iran. we are in a new era. the west is running out of water . and cable tv hits a zero-sum wall. they are pricing america out of the market. good morning, everyone. this is "bloomberg surveillance ." it is thursday, april 2. i'm tom keene. joining me, olivia sterns in brendan greeley. let's get straight to top headlines. olivia: there may be a deal in nuclear talks after an all-night session, the iranians say there is still no agreement at this hour, even after president obama told negotiators to ignore last night's deadline. the two sides may release a statement that falls short of the desired blueprint. >> iran has exhibited and shown its readiness to engage with dignity, and it is time for our negotiation party to seize the

moment. olivia: the u.s. and other world powers want to keep iran from building a nuclear weapon. in exchange, iran wants an end to economic sanctions. the ecb wants to make sure greek banks have enough liquidity to operate. at the same time, it does not want the banks helping to finance the greek budget deficit. the greek prime minister heads to moscow to meet with vladimir putin next week. he may be doing this to pressure leaders who do not want to -- for the first time ever, california is imposing mandatory water restrictions to fight very severe drought. governor jerry brown has ordered local water supply agencies to cut back use by 25%. those cuts affect everything from homes to businesses to golf

courses. california is in the fourth year of this drought or it it got worse because of record low snowfall. brendan: controversial laws critics say would disseminate against gays in indiana. the indianapolis star says it would say the law could not be used as a defense for discriminating based on sexual orientation. in arkansas, governor asa hutchinson says he will not sign the bill until the exchange. senator robert menendez says prosecutors are dead wrong and is vowing to fight federal corruption charges. he is accused of advancing a personal and financial interest of a longtime friend in exchange for free travel, other benefits, and political donations. menendez says he is angry. >> i am angry and ready to fight because today contradicts my public service career and my entire life. i am angry because prosecutors

at the justice department do not know the difference between friendship and corruption. brendan: menendez says he will stay in office. he will temporarily step down as the senior democrat on the foreign relations committee. he is the 12th senator ever to be indicted while in office. every in b is expanding to cuba -- air be in b is expanding to cuba. it says cuba may become one of the biggest markets in latin america. those are your top headlines. tom: let's get a data check here. there are interesting news -- there is interesting news in the markets. the euro turns at 108.26. to the second board -- the vix closing at 15.11. german yields this morning --

the greece spread is not out to recent record wide, but that is well worth watching 11.73. the difference in yield between greece and germany. iron ore making -- this shows a percentage change. brendan, i have never seen this curve, this quadratic iron ore featured in europe. but this is really something. brendan: i am not a commodities trader, but iron does not follow the same laws of supply and demand. it is very hard to cut back on production. you have iron producers mining operations, throwing more product into the mall of this drop. iron ore -- olivia: iron ore counts for 20%

-- counts for 4% of its gdp. tom: there is no future. brendan: when we talk about iron ore, is this simply a proxy for china? tom: i am not willing to go there. but there is a big but there -- a nuanced discussion other than price talks. this is off the cliff. brendan: nothing makes tom happier than when he can say "this is on a log chart." tom: i cannot. we have differential equation april for you, olivia. enough maps. let's get back to the important discussions in switzerland. it is in the vicinity of a 19th round of discussions. the late-night talks with iran in lausanne continue. we see clarity from our chief

washington correspondent, peter cook. peter, on and on. how do we gracefully end the talks if there is no end to the talks? peter: one of the goals for the u.s. side is if the talks do have to come to an end, if the iranians are blamed for a failure, that the u.s. did everything it could at the negotiating table to show flexibility. that is a key goal of the obama administration. but they still would like to see this come to a fruitful conclusion, which is why john kerry went back to the negotiations within the last hour or so in-laws and switzerland. -- in luzon, switzerland. there is the real possibility these will not end with the kind of success the administration was hoping for. certainly not the framework agreement they were hoping for in the first place. you could see perhaps enough progress made here that negotiations would continue toward the deadline. brendan: in all international

negotiations when they begin to break down, you can tell because sides are wildly starting to lay the groundwork to blame the other side. are you getting any actively on what might have gotten wrong from either side? peter: it is pretty clear that one of the key issues all along has been the pace of sanctions released. the united states, the p five plus one nations agreed that some sanctions we really -- that some sanctions relief would come, but exactly which sanctions would be eased and the timing of that has been a major sticking point. the arabians were calling for all of the u.n. sanctions to be eased right away -- the iranians were calling for all of the u.n. sections to be eased right away. it is sort of a nonstarter for a lot of the folks in the room, and you also have the eu and the u.s. sanctions, which are different.

u.s. sanctions being arguably the toughest of all. the europeans can telling -- the europeans continuing no swift access. the irradiance have said they have shown some flexibility. it is not clear -- the iranians have said they have shown some flexibility. it is not clear to the u.s. that that has happened. olivia: peter, what are the u.s. options if we do not get a deal? peter: to go back to the sanctions regime and to toughen the sanctions. that is something a lot of members of congress on both sides think should have happened in the first place. i would look first of all to see what is said about the july 1 deadline. is there some opportunity to continue negotiations? the joint plan of action that they committed to remains in place until that time, so there is nothing iranians can do in the meantime. that would give an opportunity for more negotiations, even if

things blow up today in loose sand, switzerland. -- in lausanne, switzerland. tom: this is an important conversation in this hour. it is a new quarter. we need to recalibrate. later in the hour we will talk with jeffrey rosenberg of blackrock. of course, where are we on april 2 yet i think it is time for a recalibration. what is different with jeff rosenberg now than 90 days ago? brendan: what is going on with interest rates, the collapse in interest rates. the big change is that the market is starting to look at the slowdown in economic data and ask questions about what it means in terms of fed policy. the one thing we want to be careful about is every quarter, every first quarter, second quarter, the first half of the year has been the week start.

the second half of the year has been much stronger. so right now the markets are questioning whether or not you will see that kind of recovery. right now the market is focused on this week or u.s. economic data. tom: the u.s. team did a great chart showing this first quarter distortion. this is not a good -- this is not a new thing. we have to get used to the idea that winter changes the economics and that things get better in april and may. jeffrey: typically economic data is seasonally adjusted. seasonal adjustment in the last five years have not been enough. you have had this persistence of different surprises. this year the story is different than last year. you have a little bit of weather, but this time you have the points shutdown and the oil price declining and leading to a big drop-off. jobs data is always critical and gets a huge amount of focus.

