getting to 2016. salesforce kills on earnings. many do not buy the story. fracking is un-american thing. no one else wants to frack. this is bloomberg "surveillance," live from new york. thursday, may 21. joining me is brendan greeley. an odd day. no news but -- brendan: we had a conversation how do you talk about there being no news as in itself a news item. tom: the fed, one big yawn. brendan: one interesting thing the fed minutes was nothing new except they are considering different ways to lift off. one of them is reducing what they pay on reserves. tom: the methodology was there. we will talk about this on radio and television. our top headlines. vonnie quinn? vonnie: a sick of at deutsche

bank. investors have been underwhelmed by a turnaround plan hours before its annual meeting, deutsche bank gave anshu jain direct oversight of strategy, admitting to the department of three key executives. shares of deutsche bank posted the worst performance in the last three years, the stock has fallen more than 6% since the plan was unveiled last month. investors yawned at a news update bank finds. shares of j.p. morgan and citigroup fell slightly. royal bank of scotland rose. the bank pleaded guilty to felonies and agreed to pay five posted the worst performance in the last three years, the stock has fallen more than 6% since the plan was unveiled last month. investorspoint $2 billion in fines. felony convictions used to be viewed as a death sentence. the justice department says the banks have been sent a message. >> part of what we are dealing with the guilty pleas is putting the banks on probation. forcing them for the next three

years to observe much more strict financial controls, much stricter reporting obligations. in some ways, the signal is that a corporate culture that led to this behavior in fx and libor needs to stop. vonnie: a new frontier and punishing banks. unlike pastpoint $2 billion in fines. cases, this times the bank's parent company pleaded guilty rather than a subsidiary. islamic forces have captured the city of palmyra. palmyra contains ruins of one of the most important cultural centers of the ancient world. the pentagon is sending 1000 antitank rockets to iraqi forces for use against islamic state. they will be used against car and truck bombs islamic state used to capture ramadi. salesforce.com is underscoring its appeal as a takeover target. the business software maker raised its forecast through

fiscal 2016. it reported first quarter revenue that beat estimates. microsoft, oracle or other companies may make a bid. shares of 6% in premarket trading. after more than 6000 shows david letterman said goodbye. cases, thishe signed off of cbs's "late show" for the final time. tina fey and jerry seinfeld took fought, so did president obama. letterman did not let it all go. ddavid letterman: in light of all of this praise, do me a favor -- save a little for my funeral. funeral. [laughter] i'd appreciate it. vonnie: letterman's replacement will be stephen colbert. letterman says i think he will do a wonderful job. we still not be able to watch. tom: something to see by the ed sullivan theater how they line up at 2:00 p.m. to get into the

show. it has sustained the buzz. brendan: like when i was a kid and reagan stopped being president p i cannot remember a time when david letterman was not on television. tom: for those who are younger, that is true. i do not remember -- who is jack parr? brendan: all right, tom is going to mourn johnny carson. 8:30, initial jobless claims. news we can talk about 9:45 consumer comfort numbers. 10:00 a.m., existing home sales. tom: that is a big number. it will give us a pace after they get housing starts number. will we see a follow "on the markets -- will we see a follow on bang? equities bonds currencies and commodities. i have not locked in on a quieter day. 2 or 3 august, it is that slow.

a statement on how the markets are in line and waiting for the next move, whether it is from central banks or greece. euro, 1.1146. futures -5 big deal. doubt is elevated. brendan the -- renminbi a source of heated debate, will china act on their currency or do they want to wait while institutions decide? brendan, this is a big deal. from an interview yesterday, michael mckee and i talking to dean maki. steve cohen's shop. the unemployment rate, here is the gloom up to 10%. a big surprise for a lot of people. the persistence and unemployment rate. maki dropped a bombshell. 4.0% unemployment -- better

than 2006-2007. back to the nirvana of 1999 when letterman was younger. brendan: test results are not an accurate -- past results are not an accurate protector of the future. one of the things the obama administration has been saying is that nobody has been adding as many over that span. you see just what they were climbing back from. tom: 10%, back to the gloom. a great chart and a real bold statement. particularly from people as respected as dean maki at .72. let's continue. to london for a briefing. markets range bound, quiet and barely describing the churn across equities, bonds currencies and commodities. no one is waiting for news more than guy johnson in london. waiting to drop shoes. what is the tone in london? seems to be the banks and the drama of greece.

what is that toxic mix of discussion within the quiet? guy: people are waiting from news. a meeting in riga later. we understand that alexis tsipras will be next to angela merkel at dinner. maybe we will get that shoe dropping later. it is a little bit quiet. you've got to reflect over the last few days, look at the equity markets and what they have done. decent rallies being generated, especially in europe. a day of quiet, we wait for the next impetus. maybe it is the day that you are going to be delivering later. we have had some mixed data in europe in the form of the pmi's. nothing, as you say, to move the dial on equities. bonds might be moving a little in europe. tom: what a jumble. brendan: amazing to hear you casually say nothing is going on. with greece so much has been happening and to say it is down to body language because of a sitting placement between angela merkel and alexis tsipras is

extraordinary. we have been reading that it was may when this was supposed to come to a head. there is no date after the riga meeting? guy: has always been th the net meeting that is going to take place. we are going to get closer to finding out where we are going to stand on the story midsummer. the next few days, we have some big payments. this has always been personal. ever since syriza got into power. since we have not had this connection between the germans and the greeks. that is where it is. the seating plan matters. tom: let's talk about something important. "the wall street journal" has rules for packed planes, including share your overhead space. i've never been on a small original in europe that was not totally packed and nuts. how bad is regional flying within europe right now? guy: this is the question i was not expecting. i grew up in the channel

