it is the outlier, the big bank call on the street. ellen zentner joins us. and sepp blatter. the sport of soccer falls into some level of brendan greeley chaos. this is "bloomberg surveillance ." it is wednesday, june 3. i am tom keene. let's get right to fifa. where you really stunned that the guy resigned? brendan: is inconceivable. nobody expected that to happen at all. all i can think is that it is nudged over the edge by the sponsor. tom: he has been likened in a collegiate way to castro stalin , and others. is that fair? brendan: yes. vonnie: he is becoming an international criminal. brendan: what is true is after

the news of the u.s. investigation broke, more people were willing to say bad things about him. tom: we will touch on this on "bloomberg surveillance" this morning with a critical interview with someone who used to work with sepp blatter at fifa. here are top headlines with vonnie quinn. vonnie: european creditors will present a final proposal to alexis tsipras. the new proposal will focus on the policies greece must adopt if it wants more bailout aid needed to avoid a default. one european official told bloomberg it was not sufficient. the threat of a possible greek default is one of the reasons the oecd is voting this morning.

the oecd says the crisis in greece is hurting confidence. it also says that business investment is lagging. president obama signed a bill that took limits on how much the set -- the national security agency can spy on americans. the bill also revives three other anti-terrorism surveillance programs that expire monday. >> it passed the most significant surveillance reform in decades. we have done it by setting aside ideology, setting aside fear mongering, saying we will protect the security of the united states. but we also protect the privacy of americans. vonnie: senate majority leader mitch mcconnell opposed the bill, saying no civil liberties were being violated by the nsa. in china, the search continues. a woman pulled from the yangt

zte river pulled from the river who survived. bloomberg news reports that u.s. prosecutors are looking into fifa president sepp blatter as part of the sweeping corruption investigation. he stuns the sports world yesterday when he announced he would resign his job just four days after being elected to a fifth term. sepp blatter: although the members of fifa have given me a new mandate, it does not seem to be supported by everybody. those who inspire life in football as much as we do at fifa. vonnie: blatter will not be leaving immediately. meanwhile, interpol is but six of the suspects in the

corruption case on its most wanted list. it is a red card, in effect brendan. brandon phillips it is amazing. -- brendan: it is amazing. we are living in a movie. numbers -- at 12:45 p.m., the ecb rate decision. tom: the press conference at -- should we shoot the intern that made that typo? brendan: we should praise the people in the control room for the work that they do. thank you. tom, the data check. tom: really? ok. i make light of it, folks. you should see the mistake list. vonnie quinn keeps it for us. currencies commodities -- looking at futures, you are up a little bit.

the euro moving off of what is going on in brussels no doubt about that. on to the next screen, if you will. 30-year bond back over 3%. the euro sterling there -- good morning. we are watching the dynamics in europe. let's go to the map monitor. big thanks to brendan greeley for pointing this out to me. euro forbor, down we go. i got to double-click on this puppy. we can do that on the bloomberg terminal. down we go, a little bit of hope. this is the lethargy waiting for the ecb to come in. this is this inflation, the deflation trend. brendan: if i can find this, i will put it out on treader -- on twitter. biggest effect this is happening is on spanish banks because spanish lenders have the largest

number of eurobor denominated loans. tom: it is a liquidity issue. reading about liquidity is not a contact sport. she pulled the good straw. what do you think -- two days in paris? that would do it for me. this morning one institution in paris catches up with christine lagarde's. caroline is in paris this mooring. i was thunderstruck by their economist, catherine man's clock, that europe is doing better. you are doing this day by day in london. why is europe doing better as the oecd lowers forecasts? caroline: europe is doing better because of quantitative easing. the cheap money from mario draghi is why economists say that europe is at the top. they raise that forecast.

who is flunking the class is you guys, the united states, the u.s., slashing the outlook for the u.s. by more than a percentage point. it is now going to grow just 2%. just a few months ago it was 3.1%. tom: other than the united states, what did you learn? caroline: i think it is what is playing in terms of china. they are seeing that china is the growth driver and is starting to rain itself in. you know rebalancing is going on in the economy. they now think it will undershoot its own 7% target. they see china as coming in at 6.8%. not only is the u.s. dragging down global growth, but china is as well. that is why the global outlook is at 3.1%. it is a big downgrade. tom: we are thrilled to bring you ellen zentner chief u.s.

economist at morgan stanley. the outlier call on the too big thing tooo the run -- can we make some news this morning? are you going to adjust for december to september or from december back to 2016? ellen: i assure you we are not, although i will promise you we will make some kind of news this morning. how about that? tom: i know you have to do that with your clients and there are compliance issues there. the news out of paris is important, and it speaks to what is behind the market. will the fed catch up with oecd and bring down the growth forecast for the nation? ellen: when any later this month, they will have to revise lower their growth outlook -- when they meet later this month

they will have to revise lower their growth outlook. it has undershot estimates quite a bit such that we would have to get 4.5% to 5% growth in the second half of the year for the fed to maintain its current growth numbers that it has put out at the march meeting. those growth forecasts will have to come down, but that will not have a bearing on whether we expect they are able to get a break -- a rate hike in this year. we expect one in december because growth is going to be stronger in the second half, and that is what they are hanging their hat on. brendan: your clients are watching these numbers and are as confused as we are as to what the path will look at. -- will look like. what is the most frequent question you are getting from them? ellen: it continues to be focused on the consumer. one report yesterday showed that if you look at history, the lag is about six months between the time that gas prices bottom and the time that that transmission to broader consumer spending really takes hold.

may is going to be a big month, and we have been pounding our fist on the table that that personal savings rate that jumped so much in the first quarter will flow back down. -- will float back down. look at auto sales yesterday. they reached a nine-year high. our estimate of controlled retail sales, which takes out gas prices, motor vehicles, and building materials, we have it up 1% in may. that will look like the start of yes, gas savings are finally coming through. that is a big turn we are on the cusp of right now. vonnie: do you think the growth in the second half will make a big difference from what we saw the first half? why will that make a big difference? ellen: it still comes down to core deflation. we are seeing the lag effect from when the dollar raised higher from august to early march. tom: we have a huge response

yesterday that inflation chart. what is inflation? is a core pce, or is it core, or is it headline? brendan: the basic question is whether you pay attention to gas or not. we just got a clear answer from ellen zentner -- wait a bit. it takes a while to kick in. you pull out the labor market conditions index, janet yellen's favorite indicator, and you show it in the negative right now. ellen: that is an index the federal reserve puts out. it takes all of those labor market indicators and puts them into one index. it has declined for two consecutive months. that is why in the recent statement, a characterize the labor market improvement as having stalled. we will have to get the may employment report this friday and we will have to see the lm ci -- tom: where are you on non-payroll this friday?

