we discussed the shades of passive investing. cate blanchett has never been more evil. shades of joan crawford. "cinderella." why is there never an evil stepfather? good morning, everyone. this is "bloomberg surveillance." joining me, olivia sterns. are you going to see the movie? olivia: yes. let's get you straight to top headlines. a manhunt is underway for the suspect who shot two police officers in ferguson, missouri. there were more protests overnight, but they were peaceful. this is fallout from the shooting of a white -- of a black teenager by a white police officer. president obama: what was

happening in ferguson was oppressive and objectionable but worthy of protest. but there was no excuse for violence. whoever fired those shots should not to tract from the issue they are criminals and they need to be arrested. olivia: last week, a justice department report says ferguson had racism and the courts. according to a person familiar with the matter, the fbi is now investigating whether billionaire investor bill ackman and people working for him try to manipulate herbalife's stock. the stock lost half of its value in the last year. we will ask bill ackman at 10:00 a.m. eastern. in japan, a milestone for the japanese stock index.

it is up 172%. the japanese are up more than 10% this year. there is so much oil on the markets there are not enough places to store it. the international energy agency said that may lead to more price cuts. storage capacity is already strained. the senate intelligence committee has approved a bill that make it's easier to fight cybercrime. companies will be shielded from lawsuits when they share information with each other and federal agencies. >> that would have happened, but we might have minimized the lost because of the response time. the fears that existed with other health care and other

financial companies, they would have also been included by the federal government. olivia: critics are concerned the bill could violate privacy rights. tom: let's look at the data. the markets are always interesting. futures are flat. not the drama of 24-26 hours ago. that is a huge deal on the japanese index. brent crude comes in. sterling showing some rate -- some weight. the russian bank is coming out with headlines within the hour. let's look at the confidence in america. i am not a big believer in confidence indexes.

here is the nirvana of the 1990's. this regression down is arbitrary, but there it is. finally, breaking above it. olivia: it is hard to map this graph along with unemployment. this is not what the comfort index reflects. i'm interested in this turnaround. tom: absolutely. is this the new normal or can we aspire to get back to this nirvana of the 1990's? there is a snapshot on morning in america. let's have a smart conversation. on a friday, you can do that.

a bloomberg surveillance data check. rob has witnessed and written about this strange evolution this morning. he is a cofounder and ceo of research affiliate. i want you to explain the legacy from peter bernstein, abby joseph cohen when, and others -- when you bring mathematics to investment what does that mean or what are you thinking about for our audience? >> it is not so much bringing mathematics to investing, as using mathematics as a tool to bring common sense to investing. one of the things that is

fascinating about investing is that people think past is prologue. people think the bull markets have a dark side. they set markets up for lower future returns. bear markets feel miserable, but they have a bright side. they set markets up for better future returns. they leave markets cheaper. we are may be at the tail end who knows, of a huge bull market like u.s. stocks. they feel wonderful, but it leaves markets high, position for low future returns. tom: let's go to investing 101. how important is janet yellen and mario draghi's great distortion for changing how we invest? we push it aside and ignore economics and the busted macro economics that we have or do you have to amend and adjust?

how do you handle that? rob: negative interest rates push us into new territory entirely. they mean that the credit worthy can borrow at the lowest rates imaginable. if you can borrow at the lowest rates imaginable, are you going to invest money in long horizon high-risk projects? or are you going to take in the low hanging fruit, stock buybacks? are you going to use the money in ways that capture the easy opportunities? tom: bill ackman is in the news today. olivia: according to people familiar, the fbi is looking at whether bill ackman and people he hired manipulated the stock. tom: kara lack -- carl icahn

bill ackman, are they constructive? rob: absolutely. anytime you have people who move markets and move assets toward their fair value they are constructive, they are helping markets reprice toward their fair value. was there overt manipulation? who knows. was there an effort to identify stocks that are overvalued and undervalued, absolutely. we are in a regime where you get punished for seeking to identify overpriced or underpriced and get punished after the fact. the rules are determined after the fact and redefined after the fact. olivia: what is your most important metric for valuation? rob: my go to metric is schiller

p/e ratio price relative to long-term horizon. olivia: critics would say that is too backward looking. rob: it is backward looking, but nothing mean reverts over time more aggressively than earnings. when you have peak earnings like now, the competitive pressures in a global landscape tend to cause -- tom: i like this, but how do you parse your caution? rob: laszlo tends to focus on cash flows, which are short horizon and drive markets on a short-term business. the valuation plays out on a long horizon basis. olivia: you do like the schiller ratio, which is retroactive. but you are saying that this sort of jack vogel market cap weighted index, the bull run that has enabled that success,

is over. why are we looking at a valuation metric that inspires past performance? rob: i'm not saying it is over. i'm saying the market is expensive. if you buy stocks today at today's valuation multiples, you are either saying this market is cheap or you are saying i have a self-discipline and i know when to get off the train, i know when the bell will chime and i will hear a chime before others do. tom: rob arnott with us. we will speak about all that is going on in passive investing. olivia: coming up, we are going to continue the conversation with rob arnott focusing on emerging markets and why he thinks they are worth the risk. this is "bloomberg surveillance." happy friday. ♪

