oil and gold surge. secretary kerry is in switzerland in search of a framework deal with iran. the mystery deepens over the crash of germanwings 9525, a pilot was alone in the cockpit. severe thunderstorms. there is a new hurricane. good morning, everyone. this is "bloomberg surveillance ." impact thursday, march 26 -- a packed thursday, march 26th. olivia: new questions about the mysterious plane crash in france. according to reports, one of the pilots was locked out. there has been no confirmation of the story. french officials have said it may take months to analyze the data from the cockpit recorders. the flight made a plunge from

30th thousand feet, crashing into the french alps. saudi arabia and its allies have begun bombing strikes in yemen overnight. the rebels are backed by iran and the saudis want to stop the spread of iranian influence on its southern border. the u.s. has offered logistical and intelligence support. saudi arabia's ambassador to the u.s. outlined the goal of the attacks. >> we will do whatever it takes to protect the legitimate government of yemen from falling and facing dangers from an outside militia. olivia: oil has been surging on news of the saudi attacks. oil is on track for its biggest five-day rally since 2011. west texas intermediate is over $51 per barrel. secretary of state john kerry is back in switzerland to read soon

-- resume negotiation. one american official said the u.s. can now see a path forward to an agreement. secretary kerry: anybody standing up in opposition to this has an obligation to stand up and put a viable, realistic alternative on the table. i have yet to see anybody do that. so, we will see where we go. olivia: the u.s. and five other countries want to keep iran from building nuclear weapons. iran wants an end to economic sanctions. brendan: the u.s. is stepping in into crete. -- in tikrit. the assault has bogged down. the u.s. is in on a knowledged partner of iran. schlumberger will pay the

largest criminal fine in a sanctions case. they agreed to plead guilty to charges that it violated u.s. sanctions against trading with iran and sudan. march madness resumes tonight. we are down to the final sweet 16. tom: yes! brendan: that is the wildcats practicing yesterday in cleveland. that is tom yelling in the background. xavier plays arizona. those are your top headlines. tom: i am whipping my children in my bracket. whipping them. killing them. it looks good tonight. 9:00, kentucky. brendan: you are cleaning up in your bracket. tom: it is an investment attitude. i know nothing about the ncaa. what i do know is any to spend more time on the data check and less on the mac monitor.

the euro is decisively through 1.10. crude is up a number of dollars. i don't want to overplay this. on to our second screen. the vix will be much more elevated. yen is a big deal. we blow through 119. stronger yen. that is a big deal. brent is migrating in the vicinity of $60 per barrel. you can see the nine dollar differential to west texas intermediate. on to some smart market talk. here is kellogg. this is 30 years ago. i bought it at $53 per share, put in $10,000, my split-adjusted. my $10,000 is worth $201,000.

dividends matter. brendan: i mean, it is sort of arbitrary. why did you pick 1985? tom: i picked a round number that is longer than most analysis. 30 years. twenty-year numbers or tenure numbers are not as dramatic. -- 20 year numbers or 10 year numbers are not as dramatic. brendan: i would must argue that you need to look at that period in any stock and take a completely different look. tom: anywhere you look in any different industry, you will see a different view. we must move to paris. there is always mystery to a plane crash. more so if a plane goes down in clear weather. there is news overnight about germanwings. we go to paris.

greg, give us a color of the three nation coverage of this. how linked are they? what are they doing this morning with germany, spain, and france? >> well, the problems with people not working together is within france, it is not between the three nations. there has been this report overnight that the pilot that left the cabin and was locked out. the french investigators the air crash investigators are curious -- furious about this story because they have not completed their analysis of the tape of the pilot's conversations. the leak must've come out of the french criminal investigators. under the french napoleonic code , whenever there is an accident with deaths prosecutors open up an investigation, but it does not necessarily mean that there is anything criminal. it is an automatic thing.

it would be the u.s. equivalent of manslaughter. instantly, prosecutors are involved. the report seems to have come from them. the air crash people are furious about that. there is supposed to be a press conference by the prosecutor in marseille and this will clear up some of this. olivia: we look forward to the news conference. all attention is on the cockpit door. what have you learned in the past 24 hours? >> well, pilots to do leave their cockpits. they have certain bodily functions. to be straight to the point there is no toilet in the cockpit. they do leave. longer flights, they even take naps. cockpit doors, since 9/11, are locked. that is all we can say at this point. if we believe this report it

seems that one of the pilots left and could not get back in. why he could not get back in, we don't know. the doors are not simple doors like they used to be. that is really all we know, at this point. brendan: given the nature of this leak, is it fair to say that the information we know now is everything about the conversation between the pilot and the copilot? there is probably a whole lot more there. >> definitely. definitely. the tape of the pilots only got to paris yesterday morning. it was damaged. they had to do a fair amount of work to extract the memory chip. the air crash investigators at a press conference in paris and they do not want to go into any detail. they said they could hear voices. they would not even confirm if the voices were those of the pilots.

the pilots would have been talking in german. this is an investigation in france. it does add to the complications. the analysis of the recording of the pilots has not been complete. this report seems to have come out of the prosecutors are the french judicial arm, not the air crash investigators arm. i think everyone should back off a little bit before we know the full story. tom: right. thank you. let's look at the markets. moving this morning. greatly affected by the new slow -- the news flow from europe. i want to fold in kraft, heinz, and the rest of that. i know you don't comment on individual transactions. money costs nothing.

when does that and? >> in terms of the policy rate, it may end later this year. but when do we leave this policy of rates? slow global growth, a lack of supply and an utter lack of inflation. tom: the basic theme is that everybody has money up to their eyeballs. is that a correct statement? essentially everybody has money up to their eyeballs and that will drive more transactions. in your strategy world, everybody sits lower for longer on rates. >> there are a lot of people looking to deploy cash. the normal asset allocation whether as an insurance company or individual, no longer works. no one had plugged into their model an environment where rates were this low for this long. tom: clients have huge obligations.

