get out the amax. expenses are off the chart. we give you the nerd book of the summer. this year's word is simple. good morning, everyone. this is "bloomberg surveillance ." i'm tom keene. joining me, the nerd olivia sterns. brendan greeley is off today. let's get some nerd news. olivia: all right, tom. nerd news. ftc staff members oppose the deal, concluding that it will not help consumers. they conclude that the merger should be sent to a hearing. that could be a significant roadblock for comcast and time warner. no one involved in the talks is commenting on the record. in brazil, the national oil company has put a price tag on

its widespread corruption. petrobras will pay more than $2 billion. petrobras was linked to a decade of alleged kickbacks, bribes, and inflated contracts. the british trader accused of helping cause the 2012 flash crash spent the night in jail. sarao will fight extradition to the u.s. he must agree to stay at his parents' home and not use the internet. i am not making this up. lawyers say he helped to manipulate the market and helped wipe out more than $1 trillion of value. facebook said sales rose 42% in the quarter. facebook generates more than half its revenue outside the u.s. the chief operating officer said

the company is finding new ways to target marketers on mobile. >> we believe video will play a significant role in bringing marketers to facebook on mobile. we believe video will become more important over time. olivia: facebook said videos are viewed for million times -- 4 billion times per day. it is a nerd show. google has unveiled a new mobile feature. tom keene is excited about this story. subscribers will pay $20 per month and will get credit for unused data. the service only works if you are one of the very few who has a google nexus 6 phone. tom: i can do that on my iphone? olivia: no. we are thinking bulletproof coffee.

it is coffee laced with butter. it is probably about 400 calories of pure butter and coffee in a cup. we have a member of the bulletproof team brewing us some coffee. tom: david was into bed. -- was in tibet. i expected to be disappointed by the fat in the coffee. is this a shameless plug for bulletproof coffee? olivia: yes, but it is kind of delicious. tom: you are going to make me do this, you are kidding me. it is actually pretty good. olivia: there is a little bit of a residue of the butter when you drink the coffee. they say fat is actually good for you. tom: did you have a sheltered

childhood? did you ever try margarine? olivia: no. my mother is german. tom: margarine is like "mad men." i did not taste butter until i was 24. olivia: we will let you know how we are doing with the coffee. tom: that is that. a series of earnings out today. the train wreck known as pepsi -- they are trying to figure out what to do. coca-cola, interesting, yesterday. we get the american powerhouses of caterpillar and general motors. citigroup has an outrageous call on the future success for gm. new home sales at 10:00, as well. a data check. it is a quiet market out there. oil has done nothing.

yields are up a little bit in the last couple of days. let's go right on to the bloomberg terminal. olivia said tom, do new home sales. i said, ok. here is the cyclical move. here is the boom. housing to the moon above one million units. here is the harshness of the crash. we are not even back to the normal back here. olivia: i was about six years old and i was thinking the housing market is great. [laughter] olivia: we had existing home sales out yesterday. existing home sales were up by 6% in march. tom: i did not know that. olivia: prices are rising disproportionately to income. tom: you may need cable tv. one description of the

back-and-forth between justice and comcast. alex sherman does not watch television but he does watch all of the justice unfolding. microsoft was a dead. ibm was a dad. trying to figure what to do with your cable bill. does any of this have to do with what i pay for cable tv? is my cable bill going to change depending on what justice does or does not do? alex: i don't think so. it is one of the great ironies of what is going on with this deal in justice. what we learned last night was that the doj was leaning toward blocking the deal based on a recommendation from their lawyers. what we learned last night is that the fcc is taking a harder line then doj based on meetings that comcast and time warner cable executive said. tom: let's rip up the script. what is the distinction for

brian roberts between the fcc and the department of justice? alex: the department of justice would need to make a case in court. they would need to sue to block the deal. the standard of evidence for the department of justice needs to be higher. the fcc does not need to sue in court. they can simply refer this case to administrative hearings which is exactly what they plan to do. which is what we learned last night. if this happens, they can more or less effectively kill the deal. they cannot remember any example of any company fighting in administrative hearings because they take so long. they would take another year or two and that would make it not worth it for comcast to pursue this any more. getting back to your earlier point, the irony about this is that i am not sure that there is a fantastic argument for the doj

to make to sue to block the case because it is not obvious to me that simply comcast taking over for time warner cable would do all that much to consumers. olivia: you are saying a hearing as certain death or not? alex: the hearing as certain death -- or 99%. tom: very cool. alex: that is the news this morning. tom: the soap opera continues for comcast and time warner cable. how about too much information? that is one way to describe this earnings season. revenue growth is a tad light. nominal gdp is a tad light. an optimistic tone, a bullish tone is being made down the