islands. we would take little planes between the little islands. they were always fairly busy. you got your own door if you wanted more space, you could open that and enjoy the space below you. tom: thank you so much. brendan: when i see tom ideally flipping through his paper and looking for something, i think i'm a good luck. tom: thank you so much. help me, the legroomm in europe is more narrow than the u.s. brendan: we are particle, when you compress particles they are more likely to explode. tom: than the u.s. brendan: that is what we do on bloomberg "surveillance." we give you two hours of interest about your life. that is the stuff we are doing in this digital world. as our focus. brian has given us great assistant at pivotal research. he killed on facebook when they

came out and he links advertising and what is left of the "madmen" world into the new, new new. give us an update on facebook's news feed. is zuckerberg happy? brian: they have done well building out their advertising products and continuing to buy new segments of advertising, whether it is small businesses performance-based advertisers. tom: what is the best practice from facebook that twitter and pinterest have to do? brian: facebook has more data and more total time from consumers than anyone else. tom: they get video and photos better. brendan: they have done a better job of recognizing that they are a platform. for me on the messenger side enabling other businesses to build on top of messenger. that seems to be something no one else is close to. brian: what facebook does facebook has become a holy company -- not unlike the ad agencies. there are a bunch of

businesses, there is instagram messenger, what'sapp. brendan: are there unicorns left? brian: plenty. brendan: these are the extraordinary returns of facebook. tom: is this "game of thrones." brendan: no, this is silicon valley. brian: what people want is a deck according -- a decacorn, a company worth $10 billion. the next is probably advertising. tom: brian's world. i think "the washington post" does the best job in the newsfeed. palmyra in syria now. this is what everybody is talking about. do you predict every news organization will be on facebook like "the washington post" or bloomberg? brian: the industry has to make a calculated bet.

sure, they are being nice to you, saying you can sell all the ads and take the money facebook is going to have all the data and that is where the value is. brendan: i agree. what i hear is, will you walk into my parlor, said the spider to the fly. tom: within our theme of how we are digitally addicted, when you in oregon see how everybody is using their phones, what does it signal? brian: it is just another device. >> it is not a moral debate? brian: i think it is evolution. new devices have proliferated over the last 80 or 90 years. tom: brian with us. kevin of saatchi & saatchi will join us. it is what you and i are dealing with. brendan: how does this business look in the future? yesterday, one shoe dropped, the doj slapped 6 of the world's biggest banks with nearly $6 billion in penalties. slapped -- on the face or the wrist?

this is bloomberg "surveillance," streaming on your tablet, your phone and bloomberg.com. ♪

tom: good morning, bloomberg "surveillance." the gorgeousity of new york. lundquist has let in two goals in the last 12 rangers games. a quiet new york as they consider the tampa bay, 12 goals in two games. our top headlines. vonnie: we are going to start with california. the governor has declared a state of emergency because of an oil leak along the southern coast. as many as 2500 barrels leaked from a pipeline near santa barbara. it created a nine mile slick.

officials in california taking new steps to solve another problem the record drought. farmers who hold rights to water dating back to the 19th century face mandatory cutbacks. that is the first time that has happened in decades. newly released documents show that osama bin laden still wanted to stage more attacks on the u.s. he wanted to control followers who broke away to form islamic state. he document were captured when u.s. forces stormed bin laden's compound and killed him. a number of books and magazines were found in the raid. here we go in the hockey playoffs, tampa bay scored in overtime to give the lightning a 6-5 win over the rangers. tampa bay leads the eastern conference finals 2-1. the rangers have given up 12 goals in the last two games. that has got to hurt. tom: yeah. 6'7". vonnie: unbelievable. tom: tampa bay, the rangers have

got to pick it up. where is the defense? vonnie: they need you on the ice. tom: please. that was back when the coca-cola song first came out. let's look forward to bloomberg "surveillance." we will look at salesforce. this is a controversial story. brendan greeley has been looking into where they are not fracking. a twisted an interesting european story. and spotify has a new era, a-p -p-l-e. banks 5.8 billion reasons. brendan: that is how much six of the world largest banks will pay 5.8 billion dollars to settle an investigation. 5 have agreed to plead guilty-ish to the charges. 925 milling dollars the most, ubs the least at $203 million.

keri geiger has been watching the sums. i heard this morning a justice department official saying we should think as the banks of being on probation. why weren't they on probation after libor and now they are in trouble? keri: great question. ubs clearly broke probation and that is why they had to take a guilty plea. the entire street has guilty pleas. is that type of enforcement on wall street you know, basically getting diluted? what's the point of doing this if there is not any real ramifications? i understand the justice department has to do something. is there a way to police these corporations in a way that makes sense and can deter bad behavior? is anyone expecting any ceos on the banks to resign? my guest and what i have been hearing is no.