tom: good morning, everyone. "bloomberg surveillance." i'm tom keene, with olivia sterns, on a friday. $46.62. olivia: we begin with the latest from ferguson, missouri. a manhunt is in progress. there were more protests overnight, but they were peaceful. bill ackman has made a big bet against herbalife. the fbi wants to know if ackman or people working for him try to manipulate herbalife's stock. we will ask bill ackman about all of that later this morning. he will be right here on

bloomberg television at 10:00. a new biography says steve jobs refused an organ donation. they say he refused when cook said he would give him part of his liver. doctors had told tim cook that the transplant could extend tim jobs -- steve jobs' life. more followed for the fraternity at oklahoma university. some other fraternity chapters new about the racist video. research done for the fda says slowing teen smoking could be attributed by raising tobacco age to 21. the volcano in costa rica is

acting up. a huge plume of smoke -and ash in costa rica. wow. tom: this is close. this is not like, over there. olivia: yes. tom: i flew by mount saint helens. just stunning. olivia: remember when the airspace in europe was closed because of the iceland volcano? tom: yes. happy volcanoes. rob: i am hoping i see lots of volcanoes and none of them erupt ring. [laughter] tom: let's continue with rob arnott. and the investment racket, they are treated with all. investors to bring first-order mathiness. rob arnott has led the way.

what not to do and what to do. right now, the to do list includes investing abroad. i picked up on this six months ago. all of a sudden, everyone is going, but where abroad? rob: i think the best opportunities are in emerging economies. emerging markets are cold as ice in the eyes of most investors. people are afraid. every election in latin america in the last three years has gone socialist. tom: cfa level one. can you trust the accounting? rob: the accounting in emerging economies is dubious. it is almost as bad as u.s. accounting. my goodness. when it comes to profits, when it comes to simple p&l, they

have revenues and expenses. they don't have stock options. they don't have accruals. they don't have preferred shares. it is as can be. i would trust the accounting there as much as i would trust the accounting here. olivia: political risk is one thing. there are also economic fundamentals. they say the taper is going to cut the legs off any growth. rob: that is the obvious fear and the fears are legitimate. the fears exist for a good reason. the simple fact is that there are no bargains in the absence of fear. the other simple fact is that valuations there are half the valuations here. the stocks in the emerging economies are trading at single-digit p/e ratios. olivia: wordy you invest in the

emerging world? rob: i like broadly divested -- i like broadly invested portfolios. tom: these negative interest rates are stunning. the german yield is much higher this morning. genuine buy siemens, nestlé can you buy giant euro blue chips that we trust? rob: i would say yes. i would not necessarily go for the blue chips, but the broad economy, fundamentally weighted. not in accordance with the popularity of the companies. the companies use named our big market companies. olivia: they have also seen a big run-up in the dax. rob: if you wait the companies according to their economic footprint, there are a lot of

bargains in europe. rob: would you bet on india or china in the next decade? --olivia: would you bet on india or china in the next decade? rob: i would bet on china. india has high valuation multiples. i would not bet on china to win in terms of gdp growth relative to india. india has more upside potential and if they get their corruption problems under control there is more room for them to play catch-up. tom: we are going to talk about your investment strategy in a bit. within that, there is the banks. in every system you are in you have got to be aware of a financial system. how messed up is our global banking system right now? we are out in front of clearing markets. rob: china's banking system is problematic.

what we need to do is let banks be banks, instead of having them be manipulated arms of government. let them get in the business of borrowing, putting risk capital at risk tom:. should janet yellen raise rates to normalize so that banks can do business? rob: absolutely. i would recommend that they begin a process of raising rates and get them back to normal levels. olivia: what is normal? rob: 2%-3% would make normal and perfect sense. getting from here to there would be perceived as devastating by the market. tom: ok. let's come back. rob arnott. we will talk about this bloomberg magazine article about passive investing. in our next hour, kevin roberts brings the spirit of marketing and advertising. he is with a small startup firm. we will talk to mr. roberts about facebook. ♪

tom: good morning, everyone. "bloomberg surveillance." it is time for my morning must-read. it is a mysterious must-read on a friday. rob arnott is with us. we have to do "cinderella." which 1945 film character helped inform kate blanchett's evil stepmother? this is back in the 1940's.

take it julie miller. the moment she comes on the trailer you know she is going to steal the movie. olivia: i feel it is much more of an "mommy dearest" kind of thing. tom: this is very exciting. we are going to talk about this later on. olivia: there is the costar, the belle of the ball. you might recognize her from "downton abbey." tom: i might. [laughter] when you look at the risk that disney is taking on this why have they given up risk investment? olivia: i was wondering where you were going with this. tom: if we go down three percent in the markets, we have a coronary. rob: people want returns they don't want risk. that is a given. of course. they go hand in hand.

we are showing richard madden in cinderella. there is no difference. the prince talks to cinderella -- what is your number one advice? you are prince charming to the american 401(k). rob: there are no bargains in the absence of fear. invest in markets that you are afraid of. olivia: very impressive, the "cinderella" allegory. ♪

tom: good morning. new york city gorgeoisity.

