watch what they do and not what they say. china remains defensive. colorado, washington state it's time for a marijuana of date. we go one toke over the line. we are live from world headquarters in new york. it is monday. good morning. i am tom keene with brendan greeley. olivia sterns is off. brendan: interest rate yields are at an all-time high. friday's deadline for greece to present a reform package appears to have been pushed off. the commissioner in charge is saying he hopes that will happen by the middle of next month. finance ministers will not sign off on a bailout for greece. the french finance minister says the next move is up to greece or

it >> we want greece to return to its ability to grow in her cover stability. greece has suffered a lot. the urban policies that have been very hard. the solution wrought -- lies in greece. brendan: the prime minister has blocked at cutting wages and tensions. in china, the government is taking his that to jumpstart the economy. they are increasing the amount of money banks must set aside. they lowered the reserved requirement by 1%. european foreign ministers are meeting about a crisis that many say they helped create. a fishing boat carried 950 refugees cap dies -- cap says in the mediterranean.

it was renzi who wants to follow up. >> our priority is human dignity as well as national security to stop the trafficking of human beings. the new slave drivers cannot think this is a secondary problem area --. brendan: libya has been used as an embarkation. the european union has made it difficult for people to emigrate legally. comcast and time warner are trying to save their merger. the two companies will meet at the justice department on wednesday and they say comcast could walk away from the deal if the government wants to many concessions. the antitrust division is recommending blocking the deal. it would hurt consumers. tim tebow is making a comeback.

he has signed a one-year contract with the philadelphia eagles. he has not played 2012. he was a polarizing player. tom: was he ever any good? brendan: he did everything wrong. he ran too much. somehow he found a way to win. this is what he did in several playoff games are in when it comes to the big games, when he stepped up against tom brady, he could not do it. tom: is this guy any good? brendan: that's going to be the most mail you get a day. i'm looking in your inbox right now and it lowing up. that's actually not true. tom: what an interesting weekend. we have morgan stanley with those good bank earnings.

we will have some coverage of that. julie hyman is helping us out this morning. we have some economic data. it is a's\ housing week. the chicago fed national activity index we will have that at 8:30 a.m. ibm reports earnings. there some huge issues about financial engineering. let's do a data check. futures are up big. crude is nicely over $60 a barrel. there is little that of backup on friday. the three-year will be focusing on greece. that's not a typo.

this is one of the tea leaves of europe showing a stronger swiss franc. we've got a host of people to talk to about this. this is the greece germany yield. i know we talked about greece, up we go. we are getting back quickly. brendan: what is driving the markets right now? i would argue we are in a pattern where every day greece is slightly worse off. i can't figure out which piece of news -- there is a lot of news and none of it is good. tom: we come down and we come back. it's will be an important agenda item ross all markets and all countries this week.

greece is not just about greece. we need jon ferro. i look at the markets this morning. what's the why this morning? we try to get the finance ministers. guest: i listened to one man and that was the deputy prime minister of greece. he was looking at the endgame which could be a new set of elections. they are promising not to renege on their offices. you give them another decision to make. if they do come back and say we will make concessions. they want to stay in europe or it we could get closer to the endgame. they could be moving to a political decision, a referendum or an election. brendan: you've got both of the

centrist parties saying we are ready anytime you want to make is compromised area guest: the bigger problem for greece could be that if they go for an election, what do they do? that is where things could get really messy. the greek people say we are sick of this and maybe we should deep all and exit. that could make even messier down the road. brendan: what is the one bad piece of news that you think is moving the market? guest: you the comments from christine lagarde.

she is not going to allow them to delay payment. that's making people nervous about where things are heading. we are literally weeks away from some big imf payments that greece does not have the cash to make. tom: that was too many shameless plug's area brendan: you are welcome anytime. tom: we welcome someone with some perfect on greece. she is the global market strategist at j.p. morgan. this is the major issue with christine lagarde. is greece banana republic? guest: it is going to be an banana republic if it not in europe. the spreads are moving higher because there is a realization that the longer it goes on the more installment greece becomes. greece is insolvent.

tom: what does it mean for u.s. investors on this monday morning? guest: china is far bigger news erie it greece is a tale risk. if greece exits the euro tom: this is critical. it's not a big deal, but it's huge deal. brendan: greece is insolvent. it clearly is. this is the position of the greek government. the finance minister was very clear. he said we are insolvent. that is one of the issues of this back and forth. we are hearing that we can talk about debt restructuring. tom: this goes back to reinhardt. what is the difference between

the liquid and insolvent? guest: with cash flow, you don't have the method of rain erie you might have the assets but not the method. there is balance sheet in solvency where your liabilities exceed your assets. greece has most -- both of those things. the same time, when you look at the liability, it is way above what they have an asset. brendan: every debtor says i'm not insolvent i'm just the liquid. tom: i said that this weekend. brendan: they are saying they are insolvent. guest: that is the reason why a deal will get done. i don't tickets get -- it gets done this friday. think about the two counterparties. it cannot function.

tom: you are from russia. when you were a kid, did you go to the baltic states to mark --? this is really important. brendan is informed on this. brendan: i have read one book. tom: i want to get an update on crimea. brendan: let's go to the twitter question of the day. it's a good question. it was tom's question. tweet us to answer tom's question about whether u.s. investors should worry about greece. ♪

tom: good monday morning. brendan: six people are in custody this warning accused of connection with a terrorism investigation. the arrest made in minneapolis and sunday -- san diego. turks are pending against a person trying to find the white house fence overnight. the suspect was arrested immediately. it was the 16th time in the last five years someone tried to jump the white house that's. convicted boston marathon bomber will be back in court tomorrow and a jury will consider whether he gets death or life in prison. some 30,000 runners will start the marathon, the world's

oldest. last night, they loaded up on cars -- carbs. tom: let's look forward to this morning. in about 15 minutes we will look at china. there is important news over the weekend. then we digress. i don't really get it with marijuana. brendan greeley is a speed on the worth of weed. we will have a conversation on ukraine and russia. brendan: a loss at the. europe is appalled at a problem they confront everyday. 950 people were trying to get to italy when the capsized. francine is looking at the

wilder -- wider implications. let's go to kevin costello at our bureau in rome. the prime minister of italy has been trying to make the point that it's is not an italian problem, it's the european problem. guest: it puts stress on. there are cost for housing these and eating them and winding them jobs. just keeping track of them is an enormous burden. brendan: this is increasing in the winter. the book trips -- there were just as many over the fourth order of last year. this is a growing problem. guest: it's huge problem. the u.n. says more than 35,000 people have made it to europe in these boats.