ellen: we are around 210. we have difficulties with the rising dollar, and that has to be divested. tom: we will come back and ellen zentner will make news with us here this morning. we will crowbar it out of her. brendan: the oecd has an answer to our quarter question of the day. we asked will mario draghi's qe sure europe? let us know @bsurveillance. ♪

tom: good morning, everyone. a very busy morning here at "bloomberg surveillance." greece and everything else going on. here is vonnie quinn. vonnie: in boston, a man under

surveillance by terrorism investigators was killed in a confrontation with police. authorities say a videotape shows the suspect munged with a knife at a police officer and an fbi agent. they say they wanted to question the man about terrorist-related information. another man has been arrested in the case. instagram is about to get more commercial. the photo app will now open itself to more advertisers allowing companies to link directly to actions. users will be a lot of buy a product with a tap or a download . jamie dimon helped build two of the world's largest banks, and that has made the jpmorgan ceo a rarity. he is a billionaire. his net worth is about 1.1 billion dollars, about half of it in jpmorgan stock. he also has an investment portfolio jumpstarted by the sale of $110 million worth of citigroup shares. he helped create citigroup before being forced out.

tom: i would say it is earned. when you look at the price of the stock, these guys are allowed to take part in the gain. liz ann sonders with us in the next hour. let's look forward on "bloomberg surveillance." i was amazed at the different threads this morning. wage growth in america -- we will speak with ellen zentner of morgan stanley about that. we look at some of the challenges in the job market later on. and brendan greeley is really focused on this fifa shock yesterday. you are particularly interested in qatar in 2022 as well. there is a small scandal in soccer. brendan: i hated the press conferences in europe. set bladder resign -- sepp blatter resigned.

the bank is controlled by a reclusive brazilian billionaire. first question to jesse westbrook and washington -- are we living in a james bond movie? jesse: i can see why you would draw that inclusion -- that conclusion. this brazilian billionaire is known for breeding arabian horses, prize milk cows, and is known for generating headlines in the brazilian media. it is a legitimate bank. it has offices in new york, in miami, where the alleged bribes were said to have run through. it has offices -- it does not have offices, but it has office -- operations in the cayman islands, where it has an operation related to reducing tax bills. it is a legitimate bank regulated by u.s. authorities. it has had a lot of run-ins with

u.s. authorities, including one involving colombian drug cartels , but it is still in business. brendan: you went back and did a deep history of this bank. how many times has it been hit by u.s. regulators, and why is it still operating? jesse: it was really only had one time by u.s. regulators, but it was a profound guilty play related to -- it was a profound guilty plea related to laundering. not reporting actions related to a colombian drug cartel laundering money. a guilty plea we thought was a death sentence for a bank, but apparently not. delta trust was not forced out of business. now we have another bank pleading guilty like libor, etc.. tom: how many delta banks are there? within the scandal, they

have to be 20 or 30 of these. brendan: we are looking right now at the list of where it has branches. paraguay the cayman islands, and switzerland. does this bank have any legitimate business? jesse: i really do not know enough about it to say something that is going to insult the bank and its clients. it seems to have had legit business. there are reports from the office of the comptroller to the currency going back to the midland -- to the mid-1990's where it helped wealthy latin americans reduce their tax bills. brendan: jesse westbrook and washington d.c. chasing down one of the banks involved in transferring money among the different fifa confederations. tom: ellen zentner is with us in this hour. in our next hour, more on equities. liz ann sonders will join us

the chief investment strategist at charles schwab. i want to ask her if there is a new terminal rate in the fixed income space lower yield. do i have to lower my expectations on equities and stock market portfolios? this is "bloomberg surveillance." good morning. ♪

tom: good morning. the euro 111.15, churning. the note this morning is particularly prescient on what is going on in brussels. german bond yields in the euro have bounced by far more than

expected. tom: they got crushed over the last 48 hours. ellen zentner is with us with morgan stanley. i guess to your associate and 40 exchange cap -- in foreign exchange, all of this links back to the united states. do you link brussels and europe and german bund yields going from .5 2.7? -- from .5 to .7? ellen: we are getting closer to the timing of the first rate hike. the only rhetoric we have heard out of federal reserve policymakers is less certainty about the exact meeting this year in which a rate hike will

occur. tom: rosencrantz is miles from fisher, miles from -- -- miles from -- ellen: there is a concentration of core members that really matter. and the rhetoric would say on the part of dudley and yelling that we -- and janet yellen that we hope to get a rate hike this year, but they will see this improving data and become more condensed with the second half supporting a rate hike. we do not think we will get it in in september, but we think it will come in in december. you cannot take september off the point, though. vonnie: that is news. brendan: i want to get back to the quote "horrible liquidity." are you as worried? brendan: we are in --

ellen: we are worried about security and the fed is worried about security. it removes the ability for broker-dealers in particular to step in and take the other side of trades. when the fed starts raising rates, they are unsure what will happen to bank intermediation or what the liquidity environment will be like, so they have to proceed cautiously. brendan: we are talking about the u.s. and europe all morning. our twitter question of the day, is mario draghi's qe curing europe? good morning. ♪

just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. tom: good morning, everyone. futures up 4, dow futures up 31. headlines of vonnie quinn. vonnie: greece is running out of

options to avert a default. alexis tsipras will learn the details of a final proposal from european creditors. he will be with the head of european commission. the new proposal focuses on what reforms greece needs to make to avoid a loud package. -- devoid -- to avoid a bailout package. it looks like the race for the republican presidential nomination may be getting more crowded. louisiana governor bobby jindal will make what is being called a major announcement about the 2016 campaign on june 24. he has aggressively courted the evangelical and tea party voters. the next president may be advised to buy a -- to advise

