an american airlines jet hit a patch of ice and skidded off the taxi. no one was hurt. an ice storm in texas is expected to cancel thousands of flights today. the best treatment for childhood peanut allergies may be peanuts.

researchers tested peanut products on small children's. the ones who avoided peanuts were seven times more likely to be allergic to them than those who ate three times per week. this could turn the childhood allergy field on its head. >> i am a big fan of this theory. another thing you can do is expose kids to a dog to make sure they avoid allergies. we are going to take a hard turn right now. in december, if you look at wealth inequality since the beginning of the great recession, wealth in the median white family has stabilized, the wealth in the median black family has nearly halved. this is the subject of one of the articles in this month's "foreign affairs." gideon rose is the editor.

why this subject now? >> there has been a lot of stories about race in the united states in the past months. when we look at it, we decided that there are a lot of racial and ethnic issues around the world. where each country thinks that it's problems are general that that is the way it is it turns out that they are historically contingent and unique to each country. we did a survey of how racial issues play out in very as countries and regions around the globe, including the united states. >> this essay from frederick harrison and robert lieberman, i thought it was an interesting way to looking at it. the problem is institutional. >> the argument is that if you look at america today, there is a whole lot of formal colorblindness in the policing of various kinds of institutions and we have an african-american president and yet there is still a dramatic inequality among the races.

what explains it? the right says that african-americans just can't get it. the left says, whites are still racist. what these authors say is that the institutions were formed in a racist era and so even though they are run in a colorblind way, they have differential effects because of how they were structured. >> what is your solution? what are the takeaways? what are the strategies that work? >> a stress test. in effect, taking a look at the actual operation of various institutions. in education, in insurance, in finance in various other kinds of ways. do the operation of seemingly race neutral policies and up having differential effects? >> let's look over to europe, where this issue is particularly important when we look at the failure of integration.

multiculturalism has failed according to an article. >> it is a great piece on multiculturalism in europe. they decided we have to have diversity and we have to have a way to manage it. but then they said, let's manage it at the group level. let's think of our society as a group and give group rights to various individuals. it was essentially group rights for minorities which turned out to harden the divisions in society that people want to do away with. it is generally not a successful way to deal with things for the future. >> how far have we moved from selma or the time of lincoln? >> we are hugely removed from the time of lincoln. we are significantly removed from the time of selma. it is interesting how these things play out over time.

we have always seen groups as other. it is almost baked into our evolutionary cake that we tend to see people in terms of us and them. and the late 19th century in particular, we link to race to biology and politics. ever since we have been moving away from that, it is going to take another few generations for race to really work itself out of the system. >> has having a black president impacted any of this? >> i think hugely. i think it has made overt racism not tolerable in any way but it has driven a lot of issues underground. a lot of things that don't seem racist turn out to be there. >> peers one of the things they don't understand coming out of this essay. you talk about the idea of stress testing institutions. the institution where this

argument has been the strongest in america is city police forces. how do you stress test a police force? >> it is not just the police force. what kinds of crime and infractions do you punish and what kind of ways? we treat certain crimes very harshly and other crimes not particularly harshly. it turns out that that has differential effects. even if you think you are enforcing the law and you are enforcing them there may be subtle and unconscious biases in the way you think about the issues that end up having consequences. but if you know that and see the effects come you can structure things in different ways. >> thank you so much. the cover of the new "foreign affairs." john silvia, thank you as well. julian emmanuel with ubs. let me do a forex report. the brazilian riau and

indonesian rupiah, it is one of the weaknesses out there with the euro holding, as well. we have another hour of "bloomberg surveillance." good morning. ♪ . .

>> this is "bloomberg surveillance." tom: forward guidance is so

2014. a data-dependent janet yellen reports to congress there will be no slack in the debate over the fed's future, and everyone is a critic. all is quiet for the most part in ukraine, and greece. in germany, a bit frantic. lagarde and the imf looks for "a meeting of the minds." global deflation is here. it is clear it is a present danger. good morning, everyone. this is "bloomberg surveillance." we are live from our world head quarters in new york. it is tuesday, february 24. i am tom keene. olivia sterns has comcast headlines and earnings out right now. olivia: i see a little bit of a messiss on the topline, fourth-quarter revenue coming in at $17.73 billion. tom: increase of 11%. olivia: the big thing to look for today from comcast is what management has to say about net neutrality ahead of thursday.