olivia sterns gets ready to see "cinderella" today. olivia: authorities have yet to make any arrests in the shooting of the two police officers wednesday night in ferguson, missouri. both have been released from the hospital. there was a peaceful protest overnight in ferguson. this is all fallout from last summer. now, it is activist investor bill ackman who is being investigated. the fbi is investigating whether he tried to manipulate herbalife 's stock. he has $1 billion bet against herbalife. their stock has lost half of its value in the past year. we will ask bill ackman about the investigation later on at 10:00 a.m., right here on bloomberg television. the prime minister of greece said his country has started fulfilling its commitments on the economy and it is time for

europe to do the same. he said he is optimistic a solution will be found. european leaders have said they will not give any more emergency aid to greece unless it reforms its economy. benjamin netanyahu is not so sure he will keep his job after next week. he told an israeli tv station he will lose the election. the zionist union favors renewing peace talks with the palestinians. in pro football, we have not seen something like this in seven decades. demarco murray has signed a five-year, $42 million contract with the philadelphia eagles. it is the first time in 68 years that the nfl leading rusher has switched teams. tom: you football junkie, you. olivia: i went to school in philadelphia. fly, eagles, fly.

president obama got a few laughs will talking about life in the white house. it happened when he appeared on jimmy kimmel live. president obama: i cannot drive. [laughter] i mean, i am able to drive. jimmy: do you have a birth certificate? [laughter] [applause] president obama: in kenya, we drive on the other side of the road [laughter] . olivia: the president also made it clear that he has hillary clinton's back. tom: very good. russia out with rates. the ruble moves a little bit. it is not that big of a move. it is the snapshot of a troubled economy.

inflation, 16.7%. they made it clear that they are on top of this. the weak economy is helping slow inflation. yeah right area there is the messaging from the russian central bank. it is not news that passive investing is all the rage. but there is a collegial heated debate. the tradition is to replicate an index off of market capitalization. rob arnott disagrees. he suggests there has to be more and that is conducting at around regulation. why is your world too complex? rob: it is not at all complex. it is very simple. you weight companies by how big they are, not by how much the market is willing to pay for

them. just how big is the business. tom: strategists get a belief in a ratio of price to sales. which of those dynamic ratios is fundamental? rob: they all have fundamental value. if you just weig companies according to their salesht, one of them ties the way to the price. the more expensive the company is, the bigger its weight. tom: are you sort of kind of like passive investment or like active investment? rob: both. relative to the market. the market is cap waited. relative to the market, we are active. relative to the economy, we are passive. relative to the economy, jack vogel is active.

tom: this is a zen approximation, olivia. [laughter] there is a lot going on here. olivia: jack vogel says that your approach is going to shake out just like his in the long run. rob: absolutely not. if you go back over the last 50 years, you find that weighting companies by their economic footprint means that the companies that have been winning in the marketplace by dint of rising and valuation, some of them deserve their high multiples, some of them don't. tom: take us back to december 2008. what was rob arnott doing? you have to get on board in february 2009. rob: rebalance into the deeply out-of-favor companies. you rebalance into the out-of-favor financial services. tom: how often should our

listeners and viewers rebalance? rob: you can do it annually. you can do partial rebalancing quarterly. move a little bit toward rebalancing quarterly. the rebalancing is where the value is added. at the beginning, people said this is just a warm over reversion of value investing. value investing has underperformed for 10 years. we have outperformed for 10 years. olivia: does the market the jack vogel built his model for not exist anymore because prices are not there the way they used to be? rob: prices have never been fair. they have always been too high or too low. jack was and is a genius. he did a wonderful thing for the marketplace. he said, prices of the products manager -- matter.

he said, you can invest in the whole market and you can do it for free. what a wonderful thing to do. olivia: how do you feel about being stacked up to the other people as carrying the torch for jack vogel? mark weidman, bill mcnabb. rob: these are very smart people. they are terrific leaders. olivia: who gets it most right among those? rob: i would not want to pick that. the notion of who is going to be the next jack vogel is kind of silly. who is going to be the next tom keene? tom: i want to know where you are right now. people are going into the weekend. where is rob arnott right now? rob: i would be aggressively trimming the beloved tech names that are trading at lofty multiples and rebalancing into the out-of-favor segments of the market. i would be trimming u.s.

equities and rebalancing into emerging markets equities. there are cheap stocks in the world, lots of them. tom: pick a nation. rob: i'm going to get really controversial here. russia. tom: you are going to go long to you back right now. rob: if you don't mind supporting a thug-ocracy. if you don't have ethical qualms. olivia: and you don't? rob: i do. tom: this is not "dr. phil" olivia. [laughter] rob: if there is no expropriations, the stocks are relatively cheap. tom: i am in the leveraging all-cash fund. [laughter] olivia: i am doubling down on cinderella's shoes.

passports, please. the superrich are fleeing some countries. china is one of them. ♪

tom: good morning, everyone.