as long as the shares are good, shareholders are happy. tom: citigroup is in the biggest trouble, they are the ones with the further story, do you agree? keri: i think all of the banks are working things out. investigation after investigation. brendan: do you have any sense that the culture has changed? that is the word we keep hearing, cultural change. is anything driving it? keri: on the one hand, the banks has added enormous he mounts -- enormous amount of staff and resources to compliance divisions. attorneys, officials -- everybody that can help them police internally what is going on. on the other hand, we had five banks plead guilty to criminal charges yesterday. i'm not sure where the disconnect on that is. maybe the culture has not changed. tom: over to deutsche bank and talk about pleading guilty to incompetence. your take -- the stories show control management reshuffle.

they are talking about a four year and five. what is the relative state of cacophony at which versus other major banks question mark keri: deutsche bank took a guilty plea for libor and rolled out a strategy plan people were not happy with. now you have three senior officials, some of them are well-liked and considered really good at what they do in their jobs leaving the bank. another element of uncertainty of what is going to happen. that puts pressure on and she jane to deliver what shareholders -- that puts pressure on and she jane -- that puts pressure on anshu jain. tom: thank you for your work. $5.8 billion. we continue our theme with brian on your digital disengagement. kevin will join us in the next

hour from saatchi & saatchi, their executive chairman. we talk about how your kids are spending way too much time on the toys. from new york city with futures -5, it is bloomberg "surveillance." good morning. ♪

tom: good morning. bloomberg "surveillance." brendan greeley with entertainment last night. brendan: after more than 6000 shows, david letterman said goodbye. letterman signed off of cbs's "lay show" for the last time. how many laughs did we get? catch an answer. david letterman: i have been doing this 33 years, 6028 shows.

we got a call from stephen hawking. [laughter] and he, bless his heart, had done the math. because he is a genius and stuff . 6020 eight shows, he ran the numbers. he said it works out to about 8 minutes of laughter. brendan: brian, this is something you have been watching for a long time. this reminds me of some of his older bits he used to do. how did he change late-night television? brian: you hear endless comedians and members of comedians talk about how he changed the mold from a format that was predestined for everyone to follow. it was impactful. the financial impact is worth hitting on. it is ironically good news for cbs.

letterman was not inexpensive. he signed the deal in 1993 or 1994, colbert -- i'm sure he will be well compensated -- he's a lot less expensive and cbs owns the property. brendan: the new economics is on the show and higher less expensive talent. brian: exactly. brendan: all right. how much advertising can you tolerate? that is changing every day. it was a shock to me to watch "madmen" on television and see real advertisements. let us know how you feel @bsurve illance. good morning. ♪

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tom: good morning everyone. tom keene and brendan greeley. markets very quiet. top headlines are not. vonnie: thank you. a showdown at deutsche bank and

all meetings, the us shareholders are preparing to vote against management, hours before the meeting, they gave co-ceo direct oversight of strategy, after last months strategic overhaul sales to win over investors. >> we believe that more than 20% of the shareholders will report against the management board. 20% of the shareholders will say, we know margaret have confidence in the management board, urging the supervisory board to make further changes or at least look at what the problems are. vonnie: as part of the shakeup three top executives are leaving. to break the stalemate in those bailout talks, at an eu summit greek prime minister reportedly will submit a plan to restructure the country's debt. he will also unveil a new proposal on sales taxes. a member of his party says that

greece will not be a to repay an imf loan early next month. a senators marathon speech raising questions about domestic phone surveillance. rand paul spoke to more than -- for more than 10 hours yesterday, saying there is no legal basis for collecting phone records without warrants. >> there is no excuse not to debate this and no excuse not to about on -- vote on sufficient amendments to try to make this better. it's what the american people want and what the constitution demands. vonnie: the senate will vote soon whether or not to extend the program, the house voted to stop bulk elections of phone records, the what secret program was exposed by edward snowden. a large protest expected outside mcdonald's headquarters today while the shareholders meet inside. dennis traders are calling for

wages of $15 an hour and the right to unionize. one building in chicago was closed yesterday because of the marchers. 100 protesters were arrested. at today's meeting easterbrook will address shareholders for the first time as ceo. in the nba playoffs, it seems like smith could not miss from long-distance as cleveland beat atlanta. in the first game of the eastern conference finals. smith hit eight three pointers and scored 28 points. lebron james led the cavaliers with 28 points. tom: cavs -- warriors would be something to see. i have not done enough at salesforce, mark been a half at salesforce with the ball out of here less night, what a terrific earnings and cash flow report. while taking on all comers,

including sap. i am surprised by this, too many say they have no doubt about what salesforce is doing. brian wieser is here to make us smarter. why is there doubt about this huge 30% total return story? brian: i am confused to, i cover salesforce and i do not feel like i am the flow of the software industry. tom: why did they eat up by mark? brian: he is a phenomenal oxford it were -- entrepreneur and they're changing the marketing industry. brendan: are they making the transition well? brian: any sales team in any middle sized company, they are certainly using salesforce.com software to manage sales contact. it is cloud-based and that was

key because a different approach to entering the market. brendan: are they marketing this transition to customer relation database to statistics and analytics? brian: yes, but it is much bigger. you have to analytics platforms, the marketing clout is more important. the idea there is this automation opportunity for trillions of dollars of marketing activity. they are one of the leaders. tom: they migrate to google. google is the want to watch with salesforce. brian: the company that came to mind for me is google could want to look at a salesforce.com easily afforded. i have no idea if they are the company. brendan: we hear microsoft will move into the cloud, ibm. this whole time salesforce has been sitting there in the cloud, doing data analytics saying, we are here. tom: why don't they get respect?