another one. 57% say it is mostly good that jeb bush would bring in his mother to advise him. one company will take over a printer business, the other will focus on services. according to emily chang, hp ceo meg whitman was asked about it. meg whitman: there will be more restructuring costs as we continue to be effective and lean and competitive on the world stage. this is now a global economy and we have to be competitive. so we are very thoughtful about this but what i know is, if we do not get our cost structure right, this will not be the happy ending that we all know it can be. vonnie: you can see all of that

interview with meg whitman tomorrow at 7:30 p.m. eastern. the quarterfinal match may determine who wins the men's open -- the men's match in the french open. it is the only major title nadal djokovic has never one bank. a game changer. brendan: those two are amazing to watch play. tom: i am not a tennis guy, but the french is my favorite because of the clay. it is like old tennis, not like speed tennis like wimbledon. i love it. is roger federer still in? i think he lost, right? rafael nadal is the best, isn't he? brendan: old habits die hard. tom: we begin three days of jobs

coverage. i want to look at population next, but right now we need to focus on friday and what we will learn about wage growth. we do that with ellen zentner of morgan stanley. tom is trying to massage wage growth dynamics with the spirit of the nation. how can we have wage growth in topline gd -- if topline gdp is so weak? ellen: the areas where we have stronger wage growth are the areas where we pay the least. so we took a deep dive into wage growth, a sector by sector look and even within sectors and subsectors, there was a very disaggregated look. we have been creating jobs in areas where the wage bill is very small. retail jobs, leisure and hospitality, home health care workers, temporary circus -- temporary service worker jobs -- those are all jobs that pay lower than the national median so they are not enough -- they

are not big enough to move the needle. tom: when do we get real wage growth in real jobs? ellen: what we saw when we looked at it and took a disaggregated approach is that wage growth is starting to broaden out across more sectors, and it is just starting to move into higher wage paying sectors. that is why we are just now starting to get those early reads on stronger wage growth, because the wage bill in these sectors is finally big enough to move the needle in the aggregate. so this is a strengthening from the ground up, from the roots up finally widening out enough to move the needle. that is important, but it is a slow process. vonnie: and it look -- will it come from demand of company goods, or will he come from frustration of workers? ellen: it comes from slack in the labor market slowly working out.

we have an unemployment rate that continues to come down. we are getting more people employed over time, and very slowly, labor market slack has been diminishing. it has been a slow moving beast and we are just now able to see it in aggregate even though the unemployment rate has come down so far. brendan: are you watching cities like l.a. and seattle that has -- that have raised the minimum wage to see with the economic consequences are? ellen: we have quantified when six states earlier this year raise the minimum wage. when six states did it covering millions of employees in january, it provided a .02 percentage point boost. you are affecting the lowest paid workers by raising their wages a little bit so it still was not enough to move the needle in the aggregate. but every bit helps. the federal minimum wage is becoming ridiculous because so many states pay more now, and so many metropolitan areas pay more

than the state minimum wages. so it has helped lift individuals in terms of wage growth. vonnie: 10% inflation without a significant change in how workers are paid for the country -- paid in this country echo ellen: janet yellen would tell you that wage growth does not lead price growth. if you look at where the price pressures are coming from in the u.s., domestic service prices are running around 2.5%. the problem is that we have weak global growth, a stronger u.s. dollar, and a collapsing core group -- collapsing core prices in the u.s. domestically we have plenty of price pressures -- health care service prices. but we are reporting a lot of this inflation. tom: two years ago, median household income rolled over and is dead.

the single best chart talked about that. when do you suggest real median household income lifts just a little bit? ellen: we think we are in that nascent process right now because we see wage growth broadening and strengthening. you have got to take a chance tom, and turn a little bit less pessimistic. tom: is she lecturing me? i think she is. i get more mail on this. ellen zentner lectures me this morning. i got a tweet on my bow tie. this is a different vote tie. it is french. it is from paris. i wore this from lagarede. people do not like it. brendan: i am not getting enough tweets about the fact that i am wearing ties at all. in the meantime, we compare job growth population growth. that is the subject of today's

single best chart. this is still "bloomberg surveillance" on bloomberg television, streaming on your tablet and phone. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." i'm tom keene.

with me, brendan greeley. the beauty, after three days of rain in new york city, it really clear the air -- it really cleared the air. in california, a serious drought out there. brendan: 55 degrees in new york on june 3. tom: who is doing the chart this morning? brendan: we have been focusing on the slide decks of mary meeker. she compared job growth to population growth. that is the subject of today's single best chart. i would like to submit myself for an award for best chart title of the year. like so many other labor indicators, you see a change ellen zentner around 2000. that is when the ratio begins to flatten out. tom: so this is everybody employed compared to the population of the nation. it is a lovely story for 40 years. brendan: ellen, is this

necessary a bad -- is this necessarily a bad thing? are people finding better work and balance within families? ellen: it is probably all of the above. but you have this barbell effect where you have the aging population continuing to move into the age ranges associated with low labor force participation rates. then you have the children of the baby boomers moving in to the early ages of the labor market -- into the early edges of the labor market. that will grow over time, and over time the employment to population ratio will rise substantially on the use demographic -- on the youth demographic moving in. brendan: you have been looking into the demographics of this. we are talking about the demographics of age, but gender has something to do with it as well. women are not entering the workforce at the rates they used to, and men have been leaving since 1945. ellen: through the 1990's, women

participation rates were playing catch-up, so they rose rapidly providing upward pressure on labor force participation. by the 1990's, we had roughly caught up there in the lack of that upward pull caused labor force participation rates to stop rising. now women have had a difficult time post financial crisis. a lot of them had to quit to go back and take care of children because their incomes -- or they got laid off and their incomes were not there to justify paying for child care, so they may as well stay at home. that is one example of why women have left the labor force and not come back since the financial crisis. vonnie: is there going to be a lost generation or a lost part of a generation? ellen: it is a difficult time for youth for the millennial population. their debt rates are higher because of student loans. it will delay major purchases

for them. they are facing difficult labor markets. students graduating this year are having a better time with the labor market than students just prior, and it will gradually get better. it delays the day, the common-out day for this generation, compared to past generations. vonnie: we will continue on with ellen zentner, but we want to look at a few photographs. we're looking at -- in d.c., president obama presents the medal of honor to elsie sherman roth. they accept the medals on behalf of their jewish father. an award was also given to army private henry johnson, an african-american for he wrote action in world war ii. absolutely incredible, and they were so grateful to be honored. it was amazing her number two in san francisco, drag queens