what do you advise them to do? >> insurance is an interesting injury -- industry. it is regulated. their opportunity set is contained -- constrained. you have large institutions, including insurance companies that have a limited opportunity set for what they can buy. it comes down to what other asset classes can produce some income? brendan: for the insurers, you have a couple very good loss years and they are sitting all this cash. what you are looking at now is not in anybody's models -- we are almost in the same place we were in europe one year ago. every piece of bad news is a piece of good news. >> absolutely. wednesday rallying on the fed. you have not had the script that

people expected. the hope was that the youth economy takes off and that pushes the market higher. olivia: that was the investment thesis. we so weak durable goods orders last week. the nasdaq was off 2.4%. the dow was off 300 points. >> yes. biotech finally hit a wall. that took the wind out of the nasdaq. it has not played to script. the dollar has been too strong. everybody is relying on monetary stimulus to get the multiplier. olivia: indeed, we are relying on it for our news flow. [laughter] tom: kellogg's took $1.2 billion for rice crispies. olivia: i would rather be in allman's milk. -- almond milk.

coming up, we are looking at cheese and catch up -- ketchup. we will discuss. this is "bloomberg surveillance." we are streaming on your tablet your phone, and bloomberg.com. ♪

tom: good morning, everyone. let's get to some substantial top headlines. brendan: mystery surrounds the final moments of the germanwings crash on tuesday. it now seems one of the pilots was locked out of the cockpit. on the voice recorder, he can be heard attempting to get back in by attempting to break down the door.

the crash killed all 150 people on board. planes from saudi arabia and regional allies are bombing shiite rebels in yemen. the saudi's want to stop iranian influence on their southern border. one person is dead after a tornado hit oklahoma overnight. it happens near toll set. it injured -- it happens near tulsa. it injured a dozen people. the army sergeant who left his post in afghanistan is possibly facing life in prison. bowe bergdahl will be tried. the republican spending plan for the next fiscal year is headed to the senate. it passed easily in the house. it would repeal obamacare and make deep cuts in welfare, food stamps, and medicaid.

apple is changing its digital music strategy. the company plans to complete with spotify with a subscription streaming service being developed. apple bought beats nearly a year ago. olivia: still to come, we look at obama's middle east realignment. we go to the op-ed from "the wall street journal." after that we talk about when wages wrote rise. -- will rise. then we look at the new normal. rendon has a lightning single best chart. it is a word that puts fear into america's workers' hearts. synergy. how many color photocopies will 3g reject? how many jobs will they have to slash?

they are building it as a merger vehicle, but it is not one plus one equals two. >> they are going to be able to extract a huge amount from combining the two companies. the question is, how do they get there? there are some obvious cuts they need to do. they have similar ingredients. they can get some supply synergy. there are some more complicated synergies. olivia: what i am trying to say is the combined company is going to be smaller than the sum of the tubing parts -- two parts. >> a lot of the fat will be cut from kraft. that means job losses. we think there are going to be a lot of job losses. they are projecting the number

by 2017 and had cut reduction would be the fastest way to get there. olivia: warren buffett is moving away from being a value investor and getting into synergy and cost cutting behind 3g. >> he is letting someone else go in and do the dirty work for him, make the cuts, make the savings. is he doing this because he cannot find the value targets anymore? or is 3g just very, very smart? brendan: let's look at what private equity does. the standard template is you make a purchase, you make cuts, you larded up with debts -- larded up with debts you make a strategic purchase. >> they hold their companies for a long time. they don't do the traditional private equity thing.

they go in, they make substantial cuts, and they hold it as a highly sufficient business. in hines, they are doing a form of a nexen but they are still -- an exit but they are still holding their stake. the other thing that they do very differently is that they do these deals 121. they approach companies, they get the deal done. it is almost unheard of. olivia: ed hammond, thank you so much. we appreciate you covering the story. our twitter question of the day. should the u.s. get involved in yemen? this is "bloomberg surveillance." ♪

tom: it will rain. it is a beautiful new york city. it is a little damp. we look for ran across all of new york city. good morning, everyone. "bloomberg surveillance." we welcome all of you to our world headquarters. we welcome you to a morning must-read. olivia: my morning must-read comes from the "wall street journal." from a friend of "bloomberg surveillance." he is writing about president obama's middle east realignment. he makes a couple of points. number one, the u.s. pulling out of afghanistan.

the obama administration keeping largely silent about iran's power grab. and number three, the deterioration personally between president obama and benjamin netanyahu. why is it that you say your clients are not more concerned about what is going on in the middle east? >> because we are seeing oil down in the mid 40's and part of it is a function of the biggest concern back in january was oil going to low and the fear was a lot of borrowing by high-yield cap. if we got into a situation where oil was down in the mid-30's, you would likely see a rise in defaults by next year from energy borrowers and that might have been the biggest concern a couple of months ago. olivia: i feel like this is a major transformation of u.s. foreign-policy. brendan: it is on most like we are recognizing and putting words to what has been happening

for the last six years. there is a recognition to the limits of what we can do in the middle east and the transition is recognizing what is happening and adapting to it as it happens , rather than attempting to make history. olivia: tom, you said it is significant that secretary of state is speaking to his iranian counterpart this morning when the u.s. is bombing tikrit once again and saudi is going into yemen. our twitter question of the day. do you think that the u.s. should get involved in yemen? amid increasing signs that the government is collapsing there. ♪

tom: good morning, everyone. "bloomberg surveillance." our nations capital with three stories on iran. an eventful morning in yemen.

