this is bloomberg "surveillance. tom: china is the new mediocre. greece unravels. can eu deflation -- this is bloomberg "surveillance." wednesday, april 15. i am tom keene, joining olivia sterns and brendan greeley. our top headlines. olivia: chinese gdp rose at the weakest pace, 7% was in line with estimates. a slowdown that seems to be getting worse. china is trying to transition to an economy or consumers and services make a bigger share. >> the new impetus is showing momentum. in general it is still small, although it is going fast. we are still relying on a

traditional growth engine. that is declining and has a huge impact on our economy in the short term. olivia: leading to speculation the government will have to take more steps to stimulate the economy. a deal that will create the world's biggest maker of equipment, howard's mobile phone network. note yellow by alcatel lucent -- will buy alcatel lucent $416.6 million in stock. no egos take on contracts with two of the biggest wireless carriers in the u.s. verizon and at&t. congress and the white house are planning victory in the fight over iran. congress will have a say in the nuclear agreement. it has become clear that democratic lawmakers will join with republicans. bob corker says the bill has bipartisan support. senator corker: i believe congress should plate a role in

ensuring that all the details are there. and on behalf of the american people, before they sanctions are lifted that we ensure this is something that holds iran accountable. olivia: the compromise gives congress 30 days to review the deal rather than iran/ it will not force iran to renounce ties to terror groups. brendan: breaking now out of the european union. accusing google of antitrust violations. that news just came out. european regulators have been investigating google for four years. critics say google highlights its own services at the expense of rivals. the obama administration normalizing relations with cuba. less than a week after meeting with raul castro president

obama told congress he will remove the country from a list of state sponsors of terrorism. that had prevented cuba from using banks in the u.s.. marco rubio calls the decision a terrible one. with a success, the landing was a flop. spacex launched a rocket by the company missed on the recovery part of the mission. the returning rocket failed to land. space s wants to cut the cost of space exploration by creating reusable rockets. tom: equities come bonds currencies and commodities. ecb meeting in the next hour. anna edwards from london. oil risk on. $52 to $54 on west texas intermediate. we've seen moves and german yields ever lower and we will discuss that throughout bloomberg "surveillance." this is different. this is the bloomberg terminal.

this is a comparison of kiev wi th moscow. the ukrainian currency compared to the ruble. the tension of 2008. normality between kiev and moscow. worse for ukraine. putin wins, kiev loses. two bouts after record differences. brendan: two movements, one of the hryvnia collapsing. we've seen so much motion in the ruble that we did not expect the news that russian banks are lowering the cost of lending to each other. anticipating a rate cut that is not there yet. tom: would you suggest that has to do with oil stability? brendan: i think it has to do with -- it turns out what we are learning is that peace is better for russia than ukraine.

tom: that is what we see with the ruble-hryvnia pair. let's continued. how do you segue from that? the press conference this morning. it is an ecb focused on lower german yields and a wider greek-german spread. how big a deal is this meeting, jonathan ferro? jon: don't expect any change the policy. 6 weeks into a bond buying program and there are question marks over that plan and whether they will run out of eligible securities by the end of the year. tom, you and i went back-and-forth about negative yields in germany. the 2s,3s, and 4s means the ecb cannot buy stuff and they have to go further along the curve. they could theoretically run out of eligible security. tom: when you wonder into the

pubs at 3:00 p.m. is a basic assumption euro through parity ever weaker euroan. jon: i like to talk about different things in the pub but on the trading floor that is what people are talking about. when we see euro-dollar parity or a german 10 year yield of 0%, will they come at the same time. euro getting weaker but it is not a one-way bet. we are starting to see divergence on the south side. noise from hsbc saying the bull market on the dollar is over. bill gross of janus taking the same view. be that as a little bit more nuanced. brendan: is it fair to say the ecb has the same problem janet yellen has had? news is better but not good enough? jon: even worse because we have such a low bar in europe. when things surprised to the

upside people get excited. inflation is still out 0%. credit conditions have improved but they have been ugly for the last couple years. does not take much to get an upside to price in europe. we need to see much more than improvement. mario draghi would love to have the problem janet yellen has got right now. tom: jonathan ferro, we appreciate it. olivia, google. olivia: breaking news on google. the eu commissioner in charge of competition is raising a statement in brussels. following the news that google has officially been delivered the charge sheet from european regulators. the accusation is that they have abused their dominant position in european search to harm competition, essentially diverting traffic from rivals to the on-site. interesting to see what the reaction is and if that changes google's business model. tom: jason turner with us --

jason trennart. you can dovetail this into the doubt in europe about the way we play the game over here. it's a constraint on american companies. jason: we have a washington office, we focus on policy. i will say technology is probably one of the most politically protected industries in the u.s. it's largely left alone in many ways. i disagree with what europe is doing because i don't think it's a good way to develop their own economy it will prevent other companies from coming in. there is a lot of u.s. companies -- tom: brendan, explain this. there is a valid case. brendan: jason is 80% right.

we have to make a distinction between what europe is doing now and a more skeptical stance they have taken towards american tech companies. this move, i don't understand how they are going to get regulation right. search is, by its nature, subjective. we are talking about search neutrality. net neutrality is so much easier to define than search neutrality. olivia: the accusation is they are prioritizing their own results. instead of pulling the results of fandango, they have their own google system. tom: jim edwards in "business insider" writes that this is google's fault. brendan: i think the real problem is they are trying to figure out how to expand beyond search-display advertising. they have so many different waste to do it. as they try these things they cannot help but use their own algorithm to promote their own result. it goes back to the point i made

earlier search is subjective. tom: euro guy, explain why that is ok in new york or des moines and why it is not ok in frankfurt. brendan: you have two different cultural views towards technology. in particular, american technology. in the u.s. these are seen as champions of the american future. the inventiveness of the american capitalist mind. in europe they are seen as the same thing but that is not good. tom: let's go to the debate christine lagarde has at imf meetings. what is the view on how europe is doing? you are interviewing wolfgang schaeuble the german finance minister. jason: it is driven largely by the ecb. it's, you have a situation

where you have no choice but to buy riskier assets because you are getting 14 basis points on german bunds. there are good things happening in europe but unfortunately they are happening for the wrong reasons. largely it is because of a weak currency and weaker oil prices not due to structural reforms that would pave the way for capital formation and long-term structural changes. olivia: bring it back to google. this is a big deal. for several years there have been accusations but this is the first time they have been formally charged. the cover story of "financial times." the power to leave the times of up to 10%. brendan: in the past what they have levied is less. tom: more discussion on this. all sorts of stuff going on. don't forget brendan's

interview with the finance minister of germany. olivia: we will turn to asia. . china confronts slumping growth the economy grew at 7% in the first quarter. the slowest rate since the crisis. we head to beijing, next. ♪

tom: good morning. bloomberg "surveillance," jason trennert just said the 10 year yield in germany was 0.14%, it's 0.126%. that's from the bloomberg terminal. our top headlines. brendan: china's slowing economy. first quarter growth was the weakest in six years. the economy expanded at an annual rate of 7%.

