baltimore calls up the national guard. apple generates cash and more cash the dividend is 11%. good morning everyone. this is "bloomberg surveillance." i am tom keene. joining me is olivia sterns and brendan greeley. olivia: let's get to our top height lines. troops of moved into baltimore overnight. riots arrested after the funeral of a black man who died in police custody. demonstrators threw rocks and bottles at police and injured 15 of them. the sister of freddy gray urged protesters to make their point peacefully. >> i don't like it at all. olivia: the governor declared a

state of emergency in baltimore. he said the demonstrators had crossed the line. >> people have the right to protest and expressed their frustration. baltimore deserves peace and safety in communities. these acts of violence and distraction of property cannot and will not be tolerated. olivia: public schools will be closed in baltimore and there will be a curfew. the death toll from that quake in nepal has risen to more than 4400 and it's likely to get worse. there could be as many as 10,000 people dead. people are trapped under the rubble and rescue workers of not been able to reach remote villages that are completely flattened. people are living in makeshift tents.

the cost of rebuilding will exceed $10 billion. chinese consumers are flocking to the iphone. that has profits soaring at apple. quarterly orleans raised 33%. iphone sales in china outpaced those in the u.s.. iphone sales were up 40%. they are on track for their highest profit in three years. brendan: the dividend is up 11%. brendan:there is an asian trade deal that could open up u.s. products. present obama's facing opposition from fellow democrats. china would be the only winner if the u.s. fails to ratify the deal. he laid out his arguments in an interview with the interview with the wall street journal. >> that is the biggest market in the world.

they are already selling to us. there are a lot of japanese cars in the united states and almost no u.s. cars in tokyo. if we don't write the rules, china will write the rules. brendan: we will be shut up and american businesses and agriculture will lose jobs. the president laid to her guide. he took the japanese ambassador to the lincoln memorial. did the sports network is suzy just suing verizon. horizons cheapest package would not include espn. that would violate its contract with verizon. verizon says it is well within its rights. here is the morning brief. t-mobile reports results. at 9:00, we get data on the

housing market. at 10:00 the consumer confidence index comes out. tom: the fed meeting is beginning today. we have a stronger euro and crude does nothing. the yen gets my attention. a stronger japanese yen, pushing against abenomics. this is one of the best charts from japan. this is a relentlessly stronger yen. this is 1997 with a plunge. we get back to this nirvana. this is the own nine crunch. is this a weekend? you can't do all be now makes in the vacuum of japan. there was a promise of other things. one of them was making japanese

businesses more competitive. one was facing huge demographic problem. these are things that they have not yet done. tom: he comes here playing to the tokyo crowd. olivia: he is looking to seal the deal on the trade partnership. he is also looking to address a joint session of congress. he is looking for a little more wiggle room. he wants to be able to build that the army. tom: there is a japanese destroyer in boston harbor to greet the constitution. i turned to my left and there were two 80-year-olds in tears. that emotion is still there. let's turn it to europe. this is an important

conversation. why is europe different than america? it is an inability to clear markets, make tough decisions that you've got to get from politics to economic propositions. stephanie flanders is an expert on the economics of the united kingdom and europe. she is a chief market strategist at j.p. morgan. this is amazing. she survived writing speeches for the treasury department. what was that like? did larry ever yell at you? guest: he yelled at a lot of people before me. tom: i loved your work at the bbc. it was about the deutsche bank conversation yesterday. why is europe have so much trouble clearing markets in a

strange and peculiar way that america does? guest:. guest:if you talk to the germans, they have some socialistic ideas. they have ideas when it comes to other countries. they have some cleansing principles. they do believe in this tough need to get things out of the system and get competitive. i think there is an edge to that. you mentioned the economics. they set up a political project with an economic tool. they haven't solved all of these political issues. brendan: this idea of give me austerity not yet. talk about needing to reform labor markets they themselves

have some the more rigid labor markets in europe. this is medicine they are not willing to take themselves. guest: when you look at the kind of reform that supports growth long-term, it tends to be the product markets and liberating service sectors which they also have not done. tom: is london better than germany? olivia: more stores are closed in frankfurt. guest: onguest: sunday. they are quite good at investing in labor. the labor market is not looking so bad. the unemployment is very low. there was a time and looked like it was really holding them back. it's not held in the back quite so much. olivia: we have to ask you about

greece. they are testing the will of europe. up to last week, i did not what know it would be possible for greece to default. what would that entail? guest: i think it's a 50% probability that they will default. most of the debt they have is owed to the official sector like the imf. all the private creditors got out. a few big payments are coming to the imf another's over the next few months. after that, they don't have to pay this back forever. tom: gdp is awesome. is awesome the right word? olivia: i am trying to figure out why you david cameron is not more popular. guest: we had the deepest

recession and the longest recovery and the slowest recovery since the 1920's. even though gdp has gone up real living standards have not gotten back to where it was. the cost of living crisis has been difficult for david cameron. tom: if sterling goes up, we can afford it. brendan: that is why i planet travel to dublin and not london. olivia: another blowout quarter for apple. the iphone boom continues. they are selling more macs than ipads. "bloomberg surveillance.""bloomberg surveillance." we will discuss next on ♪

tom: good morning. "bloomberg surveillance." olivia: the vatican officials are meeting to plan the pope's change campaign. he will call for the passage of you and treaty on global warming. the church will focus on how. argument to the sanity of the colored movie killer are underway. the defense admits he killed 12 people in and aurora theater.

he is mentally ill. prosecutors say he was saying the time because he planned and escape. facebook is set up a battle with apple and google. they're releasing a video for its messenger service. it will work on iphones and androids. facebook says messenger has more than 600 million users. those are your top headlines. tom: we move on to a chart. then move on to the discussion

last night. there was a debate over how you consume this big boxing match. did you know that manny pacquiao is in the philippines? i learned at this last night. this is a big saturday night. it's a major debate, do we go out or watch at home? brendan: i'm glad you said it. tom: it's a big deal. we've got some interest in on this. olivia: another massive quarter for apple.