"bloomberg surveillance." i'm tom keene. with me, olivia sterns. it is time for a single best chart. olivia is scrutinizing the literature right now. [laughter] this is a cool chart. olivia: it is about immigration worldwide among the wealthy. we talked about the record number of millionaires in the u.s.. 10 million millionaires. the chart shows the biggest outflows of millionaires. this is according to a new report. i think this is very interesting. we think about immigration as being low income workers leaving their country and going abroad for work. this shows that one of the things that has happened in the last decade as a consequence of the more ching -- emerging-market wealth is that wealthy people are leaving china and india and going abroad.

there are huge implications for policy. tom: this is permanent. this is a structural shift. olivia: ask sydney, melbourne. 90% of applicants for the investor visa in australia are going to australia -- coming from china. tom: we have heard that from david haro out of chicago. they want to move the money where there is a legal structure. olivia: forward buyers are really booing manhattan real estate. tom: finally, we have the stronger dollar, which may dampen the trend. olivia: if you had $1 billion in rubles, wouldn't you rather on the penthouse? tom: what is your research and

mathematics on the value of real estate first is intangibles? rob: i think real estate, broadly is relatively fully priced, but there are opportunities. to be sure, flagship companies are going to have a market of their own. when it comes to specialty markets -- tom: top photo. we nailed this yesterday. there is that headdress. let's get to our top photos. here is o. sterns. olivia: we start with robert downey junior. he fist bumps a voyeur received a 3-d bionic lamimb.

in south carolina, a sea turtle was released into the atlantic ocean. we are suckers for cute animals on "surveillance." it was found stranded on a remote beach. the south carolina aquarium documented the event. it is believed to be 15 years old. they can live to be up to 100 years old. our number one photo of the day. it is rob arnott. he was voted into the elite eight of "wealth magazine." tom: wait a minute. give me your hand? 1 this hand does not look like that hand. rob: when i take this off this

fats it, i look like that. [laughter] i do. tom: this goes back to theory and thinking about investment. rob: one of the things i learned in the intervening years is how tremendous the influence of policy choices can be on capital markets. olivia: i will point out that you moved into the elite eight with 70% of the vote. congratulations. rob: thank you. olivia: coming up elsa gears up for "frozen 2." ♪ >> another princess in my shadow. i'm a legendary story of rags to

riches. ♪ olivia: it is a princess showdown. can cinderella win back her crown? when we come back, glass slippers. ♪

tom: good morning, everyone. "bloomberg surveillance." olivia: a manhunt is in progress in misery. -- missouri. a new turn and the government's investigation of herbalife. activist investor bill ackman has made a big bet against the company. the fbi wants to know with bill ackman or people working for him try to manipulate herbalife's stock. acumen has $1 billion bet against herbalife's shares. that is coming up at 10:00 a.m. eastern, our interview with bill ackman. prosecutors plan to convict oscar pistorius of murder -- lawyers for the double-amputee tried to block the move, but they were turned down by a south

african judge. pistorius is in prison on a lesser charge for killing his girlfriend two years ago. concern about carbon monoxide fumes prompt and auto recall. general motors wants to fix 50,000 chevy bolts. -- volts. gm says to people have been hurt by the problem. tom: yes, i have heard this. olivia: nothing succeeds like success for disney. it is planning to release a sequel to "frozen." tom: yes! olivia: should we just pause and listen to the song? [♪ ["let it go"] ♪ olivia: that is my favorite part. ♪ the cold never bothered me anyway ♪ disney's shares hitting an all-time high.

speaking of "frozen" tom. cinderella is back. cate blanchett is her evil stepmother. disney is hoping to replicate "frozen" success. that is the belle of the ball. from "downton abbey." joining us now is the senior overseas analyst from box office media. can "cinderella" hold a candle to frozen? >> those are really high standards we are holding it against. i think it might be the first 2015 release to hit the $200 million mark domestically. olivia: this is not a cartoon. we actually have the live-action movie. how does it compare to an animated one? >> they are doing pretty well.

they are diversifying their assets, if you will, over at disney. they did "malifacent" which did over $750 million worldwide. they did "oz: the great and powerful." tom: the casting to me is extraordinary. rob stark from "game of thrones." cate blanchett -- how did they get her on board? was it the mighty check that they wrote her? >> they are doing very well financially. but these are the types of projects that actors want to be a part of. getting angelina jolie for "maleficent." tom: this burner shows -- burn ishes the global brand.

olivia: with all the respects i think we are burying the lead. the fabulous glass slipper that jimmy choo has come out with for $5,000. i tried it on. a tragically does not fit. i am not cinderella. the question is one about marketing. how does disney appeal to one adult audience? is that the appeal of a live-action rather than a cartoon? >> i think that helps. disney has much more than princesses. they have star wars. they have the marvel movies. on a film output level, this might be the best time for the studio with the many properties they have. tom: nicholas kirkwood here with a shoe, as well. everybody climbs on board the frenzy. why can't others do this? dreamworks has had success. warner brothers, to some extent.

what is the disney pixie dust that has allowed them to do this? >> they have generations and generations of experience and of brand recognition around the world and across generations. we don't think of disney anymore as just children's movies. with marvel and "star wars," they are getting all of us. olivia: that is where the marketing opportunity for sex with avenue comes from. they have created these exclusive shoes. when we came into this, we played the song "let it go." "cinderella" is song free. so much of the success of "frozen" was driven by the hit song. >> it does not have to be musical. "maleficent." olivia: it did not do nearly as well as "frozen." >> it is not an animated movie.

tom: i want to rip up the script. what a bitter debate about whether gay families should win $700 out of a $60 million pie. olivia: i have moved on. tom: you tried on shoes, excuse me. just keep trying it. >> i can stretch it out for you. olivia: please do. >> i really want the creative community to continue having the tools they need to produce the tools they like. tom: thank you so much. >> thank you for having me. tom: finally a quiet day. rubel is a bit weaker off the russian central-bank moves.