olivia: a stunning development overnight in the investigation of the german plane crash. evidence from the plane's blackbox indicate that one of the pilots was locked out of the cockpit and could not get back in. the pilot can be heard on the voice recorder trying to smash the door down. a 150 people on the plane were killed when it collided into the french alps. saudi arabia is leading the fight against shiite rebels in yemen. they bombed rebel installations overnight. the u.s. is providing logistical and intelligence support. earlier this week, the rebels forced yemen's president to flee. the saudi's accuse iran of instigating unrest. in switzerland, negotiators are hoping to conclude a political framework for an iran nuclear deal by this sunday. that is according to diplomats with direct knowledge of the talks. secretary of state john kerry

has returned to geneva to resume talks. one state department official says the u.s. sees a way to get an agreement, but it does not necessarily mean there will be a deal. brendan: facebook's messenger is getting a facelift. really, guys? you will be able to add photos and videos to your chat. the facebook developers conference happened and mark zuckerberg said there would be new messenger features for business. >> think about how useful it would be if you could just message about it and instantly get information about whatever you need make a reservation, buy something online, change shipping information in time. today, we are introducing a way for you to communicate to businesses right through messenger. brendan: take a look at this. a facebook drone with a wingspan of a boeing 767.

boeing is close to a $7.7 billion deal with one of china's biggest airlines. they are going to place an order for 30 of boeing's dreamliner's. in sports, pro football's most boring play is likely to be changed. nfl owners are likely to vote on proposed changes to the extra point. they may move the line of scrimmage back and place the ball closer for a two-point conversion or doing away with the extra point kick altogether. tom: very good. on the labor front, it is a good friday jobs report this month. we will be here to get all of the numbers on friday. the back story to a terrific job growth is a not so good story on structural shift in how americans are employed. the american job has changed and perhaps forever.

the chief investment strategist at black rock has put a lot of thought into this. why would a strategist want to look at the labor economy? >> obviously, the fed is paying increasing attention to the level of job creation and the level of wages. there is a silver lining to this. if you think about the stock market over the last six years it has been an immediate recovery. earnings have been phenomenal. the two big input costs for companies the cost of capital and the cost of labor, have been very muted and that has allowed profitability to stay high. tom: one of the great differences of opinion on "bloomberg surveillance" is the quality of the new jobs being created. what is the quality of the jobs being created? >> the composition has shifted. we have seen more of a move toward part-time jobs. the number of overall jobs has

beat the cree crisis -- precrisis peak. this is not just about the financial crisis. if you look at real wages for working age men back in the 1970's, this phenomenon has been going on for a long period of time. brendan: when we look at long-term secular changes to workforce participation, we have dramatically different trends for men and women. female workforce participation is leveling off. there are gender differences. >> there are. part of what is happening is the demographic shift. you have more people retiring. you also have a change were working age people drop out of the labor force and it becomes much more difficult for them to reenter. the spite the level of job creation, you have not seen the participation rate budget. tom: the history, as you just described, if you look at that does that bring down your terminal value of all of your investment strategy analysis?

do you go from the fed needing to drive a 3.5% target rate down to 2.75%? >> we are all sort of guessing. tom: it is an absolute mystery. >> i agree. tom: do we go back to our grandfathers economy? >> i don't think it is our grandfather's economy. in that you had much stronger middle-class wage growth. it is something quite different. tom: our grandparents are different ages. [laughter] tom: my grandfather was custer. olivia: oh boy. a lot of economists say productivity is a large input. you put out a note saying that we are ignoring the elephant in the room, ignoring low productivity. why does it matter? >> productivity is going to drive wage growth. productivity has been muted as it has been since before the financial crisis.

that is an environment where you expect wage growth to be slower. the optimistic viewpoint is look him up is harder to measure in the service economy versus 50 years ago when you just were looking at how many orders were coming out of a plant. the more challenging view is that we have a number of wonderful innovations and we are not moving the needle on productivity as much is they were 40 years ago. olivia: yes. there is a great piece out this morning from noah smith. robots, unions, and china. which one of those is a key reason? >> the robots. the unions, i would throw out. private unions have been on decline in the u.s.. olivia: he said the evidence falls on china. >> it is a combination of offshoring and technology. tom: i want to rip up the script. italy just sold a two-year peace for a record -- piece for a

record 0.16%. italy is at 0.16%. why doesn't mr. buffett take kraft-heinz -- brendan: why doesn't he just by italy? [laughter] tom: why don't they just take whatever they are going to buy next and refi it? >> this is why you are seeing this wave of buybacks. it is free to borrow money. tom: it is free to borrow money. this is record low italy two-year trading worse than japan. >> germany is up to eight years. olivia: negative. >> you have to pay for the privilege of loaning to the germans. tom: you should call and say, let's refine the whole thing -- refi the whole thing.

brendan: i wonder if i can call warren buffett about my mortgage? [laughter] olivia: coming up, the conversation continues. critically acclaimed sushi knock as i want -- nakazawa is one of the hardest restaurants to get into in new york city. i visited. ♪a few things were off-limits. >> i don't want you to touch my knife. ♪

tom: good morning, everyone. i am going to call it a moderating tape right now. the market is clearly on the move, with oil elevated. let's get to a stormy single best chart. brendan: no major hurricanes made landfall in the u.s. in 2014. that was the 90 or in a row. -- ninth year in a row. this chart comes from the world's largest reinsurer. losses from severe thunderstorms have been growing at a much faster rate than losses from any other weather event.