we were arguing about whose black coat he does not get the respect in doubles or in california -- in. those. brian: some people respect him highly. brendan: it is not a sexy company, are they losing pop because they are not cool? brian: marketing technology is sexy to people who understand it. you have a lot of people on software who have no understanding of the end of market. brendan: the best description i heard of silicon valley is young dudes making toys that young dudes want. they are not using this. brian: you mentioned kevin roberts, the about -- is that the automation. tom: why would mr. bezos not be interested in someone like him? brian: you have to choose to do it absolutely.

i have no idea if amazon has interest. they are a marketing organization -- marketing sales organization. they are doing over a billion dollars a year in sales. tom: the chart tells me it is something every quarter. brian: you have a lot of naysayers on salesforce that focus on gap earnings, that is not necessarily useful. cash is much more important. brendan: cap adobe and microsoft debug -- keep up? brian: adobe, yes, they are the leader in the space. most of the analysts who look at it does not understand the end market at all. if you talk to a kevin roberts, anyone, martin sarao, they understand where this is going. even oracle. brendan: we are focusing on unicorns, it is an elephant. brian: they are much bigger. tom: did i get the unicorn memo?

brendan: a unicorn is a company that get to $1 billion. tom: do you have a thought tom o'brien -- the you have a thought, brian? on uber? brian: i like the service, i think they have governance challenges which might become an issue if they have a public company. tom: i have learned more about salesforce in the last three minutes in the last three years. -- than the last three years. brendan: coming up next, shale oil and gas, waiting to be extracted all over the planet, why is the world not getting in there and getting it out? we will take a look at that with our single best chart. good morning. ♪

brendan: where is the yellow the u.s., the reserves that we

have. we had the technology here. that is not where the reserves are in the world. south america, so much more than we have, asia, as well. africa, mostly in south africa -- the u.s. only forth there. what is going on, tom that i find fascinating that majors have them clearly pulled out of poland where there is a huge reserve. they are much less excited about it that we are -- the regulatory environment is difficult to get to and they're finding local and national auditoriums -- moratoriums on fracking. it is anti-fracking. worries about groundwater and worries about earthquakes. we have brian wieser with us, i wonder, i am not sure the better way to handle it, whether europe

is right, there is a cultural difference when we look at these talk -- 2 columns. we tend to not just fracking, ask for forgiveness rather than permission. brian: the first thing that came to my mind is youtube and the rates for online videos circuit 2004, a lot of -- players trying to adhere to copyright laws. youtube was clearly, at the time turning a blind eye to pirated content and it help them get a massive lead. it is compliant now, it help them get their lead. brendan: it is true of spotify also. i did a feature about them a long time ago, and all the people to work to build it had a hand in you legal downloading -- in illegal downloading. they built up a reserve of technology that new how to

stream and download, that turned into a legitimate permission driven service. brian: back to the bank settlements you are talking about earlier, investors do not care unless they are really hurt. tom: let's go to photos. brendan: number three, the ruins of palm era, the -- which the islamic state seized, -- tom: that is not a movie set. brendan: there was a great article in the times early looking at palmyra, and point out the rediscovery influenced classical architecture in europe and the united states. when we look at that we see the very inspiration for the treasury department. tom: i am looking for three dragons in the air flying around. all of this is based on something -- that is the

something. brendan: brian, you can set your watch every 90 seconds, tom makes a "game of thrones" reference. navy ships sank 41 illegal votes. there are no people on those boats, but publicly exploding them. it is very easy to sink a boat, you just drilled a hole in the bottom, but they are blowing them up. they declared war on illegal fishing. the boats that were exploded were fishing vessels caught in indonesian waters. in new york, the one world trade center observatory is scheduled to open next week. tickets will cost $32. it includes a 14 foot wide sky port. -- got portal -- sky portal.

these are people not standing over glass, but looking down on a live video feed of the street. it contains the cities pulse ring which offers a virtual tour of the landmarks across the city. tom: a lot of distractions from the basic thing, which is look out the window. i want to know what you can see? how far can you see? i am thinking philadelphia -- that is too far away, right? brendan: i do not know. that is the title of the musical from the 1930's. spotify has a list of new partnership, it is ready to take on apple and anybody else. why they are itching to do more this is "bloomberg surveillance." ♪

tom: good thursday morning. let's get to our top headlines. brian: -- vonnie: and then who landed a gyro copter at the u.s.

capitol as part of a protest is in court today. he faces charges that could land him in prison for more than nine years. he was arrested last month after flying is gyro copter through the most restricted airspace in the u.s.. he says he wanted to draw attention to the influence of big money in politics. shares of the biggest airlines in the nation fell for the second straight day, some as much as 10%. investors are concerned carriers may add too many fights, cut fares and hurt profits. yesterday, southwest airlines that it was boosting its expansion plan to 8%. the stock market is booming in hong kong him about what people a $67 million for an apartment? one developer will find out, offering six luxury apartments in a building designed by a famed architect, located on the peak, hong kong's prestigious neighborhood.