this time the issue will be that anything on the disappointment side gets more impact than anything on the strengthening side. tom: olivia, should we tell brendan that we are here tomorrow? i don't think we should. brendan: let me tell you something, brendan is aware that tom and olivia will be here and is not at all concerned that he will not be here. the big read today is looking at emerging-market debt. it refers to the great unraveling. is that -- is that what is going on right now? jeffrey: the great unraveling was about two years ago when you had about six years of piling into emerging-market debt and then during the temper tantrum of 2013 you had a big repricing. we have a lot more balanced view on emerging markets, our outlook

as well as the pricing you see on emerging markets. i think it is much more about the debate about how much of an impact emerging markets will face as the fed normalizes interest rates. the difference is you are starting at some valuation levels that are much less compressed than you had pre-2013. that was the great unraveling back then. olivia: with the jobs report tomorrow, what do you expect to see in terms of inflation? jeffrey: the inflation data, so we are clear, the data that people will focus on is wage inflation data. we expect to see some modest uptick. there will not be a breakout. the jobs report tomorrow is the potential that you have very strong data, persistent strong data that you get at this point. tom: would have come in -- we have come in at 184.67. olivia: when do you think wage

growth will catch up with job growth? we have a gdp of 4%. what is going on? tweet us here @bsurveillance. looking forward to it. stay tuned. "bloomberg surveillance" will be right back. ♪

tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines with brendan greeley. brendan: after an all-night session, iran has tempered expectations about the prospect for a deal. the u.s. and five other world powers want to stop iran from building a nuclear weapons.

in exchange, sanctions on iran would be lifted. and california orders mandatory water restrictions to fight the drought. governor jerry brown told water supply agencies to reduce use by one quarter. also on the bloomberg journal, can you think out show bob is behind -- thinks al shabab is behind an attack on a campus. facing up to 20 years behind bars, prosecutors said 11 are guilty. about 300 workers escaped some by leaping into the water. a state-run oil company says 16 were hurt, two seriously. the cover he says it prevented a major oil spill. some people have all the luck.

a british couple won the euro million lottery for a second time. tom: oh, come on. brendan: the odds of this happening, 283 billion to one. tom, those are top headlines. tom: black swan's jeff rosenberg, an important conversation coming up. and then brendan has a brilliant chart on cable companies. and chief executive officers again as social activists looking to arkansas and india as well. brendan: mcdonald's workers -- olivia: mcdonald's workers will soon be getting a raise. mcdonald's joins walmart, target, and t.j. maxx, who have all boosted wages for the lowest paid workers. but not everybody will be loving it. that is only about 10% of mcdonald's employees.

jennifer joins us now on the set. thank you so much for joining us this morning. is this about optics or economics? is this a reaction to the labor market tightening, or do they just need the good press? jennifer: it is a combination of both. mcdonald's has been under a lot of pressure to raise their wages. there have been strikes across the industry, but at the same time, at some point companies will raise wages when it is in their best interest to do so. to fight for the -- the fight for that entry level labor is getting more intense. with competitors such as walmart and t.j. maxx, hiring at the same entry-level point, it becomes more necessary for them to be more competitive as well. olivia: you need to pay people to serve the big mac with a smile. brendan: you do, and could this be a copout? do they have any leverage there? jennifer: it would be difficult for them to do. it would be very difficult. part of that is that the franchise contract enables them

to give them certain guidelines for operations, but mcdonald's has been very careful to say -- to stay independent from franchisee decisions about wages. you have seen a lot of lawsuits coming up where people want mcdonald's corporate to be responsible for the pay of their franchisees. i think they would be hesitant to enforce that with their franchisees. olivia: we are showing the average hourly salary for a fast food worker versus the cost of the big mac. jennifer, can mcdonald's employees afford to eat there? jennifer: if you think about it, they earn a little bit less than two big macs and hour. olivia: but it still works out to 20 grand a year. brendan: let me bring up a map that shows minimum wages across

the country. is it possible to describe in the last year a tipping point on wage movement in the service sector? jennifer: what is happening is that there is a tipping point where people are just not satisfied with not being able to live off their wages. especially malik -- especially metropolitan states like california, massachusetts, you see pressure at the state level to increase minimum wages and the restaurants have to abide by those changes. when mcdonald's says the bill will be a dollar over minimum wage, in some states that is seven dollars 25 cents, and in other states that is already over $10. there is a progression happening across the country. olivia: i would also point out that yesterday mcdonald's is getting downgraded by s&p from negative -- to negative from stable. there is a one third chance mcdonald's cannot improve sales growth. tom: one analyst says it is a

modern progressive burger company. tell me what that is. we have a modern progressive twitter question for you today. when will wage growth catch up with job growth? we will answer that tomorrow. good friday. olivia sterns is falling on the "surveillance" sword. she is with me tomorrow. jim glassman will be here, and we are thrilled to bill you -- to bring you alan krueger from princeton. we will do that tomorrow, 7:00 to 9:00. stay with us. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance" from new york city. olivia goes blogging. olivia: specifically, larry summers and ben bernanke. then bernanke, the former fed chair, he has a new blog with -- he writes, -- olivia: jeff rosenberg of blackrock, do we have secular stagnation? jeffrey: i am not in that camp. to broaden the conversation about the blog, it is much more about this wonky conversation. he opens up the blog with the question that is important to

most regular folks listening which is, why are interest rates so low? 's alternative view, he talks about in yesterday's blog, the global savings glut, and some relief from that view is that you could get more normalization interest rates than higher interest rates. olivia: i highly recommend to check out the back and forth between larry summers and ben bernanke. still to come on "bloomberg surveillance," investors are paying money to hold german debt. they have discussed safe havens with black swans. ♪

tom: good morning, everyone. "bloomberg surveillance." washington is looking beautiful. peter cook is monitoring what is going on in switzerland. he will join us in the next hour

as well. we need some top headlines this thursday. here is olivia sterns. olivia: diplomats talked all night but apparently were not able to resolve differences over iran's nuclear program. iran's foreign minister says there has been progress but no solutions yet. both sides may end up settling for a joint statement that is not the blueprint they had hoped for. the white house says talks will go on as long as there is movement. >> as long as we are in the position of convening serious talks that are making progress that we would not arbitrarily -- then we would not arbitrarily and abruptly end them to rebut we've we are in a situation where we sense that talks had stalled, then, yes, the u.s. and the international community is prepared to walk away. olivia: the u.s. and global powers want them to -- want to prevent iran from developing a nuclear bomb. and customers have been taking her money out of -- have been

taking their money out of greek banks pretty ecb wants to make sure that the banks have enough liquidity to operate. greek prime minister citrus heads to moscow -- greek prime minister tsipras heads to moscow next week. california is taking unprecedented steps in its fight against record-breaking drought. governor jerry brown has ordered mandatory water restrictions for the first time ever. local water boards will be told to cut water usage by 25%. brown says the time has passed for those steps. tom: the reality is that the climate is getting warmer, the weather is getting more extreme and unpredictable, and we have to become more resilient and in a fit -- and efficient and innovative. that is exactly what we're going to do.