and native americans and domestic violence survivors are protesting. tom: they did not get shares in the ipo? vonnie: i am not sure they would want that. native americans want to be able to use their tribal names on facebook, but they kicked -- they get kicked off facebook because it is not listed on the drivers license. brendan, are you? brendan: imp or this is fascinating because it is related to the arab spring. people in egypt were frustrated because they were using pseudonyms. it is a very strong principle in internet social circles. tom: that to you -- that you can use fake names? brendan: there are very real reasons to use your real name. vonnie: there are, but why not

on other social networks. tom: they did not check for my drivers license. brendan: they didn't? tom: they can know if you use your real name? vonnie: they can. they verify with your e-mail and password. tom: what else do we have? vonnie: the number one video, the galapagos islands. a volcano began spewing lava into the ocean. it directed -- it erupted for the first time in 30 years. the species of pink iguana that live on the volcano remained safe for now. brendan: i love it when we get these videos. it is "bloomberg surveillance and volcanology report."

coming up, it has been the 12 days of fifa christmas. we keep learning new news. we will go to somebody who understands fifa from the inside and left in disgust. what does the organization really need to do to get clean? we will talk to someone after the break. this is "bloomberg surveillance ," on bloomberg television streaming on your tablet, your phone, and bloomberg.com. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines. here is vonnie quinn. vonnie: it was a bad day for amtrak tuesday at a congressional hearing. the ceo took response ability for last month fatal derailment in philadelphia. he also promised amtrak would install technology that could have prevented the accident. in jacksonville, florida an amtrak train sliced a car in half as it raced over crossing. the accident caused minor injuries. pinterest will allow users to buy products straight from the pins on its website. it is the online scrapbooking start of its move into e-commerce. the chicago blackhawks and tampa

bay lightning hit the ice for game one of the stanley cup finals. the blackhawks would be the most come pushed team of there is a if they win. it was not a new york-chicago match. tom: you have to be disappointed . it would have been magical. brendan: what is the significance of that? tom: it is a huge deal in hockey, within the north american spectrum of the game. particularly for canadians. there were six teams after the original six, including the st. louis blues, and then after that , the expansion to survive and make money. tampa bay is part of the post-expansion into -- and to hockey efficient autos, tampa bay is sort of the nouveau riche.

tampa bay has been a huge success. it will be an exciting series. i will agree with you, it is not like if chicago and the rangers had played. we will keep this going in our next hour and we must focus on greece. a huge day as alexis tsipras goes to brussels. confirmation of bp ceo bob dudley. and this is something brendan insisted on. we have to remodel. it has to do with hammered zinc countertops. that is like the new deal. i don't know. brendan: sometimes you accidentally give tom keene of phrase, and he hangs on to it like a bulldog. tom: let's get back to the news which has to affect us, fifa. brendan: in 2011, fifa set up an independent governance committee

to look at allegations of misconduct. alexandra was on the committee and then was not. in 2013 she quit in frustration. she now runs trace international, helping multinationals comply with u.s. law on corruption. she joins us outside her home in annapolis. let's go back two years real quick. why did you quit fifa's independent governance committee? alexandra: we were running the risk of being windowdressing. we brought -- we were brought in with a lot of fanfare, and as soon as we started thinking -- as soon as we started making basic recommendations, they shut us down. brendan: how likely is any real reform? how many people need to go for reform to happen? alexandra: we are at a

flashpoint with fifa. the risk right now is that they replace blatter with somebody under the same system of cronyism and patronage and we have more of the same. we will not have real change unless it is sweeping change how many people? i do not really know. but the senior leadership has stood by during this parade of scandals, and we are going to need to see real sweeping change. brendan: we have a hard time from the outside understanding what is going on inside fifa. we look at what we read and we say this cannot possibly be true. what is the system that allows this to consistently take place? alexandra: it is a system with almost no transparency, no real accountability. again this trading of favors where whoever sits at the top has access to extraordinarily large assets that can be doled out to the football association, completely within the rules, and that can secure loyalty and votes, frankly. so the system is a little

unusual and a little opaque, and you do not understand. tom: help me with the basic question. what is a bribe? there must be a formal definition of what a bribe is. what is a bribe? alexandra: the transactional definition is i give you something to get something i am not entitled to in return. there is lobbying and other things but a bribe is, if i give you this under the table to enrich you personally, you will do something for me that probably goes against your fiduciary duties. brendan:'s being of somebody who attempted to fix fifa, the u.s. indictment treats people like -- one reading of it is like it is treating people like an enterprise that has gone completely criminal. how do we put this in context in international corruption?

alexandra: i think that is probably a little strongly worded. we have all heard the comparisons to the mafia, and blatter has not helped himself when he says, "let's keep this within this football family," and it is nobody's business. brendan: do these guys think they are corrupt? alexandra: i think there are so few controls, that rampant control -- rampant corruption has always been possible. the entire system has encouraged self-dealing and self-enrichment. brendan: alexandra wrage who was helping fifa and left years ago. tom: thank you so much ellen zentner, for joining us today. we tried to get you to go back to 2016, but we could not get there, could we? she stays with

december. we stay with the foreign exchange report. the euro is front and center, 1.1123. liz ann sonders is next on "bloomberg surveillance." good morning. ♪

tom: if it is wednesday must be belgium in citrus -- tsipras of greece and brussels. a world of permanent lower interest rates in this hour. liz ann sonders of charles schwab. and fifa goes into some form of chaos. this is "bloomberg surveillance." we're live from our world headquarters in new york. the conversation we just had through the last hour. fifa, what does blatter do this morning? brendan: he is in charge but says now that i am not in charge of the election i have time to fix the organization. he will create the new reform

process that will be voted on when they vote for president. tom: it is bizarre and you have been great on keeping me up to speed. vonnie: i'm just going to say, greece is running out of options. the prime minister tsipras will learn the details of final proposal from european creditors. he will be the head of the european commission. focused on what reforms greece needs if it once more bailout money. the prime minister says he wants to see what happens. >> nobody wants it. i don't believe greece once it or anyone in the european -- european union once it. what you're aiming for is to have a solution. at the same time, we want to keep them in. vonnie: he submitted his own proposal yesterday but one european official hoped it wasn't efficient.