ukrainian currency, nobody is paying attention to me on set. ♪ cinderelly cinderelly ♪ there is a fat chance, olivia. [laughter] ♪

tom: japanese at stocks hit a 15

year high. the world adjusts to the new yellen dollar. the power of facebook. is it a friend or enemy? bill ackman investigated for delivering this -- deliberateness. good morning, everyone. this is "bloomberg surveillance ." it is friday, march 13. let's get right to our cap headlines. olivia: a manhunt underway for the suspect who shot two police officers in ferguson, missouri. there were more protests over last night but they were peaceful. all this from the fallout of the shooting of an unarmed black teenager by eight white police officer -- a white police

officer. >> what happened in ferguson was objectionable. was worthy of protests. there was no excuse for criminal acts. whoever fired those shots should not detract from the issue -- they are criminals and they need to be arrested. olivia: ferguson's government fostered racism in the government and court. the fbi is investigating whether ackman tried to manipulate herbalife stock. the stock has lost half of its value in the last year. we will ask bill ackman about this investigation later on. we were at the tail end of the.com boom last time the

nikkei index was this high. it is up 172%. japanese stocks already up more than 10% so far in the year. the glut of oil has gotten so big, we are running out of places to store it. that may lead to more price cuts. boosting estimates for u.s. oil production this year, with the inventory already at an all-time high. it is up to the full senate to decide whether to approve a bill to make it easier to fight cybercrime. critics on both sides of the aisle are concerned that the bill could violate privacy rights. it is welfare like you have never seen him before. -- will ferrell like you have never seen them before.

he played all nine positions. he is expected to raise $1 million for college scholarships for cancer survivors. tom: very cool. let me do a quick data check. today, not much going on. a pressure from their -- fresh air -- a breath of fresh air. weaker oil through this week. that bears some scrutiny into the weekend. in the old days, there was the dow and this and that and the other thing. we have a lot to talk about. kevin roberts joins us from stodgy in such soft insideachi and

sachi. what happens next week? kevin: this could be a big fed beating. -- fed meeting. this is where it comes to a head. tom: are the markets telling janet what to do or are the markets telling janet what to do ? >> they have consistently priced for lower for longer. we will see those come up next week. it is hard to imagine 2%. we get a press conference. olivia: we've been talking about dollar strength. does janet hold off on the rate hike because of the dollar?

josh: that is not clear. the fed was cheerleading for policy stimulus from other countries. a weaker euro and stronger dollar medium-term, that should come back to help us. tom: the dollar is not at extremes. olivia: it is at 100. tom: but not extreme looking back 20 years. josh: they are aware that there is this medium-term game they have to play as well. olivia:tom: what does a weaker pound sterling mean for harrods? kevin: what is good for harrods is good for qatar. they may see oil going like this

. olivia: a lot of customers are from commodity-based -- i have retail on the brain. much pause did yesterday's sales give you? josh: it is a cause for concern. we have to see how the numbers play out. it looks to storm raoni disturbingly like the first quarter of 2014. tom: you wrote an article in the telegraph yesterday. there is a chart from the atlanta fed. the sector is going down, down down. re: economists shifting to a sub 3% gdp and staying there? josh: that looks like what we are headed towards. there is still a good chance

that the consensus forecast -- you have the strong job growth supporting that. there is downside risk. kevin: if you get behind the data and the numbers we are listening to how consumers are feeling. they are feeling very good, very confident. everybody is finding work. people around them are finding -- feeling buoyant. tom: the theme i am seeing -- this is the toronto star. shutting down their tech news website. everybody is focused on the giant. facebook and their new speed. -- news feed. where will they be in 24 months or in five years? kevin: facebook is the force. they are innovating.

look at what is happening. most news in the next 24 months, almost everything we are going to see will be video. olivia: does the same argument apply for snapchat? kevin: they will be one of the top five. tom: how does facebook adjust their news feed to defend against snapchat? kevin: they will attack. defend is not in facebook's playbook. tom: are they the frenemy of all news organizations? kevin: you better collaborate connect. if not, you can close. tom: the telegraph leading the way. olivia: the new facebook would be more like a scrapbook --

today it will be a lot more like twitter. kevin: what do you think twitter will look like 12 months from now? olivia: one is news and one is personal mementos. kevin: you will see a real blurring -- josh: i have my cousins in middle school making amazing videos. tom: within this -- when i see an ad in my twitter feed, i'm upset. unless upset when i see a facebook ad. -- i am less upset. kevin: your time constrained on twitter. you made a choice which is about concise and speed. you go on to facebook, you are still into entertainment. surprised me, to like me.

let me share this your in a different mindset. olivia: will you buy an apple watch? kevin: an apple watch two, maybe. i think it will be massively successful. olivia: all right. looking forward to the conversation. josh wright, thank you so much. tom: a conversation with one of our favorite guests. our comptroller. scott stringer on shaking up the boardroom. futures up three. this is "bloomberg surveillance ." good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." let's get to a morning must-read . i sent an e-mail to olivia. olivia: i deleted it from my server. gail collins writing in the new york times. hillary clinton comes back. kevin roberts with us.

