et in bavaria. the demand greece chart a way forward for more meetings and phone calls and potential compromise. jean-claude juncker looks for minimal rules. in this hour, we focus on the future of scotland with their minister. good morning, everyone. this is "bloomberg surveillance ," live from our world headquarters in new york. tom keene with brendan greeley. we are on scotland today. i guess we have to go to the president a beer and breakfast sausage? brendan: claiming it was a knock on -- cleaning -- claiming it was a nonalcoholic beer. tom: so it is a greeley scandal? brendan: i really think this is an international incident.

this is what the g7 is about. if they were somewhere else they would be drinking some other national drink. vonnie: unless they made a special one for him. that is also a possibility. tom: you wonder why he cannot have this relationship with capitol hill as well. what a week last week. here is vonnie quinn. vonnie: the new ceo of deutsche bank will be taking over millions of dollars in legal costs and questions about his strategy. done cry and has been named -- under jane, deutsche bank's chair -- deutsche bank's had the worst performance. >> we are not asking for immediately heads to roll, but really for the supervisory board to take another look at the composition of the management board.

we are also not expecting changes within a few weeks, but overall with what has happened it is a good thing for deutsche bank. vonnie: shares of deutsche bank are higher in europe and in the premarket here in the u.s. pressure on greece this morning with g7 leaders meeting in germany am a calling for a final resolution to the impasse that has put greece on the brink. of default. president obama says angela merkel discussed the problem in ukraine. she is likely to tell russia -- in turkey, the prime minister's bid to consolidate power. voters failed to give his party and absolute majority in parliament. that led to -- that is after weeks of bargaining or another election may have to be held. apple changed the way people bought music with its itunes download.

now it wants a lead role in streaming music. it will unveil a plan at the developers conference in san francisco. it pledges to go head-to-head with industry leaders. in the nba finals, lebron james scored 39 points to lead the cleveland cavaliers to a 95-93 overtime win over golden state. the best-of-seven series is now tied at 1-1. game three is tomorrow night in cleveland. tom: the major shout out to pro sports. terrifically even matches in both basketball and hockey. let me do a data check here. after the jobs report, we will get this done quick. crude oil a little bit south under $59 a barrel. to the next screen. the fix -- the fix -- the vix --

it is a weaker turkish lira this morning. we will have a chart on that later. we go to minister nicola sturgeon here. it is a very scottish our. -- it is a very scottish hour. london in red, scotland in white. i understand there is a difference between the urban london and the all-in scotland but they part ways, showing tensions and challenges. brendan: the peak is much higher in the 19 night -- the peak is much higher in the 90's. hopefully we get to the bottom of that in this hour. tom: we will, but first we go to the bavaria -- two bavaria and the scandal over the president house nonalcoholic beer. the hills are alive with the sound of athens.

hans nichols is getting the seven united acting inpatients. on scope you heard jean-claude juncker over the weekend sort of exploding criticized alexis tsipras not just for rejecting the deal, which is a setback but for not being an honest broker. that is the most troubling moment we have had. the other troubling aspect is that we have a freshman the french finance minister, talking about how it would not be "a drama" if greece left the eurozone. we heard that from mr. novotny. the fact that we hear it from french speakers gives us an indication that europe is trying to come to grips if greece does leave the eurozone. brendan: the president listens to an out on one concert, drinks nonalcoholic beer.

what is actually on the agenda? hans: climate change. they will probably try to get somewhere on climate change. it is greatly sought after and has zero meeting -- zero meeting -- zero meaning after 15 minutes. it kills me. i have done dozens of g7's, g8's g 20's. everyone is trying to talk about the importance of the communique, and it is never followed up upon. brendan: i am literally watching right now a local train to go you on the set. i can hear birds, the hills are literally alive with the sound of music. was that, in fact, nonalcoholic beer that the president drank this morning? hans: it was nonalcoholic. white house officials are saying president barack obama would never knowingly order a nonalcoholic beer even after a

long flight. they are establishing president barack obama putting his credibility on the line. can we talk about "the sound of music"? it has history, it has sexual tension, politics. it is a great movie. i was teased about it as a child, but it is a great movie. we can make it overnight. we strap on our lederhosen. tom: it is incredible. hans nichols takes valuable seconds away from nicola sturgeon to talk about "the sound of music." thank you so much. in this hour, we focus on style and -- on scotland. with us is nicola sturgeon. it is time to look forward. how quickly can scotland get to the next independent vote? i was speaking with rodney