income statement. revenues really are not happening. magic is happening on the income statement. can that continue? michael: not forever. this first quarter has been the elephant in the room for u.s. equities. tom: revenues are light. company after company. michael: you also had the fx issue. tom: i am going to call that part of the revenues-light story. michael: i think 78% of the companies that have reported have beaten on earnings and 49% have beaten on revenue. tom: how have you reframed your call on the street, your outrageously bullish call? michael: right now, i have not reframed it. olivia: how do you get there

without organic revenue growth? michael: you have 6% or 7% of earnings growth and pe expansion? olivia: this was the biggest downward revision since the crisis. michael: that has been well-factored in. i will change my outlook if, in the second quarter, we are going to see more of the same and the outlook for the back half of the year is truly very different. i have been a relative bear on earnings, i want to point out, in my call. tom: you are relative bearish -- you are a relative bear on earnings, but you have one of the most optimistic calls on the street. how do you do that? michael: when i zoom out a little bit, my framework is that pe's, which are now high, i have that a lot higher. given the backdrop of where we are for importing low interest

rates from other countries combined with low inflation in the u.s. that is a recipe for continued expansion. pe expansion has defined the rally over the last 3 or 4 years. pe multiples are far from topped. provided that we do not go into a major contraction. that would be when i change my tune. but i don't think we will. i think we will grind through here. i think 6% or 7% earnings growth for the year is a high probability. olivia: well at tivoli -- relatively optimistic. do you have bulletproof coffee? michael: not yet. tom: hold on. aaaah! [laughter] tom: this is like when the

person at starbucks is hung over and they put in too much stuff instead of black coffee. olivia: i have no idea what you are talking about. tom and i are feeling good with our butter-laced, bulletproof coffee. google wants to get you -- your wireless business. will customers buy it? good battery morning to you. tom: get me the rum right now! ♪

tom: good morning, everyone. let's get to our top headlines. olivia: michael brown's family

will file a civil lawsuit against ferguson missouri. brown was the unarmed teenager killed last summer by a white police officer. they will file a wrongful death lawsuit. the pentagon is going where the experts are to improve its tech know-how. they are going to open an office in silicon valley. they will provide venture capital as well. it is called me at the zoo. it was the first ever video uploaded to youtube. the site has more than one billion users now. those are your top headlines. tom: you wonder where youtube will be in 10 years. how do they make a ton of money? olivia: animal videos. tom: yeah, i don't know.

the kids love it. olivia: you love it. tom: not really. i don't use it that much. we look at europe. the serious tragedy of the migrants moving across the mediterranean to italy. i will touch on that. some challenges that petrobras, to say the least. the economy is sporting. it is the nerd book of the summer. "simple roles." -- "simple rules." it is another smart, smart must-read for those who want to get a better feel -- it is the disruption book. olivia: google is launching one of its mood shots -- moon shots. it has just launched porject fi. the service will be offered through sprint and t-mobile and

you are going to get refunded for the data you don't use. you are going to get your money back. will customers buy it? for more, we're joined by paul sweeney. how big of a threat is this to verizon and at&t? michael: in the near term -- paul: in the near term, not much at all. but anytime google gets into any business, you need to pay attention. tom: when does apple do this? tim cook has got to be squirming. paul: apple is in the market at the high-end of the market. i think they are comfortable where they are.

tom: mi going to get a 20 dollar per month cell phone bill? paul: that is not happening. i don't think they do it for a long time. olivia: once you put a $20 per month plan out there that gives you your money back for data that you don't use, how can there be anything other than complete price explosion -- implosion? paul: if they say, let's roll this out to more devices, more carriers, that is when verizon and at&t have to pay attention? tom: can they roll it out to apple? paul: they potentially could? we have not seen much of that in the past. tom: what did you learn on the facebook conference call? paul: business remains very strong. tom: killing it. paul: they got a little hurt on

the currency, as everybody else has, as well. tom: zuckerberg is doing exactly what abby joseph wants. paul: and what jeff bezos has shown that the street is ok with . a lot of these internet companies who are growing double digits every year -- olivia: facebook is an enormous company still growing north of 40%. that is incredible. yes, advertising disappointed for the first time since 2012. it is a juggernaut. paul: google put up advertising growth tonight. i think a lot of investors will say, we don't mind you putting money back in here because we recognize that the opportunity is there long-term. there was a mad rush in silicon valley for engineers. olivia: the department of defense is out there.