output, investment and retail data point to a slowdown. speculation beijing will move to stimulate the economy. gnocchi are agreeing to buy october sent -- nokia agreeing to buy alcatel lucent, it will strengthennokia in china. nokia will get contracts with verizon and at&t. in boston there will be a moment of silence as church bells toll. the second anniversary of the boston marathon bombings that killed three people and injured more than 260. the surviving bomber could be sentenced to death for conviction on 30 federal counts. police dashcam video from arizona, an officer rams an armed suspect. the police car struck a wall. the suspect survived and is facing felony charges. the officer was cleared of wrongdoing. the government is protecting the

u.s. will become a net energy exporter. the information administration says it will happen within 15 years. new oil production from shale. the u.s. has not been a net exporter since the 1950's. donald sterling's former girlfriend owes his ex-wife more than $2.5 million. former clippers owner bought v. stiviano a house a ferrari, and other items. a judge says the money belonged to shelley sterling. sterling was forced to sell the team. tom: let's look forward on bloomberg "surveillance." low money and more risk, jason trennert about the economic is tensions of the times we live in. 6:40, tax day. our single best chart. brendan greeley on payroll taxes. then the big business of anti-

maps -- antique maps. one of our popular guests -- s mart maps. we'll continue coverage on the google announcement in europe in the last couple minutes. tom: -- olivia: china's economy grew by 7%. it's the slowest quarterly growth rate since 2009. tom is a bloomberg intelligence economist from beijing. take us beneath the headline number. is the data you are seeing, does not confirm a 7% growth rate or is it worse than the government says? tom: it is a slowdown but actually the government said it wanted 7% for the year. in the first quarter that is what they've got. deeper, some of the more high-frequency data is a little bit more alarming. industrial output in particular is slowing quite sharply in

march. what that suggests is what is worse to come. olivia: everybody's expecting the government to step and with more stimulus. one of the reasons we have seen the shanghai composite rise 95% in the past 12 months. what are the levers the pboc is likely to pool? tom: we've seen china's government shifting into progress mode. two interest rate cuts in the last few months. i was struck by remarks by li keqiang. he said protecting growth and jobs was an urgent task for policymakers. what the signals for me is we are going to see accelerated moves toward stimulus. tom: what do the chinese want to get out of the imf spring meetings? they always come with an agenda. what is their agenda? tom: the big issue for china this yera is -- year is the

position of the yuan. china has done a lot in terms of reforming its economy, liberalizing the financial sector. i think they see allowing the yuan into the basket as an international seal of approval for those reforms. olivia: thank you so much. tom orlik a bloomberg economist from beijing. tom: in our next hour, a conversation with henry paulson. not only his interest in china but hank paulson on the american financial system. 7:3-0 this morning. from new york city,. this is bloomberg "surveillance." ♪

tom: good morning. the georgeousity of getting into tax day. brendan: i have a correction. you said i was off for two days doing my taxes. my wife did the taxes i was cleaning the garage. tom: something less useful than doing taxes. a morning must read. a smart one on california from olivia sterns. olivia: my morning must read comes from "the new york times." he also writes about food. he writes "in most areas groundwater farland oh-fers is free as long as you can -- groundwater for landowners is free as long as you can dig a well." he's saying it's great that

jerry brown says everybody has to shower and use less water but the problem is for agricultural policy. we needa a policy that prevents profit-making from public water. what we have in california is a situation where we are growing things like alfalfa, which is thursday or than almonds and sending that to china. california is the largest dairy producer in the country. it should probably happen in a part of the country where there is more arable land and water. brendan: he's turned into an amazing columnist. eventually if you start talking about food evil arrive at economics. he has good ways of putting this. he basically says we are taking california water and selling it to china in the form of alfalfa. olivia: which cows eat. we are supporting their meat industry. we are also growing lettuce in

the desert and it makes no sense. the state is the biggest dairy producer. a lot of this would work better back east. tom: jason trennert, this is chapter one of microeconomics. there's no scarcity price determination. jason: praises lead to better allocations of capital than when you do not have prices. brendan: we talked about this last week. one of our single best chart's was how europeans are better with water use. this is not because they are morally superior it is because you have to pay by the cubic meter. jason: people respond to incentives. those prices are pretty powerful incentives. tom: i love the idea of alfalfa. water shortage, we grow alfalfa. olivia: alfalfa is thirstier

than almonds. brendan: back to olivia's point. you can charge for surface water but olivia's point, these are people who are sucking at the groundwater from their own property. how do you tell someone you cannot do that? olivia: the agricultural lobby, particularly in the u.s., is very powerful. tom: that was a great must read. a twitter question, what needs reform more? corporate or personal attacks? -- tax? ♪

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tom: good morning. in our next hour, the ecb announcement and the backdrop is simple. can you imagine german -10 year yields. we are getting there rapidly. let's get to our top headlines. olivia: the story that broke a half hour ago. after a four-year long investigation the european union has accused google of antitrust violation. they say they has abused its

dominance of the search engine market by favoring its over shopping service over rivals. they are opening the investigation into google's android mobile phone software. google has 10 weeks to respond. the chinese economy has not been the sluggish since the financial crisis. china's gdp grows at the weakest pace since 2009. the economy grew at annual rate of 7%, in line with estimates. output, investment, point to a slowdown that is getting worse. china's try to transition to an economy or services make up a bigger share. >> and general, it is still small in size, but growing fast. we are still relying on a traditional growth engine, and that is declining. and has huge impact on our economy in the short term. olivia: leading to speculation the chinese government will have to take more steps to stimulate the economy.