about 1600 of them may have died. the problem is growing green --. brendan: many do get to italy. there is a huge influx of immigrants who make it. that puts a huge strain on all sorts of other sources as well. guest: it's housing them, eating them a lot of them don't want to stay. they want to go to france or england where they have relatives. tom: francine x into the american audience the backdrop and the history. there is a large number of turkish immigrants over the decades. we think of the colonial interests of france. what is the back story that you observe from london? francine: had waves of

populations trying to get into european countries because they were hope all of her life. this is different. these are migrants coming by boat. when you look at the numbers, they have much worse. there is an escalation of violence in libya. i would say it's because the vessels are not available anymore. human traffickers these people on small life notes. that's why the situation is is. brendan: alliance share makes both stupidly are coming from turkey and they are syrian. i'm assuming that rises has turned this into a problem that your can't ignore. is it significant that all of the interior is to use our meeting in italy? what has

changed? francine: the numbers. i was looking at eminem this morning. in three months, and 5000 asylum seekers have arrived by boat. this is just in three month. it's a humanitarian crisis. tom: i think of the 21 that died moving rum 80 over two turks and chaos. will this be a sea change in europe? is it just another rationalized a at the races? guest: that's a good question. the eu foreign ministers are meeting. that's the problem. in the eu, there is a lot of this unity. will they be able to come up with a solution? tom: thank you so much.

in our next hour, we are thrilled to ring the chief and westminster abbey just of nemo capital markets. he will talk about the valuation of this talk market area --. ♪

tom: good morning. tom:robot on the top of our tower is showing you. in the distance, annapolis, maryland.

brendan: she the assistant professor at the university of north carolina. she is always worth a lead on digital trends. she wrote for the times this weekend that machines about because they perform task better but because they do a good enough job while also being cheaper and more predictable. i saw you pick up your pen and begin to write as you heard good enough job. guest: i was laughing about the quirky human beings. we don't want to talk to human beings unless we really want to. that's the way the injured going. we went digital solutions for everyday albums. if you can replace it with an

out that's where it's going. brendan: there were two things that scared me. the machines are better at i didn't find people who are stressed out and may have some visa dilation. they are better at reading that stress in the face and posture. the other was that she doesn't feel as convinced that the trend has and that machines will replace labor. there is no aaron t tom: the media loves to sell you to buy robots. i am more worried about the 2000 robots on a manufacturing lower that have no cuteness. they are replacing jobs. brendan: they are not necessarily better than humans. humans do a lot of things better than robots. if you want to employ somebody

that might leave, the robot is not going to do that. her essay is worth the read because she's not convinced that these things can be solved in the old way. coming up china's stimulus machine kicks into action. will it be enough to combat the economy slowdown is to mark --? we are available on your ipad. this is "bloomberg surveillance to --." ♪

francine: good morning. tom: there is a delicious turn to the market. we're looking at crude over $63 a barrel. headline oil crisis over. i'm kidding. brendan: the greek bond selloff is in its day. they are at an all-time high at 27%. friday's deadline appears to be pushed off. they are saying the deal will happen next. european ministers will not sign

off. the greeks are running out of cash and time. >> too much time has been lost. time is not limited to -- if something bad happens, it will be grave for the greek people. brendan: they have balked at cutting pensions and raising taxes and china is backing up a pledge to step in if economic growth slows too much. they are cutting the amount of cash a bank must hold. can reportedly economy room at the slowest taste in six years. columbus teaming up with norway sovereign wealth fund. they own a 70 million square

feet of storage. espn has a problem with verizon files. they are offering slimmed-down cable handles. the says that the packages are not part of their agreement with verizon. tom: serious devon, i'm the only one who hasn't seen it. it has become the fastest movie to gross $1 billion worldwide. it is the top grossing movie from this year. it was top of the box office for the third straight week. i don't know what social message this is. this is a monster. brendan: it's very straightforward. people are punching each other

and driving cars. these are things people want to watch any movie eater. tom: we are waiting for star wars coming. i know brendan is all fired up about capital flows. we are joined from washington. what happens in china if they actually provides endless of one percentage point? does it really move the needle? guest: they are hoping a lot more lending act 70 coming out of the banks. i'm not sure that's going to be the case. they have a demand problem, not a supply problem. tom: the idea of capital flow away from the income state. brendan: we took a look at kyle weinberg. $900 billion in cash has left

china in the last nine months. that is easy to calculate. is this about stimulus or sending cash flows and china? guest: they got a problem with capital out lows and the bank resulting -- lending. they're trying to stop the bleeding. this is not a new phase of much more rapid growth. brendan: what is the distinction between the world banks and the urban banks? guest: i think they have a more significant growth problem and some of the more rural populations. the old model of growth is dead. they are trying to find something different. the focus is not on defending that. tom: what are the ramifications of this for the investment

market? what is the effectiveness upon our viewers? guest: i think we have to watch the market very carefully. i know people are seeing opportunities for more exposure there. there has been a huge increase in rice for the last it's much. i think the government is trying to rain that in a little bit. they are increasing the supply of shares. tom: thank you so much for coming in this morning. anastasia is with us. it's not just the unique bilateral agreement between the united states and china. how does the rest of asia at that to this stimulus? guest: it's a big deal for the world. the second largest economy in the world that we are going to