one in five minutes that people spend on their mobile phones is either on facebook or instagram. one in five. tom: you are describing me. later on bloomberg television, the chief financial officer of general motors will be on "in the loop." look for that this morning. gm on fire on a cash basis. stay with us. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." this is my morning must-read. it is so good it is a morning must watch. charges against sarao have shed

light on spoofing. matt levine has done a fabulous little vignette on spoofing. ♪ matt: you may have heard that a trader was arrested in london for manipulating futures. prosecutors say that his spoofing contributed to the may 2010 flash crash on the s&p 500 index, when it fell 60% in a matter of minutes before quickly rebounding. spoofing involves putting in fake electronic orders on one side of the market. a spoofer who wants to buy futures may put in an order to sell them. others will think he is dumping and then he will never execute and will start buying contracts at the lower price.

then you repeat the process in the reverse, pretend to buy futures, which will post -- push the profit -- the price up and allowed to buy it profit. sarao did just that and netted $800,000 worth in profit in one day. tom: absolutely fabulous. this is the issue on global wall street. this is a great debate. i am more with matt levine. howard to do it for the trust of america to its wall street to get hft and spoofing fixed? michael: the fact that we are having this discussion right now is significant. the clear issue with

transparency and trust on the markets for a wide range of investors. with the bifurcation of how extraordinarily sophisticated quantitative technical traders versus the old ways of doing business. it alienates people. tom: matt levine and john arnold in " bloomberg view." you decide. olivia: when will janet yellen raise rates? you don't want to miss it. ♪

♪

morning. the eu finance ministers meeting on greece. let's get to our top headlines. olivia: a major blow for that proposed merger between comcast and time warner cable. fcc staff members are opposed to the deal. they say it does not help consumers. antitrust officials said they are leaning toward blocking the deal. the opposition of the fcc is stronger. they are stronger -- they are likely to recommend that

administrative hearings be held which could effectively kill the deal. the national oil company in brazil has added up the cost -- the price for petrobras is $2 billion. petrobras was rocked by years of alleged kickbacks, bribes, and inflated contracts. deutsche bank is prepared to settle the probe into rigged interest rates. it could be the biggest penalty yet. a dozen firms have already paid $6 billion to settle similar claims. european leaders are holding an emergency summit over the tragedy of migrants trying to make it across the mediterranean. the eu will consider a number of actions.

there will be a separate meeting in brussels between the leaders of greece and germany. angela merkel has not backed down on her demand that alexis tsipras must reform the greek economy. a judge has approved a landmark deal involving pro football and head injuries. the nfl will pay out as much as $1 billion over 65 years to former players with head injuries. they accused to the league of hiding the dangers of concussions. tom: very good. time for a pop quiz. i failed. maybe you will fail, too. our guest host suggests american investment is linked to the movement of rates across the

atlantic and back to washington. bill gross agrees. watch german yields. why do you care about what is going on in latvia or berlin? michael: sure. people talk about the u.s. treasury markets and where they are going. that has been heavily defined by the fed, historically, of course. if you asked me where u.s. rates are going, i am going to say look at the eurozone and what is happening there. but for the last jobs report, we have had a pretty good stream of jobs reports. of course, german yields, many of them are negative. swiss yields and in other countries throughout the eurozone, as well.

that sets up the relative value trade for u.s. treasuries. tom: what that means is that dividend growth is that much more valuable if the terminal rates stay low. michael: one of the metrics i track is the spread between the 10-year treasury yield and the dividend yield and, right now, it is near parity. that is impressive. some people would argue you have a better credit rating on the s&p 500. of course, it is apples and oranges. olivia: do you agree with bill gross? michael: he also talks about the timing of the trade, which is key. fundamentally, yes that looks pretty obvious. olivia: i want to look at the chart you sent us about global central banks. the green arrow to the right -- central balance sheets have tapered off in the last couple

years. what are the consequences of this for your investments? michael: that green arrow assumes that the bank of england , the bank of japan, the ecb, and the nr fed -- and the fed that green arrow takes what they pledged to do. in u.s. dollars, that shows global stimulus is as strong as it ever has been over the last five years. tom: have you come every year career, ben is focused on the fed as you are now? -- have you, ever in your career been as focused on the fed as you are now? michael: it is about global

central banking. it is about defining the markets. it is not up -- not just about the fed. tom: explain to ms s. sterns what happens in a bond bear market. she has never experienced one. [laughter] michael: it gets interesting really fast. you have the bedrock of finance going crazy. tom: this is something you learn real quickly. the idea is that price matters. we go yields, yield, yield, yield and one day you wake up -- olivia: do you have a strategy when things get interesting or do you ride it out? michael: i think folks like janet yellen have the index

volatilities on their screen. that is as much of an issue for the economy, let alone the markets. what we are doing right now is we are supporting volatility suppression thanks to the ecb and the doj. that is an important structural force right now in the bond market and the equity market. michael: i don't know when she is raising rates and i don't care that much. right now, i am looking at what is happening with global bond prices and bond yields around the world. tom: use of cash. does it continue? does everybody migrate it over to share repurchasing and dividend growth? michael: what works for a ceo. that is on until the debt leverage -- olivia: mark zuckerberg at facebook. tom: he is doing the opposite.