we are understanding a lot more about the meteorology of specific events of big thunderstorms. once that cause sale, once the generator nato's. we know a lot more than we used to -- ones that cause tornadoes, ones that cause hail. we know a lot more than we used to. there is a lot more insured value at stake. we used to focus on defining all of the events of a hurricane. insurers are switching to defining everything that goes on around a severe storm. we are looking at last year despite these losses, a comparatively good year for insurers. that means reinsurers are sitting on a lot of capital. >> i think that is the case. the problem for that industry is

that you are very constrained to where you can put it. you look at the bond market. brendan: what we're looking at right now is a severe tornado right outside of tulsa last night. this is part of the steady drumbeat of that news. olivia: i did hear that there is an unusually small amount of tornadoes so far this year. i am most interested in the issue of what value it has put in the path of the storm. is that the key driver? brendan: that is the key driver. i should point out that when we look at the bars increasing there is no direct correlation to climate change there. they are saying, let's forget about the debate over climate change and let's look at all of the value we are building all of the insured value we are building along coastlines, lung river edges -- along river edges

. we need to deal with the way we how we construct new projects. tom: let's go to top photos. olivia: number three, remember that world war ii bomb that we showed you earlier this week that was found in london? it was removed. it was excavated to a quarry in kent and there it was detonated. this is a picture of the controlled explosion by the british army. the blast was so big that it rattled houses and could be heard 10 miles away. brendan: the blitz is not completely over. amazing. tom: one of the most frightening books i have ever read about the battle of britain. it was a war. we think of it like rockets come of the smithsonian, down they come. it was a full scale war in

london that nobody talked about. olivia: that is one of the reasons why right in the heart of that city, they never reconstructed that church. tom: a lot of that is around our headquarters in london. olivia: our number two photo of the day special thanks to our photo editor for this shape to staying -- shape shifting frog that was discovered. it is a rain frog the size of a fingernail. it can morph skin texture from spiny to smooth in minutes. it likely help camouflage from predators. tom: it is the size of a fingernail. olivia: a fingernail. before this, we knew that cuttlefish and octopi did this. brendan: from smooth to spiky and back again. [laughter] olivia: tomorrow, we will bring

you the shape shifting tom keene. number one photo of the day. the pope is tech savvy. this is the pope's ipad. it is going on auction in uruguay. the institution is seeking $40,000. it comes with a certificate of authenticity. it is pretty cool that the pope is so tech savvy. it is probably old, though. brendan: it is an old model. he had this when he was in argentina? this is not one he had with him now in the vatican? olivia: either way, you go all the way on a pilgrimage to taste the holy water and it is kind of cool to have the ipad. brendan: we will turn anything into a relic. olivia: brendan said there is probably an app on that.

[laughter] olivia: still to come, we will go behind the scenes and one of new york's most celebrated restaurants. i even learned a thing or two about making sushi. >> much better. olivia: much better. >> you can't even tell the difference. [laughter] ♪

tom: good morning, everyone. futures -17. a bit of a rocky morning. brendan: we begin with the germanwings jet that crashed on tuesday in the french alps. there is deepening mystery. one of the plane's pilots was locked out of the cockpit. he can be heard trying to get back in by breaking down the door. the jet's plunge from 38,000 feet is unexplained. the crash killed all 150 people on board. saudi arabia and regional allies are bombing yemen. the saudi's want to stop iranian influence on their southern border. also on the bloomberg terminal the number of people seeking asylum around the globe is that

a 20 year high. the main reason is syria. 900,000 people asked for asylum in the developed world. 1/5 of them were from syria. roads are swamped and power was knocked out in chile. housing prices are rising much faster than wages. one reason, more investors are buying property as rental. americans are beating a path to the sunshine state. florida has six of the fastest-growing metro areas. a retirement community called the villages is in the top spot. florida is in the third place behind california and texas. olivia: still to come, the mystery deepens into the germanwings plane crash. saudi arabia and allies strike rebels in yemen.

brazil edges toward political chaos. we speak to the chief economist. rent hikes are driving new york city restaurants out of business. landmarks have shut their doors in the past year. even the restaurant openings are back to precrisis peaks, the number of closings doubled in 2014. possibly the hardest restaurant to get into in new york is a320 --sushi nakazawa. it is helmed by chef daisuke nakazawa. i had the privilege of apprenticing with him. >> thank you for having me. olivia: you have this incredible star chef. what matters more? the chef for the food? >> i think it is both.

it is the attitude of getting into the industry. the economics are the most important factor. the economics are one, but then implementing is the most important factor. olivia: what is the most ideal equation? >> rents are always fluctuating. they are going anywhere from 150 -- one at $50 per square foot -- $150 per square foot and up. when we are looking at a space and a concept, everything has to go hand-in-hand. brendan: this seems to be driving newer, more experimental restaurants out. >> correct. i think smith street is a perfect example. 10 years, you could have picked up anything for nothing.

you go there now and the area is much more trendy. your landlord, the person that is leasing the myspace is in business to make money. we can understand that. olivia: you have got one of six restaurants in new york city that has four stars from the new york times. your brother is making lasagna and meatballs and making a better margin. why are you in this business? >> i am passionate about what i do and it is not all about money, especially at sushi nakazawa. it is something that it wanted to execute. we work on a 10% profit margin. that is when you are dealing with high-end items, such as what we do. it goes forward. at the end of the day, all of the restaurants would like to work on more of a 20% profit margin. olivia: how difficult is it to get the ingredients you need? you are seeing chef daisuke nakazawa grading was sabe on

sharkskin -- wasabi on sharkskin. >> it has become harder because we are looking for the perfect product. what we do is we go directly to the fisherman. we don't have a little shop in the market that we are getting fish from. what we do now is that we travel to north carolina. we have been creating relationships directly with the fisherman and appears -- the peers. tom: the $12 martini has become the $19 martini. marlboro cigarettes do you reach a price ceiling where across the entire industry the audience says no? >> i think there is going to be a point. the perfect example would be sushi nakazawa.