one reason the oecd is calling the forecast today. the organization says the economy will grow 3.1% this year down from the 3.7% growth in last year's or cast. the oecd says the greek crisis is hurting investment and business investment is lagging. a woman from that yanks he river after a cruise ship capsized in the storm. rescuers are still searching but survivors are few and far between. no more than 450 people aboard. the ship's engineer say the strip was -- ship was struck by a tornado. bloomberg news reports that u.s. prosecutors are looking at fifa president set blatter in a sweeping corruption investigation. he stunned the world yesterday

when he said he would step down and was elected to a fifth term just four days ago. >> although the members of fifa have given me a new mandate, it does not seem to be supported by everybody. supporters clubs, players just like we do in fifa. vonnie: meanwhile behave ousted to put fixing the corruption case on its most wanted list. tom: that is a game of soccer they play out in the field. i wonder what the players think of this. vonnie: it depends where they are from. brendan: the players union made so public statements that this really had to change. tom: and the guy who just

retired? brendan: one thing that pushed everything over the edge is the idea of holding the world cup in qatar in the summer really stressing the players and when you mess with the game and the european leagues, that is when people -- tom: we have a meeting coming up? brendan: the ecb rate decision is coming out. we will be looking for some data that will help us stand the economy. the employment change numbers at 2:00 p.m., they will immediately begin flipping through. tom: you are big on the beige book? brendan: i think it is hilarious. tom: i think it is antiquated. vonnie: it is a margin. brendan: people look for the beige book what they don't find in the data. vonnie: it is more geographically -- tom: this was such a nerd fest

talking about the page book. lots to talk about. -- beige book, lots to talk about. vonnie: big move for the euro in the past few days. tom: stay tuned to bloomberg radio and television for all of those headlines. it is a critical day for greece. hans nichols is not in athens or brussels, he is in london. eu leaders will dictate terms to tsipras. i have seen that word a lot this morning, what does it mean? hans: it means that he may be getting a ultimatum and this could be the last test offer. it is not and will ultimatum in the sense that it might between a little bit but we do know who else will be in the meeting. will there be someone from the

imf or ecb? tom: three times yesterday i was asked why haven't markets moved on the fear of this. why is that? hans: markets like the fact that the creditors are now on the same page. there were differences between the imf and the euro member states. the fact that everyone got together on the same page in that monday night berlin meeting after midnight gave the markets confidence that you could see and will and game -- and and game. -- end game. hans: it looks like he is driving an awfully hard bargain. if you think he is a problem with his own party selling this what he has done is signal to syriza that he is looking to fight tooth and nail. if it comes to a bad compromise

or leaving the euro he may be able to get a bad compromise through. that is one theory. tom: thank you so much. a conversation -- to sell and go away or hold and acquire more shares. joining us this morning, various walls of worry out there. he says unfortunately there is some legitimacy to sell in may. liz ann: if you look in history there absolutely is legitimacy. there is a pretty strong pattern in the averages of the major november period. tom: you have the certitude of going to cash and to sell everything but shades, where is your shade? liz ann: that is where we have

been for much of this year and to quote you to come it has been and will continue to be a running market. you still hang around all-time highs but you do not get a lot of traction. i am not so sure we get out of that pattern anytime soon. valuations are a little bit stretched and maybe we need to see an organic improvement. tom: i want to talk about the developments. brendan: i want to talk about youtube. -- u2. i'm pleased by that reference. let's take a look at all of the dots. which dot are you closest to? liz ann: i actually am not keen on the individual dots for each one. i do know that we have come down

in average from each one. from december to march we went down and i think they come down again. at some point we will be at the end of 2015 and the dots will be the same. i think the fed will have to continue to come down but the market will come down. tom: the oecd is essentially leading the fed body into the new area where the dots come down. liz ann: not necessarily. first of all the oecd is a think tank in the fed will have its own forecast. the huge dispersion of what the officials think what they will raise the forecast. what are you looking for this year? liz ann: no more than two hikes.

if the goat in december we think there is a decent chance that they do one and temporarily done. no more than 50 this year. brendan: it is almost because we have lost the face that we know what will happen. that is like putting up a test balloon. liz ann: i think the fed has gone to great pains to tell us that they were going to do a closed cycle -- slow cycle this time. we have not had a slow cycle since the greenspan era. it is decidedly not the case right now. brendan: we will go back to europe for our twitter question of the day. q we here and now over there will draghi qe your europe? ♪

tom: good morning everyone. a discussion on oil? brendan: leaders from saudi arabia-led opec are currently meeting with the largest oil companies in vienna. the cartel announces its reduction strategy, that is coming up on friday. ryan chilcote is at the meeting and joins us now. ryan: the opec seminar is effectively a two day oil fest.

they get the 12 opec member nations together including iran this year, together with some of the biggest oil companies in the world. today i am joined by dudley thank you for finding time. i had to pull you away from a pretty trysting meeting with all the other oil executives. i want to ask you about price. you have been consistently a little gloomy on the outlook for oil price. even today, we heard from the shell ceo that the environment for prices should improve because investment will drive up prices. why you remain fresh -- bearish? guest: i have been bearish for a long time.

fundamentally, there is lots of supply. u.s. oil production is certainly up and then flat. chinese demand is not the growth rate we saw before. there is increase in demand. ryan: we saw wti dip low $60 a barrel, how low could it go? >> in that case with the u.s. being somewhat donald up with exports it depends on the summer driving season. a lot of that crude will go into refined rocks for gasoline. you may end up with a lot of product. you could see softening after the summer barring any geopolitical things. reporter: two years ago there was a seminar people were making light of the shale revolution. the you think the industry under

estimated the potential of shale producers? >> obviously the shale producers got it right. but that is a? of how long the u.s. will take before production goes out. production has been rising. things should level off now. reporter: would bp like to do more shale? how do you do that? acquire the shale producers right now or try to do it organically? >> we have a big on shore u.s. operation. which we would do it in organically and let's see how well the opportunities are that want to join forces. reporter: you mentioned geopolitical factors that could influence the oil price and iran returning to the market is one of them.