tom: i would look at the use of cash, the shift of the roberts family from 20 years ago. this began a couple of years ago with me will movement by comcast and again a dividend increase as you saw with home depot. very good. let's get to top headlines right now. olivia: greece moving in other steps closer to -- greece moving another step closer to getting its deadline approved. ahead of the group of euro-area finance ministers says his first impression is quite favorable. they will hold a conference call shortly. pledges to crackdown on corruption and tax evasion. in ukraine, pro-russian rebels say they are complying with one of the provisions of the cease-fire. they are withdrawing heavy will of the -- heavy weapons from the combat zone, but the reigning governments at the cease-fire has broken back and it will not pull down weapons for two days.

leaders will meet today in paris. brendan: republican leaveder mitch mcconnell is trying to avoid a shutdown of the homeland security department. he is changing his strategy regarding president obama's immigration policy. he proposed a bill that separates the immigration bill from homeland security funding. republicans have insisted using the funding bill to block the president for the decision to ease the partition rules. meanwhile, the home of security secretary warned congress not to just pass a temporary spending measure. >> i must remind you that the consequences to this department if we remain on a continuing resolution are also severe. brendan: funding for homeland security expires on friday. said chair janet yellen -- fed chair janet yellen heads to washington. yellen begins two days of testimony before congress.

lawmakers are demanding more transparency from the fed. democrats accuse the fed of being too cozy with the bank that regulate, many republicans are unhappy with the fed's aggressive monetary policy. and americans flocked to home depot for the last three months. it posted orderly earnings moments ago showing it beat estimates, giving an assist to rising home prices. they urge consumers to spend more on their houses. also an approved $18 billion stock buyback. shares up as much as 2% in premarket trading. tom: in the oscars "birdman" might have soared in the academy awards, it had the lowest ratings since 2009. critics say one more sign that hollywood is out of touch with moviegoers. 5 million people have seen "birdman." 40 million americans have seen another nominee, i'm "american sniper." a pre-yellen data check, euro

$1.13 oil below $49.85 a barrel. things are relatively quiet in europe kiev, and athens. berlin, our hans nichols is there as germany considers to cwo crises. let's go to greece right away for stop what we learned in the last two hours on greece? hans: the economy minister said positive things about this reform list that has been sent. we still do not know if he has seen it. a conference call will take place in about two hours time. all of the conference ministers will go over this call. all of the indications is that this is substantial and will pass muster. until we hear from wolfgang schaeuble, and we have not yet. olivia: how will the germans

received this? hans: you have to think of this not as the final negotiation but one step in what is point be a long negotiation for the next or month, so even if schaeuble is cautiously optimistic where they go and get this through, there will be another fight in april, there can be another one in march. in april is when the real money gets disbursed to greece and at that point we will have another conversation about what greece is doing to reform their economy. brendan: hans, there were three words i did not see in a stress from greece "primary surplus ratio," the measure of austerity that is a contention. is there any note of what schae uble is willing to accept echoh ? hans: they've indicated they will give some flexibility.

a have not given us a hard number. you need to factor in future tax receipts, and those taxers these are going to be coming down, too. there is a lot of modeling on that number. that seems like an easy place to get to. you say 1.5%. the harder thing to do is how do you factor in what greece's labor market reforms are going to do? is that a violation of what we call the old austerity program? how far are they going to go along on privatization? can they continue going through the motions of selling out the port of race? that one -- the deficit you can get around because that is low the others are more structural entity core of what greece has to do to reform their economy. tom: hans nichols, thank you so much in berlin this morning. this is an evolving story. we will have interrupted a you on bloomberg television and radio. we are happy to bring easton harris in the author 800 48

copies were sold i was responsible for selling 839 of them. this is a great book. brendan: hold on, is there a key -- tom: i get a royalty check. for those of you on radio, you heard me talk about ben bernanke's fed numerous times. a great primer from greenspan to bernanke. >> can we photoshop yellen's picture? this is now selling for a penny on amazon. tom: which is tries as much as my book -- which is twice as much as my book. [laughter] ethan: exactly. janet yellen is known as bernanke with a beard. not exactly a compliment. she believes in a policy of transparency, and aggressive policy to end the risk of deflation. a pretty simple transition from bernanke to yellen. tom: her issue is to first do no

harm. what we listen for her not to say? ethan: i do not think the fed is ready to raise interest rates. people in the markets are waiting for that big -- we are ready to go -- kind of moment. tom: d think the answer will be longer than anybody perceives? ethan: she is in the right direction. with a fed hike in september but clearly the risks are to the later than june, and i think they are not ready to declare victory here and start hiking interest rates. brendan: one of the things you have been tracking is the shift in the fed focus from the unemployment rate to the labor force participation rate. ethan: the fed wants to see a complete picture of recovery and the biggest thing missing is the wage growth and normal inflation, so that side of their mandate, they are just not hitting it.