how should hillary change her messaging? we have seen her tweeting "grandma knows best." kevin: it starts with this quote you just put up. the new personality. the difference between clinton and most other people is personality. they have one and she doesn't. it is a bigger problem than messaging. olivia: what would you advise her for messaging? i don't understand this litmus test of what i want to drink a beer with her. kevin: she shouldn't retire and disappear and let the field come open for a younger, more dynamic and it. -- she should retire and disappear and let the field come open for a younger, more dynamic candidate. tom: someone so visible and so known -- what do you do with

someone who isn't so visible you have to reposition them -- is it so visibl so visible you have to reposition them? did the british do this? they have their own politics right now. kevin: we helped labor lose the last one. josh: so much of it is driven by money. clinton, whatever you think about her politics or personality she has the money. kevin: i don't think it is about money at all. when obama was elected ran the worst marketing campaign. the advertising was terrible and the money was wasted. there was a grassroots movement created. hope, change, dreams.

the movement was created from the grassroots and he got in. money is old-fashioned. tom: hope and audacity. kevin: it is too late. i'm a radical optimist. tom: coming up, bill ackman in the news. he will be on "market makers." ♪

tom: good morning, everyone. we are having fun on saturday. we are going to see the matinee of "in the relevant." -- "cinderella." olivia: a manhunt in progress in ferguson, missouri. there were more protests last night. but they were peaceful. a new turn in the government's

investigation of herbalife. they want to know if bill ackman or people working for him try to manipulate herbalife stock. he has bet $1 billion against the company's shares. we will ask bill ackman at 10:00 a.m. islamic state accepting a pledge of allegiance from the extremist group that inducted -- abducted two and 75 schoolgirls in nigeria. -- 275 schoolgirls in nigeria. more fallout from the university of oklahoma fraternity video. sigma all caps on investigating chapters at other campuses. -- sigma alpha epsilon. a new biography says a steve

jobs refused an organ donation offer from tim cook. the apple cofounder refused when cook said he would give him part of his liver. jobs died four years ago of pancreatic cancer. a volcano in costa rica acting up. a huge plume of ash. it is the most powerful eruption there in two decades. the airport was clouded. 140 billion dollars, how much public companies could grow their market cap by if they embraced proxy access. let your long-term shareholders hire and fire the board. scott stringer has been leading the fight and he joins us on set. thank you for joining us. shareholders can vote. why should they get to call the

shots with management? scott: we have always had this right. part of what we want to do is grow the holdings. companies that actually have the ability to have proxy access make the company stronger and more powerful. this is a movement that is sweeping the country. we are making agreements with staples and abercrombie. olivia: those companies are a bit desperate. you are not going to get apple on board with this. scott: if the fcc would deliver rules. tom: what is the response from major -- do they love what you are doing? scott: this is a national coalition. we have organized treasurers and controllers around the country

and we are talking to companies saying we want to have the ability, we want a say in the direction of the company. when we see you are not a diverse board we want to change that. tom: what is the response when you talk to these major owners? what is the conservative response? scott: look at what is happening. prudential is doing proxy access on their own. look at ge. we are working on it. olivia: why shouldn't it be voluntary? scott: part of what we -- we have a right to ask for this during the proxy season. this is the way you impact change. we have a stake in growing

long-term value. if we see companies going the wrong direction, we want to have the ability to say to them, you do not have a private system. you have to open a little so we can work on these issues. kevin: it's about nominating people. scott: this is hardly going to turn corporate america on its head. this is the most responsible way to create long-term value. olivia: why are you auditing success academy? scott: part of the law says, we audit all schools. olivia: your critics would say you have the right to financially audit them. not audit their full performance. scott: part of doing a financial audit is also looking at a whole set of issues. part of a construct we go in -- we are not auditing the political issue.

part of my job is to make sure everything is transparent, open so parents can see what's going on. olivia: was there something going on that concern ed you? scott: malpractice as controller if i was not doing my due diligence auditing agencies and charter schools. it is what i do. i don't care about this from a republican or liberal perspective. idea my job making sure we get the best bang for the buck. i have to do my job. tom: what about the potholes in new york? how do you audit potholes in new york? it is like i've never seen. scott: what in the blah zerodid build a blah zerobill deblasio say?

olivia: we see of the cyber security bill will keep you safe. ♪

tom: good morning, everyone. a strange morning. a little less economic finance move. let's look at the bloomberg terminal. i don't look at confidence indexes all that much. i don't have faith in them.

here is a monthly chart back 30 years. here is that state of malaise we've had. we have come up nicely through -- we are more confident than a year ago. josh: did we have euphoria in the 90's? tom: that is normal versus -- josh: it does look closer to a normal of what you get. tom: does this mood look the same in london? kevin: london is very confident right now. josh: what is common between the two? proactive policy. proactive central banks. their willingness to take the tough decisions upfront. olivia: is it the british

consumer that is confident or the international wealth? josh: consumers are confident. kevin: if you are a british consumer living in britain, who cares? you have food deflation, supermarket wars low cost flights. france is in the poo. tom: can we say that on air? france is in the poo. olivia: a manhunt continues this morning after authorities have yet to make any arrests in the shooting of those two police officers in ferguson, missouri. they were shot during a protest at the ferguson police station. both have been released from the hospital. there was a peaceful protest in ferguson overnight. dems stringer say they will keep working for change. all of this is fallout from last summer's shooting. -- demonstrators say.