i know that you would like to get back in if the sanctions were removed and the company is allowed. how big of an opportunity is it? >> is not short-term. if there is a deal done in june it does seem like there are a lot of resolutions to do that. it will be down in the very straight nuclear verification. i think it will take a while before big companies are back in their working and you will see production come on the market. there is a lot of floated storage around. -- floating storage around. reporter: the effectively found the first iranian oil. >> and we would certainly be interested at the right time inside the guidelines. reporter: when that happens, do you expect and even playing

field? oil companies being allowed to get in at the same moment? >> good question. i think that certainly it really depends on what the sanctioned guidelines are. we will not go near it. i don't know what the other companies might do. reporter: thank you very much for your time. as you can see it is pretty busy here and we will pass it right back to you. tom: thank you so much. let me do a data check from vienna. oil has been very stable here but brent crude is now 63.97. it is a spread between west texas intermediate and brent. between three dollars and four dollars a barrel.

we look at futures green on the screen and the fix 14.24 showing what liz ann sonders suggest. i am most focused right now across economic finance and investment in that first conference we will hear from mario draghi at 8:30 euro time. the euro-sterling at 73 pence and the swiss is fractionally weaker in the past two days. here is a look at your top headlines. vonnie: in boston, a man under surveillance by terrorism investigators died in a confrontation with authorities. he longed at authorities with a knife. they say they wanted to question him about terrorism.

and instagram is getting more commercials. the app is opening itself to more advertisers allowing companies to take direct action and users will be able to buy a product or download an app directly from the ad. jamie help build two of the largest banks in that makes him a rarity. he is a billionaire. he is worth $1.1 billion am a almost half of that is in jpmorgan stock. he also has an investment portfolio. he helped create citigroup before being forced out. we love to look at our billionaires from time to time. tom: mr. diamond is recovering from cancer fully in charge of j.p. morgan and they have done great. vonnie: helping his bottom line as well. tom: jamie dimon. a newly minted billionaire.

there are distractions and let's start with janet yellen. this is about the stock market and revenue growth and earnings growth. liz ann sonders measuring the rate of change and sales and how much is brought down to your bottom line. i haven't had this discussion in ages. where is corporate earnings growth? liz ann: we managed to get into low single digits in the first quarter and that was up from an expectation of the first quarter. that improvement is the largest on record. not to a level that is terribly lp for corporate profits but it is supporting the idea that analysts said the bar too low. tom: we know currency has been challenged what is your

confidence that corporations are officially getting to whatever earnings are? do you have a belief? liz ann: whether they are efficiently getting there or whether it will benefit long-term shareholder value because they have been doing it the most part. i get the question all the time you are not talking about the retail investor or the hedge fund or pension fund, not even some of the short-term. it is corporations themselves. that is to the benefit of earnings in the short-term and the stock market. whether it is the right long-term use is the question. tom: is a critical question to get away from cfa mumbo-jumbo. is it smoke and mirrors? liz ann: it is financial engineering. tom: what the hell is that? liz ann: it sounds better than smoke and mirrors. they're borrowing to buy back their own stock. brendan: that sounds like fifa.

tom: a million years ago in delaware could you enroll in a course in civil engineering? yes. financial engineering? liz ann: this is a new thing. brendan: you see wage growth going and how can it affect earnings? you can look at average hourly earnings which is the most common measure. i would agree with that. you can also look at just a broader measure of real income gains. that is one of the things missing. inflation has been so low so when you look at the broadest measure of what people are taking home it is actually not that. most of the leading indicators that suggest a boost are starting to kick in. they're saying we think we are in the early stages of a pickup in wages.

i don't think it is anywhere near the kind of level that means major overall inflation risk. vonnie: we do start to approach the time when the fed will raise rates are we going to see corporations find back less of their stock? liz ann: i am of the view and i don't think it is consensus that the fed staying at zero for as long as they have has been a different step. it has been a negative for the economy. when you think about the concept of whether it is individuals looking to buy a home or corporations, i cannot help but wonder when the fed will get zero down and take the first step like something akin to normal. whether that is the trigger for boosting confidence. the fed has continued to treat the patient like it is still in the trauma room. brendan: it almost sounds like you're going to flip the chessboard and see where the pieces settle and take a look. liz ann: i do think the fed

wants to get off the zero down and then see what happens. unlike the last cycle which was 17 consecutive basis points. i go to there is any chance this time. tom: -- i don't think there is any chance this time. tom: do you anticipate an equity chance? down 3% one-day and 4% the next? liz ann: i don't know that i would call down 3% a tantrum, but do i think we are at elevated risk from the last four years yeah. some of the gloom you see on the internet is that we are at the top and of a cyclical channel consistent with what happened in the past when we had the 50% plus their market. but something closer to a correction?

sure. tom: liz ann sonders, we will continue. now the best guy i know on pipelines and oil in america. this is bloomberg surveillance.

tom: good morning everyone, liquidity is in the air. you cannot let me know because i cannot find it. liquidity is this weird word, ira member writing it up in an essay.

let's go to the brendan greeley saying, hey stupid, do this on the mac terminal. this is the recent shot of the euro war, more negative. this is the crisis 09, delhi go and down to a negative three-month paper. brendan: most of my e-mails to tom to begin with, hey stupid. they're both measures of trust. that right there, this is the story with a lost trust in each other. they have lost faith and trust in the economy. there is no trust that it is going up anywhere, anytime soon. tom: are weak immune from this because we do not have negative rates? liz ann: i don't think so.