we have been stable with our pricing. we have not moved. the reason why we are capable of doing that -- tom: the rest of the industry are they going to reach a ceiling of a $60 stake and a $90 martini? -- $60 steak and $19 martini? >> than you want to dinner. tom: will we migrate to >> -- >> then you won't have anyone going out to dinner. tom: will we migrate to queens? >> i think manhattan will be a museum in 20 years. tom: thank you. it is killing me. what percentage gross revenue do they take from the lease? >> every area is very, very much different. we have stores in the outer boroughs and stores in manhattan, but it varies. olivia: purveyor of sushi nakazawa thank you so much.

we all now expect to be able to get a reservation. >> anytime. olivia: thank you. [laughter] tom: yen is a fear factor across all the markets. stay with us. we have more on "bloomberg surveillance." ♪

tom: saudi arabiatom: leads tends sunni nations against dmn. -- against yemen. secretary kerry is in switzerland in search of a framework deal with iran. the mystery deepens over the crash -- a pilot was alone in the cockpit. brazil edges toward economic chaos. this is "bloomberg surveillance ." it is thursday, march 26. olivia: new questions this morning about the mysterious plane crash in france. one of the pilots had left the cockpit and was locked out. the pilot can be heard trying to break down the cockpit door. there has been no confirmation of the story. french officials have said it may take months to analyze the

data. it made an unexpected plunge from -- there has been a new turn in fighting in yemen. airstrikes on rebel positions. shiite rebels are backed by iran and the saudi's want to stop the spread of iranian influence. the u.s. has offered logistical and intelligence support. saudi arabia's ambassador outlined to the goals of the attacks. >> we will do whatever it takes to protect the legitimate government of yemen from falling. olivia: news of the saudi attacks at the price of oil surging. oil is now on track for its biggest five-day rally since 2011.

negotiators are hoping to have the political framework for a deal on iran's nuclear program by this sunday. that is according to diplomats with direct knowledge this morning. john kerry is back in switzerland. one american official said the u.s. side can now see a path over to an agreement. kerry had a response to critics of the potential deal. >> anybody standing up in opposition to this has an obligation to stand up and put a viable, realistic alternative on the table. i have yet to see anybody do that. we will see where we go. olivia: the u.s. and five other countries want to keep iran from building nuclear weapons. iran wants an end to economic sanctions. brendan: u.s. has now joined in on iraq's fight against islamic state in tikrit. iraq has been relying on iran to expel islamic state forces from

the city. the airstrikes make the u.s. and unannounced partner of iran. paying the largest criminal fine yet -- the unit of the oilfield services giant pled guilty. it is sweet 16 time in march madness. but road games tonight, four tomorrow -- four games tonight four tomorrow. notre dame place wichita state. wisconsin plays north carolina and xavier plays arizona. tom: it's an improved data check off two hours ago but really moving with the yemeni knowledge. the yen stronger as well.

futures at -16. we need to go to paris, the mystery of a plane crash in southern france. greg has been looking into this. what should we learn in this press conference that is coming up quite shortly? greg: hopefully, we will learn where this report comes from that one of the pilots was locked out of the cockpit and could not get back in. this did not come from the air crash investigators or the people analyzing the recordings. it seems to have come out of the french criminal investigators and they are holding a press conference within the next hour. hopefully we will get some details from them. brendan: what do we know so far about protocol for locking the cockpit and what was actually done on this flight? greg: as i said, there is

nothing official yet. from the report, the pilot left the cabin, leaving his fellow pilot in the cabin. i presume to go to the toilet. this was only a two hour flight or so. cockpits are locked. generally when -- one allows the pilot to return to the cockpit afterwards. he is heard knocking on the door and not being let back in and he tries to break down the door itself. cockpit doors are locked but there is a way -- they are allowed back in. brendan: at least somebody, a flight attendant stays in the cockpit with the copilot. do we have any indication out of

france whether that protocol was followed? greg: we don't. that isn't standard. a pilot is never left totally alone. -- that is standard. tom: thank you so much. with us this morning near the end of the first quarter bart chilton. most closely identified with the cftc, regulators of that commodity business. i want an update on new regulation. is it a brave new world? is dotted frank clinton --. frank doododd clicked in?

you get a coolness point for being able to go through the alphabet soup. four: only about 70% of the dodd frank rules have been implemented in the commodity space. tom: why is that? i get a lot of feedback that says. dodd frank is bad, it is limiting business. do you buy the political line of dodd frank on either side? bart: usually congress goes too far and it's up to the regulators to pull back somewhat and make some sense out of it. what happened with dodd frank was different. in order to pass something, it

had to make a broad and it left a lot of ambiguity to the regulators. regulators may not have actually got it right. in the next couple of years, you will see as the rest of the rules are completed -- olivia: which of the new commodities regulations do anticipate will actually be performed if any? bart: deals with end-users. there are speculative positions -- the people who use the physical. in the middle space, the mining industry alcoa. in the ad space -- energy companies and crude oil. those guys were never supposed

to be impacted in a negative way from speculative position limits. limits on how much of a commodity can hold. the agency can fix -- if they don't fix it, congress may come in and provide guidance. olivia:brendan: why is the rulemaking taking so long? bart: because they left the sole ambiguity -- in order to get support, they cannot be too specific. there was this whole area of financial industry that congress had no clue about, let alone some of the regulators. the ftc area. it is a problem but hopefully they will keep moving forward. tom: we have five regulatory groups. bart: i have always been opposed to that because i thought what would happen is the cftc would be best given the amount of volume traded in commodities --