they're getting their unemployment rate down, which is what they want to see, but with wages, they are not seeing what they want to see. brendan: maybe we are not being patient. ethan: we need to be patient. the fed is telling us the patient. they have always gone slower than the market expects. olivia: janet yellen is facing a lot of criticism from both sides of the aisle that the fed is not being transparent enough and are not doing a good enough job on regulations. ethan: everyone who was in the regulatory world during the crisis there's some blame for what happened. we all bear some blame. i do nothing we should be calling up the set of particular. the fed is one of many regulatory institutions that did not catch the subprime mortgage crisis. olivia: you were at the new york fed for nine years old up there is a lot of criticism that the new york fed is to go see what the big banks. do you agree with that? ethan: no. there's a tremendous pride in

the independence of the fed, and i certainly shared that when i was there, and a sense that we are really out there to kind of do a public service. that is why i went to work at the fed out of graduate school. this is what motivates most people at the fed -- they really want to be public servants and above the political fray. olivia: all right, this brings us to our twitter question ethan harris, do you agree with rand paul's proposal -- should we audit the fed? what do you think? tweet us @bsurveillance. this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your phone, and bloomberg.com. "bloomberg surveillance" will be back in just a moment. futures are trading just a little bit higher ahead of the janet yellen testimony later on this morning. ♪

tom: good morning, everyone. "bloomberg surveillance." i am tom keene. brendan greeley and olivia sterns with us. we await yellen to comment. let me get to a morning must read. i put this out on twitter last night, a rave review to "bloomberg view," quoting zeynep ton

whatever you do today read rick holds -- read the treaties on income statement and corporate labor realities. i thought this was superb stop brendan: one of the things we are recognizing with walmart if there is nothing so good for the labor market as a booming economy. walmart has been under this political pressure and labor pressure for a very long time, and i suspect they did not have a management change of heart but they are looking at the actual numbers and figure it out what they need to retain the workforce. olivia: if anything, they were getting out of front of the inevitable. the minimum wage is excited to

go up. this is not good will. tom: very quickly in davos, one of my most important conversations with the ceo of aetna, who just got sick of losing people. is that we see in the jolt surveys and other data? ethan: companies raising their minimum wage, it makes sense, you have the tightening of the labor market, so you want to retain those workers, but also there is a big cost and rapid turnover, particularly in walmart for the case, they have got a grocery business, and you want to have effective stop controls. you do not want to merchandise out of date. brendan: this is a painful lesson that home depot went through, which is that they had huge turn over a decade ago and they fixed that. they recognize that turnover was really bad for business. is this a long-term change, a secular change in how businesses look at retention, or is this a function of the economy? ethan: i think it is a little of both.

companies recognize that cutting wages to the bone is not the answer to every cost issue and you have to motivate your workers and have some productivity out of them. there is a limit to how much you want to lower their wages, and that's what we're learning from walmart right now. olivia: a lot say if you want to retain workers, you have to give them more hours and perhaps health benefits. ethan harris, t why so much. next up, we will have a conversation about luxury real estate in new york city. we will look at a skyscraper going up and tribeca. ♪

tom: good morning, everyone. "bloomberg surveillance" this fed day. not a fed meeting, but janet yellen speaking today. we will have that coverage on bloomberg television and bloomberg radio. top headlines this morning. brendan: two stories where tracking -- greece will learn if a package of economic measures is enough to win more funding from the euro region. according to a draft obtained by bloomberg, those commitments