olivia: the sierra nevada's snowpack is at its lowest level in 65 years of record-keeping. olivia:brendan: lawmakers in indiana and our guitar trying to reside a religious freedom bill -- are trying to re-vise a religious freedom bill. in arkansas, government agent -- governor asa hutchinson says he would not signed his own state's bill until it is revised or it commodities regulators are suing craft and mother lay -- and mondedle. mondelez is not commenting. kraft says it cover the allegations before the spinoff.

scotch -- i love scotch. exports globally of scotch whiskey fell for the -- fell by the largest margin in -- those are your top headlines. tom: this is what happens when you pick the news stories. brendan: i did not pick that news story. that is just a gift to me. thank you all. single malt scotch -- it is rising, but it is not rising as quickly as berman and irish risky -- and i wish -- such as bourbon and irish whiskey. tom: after two so-called black swans in one so-called decade we have lost our so-called collective confidence. jeffrey rosenberg sees a toxic through in europe that may signal a swan -- maybe not black , but some shade. i ended loved -- i loved your

note about exogenous shocks. jeffrey: we were talking about some of the headlines. the biggest one if we talk about outside shocks -- the obvious one is what is going on in greece and whether or not you will have a smooth transition there. greece is not the risk that it once was. there is a lot more resiliency built into the european market so it may not be the black swan shock but the question is whether or not there is too much complacency built into the economics market around some of those concerns. tom: what is the read of the banking system? jeffrey: you fundamentally have changed the banking system post financial crisis. it took much longer in the u.s. to do that. the regulatory environment is about raising the quantity and quality of capital. so you build the capital basis to create a greater cushion around any kind of asset systemic risk, to make sure that

the risks are absorbed all in -- are absorbedabable inside the balance sheet. brendan: the banks did not think about these kinds of tail risks and were not prepared to handle them. jeffrey: one of the classical problems is that they become very pro cyclical. one of the regulatory changes is to institute a countercyclical buffer. rather than having capital levels that go lower as your perceived risk goes down, you go the opposite way. you start to add more capital at the peak part of the credit cycle so that you are mitigating the potential for those model errors. brendan: is that a fancy way of saying we don't know what is going to happen? jeffrey: it is a fancy way of saying that we recognize we know the model air can become the problem itself, so we build that into the kind of buffers we put

into the financial system. it is an important evolution that helps to mitigate some of those risks. olivia: is this definition of blackrock something that -- of black swans something that we did not see coming? jeffrey: we spend so much time looking at the next potential black swan that we do not look at what just happened. that is not the way history works. i have this funny saying. it is from mark twain. "history doesn't repeat, but it rhymes." so you have these similarities. it is unlikely the next financial crisis will be centered in the financial system the way that the last one was. there are lots of other ways to see a financial crisis without it repeating from subprime housing or financial balance sheet. tom: one of the ways to see it is old world analysis. let's look at somebody else with a non-american framework. as the euro weakens, external

accounts in periphery countries' external accounts have swung from deficit to balance and increasingly to surplus. the ecb's monetary policy will take on an increasingly beggar thy neighbor cast, leading to trade and currency tensions with the united states and other trade partners." this really plays into the -- to what mario draghi wants. jeffrey: it does. the others have not been benefiting to the point, to the same degree. looking at aggregate data, you are seeing a big surplus coming on the heels of germany and german power exports. it is more the collapse of the import side. tom: i have the 10-year german

under .17%. can germany give up a german-centric view? jeffrey: i am not sure they will be able to give that up. they have an incentive to give up the view. olivia: can i ask you quickly about the u.s. economy? the atlanta fed wiping out their forecast for u.s. gdp in the first quarter. are we ignoring bad news in the markets right now? jeffrey: i do not think we are. we talked about why interest rates are 184 on the 10 year. we were at 225 on march 6 as we came out of a strong employment report, and we are a day before employment here today. the markets are catching up to a slowdown in economic data that his -- that has been highlighted or exacerbated by a dovish

perspective from the fed accumulated communications. janet yellen's speech last week has been more dovish, pushing back on interest rate expectations. q1 data has been looking in the rearview mirror. we look forward the data will turn around. but the markets are short-term in nature and they are reacting to that economic data. brendan: we will take that macroeconomic lens and apply it to telecom. now we are going to talk about poverty. that is our single best chart. this is "bloomberg surveillance" on bloomberg television, streaming on your tablet and your phone. ♪

tom: good morning, everyone. "bloomberg surveillance." we need a single best chart. here is brendan greeley. brendan: new pay-tv subscriber growth is stagnating. this may be more about economics than technology. that is the subject of today's single best chart. this comes from a long analysis by those socialists at moffett davidson. growth has to come from the fourth quintile. look at how much each quintile spells on telecom. in the lowest quintile, this is below $25,000.

you are spending between your cable and respond bill -- and your phone bill if you're paying it. tom: that is more than you spend on food. brendan: that is a huge percentage. when you have a company like comcast, that has what you could call a $4 billion hedge fund that it has started, one of the things it may need to look at, which is what moffett davidson is arguing, is that it may be charging too much to continue to grow. you have this problem as you look at wireless and wire. people are not buying both. they are thinking of the two as substitutable goods. it may be cheaper to have just a smart phone. tom: what is your prediction for 12 months from now, 60 months from now? brendan: they say they do not have a prediction. they said looking forward, poverty will be a problem for telecom through they said looking backwards, we have realized that we are right.