michael: god bless him. olivia: coming up, we had to south america. it is not pretty. we are streaming on your tablet your phone, and bloomberg.com. ♪

olivia: good buttery morning.

we are drinking bulletproof coffee. it is coffee laced with butter. tom keene is loving it. he is a happy man. tom: aaaah! olivia: aaaah! the idea is that the coffee is laced with fat and fat is good for your brain. tom: are you saying that i look fat? culturally, this is a big deal. it is normal. olivia: there was a backlash against fat in america in the 1990's. the guy behind bulletproof coffee is saying that fat is good for you. tom: do they do this in brazil? olivia: the coffee is also good in brazil. that is our segue. we are looking at petrobras, the brazilian oil giant.

the state-controlled company brought off $2.1 billion in alleged bribe payments. there were more problems than corruption at petrobras. petrobras has underperformed the s&p 500 oil and gas orders index. they do not just sell oil. they also sell plastic. what you have seen it is that the fallout has affected the plastic sales. tom: the buttery coffee is kicking in. it is about 41 days. it is a slap on the wrist kind of thing. tell us about your take on this brazilian juggernaut? michael: this company has had several years of massive issues,

as the chart indicates. there was everything from -- there was the corruption, but they were undertaking a real moonshot with unlocking this tremendous research. if they were able to achieve these things, they would be producing more oil than at some mobile in eight or nine years. they raised $80 billion. at $35 per share. tom: the money question for our viewers is do they express an international view through caterpillar and procter & gamble and gm or do they buy a brazilian company? olivia: petrobras they have a mandate to buy domestically. they are buying their equipment from domestic producers. it is not as big of a bone for companies like caterpillar. michael: there is a huge locally sourced issue. tom: do i want to buy gm or do i

want to buy an automaker? michael: it is really more of an event-driven situation. this company had a $400 billion-plus market cap. tom: do i want to buy u.s. multinationals to express an international interest? michael: in this case, i would say, yes. a large cap u.s. company. olivia: we are looking forward to caterpillar earnings later today. let's take a look at photos. tom: what do we have? olivia: a volcano in southern chile. tom: this is not "game of thrones"? [laughter] olivia: no. the area continues to remain in red alert. 626 miles away from the capital.

unbelievable. tom: very cool. very wonderful. olivia: in the meatpacking district, the whitney museum of american art is about to reopen in its new building on may 1. tom: do you have to wear black to go in it? olivia: no. bloomberg got a look at the opening. it features 50,000 square feet of galleries with views of the high line. the board of trustees is hoping the luxury building will become a hot spot for events. tom: i think it is great for one reason. i was never comfortable in their madison avenue museum because it was so squeezed in -- the geography on madison avenue. this is much better. olivia: 50 thousand square feet. i can't wait. i am going on tuesday. the opening is monday. are you a "star wars" fan? darth vader received a makeover

in japan. his mask was plated with gold. it is not for sale, i am sorry to say. the golden coins can be purchased for $8,300. tom: this is the beginning of the "star wars" hysteria. ima huge fan if they get the story line right. "return of the jedi." they have to do "empire strikes back." olivia: we will have a surveillance outing to the star wars premiere -- "surveillance" outing to the "star wars" premiere. good morning. ♪

tom: you've got to love "bloomberg surveillance." off-camera, i am talking then diagrams nirvana -- vendia grams, nirvana. what it --which foreign policy issue will matter most for 2016? olivia: north korea could double

its exports. north korea may have 20 nuclear exports -- warheads. the former hewlett-packard chief executive will formally declare her campaign online on may 4. ben carson and mike huckabee also plan to enter the gop fray. baseball's home run king is no longer a felon. barry bonds appeared before a grand jury investigating steroid just review should. the verdict was his only conviction. tom: earnings coming out. and number of blue chips. we will be looking at revenue

dynamics. congress. we will have a nice international relations track on congress. we look to iran. this is wonderful. this may be my book of the summer. disruption. that was the nerd word turned overused cliché for 2013 and in the last year. it is a surveillance -- simple is the new disruption. "simple rules" is the new nerd must-read. where did this come from? it seems too easy. >> it came from when kathy and i started studying companies in the mix of the dotcom bubble.