for the first time, they sold more iphones in china than in the united states. sales in china were up 71%. they hike dividends to $.52. at was ahead of analyst estimates. the one concern remains ipad sales. sales fell again. we went to focus on cash. the cash reserves rose to $190 billion. a lot of analysts maintain that

they are overweight. tom: they are going to take the cash abroad and do bonds at next to no interest and deliver out to shareholders. brendan: is any of that cash ever coming home? tom: i think it depends on cash -- tax policy. the dividend one up 11%. they use the cash, a 17% pop. olivia: we try to be fair in bullet -- balance. the weak spot looks like the ipad. they are selling more macs than ipads. michael dell is looking at this and saying you're making this money off computers? tom: she is holding up her ipad it. >> i can hold this up too much. i refuse to use this holder i was given. it's just not quite nice enough. i do use it a lot. from an economic standpoint, these results show that china had 9% growth. it is now a much bigger economy because it has that eight or 9%. the global demand is still growing a lot. brendan: nerds said you need an open system. they have this system and everybody is holding on to it. they are buying apple laptops. tom: his perspective on apple.

craig moffett on the content of the media and how it looks to tim cook's world. this is "bloomberg surveillance." good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." the euro and the yen our strengths this morning. the euro is getting up to one of 927. getting our attention is the morning must-read. olivia: my morning must-read is from the "baltimore sun."

for more and never thing that happened in baltimore for the past 24 hours, we want to bring in julie fica wits. i know you cover the crime beat at the "baltimore sun" for almost a decade. what do you think about what he is writing? did you see this kind of police brutality play out? guest: thanks for having me. i am happy you were talking about this. but i saw in my years of reporting was tension again and again between the community and police. i was writing 15 -- 10 years ago -- some of the aggressive tactics that are getting a lot of attention right now.

it does have some deep roots in the community. brendan: we spoke yesterday and you said you were heartbroken at what is happening. looking back, or their points when baltimore could have prevented this? guest: that's a really good point. i think a lot of this does trace back to martin o'malley's election in 1999. he is now thinking about running for president, he made his political name out of zero-tolerance approach to crime and super aggressive policing strategies that sent record numbers of people to jail. it was so aggressive that the aclu sued the city over improper arrest. that did not help relations. the next mayor tried to undo

some of those policies and met with a different style of police commissioner. the mayor that is in place now reverted back to more of the zero tolerance style herself. it has been back and forth for years. certainly, the tension has been a constant. olivia: i was reading in "the baltimore sun," and there were some incredible statistics. scores of people killed in police custom-made. $5.7 million in settlements paid out to people who were abused in police custody. do you have any sense of this situation has improved? are things as bad as ever? brendan:guest: it has been such a long simmering situation, even if

changes have started to take place in recent years, there is a deep level of mistrust out in the community particularly of west and east baltimore. these are people who have grown up seen relatives harassed by the police certainly aggressively approached by the police. there were times when police arrests looked a lot like hostage situations. people were not told why they were being stopped or searched or why they were being taken to jail. that sort of environment over a number of years is very difficult to undo. to my knowledge, there hasn't been a concentrated effort to really work at it. it sort of happened in fits and starts at it flares up when there is a lawsuit and it will die back down. people don't want crime in their community, but there is a constant tension between cracking down on crime and

outreach to the community. olivia: we will leave it there. thank you so much. she is a former reporter for "the baltimore sun." our twitter question for the day did urban renewal fail in baltimore? we would love to hear your thoughts. brendan: when you talk about urban renewal, you talk about those projects and it does not seem to work for the rest of the city.

leaves are out in new york did they have sprung in the last few days. we are looking down at the empire state building in the lower end of manhattan. let's get to the top headlines. olivia: baltimore received reinforcements after riding left buildings and cars in flames. national guard troops moved in and riots broke out. i man died from injuries suffered while in police

custody. demonstrators fought with police and torched buildings. at least 15 police officers were arrested. freddy gray's mother pled to end the violence. >> don't do it like this. i want to get justice for my son. don't tear up the whole city. it's wrong. olivia: larry hogan declared a state of emergency and the police commissioner worried that authorities have run out of patience. >> this is just criminal acts. we do not need to be harmed in the ways that we have today. olivia: we are getting april limit very idea of how much that deadly quake in nepal will cost financially. the finance minister says it will cost at least $10 billion to rebuild after the quake. there is a human told the people

are focused on right now. more than 4400 people are dead and at least 10,000 people may have died. rescue crews are still searching for survivors. many villages that were devastated cannot be reached. the supreme court hears arguments in a case that may realize same-sex marriage nationwide. the court has allowed game marriage in 17 new states. that leaves 14 where they are still not allowed. it was a big order for bp. profits were twice what analysts had estimated. bob dudley has been set in the company up for a long. time of profits. tom: the national foot all-league is trying to take better care of players.

the legal institute of medical timeout for players who appear to be hurt on the field, the commissioner talked to charlie rose about that landmark settlement in which the league will pay up to $1 billion to resolve concussion lawsuits. >> players it may have suffered injuries we have programs that we hope will be responsive to getting them the kinds of help they need. you can't really determine causation. that's one of the things that the judge said in her decision. the causation wasn't clear. tom: you can watch all of that on "charlie rose" tonight on bloomberg television. olivia: it is nine days until the elections in the u.k.. david cameron is the with the leader of the labor opposition. there is a possibility that

neither party will win an outright majority. we are very happy to have her as our guest host for the hour. ed miliband is the most radical labor leader in decades. they are talking about this could be returned to the 1970's. you see shares of builders selling off because they are worried he will put rent control cap's in line with inflation. how worried should businesses be? guest: it's not just the uncertainty about the outcome. the uncertainty around who they should want to win. traditionally they would favor the conservative government. you have a conservative government committed to holding a referendum on mentorship in the eu. the single most important issue

for business in the u.k. is whether or not britain is in the you. miliband is saying a lot about london in the housing market. there are mixed messages. it's not just a simple as businesses worried about ed miliband. they are worried about the outcome no matter what happens. there are some who support that approach to europe. i think the key things for the u.k. are about what happens to growth in the u.s. and europe and what happens to its productivity. the funny thing is neither of those things will be affected by the election. by the end of year, there will be an exciting coalition and maybe and look funny. those things will be the most important factors for investors. olivia: why can't he just form another coalition? guest: he's got to have an overall majority and looks like he won't have enough with just a liberal democrats.