they have a message -- they have an average called arpu average revenue per user. this is not just a price through -- a price war. they will have to get cheaper. tom: what is scary is if you sit at the dining room table and get out a pencil and add up all this stuff, and any income level, it is bigger than food. it is not as big as your medical, but it is a huge monthly cost. brendan: "it is the very nature of high fixed cost telecommunications businesses that they require near ubiquitous service penetration." they cannot just pitch to the high end. they have to figure out a way to sell all the their products to everybody. tom: ok. fascinating. let's get to our photos right

now. olivia has some interesting photos. olivia: we start with number three, a special request from tom. drew miller of the red wings speaking after being struck in the face by an ice skate. every player's worst nightmare. tom: every parent's worst nightmare. this is why hockey has a strange energy. every second of the game -- if you have a 4-year-old or a 12-year-old on the ice, it is no different. it is like horseback riding and other sports like football. brendan: why don't they all agreed together to wear masks yak of the kids do, but why don't the adults? tom: eyeguards come down to about here, and they really help, particularly with the

puck. but this is an example -- as we go into the stanley cup finals -- of the immediacy of it. this is what happens, just totally random. olivia: he has 50 or 60 stitches. he still wants to play in the game against austin. tom: no doubt about it -- in the game against boston. tom: no doubt about it. tom:olivia: look at this. in spain, the world's most dangerous footpath, kings little path. it hangs 300 30 feet above water. it is nearly five miles long. it was closed after two fatal accident in 1999 and 2000. tom: that is the footpath? olivia: that is the footpath. tom: you are kidding me. we are not doing a remote. unbelievable. and now it is open again. olivia: are number one photo of

the day. it is easter this sunday. wouldn't you like a giant chocolate bar of benedict cumberbatch? 500 belgian chocolate bars were made -- were used to make this. it is six feet tall. the creation followed a national poll which named benedict cumberbatch as britain's diniest? brendan: his shorthand name in china is "curly blessing." olivia: his hair is not that curly. who knows? obviously the wax museums are a big hit, and now there is a giant chocolate benedict cumberbatch prince still to come, we are going to talk about more serious things. ceo's are taking a stand against indiana upon controversial law. we have that controvert that we have that conversation next.

-- we have that conversation next. ♪

tom: good morning, everyone. "bloomberg surveillance." we will be here tomorrow as

well, good friday. brendan: we begin with nuclear talks in switzerland. after an all-night session, the iranians say there is no agreement. the u.s. wants to keep iran from building a nuclear weapon. police and can you think al -- police in kenya think al shabab is behind an attack on a campus. also breaking news from yemen. 300 prisoners have escaped. the security official says qaeda militants stormed a jail and turned them loose. two guards and five inmates were killed. among those freed, a terrorist leader who had been held for four years. robert durst's attorney says his hotel room was searched illegally. he will face a weapons count. facebook is hoping that rif

becomes a verb. it allows a short clip -- a chain of short clips to be gathered on a single topic. "the wall street journal" says -- those are top headlines. tom: looking forward on "bloomberg surveillance" an important hour for you. we will talk about acquisitions particularly after the heinz-craft transaction. admiral's dubious -- admiral staff read this will join us. and the ecb minutes -- they do not call it the minutes but i will call it the minutes. they will put out there minutes. at 7:30. i have no clue if they are important, but they will probably use the words several,

many some. olivia: we are really excited. tom: several ministers said some of them, whatever. will it be a snooze fest? olivia: it might. how could it be a snooze-fest? we want to hear what mario draghi is going to do. ceo's are all taking a hard stance against religious freedom was in indiana and arkansas that they say discriminate. many issued a joint statement to lawmakers in response to the so-called anti-gay bill. we're joined by the newest member of the bloomberg family. this is pretty unprecedented for corporate ceos. you want someone to stay out of the political fraker why are they getting involved? >> it is not unprecedented. it is unusual. david rockefeller, when he was at chase, spoke often about apartheid, which was important then. if you look at the 1980's, the

first head of dupont, not a dupont, spoke out. it used to be that ceos would talk together and now they are doing it independently. a bunch of ceo's are based in silicon valley. they feel liberated to do that. so mark benioff, tim cook, they feel free to do that. brendan: for me this prize was walmart. you expect tech companies to do a certain thing, but walmart -- is it fair to say that that statement does not reflect arkansas values? does that shift the tight? david co it made -- david: it may be shifting the tide. i think part of the calculus is that there are going to be people that the ceo's upset, be

they employees or be they customers. olivia: we have a quote from tim cook. he says, -- olivia: sometimes, though, it can backfire. david: if you look more recently, the ceo john mackey who headed whole foods spoke out about health care. people were upset about that. certainly it can backfire. brendan: we all made fun of howard schultz for forcing his paresis to talk about raises. -- to talk about race. but it came from a good place which is internally he had conversations with employees and

realizes that that is something that the company was failing to do, was to talk about race within the company. is there a better way that he should have done that? are their employers who have handle that kind of activism well in the past? david: i think social media company at all of this and can be perilous. howard schultz is coming from a good place. if you look at howard schultz, something else he has been active on is encouraging his colleagues that are ceo's to hire veterans. he has been successful there. it has been a mixed bag for him, but it has worked out. olivia: and it looks like it has really worked. governor mike pence has changed his tune. david gura, thank you for joining us. tom: let's do the four x for you right now. the forex report, the euro has been a major story this morning.

jeff rosenberg of blackrock thank you so much. as we continue another hour of "bloomberg surveillance" tomorrow, jobs day, we will be here on good friday. stay with us. ♪

tom: is it possible secretary

kerry negotiates longer than president wilson in 1919? america goes in search of a treaty of versailles with iran. we are in a new europe, says governor jerry brown of california. the west is running out of water rid and money for nothing. can there be more meetings with heinz and kraft? this is "bloomberg surveillance ." we are live from our headquarters in new york. tom keene here it joining me olivia sterns and brendan greeley. here is olivia. olivia: iran is making it clear that the talks over its nuclear program may not result in a deal. there is still no agreement even after president obama told his negotiators to ignore last night's deadline. the two sides may only release a statement that all short of the desired blueprint. the iran foreign minister says his country has shown a