jefferson, and he said that is the question in your beautiful parliament down the royal mile at holy route. what is the urgency for you to get to another referendum? minister sturgeon: it is an absolutely exhilarating debate. everybody was gripped by it. it has had a lesser legacy in scotland. people are much more engaged in politics, putting politicians on the spot, interested in how the country is governed. that has been fantastic. we are getting more powers into our parliament to get more control over the economy and the state of our welfare system. tom: what can you learn from irish independence? vonnie quinn joins us on the set, iconic in her knowledge of ireland. what can you learn from vonnie quinn's ireland? minister sturgeon: the main

lesson about ireland -- it is a smaller country than scotland. it does not have the same natural resources the scotland has, but irish people are fiercely pro-independence. they would never be governed by london again. what is the lesson from ireland? you can make the independence delivers confidence in the ability to run your own affairs. i think they will grow in the years to come. vonnie: prime minister cameron is on a tour at the moment in certain countries and if you were to gain some things in favor of britain, with the idea of a scottish independence referendum receipt a little bit? minister sturgeon: it is a question of whether the u.k. stays within the european union. what i would say, if the u.k. wants to come out of the european union, it is unlikely

scotland would want to come out, and that scenario may make people look once again at the independence question. it is important that we are making the positive case within the european union. there are lots of jobs and investment dependent on that. i think david cameron is bringing the u.k. dangerously close to the exit door. that would be dangerous. brendan: i want to sit -- i want to stick on this theme for a second. how did the u.k. elections change the calculus for the scottish independence? minister sturgeon: it gave scotland the opportunity to have a much louder voice within the united kingdom, and that was very much the legacy of the referendum. we came out of the referendum campaign, scotland had voted to stay part of the u.k.. but suddenly thought, if that is the case, we want to much -- to

have a much louder voice and influence. brendan: used it after the election and said we are not going to have business as usual. now you have 56 people in westminster. what does it mean business as usual? minister sturgeon: new powers for scottish parliament is a debate we will see. income tax rates come to the scottish parliament, rader responsibility with our social security system. i do not think it goes far enough. scottish parliament should have talked about business taxes anything a country takes for granted to try to get more growth in its economy and create more jobs, but it is a vibrant debate. tom: how can you find ground with the heritage of gordon brown and alastair darling? where is the common ground that can go from alex hammond and

nicholas -- and nicola sturgeon? where do you meet five or 10 years from now? minister sturgeon: there is lots of common ground between those who argued for scotland to be independent and those who wanted scotland to be part of the united kingdom. we just have a different idea of how to achieve it. we need to work together take a look on both sides of the debate to make sure that scotland is as successful as it can be. very often, in debates whether it is general elections or -- we agree on quite a lot. scotland is open for business. we are a good place to live in, to study in. you tell me that your daughter studied in edinburgh. -- in edinburgh -- tom: was that a shameless plug? that was a massive "surveillance" shameless plug.

brendan: coming up, can deutsche bank compete with goldman -- jpmorgan and goldman sachs? on bloomberg television, this is all coming up, streaming on your tablet, your phone, and bloomberg.com. this is "bloomberg surveillance ♪." ♪

tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines with vonnie quinn. vonnie: in new york, two murderers made a daring escape from prison. they use power tools to break out of a prison located 25 miles from the canadian border. they left homemade dummies in their cells to fool guards.

germany is in correction territory. the dax has now dropped 10% since its last peak in early april. some investors blame the country's bond's love her german debt -- bond slump. switzerland is the new -- novak djokovic was beaten 6-4, 6-3 6-4. the french open is the only major title that? which has not won. stan wawrinka won the french open. brendan: staying in europe, the co-ceo's deutsche bank, are stepping down. christine harper joins us on the set. there is a quote in the piece on the terminal about the move this morning.

"too little equity capital, a flawed culture, and an appalling record and risk management." what do you do with that now? >> i guess jain, after 22 years in the bank, has decided it is best for the bank if he moves on. juergen fitch aschen comes from more pure, investment banking. and he is somebody who has some experience turning around banks. we have a story today talking about his experience turning around ubs, now seen as one of the darlington the banking market. tom: i have to compare and contrast. what a stunning performance by james dimon over the recent

years. it is a .6 tangible book failure, absolutely unacceptable to all. the shortest path has to be to cut costs. how many jobs will go? >> that is one of the problems that anshu and fitschen have had. they have gotten the lowest shareholder support at their annual meeting that they have gotten in the past. tom: the history for the u.s. -- they built up the new york platform. with all their expense, will they radically restructure new york? >> what investors are reacting to is the view that, mr. cryan when he comes in they are not expecting the strategy to change.