tom: to the next hour, kevin roberts will join us and we will continue our theme for the day your digital world the time you are spending on your digital toys, including listening to music streaming. we will look at isis and this idea of being 67 miles west of baghdad, but 150 miles from damascus. a major banking news, more than heads roll at deutsche bank, a complete restructuring when you read the press release, is a failed platform. very interesting news. brendan: last year, music subscription streaming grew by 39%, music download shrunk by 8%, the short version good for spotify, bad for apple. the spotify ceo traveled to new york to make announcements, will begin offering short videos and podcasts. apple is relaunching beats and

google has brought a streaming service. jake shapiro joins us. he is the ceo of the public radio exchange, has been working on streaming audio for more than a decade. what has changed in the last year -- all of a sudden you have a billionaire calling you up and sang let's be partners. >> the mobile source of streaming and listening has taken root, you have a radio and 2 billion pockets. that is eating radio for all of it representative or streaming music. brendan: the iphone has been around for 6, 7 years, what changed? >> access to the streaming rates andy 4g networks and the ease-of-use. competition to make seamless access to the entire galaxy of music.

everybody being taught from netflix or spotify, that everything you want is on-demand. brendan: spotify had been sitting on this catalogs, now they want to take some of the stuff you have, the public radio podcast and add them to their catalog, why does that matter? >> a huge source of non-rights and covered audio -- encumbered audio. they have been the hidden category of audio. they are moving from radio into this space that does not have the fights the labels are engaged in in terms of rights and royalties and represents a huge entertainment opportunity. tom: how does apple fit into the debate? this is a huge issue for them. >> they are making a ship, a cousin they have been the source of paid downloads and that is not how consumers are experiencing it anymore. they need to catch up with that streaming experience and i think podcast will be a part of that. brendan: is apple behind?

>> they are, we will see if they can catch up, internet radio on apple was never a big pickup. brendan: spotify's plan is to be a part of's -- their plan is to be a big part of your day. >> they talk about being the soundtrack to the life. they are integrating video as well as spoken word. i trust them as a source of music for my moods. i am not sure they will be the universal portable for all of the stuff -- portal for all of this. tom: tell me about your role and podcasts. i looked at the yield university radio website -- yale university radio website. there was nothing but podcast, where will they be in five years? >> nobody understood they were, it was a bad term, you had to be a geek to be able to connect your ipod and manage files. that changed with the

smartphone, but the truth is it is a great way to listen to information. it is making that shift. tom: can it be a revenue producer? >> it is, people who listen our high engaged. brendan: i want to talk about the podcast from this american life. npr distributes it. i spoke to spot a fight and they said serial -- podcasts have been on the list, but farther down, serial changed how they thought about it how has the success of the podcast change your world? >> there was an amazing show that had intrigued and chapter rise cliffhangers and now has 7 million downloads per episode, an audience had never of it now streaming it. brendan: where do you see the money, brian? brian: there is a chance for

advertising. audio is not as sexy as video to the point spotify is trying to have more video. brendan: vonnie: have we. -- brendan: have we figured out the format yet? the format of monetizing audio? brian: advertisers have been long available with public radio, not just in your face. >> we see the ship, not just from the advertising but crowdfunding. we asked the fans for money and they gave $600,000 in 30 days because they had huge fans. the upside of the truth and is recently in basis. tom: is your world a threat to mainstream media? do the podcasts world, spotify apple, a threat to cbs? >> ultimately yes. it fragments the best stuff.

the best talent is going to this because they want a direct relationship with the audience. brendan: an example of talent going straight to the space. >> this american life and serial itself, operate directly to his fans. brendan: he had huge kickstarter success. we will move into that world. thank you for lending. tom: forex report, kevin roberts coming up in a bit. the yen is weaker and over the last three days, real movement 119 to a 121 handle on the dollar. euro 111.57. this is big news, chinese and then the finally moves and goes

to 6.201 on good economic news. out of china. another hour of "bloomberg surveillance." ♪

tom: deutsche bank admits failure. it is about getting to 2016. we go to london, we wait for jonathan ferro. citigroup, they call it digital exhaustion. read a book. good morning, everyone. we are live from our world headquarters in new york. i am tom keene. joining me, brendan greeley. i love the theme this hour. read a book to seth. brendan: meyer rudolph also gave the commencement speech at to lane university. she said get off your iphones. tom: trying to get an engage from your to way. let's get to our top headlines.

>> a major shakeup at deutsche bank. they are giving the chief executive officer new power. it happened before the annual investor meeting. shares have been the weakest among the world's banks among the last three years. last year, they unveiled plans to increase returns. the big fines against five banks are not bothering investors. shares of ubs, and the royal bank of scotland are up. citigroup and jpmorgan are down slightly. the justice department said they were sending a message. >> part of a we are doing is putting the banks on probation

forcing them to observe more strict controls and reporting obligations. the signal here is the culture that led to this behavior needs to stop. tom: thank you. the pharmaceutical area, they are both not in dublin, which is interesting. cvs is going to buy -- four a large transaction. brendan: it is a domestic story. they're making an assumption about continued funding for medicare. omnicare and cvs are deciding

this is a market they want to stick it -- stick around in. tom: it speaks to the persistence of performance and health care. some would say out of the affordable care act. the enthusiasm -- brendan: we are looking at an increase in drug prices. they are trying to figure out how to make it cheaper. tom: we're going to continue on disengagement. this deutsche bank announcement is a huge deal. i read the press release. it is a lot more nasty than the press reports out of england. brendan: deutsche bank has the biggest problem. i looked at their assets. huge spike in 2004. that is the bank figuring out

maybe we want to be something different. that strategy has not paid off. tom: let's get back on track. may 2015 this is important. what are we doing to our children? leaving less books, reading more digitally delivered stuff. some of value, much of it not. he calls it the disengagement economy. kevin roberts is the executive chairman at saatchi. you are all-black today. i love this phrase. we are disengaged. what is your disengagement economy? kevin: i was at disneyland and everyone was engaged.