willingness to negotiate. >> iran has shown its readiness to engage with dignity, and it is time for our negotiating partners to seize the moment and use the opportunity, which may not be repeated. olivia: the u.s. and other world powers want to keep iran from developing a weapon. -- a nuclear weapon. the european central bank is boosting the amount of emergency funds for weak banks. the ecb wants to make sure the banks have enough liquidity to operate. at the same time, it does not want the banks helping to finance the greek budget deficit. the greek prime minister is heading to moscow next week. he may be doing this to pressure european leaders who do not want to give greece more bailout money until there is a more detailed proposal and economic reforms. telephone you has never done this to fight a drought. the state is imposing mandatory water restrictions. governor jerry brown has ordered

water supply agencies to cut back use by 25%, affecting everything from homes and businesses to golf courses. california is in its fourth year of a severe drought. it got worse because of record low snowfall. brendan: lawmakers in indiana and arkansas will be's rambling to revise controversial laws that critics say would allow discrimination against gays. legislators hope to have -- it was say the law cannot be used as a defense for discriminating based on sexual orientation. governor asa hutchinson of arkansas says he will not sign his state possibility until it is changed. senator robert menendez says he was doing favors for a friend. prosecutors see it another way. they call it corruption. he is accused of advancing the personal and financial interests of a long time friend in exchange for free travel and other benefits.

>> i am angry and ready to fight. because today contradicts my public service career and my entire life. i am angry because prosecutors at the justice department do not know the difference between friendship and corruption. brendan: menendez says he will stay in office. he will step down temporarily as the head democrat from the senate foreign relations committee. he is the 12th senator ever to be indicted while in office. airbnb is taking advantage of the thawing relationships between the u.s. and cuba are it airbnb says the island may become one of the biggest markets in latin america. in january, president obama loosened the restrictions on doing business in cuba. tom: where is this in one year or five or 10 years? brendan: airbnb is always

competing with existing infrastructure in hotels. there is no competing infrastructure. there are hotels in cuba, but it is not as developed as elsewhere. they are predicting that it will be their biggest market. tom: let's get a data check right now. equities, hans, community -- equities bonds, commodities. the 10-year grinds in -- we have seen that for 1, 2 3, eight days, whatever it is. crude gives back a little bit of the pop we saw yesterday as well. we are in the vicinity of the 19th round of discussions with iran. i am exhausted, you are exhausted. secretary kerry is getting a breath of fresh air, gazing out the window of his hotel. we go to peter cook in washington. what is the level of tension at the white house? peter: the level of tension at the white house is probably pretty high. the level of exhaustion in

switzerland is even higher. i am not on the scene, but the folks who are there are describing beleaguered negotiators looking tired, bleary-eyed, coming up with a framework political agreement not even the fine print, on a nuclear deal. it has gone into double overtime, suggesting how difficult it is and the possibility they may not get a successful conclusion. brendan: there was interesting analysis in "the new york times" saying that the u.s. was looking for verifiable details, while iran is looking to leave the negotiations with pride. are these competing narratives or competing details? peter: both countries have looked at this initial deadline differently from the start. the real deadline in the eyes of the iranians has been july 1. that is when the fine print has been required. that is the deadline that the

supreme leader in iran has talked about more specifically. to some extent, the iranians have suggested that the first deadline was created in the united states, that there is more pressure for the u.s. to come to the table and have something more successful in switzerland. this tells you that there is just as much significance to the iranians. the other negotiators alongside the united states they need to show something tangible or it will be a tough sell not only in iran but in washington. olivia: it appears that the key sticking point is the pace of sanctions relief for iran. remind us what it is that iran wants lifted. peter: you have to remember there are different sanctions from different sources. you have the u.s. sanctions that have been there since 1979. they want to see the u.n. sanctions rolled back specifically. most expressly in the u.n. sanctions, it has to do with proliferation of military arms

that sort of thing. they also want oil sanctions lifted. they need to generate more cash. they have $100 billion offshore right now, money they could use to prop up their economy. that is money that is owed to them from countries who have purchased oil from them in the past. tom: peter cook, thank you. in this half-hour, we will speak with a guest about iran, a former european commander for u.s. forces in europe as well. let's move on to the markets and what we are seeing as we move into the second quarter. there are transactions. right now the oil in the machine is cheap money. jim head is cohead of m&a at morgan stanley. morgan stanley arguably it is --

has an outlier call benefiting you. this is a fed that will delay and delay. do you work in a mode that there is cheap money forever? >> i don't think it will be cheap money forever, and our clients do not either. but there is an expectation that rates will back up, and people are trying to take advantage of it today. tom: will every ceo restructure to capture these yields? >> take the maturities out,. coca-cola, for instance -- tom: does coca-cola have an eight-year bond? >> what this is doing is spurring m&a activity, not from

a lofty perspective, but people know that financing is available today. brendan: last week we looked at the southern these index tracking sotheby's air -- subsidies price. that relationship has fallen apart in the last two years. what is your anecdotal indicator of what is happening with m&a? jim: i have never seen the southern these index, but it is a good one. i think the number one indicator is stock prices. they are at an all-time high. boards and ceo's are looking at how to take it to the next level. olivia: what is the quality of the mergers and acquisitions you are seeing? are they constructive? are they about investment or about restructuring? specifically, i am thinking about the heinz-kraft deal. jim: if you are a ceo or a board looking at a low growth environment, and you are looking at five years of not much happening with respect to restructuring your industry, ceo's want to restructure industries.

food, telecom, etc. -- folks are addressing what they need to do, which is largely cost driven. tom: our twitter question for the day -- there is no charge for this -- when will wage growth catch up with job growth? a major question for economists. tomorrow on the program, olivia sterns picked the short straw and will join me for our jobs day coverage. we got some guests for you. tony crescenzi of pimco. william gross of janus capital, and alan krueger will join us from princeton university. that is a pretty good list your it we will look tomorrow morning at washington. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." alan krueger will be fascinating on the two americas. here is brendan greeley. brendan: from the hellenic republic, written as a document prepared by greece's government today. tom is a guy who looks at the numbers. this is their proposal to the eurozone. i like to read the preamble to show what they are thinking.