it appeared to be losing battle for president obama, so the white house has given in. president obama has agreed to recover mice that would give congress a say over the nuclear agreement with iran. democrat lawmakers would join with republicans to pass. >> it is clear that there is a strong common commitment and the congress of the united states and in the white house to make sure iran never becomes a nuclear weapon state. that is our objective. that is a game changer for the middle east. olivia: the compromise gives congress 30 days to review the iran days rather than 60. and it would -- force iran to cut ties with terror groups. brendan: the world's largest chip maker august 2 quarter revenues in line with estimates. demand is increasing for data center chips needed to turn out

information formal devices. target is closes to a settlement with mastercard for the data breach in 2013. target would pay the card company about $20 million, mastercard would reinvest banks that had issues -- that had to reissue credit cards. the breach compromised credit and debit accounts. the game that turned all of us into rock stars, guitar hero is being revised with a twist every five-year hiatus. a new version of the game will be playable on mobile devices as well as on game consoles. this will feature filmed images of concerts and bands, rather than cartoonish images. tom: hated. olivia: -- brendan: you hate it because you can actually play guitar. olivia: the eu says google abused its dominance of the search engine market. joining us hans nichols.

we are hearing the european commission has begun an investigation into android. hans: there are two ways to look at this, one is a positive for google gus what this complaint is about is comparison-shopping for google. they headed they may go after google travel, but the complaint is clear that they do not want to ask a google to alter its algorithm. that's their main source of profit. we suspect google does not break it down all that well. the negative side, the eu commission has opened a second inquiry into mobile phones. that could be ongoing. in the past, eric schmidt has been in berlin, they pledged to work with the eu. remember the right to be forgotten, google has gone out of its way to play nice with european regulators. there may be a limit to the patients. there is no limit to how many of times.

-- brendan 10 google. brendan: i understood that google would have to change its algorithm to fix the problems how can they be fixed if it is not changing its algorithms? hans: they can move up other peoples search when it comes to comparison-shopping. this is a formal complaint, it has to do with comparison-shopping. a product ruvell has had since 2008. -- google has had. it does not get there until you want to do the comparative shopping. initially, this product was called frugal. tom: as olivia nailed, the real story is it a surprise of android. why is the eu upset at android and not the ios apple iphone system? hans;: because android is open

source. they say they are still preferential treatment to the open source coders who create apps compatible with android and there is preferential treatment being given to some of them. that is the eu -- the broader issue is not just google, all tech companies that have a footprint in europe. google gets 35% of the revenue from europe. they will all have to deal with european union. olivia: for viewers -- this news conference is still going on live. tom: brendan you are dying to say something. brendan: this is an up or distinction -- android is not open source. the distinction is coming android is code live away for free by google. google works on the code and hands it out. a huge difference between that and something generally

open-source. this is against google has been trying to do for a long time, say we are open-source, and we corporate, but it is difficult. and still hold on to the code and take individual champions. it is a delicate dance. tom: ok. more on google throughout the day. i don't get it. i don't get why this is un-american or on european -- un-european. didn't they say don't be evil and their perspective? speaking of evil -- none other than bill gross discusses -- says our greatest torsion. jason trennert completely agrees. the suggest a move from negative interest rates to normality may

be a cause for challenge and it is tension you put on this is in the financial area. jason: i think -- one of the ironies about the policy that we have -- we have easy monetary policy with tight radio for a policy. the benefits of largely accrued to the wrong people. this is part of the reason -- this is the bull market no one loves, evil call it a rally, the market bottom six years ago. the benefits of largely accrued to the financial markets have not occurred at the real level at the economy. not as much as it has. does that lead to instability? if we have a great distortion how do the banks in europe or america -- jason: it goes back to the water story, if you're fixing prices, if you do not have prices or you

are distorting prices, you get allocations of capital. i think central banks have decided this is a risk worth taking. it is hard not to believe it is not causing problems or misallocation of capital. olivia: what prices would be normal in this environment? jason: that's why the stock market, in my view, has remained reasonably priced. it is an existential question you can even do the math. brendan: if you can say islm, then we can say exit central. -- x essential. jason: you can do the math. this is a choice that central banks have made. you are dragging people along through higher risk assets.

tom: in our next hour, we will look at e.g. capital spinoff. -- the ge capital spinoff. the conversation on the industrial giant. stay with us, this is "bloomberg surveillance." ♪

tom: good morning. it is tax day, i am depressed. brendan greeley with the single best chart. brendan: where do taxes come from? that is the subject of today's single best chart. pay attention to the blue line. they get smaller and smaller over time. that is corporate income tax. it is easy to minimize your tax bill if you are a corporation. the red line is flat, individual income taxes. this is what you pay on top of your income tax. for fica, medicare and social security. that has grown over the past five decades. it has blossomed. increased.

what is a tom keene weight is a that -- way to say that? tom: it kills the middle class and working couples making a lot of money. they get double-tax. brendan: when we are talking about the 47% not paying taxes they are paying payroll taxes. jason: there was no formal income tax in the united states until 1914. we are also -- i would also say when you look at the tax code there are 3.5 million words in it. new testament is about 300,000 words. the other story is ge somebody in our washington office made the point that ge has the best tax lobbyists on the planet. the fact that they decided to throw up their hands and repatriate a lot of this money held overseas means corporate

tax reform is unlikely in the next couple of years. tom: we will talk about the ge transaction in the next hour. olivia: we start with the number three photo, the world's largest -- from china, it broke a guinness world record. it weighs more than a ton. brendan: how do you launch a kite like that? just run really, really hard. olivia: get a lot of little children to run hard. in sweden, the first doughnut was sent into space. it traveled 20 miles above the earth's atmosphere, glued to a glass plate and attach to the helium weather balloon. brendan: because why not?\ this is an episode of "the simpson's." olivia: clearly some time,

effort, and money went into that. the first color image of pluto and its moon was released. nasa's new verizon has been traveling for nine years and more than 3 billion miles away from earth, it will approach pluto in july. high-resolution photos will be released. tom: jason trennert who travels everywhere will be in pluto in 2017. coming up, stephanie ruhle sat down with stanley druckenmiller to talk about the future of greece. stay with us. "bloomberg surveillance." ♪

tom: good morning, everyone. let get to our top headlines. brendan: breaking news -- the eu is accusing google of antitrust violations. regular readers have been investigating for more than 4 years. they say google highlight its own web services in search results at the expense of its rivals. titus economy is slowing down. first go to gdp growth was the weakest in six years.