we were trying to differentiate what separated simple and complex companies. they would apply a handful of simple rules to a critical process. it would provide guidance, but leave flexibility. tom: sean connery, "name of the rosary." would go back to the 14th century. how do we get to a lot of nerd talk? >> we do it via sir isaac newton. tom: ok. going 17th century. >> indeed. isaac newton came up with the first set of golden roles for managing monetary policy. tom: very cool.

the one volume one isaac newton is worth reading. here is a quote from "simple rules." i love this. i love the idea of thinking in chunks. discussed that. >> we are getting a lot of information all the time. how do we parse that information? what can we afford to ignore? simple rules draw boundaries. ignore, ignore, ignore. within this boundary, we focus, we prioritize. olivia: what is the connection with tina fey, bees, and burglars? >> they all use simple rules. tina fey learned from "saturday night live."

she used those on "30 rock." olivia: what are simple rules for investors? >> the types of rules. one type of rule would be a timing rule. you are talking about brazil today. a big resilient conglomerate has a role they have used for years. tom: let's bring in michael. he is dying for simple rules for the federal reserve area. if anything, they have gone to more complexity. it is a most like the fed is doing opposite of what they are saying. michael: the fed has been negotiating for wiggle room for more and more complexity. >> not following the rules

slavishly, but some guidelines which with you use discretion. to communicate to investors this is what we can expect. to build on the experience of centuries of what has worked and what has not worked in monetary policy. tom: this chunk so far, we have not mentioned type one, type to construct. it is very cool. olivia: it must be the butter coffee. how do you be -- have do you get too simple? >> know your objectives. find the rules. develop the rules. sometimes from big data. it starts with having clarity on what you are trying to achieve. tom: thank you so much. this is the book of the year. "simple rules." i am going to turn to the bloomberg terminal. there is the forecast from a major consumer company. procter & gamble expects organic sales growth of low single digits.

i am going to collect a tepid forecast. michael, this goes right back to nominal gdp as expressed through major consumer company. michael: right. olivia: it goes back to your point of no organic revenue growth. michael: nominal gdp is lower than it was in 2005-2007. for any postrecession environment for the last 50 years. this has been an issue for a lot of companies in achieving pricing power. tom: you go down the press release that comes out. there are a lot of negative numbers under buying. revenues is unit sales and price. price is pretty good for procter & gamble. they are getting killed on organic volume. olivia: they are getting stung by fx. they do say that

currency-neutral core earnings, they are maintaining their outlook. the other thing we want to hear out of the call today. whether or not they will divest the business. tom: stay with us. this is "bloomberg surveillance." good morning. ♪

the chart. forget thomas jefferson and james madison. the state of our secretaries of state after clinton and carry. this is "bloomberg surveillance." it is thursday, april 23. staff members opposing a deal after it will not help from consumers.

no one involved in the talks is commenting. a price tag on a scandal. it cost the company more than $2 billion. it all call -- it also cost jobs, access to bond markets. petrobras was linked to kickbacks. a vendor wants to get out of jail. -- will be freed after --. he manipulated the market that briefly wiped out a trillion dollars back in 2010. facebook rose 42% in the first

quarter. facebook generates more than half of its revenue outside of the u.s.. the company is finding ways to target marketers on mobile. >> video well play a -- a video will play a role in bringing marketers to mobile. videos are viewed 4 billion times a day. most of that is on mobile. google hopes it has found a way to learn you to its mobile phone software. subscribers will pay $20 a month and get credit for unused data. it only works if you are one of the lucky few who has a google nexus six phone. tom: pepsi is out now.

do your pepsi release like pepsi. they have a gross margin expansion and organic revenue sales, which is good. it's a very interesting mix of unit dynamics and price dynamics from pepsi. it's a positive tone for pepsi. olivia: it looks like they are weathering the head. they are reaffirming the view. tom: i thought it was pretty good versus some of the

challenges that png. i am going to give it an up for pepsi-cola. a lot of this tying into the dynamics of our economy and what the central banks will do. speaking of a frenzy, there is a time when you get smart people on to talk about the issue of the moment. paul sweeney has been out front on industry analysis. rich, no surprises. you nailed this call. what did you see months ago? >> when comcast started to do battle with netflix, you

remember the slowdown when netflix was doing battles with the isps. picking a battle with a consumer-centric company put it on to the front burner of politicians and regulators. you saw a change in how this issue was being looked at. tom: sec versus justice department. that is a huge deal. why? >> bloomberg reported the doj was -- and now the fcc has a lower burden of proof to hold of this deal. that introduces a long delay. that is the play. it may force comcast to say

enough is enough. tom: does the justice department and the fcc have a great here? >> you have two issues at hand. one is there a significant documentation tied to the prior nbc deal. the justice department does not believe comcast operated in good faith following the nbc decree. they asked comcast to do things as part of that process. they are not happy with how comcast lived up to that dissent decree. the other side, there is no constituency consumers, media companies, everybody seems to be worried that giving comcast control of so much of the internet is going to create long-term problems.