olivia: i do not mean to be completely rude, but how can you say forget the past but also you os money from world war ii? brendan: exactly. i think it is acknowledged that that is negotiating -- olivia: he keeps bringing it up there it i have seen that many times. brendan: this is their competing narratives right now. tom: where does this go into the weekend with spreads out 10 basis points this morning? brendan: we keep having conversations with hans nichols in berlin. he keeps coming back with the same answer -- we all think it is about to be over and it never white is. -- and it never quite is. europe seems to be able to stumble through, and i predict they will stumble through this as well. olivia: you read the german

press. is there a sense that angela merkel or the germans are generally getting more per pale you -- are getting more prepared for the possibility? brendan: you see it coming out of the government that we have a plan b. angela merkel was so much more conciliatory once she speaks with tsipras. her finance minister is the negotiator on this. tom: is currency dynamics part of the m&a world right now? jim: it is part of the m&a equation. a 20% move roughly and currencies versus the dollar over the last six months -- the equation is that values have gotten a lot cheaper for the u.s. buyer. hedging -- tom: i have to make a

statement here. jim: our clients really need to create solutions to hedge this. currencies, commodities, it is a very volatile time. tom: bolivia was mentioning iron ore under 50 yesterday. coming up, it a conversation with admiral stavridis. ♪

tom: good morning, everyone. "bloomberg surveillance the 10 year yield is at 1.83%. grinding ever lower. let's call it jobs day tomorrow morning. let's get to top headlines with olivia sterns. olivia: we begin with nuclear talks with iran in switzerland. iran is temporary expectations about the prospect for a deal. the u.s. and five world powers want to stop iran from building

new. in exchange, sanctions would be lifted. an unprecedented move in california. the state orders mandatory water restrictions. governor jerry brown told water supply agencies to reduce used by 25%. the cuts would affect everything from homes and businesses to golf courses. police in kenya think al shabab is behind an attack on a university. 15 people were killed when gunmen stormed to the campus. disaster at sea in the pacific. at least 54 sailors were killed when a russian trawler sank today. it happened in icy waters in -- in icy waters off the east coast of siberia. 90,000 mcdonald's workers will be paid in -- will be paid a dollar an hour more than the local minimum wage. most of the 14,000 u.s.

restaurants are franchised. the first wife of john lennon has died. cynthia lennon met him in liverpool in 1957 and married him shortly before the beatles rose to fame. the couple divorced in 1968. she died of cancer at her home in spain. cynthia lennon was 75 years old. those are your top headlines. tom: coming up, iron ore implodes in. this is an important conversation on this year's -- on this huge drop in iron ore. we will look at an important tax out of europe. in ecb event coming up there it later in the hour, we look at mergers and acquisitions. and of course, craft and -- of course kraft and heinz. olivia: negotiators are scrambling to strike a deal.

nuclear talks are dragging well past their self-imposed deadline. at home, criticism is mounting about the talks intentionally faltering, and many critics are saying the u.s. increasingly seems desperate. for more, i want to bring in admiral stavridis from boston. great to see you. thank you for joining us this morning. perhaps we will start with how much of the president's strategy in the middle east, in the gulf in the broader region, is riding on a deal with iran? adm. stavridis: i think the main ball in the middle east is iran. we ought to worry about isis and al qaeda, but the one is iran and its ability to move forward and dominate more of the middle east are therefore, holding them back from the nuclear weapons is in fact an extremely important strategic construct. olivia: it is such a complicated

situation on the ground. we are lined up against iran in yemen. we seem to be lined up with them in iraq, and again are with them in syria. "as a responsible regional power, iran will actively participate in combating and containing extremism and violence through bilateral regional and multicultural cooperation." it sounds great, but can iran be a military partner in the middle east? adm. stavridis: i don't think so at this point. that is decades away, if it ever arrives. what iran is all about is dominating capitals in the region. today they effectively run five capitals around the region, and they will continue to push. it is all part of this sunni-shia war that is going on. our number one thing is to reassure our allies in the region -- israel and the sunni

states of saudi arabia, and the gulf states egypt -- that is where we are putting our focus. not finding cooperation with iran. brendan: i will put john kerry's own question back to you. if not through talks, then how? adm. stavridis: the question is, if talks fail, what do we do? i think we continue the sanctions, and we go after the program with unconventional means. that is cyber, unmanned vehicles, special forces. there is a variety of things we can do short of an all-out war in the middle east. that is probably where plan b goes. brendan: do we have the legal platform to declare this low-grade cyber-plus special ops w.a.r.? adm. stavridis: i think we do. we look a lot at the laws of war

and the ability to go after and preempt a clear and extant threat. given the statements of iran and how they would intend to use a nuclear weapon, i think there is a clear case to be made. olivia: is the fact that it is taking so long heartening? is there hope we will get a deal, or are you increasingly skeptical? adm. stavridis: first of all on our side -- and not just the u.s., it is the key -- it is the p5 plus one. i think parts of our side are emotionally involved in this. that is always a bad thing in a negotiation. you never want to show the opposite side, that you are unwilling to walk away from it. our negotiators looked tired and tattered. i think we are actually at a point where it is unlikely that we will get an accord. that is unfortunate. we ought to be able to push this

deadline if we need to to go forward. olivia: admiral jim stiff-arm does, thank you for joining us. -- admiral james stavridis, thank you for joining us. tom: stay with us. this is "bloomberg surveillance ." ♪

tom: good morning everyone. yields grinding lower in europe. german yields finding a new record lows. we are really getting quite close. a new record low back 5, 10 years. brendan greeley help me out. iron ore china on a long chart

showing percentage change, i have never seen this. this is the mother of all curves. this is a cool, french curve i drew using a bloomberg annotation. brendan: tom has been talking about that all morning. we are looking at the shape of this -- iron ore is not like the shape of widget. iron ore, once you produce the capacity you have to keep digging it out of the ground and that is why we are seeing this movement. tom: iceland, with electric utility, this is about investment in australia i chinese companies and the money is a sunk cost. olivia: bad news for the yesterday in economy, iron ore is 20% of australian exports. talking about the collapse in the price of iron or, they said $50 is psychological but it is

arbitrary. the bigger news is the move from 130 to 70. tom: i did not know you would say that. from here come a down to 70, and this recent freefall -- olivia: i don't to you everything i'm going to say. tom: we do not put weight in this in america like they do in asia. brendan: sometimes olivia things of new things to say. tom: the quadratic is unprecedented -- brendan: it is much easier to back off on oil capacity. olivia: the ecb's statements are out. these are the minutes from the march 5 monetary policy meeting, the meeting in which draghi put meat on the bones of this one trillion euro quantitative easing bazooka where he outlined. brendan: we're looking for hints of the tapering. olivia: we are going to move on