our two-party -- we have a system that was designed for two parties and now we have a lot of parties. the middle is not holding. we have the scottish nationalists who are going to get 4% of the vote. that's going to be difficult for people to deal with. brendan: when we talk about the non-mainstream parties, how do we see the effect of their positions on the major two parties? has he already won by pulling david cameron to the right? guest: the anti-european party has not done as well as champ and as people thought. they are second place with a lot of seats, but they won't really win any of them. the scottish nationalists have a very clear anti-austerity message. because of all the votes in scotland, they will come away with a lot of seats. that may be the surprise of the

election. tom: the audience gets a lot of this from commanding heights. it begins with churchill losing after world war ii. is there a generational shift this time around? there is something to me abroad, something different. is it that time has marched on to mark guest: it's a rejection of the mainstream. both sides look like they are deeply implicated in this difficult time. the u.k. has been more successful than the eurozone. tom: we all talk about how london is six miles west of london. that's not the u.k. that matters. how is this plane out for the elites? guest: it's going to be a very

regionally split election. london is its own country. it has been fantastically successful. you're now going to have for the first time a generational change that has happened. there will be a split between the parties. it is almost all regional. there will be no mps at all in scotland. tom: doing of who wayne rooney is going to vote for? brendan: he is going to vote for whoever has been responsible for moving his hairline back. olivia: still to come, stocks are at record levels and some are running for the exits. this is the subject of today's single best chart. this is "bloomberg

surveillance." we are streaming on your tablet and on your phone and that bloomberg.com. ♪

tom: good morning. "bloomberg surveillance." the yen advances. let's get to a single best chart. it's a flowing chirp.

olivia: we've been talking about the market gains. the s&p 500 climbed to a record last week. it hit 2000. investors not find it. according to a report, there has been a big d coupling in recent weeks and prices. that means the risk of a correction is growing in the absence of fresh inflows. they are seeing inflows and money coming out of equities. i think gwenyth paltrow would call this conscious uncoupling. tom: what they are going into with the fed meeting is a single veteran inflation. james sweeney is adamant that inflation is over. what is jpmorgan calling this?

stephanie flanders is with us. are we worried about higher inflation? guest: there was a time when the fed was insane enough inflation. we are moving into a time where there is a short term oil. you can have inflation in the u.s. up to 3% for the next 18 months and on the five-year basis it's still at target. brendan: politically you can't get above 2% or people start howling. guest: i think of this country as being a more inflation tolerant country. olivia: i cantilever when it was a problem. guest: we have a lot of deleveraging of people are sitting on some inflation. it's not a great thing for markets. we are in a worldly fed has more inflation than less. olivia: everybody is grabbing for yield.

i think it's curious how stock prices are going up if money is coming out of u.s. equities. tom: this is not common. the correlations are very tight. this is a bet on higher inflation. it's a bet 40 fed that is going to raise rates. the market is way out in front of this. he does brilliant, original work. it's a great chart. underneath it is the yellen call, the june call. brendan: we have analysts come onto this desk and everybody is trying to solve the same question this market has to and. is this cultural? we just assume that things have got to get bad? guest: i think there is a feeling that people are looking at the u.s. and looking at current valuations.

other places a started to look more attractive. europe is improving. it's been over 40 months since the 10% correction it's likely we will have a correction. if you look for the signals and the triggers you need for a proper bull market, they are not there. you don't see any of them. olivia: $1 billion has flown into u.s. equities versus $120 million into bonds. tom: let's go to photos right now. brendan: number three is a video from cambridge university. this is an algae embryo turning itself inside out. this was used to capture this footage. the germ layers are formed to create organs.

i'm not even sure what it means. i can't stop looking at it. olivia: aren't you glad you are doing photos today? brendan: spacex launched the first communications satellite was there 18th launch. it's their second launch in two weeks. that sell it was that operation for 15 years. we are suckers for space photos on "bloomberg surveillance." olivia: and everything elon musk. brendan: we have to return to baltimore this morning. tom: this is the cvs pharmacy. brendan: national guard members were called to the scene and pepper spray and tear grass reviews. elijah cummings spoke at freddie grays funeral. he said something moving. he said, our children are

sending us the future they will never see and there's something wrong with that picture. tom: he came out of this town and did the education the tough way, through howard university. he did not go to any fancy schools. brendan: he has so much legitimacy in that town. we have to get the geography of this right and the numbers right. the shiloh baptist church is right there, the riots started and where freddy gray was apprehended. this is all in a very small area. i think the important part of today will able to get this right. how far did the writers get to the center of the city? it's larger than ferguson. it's a major american city.

in the history of baltimore it's the history of race in america. we can take this on for another two hours today if we wanted to. tom: good photos today. brendan: we are staying with baltimore. the inner harbor and candid yards are urban renewal. there was a tremendous amount of money poured into that part of the city. didn't fail the rest of baltimore? tweet us.

tom: in our next hour, we will have craig moffett. let's get to our top headlines. olivia: the greek prime minister says he may ask voters to decide on any possible deal with his country's creditors. this may not be in line with his campaign promises. the talks are going on.

tyson foods say they will not use at about x in chicken. they will make the chain by late 2017. there is concern about antibiotics in the superbug. tyson is the largest seller of chicken. game of thrones the fifth season premiere attracted 18 million viewers. that is about one million viewers more than last year's premier. it is their most watched show. those are your top headlines. tom: let's forward here. we will continue our coverage of all.

this is west of camden yards in west baltimore. of course, the pageantry tonight in washington as abe meets with president obama on trade. brendan: it's the fight we've been waiting for. floyd mayweather and manny pacquiao will step on the canvas. the fight has not happened yet. it is already historic. hbo and showtime came together. they will broadcast the fight jointly. we have a sparring partner. he has been following this fight. we talked to the head of hbo. how big of a deal is this for hbo right now? guest: this is the biggest brawl in history. in terms of the boxing world.