tom: bart chilton with us. a lot to talk about, including the controversy over high-frequency trading. olivia: the conversation continues. more than a million brazilians took to the streets to make their disapproval of the president clear. we will discuss the president's role as the country's economy improves. we will be joined by the chief economist -- this is "bloomberg surveillance." we are streaming on your tablet your phone and bloomberg.com. ♪

tom: good morning, everyone. olivia sterns looks at iran. olivia: we are going to -- saudi arabia's allies have begun strikes on yemen. lynn, good morning. thank you for joining us. the u.s. papers are trying to make sense of this, trying to figure out whether this is a proxy war between saudi arabia

and iran. is it one? >> saudi arabia is acting because of an iranian threat in yemen. people say to me that saudi arabia would not let iran take control of the country. it was too close to their border. it's a more important issue to saudi arabia than even syria. the saudi's acted to prevent iran from having a greater influence in the southern arabian insula. olivia: why should we care about yemen? glenn: it straddles the southern arabian peninsula. it sits at a straight that runs into the red sea which is a major shipping lane. it borders saudi arabia. there's been instability in yemen.

a lawless state anywhere is negative for bordering countries. one like yemen where you have the al qaeda affiliates, it makes it even more dangerous. it's a security threat to saudi arabia and as the foreign minister says it's a threat to the region and the world. olivia: the headlines are truly incredible. we've heard the sunni president fled -- the base of the u.s. was overrun. all scary stuff. what is the u.s. role at this point? glen: my conversations today suggest that the americans on some level are supportive of the saudi role in hyemen as long

as it leads to a political process in the country. there's been statements about a joint communication scell. this is a saudi operation. olivia: thank you so much for joining us. our twitter question of the day, should the u.s. get involved in yemen? ♪

tom: good morning everyone. a bit of fear in the market. a risk this morning. olivia: mystery surrounds the final moments of the germanwings jet that crashed tuesday. one of the pilots was locked out of the cockpit. he can be heard at trying to get back in by breaking down the

door. the jet plunged from 38,000 feet. the crash killed all 150 people on board. planes from saudi arabia bombing shiite rebels in yemen. rebels hold major cities and forced the president to flee. one person is dead after a tornado hit oklahoma overnight. this afternoon. . -- this happened near tulsa. another touchdown in northwest arkansas. -- touched down in northwest arkansas. post rules would stop triple digit interest rates to protect people from huge debt. lenders would have to make sure borrowers have the ability to repay. facing the possibility of life in prison -- bowe bergdahl will be charged with desertion.

he was held five years by the taliban. apple is revamping a strategy on digital music. the company plans sweeping changes, including an enhanced itunes radio that would compete with spotify. apple is developing the streaming service with beats engineers and executives. tom: a huge deal. trent resinznor is working on this. i'm a huge trent reznor fan. olivia: we will focus on the iran nuclear talks. brendan: brazil publishes its

fourth-quarter numbers tomorrow. economists have gdp growth at -.4%. in the last week, we have seen people on the streets in cities all over brazil. who was on the streets and what does that mean for joaquim levy moving forward -- dilma rousseff moving forward? >> they are now concerned the policies will lead to loss of income, loss of employment and the corruption allegations. brendan: there are two different groups of people dissatisfied right now. the people who did not like her to begin with and the people who voted for her are dissatisfied now. why? >> she needed to change her

policies. she promised she would keep the subsidies, keep all the benefits and that was not realistic. now that the election is over you have to do the justice -- there is a fiscal adjustment electricity hikes prices interest rates going up everything becoming more real and people are disappointed. brendan: the changes she made with joaquim levy those are good things they needed to do. >> you need the adjustments in order to make the economy recover. however, when you do these adjustments, they are painful and people don't like to pay the price for the future. brendan: i suggested to our bureau chief -- she described

what is going on in brazil is you have for problems that brazil has never been able to solve. like a been to structure corruption -- lack of infrastructure corruption high taxes -- is there any evidence that brazil is any closer to tackling any of these problems? >> we are now in the middle of corruption allegations. last time we had the corruption investigations, people went to jail, even politicians. at the end of the line, the country will be better, there will be more discipline. it is a painful process and people are upset right now. brendan: there is a spark of hope that there is an investigation happening. olivia: the judge was seen driving his porsche. is that correct? have there is the judiciary system in brazil? >> the corruption allegation --

a prosecutor that is not linked to the state. olivia: is the court system clean in brazil? >> mainly, yes. he was ousted after this was revealed. olivia: will we be having this conversation if the price of oil had not collapsed? >> maybe not. brendan: a lot of economists look to latin americans have chile did all the right things in the last 10 years. why has brazil found that so difficult to make those changes? >> one thing brazil did was -- it improved quite a bit but did not invest enough. you need to do it. now, it's a difficult moment to do it. brendan: thank you so much.

olivia: our twitter question of the day saudi arabia is leading airstrikes in yemen. what you think, should the u.s. get involved in yemen? ♪

tom: you did not own kraft. a look at kellogg's going back 30 years. dividends can really work for you. your total return, 10.9% per

year. you bought it at $53 a share. he turned $10,000 into $200,000. brendan: he is looking at the middle of the grocery store. you walk around the edge, all sorts of things have happened in produce. in the middle, these things have been the same for decades. tom: i hated rice crispies. brendan: we were not allowed to have lucky charms. now, i eat them every morning. tom: cereals are troubled. what was your favorite as a kid? bart: rice crispies also. tom: we can all be a warren

buffett if we pay the dividends. olivia: the packaged food is still 80% of the u.s. food -- tom: there has been a lot of good reporting on this. 700 basis points pick up. 70 basis points on gross margin. it gets to a financial performance. olivia: my money on almond milk. a stunning turn of events in the investigation of the german plane crash. evidence from the black box indicate one of the pilots was locked out of the cockpit and could not get back in. the pilot can be heard trying to smash the door in. all 150 people on board were killed. saudi arabia leading the way in the fight against shia rebels in yemen. u.s. is providing logistical and