to ponce nichols -- hans nichols . but first, top headlines. the original deadline -- diplomats were not able to resolve the differences over iran's nuclear program, talks are resuming in switzerland this morning. iran's foreign minister says there has been good progress but still no solution. both sides may end up settling for a joint statement that is not the blueprint they had hoped for. the white house says talks will go on as long as there is movement. >> as long as we're in a position of convening serious talks that are making progress that we would not arbitrarily ended them. but, if we are in a situation where we sense that the talks have stalled, then yes, the united states and the international community is prepared to walk away. olivia: the u.s. and other powers do not want iran to have

a nuclear bomb, the iranians want the west to drop economic sanctions immediately. great banks are getting more emergency funds from the ecb. west was have been taking their money out of greek banks. the ecb wants to make sure the banks have enough liquidity to operate. the new prime minister has to moscow to meet with vladimir putin. he may be doing this pressure european leaders who do not want to give greece anymore bailout money. california's record-breaking drought has entered its fourth year, prompting the state to take unprecedented steps. governor jerry brown is ordering mandatory water restrictions for the first time. local waterboards will have to cut water use is likely 5%. -- by 25%. governor brown: the climate is getting warmer and the weather

is getting more extreme and unpredictable. we have to become more resilient, more efficient, and more innovative. that is what we will do. olivia: before and after pictures tell the story, the big problem is the sierra nevada snowpack is at the lowest level in 65 years. brendan: lawmakers are backing on controversial religious freedom bills. they are try to revise legislation critics say would allow discrimination against gays. in indiana, legislative leaders hope to have the new language ready for a vote today. the napa star says it would specify the law cannot be used as dissemination based on sexual orientation. arkansas governors said he would not sign his states bill until it has been revised. house leaders hope to do that today. tom: let's do a data check equities, bonds, currencies. a 10 year yield was a 183 moment -- a moment ago, grinding down. i am sorry mario, i am calling the minutes, get over it.

nymex crude comes in at $50. i would point out that german yields have come in in the last 20 minutes. watching that for new recent record lows in germany. olivia: this is "bloomberg surveillance." let's get back to that breaking news from the ecb. mario draghi calls them summary statements, i have released the account of its last-minute meeting. let's get out to hans nichols from berlin. hans: the take away is that greece has only raised the 700 million euros. they are giving them incremental increases to keep them on a tight leash. last week, they did over -- around a billion dollar increase. it is right now at 71.8 billion.

brendan: one of the things we had been looking for in the ecb minutes, they call them accounts, we call the minutes is whether or not there are enough assets in the eurozone to buy under their current program. any sense yet from our ecb watchers on whether they will change what they're looking at at the by. hans: we will have to drill down deeper when we get the full scope. will there be enough german bonds? brendan: the other -- olivia: the other question is who will be buying them? hans: it will go through the national banks. that has always been the setups the national banks will be doing the purchasing. brendan: our own stephan rieger

and frank for says his takeaway, the media takeaway is that the ecb may alter the pace of bond buying plan if it finds it necessary. we have any sense of what that news may do in europe? hans: the pace was set out at 60 billion per month, whether or not between that will come down to availability. yes, they are chasing yields what to buy, but you have to look at the broad picture, what is it going to do to inflation what is it doing to the euro? it is hovering around 107, you are starting to see that strength come through on german corporate's where you see them may be reporting stronger because they have the currency finally at their back. brendan: one of the things we will be digging into is hints in this document on whether anyone other than the two germans on the governing council has become

more hawkish. have they converted anybody? hans: there are always a couple borderline cases. are you counting the austrians as a german? you want to go up -- to the belgian central banker. you want to have a track with the finance ministers who are opposed to greece, see what answer they give you. olivia: thank you come our chief international correspondent joining us from berlin. i am not seeing a much movement on the euro. tom: a lack of inflation. which is the animal that keeps everybody going, we do not have that anywhere. how do you get cfos and cios -- ceo's to do anything without the bright lights of inflation? >> the animal spirits begin when things stabilize, whether the

energy markets, the stock markets. what people are looking for is equilibrium, particularly in the eurozone, before they start proceeding with deal making. from a u.s. perspective, animal spirits are wide open and they look at that as an opportunity. olivia: what a -- what has to be done? jim: it has pushed the currency down. there is more optimism in the euro zone economy. you will see a little more of the european exporter m&a coming into emerging economies as well as united states. olivia: it is not -- brendan: it is not there in japan. the central bank begging companies to find confidence and raise wages. jim: japan has been brighter than you think on the outbound m&a. it is certain sectors, financial institutions, and consumer

businesses. olivia: coming up, $815 billion less than the total size of tv europe, the total value of deals done in the first three months of 2015. ♪

brendan: live pictures from new

york city, south, through the morning at new jersey. i am brendan greeley. new jersey is not where matt miller was yesterday, he was in new york at the auto show. detroit may be more cars are made, new york is the town to show them off. it wasn't till when -- an hour ago? i'm going to ask you a very easy question -- what was the also missed -- most also saw you thing yesterday? matt: i like older models. i like their mercedes gt. the only car that i like in yellow. brendan: are using the europeans are already adapting to this below -- low euro market? matt: i asked a lot of ceos about that. all of them give the same measured response come a they produce locally and a hedge in certain ways. the fluctuations in currencies

do not make a difference. i do not believe them. i am filling in for betty liu this morning and we will last the ceo of nissan if this weaker yen makes a difference. brendan: people go to these other shows because there are new things rolled out, but there are also things important to the industry, like the civic. matt: i did not check that out. honda usually has a formula one or some kind of indycar which i see out of the corner of my eye, but i am focused mainly on the u.s. carmaker, the big three. nissan is the second-biggest car seller in the u.s. they are not the detroit three, but a very important carmaker for this market. i'm going to talk to the ceo of lamborghini one of the most

important car makers in the world, they sell hundreds of thousands of cars every year here in. brendan: i need to provide valuable context, a great appreciator of european luxury matt miller. you are looking at what detroit is doing, are they getting it right? matt: they have been for quite a few years. it does not hurt that the economy is bounding back. gas prices are low and people can afford to fuel them. ford, general motors, and chrysler are all building more quality products and products people want to buy more than ever. brendan: when we look to the domestic market, are we talking light trucks or big cars? matt: light trucks are the biggest moneymaker and cars that americans like to buy the best david the cars are coming back