maybe not problems today, but how can this in the best interest of americans? i think this is a death sentence. what does brian roberts turn his attendant -- turn his attention to to buy. they are going to buy something else. do they look overseas? comcast has no wireless strategy. do they get bigger through a team of acquisition? everyone thinks charter steps in to buy them. tom says you have been doing this for years.

how desperate is brian roberts? what is the sweat factor at comcast this morning? >> it is a critical point for them to here. tv viewing is becoming less important. the mobile phones becoming the center of everyone j k life is there a better transaction for comcast to pursue? this is an ego blow. the reality is, there are better things to buy. tom: we have two heavyweights with us. star wars in december. you have been looking at this for decades.

is this a "furious 7" thing that they are going to do with "star wars"? >> star wars is another example of disney making money hand over fist with all of its acquisitions. they are on a roll with all of the acquisitions they make on the film side. olivia: what about the chance that brian roberts could buy t-mobile? >> it is possible. i would argue they are looking overseas. that is where we see the media companies. tom: i am just trying to get to brian roberts in a pink t-shirt and i just can't get there.

paul, you are on facebook. one thought. i thought it was a thumb up yesterday. >> it made it tough to get a hand on it. if you believe in social media facebook is right there. tom: when we invented "bloomberg surveillance," this is what it is about. olivia: 42% growth. amazing. our twitter question of the day -- which foreign-policy issue will matter the most for 2016? ♪

olivia: how about butter in your coffee? we are drinking bullet coffee. tom keene and i are drinking it. i am feeling pretty good. that is a happy man. silence. so rare, for one tom keene area -- for one tom keene.

it is half butter, half coffee. adult stuff, my morning must read. congress is finally back on track. house speaker boehner and mitch mcconnell have restored order to their chambers. they are finally acting as the constitution prescribed. our guest covers foreign-policy. we are lucky to have her. is there a feeling that things are back on track? >> you have to understand carl would say this because it is a republican-controlled congress.

they finally moved forward with this bill and managed to not undo this ban on funding for abortion. that was important to the republicans and clears the way for talking about loretta lynch obama's nominee for attorney general. i was watching the iran legislation. that is not going to be taken out by the senate until next week. tom: is the cadence what you knew five years ago or 15 years ago, or is there a new valet?

>> they have tried to work out wording they can live with. tom: coming up, a speaker of the house will speak with mark halperin. ♪

olivia: michael brown's family will file a double loss. -- will file a civil lawsuit. the officer involved in the

shooting was not -- the senate is voting on whether loretta lynch should be the next attorney general. senate others cleared -- senators cleared the way for a confirmation. she will be the first black woman to be attorney general. a group led by -- has won the meeting for the hawks. it is the second-highest highest amount paid for an nba franchise. that is behind the purchase of the l.a. clippers. his group includes grant help. those are your top headlines. tom: let's look at "bloomberg surveillance." the true tragedy that europe confronts with the migration to italy and the deaths of a few days ago. we will bring you christopher

wheeler. we will move through the morning. yesterday a great conversation. my interview with a nobel laureate. brianne with a sharp book review in the wall street journal. thank you for doing this. liberals are like the dog that finally caught the car. what did they do for brian westbury? i will put out my interview and also the op-ed, if i can find it. olivia: u.s. warships patrolling the coast of yemen. the tension comes on the heels of a historic breakthrough. we're joined.

this is a tricky situation for the u.s. is there a concern that what has been unlocked on the ground could scuttle the deal? >> no. there are many issues that the u.s. has with iran. i do not think there is a new dawn in relation. while they try to keep the problems separate, they tried to keep serious separate. we saw talks yesterday. we have been hearing things. it sounds as if the u.s. president has been

misrepresenting the terms of the deal. >> it is natural you want to show this as both sides as a win. it can be the --. it is possible. what we are getting to is the nitty-gritty. when the parameters came out after our marathon session, everyone thought the obama administration got what it wanted. now, we are talking about the real details. all of this is complicated. tom: let's bring this back to henry kissinger. what he do this different? how far removed are we from

henry kissinger's zeitgeist? >> it is not saying iran is our best friend. >> is congress? they want to say we want to stop iran from getting a nuclear weapon. congress is skittish about this. they believe they cannot trust iran. they cannot trust the ayatollah and the guards. what kind of verification comes into the deal. it is u.n. atomic energy inspectors. this is their job. they have 24 hour a day every day access to facilities in iran that they did not have before. tom: do the people look in silos

are whatever they do? >> i do not know. i don't think we were under the same kind of scrutiny. i will say that in any case, the verification on monday, the energy secretary talked about wanting to have any time anywhere access. this deal will not work a must we get -- where we have suspicious of nuclear activity. some of this may be hard negotiating position from which they will drawback. tom: i want to give verification

on my kids's homework. olivia: you have to get the passwords to their iphones. migrants flocking illegally. we will discuss next. ♪

tom: how about new home sales up.