we're going to see record revenues across the board. paper view is going to be the biggest moneymaker for both of these cable companies. $100 for high debt it's only $10 more. we spoke with richard peppler and he has a forecast of how many buys are going to happen. >> i think we can project over 2.5 million. i think it's going to be something that transcends the fort -- sport. it's people who want to see an event and this is decidedly an event. guest: it will make it rain money everywhere it goes. estimates range between 3 million views and 4 million pay-per-view buys. we are talking about $400

million. that is crazy. brendan: he has been taking a victory lap for the last six months. i think he said the word event. boxing works on paper view. is this a highlight for hbo or is this a last gasp? guest: it is a highlight and a single light. everybody says that after this fight, there isn't going to be much looking ahead. we don't have any more talent in the pipeline. that is because the infrastructure that has led to a lack of youth talent. this is something that is very real, boxing's demise. we may not see something as

major as what we are seeing on saturday. olivia: mayweather stance to make $100 million. that is nuts. guest: in terms of the people who will be watching everyone is going to be paying or going to parties. they will be paying this $100 fee. a lot of fees will be coming from bars will truly live streaming. about $13 million is coming of that. tom: what is the international audience? guest: we're looking at record numbers in the philippines. tom: thank you so much for giving me those tickets you gave me. olivia: yankees red sox, it's the nfl draft, it's the kentucky derby. tom: let me do a four x report.

stay with us. craig moffett ♪is next. . .

>> this is "bloomberg surveillance." tom: baltimore calls out the

national guard. police officer injured as a rrests made. no baseball at camden yards some two miles from the riots. in this hour, professor brad and craig moffett. agood morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is tuesday, april 28. i'm tom keene. joining me olivia sterns and brendan greeley. olivia: very quickly at first glance, we see pfizer coming and basically in line with estimates, $.05151 versus estimates of $.50. ford coming in at $.23, just shy of estimates. a couple of analysts

said we might see unusually low estimates in the first quarter. that is because of the overhaul they are doing to try to put in a new simply line for the new f-150 the new aluminum-body truck. tom: a lot of noise beneath as well. with our top headlines, again olivia. olivia: national guard moves into baltimore overnight after long day of violence. this is following the funeral of a black man who died while in police custody. buildings and cars were torch. 15 police were injured. the twins as to her of freddie gray -- the twin sister of freddie gray urged people to be peaceful. ms. gray: [indiscernible] olivia: the mayor of baltimore took a harsher turn.

mayor: too many people spent generations going up the city for it to be destroyed by thugs. olivia: starting tonight, 810 p.m. curfew and baltimore at public schools will be closed today. meanwhile, the cause of the massive quake in nepal is staggering. the death toll is more than 4400 and likely to get a lot worse. the prime minister said there could be as many as 10,000 dead. many remote villages are described as completely flattened. the prime minister said the cost of rebuilding will be at least $10 billion, about 1/6 of the country's gdp. and chinese consumers cannot get enough iphones. the company's quarterly earnings rose 36%, for the first time,

iphone sales in china outpaced those in the u.s. apple is on track for its highest annual profit in three years. investors will get their share too. apple is raising quarterly dividends by 11%. and the japanese from assertions allow by -- and japanese prime minister shinzo abe will meet with president obama. the president said china will be the only winner if u.s. fails to ratify the deal. he laid out his argument in an interview with the "wall street journal." president obama: number one that is the biggest martin wolf. number two, those countries are already selling to us. a lot of japanese cars in the united states come almost no u.s. cars in tokyo. number three, if we do not write the rules, china will write the rules in that region, will be shut out, american business and american agriculture -- that will mean a loss of u.s. jobs. olivia: president obama played

tour guide. he took the japanese leader to the lincoln memorial where they looked at the gettysburg address. tom: amazing symbolism there. and the self-proclaimed world leader in sports, espn, a small start up in connecticut is suing verizon over the company's plan to repackage pay-tv networks for its fios customers. the cheapest package would not include espn and espn says that would violate its contract with verizon. verizon says it is well within its rights to offer the new package. my things are changing in craig moffett's world. t-mobile comes in later in the hour. it will be interesting as they change the microeconomics of the cell phone business we are all involved it with. robert shiller will join us later. always interesting.

and consumer confidence out at 10:00, something i have never really looked at all that much but consumer confidence is important as we go to the first quarter g-v call here. let's look at our data check. we look at equities, bonds currencies, commodities. futures -7 and a deteriorating yields a do nothing. currencies have got my attention, a $1.0940 with euro nymex crude turns with bonds. the vix showing the good news within the equity markets $13.12. there is the yen. i put in here apple with a $134 earlier, $132.65. that stock split, getting up to $1000 per share on a pre-split basis, on toward icahn's $200

which was make it a trillion dollar blue-chip company. we offer blackburn geniuses. professor brad hintz has for years written definitive analysis on wall street. his former colleague, barely on speaking terms at one point has try to understand the junction and their demand within media. professor hintz is retired from nyu. rumor is he has given up very few a's. and moffett, we look forward to going to the two of you, particularly craig on what we witness yesterday. we need to look at baltimore. olivia: last night, the governor of maryland declared a state of emergency and put more than 5000 national guard troops on hand. 15 officers have been injured. 27 arrest have been made. abc news reporter lives her is live outside baltimore city hall and joins us -- abc news reporter liz hur is live outside

baltimore city hall and joins us now. are these isolated protests? liz: according to the police commissioner, what you have to understand here is baltimore is a large city, and the video that you are seeing of the unrest that is a pocket of the city where it is unfolding, so i can tell you where we are just outside city hall i do not see anything but heavy police presence. however, just go about 10 blocks from where we are, and according to police, that is where some of the areas were unfortunately hardest hit, so it is in various pockets of the city. sometimes you will turn a corner and not see anything. sometimes you can go a few blocks more, and that is where everything is. olivia: livaz, do you have a sense of how this got out of control the weight is, and what has been the police response? liz: police say they are fully