in a big way lincoln has a new continental out and general motors is picking out a new big cadillac. the new american cruiser could be the car of 2016. brendan: today at miller will talk about cars as he hosts "in the loop." at 9 a.m., the ceo of bloomberg any -- of lamborghini, matt miller is excited about that. ♪

tom: we are watching german yields coming down. they are grinding lower this morning and futures negative for. let's get to our top headlines. olivia: nuclear talks with iranians details -- the iranian say there is no agreement. the u.s. and other world powers want to keep iran from developing a nuclear weapon, iran wants an immediate end to economic sanctions. kenya police al-shabaab is behind an attack on the university where 15 people were killed when gunmen stormed a campus. they are militant group and some all you and out revenge when can you send in troops to fight

them. google may soon face an antitrust lawsuit in europe, the wall street journal says regulators are ready to file charges. the european commission as suspects google of abusing its dominance in the search market. google denies any wrongdoing. facebook is opening riff soon becomes a verb. it enables users to make videos with friends and let groups create short clips on a civil topic. the avoid-mayweather manny pacquiao fight is exploding records. the high-definition paper view fight will cause an unprecedented $99. tom: that looks like me and brendan getting ready for the show. olivia: ellis expect 3 million pay-per-view users. -- experts expect. brendan: takeo -- one is wearing a tie.

olivia: doctors have a message to program -- pope francis, stop eating so much spaghetti and ravioli and start exercising more. they're are concerned he gained too much weight. doctors have told the 78-year-old pontiff he needs a more disciplined regimen. that means not eating pasta no more than twice a week. no more pasta for the papa. i know a lot of thin italians. i lived in italy for a while, i walked so much i lost weight. brendan: this pope is to live please. olivia: he has to cool it on the pizza. tom: in our next hour of bloomberg television, conversations -- the new york auto show on the new new in global auto.

mark pinto on investing, he's with janus capital, they have one bill gross with them. mergers and acquisitions. warren buffett -- the madness was wall street was maxed out of the deal. mr. buffett is pursuing partners -- what is in store for transactions for commendations for the next three quarters? he lives in airports he is in new york today, how much are you in airports right now, is the phone ringing off the hook? jjiim: yes. people are marching into 2015 and saying that this is the year to transact. tom: what is the difference in the strategy of sellers and buyers.

? jim: seller's perspective, how are you going to get a better matter -- market. corporate acquirers are saying now is the time to do a dream deal. from the corporate side of the equation, m&a is the number one tool to drive future stock prices. tom: we always focus on the megadeal, take us below the megadeal to the moderate deal. it is another transaction. what do you do right now to affect that transaction? jim: the level of activity of billion dollar deals and below is flat from last year. a billion dollar plus is up about 25%. the deals are driving the markets. -- big deals are driving markets . buyers and sellers are finding a

way to match and buyers are stretching. brendan: we still have march madness happening, copies are willing to play this year, does janet yellen run the shot clock when she makes her decision, does this end? jim: in 1994 1995, 2004, 2005, where rates backed up and it was largely because of a strong economy. i think, as long as it is not happening to rapidly our clients are going to find a way to transaction. olivia: we hear a lot about biotech wondering if kraft-heinz will see more m&a in food -- jim: call it a 12 cylinder engine, 10 of those 12 cylinders are coming. -- humming. largely because, if you are a healthy company and a seller you will wait this out. the largest players want to

transact, want to put capital to work. where the action will be in energy, is largely going to be and more distressed situations where people will be forced to do something in the near-term. brendan: you travel today's we how many days a week we be traveling this year? jim: 20% of the time i will be on the road. olivia: we were talking about the m&a market, what is the quality of the ipo market? yesterday we had go daddy go public and it got a 30% pop. jim: the pipeline of ipos into the end of last year was depressed. the fourth quarter had volatility. there is a lag to these ipos. what we are seeing is everybody filing. the markets are conducive to it. successful ipos like go daddy are going to bring more people

to the market. olivia: m&a makers are seeing wage inflation on the back all these deals, this brings us to our quitter question -- twitter question -- when will wait growth grow up from the job growth? second answer, education and innovation will bring change to the current cycle of low pay. third and final, like el dorado there are no well-paid service jobs for all. tom: that is certainly the heart of the motion. whether it is mcdonald's, it goes way about the minimum wage, to two americas. this will be the first question to professor krueger tomorrow. olivia: is optics for mcdonald's or does it reflect a tightness in the labor market?

tom: easterbrook, a modern progressive burger company. they use that phrase almost as a branding item. modern, progressive burger company. we are not ashamed to be a burger company. brendan: so long as it is both modern and progressive. tom: my agenda is simple, olivia sterns tomorrow will be with me. wonderful guests on the jobs report. krueger, glass, gross will give perspective a decidedly interesting report. the tendency is sluggish, maybe not. jim glassman with -- on the pulse of the american economy. olivia: the iranian negotiation issues are still ongoing, secretary john kerry, there you see him, he is still talking to

this iranian counterpart. will they get a deal? lawmakers in the u.s. are skeptical -- these -- the key sticking point is the pace of sanctions for the iranians. brendan: i am looking at indiana and arkansas, mike pence of india and asa hutchinson of arkansas the cultural grounds have shifted beneath their feet. they did not have any expectations that there would be the response of the business community, even in their own states. walmart came out hard against these laws and their scrabbling to adjust. olivia: all the pressure from corporate america from all these ceos appears to be working. arkansas has backtracked, mike pence has changed his tune. tom: a detailed article that explains this debate, the nuanced -- a nuanced detailed article. jim: this is corporate activism. tom: jim, thank you so much.

that is it for us, futures negative 4. we will continue on radio, "in the loop" with matt miller, next on bloomberg television. good morning everyone. ♪

>> good morning it is thursday april 2. your "in the loop. i'm matt miller in for betty

liu. nissan ceo carl goetsch is my guest escrow coaches my guest -- nissan is the second-biggest car seller in america. his fourth sales record in a row -- yearly sales record. we talked to george pine. he raised -- soccer, hockey nascar. we'll find out where he is putting his money next. here's a look at our top stories this morning. talk with iran went through the night but no nuclear deal. this morning, iran is saying progress was made. >> we reviewed all solutions. the solutions were discussed as general topics