if you look at the correlation, historically it has always been high. recently crashed and a couple months ago got as low as no correlation. if you look at the correlation between u.s. long rates and g7 long rates that has gone straight to the roof. what is going on in the u.s. fixed income market has a lot to do with what is going on here. it definitely matters. tom: it will matter as we go through june and into the summer. let's go to our top headlines right now. vonnie: the ecb president right into the specter of default as greece runs out of options. secrets -- tsipras will be in brussels for a head -- for a meeting. greece could be out of cash

friday and there is speculation that they may leave the eu. the prime minister says no one was to see that happen. >> nobody wants it. nobody in greece. nobody in the european union. nobody in the eurozone. what you're aiming for is a solution where greece accepts the new governments. vonnie: tsipras has balked at reforming greek pensions. the list of republicans in the republican nomination gets longer. next up is louisiana governor bobby jindal making a major announcement on june 24. there are reports that the gop field already has nine declared candidates and could have another half-dozen. the next u.s. president could be

advised by a former one. 57% of likely republican poll go say they would be mostly good for jed bush to have brother george as his advisor. 83% approve hillary clinton getting white house advice of her husband bill. in an exclusive interview with emily chang, the hp executive was asked about -- >> there will be some restructuring cost as we continue to be effective and lean and competitive on the world stage. this is now a global economy and we have to be competitive. weird very thoughtful -- we are very hopeful about this. i know if we do not get our

structure right this won't be the happy ending that we know it can be. vonnie: those are your top headlines. tom: hewlett-packard the last 10 years has done 5% per year total return. that is not miss whitman's fault that the company has been a train wreck. it has been a disaster. vonnie: after the last earnings announcement the stock shot up again. tom: another important interview. david path of over will be in -- of uber will be in the studio as many of the huber cities around the world are challenged to say the least. currency commodities and green on the screen up seven. the s&p futures and that two-year yield elevated in the

last number of days from .61 tip .66%. watching yields migrate higher. we talked earlier to ryan chilcote about american oil. $60 point nine cents -- $60.09 per barrel. brendan: americans are remodeling like 2007. spending on home improvements could exceed the precrisis high. joining us from massachusetts kermit, what data are you watching? >> there are two main data sources that we use. one is a consumer survey where they tells us what they are spending and the second is a survey that we do with residential architects that tell us what kind of projects they

are seeing and what are the emerging trends in kitchen design or bathroom design throughout the home. brendan: tom once to talk you about zen countertops in a second but let's talk about that money for a second. where is it coming from? is this credit driven or spending down savings? >> unfortunately a very small share of home improvement projects are finance. i think they are still having difficulty getting home equity lines of credit. about 70% of their credit is coming from savings. households significantly save for a. -- a period of time before they get involved in that does limit the amount of growth. brendan: in the studio we have liz ann sonders who is the chief investment strategist with charles schwab. liz ann: i have a question. it may just be specific to our local area but one of the trends

that i am seeing recently is the unwillingness for buyers to buy a home that does not have refreshed kitchens or atheromas. a lot of about to sell owners are forced to do this remodeling. is that nationwide or unique to certain areas? >> it is in the hotter markets of the country. we are seeing a more competitive market and homeowners are seeing that they do need to stage their home a little bit that are to make them more sellable and attractive to the buyer. it does very market to market. tom: i think liz was getting some housing advice folded in there. what kind of countertops do you have? liz ann: i have marble in my connecticut house, in my florida house i have taratel.

from the 1950's. tom: there is the reality. it is rip out the marble and i want hammered zinc is all the vote right now. to liz's point of microeconomics of what we do to our kitchen, do we get our kitchen expense back when we sell the house? >> in a hot market you do. as we are seeing the market improve we are seeing returns on these projects rising to even 90% of the cost returned. tom: so if you put $2400 into your kitchen you will get back about $12. brendan: i want to find out what we are going to learn from this. as we see your indicator increasing what does it tell us about the following year? our people hunkering down and improving what they've done? >> i think it is really both of

those. we see that those homes do generate a lot of home improvement activity and that will help the market. we are seeing a lot of baby boomers. figure they will sit tight in her home for a while and they have to prepare their home for their evolving needs into their late 60's and 70's. vonnie: the home-improvement retailers, are they employing architects? >> they are as consultants. i think that as design issues get more important, they are getting more engaged in the process. brendan: thank you very much for the harvard center for housing's eddie's. -- housing studies. the ecb is about to release its rate decision. not the decision we are looking for but that data.

we asked will draw the's qe your europe? -- will draghi's qe cure europe? ♪

tom: good morning everyone.

"uber surveillance," i am tom keene -- "bloomberg surveillance," i am tom keene. brendan: soon mario draghi will hold a news conference hopefully glitter free. meantime, hans nichols joins us in london. we are looking for good news. hans: we are looking for the refinancing rate and the deposit rate. that is what we will get at 45 minutes after the hour and in some ways the press conference will be more important and we may get some sort of hint of how long these asset purchases they will last. the goal is 1.1 trillion euros. that is the goal and we will see whether or not he asian numbers we had yesterday are better than expected.

that april number was at 0.0. it looks like we have some positive signs. tom: the nudge here is that the german bonds of 28 basis points and in switzerland the 10 year yield has turned positive. the minutia ideas, do they affect the fed or is the ecb like fifa where they are discrete and separate and remote? liz ann: we don't know how this will affect them because not only was court cbi ahead of expectations and that is what the ecb looks at. but of course they were up .9. there is a reason we are seeing the reversal in on yields and the intention will be on whether the start to get any sense that if this acceleration insists

whether they will tone down the qe. tom: i'm talking to brendan greeley but i think this is important, catherine mann is a world-class economist in the single sense is that europe is doing better. brendan: let it be said that tom made the fifa remark. i did not make that. but let's get a preview of this press conference where we will probably learn more than we do then when we get the rate decision. does he release a lot of information or is she inscrutable? hans: the time he has release a lot of information it has been pretty well telegraphed. it is a monday night conference on the ecb and he telegraphed two. it was sponsored by them as well. he telegraphed the idea that

they will frontload the asset purchases which is fine except that wasn't made public to everyone. the next morning the ecb releases a text of the speech and then you really saw it move. what is the communication strategy going to be? on the back of that they said no more embargoes. tom: our communication strategy is to look at the headlines and then massaged them. brendan: you will get these numbers at any point -- there they are. ons with the rate decision. hans: we have a benchmark interest rate the same at 0.02%, then the negative positive rate at 0.2% tom: what is that mean? translate what a negative deposit rate means in english. hans: we've seen in sweden and switzerland. this is banks -- people paying

banks money to store their money. it is a way to inject more liquidity into the system. tom: is it working? hans: there are not good solid results out of sweden and its wits when that is their main policy tool to keep the frank at least somewhat revalued. they have had some success at least the bankers and switzerland feel like the rate has been somewhat of a guard against the strong currency but i would have to get back to you. tom: i want to say this on the bloomberg terminal it is bizarre that these ecb headlines are coming out and in the middle are greece headlines from brussels. brendan: mario draghi was just in hans nichols's or lynn -- berlin.