they like the idea of cutting all these costs, making sure that their assets on the balance sheet get shrunk, but they want him to come in and show how they are going to do it. the view to some degree is that jain will have a difficult time unwinding what he built. tom: fascinating. sort of, maybe we will, maybe. there is a new plan. our plan is to have michael holland with us in the next hour. speaking to him not only about deutsche bank, particularly his expertise on successful american banking, but of course michael holland on these most interesting markets. what we saw last week was something. stay with us worldwide, and in scotland. this is "bloomberg surveillance ." ♪

tom: good morning, everyone. "bloomberg surveillance." photo op, bavaria. of course, the chancellor, the president, and madame lagarde after a very busy week last week , lining up for the photo op. it is a moment for prime minister cameron, shinzo abe from japan. good morning. bloomberg surveillance from new york city. time for the morning must read as we celebrate scotland. let's go back to the beginning of the scottish national party. john mccormick from glasgow -- here is his mother's response. "home rule in deed." tom: the mother of john mccormick.

started on the back of an envelope. minister sturgeon: i have never seen that court before. john mack cormack is one of the founders -- tom: he from day one, minister, took it to center. minister sturgeon: his son has been a celebrated professor of law at the university of edinburgh. tom: would he know your party today? minister sturgeon: i think he would see in the party today when he and colleagues saw back then. it is been disproved along the way because we now have a scottish parliament that is becoming ever more empowered. i think the profile of scotland internationally is good for an economy good for business, and

good for our general standing. vonnie: first minister, would you describe this as a pro-europe, -- minister sturgeon: i think scotland benefits from being in the single market. the jobs and scarlet and -- in scotland depend on the single market but our culture and our sense of who we are -- i am anti-austerity, in the sense that austerity cuts, and george osborne, the u.k. chancellor are harboring full numeral p people -- vulnerable people. the innovation in the skills to get the economy going day, many people in scotland are pro-monarchy, and many people wanted to be independent. they have a great respect from -- for her majesty. brendan: what is the difference between labor and the --

-- labor and the s&p -- and the s and p. minister sturgeon: labour has moved probably closer to the conservatives, and has taken a leading role in more investment for growth. tom: we will come back and talk about the prime minister's grand tour, as well as the twitter question -- "can the g7 get anything done? good morning. ♪

tom: good monday morning, everyone. "bloomberg surveillance" after jobs day per it what a jobs day it was. here are top headlines with vonnie quinn. vonnie: shares of deutsche bank

gain the most in two years following the shakeup at the top. they are higher in u.s. premarket gaining -- premarket trading. anshu jain will step down. juergen fitschen will stay until next may. john cryan, the former cfo and ups -- at ubs, will take over. german chancellor angela merkel x x g7 leaders to send russia a united signal on ukraine. merkel and president obama think beer yesterday at a resort in germany where the g7 is meeting. they believe the sanctions against russia will stay that will stay in place. south korea has reported its sixth death from mers. the country now has 87 cases of the disease. it has killed 400 people

worldwide. there is no vaccine or cure. general electric is on the verge of a $12 billion deal. bloomberg news reports the -- that ge sold its lending arm to canada pension plan board. ge is trying to unload $200 billion worth of assets from its ge capital unit. american pharoah will get a two-month vacation before he races again. he is the first triple crown winner in 37 years. a day after his victory in the belmont stakes, he is expected to run only a few more races before retiring to stud duty. i do not know what that is, and i do not want to ask. brendan: the owner expects to make more money on stud fees from his father. he has sold his stud rights to american pharoah.

tom: did i do that in court once? i thought it was absolutely fabulous. david papadopoulos, thanks for a terrific perspective through the triple crown. let's turn to scotland, and the challenges with london. the dust has settled. the prime minister has taken a grand tour of the continent. nicola sturgeon is the first minister of scotland. scotland is future in independence is linked to what england does with brussels and europe. what would your fondest hope to be to get out of westminster? minister sturgeon: scotland is only good to become independent if scotland's people are confident in its ability to become an independent country. i want to see that as a positive step forward not something that is a reaction to something negative. i will make a case over the next couple of years for the u.k. to stay within the european union. there is no doubt if it can come

out of the european union, scotland would look again at a relationship with westminster and the european union. these are exciting times, but they are important times because it allows us to think about our place in the world and how we had test it quit ourselves for more jobs and prosperity. brendan: david cameron called the smith coalition together. you said it does not go far enough. minister sturgeon: the commission will lead to a debate in the house of commons leading to devolution to the scottish parliament on income tax certain responsibilities over our social security system. but it leads with westminster's powers over corporation tax, over a large part of our social security system.