you are either connected or sleeping. i am not seeing a lot of disengagement. the kids were engaged. they were multitasking like crazy. people love technology. more than that, people love people. you are still seeing fantastic parental relationship with kids. they are getting video on demand. brendan: our skepticism, it sounds like you are saying that is our version of what our parents and grandparents thought about rock 'n roll. kevin: i would -- we saw this great coke ad from the 60 -- from the 1960's. that is how you engaged. now you do it through facebook. tom: are we going to be dumber

while we are engaged? i have blah blah blah, but i am not reading charles dickens. kevin: what a shame we lost all those horses and got into cars. tom: you are one of the best people in the world on this. are we going to be dumber with our multitasking? kevin: absolutely not. only the dumb people will get dumber. it is moving power away from the select elite few to everyone. tom: i do not disagree. brendan: i was with you until you said this was going to democratize power. new technology has a way of making things even for time until people how to -- until

people figure out how to control them. kevin: control is not in the vernacular of kids. they want to share. wherever you are in the world you want to participate and join in. tom: everyone wants to work at saatchi. it is a cool place to work. brendan: how is their work product different? kevin: it is faster. information is open to them. they can test stuff, connect creativity has never been higher. tom: we have this merger. we have lots to get to.

it is immediately --. >> this is one that cbs is working out for a long time. tom: let's focus on cvs this morning. >> it is popular space because it provides predictable revenue streams they can take for a long time. this is where omnicare sits. the business comes from managing the descriptions for retirees for company insurance plans,

that is something -- tom: if i take 10 pills a day, i go to omnicare? brendan: what is driving this move for cvs? >> as drug prices go up companies, insurance firms, even the military are looking at prudent ways to manage the cost of that. they pass it on to people who can be more efficient. brendan: what else is cvs doing to manage this transition?

>> it is managing the transition by making these kind of deals. walgreens cvs' biggest rival they are tied up with their own thing. brendan: thank you. coming up, a shareholder showdown. deutsche bank says it's -- will lead the new strategy overhaul. we're going to head to frankfurt. surveillance continues to figure out what this means. a changes at a huge bank. good morning from "bloomberg surveillance." ♪

tom: futures negative four. brendan: one of the most important cultural centers of the ancient world, elliott gotkine joins us. what is the right way to look at this. is islamic state advancing on two fronts? elliott: taking over the biggest

city now, how myra -- palmyra . victories and strategically located places that will help them bring supplies to and from other parts of the two countries that they control and could provide with additional wealth. it could also provide a launching post, perhaps a tax to damascus. brendan: attention has been on our strategy and their rock. help us understand what is going on in syria. elliott: it is a fluid situation. the u.s. has been carrying out

airstrikes as well. the suggestion is they want to show that they were making ground against islamic state. islamic state has given a response to those suggestions by taking those two cities. brendan: richard said it is broken and it cannot be fixed. >> you are not going to put humpty dumpty back together again. the multiethnic iraq is over. brendan: is that over? can we not put it back together again? elliott: it is not looking positive.

brendan: thank you. coming up, deutsche bank admits failure. they are going to search for a lot more than that. it is all about getting to 2016 or getting to tomorrow. this is "bloomberg surveillance." we are going to get through the next hour. good morning. ♪

tom: good morning. the yen shows weaker. also note, our top headlines. vonnie: california facing problems. an oil spill near santa barbara is cleaned up. the slick is more than nine miles long. rules are being tightened because of the drought.

it is the first time that is happened in decades. new insights about osama bin laden and the years after 9/11. document sees when he was killed show he want to stage more -- he wanted to stage more attacks against the u.s. many english-language books and magazines were found in the raid on his compound in pakistan. a high-scoring battle in the nhl. -- has a two-one lead. tom: 12 goals-against mr. lundquist in two games worldwide. much to talk about. we will look at dodd-frank. this is what it means for

regional and community banks. an important conversation, all of that with the wonderful ending to madmen. we need to go to frankfurt germany. it is spin city. deutsche bank massages their message. 20% of shareholders not impressed. management in panic. hans the goals is collected and knows effective delivery when he sees it. the focus on bodies and and bodies out. is this a bank in panic mode?

hans: it's a preemptory move. gives more power. he may want to bring some coax to the meeting. he could buy everyone some coke and called things down a low of it. what we have is criticism and a status quo continuing. brendan: how did we learn about the co-ceo structure and how it is working out? hans: they say -- tom: they have run out of time. were they going to do. what is the to do? we do not know the answer.

hans: we do not know the answer to that. will they have to do it right and raise more capital? some shareholders are concerned. we do not have the answer. brendan: they just raised a .5 billion euros in the market. walk me through the parts that work and the parts that do not. hans: last quarter, they had a good quarter when you talk about the cost in the litigation challenges. they had to pay 2.5 billion last quarter. no one knows what is beyond how much more litigation cost is out there. we miscalculated some of the legacy litigation.

before that, he ran the eye bank. brendan: help understand the difference between deutsche bank and deutsche land. hans: there is some commercial ending that goes out. there's also commerce bank. this was part of the strategy review. then going to trim it off and take the remaining shares and ipo than that share. you can make the same case and put it in a similar bucket as loose tom the -- as lufthansa. tom: i want to get back to the sweat in the board room and the sweat among mr. jain in his -- and his newly attended managers.