aware that there was chatter on social media over the weekend about this violence. that the students, local high school students were planning, they were monitoring it, and they were prepared for it. they had deployed hundreds of officers to be in position to be able to respond to whatever this violence that was supposed to go down. unfortunately, they say, they were simply outnumbered, and that is the reason why the state of emergency was declared and the national guard as well as additional police are not only across the state but across the region were called in today to help out. bringing order and combat to the state -- and calm back to the state. tom: liz, it is early in the morning. what do you expect when the sunsets? liz: anyone can speculate as far as what could go down. i will tell you, though, as i

just mentioned, police are monitoring social media. you and i as journalists are also on social media to see what is the latest, and i've seen tweets from residents in baltimore who are out right now turning anger into action, policing the streets on their own, to make sure that they can do whatever they can on their end to help bring baltimore back to the city that they love and are very proud of. olivia: liz, i'm just curious -- i cannot figure out why the mayor took until today to put in the curfew. why not put in place last night? liz: many wondered the same question, and last night, the mayor did address that issue at a press conference, and she basically said keep in mind she and her staff have been monitoring the situation around the clock and they are working around the clock. the reason for this, basically two reasons -- one, the city had to get the additional law

enforcement personnel, the added resources that they needed in place. they knew that them to arrive. that was going to be sometime overnight and into today. that was reason number one. reason number 2 -- it was all about logistics. the city wanted to give the people of baltimore the time to prepare for such a curfew, and they said they just basically came down to logistics, they wanted to give people the time to plan, tom and olivia. olivia: liz we will live it there, our thanks to abc news reporter liz hur joining us live on a scene in baltimore. this brings us to our twitter question of the day -- did urban renewal fail in baltimore? we would love to get your thoughts about what is behind the violence. tweet us. ♪

tom: good morning, everyone. "bloomberg surveillance." craig moffett and brad hintz. craig moffett does not follow apple products directly, and brad hintz uses apple products. that is about his only qualifications. [laughter] craig, what is so cool about this? you wrote "black book" for sanford bernstein about these sum of all technology. craig: apple already is just

about the largest supplier to the telecom industry, so that has become one of the largest consumers of media business. tom: the big thing i thought was a shift from a luxury park at that cap talking about the craig: middle class craig:, the middle class, the middle class. -- about the middle class some of the middle class, the middle class. craig: in china. remember, there was a push to make low andend phones to serve china. what are they buying? the most extensive phones. tom: unlike u.s. sanford bernstein, you have the responsibly billy as the chief financial officer instead. apple had a 3h coupon bond a number of months ago. it is trading in premium now to its offer. it is a time of free money. we knew what the beleaguered do. how does a giant like apple work when money costs nothing? prof. hintz: they finance. why would apple need to finance with a positive cash flow like they have?

they would not technically. but these guys are looking out further, they are looking out into a world where rates will rise, and in that environment they should have some level of leverage. they are being handed an economic gain by the marketplace. tom: professor hintz, professor hintz, are they un-american because they have all of that money abroad between the bond deal to bring money back to the fatcats that own apple? prof. hintz: [laughs] the answer is no. what is the motivation? the motivation is to the shareholders. minimize your tax liability, do not bring it back. now, you change the rules, you bring it back, but you will not bring it back until then. the games being played by corporations today are games that i learned as a brand-new mba in chevron's treasury 1970's. -- in chevron's treasury in the

late 1970's. olivia: apple tv could change your world. craig: the iphone is a pretty tall order, but sure, apple tv could be a big deal. they are watching the lawsuit with verizon and that sort of thing to figure out can they get the content to make this business model work? i would not bet against them. tom: craig moffett brad hintz what a pleasure. stay with us. it is "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." let's get right to top headlines. olivia: the vatican officials are meeting today to plan the pope's climate change campaign. in a major statement this summer pope francis will call for a u.n. treaty on the global climate change. the climate change policy is

opposed by some conservative groups in the u.s., including one backed by the koch brothers. in south korea today, a life senate for the captain of the theory that sink and killed more than 300 people last year. he was originally sentenced to 36 years. prosecutors had sought the death penalty. most of the victims were high school students on a class trip. based august setting up a battle with apple and google. the social network is releasing a video call feature for its messenger service. it will work on iphone and android. that puts facebook in direct competition with apple's facetime and google's hang out. it has over 6 million users already. those are your top headlines. tom: very good. craig moffett with us, that is important. jack lew, a conversation with our brendan greeley on tax reform. and what is next for deutsche bank? professor brad hintz at the challenges that deutsche bank faces. we will speak to mr. hintz

about the uproar over the committee in this hour. olivia: president obama and japan's prime minister are meeting today to talk trade, but obama played tour guide before getting down to business will stop you took able to the lincoln memorial where they looked at the gettysburg address etched on the -- down to business. president obama took abe to the lincoln memorial, where they looked at the gettysburg address etched on the marble. peter cook, this is the first time a japanese leader will address a joint section the session of congress will stop why does this matter so much? peter: they are rolling out the red carpet for shinzo abe. this is to highlight the economic ties and to bolster defense ties between these two countries as a counterweight to china. both sides are saying this is not intended to send a direct message to china. simply to enhance the relationship that has been built

up between these two countries over the years. it is pretty clear what is at stake. they will talk of the transpacific partnership. they have not finalized the u.s. japanese component of this deal. they will not during the course of this is a, but they will highlight the substantial progress made and they will talk, as he mentioned, this historic visit to congress a joint session on wednesday with shinzo abe addressing members of congress. it is going to come up there as well. olivia: thank you so much, peter cook will be covering that story for a start the day on d.c. meantime, rodger baker is the head of asia-pacific strategy that stratfor. rodger, good morning. is this a pivotal moment between japan and the united states? rodger: it is certainly supposed to symbolize that. this is the united states recognizing japan as the critical ally in the asia-pacific region, and as a country that is not only going to take a stronger defense role in security role in the region but also political economics. olivia: and chisel off they