crosby stills and nash. this is a cyclical move in new home sales. we are barely back to normal. i do not know where we go back to. olivia: this shows the market has not recovered. new homes are key to inventory. we had existing home sales. there is a big diversions in what is happening in existing home sales. tom: caterpillar earnings coming up. a bit. this is up and down. cyclical. i do not know what this is. i do not know if it is a structural change or if we are going to get back to some form of normality. olivia: maybe it is an easy

credit supply glut. tom: tom's sell, tom buy. olivia: it plunged before the crisis. this is a great story. tom: g.m. 86 versus 97. we are affirming the forecast. more details on the complexity. olivia: caterpillar rea forming

-- the caterpillar reaffirming the forecast. tell me about the american business of caterpillar. does it have momentum? >> the one piece of good news was north american. mind america has been weak. olivia: estimates of 135. previously the forecast was for $4.75.

>> you have to deal -- you have to dig deep with caterpillar. it will be a profitable business. tom: what is the distinction between caterpillar and john deere? john deere makes a little zamboni for your backyard ice rink and sam -- and caterpillar does not. >> john deere is 80% farm equipment. olivia: part of the reason is the sale of a unit stake. they thought there was a good chance for a first quarter beat. it is -- because of backlog. >> energy is not down yet.

i go to don vos, every banner says the word infrastructure. that has to be cat and u.s. friendly. >> globally is not happening. the u.s. can marshall construction -- the u.s. commercial construction is getting better. mining has been terrible. tom: what has been good for cap? -- for cat? >> north american construction has been better. to do five dollars, that would be incredible. tom: have you ever driven able those are? what is it like? >> it is pretty easy. tom: i have never done it.

let me do a data check. not much going on. futures negative four. euro churns and oil turns. dow futures are negative. olivia: this is "bloomberg surveillance." today, leaders are holding a summit to address the humanitarian crisis. refugees from libya to turkey are flooding across the mediterranean in search of safety. boats carrying 13,500 people last week alone. hans nichols is in berlin. can the eu fix this? hans: it is unclear how the plan as different. in some ways this is a problem. death rates are higher.

they are fleeing awful situations. they're are going to take enormous risks and with those risks come the possibility of losing their lives. what you are hearing now is to have visa-free travel. if you are a refugee and you have endured -- and you have ended up in libya, you should be allowed to have that. i don't suspect it will be a reality. it is one proposal gaining steam. tom: look to the authorities and

the elites think about it? had he get in the way of the economics of this? hans: you can go after the smugglers. there are talks about increasing penalties for people involved in human trafficking. you have very strong human trafficking. tom: let's ask you. >> what about the toll on each of these nations? how do the government's cope with this? hans: it is a political problem.

germans went from 130,000 to 2000. a refugee house was set on fire out side of berlin. a lot of refugees are not necessarily in those areas. this is a massive dialogue. it is a conversation and it -- how you bring in migrants and make them european? olivia: it is an unspeakable tragedy. there are a million people desperately wanting to cross.

what happens if they are lucky enough to get past the patrol. they are going into a camp and they might be sent back. hans: often times they get discharged and they are elsewhere throughout europe. having an adequate amount of resources to take care of these people. if you don't have the funding or staffing to make it safe and secure, your unified policy does not mean a whole lot. you will have a diffused and bifurcated policy. olivia: thank you.

tom: the angst for general motors. north america leads the way. we will talk to matthew miller. stay with us. ♪

tom: good morning. olivia: missing estimates as struggles undermined sales of light trucks. sales of pickups and suvs remain strong. matt miller joins us. russia and brazil -- is that a surprise? matt: it is not a surprise. gm missed by a dime with $.86. the other half is the tax rate. the myth is not as interesting as what is going on here. tom: i agree. how much did they make on a suburban? matt: they do not release their figures. tom: they have to be loving

gouber. matt: suburban sales have doubled in the first quarter. tom: the french press is out with a single headline. the prophet is eight times bigger than it was. are they killing forward? matt: gm and ford are strong competitors. they are at different points in the market. ford is looking at explosive growth but does not have as much of a base. tom: i do not see ford cars as much as i see gm cars. matt: gm is a bear for -- gm is a bigger company. ford has its strong points.