the economy expanded at an annual rate of 7%. there is speculation beijing will move to stimulate the economy. eight educators are headed for prison in a cheating scandal. they were convicted of rigging test in atlanta schools, terms range up to seven years of prosecutors say they fixed scores to take their jobs and make the look -- schools look better. demonstrators protesting police brutality. in new york, they slowed traffic on the brooklyn bridge. in los angeles, 15 people arrested after police said a block a railroad track and stop a commuter train. japan is poised to overtake china as america's biggest creditor, china cut investments. u.s. bonds offer higher yields than those in japan. many millennial's are saying no to plastic.

a new survey says more than one third of americans ages 18 to 29 have never had a credit card. 2009 law back narrowed credit offers to college students is one reason tom:. -- tom: bank of america out with earnings after j.p. morgan and wells fargo. emerging of dinosaurs -- the merging of dinosaurs in europe constructive elements there and we will look at oil and the after shots, particularly if we get another dive in the price of oil. this is fun we do this once a year, people with money need to know -- the conundrum for the successful hedge fund type. you have acquired square feet in tribeca at have to put stuff on the walls. you have to impress your friends. he sells maps of nebraska

pictures of birds in nebraska and indians of nebraska. he joins us. what is selling right now? >> autobahns. it is the top 50. a lot of famous people have got them in their offices. they are in the hedge fund business. tom: i have been in your office where you have spoken to a big hitter like jason trennert. and you say, a map is too small for you, you need an atlas. you have brought christopher columbus'map. >> this is from 1513, and shows christopher columbus' perception of the lactic ocean. -- the atlantic ocean.

this was made to show charles the fifth what he owned. this was made after columbus gets back, the information is disseminated. tom: how much is jason trennert going to pay for this? >> $1 million. brendan: -- jason: are you saying a change in the buyers from hedge funds to foreign buyers? >> sophisticated men who want to know where they are. [laughter] tom: brendan greeley's expertise from nautical, a question-- brendan: there is debate where christopher columbus landed. where can we see his own perception of what a spaniel was? does this show -- there is all this -- there is a bay on the

island where he landed -- >> there it is. brendan: it is a bay -- olivia: i am looking through the castles of italy. >> this one was from 100 years later i the first guy to put maps of a uniform size. tom: she has a book from the time of the pilgrims? >> this to go for $500,000. olivia: it is well worth it. brendan: where they originally not fortnight gators but for richmond to know what they had? >> henry viii was curious everybody was crashing, they were portrayed, to help people get the goods where they were going. tom: jason trennert has a great book out. they will go into your store and

look at maps, look at audubon birds, and they want to hang out with academics. ring us up to speed on the education part. david rubenstein -- tie it into him and what you are doing in education? olivia: thai christopher columbus into that. >> in the title page itself, for larry, under eighth birthday hope this gives you an interest in conservation, love daddy. that's what i want, but i want this in all american universities. i have given away $50 million with the material to the university south carolina california irvine, 15 other schools where teachers are using this material to inspire kids. tom: what you lose this in the

digital age? >> this is more exciting because this is the real thing, this is what rich people have been hanging in their homes. tom: what is david rubenstein doing? what is a guy like him -- >> the left monticello and the library of congress. he gives money to them or buys things they used to inspire people. i do not agree with that. i feel that universities are for your educational institutions are great american conference. tom: what is the best neighborhood -- ever him like a map -- abraham lincoln map? >> he was really not about that. brendan: did we ever get a chiron to say things tom keene says? tom: we will see you on madison

avenue. thank you for showing up. we have another hour, first a four x report -- forex report. stay with us. ♪

tom: china confronts slumping

growth this relation command a credit bubble. china is the new mediocre. can you deflation derail euro -u.s. growth? good morning, everyone. this is "bloomberg surveillance" live from our world headquarters in new york. it is tax day, when a, april 15 and it is also bank of america earnings day. olivia: as always, bank of america earnings make little sense on first read. $3.4 billion. what we are looking for his net interest margins. we want to see what is happening to consumer real estate. tom: in olivia -- in olivia's

defense, every bank statement is different. take a memo for how jpmorgan puts out their headlines and earnings. they do it better. there is a headline about net charge-offs, 28%. we saw that someone from jpmorgan yesterday with a positive construction. michael moore, quick comments here it every bank the same or are they all unique? michael: they are very unique. and what bank of america is saying here is they have moved where they put their mortgage segment. tom: we are going to go to top headlines, but what you will you look for? michael: fixed income, like jpmorgan are up. how the net interests get squeezed. thanks just keep waiting for rates to rise and how much is it hurting them? and last are they have a huge settlement for

countrywide and how it might look this quarter. tom: let's go to top headlines and we will come back on bank of america. olivia: breaking news this morning from the european union where google is being achieved -- the accused of violations. regulators also said they have begun an investigation in google's android mobile software. that is news. the company has 10 weeks to answer the eu's accusations. and china is still one of the world's fastest-growing economies, but it's first quarter growth rate was the worst since 2009. it grew at 7%. it was in line with output data. china is trying to transition to an economy where can tumors and services make up a bigger share. >> the new impetus is showing momentum but in general, it is still small in size although it

is growing fast. we are still relying on a traditional growth engine command that is declining and that has a huge impact on our economy in the short term. olivia: that is leading to speculation of the chinese government will have to take even more steps to stimulate the economy. and it is a deal that will create the world's biggest maker of equipment. has agreed to by the french company alcatel lucent. it will allow no kia to improve its position in china. it will also take on contracts of the two biggest wireless carriers in the u.s., verizon and at&t. brendan: president obama is agreeing to accept a compromise legislation on the iran deal that would give congress a say over the nuclear agreement with iran. democratic lawmakers would join with republicans to pass legislation. bob corker said the bill has bipartisan support. senator booker -- senator

corker: more and more i believe congress should play a role in ensuring the details that are there and on behalf of the american people before the congressionally mandated sanctions are lifted that we ensure that this is that holds iran accountable. brendan: the compromise gives congress 30 days to review the deal instead of 60 and it won't force iran to renounce ties to terror groups. less than a minute -- less than a week after meeting with cuba's president cannot president obama said he will remove the country from the list of state sponsors of terrorism. that has prevented them from banking in the u.s. and elon musk's spacex still have not successfully gotten the rocket used yet.