include maintaining state asset sales, consolidating pension funds, and revamping tax collection. in ukraine, a spokesman says a peace accord is not working. pro-russian separatists are not pulling back the reverend -- pulling back their weaponry. they say that is not true. here is a look at other headlines this morning -- v.a. secretary robert mcdonald is apologizing for falsely stating that he served in the u.s. special horses. -- forces. he called the claimant accurate. the white house says it accepts the explanation that he never meant to enhance his service record. institutional clients over certain deposits, the move comes as tougher regulations require banks to hold more capital againsts some funds. according to a memo, it is a costly and inefficient use of the bank's balance sheet. rough commute for two people in south korea. a man and a woman in seoul were

consumed by a sinkhole seconds after stepping off a bus. he 10-foot plunge was captured by surveillance camusso stub officials are investing in what caused the sidewalk to collapse. those are your latest top headlines. olivia: there is a new luxury tower going up in new york city that looks like it might just fall down, or so some say stop the building is nicknamed the jenga tower because it's resemblance to the stacking game. in reality, of course, it is extremely sturdy and so is demand. only two units are less common one is penthouse 58. 55 hundred square feet, five bedrooms. currently on the market for $35 million. the view -- priceless. dan joins us now on set. thank you so much for being here this morning for stop less than two years ago, this apartment was on the market will stop asking price $26 million. notice already $5 million. how does apartment -- now it is

35 million dollars. how does an apartment go up when nobody lives in the building? dan: when you do your initial pricing and you need to sell 135 units, you price it for the sell of that number of units. as you sell down your units and end up with a couple of units at the end, the combination of more scarcity at the level but also an improving market would account for the change. olivia: i am really stunned by the number of skyscraper towers residential towers going up in new york city with luxury apartments north of $30 million. how strong is the market in the $30 million and up apartment, and who is buying these apartments? dan: you have to look at different submarkets. in our property, it was mostly americans, u.s., locals. in many cases it was new york locals if you were in tribeca, you wanted a property that had views and amenities which were unusual for tribeca. i think there is a small

amount in our property of foreign nationals from different countries. a lot of these other properties, it depends on the submarket you are in. a lot of properties in midtown or central park south probably have a heavier emphasis on foreign buyers, but i think the question you are asking we will find out over time whether there is enough demand. olivia: sure like 157. are you looking at exposure in new york city, or do you feel like the market is capping? dan: we made a commitment to a property on 22nd street for stub in the right submarket, you can still do well there. brendan: how much in your business do you watch events abroad in anticipation of it affecting your market? dan: we think about that, we think a lot what is going on with the stronger dollar, what impact that might have. we look at what is happening in the oil countries and the flow of fundss. a lot of really straight market is driven today by flow of funds , and those two issues are important. olivia: disney world, the price

of admission to the magic kingdom is above $100 for the first time ever. why disney world, why florida why orlando? dan: one, it was a combination of an unusual asset. four seasons had this property title for a number of years, and we were able to come in after that period of time. if you look at what happened in the financial crisis in orlando, the properties outside of disney world had revenues drop by 40%. actually properties inside the park only went down 5%, so we think that the idea of being inside the park created a posture for the property that attracted us. tom: dan what people do not know about you, you spent a lot of time on the island of manhattan. in 1979, there was a photo of a bunch of black girls in sweatshirts, and it was just unbelievable how original prep for prep was as a program to

motivate black kids to reach an education. give us an update on where prep for prep stands right now. dan: it has been spectacularly successful. tom: it has been stunningly successful. dan: that is how we got involved, as we watch our kids and the private schools and we watched the prep kits, and one, they were great achievers, but they also made an impact on the classes where our kids were involved, and today i think rep has affected over 3000 kids. it has really changed their lives and is something i part of smart connections, which i think has affected 300,000 kids. tom: how do you respond to somebody who says the minorities are pushing out white kids from educational opportunities today? dan: at least what i saw and our kids' class, and it sounded like the same thing happen for you is the kids really improve the educational experience for the kids who were there. tom: congratulations on that. olivia: daniel neidich, thank

you so much, joining us from doing capital. please answer our quarter question of the day -- do you agree with rand paul's provocative proposal? should we audit the fed? tweet us @bsurveillance. this is "bloomberg surveillance." on bloomberg television streaming on your tablet, your phone, and bloomberg.com. ♪

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9. make no mistake about it. they're out there.