inject as much liquidity as we have since the crisis. that is a big deal. that is the message that they are sending, grow your appetite for risk assets. brendan: this china have a liquidity problem that needs solving? guest: they are trying to rein in some the credit that has been put in place. they are walking a very delicate allen. they are trying to read enough jobs to make sure it makes sense to move to the urban areas. they have to make sure that they do so in a way that does not create a bubble. tom: iron ore is down 63% in the last working month. that's got a little bit to do with that area brendan: it's been a couple of months since we saw the opening of this connect between shanghai and hong kong. what is coming up? guest: the investors are very

much in aged in the market. it reacts quite a bit more to monetary policy. that has rallied wide a bit more than the agent or mainland. tom: can my money go out if i'm in china western mark --? brendan: with great difficulty. tom: can i move $80,300 this morning? the answer is no. brendan: if you have $500,000 you can invest in a temporary visa and get your kids educated in the united dates. that is happening. guest: there are restrictions as to how much money can flow. that is why we have these investors in china getting an appetite or investing. trade volumes in china are retail investor driven. brendan: coming up, it is april

20. think about that very carefully. we are going to look into what the we industry is really worth. tom: q the steve miller band. brendan: this is "bloomberg surveillance." ♪

tom: futures are up 13. let's get to the single best jerk. brendan: today is april 20. this is the day people consume cannabis. i don't know if there is a difference between celebrating and consuming. these are some of the big numbers in the marijuana business. that is the topic of the single best chart. we are looking at a real industry, $1.5 billion in 2013. we're looking at some comparisons of under -- other industries food trucks are a $3 billion industry. in a few years pot will surpass food trucks area

guest: we are looking ahead to the next five years. it estimated to get $11 million. this is on the back of the road of legal marijuana in 14 states. brendan: tom and i have long thought that pot will be a serious is this when we can talk about it without tickling. we are not quite there yet area let's talk about companies that are making this money. we are looking at the list of companies. they are returning 1133%. guest: how is this even possible? this is the first medical marijuana web portal. they started last year. people believe in this. tom: i don't mean to interrupt. who is against this?

guest: that's why it was legalized in a colorado area --. there are some conservatives on the issue. brendan: are you kidding me? take that back up. i'm trying to do a serious segment and you were in fact role in a joint. this is where we are. i can't say that. let's talk about this. i would argue it's the fed who are not sure where they stand on this area --. guest: i think the serious issue is if you're going to be a serious business, how he do that

when you don't have back the banking system. guest: that is the challenge being faced by these companies. they want to get business. they can't get to the banking sector. they can't access cash. brendan: let's bring that risks -- list again. these are still penny stocks. they don't have access to real cash. guest: the filings are not very can't parent. they are very volatile. people can move the dial very quickly. tom: will this be in all 50 states? is this an event here to stay? is it pigeonholed into just a few states. guest: i do believe at some white in my lifetime we could see marijuana legal across all

50 states. brendan: what about tom's's lifetime? guest: that i am not sure. brendan: we're going to move on to top those areas this is what i am holding in my hand. tom rolled this while we were talking. this is where we are on this issue. we are going to take a look at top photos. this is the shroud of turin. was it great over the body of jesus? there was debate this morning. the carbon dating says no. it is being displayed for the first time in five years. i don't know where it is. it's in italy. we should have known the answer to that this is much more serious. this is the 20th anniversary of the oklahoma city bombing.

168 people were killed or it a ceremony was held yesterday. the service included 168 and of silence. we talk about the milestones that was one of them. our number one photo, kim jong-il on on a mountain top. he evidently climbed it. north korea propaganda said that he climbed it with special forces from the north korean air force. he doesn't really look like a guy who just find the mountain. he looks like a guy who was deposited on the top of a mountain. he is commemorating the death of

his father. tom: they look a are almost 1960's vintage. brendan: the shroud is displayed in a turin. time to ask our twitter weston of the day. should u.s. investors worry about greece? let us know. this is "bloomberg surveillance" and cannabis report. ♪

tom: let's get to the top headlines. brendan: explosion in smalley a kills 10 people. -- somalia kills 10 people. militants of claimed for responsibility. the oil rally is being helped by

slower output. the price is up 30% and after hitting a six year low in march. jon corzine will try again, he is planning a hedge fund and use his own money. he has the -- cap a low profile. those your top headlines erie --. tom: we start with francine and greece the top of the hour. brian ball ski is joining us. we will focus on valuations in equities. morgan stanley earnings are out and we will look at their better than good earnings. brendan: christine lagarde met with officials from ukraine.

they have an end to that talks. you have a deep understanding of this issue. i thought coming out of those talks, her comments were in a pointed contrast to what people had been saying about greece. ukraine has done what it's supposed to. do you sense a difference in the quality of those talks? guest: ukraine has no other alternative. it needs support and they needed it two years ago. ukraine has to do everything the imf is asking. i think greece is in a different situation. they have done a lot of what has been asked. they reduced their budget deficit by 16%. tom: they recapitulate. why do we have sanctions? the distances unchanging.

what changed the debate? brendan: the imf is coming closer to doing what they need to do. the other thing i wanted to ask about is there any chance that private creditors are going to take a haircut on ukraine as well? guest: i think there's a very good chance that they might. the ukrainian economy is in shambles. the debt burden is overwhelming area russia would have been a creditor is not going to step in. tom: the playing -- players are buying this stuff. guest: i think you would have gotten the answer that there is not going to be a credit haircut. there is a possibility that there is. you might react more cautiously to that. brendan: the imf is recommending

to let the hryvnia float. when will we know if that medicine is working? guest: it has to be a frontloaded measure. the medicine has to be taken. one of the reasons why it can be taken right now is because we do have some support to offset that. you get a little sweetener from the infrastructure fund on the other hand. tom: i want to be sure to get this in. what is the relationship right now between russia and try mia -- crimea? guest: in a lot of ways, it is mission accomplished. you are not going to get much more than this.