the company missed on the recovery part. the returning rocket failed to land on a barge in the atlantic. spacex wants to cut the cost of spaceflight by creating reusable rockets. tom: bank of america reports today. olivia helping out. michael moore with us some bloomberg news. bob nardelli with us today on industrial america within the hour. what i see here is different than jpmorgan. michael: yes, and bank of america said credit mortgages are down. that is a big tease of it. and return -- that is a big keys of it. and returns are half. olivia: i don't see a statement

that says they are increasing the dividend, but you are seeing signs that the beat is up with american consumers. the first quarter earnings came in at $.36 per share. initially, we saw the stock at about a week 1.5% -- about a 1.5% pop. tom: bob nardelli what is looking like is that they will have to lay off a lot of people. how do you lay off 10,000 people? robert: the john's they have is they are going to have to add people. -- the challenge they have is they are going to have to add people. the quid pro quo here is that the government is forcing them to add and they have to figure out how to be lean and cost effective.

you got to add people in certain areas and lean out in other areas. tom: when you noticed harper sit down and talk about the pull in 2015. are these guys excited about the future? are they hungry down and not wanting to talk to michael moore? michael: i don't know that they are excited. they are still waiting on the interest rate to go up. lung guard has not death quite as robustly. -- loans have not picked up quite as robustly. tom: do you see all the jargon he uses? that is impressive. brendan: about to throw in some more. the basil three capital ratio is that what you are seeing? tom: it's not swiss like.

michael: no, it's not. brendan: but this is somewhat subjective according to their internal models. michael: it is somewhat dependent on the risk-weighted assets. all the banks have got to where they needed to be. it's how much capital they can return out. robert: today's consumer index report takes exception to being very positive about the consumer. i think they are still being very cautious. tom: what is brian monahan's biggest headache? michael: mortgages. tom: compelling -- compare that to wells fargo. michael: not comparable. it's not merely the problems and -- merely that problems and lawsuits. olivia: how far along is brian moynihan in paying off the task for countrywide? michael: i think he is mostly

there. that was the biggest piece of it. there will probably be some residuals. robert: he really stepped into a big mess. tom: what can be done? robert: everyone was frantic to get assets, and he bought countrywide. that was a big burden. tom: frantic is not good management. robert: it is not. we are seeing this frenzy now in an and a market cap -- in the end and day --the m&a market. i was frantic through congressional hearings. tom: did you take a van from detroit to washington, like hillary's trip?

did you go into a chipotle? robert: no, and this is a true story. i drove in one of the top post stop it took me two days. i stopped at a truck stop and at a holiday express, because i wanted to be smarter for the next congressional hearing. tom: you can't make this stuff up. robert: no, you can't. they asked me about it, where did you stay and where did you eat? they did. tom: how many gulfstream's did you use? brendan: bob nardelli, you're a performance artist. olivia: much more from bloomberg surveillance after the break. tweet us.

tom: good morning, everyone. futures up 41. brendan: it is confirmed, nokia to buy alcatel lucent. it will create the largest supplier of equipment that powers phone networks. the ceo of alcatel now joins us. francine, this is the meeting of not just to companies, but nations.

how confident was friends -- was he that france would approve this deal? francine: very confident. he also assured me that he will get it through not only different government, but also the chinese government. brendan: stay with us for a second. caroline connan asked if the french government had helped with the deal. quite nothing except the rationale helped to get to the finish line. in terms of france, i would just say that the economy and the president were very supportive of the deal and we got a lot of good buy from the exchange. brendan: francine, i think i have this antidote right. -- anecdote right. the ceo said we are on a burning

oil rig and will have to jump in the water. it's amazing to see how far they have come. did they swim to shore? did this work? francine: they did, and it also explains that alcatel lucent they are not the first in class and had had to have huge restructuring. but there is also so much competition from china and from u.s. providers that unless they merge there will -- they will not be able to survive. and we heard from the french economy minister and he was saying the same for alcatel lucent. brendan: walk us through the basics. people all over the world, particularly the developed world, think of handsets when they think ofnokia. that is not who they are anymore. franken: no, they sold that years ago. what they want to be do is provide wireless services.

not sure if it will be robotic cars or robotic surgeons. brendan: francine lacqua from a gas with us from london. -- francine lacqua with us from london. olivia: still to come, which countries are honorable to oil prices? we dig into the winners and losers. ♪

tom: good morning, everyone. let's get right to our top headlines. olivia: breaking news this morning out of europe. european investigators have been investigating google for more than four years. it saying it highlights it on search read -- search results at the expense of its rivals. and gdp growth was down the most

in six years. output, investment, and retail data in china all point to a slowdown. there is speculation beijing will move to simply become human -- the economy -- to stimulate the economy further. also, boston will market its second anniversary of the 2013 boston marathon bombings, which killed three people and injured more than 60. dzhokhar tsarnaev could be sentenced to death for conviction on 30 federal council stuff and there is controversy brewing over a recently released police video from a dash cam. an officer is seen ranting and arms cruiser -- an armed suspect. the officer was cleared of any wrongdoing. and they built changing how doctors are paid in medicare cases pending.