i guarantee it. welcome to the nascar xfinity series. tom: good morning, everyone. "bloomberg surveillance." breaking news. eu commission says greek lists -- i love this -- sufficiently comprehensive. brendan greeley is in charge of adverts at "bloomberg

surveillance." what the hell does that mean? brendan: it is important to distinguish the different institutions of the european union, so these are the finance ministers, the one to have to improve this is that we are talking about the eu commission, the bureaucratic group of economists run by jean-claude juncker out of brussels. they have been trying to press this agreement, so when they say this this is news, but it is not surprising. the eu commission has wanted a deal. we do not have an agreement from the finance ministers. this is a different group, and most importantly finance ministers for schaeuble. we are waiting for the individual finance ministers from all the euro countries. olivia: tsipras said it does not want to call it the troika anymore. tom: ethan, you have a fabulous

european team. can they give us clarity? ethan: i do not think they should call us the three amigos. i will say that. [laughter] this is an ongoing mess. every time a decision is made, we have to go through 300 different hoops. tom: do you assume down the road we get to a true debt restructuring that none of this is more than drama before the real ballet? ethan: that is a long, long way off. this is a game where the two sides have to prove their own populations that they have fought the tough battle before they reach an agreement, as it always goes down to last-minute and never seems to be a complete solution. olivia: one of the takeaways seems to be -- what if we achieved in the last week? nothing more than what we will see four months from now all over again. brendan: this feels a lot like american politics, one of the things germany is worried about is that they are losing the pressure that they can always

apply to greece to make them do what they want. tom: we need clarity on something more simple, now would be ukraine. olivia: in ukraine, pro-russian rebels say they are complying with one of the provisions of the cease-fire. they are withdrawing heavy weapons from the zone, they say, but the ukrainian government says the cease-fire has in fact broken down and will not pull their weapons back until the truce holds for at least two days. for messieurs russia, ukraine germany, and france will be meeting in paris -- foreign ministers from russia, ukraine, germany, and france will be meeting in paris. brendan: janet yellen will begin today's of testimony on capitol hill starting at the senate. lawmakers from both arteries are demanding more transparency from the fed and its chair. democrats accuse the fed of being too cozy with the bank that regulates -- republicans are unhappy with the fed was the aggressive monetary policy. there is word that u.s. is compromising with iran over its nuclear program. the u.s. has discussed a deal

that would prevent iran from obtaining enough material to create a nuclear bomb for at least a decade, but then the iranians would be able to build up their capacity again. that appears to be closer to iran's timeline. in the past, the u.s. wanted a freeze of up to 20 years. tom: prosecutors want to know the what was the biggest banks try to manipulate the price of gold and silver. people familiar with the matter sadie toay the justice department is investigating. goldman sachs and torch a bank, hsbc says it is cooperating. u.s. prosecutors are looking into whether banks rigged interbank lending rates and currency markets as well. apple is going to make of a change in the way customers deal with its lousy retail genius bot that is my op-ed there. apple stores will start a new initiative called concierge that will replace the absolute bogus genius bar walkable performance

with an algorithm that will be able to give customers a wait time. the service is expected to reduce crowds inside apple stores. the theory is people on the weekend who think the thing is a total charade. brendan: i am sensing an editorial tone to your news read. tom: the genius bar is an absolute freaking fraud. olivia: i agree it is side was, it is moving people in and out of the store more quickly. tom: they are changing it. brendan: i find the word "genius" condescending. olivia: try to get help at a radioshack. tom: that is true. how about a data check? equities, bonds, currencies commodities. this is a yellen data check, the euro $1.1325. yields doing nothing. oil $49.69. brent, $10 away, $59.45. brazilian real in the indonesian rupiah up to new weakness.

we remind you that the dow jones industrial average is lofty, well above an 18,000 statistics, andy the vix under 15. not bad. this is "bloomberg surveillance." i am tom keene, with me olivia sterns and brendan greeley. brendan: europe is fine. stock 600 index is almost back up where it was in 2000 and 2007, the dax germany's index, they have their eye specs out, searching for a new alpine high. jon ferro joins us from europe. who's afraid of a little varoufakis? jon: nobody. used it yet -- you strip out the news, it is news, yes, but look at the 10 best performing equity markets in the world year to date -- they are all in countries where the central bank