tom: olivia does not know what an opel is. matt: opel is going strong. they pulled the chevrolet brand out of europe. russia is the interesting story. are the cadillac ads working? olivia: is that the matthew mcconaughey ad? matt: no, lincoln. it split off the business. they are going to invest $12 billion in the next five years.

they're working to make this a real luxury band -- a luxury brand. olivia: what is mary barra's biggest headache right now? matt: they have raised the victim compensation fund so that probably -- tom: a call on gm. stay with us. "bloomberg surveillance." good morning. ♪

olivia: good morning. in this blender is one tablespoon butter. it is the lashes. it is bulletproof coffee. tom keene -- a fan? tom: i would like it with from. olivia: i think it is delicious. i am on top of it.

carly fury and into the list of contenders for the list of president hurray mike huckabee also plans to enter the gop fray. baseball's for objecting -- investigating steroid distribution. the verdict found only conviction in a prosecution that began in 2007. did you see i did not stumble? thank you for the coffee.

deutsche bank looking at a libor settlement. gm with a nuanced quarter. they boom in new -- in north america. mr. zuckerberg, he is investing. is it an investment or an expense? we will talk about that. this is important. we look at america's projection abroad. it starts with legacy. thomas jefferson, james madison. secretaries of state, president obama they have defined a new american order. is this secretary of state now like it was 10 years or 20 years ago.

>> i think president obama has made a big priority to increase his profile. he picked two people known for having run for president. secretary jake cake -- secretary clinton's was treated like a rock star. that was a big part of it. tom: what of other secretaries of state will do with the future? >> one thing clinton prioritized was commercial diplomacy, going out there. that has stayed on during secretary kerry. the question is trying to

promote u.s. companies overseas. olivia: what is her legacy with the voters? >> business will not forget it. whether or not she will be elected, she is the democratic nominee. the biggest news today is because of concerns about the tax returns of the clinton foundation they are going to go back and release five years of returns. hillary clinton said they may audit more. they call it an absurd right-wing conspiracy. tom: i understand the debate. i do not think hillary clinton had any slaves and thomas jefferson did. we are not arguing about slaves. olivia: what is your perception between the difference of

hillary clinton as a candidate and as of secretary of state? >> i covered her. it was a striking contrast. you can put that down to the contrast between campaigning versus governing. some people are into campaigning and you do not see them out. hillary clinton as secretary was very into her job. tom: who else is running? i do not see them with a tangible foreign policy. am i wrong? >> she is the only one who can come out and say i have talked to every foreign leader. olivia: you covered her as secretary of state and canada. the chief criticism is that she lacks authenticity.

tom: i disagree with that. olivia: i am not saying i think that,. >> she seemed more comfortable in her skin as secretary. she was into her job. she knew all of the points. she was up to speed. as a candidate she is saying more what people want her to say. tom: is john kerry worn out? >> it is the same thing we saw with hillary clinton. we spent an entire month in switzerland. on the last day, he told us he slept for one day. tom: --

>> is hillary were not to have been in the race, i think there is no question that john kerry would have been in the wings ready to take on the mantle. no democrat of john kerry's caliber is going to challenge her. i do not think someone like john kerry will challenge her. the benghazi report, they are going to hold it until next year. they will be releasing that publicly before election. tom: how do you define gop foreign policy? >> i think marco rubio and jeb bush have a more moderate foreign policy than some of the

other candidates. marco rubio gave a speech i covered and i walked away thinking -- did he write down the talking points? a lot of what she said -- tom: she put 2.4 million miles just on delta. olivia: a twitter question of the day. which foreign policy issue will matter most? target complete global destruction of nuclear weapons by 2020. china, arming itself to the teeth. tom: this is interesting.

the river between china and north carol -- in north korea. >> china does not want to see north korea collapse. olivia: new estimates show that north korea could have doubled the nuclear arsenal. how big of a deal is that and how reliable are u.s. intelligence estimates? >> it is a very big deal. we have had to put in north korea in the back seat. we have not negotiated with the north koreans since obama came to office. he tried. everything fell through. it will be a template for talks with north korea. tom: thank you.

we continue across all of bloomberg media. "in the loop" next. we leave you with futures at negative six. good morning. ♪

bet good morningt 30 yearsy thursday,: april point third. thursday already and i am betty liu. we have got a great show ahead

this morning. some of the biggest tech giants reporting. facebook and ebay last night. google and amazon and microsoft tonight. we want to make it easier for you today roller coaster ride years after bankruptcy. now if not a lot of company these days. the outspoken senator al franken joining us. first, a look at top stories. new enemies in washington today. bloomberg news, the federal communications -- lawyers in the justice department are already taking a dim view of the merger.