they were not going to get a bigger chunk of ukraine than that. not only have they gotten a piece of land that they belongs to them, they got the political support. they also got a portion of eastern ukraine that is not completely anti-russia. brendan: we seem to have learned what they wanted. can ukraine survive economically without an industrial east? guest: the other part of ukraine is going to cater to the western economy. i don't think it's going to be in opposition. i don't think that we're going to see a fracture is asian. there is some eastern regions that have a special status. tom: do you buy the debt right

now? guest: i will get back with you on that. tom: i don't mean to put you on the spot. we talked about insolvency earlier with greece. this is the same story. guest: i think it all depends on exactly what support ukraine gets from imf and what measures they are going to have two make in their economy. if you're looking for long-term distrust opportunity, there is a right vehicle for that. if you are you investor -- an investor that's not the place to go. brendan: there is a real difference in the rhetoric you compare what the imf says about greece and what they say about ukraine. they are grateful that ukraine is doing everything they have been asked. tom: let's look at the forex report.

the ruvell is doing better. we have a stronger ruble over the last couple of weeks. coming up, the markets and francine on greece. stay with us. ♪

responsible for its caption content and accuracy. visit ncicap.org] tom: draghi says much more work is needed now and now is by friday. watch what they do, not what they say. and james cornered has done better than good. morgan stanley reports at this hour. this is "bloomberg surveillance." we're live from our world headquarters in new york. it is monday, april 20678 i'm tom keene. joining me brendan greeley, olivia stearns is off today. let's get you our top headlines. brendan: interest rates on yield hitting an all-time high with almost 27%. the european commissioner in charge of you're roe affairs hopes that will happen by the middle of next month. the finance ministers won't sign a bailout fund until they sign a reform act.

>> greece has suffered a lot. there have been policies that have been very hard. but the solution to the greek situation lies in greece. it needs to be proposed by the greek authorities. brendan: the prime minister is balk in raising taxes. in china, the government's taking another step to put more money in the economy. it's cutting the amount of cash banks must set aside by the most since the global financial crisis. the people bank of china lowered the reserve by 1%. that will give banks another $200 billion to lend. last week, china reported its slowest economic growth in six years. disasters in mid terranean may turn up the pressure in europe for refugees. a fishing boat that carried 950

refugees capsized. italy and malta have been able to find sfrl dozen survivors so far. the european foreign ministers meet today on the issue. the continent has a moral duty one says. >> there is no easy solution. there is no magic solution. but it is a responsibility that we must exercise together as europeans and in consistently. brendan: critics say europe has made it tougher to immigrate legally. meeting this week may help determine the face of that big come past-time warner cable merger the two companies will meet wednesday at the justice department. comcast may walk away from the deal if they want too many concessions. they say a merger would hurt consumers. and pro football has not played

games since 2012. now, tim tebow is making a comeback. the former broncos jets and patriots player has signed a one-year contract with the philadelphia eagles. tebow led them to a playoff victory but was criticized for completing a low percentage of passes. tom: on halliburton, not much to talk about. but within the press release, there's some interesting stuff. le 300 million on something and $199 million on foreign exchange and they've got north america down 54%. it is a precursor from what we seen within the next 12 months. they're going to massage the earnings, massage the revenues. everything's fine. happy, happy happy. meanwhile, they're going to take some charges along the way. brendan: they seem to be meeting estimates. but we're looking at shared charges on the energy market. they are making adjustments.

and later, we have morgan stanley earnings. tom: we've got a risk on field after the carnage friday. you're roe churns. nymex, 56 a barrel and some other movement. just a churn to the industry. let's turn to the global markets. and clearly focus on drew brees this morning. francine lacqua knows the mark. she's been in athens as many times as she's been on the greek islands. she joins us this morning. i want to talk about the policy process here. i think our viewers and listeners in america are baffled by the process of all this. who does greece speak to? francine: same people, tom, that they've been speaking to the the last six weeks. it's the you're roe nations and what they call the brussels

group. this is the formerly known troika group. the problem is they still don't have an accord and that's what's so crazy if you want to talk about this process that they've been talking. and the e.u. just wants a little bit from greece. tom: is brussels part of the dialogue? francine: yeah, but they're the second people after the you're roe nation because it's a little will. we talk about did lines. it's about the -- deadlines. and at the moment, they say we can't give any more to greece because if we do, then the spaniards they can portuguese, even the italians will come back to us and say went better deals. brendan: lest talk about specific deadlines. i want you to translate e.u. to

english for me. i'm reading the terminal piece on this. the vice president of the european commission said in an interview the europe group meeting will be a chance to take stock of talks. what does that mean? francine: all right. i'm not really sure where do i talk. we've had technical talks over the weekend in brussels. this is the people that talked details. we don't van agreement on that. then the finance ministers meet in latvia on friday. but the general point, there are five or six deadlines. greece now has to make a choice on whether they possibly default. so don't pay the ms or dependent pay the e.c.b. or whether they stick to that commitment. they have to either pay the international creditors or the cred terse. brendan: is greece a banana

republic? francine: they are trying to do their best. the government has mandate. let's see how long they stay in pour. tom: francine, thank you so much. francine lacqua running our show in the london newsreel. brian belski is known for exceptionally smart notes on the equity markets as well. it's our twitter question of the day. should u.s. investors worry about fwreast? it's front and center. the markets are moving. is i one big so what for u.s. investors? brian: yeah, but yeah but? right. [laughter] here's what we think. greece when all this started few years ago was less than 2% of the eurozone g.d.p. now it's less than 1%. and there's a lot of headline risks just because people want to be reactive because that's what we do. we react. but at the end of the day, europe has bigger problems than

greece. and they are addressing those at least on a near term -- brian: brendan: would the currency help? brian: yes. we don't deny that developing markets are outperforming because of what's happening with q.u.e. but where doe the fundamentals come in after this q.u.e. comes into play? and any time this business that we think our jobs are easy investors are taking the easy template which is apply what happened in america on to europe. the question that i always pose people that are european companies right now is strong on a balance sheet basis as american companies were in 2009-2010. brendan: it's good to be reminded of this. tom, if i heard correctly, greece it is a political problem for europe. it is not an economic problem for europe. we talk about trying to bring the periphery of europe into the economic prosperity that was created by the corps over 40