intelligence support. the rebels forced yemen's president to flee. the saudi's accuse iran of instigating the current unrest. negotiators in switzerland hoping to get the framework for an iran deal done. john kerry has returned to resume negotiations with iran's foreign minister. when state department official says the u.s. sees a way to get an agreement but that does not mean there will be a deal. olivia: you will be able to add photos and videos to your online chats on facebook. developers can add new features. mark zuckerberg also said there will be new messenger features for business. mark zuckerberg: think about how useful it would be if you could just message them and get information about whatever you need make a reservation, by something in line, change

shipping information and time. we are introducing a way to communicate with businesses through messenger. brendan: a facebook drawn with a wingspan of a boeing 767. they will be minute access down from drones like this -- beam internet access down from drones like this. the centers for disease control a $60 million campaign aimed at helping workers quit. electronic cigarette space none of the restrictions that kept cigarette ads on tv for more than four decades. pro football, is there anything more predictable than the extra point? that may change next season. nfl team owners are likely to vote on post changes to the extra point. moving the line of scrimmage back placing the ball closer for a two-point conversion or

doing away with the extra point altogether. tom: they should change it but not give up the thrill of that variable after a six-point touchdown. olivia: brendan: brendan: move it back. olivia: why does this matter? tom: for the excitement of the game. the kick is boring. olivia: because everybody always makes it. tom: hockey is doing the same thing. the shootout was a failure. olivia: a terrible way to end the world cup. brendan: everybody wants more excitement for more viewers. olivia: fascinating. tom: we did not mention my bracket. i will do the data check -- euro-dollar 110.

the 10 year yield at 1.91. the fear of the morning -- american crude at 51 a barrel. olivia: good morning. this is "bloomberg surveillance ." sunday is the deadline to reach an agreement on key issues of the nuclear deal with iran. john kerry is there meeting with his iranian counterpart. the u.s. has just begun airstrikes in tikrit. peter cook joins us from d.c. to help us connect the dots. we have a preliminary deadline. what progress has been made? peter: we should read this as the opportunity for progress.

until john kerry leaves these meetings today, we won't have a clear picture as to whether or not a deal can be reached. everything is pointing to the possibility, the prospect for a deal. there is a path to a deal, a framework deal by the end of march but still unclear whether the agreement can be reached. clearly, there are some differences out there even some tactical differences among the nations negotiating with iran. the end goal is still the same. they want something in place by tuesday. olivia: we are talking about a nuclear deal in switzerland. we have all sorts of other developments. they all involve u.s. allies and iran. is it a larger -- peter: the u.s. can be at the negotiating table in switzerland with the iranians and at the

same time backing the saudi's with intelligence support for their airstrikes in yemen. i don't know if we can have a full-fledged -- you had the added complication of what's happening in iraq right now. u.s. forces with the same goal as those shiite militias in tik rit. showing the iraqis they can be their benefactor. this is a competition situation but not a full-fledged the top -- these nuclear attacks are ongoing. it's a couple getting factor but shows you there are multiple tracks. olivia: in yemen the u.s. is backing the saudi's. we are on the opposite side in iraq. the iranians did the groundwork in tikirrit.

what are you hearing and watching about president obama's priorities and strategies in iraq right now? peter: this came at the request of the iraqi president. this is not being coordinated with the iranians or the shiite militias on the ground. this is an effort, the u.s. coordinating with the iraqi army , an effort from a u.s. perspective to reinsert itself in the fight for tikirrit. the reality is the are both going for the same goal here, to take on the islamic state. the criticism from republicans is this is only adding to iran's influence in the region. we have part children with us --

olivia: we have part children with us. -- bart chilton. bart: i'm wondering how you think this will impact oil prices in general. we've seen that big five dollar raise in the last couple of days. you think it will continue? peter: if there is an iranian nuclear deal and the framework is announced you could see a situation where we have these conflict zones in yemen and yet we have perhaps beginnings of a deal with iran. it tells me there is a lot to keep oil traders up at night. perhaps opportunities as well. olivia: thank you so much.

so many moving parts. as we go to the break, our twitter question of the day what do you think, should the u.s. get involved in yemen? ♪

olivia: you are looking at live

pictures from new york city. it is sunny here on set and we will be talking about holiday cruises and. a rough seas for the cruise ships. betty liu sat down for a special titans of the table profiling two of the biggest players in the industry. very cool stuff here. what is your take away? betty: this has been one of the most mulch was moments -- tumultuous moments for the cruise industry. over the last 18-24 months -- that is the world caribbean ship

-- royal caribbean ship. they are piling in billions of dollars in order to tell people it's ok to cruise again. that has been one of the biggest issues, people say is cruising safe anymore. they are fighting this whole impression that the only people who cruise are over 50 retirees , your grandmother, olivia. the ceo of carnival said that there are these wrong impressions of the cruise industry and he is trying to change that. >> 99% of everyone that cruises has a great time. that doesn't make the headlines. how many people are stuck on the runways on airplanes and take off? how many times do they have a

traffic jam they are stuck in on the highway? the concordia was an accident, a tragedy that happens once in 100 years. betty: when do you hear about the traffic? of course. the remarkable number of them over the last several years is what got people worried about the cruise industry and this what they are trying to do to make that come back. olivia: what is going on overall? why are you floating in a zero gravity tunnel or driving bumper cars? betty: that might get you to buy a ticket on the next cruise. royal caribbean just launched the quantum of the seas late last year. bumper cars, skied rising -- skydiving. these are ways they hope will get younger people to come on board. the quantum is sailing here for

the moment -- they will be docked in shanghai, the next growth market china. olivia: really looking forward to your special. betty: titans at the table cruising the high seas. olivia: if you've ever thought about a cruise you have to watch the special. a quick twitter question of the day. should the u.s. get involved in yemen? ♪

tom: good morning, everyone. breaking news. french prosecutor speaking and these are stunning headlines. 30 headlines out, all of them painful. brendan: the french prosecutor says the copilot appears to have refused to open the door. there is a conference that press conference going on as we speak. the copilot seems to have sought to destroy the plane. olivia: the dissent could have only been voluntary. brendan: the prosecutor's office