would like a stronger defense role, but that would perhaps mean loosening up on the pacifist constitution. is there any room to allow japan to arm? rodger: the u.s. has been pushing the japanese to change the way it interprets its constitution and the way it acts on it. if you look the military in that timeframe, they have gone a long way from what people think they are to really where they are actually at. so the japanese have added refueling, which had originally been considered only an offensive capability. they have an aircraft carrier. they have integrated the communication networks between the air force, the army, and the navy with the coast guard and the civil services. tom: i am trying to imagine the president visiting tokyo and speaking to their legislative branches. how well abe be greeted by this

congress? rodger: for the most part, he will be greeted fairly well. you have the issues of economic and trade, this long-term partnership -- tom: we have the issues of our legacy with them? rodger: in part. if you look at the president taking abe to visit the lincoln memorial, that goes into the origins of the relationship with japan in the 1850's, but also i think was a bit of a nod to the south korean to of been sitting on the sidelines and then very nervous about this. this is a subtle way for the u.s. administration -- tom: a goes back to mccarthy and the and p are all garden in tokyo. this relationship, it is not a tinderbox, but there are still delicacies that have to be addressed over a state dinner. rodger: certainly. olivia: dropping an atomic weapon is delicate. tom: no, i mean i interviewed john dollar from tokyo, and the

importance here is we move on. what we listen for in what mr. abe says in congress. rodger: what we're looking for us how he tries to push japan's role and how much he pushes to set japan of an equal partner with the unites states in the asia-pacific region. olivia: i keep hearing the ap pcp will try to avoid -- rodger: you do not have contiguous territory to stop there are a lot more negotiations going on in agriculture that is opening up space in japan and also the united states. really critical to this is in the end is just the japanese and the u.s. relationship. once that can get locked in, the rest of the countries will fall in line. tom: we could talk for two hours about this. rodger baker just really helpful, with stratfor intelligence this morning. coming up, and the earnings derby, this will be absolutely

fascinating -- t-mobile coming out with earnings. i will not wear a purple t-shirt or whatever colored is, but there it is, t-mobile's earnings. craig moffett with us. futures -7 dow futures -63. they with us. ♪

tom: good morning everyone. "bloomberg surveillance." of course we're talking about japan, the state dinner tonight in washington. let's look at one of the challenges that rodger baker just brought up. this is something the pros look at, this relationship up japan with korea.

here is a stronger korean won. it gets stronger in the financial crisis. it gets stronger again in korea 2009, and the challenge -- is this the korean won stronger, or is that the japanese yen managed weaker? call it the currency wars for northern asia. olivia: obviously shinzo abe worse it's a governor kuroda, doubled the money supply. tom: massive qe -- way more than ours. olivia: i would have thought the chart would have a steeper slope. tom: this is dollar yen and you can see the forever trend of stronger yen and the management. i have to go to standard deviations. there are some mixed opinions about whether mr. abe needs an ever weaker yen and a stronger

dollar stronger korean won stronger everything. the litmus papers the tea leaves that you can see as mr. abe as a number of discussions. i saw one article today with the disk or disagreements over this trade. this is not a done deal. olivia: it is not a done deal but it is critical against guarding against chinese influence in the region, that we need to step in otherwise they will. t-mobile earnings just crossing, first quarter even, $1.39 billion. service revenue up 9%. i'm clicking into the full press release, but the general idea is that t-mobile is the only u.s. wireless carrier that is going to be actually adding wireless subscribers in the first quarter. still with a sunset, craig moffett.

craig, why is t-mobile the only u.s. wireless company adding? rodger: it is the only one growing. this used to be a growth sector. remember whenever that he would name reflexively wireless as one of the growth engines of the economy -- ? you go through the accounting adjustments, the industry is growing at less than 2%, and here is t-mobile. tom: they are a disruptor. craig: they are a disruptor. olivia: i have a headline, 1.8 million total net adds for the eighth consecutive quarter of adding more than one million consecutive drivers also good morning for john legere. in baltimore, troops are called in after day of writing that l -- of rioting that demonstrators

fought with police and torched buildings. at least 15 policemen were injured in more than two dozen protesters were arrested. freddie gray's mother pleaded for an end to the violence. mrs. gray: do not tear up the whole city. for him, it is wrong. olivia: maryland governor larry hogan warned they were out of patience. >> this is not protesting, this is just criminal acts doing damage to a community that is challenged in some way they do not need this and do not need to be harmed in a way that we have today. bolivia: we are getting a parliamentary idea of how much that deadly quake in nepal will cost financially. the finance minister says it will take at least $10 billion to rebuild nepal in the wake of the quake. it is the human toll people are

focused on. more than 4400 people are known to have died. nepal's prime minister said more as many as as 10,000 could be dead. and 2.5 hours of the supreme court today, justices will hear arguments in the case that many say could legalize same-sex marriage nationwide. 14 states are left where same-sex marriages are not allowed. tom? tom: let me do a data check here, folks. equities, bonds, currencies, commodities. futures -9. i will not make a big deal about it, but there it is. some attorney into the fed meeting as well. of note is a stronger euro and a stronger won. go to the next grain. $1.0940 on the euro, and yen

well under a $1.19. this is a big deal. autonomic can -- abenomics cannot get it back to $1.20. i put apple in there for ufun. apple up, up, up. olivia: this is "bloomberg surveillance." our guest host craig moffett follows all of the u.s. wireless carriers. t-mobile is his loan by -- lone buy recommendation. first quarter revenue topping and these describe regrowth, 1.8 million subscribers added in the first quarter. does this mean your expectations? rodger: it craig: we will have to dig in to see what the composition is. the unique thing about t-mobile is the rest of the industry is putting a positive numbers but they are putting a positive number seven because they are

adding a lot of tablets, and tablets are not at a lot of value. they are losing phone subscribers, which is where the value is. t-mobile is adding almost all phones are not participating that much yet in the tablet market, so the quality of their growth is even more impressive than the size. olivia: the price wars are unbelievable. john legere is literally going to head you hundreds of dollars to get irate contract with one of his competitors. have we hit bottom? rodger:craig: it has been breathtaking. the industry has changed accounting in a way that has overwhelmingly flattered results and makes it look like much less serious a price war than it is. tom: well said. where do you see it on the balance sheet? craig: the income statement where the industry as of the end of the fourth quarter, the last quarter fully reported for everybody, reported -5% growth. had it not been for the accounting changes in the industry, it would have been