years. that's the political challenge. but economically -- tom: and driving the ftse and sterling up 80%. but it holds up well, right? brian: considering that u.s. stocks have been up for six straight years and the kind of returns that we're posing so far this year and how canada's been positive so far this year tells you at the same time that investors, we think, seeking stability and consistency. tom: reframe is monday morning, your call, 12 months out. brian: we think canada will be single digit return as well. we do think that there's going to be stronger returns in europe but at the end of the day you have to have a sell strategy for europe because we think this is a bit of a rested period for u.s. stocks but that's ok, especially considering the two great unwinds that are occurring right now. the unwind of the q.u.e. and the unwind of commodities. brendan: tom speaks wall street

and i don't. in your notes what is a stealth bowl? brian: a stealth bowl is we see it there but we don't really understand it. this is a stock market that people cannot wait to diagnosis -- diagnose the end of it. we're consumed with it. how can it be this super megabowl market if we're waiting for it to go down? that's a stealth. tom: walls of worry. many walls of worry. brendan: we're going to take this back to greece. should u.s. investors worry about fwreast? brian belski is with us. he says if i understand correctly, not so much. you should let us know @bsurveillance. this is "bloomberg surveillance." good morning. ♪

tom: good morning everyone. morgan stanley earnings out. julie hyman will give us the update next. what a smart op-ed. project syndicate. if you don't know that name, you should. he's a real deal. -- this is a nuance op-ed for

those of you in this debate. brendan, if the i.m.f. really push back against sorms on this. brendan: but i do think we're going back to first principles on economic debates. what's been fascinating is since larry somers decided to write about it so the rest of us could start talking about it, we're going back to understand the basic developments of what development is. so now we're having this fight about it. is it growth or productivity? tom: brian belski with us. the heart of earnings rises is growth tied to nominal g.d.p. is the ump there to keep the earnings juggernaut?

is the productivity there to keep the whole game going? brian: well for now. but we think the next big phase of the bull market will be led by or actually helped along by corporate tax reform and repatriation which isn't going to happen because of the current regime of the white house. tom: what about the expansion? brian: the majority of the multiple expansion has already occurred. so you can't squeeze much more risk premium into that. so earning's stabilized from here. remember, if you look at consensus wall street estimates, fourth quarter earnings would have been positive if you stripped out energy. this quarter, if you would have stripped out energy earnings would have been up 5%. the comment that you made about europe or about productivity and population is really poor to understand europe. europe has negative population. they have negative population europe in an aging demographic.

tom: what about the u.s.? brian: still positive demographics. and this has been the slowest economic recovery in the history of recoveries. and the issue is we've seen monetary policy and no fiscal policy. tom: why do your equity marks do so good based on what you just said? brian: at the end of the day remember, people buy bonds in 2008, 2009 because i -- brendan: morgan stanley first quarter standings have just come in. giuilana, what do you got? -- julie, what do you got? julie: if you look at the earnings per share excluding the effects of a certain accounting thing that they do, $1.14 is what you get. about 78 cents is what analysts have been anticipating. i'm seeing a revenue number of about $9.2 billion. and i'm seeing some of the

breakout for some of the other measures that we look at for morgan stanley including investment banking revenue at about $1.36 billion. that is better than estimated as well. the companies trading revenue numbers are starting to come out. you look at the fixed income and commodities of and also trading revenue, that's coming in at $1.9 billion. that's better than estimated. that's an area where we have seen morgan stanley pull back to some extent. however, if it's working well and it's worked well with some of the other banks this past quarter, it makes sense that morgan would beat as well. tom: i noticed a dividend increase of 50% which gets your attention. and the other thing i notice is an act of god which is a pretext margin of wealth. brian belski with us. you and i don't know that number. that is a new wall street led by mr. gorman. i know there are -- are a competitive unit and you don't

have to comment directly on morgan stanley. but can you comment on the mindset that you see among new executives like james gorman? brian: gorman came out of the merrill lynch r.e.m. which i did. we were together for a time. the key thing for all of us is to wrap it up. wall street, main street and in terms of ethic gathering, that's the theme. think of the cake right? the cake itself is wealth management and fees and assets. the frosting is the institutional business now. what got us in trouble in the 1990's and 2000's is we try to make the cake -- tom: we're all frosting. brian: the opposite way around. and that's a stronger case. tom: but that 22% for gobble wall street down the road on wealth management is extraordinary. we'll come back on the state of wall street and also of course, brian belski on valuations

within the equity markets. thanks for julie hyman for that look at morgan stanley. let's and a data check here. equities bonds, currencies and commodity. futures up 11. churning to the two-year yield to get an economic data is to a housing set of data. and nymex is stunning. the ruble is stronger. canadian dollar is stronger as well. brendan: this is "bloomberg surveillance." we're going to go straight tour headlines. six people are in u.s. custody this morning. they're accused in connection with a terrorism probe. it is focusing on traveling to syria to join with islamic militants. the arrests were made in san diego and new mexico. people trying to climb the white house fence. the suspect arrested immediately last night.