what is the overlay of this american management and leadership practices or does that have nothing to do with the dialogue? hans: everyone came up through the same league. the idea that there is a distinctive american approach to the management of this bank, not sure if that is a factor. mr. jain started off his press conference speaking german and then he switched back because he wanted the clarity of english. the translation remained in english. tom: that is brilliant. brendan: hans nichols, thank you for helping us understand what

is happening. today marks another round of washington versus wall street. we will explain why big banks are not a big fan of the new bill easing financial rules. this is "bloomberg surveillance." good morning. ♪

tom: we need to talk about one of our guests. dean maki. you know him from barclays.

what a name, steve cohen, you can do better than that. dean maki with a brilliant call. here are the unemployment rates for the united states of america. a very cyclical 5%. the exact average of the 1990's out to 2007. here is this miraculous recovery. brendan: he does a victory lap every time jobs are added. i have been looking at the unemployment rates in other countries for a sense of scale. we are better off. help us feel good about ourselves. are we just better than everyone else? >> it is the home of innovation.

tom: maki is saying better than 2007, 2006 and back to the nirvana in the 1990's. brendan: janet yellen's fed has done a good job of digging into the numbers and seeing what they mean. some people have a job, but the hours are not as many hours as they would like. this is not the only number we need to look at. >> they do not want this old-fashioned job fixation that we had before. they want to have it integrated a little bit.

tom: lets you to our top headlines. vonnie: a shakeup at deutsche bank. the code chief executive officer or are has new powers. it happened before the annual investor meeting and prompted the departures of three executives. the shares have been the weakest among the world's banks in the last three years. >> more than 20% of the shareholders -- against the discharge, think 20% of these shareholders no longer have confidence in the management and urge the supervisory boards to make further changes or look at

what the problems are. vonnie: the company unveiled plans to boost returns, but the stock has fallen since the announcement. greece will try to break the -- in the bailout talks. alexis tsipras is at a summit in lobby. he will unveil a new sales tax plans in. a florida bank is agreeing to handle cuba's future business in washington. stonegate bank will process bills and issue visas. president obama announced plans to normalize relationships with cuba back in december. a protest outside mcdonald's while shareholders meet inside.

demonstrators are calling for wages of $15 an hour. lebron james get help -- gets help from a teammate. jr smith drained 823 pointers for cleveland. game two, tomorrow night. tom: thank you. warriors cavs would be interesting. a quiet warning, full begin interesting nuances. on to the next screen, what is interesting is dollar is breaking down ever so slightly.

watch to see if it goes from 6.20 to 6.18. careful scrutiny showing the good at graymarket. the dow, lofty, to say the least. brendan: this is "bloomberg surveillance." changes coming to dodd-frank. it is back in markup today. a bill would ease financial rules on many of the nation's banks smaller ones, and rain in the fed. bill: the thought this president would under cat -- would undercut dodd-frank which she has taken an enormous amount of heat from those of us who are in the financial service sector for parts of dodd-frank is ridiculous. tom:brendan: it is a little more

subtle. it only affects smaller regional banks. peter: they do not have much of a fight over this legislation. it does not affect them directly. it gives them a little more capital to work with. this is controversial. it is a rollback of dodd-frank. it is aimed at the smaller to mid size banks. this bill, and the view of democrats on the senate banking committee are looking for the alternative. the question is if they can find common ground. brendan: you have a strange

relationship between senators brown and vitor. as it possible we could move forward on something that protects smaller banks? peter: i think it is possible. there will be an effort by others to lard on a whole bunch of other provisions. the rules for wall street have affected us, make our lives difficult. there is common ground. tom: how me pages are there in dodd-frank? we talk about it like it is a ring. what is it? peter: i have read every page. i was there at the conference

committee on capitol hill. regulators have been tweaking it. it is unlikely to happen. if there is not bipartisan common ground, it will not happen. >> this distinguishes him from the rest of the republican field. it allows him to tap into a popular strain out there in america. they support rand paul on this. this is an interesting moment.

it is going to elevate his campaign and a time when he was not front-page news. this brought him back for the moment. brendan: when he runs, is his tents going to look different? >> he is trying to make it bigger. he is more savvy on social media. he made a conscious effort and has credit within the republican party. is it enough to win in the early states? hard to imagine that it is. he has 19, or whatever, other competitors out there. brendan: we will be coming back to these candidates in the next block.

how much advertising can you tolerate? that is just advertising for products. let us know. advertising has been changing more rapidly the last three years. ♪

tom: a little bit of politics here. can we pretend we are help her in -- halperin? brendan: -- will not participate in the iowa straw poll. he writes i have concluded this year's toll will serve to weaken candidates and empower the washington ruling class and their hand-picked candidates. brendan: phil mattingly is following the race to the white house. i am going to try and take this at face value.

phil: the bigger issue is less about my cut command more about the straw poll. his willingness not to invest money in this is putting the kill shot on the straw poll for what this was. there are still a chance marco rubio will play. it is a shifting in the ground on how early primary states are working, especially when i comes to iowa it costs money and it is not worth it. if he is not going to play, who wants to. what does a party have to do

image wise to manage the candidates in the primaries here? >> fox news release they were going to put the top 10 candidates released on a top five polls. carly come the only woman in the republican field. do you want to cut her out? the republican party hopes this start to weed out over time. tom: florida and the republican primary will not be a proportional outcome. it is winner take all. who does that benefit? >> it is early. this has not gotten the attention you think it would.