has topped or eased monetary policy, and the majority of them are in europe. you could have blanked out everything you do with greece and ukraine and just focus on was central banks are doing, and you would have found a market. brendan: jon the deep irony of this is the country that least wanted a rate cut from the ecb or an easing is the one that is benefiting the most with this export -- germany. jon: absolutely, and the dax is made up of some big international companies, some big exporters that are going to benefit from that weaker euro. that is exactly what we see playing out through the market. tom: even harris with us from bank of america merrill lynch as well. some say parity on euro. do we need to get to parity on ever weaker euro by some 11% or 12%? or even halfway there is such a boom to germany, isn't it? ethan: europe is already benefiting a lot from the weakness in the currency. we have been waiting for this. this is a region that has

serious economic troubles and should have a very weak. currency at this point the currency is probably stabilize a little bit because it has adapted to the quantitative easing coming out of the ecb but europe needs the week exchange rate. tom: jon, which is a, r four and a strange artists out front of this debate, or are they catching up with the vector moving up even weaker in europe? jon: it's has been a very crowded trade, just about every call and everything will outlook whether it is wall street or the city of london will sell the euro and by the dollar. for the first two months of the year, that was the right trade. things have slowed down, stabilized somewhat. we are looking for a move to $1. by the end of the year. 10 olivia: brandon asked you who is afraid of varoufakis we also have to ask who is afraid of vladimir putin? moscow up 26% year to date. what is going on? jon: i think people are maybe a

little more settled with it. i think the moving has come much lower from there. he dominated russian market performed very well for obvious reasons. i would not look too much into those moves, olivia. the risk around russia is no clear. they cut the junk by two significant rating agencies right now. it is not worth the risk. tom: jon ferro, thank you so much. in a credit to him, i stole this chart yesterday on portable and the united states. he will get a royalty check in the mail from "bloomberg surveillance." dr. harris, it is such a distortion. portugal's 10-year yield as the same as the united states' 10-year yield. that is not any textbooks. ethan: the european central bank has basically stepped in and ring fenced the debt markets and protected them against the risk factors including ukraine and

greece. one of the great benefits of the ecb acting, which i agree with what the ecb has done, has been to create very low interest rate and stable markets in the peripheries. tom: can you predict a boom economy for europe, 2%, 3% gdp? ethan: no what they're doing is buying time for some growth, some healing of the banking system. there is no boom in europe. it is more kind of prevent a downside. brendan: i have a question that was e-mailed to me from neil dutta at renaissance -- how many job numbers will it take for ethan to change his views on the fed? brendan: neil used to work for me, so this is a bit of a pointed question here -- ethan: neil used to work for me so this is a bit of a pointed question here. the last two months have been over 300,000 on average, so on that basis, the fed should already be hiking interest rates. i think what is slowing them down is the lack of inflation and the ways number.

that is what holds them back, but no question, great labor market. tom: anybody else who used to work for ethan harris, please send us your e-mails. [laughter] olivia: anybody who thinks ethan did not pay them enough, please let us know. and also, what do you think, should we audit the fed? ♪

olivia: good morning. this is "bloomberg surveillance."

i am olivia sterns here with tom keene and brendan greeley. it is decision day for chicago's mayor rahm emanuel. he is in the running against four other candidates to hold his position the survival of his career is that state. -- is at stake. "in the loop" anchor betty liu is here. does it look like rahm is going to win? betty: it looks like he may squeeze out a victory, but this is smaller than he had in 2011 when he won 85% of the vote. jim reynolds will be joining us, one of the big bankers in chicago, a personal friend and supporter of rahm emanuel, but rahm has had a really hard time in chicago in the last four years. he is doing what he said he was going to do, which is clean up the finances of the city. he closed several schools in chicago, which was extremely unpopular, launched, essentially created a teacher's strike, or

they struck the first time in 25 years. a lot of america has seen in chicago, and we have had a chance to speak with rahm a few years ago when he was going with these tough times in dealing with tensions and the glee's. your is what he said about his task. mayor emanuel: it is not just to solve for retirees and the taxpayers. i do not want the cost as it relates to pensions to crowd out the future of the city of chicago, which is our children. that is really what we are talking about, and you cannot tell me a city, state, municipality today is not facing that. chicago has it in spades because of what has happened in the past, but it is a national problem, not a chicago problems . betty: he should be winning this election. he is the most money, he is running against for people who are relatively unknown, yet he is still having a hard time. brendan: even harris, i know you