-20%, so this is an industry with a huge, huge distortion. step back from my coming here is the thing -- first of all, sentiment in telecom is terrible. people have gotten the message that the industry is in real trouble, so the stocks have underperformed. the sentiment is awful. going into the quarter we said look, for the first time you might actually see, if not real evidence of a turn, at least they possibly of a turn whereas the marginal price is available in the market are not really dramatically cheaper any more than the average price of the market. tom: this is what you do best. where are these guys in five years? craig: let's ask this to john legere today. what do you take away from comcast and twc being blocked as it relates to the prospect for consolidating the wireless industry? one of the real roads forward for wireless is whether or not we will see a merger of the

three or four players, sprint and t-mobile in 2015. tom: professor hintz, this is the basic idea that merger consolidation, transactions are over in the transition business. when do we finally see a combination within the banking business facing the same challenges, the same combination that we see in craig's business? mergers and shrinkage and -- when do we see it? prof. hintz: remember, we have a different issue here -- we have regulators who not let the big guys get bigger. tom: thank you. prof. hintz: what you are now facing us management talking about making themselves smaller. that is a reverse. tom: the differences here are bizarre. olivia: we had a guest last week of said comcast goodbye t-mobile. prof. hintz: i do not think so. effectively the department of justice and the fcc just said that their concern is that comcast is too big in broadband. the only prospect that the fcc

holds out now for real competition in broadband is wireless. if comcast says i am buying a wireless operator, i think they will run as to the same brick wall. it just adds more concentration. tom:tom: i want to go back to olivia's question earlier on apple tv. to me a sound like further disruption. are you going to buy apple tv, professor brad hintz? prof. hintz: well, i am already roku. i had a 25-year-old son tell me that i should get rid of all of my cable suppliers in my arizona home and my new jersey home. olivia: what about google? craig: google is trying to do something very similar to the wireless business -- olivia: are they going to put at&t and prizes out of business? craig: they will not put them

out of business, but it is a deflationary force. olivia: my wireless bill seems to keep going up. tom: yes, precisely. olivia: coming up, we will hear from the ceo himself, john legere will be on "bloomberg west." this is "bloomberg surveillance."" on bloomberg television. ♪

tom: good morning, everyone. "bloomberg surveillance."

professor brad hintz with us. we will talk banking with mr. hintz. his former colleague, craig moffett, with us. i will fold all of this in together, and this goes to your wonderful research notes on the disruption of media business will stop i have got disney waiting on the home run of the "avengers," than they go to the home run of "star wars: content ." content is king. i've got the magic of the nhl playoffs. then i go to a fistfight, or i can go to to another phrase where verizon, i think, espn is going after verizon over the reality of what olivia sterns wants to do with her cable box at home. fold all of that in. the power of content versus espn suing verizon. prof. hintz: a lot of interesting things to unpack and what you just said. one of the interesting ones is i have heard that content is king of so many times that a couple of years ago i went back and looked at content versus

distribution. distribution has outperformed content in a most every major time period. olivia: fascinating. craig: now we are in this period where distribution is becoming a business rather than broadband, but now you have this fraying of the bundle where there is concern that everybody loses. the one winner of the fraying of the bandar would be the cable operators because of their broadband market share in their ability to price broadband, but now you have got regulatory intervention that raises questions about that. everybody right now scratching their heads over -- who are the winners in this? if you really do unravel the bundle, then all of the weak channels disappear. tom: how much power does espn have? this comes down to negotiations and power. craig: right now, let's take their word for it for a moment that they have contracts that

say you cannot take espn out or put it on a separate sports era, and i think that is right, the fact that they can get that clause tells you they have an awful lot of power that they can dictate those terms. why is verizon provoking a fight with the programmers because in their wireline business where they are doing the smaller packages now, when the foundational strategy of their wireless is this is to strike -- wireless business is to strike deals with these exact same companies? it is certainly looks that way from the outside. they must have some grand strategy, but for the life of me i cannot figure out what it is. tom: i want to go back to apple tv. that is a broadband play. who wins outside of mr. cook with apple tv? craig: that is a fundamental question, and that is are the cable operators allowed to price for it or not? that is ultimately a regulatory question, and i would argue that the reclassification of

broadband under title ii is an unmistakable step toward price regulation of the broadband business, and why it may not preclude, it certainly raises questions. tom: craig, thank you so much. craig moffett with us a day after apple earnings. coming up, this is an important conversation with professor brad hintz, lessons learned from american banking. we will talk to professor brad hintz about governance and banks. stay with us. on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

tom: good morning, everyone. futures are -8 this morning. olivia: the greek prime minister says he might ask voters to decide on a possible deal with this country's creditors. alexis tsipras says of the plan may not be in line with his campaign promises. bill out talks are going ahead without yanis her yanis her c varafoukis. and tyson foods will go on without antibiotics. the announcement comes after concerns of antibiotics reducing the super bug in people

partially blamed on widespread use of the drugs and farm animals will stop tyson is the nation's largest owner of chicken. and patience has been profitable for floyd mayweather and manny pacquiao. the boxers will finally meet saturday night in las vegas x years after first discussing a possible fight. the ballot will bring at least $300 million in revenue. that is twice what it would have generated in 2009. the growth of it on social media and a recovered u.s. economy have both played major roles. those are your top headlines. tom: looking forward to next hour on bloomberg television ford up against the gm. an important part of the discussion. still discussion on apple, the cash generator on use of cash. and the president, the pageantry in washington, a state dinner as abe visits obama. most interesting through the

morning on bloomberg television. one of our themes this morning as banking currents. we spoke with stephanie flanders in the last hour of well with u.s. banks did and what the european banks have not done, if you can compare and contrast city groups and deutsche bank maybe you get some perspective of the tough decisions avoided in europe. professor brad hintz is with us he is a professor at in way you stearns. -- at nyu stearns. brad, i want to quiz you, were you surprised by the challenges at deutsche bank? prof. hintz: no not at all. if you think of their 2015, they have a strategy 2015 was their previous remake. in that strategy, they focused on increasing their capital ratios. they succeeded on that. they talked about bringing their margins up. they improved them to some extent.