a new plan will reward doctors when their patients get better. about 50 million elderly americans depend on this is some. and the employer of that i can or took an airborne masks said he broke company rules. the man fell asleep in the cargo hold of an alaska airlines yet. the plane returned minutes after takeoff from seattle when they heard a man banging on the wall of the belly of the plane. the man's job status is currently unknown. tom: delta out with earnings. airline on fire. they are flying at 105% of capacity. a conversation with henry paulson, we will do that twice today in the 7:00 hour. look for that i'm bloomberg radio in the 9:00 hour as well. michael mckee and i will sit down with a china thinking henry paulson. and robert nardelli, on general electric, as they move to become

another industrial company of a another time and place. brendan: as you know, they were looking for a bit and found one for now. forecasting will prices is a game for us. luckily, that is not what part -- bart has done. you look at the consequences of different scenarios. the one that worries me, oil below $40 per barrel and you title that "regional instability." what does that mean? bart: the key measures that we are looking for a today at the conference for our to take care and take account of a lot of different outcomes. this is a very different episode in the oil price developments than what we have seen historically and there is the possibility that prices would go down much more substantially. we don't think it is a high probability, but we need to take that into account. brendan: in the case of below $40 per barrel, what are we

looking at? region by region, what are we looking at? bart: there are issues the middle east and we have a lot going on there. and enemy have the situation with russia. -- we have the situation with russia. we need to look at how producers are going to react. what we are worrying about is that we are going to continue to have a lot more oil on the market than historically in those cases. brendan: we have bought nardelli sitting right next to you. -- bob nardelli sitting right next year. he is a car guy. how will this affect gdp next year to bart: -- next year? bart: we had a 4% annualized gain. it is not insignificant, but it is also not a lot. if prices stay where they are currently, we don't think there is much more coming out of it. tom: i hate your reports. i'm like, oh, i've got to read

it, it's so smart. what was the distinction about hydrocarbons that you learned? bart: i think will really figured out is that this is really a different episode. because we have new kids on the block, particularly with shale oral -- oil producers, that is making a huge difference. in the u.s., we see a significant decline in the number of rates, but production levels stay up. tom: bob, you grew up in this territory, in shale country. robert: i did. the question for me is, the u.s. has done a phenomenal job thanks to innovation and entrepreneurship, you talk about fracking. what is the one thing we need to do in this country to reestablish growth levels, great paying jobs, a great backspace base, and to use our oil on a global basis to help merkel and germany etc.? bart: we have to make sure that the users that are the consumers

have the benefit of this loyal oil prices -- this lower oil prices. the issue that we have now is that we have all of the volatility, the scenarios that we are talking about, you know we are looking at the possibility the next 10 years between $10 to $100. that is hard for business or even consumers to plan on. robert: can obama export oil? bart: the question is, can you avoid it? we cannot use it all ourselves. olivia: good. why do you think the impact on consumers that far has been muted? bart: it is very interesting. we looked at a couple of different surveys of consumers. about 25% of the windfall is actually spent. the other 25% intentionally ate and paid off debt. there is the 50% that kept it in their pocket. brendan: thank you.

tom: on oil, our twitter question of -- and on our twitter question of the day, what needs reform or, corporate or personal tax? stay with us. ♪

tom: good morning, everyone. it tax day, so let's do something twisted on the bloomberg terminal. let's go to moscow and kiev. this is a comparison of the ukrainian currency with the

russian ruble. after the collapse in 2008, weaker kiev currency. and this is prudent wins. -- putin wins. the story simply, russia does better as kiev struggles. brendan: was prudent wanted to do was create instability in ukraine and it worked. but now you have a sort of peace that we are looking at, but great financial instability in ukraine. olivia: and the take away is that putin has inflicted more economic damage on ukraine and the u.s. has inflicted on russia with sanctions. tom: and i think he goes to the imf meetings with china and the weak gdp today, the new mediocre and all that, but this is still on the front burner. brendan: something nobody would have anticipated, if you had bought a vrable a month ago -- bought the ruble a month ago you

would have money now. tom: there it is, what you can do with the bloomberg terminal. i should point out we will have coverage of the imf meetings. i'm thrilled that can robots will be joining us. -- ken rougoff will be joining us. does this change corporate in america? robert: absolutely. we are seeing a lot of corporations saying there is a negative impacts of they have not built in hedging or natural current exchange. tom: and we saw that yesterday with johnson & johnson. we have earnings on delta airlines. what you have? olivia: earnings-per-share coming in at $.45, just one said ahead of estimates. -- one cents ahead of estimates. tom: and gdp is not bad. olivia: right, and that's what we wanted to see, passenger revenue. tom: they fly at 120% olivia: capacity. olivia:did you know that bob

nardelli is basically their most important customer? kiev flown over 100,000 miles. brendan: did they give you a hat? robert: not like in the movies. but listen, richard has a great job. tom: delta will cut international capacity over the winter. olivia: and billions in fuel savings. brendan: this is what deutsche bank was warning about, that the disappointment become -- would come from international sales. and they have their on refinery. tom: delta has their own refinery? brendan: yes. tom: let's get you top headlines. olivia: the european union today is accusing google of dominance of the internet search market. that was pretty much expected after a four-year investigation but now the eu says it will also investigate google's android mobile falling -- mobile phone

system. google has 10 weeks to respond. an economy has not been a sluggish in china's financial crisis. the first quarter rose at the weakest patients 2009. the annual rate was 7% in line with economists forecast. it all points to the slowdown just getting worse. china is trying to transition to an economy where can toomer services are -- where consumer services are a bigger share. >> it is sure momentum, although in general still small in size, although growing fast. we are still relying on a traditional growth engine and that is declining and has huge economic impact in the short-term. olivia: that is all fueling speculation that china will have to take more steps to fuel -- stimulate its economy. president obama is agreeing to a compromise that would give congress a say over the nuclear agreement with iran.

it became apparent that democrats would join republicans on the measure. senator ben cardin said both the hot -- the administration and the congress wins in the deal. senator ben cardin: it is clear to me that there is strong movement within the congress and the white house to measure that iraq never becomes a nuclear power. that is our objective. olivia: the copper mines gives congress 30 days to review the deal rather than 60 days and it won't force iran to renounce ties to terror groups. brendan: shares of intel are higher in premarket trading. the chipmaker is in line with estimates. intel says sales of personal computer chips are falling, but demand is increasing for chips created t for mobile devices. tom: with economic data coming out later this morning. futures are up nicely.

the dow closing above 18,000 yesterday. the euro at 1.0604. i will call it the yen strength in the next -- last 48 hours. and the nymex crude now at 53.84 per barrel. olivia: this is "bloomberg surveillance." china's economy grew just 7% in the first quarter, staying in line with analyst estimates, but the slowest rate since the financial crisis. former u.s. secretary treasurer hank paulson has just released a new book dealing with china. the book details why it is so important to have a relationship with what he says is the world's largest economy. we are joined now by peter cook chief washington correspondent. he spoke to paulson. what was your take away?