bill ackman is being investigated over herbalife. the fbi is investigating whether or not ackman try to minute later life stock after the fund that a billion dollars against herbalife. the stock has lost half of its value in the past year. we will ask bill ackman about it. the priming us to her of greece and says his country has started fulfilling its commitments on the economy. -- prime minister of greece. he says he is optimistic. >> at the end of the day, we will solve these misunderstandings and go on with this compromise. our intention is to implement these decisions. olivia: european leaders said --

one of the dallas cowboys biggest stars is going to play for one of their biggest rivals. demarco murray hasn't signed a five-year $42 million contract with the philadelphia eagles. -- the marco murray hasn't demarco murray has signed. maybe obama was practicing -- he was on jimmy kimmel live. >> is there anyway we could flight obama to some golf course have to way around the world and leave him there? i think that's a great idea. olivia: the president had some fun at hillary clinton's

expense. he said he would not give her's new e-mail address -- his new e-mail address. kevin: the most popular leader on facebook. tom: i have seen him live a number of times. olivia: he gives katy perry a run for her money on twitter. tom: let me do a data check. bring it over to the terminal. this is three days of oil. we fade in the afternoon. we are fading down to a 46.34 on oil. stephen short is adamant we are up to our eyeballs in oil.

talking $39 a barrel at goldman sachs. futures up two. good morning, everyone. "bloomberg surveillance." we look to washington. olivia: one issue every ceo on the planet is losing sleep over. it is cyber security. we have seen a humiliating hackett sony -- hack at sony and a creepy data breach at anthem. a bill to get private companies to share info amongst themselves about a threat. peter, so much criticism here from privacy advocates. peter: once you have the business sharing information

with the government, the business community, you have the risk that personal information will be shared and this will be another open door for the government to conduct even more surveillance. that is the concern on the part of privacy advocates. supporters say they have addressed those concerns. they are not quite clear how much farther they need to go. they believe this legislation is a breakthrough in terms of voluntary cooperation within the business sector and the government in addressing this issue. take a listen to the chairman of the senate intelligence committee. >> everybody gave a little bit. we got a bill that legitimately can go to the senate floor and find a majority to overcome the obstacles we have seen of late. hopefully pass the senate with a significant margin. >> we don't see a lot of

bipartisan votes like that on capitol hill. a good sign for those people waiting years for cyber security legislation. still a long way to go. olivia: another interesting take away was he said if these rules are in place, the hacks still would have happened but would have been resolved quickly. what are the chances this will pass? >> a 14-1 vote is a rarity in a committee. it needs to be cleared in the full senate and over in the house and the white house needs to weigh in. the white house was critical of the spill a few days ago. there were efforts to address those concerns. -- of this bill a few days ago. this might be the best vehicle for cyber security improvement in this country right now. olivia: peter cook, thank you so much. kevin roberts still with us.

how worried are your clients? kevin: they are all worried about it. you would not want this to happen. this is important legislation but the real issue is how do we stop the thing happening in the first place. internally from companies and guys putting in new systems. the hackers are getting smarter and smarter and faster and faster. we are lagging. they are on the offense event business is on the defensive. tom: are we awaiting a big crisis? i do not see this galvanized in my twitter or e-mail. we are waiting for something big to happen. kevin: sony did not care about it, either. all of a sudden, they care about it now. hollywood really cares about it. png and the big companies are

going, we have firewalls up, we are saved. as soon as the first thing these -- first big piece of data released -- josh: it's also about individuals and public education. it is going to require more education. it is not clear that this bill addresses that. kevin: the bill is good. we need to get that in place. that is blocking and tackling. the offense is over this side of the spectrum and we have to find different ways of actually fireproofing ourselves. tom: william ackman had a bang up 2014. this morning, a discussion about herbalife.

he will have a discussion on "market makers" this morning. look for that this morning on bloomberg television. ♪

olivia: good morning. this is "bloomberg surveillance

." it is our favorite topic on "bloomberg surveillance." the fed. the labor report for february shows the retail sales have dropped. why aren't consumers buying more? betty liu hopes her guest will be able to solve this puzzle. >> an american mystery that only you guys could help solve. it is a big conundrum here. we have the chart of the last year. look at what has happened in the last three months. we have added 863,000 jobs. great news for the economy. the retail sales numbers have continued to decline. down in each month in the last three months.

i'm not quite sure why. this is something we want to ask alan greenspan about. we are not seeing spending. could the solution be in the wage growth or lack of wage growth? josh: some of it is the weather. retail sales are reported on a nominal basis. we have low-inflation consuming. olivia: more of a surprise to me that they are not spending. they are saving more at the pump. it is because of this permanent effect -- people won't spend the savings until they believe it is there to spend. josh: the savings you get each month are not all that much. olivia: not enough to buy an

apple watch. josh: that is affecting the consumer confidence numbers. betty: another story is forecasting the weather. on monday verizon dropped the weather channel in favor of this other company called accuweather. we have the ceo joining us. bryson says people are not getting their weather from television. -- verizon says people. we will find out. olivia: a very punchy move. betty: the weather affects everybody. when you have nothing to talk about, you talk about the weather. kevin: mainly moan, complain. olivia: is that a holy grail for

advertising? kevin: it is. they've got themselves so geared that store by store they are moving -- that is done through the weather channel. i'm astonished that verizon took that view. olivia: thank you so much. looking forward to that interview. betty liu will be joined by alan greenspan. this is "bloomberg surveillance ." ♪

tom: good morning, everyone. it is a gorgeous morning. let's get to our top headlines. olivia: a manhunt in progress in missouri. please looking for suspects in the shootings of two police officers in ferguson. a new turn in the government's investigation of herbalife. bill ackman has made a big bet against the company. the fbi wants to know now if acumen or people working for him try two-minute relator blackstock. -- ackman or people working for him tried to manipulate

herbalife stock. russian central-bank announcing it is lowering its key interest rate to 14%. the move comes as inflation stabilizes and moscow tries to boost an economy crippled by low oil prices and sanctions. prosecutors plan to convict oscar pistorius of murder. he was already in prison on a lesser charge. the pfizer ceo got a big paper used in 2014. his compensation dropped 23% -- jumped 23%. nothing succeeds like success for disney.