umag you at pictures of him right now trying to give up press conference. no, that is tape. i was just talking about this -2% deposit rate, the fed uses this is a tool as well but we used -- we still pay interest. liz ann: i think the fed will consider that at this point. tom: vonnie this is amazing i've never seen this. the ecb headlines. the famous bloomberg red stickies. in the middle of his mom boat jumbo is greece. it is cap to -- coughkafka? brendan: he was a novelist. vonnie: more than a novelist. the 10 year yields up three basis points in anticipation of mario draghi.

tom: the yield hire a german bonds and equities here moving up as well areas we are up 10 on the s&p futures. all in all, interest rates are higher off of the announcement this morning. let's get to our top headlines right now. vonnie: it was a bad day for amtrak on tuesday when a ceo took responsibility for the development. he promised that amtrak would install safety technology that could have prevented the accident. meanwhile, and amtrak train slices a car in half in jacksonville florida. the woman was ejected completely but the accident miraculously suffers only minor injuries.

it is the online scrapbooking's startup first move into e-commerce. the chicago blackhawks hit the ice tonight in game one of the stanley cup finals. chicago is on the quest for its third cup in six seasons. the second trip to the nhl finals for tampa bay which is the youngest roster in the league's postseason. i want to know about ice in tampa. tom: it is like 90 degrees out and it is surreal. you go in and there can be a different. huge credit to nhl where it is really unifying. brink to rank -- brin kt ok to rink.

you can say that tampa bay will have the same ice as chicago which is very cool. that is not the way it was in the old days. when i played we deliberately warmed the issa -- warm to the ice up. vonnie: but you were not supposed to do that. brendan: is that deflating the ball? tom: we were deflating the ball. ages ago. against the faster team. you had to slow down those lads from canada. how about in the investment world it is the discussion of the moment. ridiculously with the sound of charles schwab. not dollar theory, the arch discussion is that there will be a new rate somewhere modestly lower. how does that fuld over into your retirement?

liz ann sonders is a big-time pro listening. do you bring home the actuary assumption? liz ann: i think most have brought down actuarial assumptions. to your point about listening to retail investors, there is desperation out there. tom: i agree. boston university was way out front on this. where is the return that a 50-year-old should expect? liz ann: it is low. mid-single digits. you will get more of that on the equity side and you will need to be globally diversified. tom: we brought that up yesterday with mexico. the equity market actually outperforming our market over

the last decade brendan: what would talk about returns it makes me think of the retirement planning. now we have another problem which says we are not getting used to that. liz ann: if you look at millenial's they tend to be more focused on putting money away. the initial approach to investing not gathering a pot of money are putting it in the stock arc it but taking money out of your paycheck -- brendan: they don't need to be nudged. liz ann: they need to be nudged to go into the investments that the baby boomers made but they don't have to be nudged to think about the concept of saving that money. tom: the money question is a generalization. dividend gross an alternative or

equivalent to a bond coupon? liz ann: not a replacement but a part of a portfolio in addition to the fixed-income side absolutely. you have to be very careful because investors will start by looking for the yield without doing the fundamental work on the security or having that the a secondary decision. oftentimes the security can have a very high yield for different reasons meeting you have -- vonnie: is the base profile still 6040? liz ann: i think it depends on the investor. it makes no sense. you can be an older investor that doesn't have a lot of time but be willing to take the risk. vonnie: where globally would you be looking? liz ann: right now we think you ought to have at least market exposure to not only u.s. equities but to develop emerging

international equities. what that represents in a portfolio -- within the developed to national market we think japan is still very interesting but in an emerging market if you can take a more active approach there will be bigger diverted since that the spread between the winners and losers will be wider than normal. brendan: sometimes a feel like we and people who write about it are waiting too much for millenial's to riders in as the calvary. are they the known unknown that we think? liz ann: we didn't touch on it when we had a conversation with kermit but i think the stories that relate to the housing and millenial's, the formation has absolutely spiked in the last several months and it is consistent with the big

improvement in job growth which ties directly to household provisions. the assumption was that the millenial's would never form households are it we're starting to see that was an erroneous assumption. it took a while for them to have that formation. vonnie: soap michael jordan and tom first -- so michael dorda in tom for city -- tom forsetti. we have to begin our conversation about the twitter question of the day. will take your europe? -- will qe cure europe? we should not be guided by rising inequality qe serves the

rich. brendan: what it does is increase the price of a picasso. vonnie: we have to wait and see. second answer, most likely not. japan and u.s. thinks europe will be no different. brendan: i think the japan is different from the u.s. and i don't know that we can always look back the lost decade. brendan: would you argue? liz ann: i don't think you can really compare the reasons behind the lost decade to what was our lost decade in 2009. one of the big differences is the cleaning up of the balance sheet that happened much more quickly in the u.s. than it did in japan. vonnie: this will remain unanswered for quite a long time to come. we will be keeping an eye --

brendan: tightened security to make sure that nobody throws anything at mario draghi. vonnie: the market reaction has been good so far in terms of yields rising in europe. also watching the u.s. data today. more updates already and 8:15 eastern we get the first of three this week. brendan: the millenials are going to the rescue. they will buy homes and fix everything. i got a note from a viewer this morning who said why do we care about fifa? i will take that criticism to heart. we have a hard time teaching out whether it is just a fascinating story filled with billionaires or because it is a real important story. vonnie: it is scarface. brendan: it is amazingly fascinating at the very least. brendan: thank you as always.

bloomberg surveillance continues on the radio in the meantime and market makers is on bloomberg television. up next, this is "bloomberg surveillance." ♪

>> live from bloomberg headquarters in new york, this is market makers with erik schatzker and stephanie ruhle.

stephanie: good morning. this is market makers at our new time. erik: we have got a lot to pay attention to. important economic data breaking. we will show you reaction. stephanie: ecb leaves rates unchanged. in 30 minutes we will hear from the ecb president mario draghi. there is a lot to watch this morning. before we get to the big numbers, top headlines just for you. they're are not calling it an ultimatum. they will present what they described as a proposal. they will meet with the head of the european commission. the new proposal will focus on policy they must adopt if they want to avoid a default. open to get feedback on a greece proposal submitted yesterday.