they face an issue, the same thing that u.s. banks face -- regulation is moving ahead of the strategy of the banks, so as leverage got squeezed in europe, they face the challenge of fixed income was not going to work. if you remember 2015 it was based on fixed income. now they had to pull back. tom: this will come over to bank of america in a minute, but within deutsche bank, they have a two-board system like most other major european countries. is that a testament to their ability to act? prof. hintz: it certainly is a detriment to their ability to cut expenses. tom: because you have labor right on the board. does this go back to ackerman, or do we focus on the two leaders of deutsche bank right now? i know you're out of the loop -- prof. hintz: no, no, no.

it predates the two leaders because we can think of deutsche building its capital market business. essentially, you know, you play the hand you're dealt, and the two managers who are running a now have played their hand a global fixed income player classes in europe, smaller player in the united states, globally positions, they made the move of let's go into retail. so they expanded in retail under the idea that they can't use the deposit, the leverage is difficult. olivia: although now they are spinning off. tom: because of time here, i have got to go to this uproar over bank of america becoming visible. the idea of iss, who represents institutional shareholders saying the governance committee at bank of america moynahan's bankamerica, has not been all that good.

mike mayo still pricey on the street at clsa has taken up this debate and says it is a most unusual board. how critical a board are the ceo's of american banks? prof. hintz: the answer is simple -- looking a number of people is that on a bank board. way too many. tom: way too many full set thank you. steve burke of comcast is i believe on the citigroup board. prof. hintz: i want a risk manager because risk management is something board managers typically do not have, so i want a finance person, i want somebody who is very knowledgeable about risk management. i would love to have somebody who knows something about capital markets in terms of the trading businesses, and then the rest can be the golf partners. tom: this is really well said olivia. this is the reality that guys like professor brad hintz look at when a look at the back of the annual report. olivia: you were talking about

what went wrong with strategy 2015, back in 2012, the return on equity target was set at 12% roe. prof. hintz: nominal. olivia: it has been revised down to 10%. you know, jamie dimon has got 15%. what is he doing so right that juergen fitschen and anshu jain can't do? prof. hintz: part of it is expense base. remember, you have an anglo culture in london, you have another culture in germany. an unnamed deutsche a cfo at one point when i was in equity analyst may be commented to me well i will just tell the people in london what to do. i do not think he really understands how traders work. tom: it is true. professor brad hintz, thank you so much. we have an agenda this morning. olivia: we do.

on my agenda, shinzo abe, the white house will host the japanese prime minister tonight at the state department. we hear that the first lady michelle obama, is rolling out the new china, and more importantly, tomorrow will be shinzo abe's address to a joint session of congress, the first time a japanese leader will speak to a joint session. he obviously is very focused on the tpp and wants to win some concessions on a transatlantic trade agreement. tom: it has not lost any of its majesty. olivia: president obama playing tour guide, taking shinzo abe to the lincoln memorial. tom: very emotional particularly for older americans. we need to continue something we have not mentioned today, nepal. it is very difficult, the headlines coming out. of course the death count rising. the nation's shellshocked and without question looking for aid from china, from india, and from the rest of the world that we will not escape for many weeks to come. olivia: of course also is what

is happening in baltimore. mayor stephanie rollins blake instituting a 10:00 p.m. curfew as the governor of maryland issues a state of emergency in the city and puts more than 5000 national guard troops on hand. 27 arrests. tom: you wonder what happens tonight. olivia: i really recommend logging onto the "baltimore sun." fantastic coverage. tom: good idea. olivia: time now to answer our portal question. we asked you -- did urban renewal fail in baltimore? first -- it is obvious urban mono will has failed in baltimore. urban renewal has failed in every city. they can answer -- the people themselves must be held accountable. we cannot condone degenerate behavior. third answer -- there is an and balance in our society caused by years of systemic dissemination. it is coming out through violence. that third response really gets the nerve of what i am seeing

and a lot of op-eds, particularly one in the "baltimore sun" this morning saying this is the consequence of 20 years of discrimination and police brutality. it is incredible some of the numbers, $5.4 million paid out of police sediments -- tom: it is not that much different than ferguson come although brendan greeley mentioned it is a very large city versus what we saw in ferguson. but the character of it last night, and you saw this from the mayor, and my distant take looking at the feet of the bloomberg coverage is this was a mayor struggling for the hours to get a handle on the moment. olivia: a lot of people are try to figure out why she did not put that curfew and place last night. either way it is going into effect today. let me show you the cover of the "baltimore sun" this morning. riot erupts describing a city in chaos. i have yet to see sheer numbers of how many people were out on the street.

clearly tensions in baltimore. tom: for those of us of a certain vintage, it harkens back to 1963 and 1964. stay with bloomberg through the morning. coming up next on bloomberg radio, bob schiller will join us on american housing. good morning. ♪

betty: good morning. we are live from lou barletta headquarters in you are in the loop and i am betty liu. we've got a great show lined up

or you this morning. we talked to an analyst to a nanotube says the iphone numbers reported by apple -- a home run for tim cook and company. the number one traded stock in the premarket. everybody has an opinion on this and nobody got it right. where is oil headed? nobody can quite anger out direction. somebody who knows a lot of the oil market joins us in just a few moments. this is a look at our top stories this morning. this is a live shot, the national guard keeping the peace on the streets of baltimore maryland. a state of emergency has declared. the troops of been called in to restore order after a day of violence in a baltimore. a writers torched cars and buildings. firefighters are still