peter: he does talk about the problems with the chinese economy and the fact that the double-digit road we seen in the past is not going -- growth we've seen in the past is not going to continue and that china needs to make changes to its economy going forward. he says he has cautious optimism that the folks we deal with on a regular basis -- he traveled to china all the time even though he's no longer the treasury secretary -- and he's confident that they have the tools and the will to make the changes, but it's what to be difficult. here is paulson about why he wrote the book. henry paulson: i wrote this book because this is by far the most important bilateral relationship, and it impacts business leaders. because china has now come up the value-added chain and they are now a formidable competitor in addition to being a partner. we will be increasingly competing on the one hand -- and there is nothing wrong as long as it's healthy competition and not debilitating competition. and we will be partnering on the other. brendan: and he talks as well in

our -- peter: and he talks as well in our interview about the relationship and that china gives the obama administration credit on how they had handled china, particularly on climate change. one issue was where he's not so impressed with how the obama administration has handled in, the asia infrastructure investment bank that china has created. the u.s. is fighting that effort, but paulson also says it's not a big deal. take a listen. henry paulson: many observers have said this is landmark, this is a watershed event china passing the torch. that is bull. it was not huge thing. we don't get everything right. we didn't get that right. peter: we didn't get that right referring to the obama administration and how it handled the creation of this chinese investment in

infrastructure bank. but he says is another big issue right now in the big scheme of things. he says china has a lot on its late and he is cautiously optimistic china will be able to handle it. -- a lot on his plate and he is cautiously optimistic china will we able to handle it. olivia: peter cook, our chief washington correspondent. we will leave it there. i like it, hate polson calling bs. brendan: my children watch -- hank paulson calling bs. brendan: my children watch this hour. please. robert: you and i are of this age when we have seen japan. i remember 30 rock and we were very upset as a country. we saw them by the waldorf will stop we live through these -- we saw them buuyy the waldorf. we lived through these things. brendan: is in china's economy

quantitatively different than japan's? robert: yes, significantly different. i think hank made a good point there. it is a love-hate relationship. they are critically related to the international market. you look at boeing and some of the others. we love them as the buyer. and we are fearful of them. tom: a portion of our audience radio, tv, print, is listening to guys like henry paulson and bob nardelli and saying, wait a minute, this is a regressive iv, not a democracy -- regressive society, not a democracy. how do you respond time and again to the issue of human rights? robert: there is no question. i was going over there when they were still wearing the quilted outfits and we had kerosene heaters in the room when we were negotiating. today, if you are not in an armani suit and a high-priced car -- tom: it is an evolution.

robert: it is. but they are very progressive. if they say they are going to do something, you better believe they will do it. olivia: china economic growth is the key to geopolitical security. the ecb is about to release its latest decision. don't go away. ♪

tom: good morning, everyone.

a busy international surveillance this morning. brendan: the european central bank will be out with his latest rate decision in a just a few minutes. anna edwards joins us from london. what should we expect? no change, right? an eye: yes, nothing, expect nothing. that is the key message from the ecb. it's all about quantitative easing and how well that bond buying program is working. the decision comes just under three minutes time and we are not expecting a change in interest rates from the ecb, but then the focus shifts to 45 minutes in the future and that is where there will be the cop -- the press conference. it will be a lot of questions about the future of the quantitative easing program, and not the least of which will be greece. brendan: what should we look for at that press conference? anna: one of the questions will be when quantitative easing may

perhaps come to an end. we are speculating about that even just six weeks into that 1.1 trillion euro plan to buy. but that is the question many are asking. steve match at the ecb is saying that the program could be curtailed or extended. tom: as we wait for this announcement so much of this dovetails into what they are saying to mario draghi, what they are saying to christine lagarde, and what they are saying to germany -- look at those rates. brendan: i will be talking later today to the finance minister of germany and i have many questions about what i mostly want to ask him about the german perspective. when we look at the minutes of a month from now, when we understand their thinking because there is a very german minded block within the ecb will be saying, listen, conditions

are better. you had your experiment. let's stop. tom: it shall three are, what will be the question that he would ask mario draghi? brendan: exactly what i just said. you have had your fund. -- your fun. when will this end? tom: olivia sterns, the german 10 year yield is below japan .127. olivia: .127, it's insane. brendan: and yet they refuse to borrow more money. there are no new debt. olivia: the ecb in frankfurt what is the distance between the ecb and berlin here? brendan: it is growing wider and wider all the time. the ecb has been made a model of the bundesbank. that was not an accident. mario draghi's taking on more and more responsibility for economic conditions in the eurozone.

tom: let's get somebody in the real world, bob nardelli. how does a corporate officer work at siemens or nestle or were ever with german rate at .127? brendan: -- olivia: i know how you operate. you issue bonds at negative yields. robert: and we are seeing a lot of them issue bond that negative rates. it is a challenge for anyone running a corporation in that environment. brendan: but again, olivia, to your question, even at these rates germany is not only to borrow money to spend on infrastructure. the decision is out? tom: yes let's go back to anna edwards for perspective on the non-news. anna: the ecb rate is unchanged at -0.12%. as i said, no change, but expect

some fascinating insight into just how long they will carry on with the quantitative easing program later on. perspective comes from the fact that it is quite ill-defined right now in terms of when they will end it. tom: give us some perspective. i want to rip up the script. tell us how the improving europe due to the weaker euro dovetailed into your london given the u.k. elections? what is the spirit in london this april, given all of these distractions? anna: it is a fascinating conversation because the u.k. is reliant on the eurozone as a trading partner. there is a great deal of reading across. but the european conversation as it falls into the u.k. election is focused on something different. it is not focused on the weakness or strength of the economy as a stand at the moment, the how involved u.k. should be in europe or whether it should get out entirely. there was a meeting of the independence party this morning a party that wants to take the u.k. out of europe.