worked at the new york fed, so i will not make you talk about chicago, but his economy has worked the best for the tonier parts of chicago. this is very similar to an activation -- we have seen republicans level at the obama administration, that the last six years have been really good for the 1%. what is the best way to think about this? ethan: the problem has been a we have is long-run trend toward income inequality that really has nothing to do with what local politicians or even the president -- that is a trend that has been developing over many decades. layered on top of that, we have had a really crummy economic recovery that has not trickle down to the average wage earner. i hope that is over now and we start to get some wage growth, and so joe six act starts to do a little better. brendan: this is coming up in city politics. is there anything a city mayor can do to combat income inequality? ethan: there is a laundry list of things. obviously on one side you have better education and better

opportunities. on the other side you have more intervention in the markets with things like minimum wage increases. the best thing i would happen would be to get some real growth out there. i think we are having a now. things will look better in the next couple of years. olivia: certainly that will be part of the decision in chicago today. they go to the polls today? betty: that is right. olivia: everybody be sure to catch jim reynolds on "in the loop" with betty liu. and tweet us -- should we audit the fed? ♪

tom: good morning, everyone. "bloomberg surveillance." again, janet yellen will speak later today. we will have it on bloomberg television and radio. let's get to top headlines this morning. olivia: two stories we're tracking closely at this hour -- the eu commissions of a package of economic measures from greece is sufficiently comprehensive, but word from the finance ministers still awaits. the flow of bailout dollars hangs in the balance. greece's commitments would include maintaining state asset sales, consolidating pension funds and revamping tax collection. meanwhile in ukraine, a government military spokesman says a peace accord is not

working. ukraine contents pro-russian separatists are not pulling better weaponry for stopping rebels say that is not true. foreign ministers from ukraine, russia, germany, and france are meeting in paris today. other stories we're watching at this hour -- audits by the irs or at a 10-year low. last year, the tax agency's audit rate was under 1%. they have dropped more than 20% since 2005 was not the reason for the drop, you can guess, the irs is losing agents due to budget cuts. a commuting hassle this morning a southern new jersey. drivers are dealing with traffic was after a tanker truck carrying gallons of fuel overturned on monday. nearby homes were evacuated until the blaze was extinguished. ramps where the accident occurred were close. rhodes will reopen today. and alaskans are waking up with

new marijuana right post up they are able to smoke, grow, and possess it. it clears up 40 years of conflicting laws and court rulings. the creation of a regulated and taxed marijuana market is expected to begin sometime in 2015. velasquez is now the third u.s. state with legal pot, -- alaska is now the third u.s. state with legal pot. very strange to see these legal pot stores in town. tom: yeah, three states now. i wonder how they get from three to 10? is the trend there? olivia: certainly the trend is there in terms of popular support for legalizing it. huge westerns on economic impact. very early numbers the revenue is not what is expected to be in terms of taxes coming in colorado. brendan: i have to be honest, i'm winning for all of the states to follow colorado's lead to set up a micro-distillery. olivia: i went into a pot store

and ask, it was high and very fringe. i was not expecting it. tom: upon us global deflation, market clearing america has sidestepped deflation of some form, but there it is, the elephant in the room, and the key phrase is spare capacity. ethan harris has thought a lot about this with bank of america merrill lynch. i love we say about spare capacity the a just idea, there is too much stuff out there and not enough demand chasing us. ethan: we had the deepest recession in postwar period in 2008, 2009. it affected every country in the world. the recovery has been very spotty. in the u.s., we're beginning to close her to the end of the tunnel, but many other economies have never recovered, so we are left with his legacy of too much capacity. high unemployment rates factories that are not being used at full utilization -- tom: unit global headlines four

or five years ago resiliently saying weak economy. what everybody else was more optimistic, you were correct at the time. we underestimate the mumbo-jumbos about deflation monetary theory over to the so-called i.s. curve. what will this global realization due to the global economy? brendan:ethan: right now the global really economy is slow. the u.s. is outgrowing its potential, so that is certainly helping. i do not think we have reached a point where the inflation or he risks are undercutting confidence and growth, but as we get closer and closer, particularly in europe, you worry that at some point europe slips into a japan scenario. there is a kind of undercutting of confidence from ongoing deflation. so far, the impact of the low inflation under real economy has not been dramatic. this is a risk we do not want to be taking right now. the u.s. needs to bank which any