bush is blitzed behind the scene to lock out all of his former allies and aids. if he is able to successfully do that, it is a big deal. tom: thank you. we will talk about this more. this is a huge deal to go to a florida winner take all. we are going to go back to this. how much advertising can you tolerate? ♪

tom: let's get to our top headlines. vonnie: a major deal in the pharmacy sector. cbs health has agreed to buy omnicare. -- cvs health has agreed to buy on the care. -- buy omnicare. -- at first year profit was eight cents better than estimated. revenue fell but was better than analyst forecast. some developers showing

confidence in hong kong's current bone. -- current boon. tom: how about gunsmoke and laugh then? they would bond. we came back up from these words from our sponsors. >> i would like to buy the world a home and furnish it with love. grow apple trees and honeybees and snow white turtledoves. >> ♪ i'd like to teach the world to sing with me in perfect harmony. i'd like to buy the world a coke

and keep it company that's the real thing ♪ ♪ tom: i hated it then i hate it now. it was beautifully captured in the final episode of "mad men." when i first heard the song, i said, are you kidding me? >> i was uplifted. brendan: when they get to the point where they were -- >> you were all singing along. brendan: if coke is that interested in harmony, why don't they just give it away?

>> it reminds them of things when they had hoped and had change. you had a president elected on that platform. tom: it is comedy now that is the new emotion. >> i think love is the greatest emotion of all and you can have hope and dreams. tom: did that work with mcdonald's in the super bowl? that did not work out. >> i think you can win or lose. at the end, we are you emotional people. brendan: i remember being absorbed and suckered into long-distance telephone commercials featuring mothers calling their children. every heartstring being tugged.

what is an example of an ad campaign that embraces love on ironically? kevin: i think a lot of the car guys. tom: with bob seger and all that. we could go sam elliott with that magical voice and what he has done with different car commercials. the voice matters still. kevin: the key is happiness. brendan: he also said love is an emotion invented by men like me to sell pantyhose. i don't member what car manufacturer it is, but it features a man in a car talking to his six-year-old daughter about driving. she is not six years old, but she is an adult, but that is how he thinks of her. tom: does the ad world -- does

this translate into earnings and cash flow for traditional ad providers such as saatchi and saatchi? kevin: we are all in the entertainment business. we would create fantastic ideas that touch people. brendan: what would he put on spotify? kevin: a tribe that he and his people wrote that was uplifting and full of hope. -- a track that he wrote that was uplifting and full of hope. tom: vonnie: is more cynical than me. vonnie: madmen was successful.

let's get to our twitter question of the day. how much advertising can you tolerate? we are bombarded with over 13,000 advertising messages a day. a few more or less to not matter. a second answer, zero advertising. that is why bbc and cbc radio rule my world. even pbs gets on my nerves. tom: it is an interesting trend to see where it is in five years. kevin: someone once said to me there is no point in being brilliant at the wrong thing. this is the wrong question. how much is a quantity question. tolerate is not the right die mention. advertising today has got to be about -- not about interruption.

the question they are asking of any piece of content is will you improve my life, my happiness today. brendan: it is a quantity question. do you think we could sit down for a 32nd ad? kevin: it is the wrong dimension. you will sit down for a content that is five years long times 45 minutes because you are engaged. you can watch something and five seconds because you get it. vonnie: we have to say goodbye to tom keene, unfortunately. an advertisement for his radio program right now. here is another twitter answer. do not feel guilty, you do not have to buy everything advertised on tv. brendan: we are going to take a

hard turn. the agenda is where we look at what we are paying attention to. the islamic state fighting a war. no real good answer in syria, no good answer in iraq. as we look forward, the conversation is what to do with that strategy. vonnie: we will be keeping an i on mcdonald's protest. the shareholder meeting is taking place. brendan: mcdonald's relied on advertising to grow its business. my last agenda is deutsche bank. it is part of the larger question of what is a bank now?

deutsche bank tried to be something more. you see the huge rise in assets in 2004. thanks are trying to figure out what is the right shape, how much retail branch banking? vonnie: it could boil down to a pr question. they are in the middle of a pr nightmare. changing their strategy before shareholders gather for their meeting. brendan: it means throwing them out of a window. kevin: i do not think it is a pr issue. it is a product issue. they have to build trust and respect and do the hard yards. all they are doing is talking, talking, talking organizing organizing, organizing restructuring. where is the beef? brendan: kevin roberts

puncturing our cynicism. the kids are all right. love is an important emotion. we are going to keep that with us. this is "bloomberg surveillance." "market makers" is next. ♪

announcer: nikhil: live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. erik: good morning everyone. you are watching "market makers panko at our new time.

i am erik schatzker. olivia: i'm olivia sterns. stephanie is off today. shrugged at nearly $6 billion in fines against some of the world's biggest banks. erik: right now it is time for some top stories this morning. we begin with a big takeover in the pharmacy business. cbs, the largest retailer of prescription drugs in america has agreed to buy nursing home pharmacy on the care -- omnicare. the debt is $12.7 billion in omnicare is a geriatric business delivery drugs to manage resident prescriptions. greece will try to break the scale in bailout talks at the summit. greek prime minister tsipras will submit a plan to fix the country debt and he will also unveil a new proposal on sales taxes. the number of tsipras' party says unless europe