-- you have an accident investigation and potential criminal investigation. these headlines are coming from the criminal investigator, the prosecutor's office. olivia: they have started the process of identifying bodies. the second black box has not yet been found. truly incredible that clearly investigators are pointing to deliberate -- tom: the egyptair crash in 1989. anybody reading these headlines has to go back to that horrific egyptair crash 15 years ago. brendan: the commander leaves the cockpit, asks the copilot to take command. he asks the copilot to open the door and the copilot refuses. the copilot started the flight

monitoring system for di escent. as he was descending, the commander of the plane locked outside of the cap bit -- cockpit was trying to get in. tom: there are those copilot's -- two pilots. the differential here this is not a long-distance flight. brendan: there were protocols put in place after september 11 -- the cockpit was locked hard and there was a protocol to make sure that nobody had the key outside, you could not get in and out the flight attendant had to block access to the door.

there is a way around these protocols. the copilot wishes to crash the airplane -- olivia: there was the assumption that no pilot would be deliberately trying to take the plane down. brendan: we are making a guess here. we don't know that he deliberately wanted to crash the plane. he refused to allow the commander back into the top pilot and decide -- into the cockpit. tom: appears is the operative word here. this is from the french government with appears being the operative word. brendan: the flow of headlines is incredibly dramatic. tom: the headlines as the press conference continues. let us continue as we look at something more basic

investment. what to do after public service. michael lewis knows high-frequency trading -- they have hired our guest host, a policy advisor. bart chilton has decades of experience including distinction of being knowledgeable about what people are doing and trading. let's listen in on speeding trading -- speedy training. >> work for the other side. it's a revolving door. we can argue about whether that is a good thing or not. here is the important point -- high-frequency traders do not have the speed advantage. they cannot exploit ordinary investors in the way they can in the broader market. hft are half of all trades in the broader market. in a fair market, what

percentage of the trades are they? you eliminate these advantages -- tom: they disappear away. >> they don't disappear entirely. they level the playing field. the answer is 20%. that gives you an idea of the volume of trading going on in the broader market. tom: michael lewis goes after bart chilton. he was gracious to you in our discussion. who do you represent? bart: first of all, i'm not a registered lobbyist. tom: what do you do? bart: i advise on strategy and tactics for a group of high-frequency traders that call themselves the modern markets initiative. tom: mr. lewis's distinction is

the percent of trading harming the market. we are arguing 50% or 70%. does he have justification to say that hft is still in treating unfair pricing -- intruding on fair pricing? bart: the more liquidity, the smarter trading you have -- my concern has always been as a regulator and now that we need to win sure there are appropriate safeguards. -- to ensure there are appropriate safeguards. tom: a geographic boundary that would allow a level playing field to the benefit of hft? bart: it's something exchanges can do. fine. they still rely -- all of these exchanges rely upon hft's for liquidity. tom: why not have a delay

regulated by guys like you that levels the playing field so we get trust back into our markets? bart: people can do that. it would not be a bad thing for one exchange to do it or another. in germany they talked about slowing down to her three times -- it's how quickly and how smartly they react. i give you something and you react quickly -- if you react wrong, that's not good for your business. tom: we have to go back to this important news. you've been following this -- olivia: a news conference going on about the crash of the german wings flight in france. the prosecutor sing the copilot appears to have refused to open the door seems to have sought to destroy the plane.

the copilot was a german citizen. he appears to have wanted to bring down the plane. it could have only been volunteary. the copilot could be heard breathing. brendan: this is a criminal investigation into different countries. -- in two different countries. you have public prosecutors into different countries sharing this information -- in two different countries sharing this information. the copilot was breathing normally until the moment of the crash. olivia: they have 30 minutes of transcripts from this first black box. the second black box has yet to be found. the descent was intentional. tom: this is not the first time

this has occurred. it occurred in 1999 with egyptair. to get the trust back in, you wonder how the professionals will adapt and adjust over the coming years. brendan: every new detail we are learning seems to point towards the conclusion of the french prosecutor that this was intentional. there is a small handle you can reach from the copilot and pilot seat that will open the door. you can make that decision without leaving the controls. there is a handle within the cop cockpit that the pilot and copilot can reach that will open the door. it seems to have been a conscious decision to keep the pilot out of the cockpit. tom: we will have much more on

this in the press conference continuing in -- bart chilton, thanks for being with us today. futures at -15. betty liu is next. good morning. ♪

betty: good morning. it is thursday, march 26. we are life from bloomberg headquarters. we are 90 minutes away from the opening bell.

we debate whether rising interest rates can hurt the six-year bull run. it has not heard this company, paychecks, the stock on a huge run. we will talk to the ceo. the renovation of wall street continues. one luxury mall opening today just across the street from the world trade center. the small has had its share of controversy. one of the key leaders in this project joins me in just a few moments. tonight is the big premiere of titans at the table cruising the high seas. credit: royal caribbean -- carnival and royal caribbean vying for your next vacation. the two cruise liners say it is time to climb aboard again. if you can't do it, the chinese will fill that gap for you.