risk of deflation as quickly as possible. brendan: more broadly around the world, looking at countries like indonesia, much higher rates of inflation, that are still looking at rate cuts and urba -- in order to spur the economy. we're not just looking at the environment in the u.s. and europe. ethan: many countries are lower than normal inflation, so countries with a very high inflation, low inflation have zero inflation, so they are all kind of under the same kind of pressure. tom: let's stop the show because. brendan, what you said is quickly imported -- is critically important. in indonesia, is deflation inflation of 2% or 3%? ethan: from their perspective, it is almost like deflation because it is him and like they have not experienced in a long time. this deceleration inflation

is impacting many central bank's across the world. it has clearly had a big impact on the global bond market, and the u.s. is not immune. we are integrated in these markets, so we are seeing our own inflation low. brendan: we can calling this a currency war, but this is really an inflation war. ethan: obviously there are currency battles, skirmishes, not wars but the reality is everything so bank is facing the same common enemy, which is very low and potentially deflationary situation. that is really ultimately what is driving central bank from the world. the other thing about the currency wars, to be a war, there has to be losers and violence a negative outcomes but it is good that the central bank that are easing. think what would be going on in europe if the ecb had not stepped in and done qe. we would be much more worried about the global invocations of europe. i like that central banks are

easing. i'm not think it is a war, i think it is a battle. olivia: think of where we would be if they had done it sooner. ethan: we would be better off. olivia: it is time to answer our twitter or some today, we don't where you stand, you're not a fan. do you viewers agree with rand paul? should we audit the fed? our first answer -- of course. to raise the light shining under the hood of government is a good thing. second answer -- among d.c. institutions, the fed is the only one doing its job, and quite well. we low unemployment and inflation. brendan: there is an argument for that -- it is the only institution in d.c. that has been pursuing policy of any kind. olivia: exactly. the only game in town in the absence of fiscal policy, the fed is the only organization who would do anything. i like this 1 -- i believe in father christmas, so of course i believe what is written in any said audit. (smoke and mirrors) that is my agenda today.

i want to hear from janet yellen when she starts eating to congress beginning at 10:00 a.m. this morning. we will of course have covered on bloomberg tv and radio. brendan: we agreed on our agendas at 5:30 in the morning, mine was going to take a look at the german parliament, how they would take a look at this greek or basel because the individual countries all have to accept it. something interesting has happened in the last 20 minutes -- wolfgang schaeuble, the german finance minister, will have a tremendous influence on this german vote, has come out in favor of the proposal. that is a huge concession. ethan: it is. we have seen the usual greek game go on, which is that both sides, they will never compromise. the greeks say we want to roll back all of the austerity, germans say no room to move it all and the final compromise is closer to europe than to greece. basically we will give you a little bit of flexibility within us, but we will not give any major concessions. germans now say we have

extracted our pound of flesh and are willing to except a deal. brendan: we have been wondering what is in this. we cannot figure out what is different from promises made before. we have a quote from schaeuble he says greece's recognitions of its obligations. olivia: i did not see a pound of flesh come out of greece, but i see that maintaining the status quo. it will be the same thing for months from now. brendan: you want a fight? tom: when are the fireworks? brendan: four months from now we will schedule a, tom. tom: my agenda today is the oscars -- they have lost america. the "new york times" has a great article today. it is beyond sad what they have done over the last decade or so, and what we saw the other night was indicative of that. olivia: i will go out on a limited is not the people's choice awards. tom: it used to be the people's choice awards. brendan: does it have to be?

wasn't there a golden age of the oscars when it meant something more? tom: anyway, there it is. stay tuned for janet yellen later this morning on bloomberg radio and bloomberg television. we continue. good morning. ♪

betty: good morning. it is tuesday, vibrate coverage way for. we are 90 minutes were from the

opening bell and two hours away from a much anticipated testimony from janet yellen beginning at 10 ago km 10:00 a.m. evergreen is a former economist and now head of economic research at td securities. also with us is randy caused cosner. betting on september now for a rate hike and says it is all about watching the economic data. from chicago as well, my guest hosts for the hour -- jim reynolds weighs in on transparency at the feds. trillions of dollars into the safety of u.s. bonds and whether his hometown of chicago? we will see. the fist pumping starts now. here's a look at our top stories this morning. greece is one step closer to getting a four-month extension of the bailout.