olivia: and of course, we have heard mario draghi, the head of the ecb saying he cannot fix the european problems alone. the onus is on the national government to implement reform. how much progress has been made on these structural reforms? anna: there are some poster childs, aren't there? unemployment in spain is still well over 20%. that is a complicated conversation. there are all the these poster child for reform. and the greeks will go to latvia to talk about the reforms they want to do to get the cash on -- get their hands on the cash they want. mario draghi will probably be question on what happens if there is no deal between the eurozone creditors and greece in riga. how much capital will be spent

to those greek banks and? tom: and edwards, thank you. coverage continues on bloomberg television and radio. brendan: dan druckenmiller has one of the best track records of investing. lately, yes been saying the fed rate have been too low for too long. we have stephanie ruhle of "market makers" on the desk with us today. stephanie: do you do a shot of tequila every time he says "rip up the script"? brendan: yes, we do, and i'm feeling very relaxed right now. stephanie: let's talk about and -- spam. -- stan, because he is very successful. brendan: what are you hearing? stephanie: stan says no way, jose. he is very constructive in europe and he likes a lot of european countries. but we have to talk about greece

for a moment. i have to what would happen there. take a look. -- i asked him what would happen there. take a look. dan: -- stan: my guess is there won't be contaigion, but if there is, he can contain it. i don't get this how resources itself on the -- flushes itself down the toilet and spain and others sake of a we will, too. i look for europe to become more, not less. stephanie: as you heard there, he is not a concern over all about europe. in terms of construction in europe, is it just about trade? i've talked to traders that love europe right now because they have $.20 on the dollar -- paper

for $.20 on the dollar and can sell it here for $.30 on the dollar. olivia: it is while to hear stan druckenmiller say he doesn't think there's going to be contagion. member the story from the financial times on monday that says greece is preparing for that contingency? brendan: and a german newspaper says it has details on the german government that says they are planning ways that greece can default, but stay within the euro. there is no map for where we are right now. tom: it is interesting listening to the viewers and to see how wide this debate is. seven -- stephanie: that is the beauty of the market. robert: a lot of the private equity groups are buying paper over there. i mean, they are buying it. to get in. not the physical assets, but a time of paper. stephanie: that does not mean to say that greece or any peripheral countries are in great shape, but just that

there's a great trade to be done. olivia: hold the phone run second. did you see stephanie ruhle putt? stephanie: did you like -- would you like to know why i felt that punt? maybe because i'm from the state of new jersey and i have been playing mini golf for many years. brendan: my favorite druckenmiller called $.80 on the euro. much more to say about the economy and what he thinks about activist investing. tom: let's turn to a huge transaction last week, widely expected, but big news. nardelli has big perspective -- terrific perspective. let's turn to the reaffirmation of ge. the chart is a chart of

struggle. it has been an ugly story. he's getting lots of positive response here. what is your take away of what mr. immel has to do now? robert: there are two schools. one is, he's brilliant, in that if you look at the banking regulations and jamie dimon announcing $900 million in legal fees and adding thousands of workers for regulation. he may look at that and say this is the perfect time for general electric to exit. it's not what we do. we focus on the industrial side. and he's getting leaner and meaner. i think he made a good move into all and gas. we are in a bit of a trough now, but he is well-positioned. assets are $.50 on the dollar and maybe should buy more and do more to prepare for recovery. olivia: jack welch put out between saying he approved of what jeff immel is doing, but to a large extent it is undoing the world's biggest legacy. robert: all of the alumni are

saying we spent years building this empire and now we are dismantling it. i think we will have to see how it plays out. i know the analysts are just badgering jeff and general electric for 15 years on intermediate ring and taking the capital portion away because the price-earnings ratio and the imbalance between industrial and banking. brendan: the best comment i heard on this -- i wish i could remember who said it. ge is -- and g-8 core business will bet on the economy. will that payoff? robert: as you know ge's lighting is for sale as well. but you know he is putting money into aviation. the core businesses for our country globally. tom: as you know, it's not what you do, but what you don't do.

they clearly are saying we are not going to do finance. within industrial, what are the worst practices that ge wants to avoid? it's easy to say we want to go into health care and all of this. that makes sense. what is he going to not do as he reinvents connectivity -- schenectady? robert: the importance is that we are able to get growth and new channels with existing products. we have to look at health care where it's going and not wear thin. lighter, more inexpensive, a quicker response. tom: a more valuable executive structure has got to be part of it. robert: -- tom: a more malleable executive structure has got to be part of it. robert: that has got to be part of it. olivia: is this because of dodd-frank? is this all because just a little -- jefgf immelt doesn't

want to be worrying about compliance? robert: yes, and he's got to get this done quickly. tom: how do others respond to what ge has done? robert: i think you will see a lot of bidders to try to pick up these great assets. they are valuable and could be tucked in for tremendous synergy. tom: what do we have? olivia: it is tax day. we have to what you think needs reform or, corporate or personal attacks. here are the answers. hard to argue with that. i agree with that. living in england, my tax return

was three pages. i can't do mine in the u.s. tom: a couple of years ago there were a lot of changes, but nevertheless the complexity. robert: look at what ge is paying in repatriation. some $16 billion and what value is added to the economy? tom: you have something like 16 kids. brendan: yes, that is exactly what happens. i'm going to go by markets. no, a bigger car. -- i'm going to go by more kids. no, a bigger card. what happens is you get a pop in the markets. that is not necessarily true with personal income tax. so far as we know, the corporate makes a big difference. olivia: time now to look at the stories shaping the day. i'm looking for this news conference, mario draghi of the ecb speaking at 8:30 a.m. new

york time. so many questions. qe has been in place for a whopping five weeks now. but there are so many questions. tom: i'm going to say that everyone looks ho-hum. i don't agree. olivia: the last inflationary was 0.6%, the lowest on record. brendan: it depends on your definition of victory. tom: and a conversation tomorrow with madame lagarde. so much to talk about. brendan: today at 12:15 p.m. eastern, i will be sitting down with the finance minister of germany. tom: what are you going to ask him? brendan: my goodness, where to start. the germans have made it clear they are not interested in issuing any more debt. with capital as low as it is among that is a hard one to understand. tom: and you are the when to do it with your cultural understanding of germany. i will look for that later on bloomberg television today. and on bloomberg radio in the

9:00 hour as well. bob nardelli, thank you. we continue. stay with us this morning. ♪

betty: good morning. it is tax day. did you file your taxes? your "in the loop."

i am betty liu. the man behind the power breakfast is taking his concept outside of new york city. expanding the regency brand. why is he taking on the agriculture industry? i will explain what i mean about that. mistakes the u.s. made in dealing with china. former treasury secretary hank paulson joining peter cook, laying out the mistakes that the u.s. has made with china. google calling the antitrust charges facing europe off the mark. regulators say the company is abusing dominance in the search engine market. google favors its own comparison shopping service above rivals. the