no identity has been released. it's the 16th time that someone has tried to jump the white house fence. and target is swamped by demand by for a new line of designer clothes from lily pulitzer. by the time it was up and running, much of the pulitzer line had sold out. target apologized the disappointment. those are your top headlines. tom? tom: very good. moore months let's continue. what do you have, julie? julie: we were talking about looking at the morgan stanley excluding certain items including d.v.a. if you back out that tax benefit you, get 85 cents. so not as big of a beat as we were talking about. 78 cents was the analyst estimate. this is something that the c.e.o. has squarely targeted saying that he wants to get above 5% closer to 10%. i'm seeing a number from continuing operations if you

exclude, again, the same things that they were excluding on the earnings per share number. you get an r.o.e. of 10.1%. this is the better quarter morgan stanley has had in quite some time. you take that r.o.e. number, that's the metric that he's putting himself up against to be measured by. it makes sense that he's highlight this has a -- highlighting this as a strong quarter. tom: the other story at china. brendan: back to macroeconomics. china surprised investors yesterday by lowering its reserve requirement racial owes. more than expected. it's easy to laugh at china's misfortune. u.s. is hovering above 2 p.c. but china is changing. the pace of urbanization is slowing. this change is the subject of china now this month's foreign affairs. justin is with us. there's this chestnut about chinese development. the country will get rich before

it gets old. you have them saying that's not the case. china's going to make it. guest: that's right. you were talking about population growth for g.d.p. in the past six decades, kind's life expectancy has doubled. if you've got a third of your population as estimates say it's going to be elderly. as china got what it takes to provide for those people? they argued that this is overrated. this problem is exaggerated. the chinese state since 2009 has taken aggressive action on two fronts on health care and on -- ref. it has doubled the number of chinese citizens who enjoy a pension. brendan: help me understand the cultural difference between what we expect the government to do

which is to take care of people and the cultural expectation in china which is that children will take care of their parents. is that changing? justin: it changed a little. the state will really absorb a huge amount of that because we're talking about a system of government where the society is driven to a large degree, by state policy. the chinese are relying on that idea. and there is a sense -- think of it this way. you have one child in the family. it's a one-child policy for the past few decades. that person is going to be expected to care not just two parents, but for their grandparents as well. that's a major challenge. the chinese think it is going to uphold. tom: let me state, first of all i hate your magazine because the font size is readable and it gets more and for readable and the whole issue is on china, right? justin: not most but a good chunk. tom: you talk about the chinese dream, the leadership talks

about. i think i get how that plays in shanghai. how does the chinese dream play in an unnamed city, 1,200 miles away that brendan and i have never hear about? justin: for the people who are in the that city, they have just come. the chinese dream is arriving in at city and getting the kind of job that we wouldn't have in a rural area. ping's vision is all encompassing. we take for granted the transformation that have taken place in china. it's become this narrative of growth. but it's really by any measure, it's a huge event in human history. tom: who is controlling the game one and two and three decades out? justin: they have been called

authoritarian adaptation. trying to tinker along the edges of the system and see how little can we get away of changing without giving away the game? it's a gamble. and right now, the regime seems stuck and that's why we have the stories about growth, this narrative of decline even though we're talking about 7% growth. tom: authoritative adaptation -- brendan: it's what i do at 5:00 in the morning. when tom demands changes to the show. tom: yes. justin: i'm fascinated by the title of the magazine. brendan: we've been telling ourselves about the narrative of china. what is the short version of this change? justin: look the anti-corruption campaign. the key to what's going on is jinping's massive campaign. if we're not going to make fun of fundamental change, can we make it at least appear to be working for everyone?

brendan: i've got to jump in right there. we will move back to thus this year. come blast time warner table. we will look at the ripple effect. this is "bloomberg surveillance." good morning. ♪

tom: morning in washington. i mean m.o.u. washington. it is a gray cloudy washington this morning. let me go to the monitor to the bloomberg terminal and look at a chart we've look at for years

which is a difference in yield between greece and jeremy. normality down year. no spread. this is wonderful. here's the ugliness of a few years ago. beginning of a crisis. out to significant restructuring in greece. and thinks are quite good. and boy, we've deteriorated. and that difference in yield is about 12 full percentage points. brian belski how do you use spreads in the bond market to interpret the equity market? brian: there's a saying that bond people are smarter than equity people. but they've had a nice 30-year run. we'll give them that right now. but if you look at what kind of risk people are willing to take on and begin what we've seen in terms of policy and how fast they've been able to enact it, it would be very interesting to see who is able to buy that spread product. that's the big thing so who's going to be able to buy that because we know some of the big banks are able to do that. tom: that was the same when russia was blown up.

how do you very quickly here, the low yields in the u.s. how do you filter them in for a 15-page equity report? it's impossible. brian: it's really, really difficult. and the thing you have to figure about what is happening with u.s. yields and all the yield product in general is that when does that start to unstpwhind we've seen yields head higher here. and at the end of the day, we think that starts to really, really unwind once the fed raise rates and the economy goes through. tom: can you beat equity? brian: we can, especially after we see this reactive to when the fed raises rates, yield pop, investors sell their stocks. that's the next great buying opportunity for u.s. stocks. tom: very good, brian belski. let's get to our top headline this monday morning. brendan: we have never seen a greek bond mark like this one. that's not true. of course we have. the sell-off-the-has resumed with interest rates on greek.

three-year notes at an all-time high. friday did-line for greece appears to have been pushed off. european finance ministers won't sign up more bailout funds until they prive of a reform package. the next move is up to greece according to a france minister. >> we want greece to recover a stability that has lacked for years and years because greece has suffered a lot. there have been policies that are very hard. but the solution the greek situation lies in greece. it needs to be proposed by greek authorities. brendan: the prime minister balked and insisted higher measures. banks in china have another $200 billion to spend. people of the bank of china

reduced the requirement ratio but one full percentage point. last week, china reported if the economy grew at the slowest pace in six years. still 7 p.c. the world's largest owner of industrial real estate will expand. the prologis will buy k.t.r. capital partners. k.t.r. owns 707 million real estate markets like california new jersey and chicago. verizon fios has plans to break up the bundle. espn a problem with it. they are offering slimmed down cable. espn and espn2 are not in that core package. packages like that are not part of espn's agreement. and the company does not have the right to strip espn from the tom: "furious" 7 has become a money machine. the film has become the fastest picture to gross a gazillion

dollars. "furious" is also the top grossing movie of 2015. and over the weekend tops the box office in north america for the third straight time. "furious 7" took in $29 million and when they did this before brendan, i got all sorts of wonderful messages explaining to me that "furious 5" is better than "furious 3." you've got to believe there's a "furious 8" right? brendan: of course. they will go to "furious 9." tom: you're serious? brendan: have a formula and that formula works. that is the stuff of what amazing movies are made. cars punches, this clearly works. tom: it works. brendan: we can't be snooty about this. people like it. tom: ok. "furious 7," doing better than good in the movies. let's do a data check.