tom:>> ♪ i don't care what they're going to say ♪ tom: the shoe never fit anyway. olivia: that is cinderella. disney is planning to release a sequel to "frozen." disney shares sitting at an all-time high. will you sing "let go?"" tom: the shoe never bothered me anyway. many will say a great mystery is what about marketing. he cut 50% of his ad budget. kevin roberts suggests marketing is dead. where did this come from?

what is marketing? kevin: there are different definitions. peter said it was about creating -- the performance, the pricing of this kind of stuff. building a brand. tom: building a brand. kevin: there you go. that is dead as a doornail. building a brand is not enough. you have to create a movement. olivia: how do you create a movement? kevin: go talk to steve jobs because he did. you add mystery, sensuality and intimacy. you don't learn a lot of those at nbat mba school. tom: you represent cadillac? cadillac is going to move to new york. they need marketing to rebrand

branding cadillac. kevin: they cannot rebrand cadillac. they had to create a movement behind detroit, behind america. if you see the stuff they are doing, they are trying to create a movement. they are about a purpose bigger than the brand. olivia: they are not doing any advertising. kevin: they don't have to anymore. the movement now is -- fantastic. you want to be part of the uber movement? what is the brand? olivia: i've been struck by these new android commercials. look at that. i love this. try to take a page from steve jobs's book. be together, not the same. how does that stack up?

kevin: desperate. it is a try hard -- use animals, use babies. tom: 2015, young up-and-coming -- is there a place for a peggy olson anymore and advertising -- in advertising? kevin: 65% of our people are females. they are all ambitious and taking charge. tom: it's an entirely new formula. kevin: they take it to a new level. tom: go on twitter or facebook? kevin: go where the people are. the consumer is the boss. people have all the power now. tom: how do you watch the super bowl? kevin: as far away as possible. olivia: we had tim armstrong and

he was saying 4% of all advertising is done by computers. can computers get it done? can they create movements? kevin: no. it is all iq. you have to add the ideas creativity, how you communicate with consumers is what has changed. you don't tell. tom: what does bloomberg do? how do you handle a global brand like bloomberg? within that shameless plug, how do you leverage that? kevin: through your personalities and the emotion. tom: bowties is the answer right? olivia: he has those.

josh: i like this point about iq versus eq. how much can you plan in this new world? you can design something before hand or you have to put out lots of different things and see what swims and then expand that? kevin: the answer is the second. no plan today. you don't have plan a and plan b. tom: where are you in five years? i'm fascinated by where -- kevin: the companies that win will be those companies that have iq, eq, t q vq, powered by cq. smart people, iq. t q come on top of technology. bq bloody quick. all powered by cq, creativity.

that's what bloomberg needs to be. olivia: and they are. tom: i was thinking dq. we should make a trip to dairy queen. olivia: time for the agenda. cinderella hitting theaters today. move over elsa. kate blanchette playing the evil stepmother. is there the same brand power behind a live action movie? kevin: not for kids, no. disney were caught -- there is no great strategy behind frozen. they were bewildered. they were way late on the merchandising and music and way too late on the sequel. for kids, the magic of disney is the dreams and that his

cartoons. tom: i cannot wait to see it. the casting is brilliant. also, the casting at the federal reserve. kate blanchette will be playing janet yellen. this meeting has snuck up on us and it is a big deal. josh: it may have snuck up on you but for economists, this is one of the most long-term anticipated meetings. it's not a burning fever right now -- tom: can it move the market quickly? josh: it could. there are expectations that the fed will make some changes. olivia: you know who i could see playing yellen? helen mirren. tom: she only plays world two. wait, janet is a royalty. olivia: bill ackman -- the fbi investigating whether he himself

tried to manipulate herbalife stock. catch the interview right here on bloomberg television on "market makers or go have a greats." have a great weekend. ♪

betty: good morning. it is friday the 13th. we are live from bloomberg world headquarters. i am betty liu. your nine minutes away from the

opening bell. have a great lineup for you. we are forecasting the economy and forecasting the weather -- two different things that affect every american. former federal chair alan greenspan joining me in a few moments on why spending is stuck and why we keep adding hundreds of thousands of jobs. plus, the skies cleared up. the activist ceo is taking over from the weather channel on verizon files. it was announced this week. is it true that americans do not need the weather on tv as much as that used to? then, i will speak with senator ron johnson who was one of the 47 senators who signed the letter to iran's leader undermining obama's policy on a nuclear agreement. we will find out how he can defend that letter. first, a check at the top stories. the price of oil skidding to a fourth weekly decline. a