churning markets before a lot of housing data this week. nymex crude, $55 a barrel. and the two-year yield advanced highly higher. brendan: this is "bloomberg surveillance." i'm brendan greeley with tom keene. olivia stearns is out today. it is a big week for google. it will focus more on mobile. every time it does that, a bunch other companies freak out. we will get to that story in just a second. first, it's a pivotal week for the merger of comcast and time warner cable. comcast be meet with officials to discuss their plan. alex sherman will not be in the room but he is with us now. the justice department is making some noises recently that it is not feeling this merger. what's going wrong?

alex: the first leak in this whole process which started february of last year we heard that anti-trust lawyers were leaning towards recommending blocking the deal. that was going to be the recommendation they gave to the d.o.j. which is the first time that we've really heard any sort of negative sentiment out of the d.o.j. tom: and this is the story that wee seen before. brendan: one of the things that's changed is the department of justice has changed. when the at&t feel apart, we first heard from justice. alex: two things can happen where this deal falls apart. one can be that the d.o.j. blocks the deal and comcast says it's not worth it for us to litigate this thing. the second could be that so many owners conditions are placed on this deal by the d.o.j. where comcast says it's not worth it for us to pursue this because the deal that we thought we were getting isn't the deal we're going to get. brendan: are we seeing the end

of the 10-year era in telecom's policy where the s.e.c. says yeah, you can merge but these are all the things that you're going to do for us. is that over? alex: it might be. it's one of the things that's really being close will you looked at. one thing that they're looking at resolves -- revolves around huell lieu. comcast is a passive owner in hulu. tom: i do research at home on this. is this deck chairs on the titanic? just that simple. there's zero buzz in my house about cable tv.

alex: no it's not deck chairs on the titanic. tom: how much of that is internet and how much is that shows that you don't watch? alex: in math, people start to leave. but still, millions and millions of people buy cable tv. if that number's really starts to go off the cliff, the titanic stars sinking, you have to pay a lot more money for your broadband only. brendan: you're going to have get the signal whether it's a pay tv signal or an internet signal. alex: there's one key point which is title 11. brendan: yeah. alex: if the f.c.c. decides that they are going to regulate internet companies, they've said us we're going to put off rate regulation to the side. but maybe the next f.c.c. says under title ii we can going to restrict how much you can charge for broadband.

tom: are they rooting brian roberts? alex: depends who you ask. honestly, the big winner if this deal falls apart, there should be a ticker-tape parade for john malone. tom: who is the big loser besides mr. roberts? alex: time warner cable might be a loser. tom: what about disney and the rest of them? what do they have at stake here? alex: they're probably in the and winners. because the more distribution platforms -- this was your earlier point. netflix, hulu, amazon apple. they're all paying disney. they're all paying time warner. the more distribution platforms the more of these guys win. tom: and comcast loses? you can do this on monday. i actually learned something. brendan: he actually learned something and we couldn't get to google because tom was so fired

up about net neutrality. this is an amazing day for us. tom t somebody said title ii on set and it wasn't me. twitter question of the day -- should u.s. investors worry about greece? tweet us @bsurveillance. ♪

brendan: you are looking at live

pictures of new york city. south of new jersey as the sunrises. this is "bloomberg surveillance." i am brendan greeley. bill dudley will be speaking this morning at 8:40. "in the loop" anchor betty lui joins us. betty: you get the newsmakers to come to you here right? brendan: i just like the snacks. betty: bill dudley will be talking with matt winkler where he's going to be discussing fed policy right, and trying to give as much or as little as the markets want. you know that bill dudley recently made some comments saying that it looks as if raising interest rates might be a little bit later. on the later side. brendan: he's been one of the fed governors who's been more willing to wait. betty: exactly.

i know tom keene was at the ms meeting last week. and you can imagine that all these guys have left d.c. next year is going to be a completely different world, right? the fed would have supposedly raised interest rates by then. will we see if the world can handle that, right? it's been well broadcast, brendan. do we really know how other countries and how our own markets here are going to be able to react to the fed finally going on to the act? brendan: when it was communicated that it was coming two years ago. and the hope is of course, economies all around the world have insulated themselves from this in a way that they weren't before. i think the other question that always comes up when bill dudley is in the room is there has been an accusation consistently that the new york fed is too close to the company that it is in charge of regulating. do you have any idea when he's addressing that?

betty: probably. he's probably going to talking about the fed and its oversight. there's a great story today on the terminal about the leakiness, in many ways of the new york fed and how some information has gone out and what that's done to the markets. sewell of that is on tap to talk with bill dudley. brendan: i'm going to run out of that building and to see what leaks out of it. who else do you have? betty: he's a big-time hedge fund manager. owns about a 1% stake in m.g.m. he launched this proxy fight against m.g.m. and he's going to be joining us with more. there's a lot more to this story to his battle with jim, who is a longtime friend of his. he wants m.g.m. to take some of their assets and turn it into a ree. so he's going to be joining us

exclusively. brendan: this is something we've been seeing for a while. betty: yeah. shareholder activism. and we're not just talking about casino operators but retailers as well, turning their real estate assets into reef. brendan: should u.s. investors worry about greece? tweet us @bsurveillance. this is "bloomberg surveillance" from the bloomberg building in new york city. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." a monday morning and a greece morning. let's get to our top headlines. brendan: cross the bloomberg terminal, an explosion in somalia has kill at least 10 people. at least four of them are reportedly staffers with the united nations children's fund. it occurred about 600 miles northeast of mogadishu. strong earthquake rattled tyrion's capital -- taiwan's capital. 6.5 magnitude was centered. some school children were evacuated as tsunami precaution

but no tsunami was detected. and former goldman-sachs chairman jon corzine wants another bite at the apple the "wall street journal" says he's planning a henled. he would use his own wealth and a handful of investors. m.s. global went very publicly bankrupt. those are your top headlines. tom? tom: looking forward to the next hour of bloomberg television. morgan stanley further analysis as they came out with a dividend increase and some other pretext margin glory. time warner cable and comcast deal. and teva pharmaceutical in the biotech/pharmaceutical space. one swrue did a study of

valuation models used in the stock market. let's talk to a grizzled veteran brian belski that joins us now on the belski ratio. brendan: you've got to call him grizzled? tom: he's grizzled. if you look the forward consensus, cap adjustment and enterprise adjustment, there's all this c.f.a. gobble. a business insider out this weekend. translate this for our listeners and viewers. which valuation metric matters to brian belski? brian: there's not one set number. you have to take a set at all components of the financial statements whether or not that's the income statement, cash flow right? book value, all these kind of things. and we do more denominator analysis just to find how how good and how real that number is. so that's why trailing me's is

better than forward p.e.'s. the fy-2 peg ratio when you're looking at earnings versus where the p.e.'s are -- tom: and estimated growth. brian: has been the best predictor of forward returns we've seen. because we're in a growth market right now. tom: this is really important and we need to break this down. the numerator is the top part of the fraction. the denominator is the bottom. amateurs always look at that top headline number. and i put a thing out with a business insider on total assets which is that denominator number. nobody looks at that stuff. brian: that's exactly right. and so many people when they want to be nervous focus on the p.e. the p.e. would tell you to sell apple and buy g.m. tom: thank you. brian: how did that work? not very well. tom: this is so important for the person that's out there that doesn't care about what brian

and i are talking about. this stuff matters. brendan: it does. but i'm curious to go back to barry's article. he gives us three commandments for valuations. i'm going to take the last one. thou shall focus on the best measure of market valuation. according to academic research and data. tom talks practitioners and i am more likely to talk academics. what do you feel the academy has to offer you? brian: i think sometimes we become too academic. and the problem we've seen with strategists and economists is they've never really had to buy a stock or imagine a portfolio before and they need to feel a loss and they need to have a sell strategy and. and their issue is so many of us in this sense have relied on academics because we're too worried about wrong. it's like playing sports. we focus on 18 times earnings is expensive?

so is that earning part real? there's a little bit of c.y.a. on that. brendan: if you can point the best practices, then you're covered. brian: that's exactly right. that's with a you have to be bullish on it. we're so worried about keeping our seat versus creating wealth. and we have a lot of twolte re-create and we think that's why the bull mark is just beginning. tom: you talk about the shroud of turin earlier. the shroud of turin is the image of barry having a meltdown because he sold apple two years ago. brendan: are you suggest that we should carbon date him? tom: tell me about p/e ratio. why should people not look at it? brian: it's what you know the real earnings are. all respect to analysts they continue to revive earnings lower. remember too, this is the underpromised overdelivered corporate america model. underpromised/overdelivered.

first half earnings have been slashed. they're now awe justing for the second half of the year. we think the second half of the year are going to be going up. tom: here at "bloomberg surveillance" for our global audience, we are in the throes of nirvana. the stanley cup is upon us. brian: holden. is this the part that you talk about hockey? tom: yes. brian: can i go? tom: yeah. the montreal canadiens. this is the fourth team from canada are in the stanley cup. brendan: and throw in minnesota which is kind of like canada where i'm from. this is exciting. we have great games tonight too. tom: montreal can put it away. what is distinctive about quebec hockey? it used to be a medieval surf dom and that has changed. brendan: we had a big dinner on

friday night and they wheeled out the two big screen tv's in toronto watching the sens and the halfs and this is ontario. that's the difference. hockey in general is what we do and how we live. tom: it's a great time. i saw rangers-penguins this weekend and i thought it was great. gary bettman hit the ball out of the park with this excitement of the game. brendan: yes. tim horton makes a mean doughnut. tom: he is doing a nutella doughnut. brendan: time for the agenda. we look at stories shaping the day. tom, you start. tom: boston marathon is a regular working day across america. it is not in boston. it is an important day. of course, the marathon and this is the pageantry of the marathon from the suburb into the city and red sox playing at 11:00 as

and the backdrop from two years ago. still very difficult. brian: that's a very important day. brendan: it is a massachusetts-only holiday. that's a beautiful day. my agenda, we're taking a look at earnings. boeheim -- i.b.m. earnings at 4:00 p.m. today. really looking at a change in strategy. yahoo! is reporting on tuesday. facebook reports on wednesday. wednesday, we have google microsoft and amazon. we will take the temperature of the tech industry. i.b.m. trying to figure out the cloud that other companies already moved into in various -- and you know what again, today my agenda is greece. and my agenda today is trying to figure out whom i actually have to listen to to help me make sense of this. you have stuff coming from the european commission in brussels. you have different finance ministers groups.

you have different people within greece talking and i don't yet know who i'm supposed spob listening. tom: and there's greece fatigue. brendan: but we can't afford it because it is still moving. we need to continue to understand it. time answer to our twitter question of the day. we asked should we even care about greece? you answered yes. greek crisis will influence the awe attractiveness of europe. brian belski, you say yes? brian: no. it has for the near term basis but we've invested the long term in the next 12-18 months. we can be as reactive as we want . no, we don't agree. brian: brendan: the next question is an extraordinary mixed metaphor. the greek odyssey is a european flat tire. american investors have little exposure but chicken little is with us. last answer, greece is bad. but china's implosion. we'll are will have a layman-like ripple effect like goldman in yield chase. i would say that if china

collapses, it would be larger than layman. tom? tom: brian belski, thank you so much. brian: thank you. tom: we continue on bloomberg television and bloomberg radio where the futures up nine. stay with us. ♪

betty: good morning.

it is monday. a greater show ahead of you. i'm betty liu. bill dudley speaking in just about 30 minutes. we will bring you the comments live in just a few moments. want to listen to what bill dudley has to say. plus, a hedge fund actress and manager, john litt. an energy secretary ernest moniz. i love the hair. first, here is a look at the top stories. representing the creditors, the bond at a