it leads to decisions about where we set the minimum wage. brendan: you are here to encourage investment in scotland. would you then do something like what ireland has done, which is lower business taxes to encourage investment? minister sturgeon: we have argued that for quite some time. if we had the responsibility to set corporation tax, we could use that in a positive way. it is important that scotland does really well in terms of foreign and direct investment. we can do even better. tom: what is your vision for banking? i think of ireland with the bank implosion there, london with its own characteristics. we say the royal bank of scotland. what is the minister and your government's view of where it should go going forward? minister sturgeon: we are on the road to recovery and some hard

work and some hard decisions to take them back to a sustainable place. many things have to happen. first at the banking sector as well as individual banking institutions, have to continue to regain the trust of the public. banking has to become much more sustainable. there is a real appetite on the part of institutions like the royal bank of scotland to get back -- tom: if deutsche bank goes on with new management, what is the distinction between london and edinboro policy? minister sturgeon: most of the key decisions and levers of decision-making around the banking system are taken in westminster, they tend to get back to what is often seen as the traditional look at scottish banking, investing in the

economy, and other businesses succeeding. it has been a hard lesson, and this is not just a view of scotland to the u.k.. we have to make sure that those hard lessons that were learned from the mistakes that the banks made are learned, and those mistakes are not repeated in the years to come. brendan: we have to talk about north sea oil. i am going to bring up a chart from yesterday, the price of brent crude. when the referendum happened, it was up above 100. when the election happened, it was down below 70. how does that change the way you look at scottish independence? minister sturgeon: firstly, it does not change the fact that i believe scotland would be a successful, prosperous independent country. oil producing countries are already independent. when the oil price falls, they do not suddenly question their ability to be successful independent countries.

oil is an important part of the scottish economy, but it is not the the all and end all. other parts of the energy sector, renewable energy, life sciences, engineering, creative industries -- we are lucky that we have many strengths and the importance that -- we have to focus on that. vonnie: -- >> the whole argument for having fiscal autonomy -- and i should say there is no sign that prime minister cameron will offer scotland a fiscal economy -- but the whole important to that is that it puts in your hands the levers to grow your economy to incentivize business growth through your use of tax powers to invest in sectors of the economy that you want to see grow.

nothing grows your revenues as your growing economy. that is the whole point of having greater power in your hands. tom: if you lose the fifa powers in 2022, could that -- could you pick up the slack? minister sturgeon: we are up for anything. brendan: i did not do it. i would have gone scottish league. we are going to stick with scotland and focus on scotland. exports, agriculture economy. it is now all about -- it is not all about scotland. streaming everywhere. good morning. ♪

tom: good morning, and particularly good morning to the united kingdom. we continue our view this hour on scotland. brendan: you will see that scotland's website has changed its url. you will also find a wealth -- we got a little eyebrow raise from nicola sturgeon on that. today's single best chart. we have first minister nicola

sturgeon with us on set. what we are looking at is exports, agricultural exports from rural scotland to the rest of the u.k. and the rest of the world. a lot more food stuff going to the rest of the u.k. what is leaving to go to the rest of the world is scotch. let's stick with the links between the rural u.k. -- the rural scottish economy and the rest of the u.k. how do you see those links going forward? minister sturgeon: regardless of what happens to scotland constitutionally, the rest of the u.k. will be our guest export market. half of our international exports go to european union countries. that shows the importance of memory ship with the european union single market. the united states is an important export market for scotland as well. food and drink is one of the fast grossing -- one of the fastest-growing sectors of the

economy. scotch whiskey largely driven by scotch whiskey exports. china is a growing example for whiskey. but food as well. scotch salmon, scotch beef is growing in a national -- in international markets for these products. brendan: there is actually a chart on scotland's website that will tell you what scotland produces per-person per year -- 583 bowls of porridge, four chickens one/seven of a pay. by and large, economically rural areas of scotland are doing much better than urban areas scotland. minister sturgeon: the scottish economy is growing overall. it is projected to go over the next year. employment is growing and the

employment rate in scotland is higher than in the rest of the u.k. we have been very successful but we have a long way to go. overall, the projection for the scottish economy is a strong one. brendan: how do you explain the disparity between urban and rural? minister sturgeon: the economies there are performing well. many of the other sectors we are talking about around energies and life sciences, growth sectors for parts of our country. there is lots to be positive about. tom: the g-7 meeting is being held. they reemphasize sanctions on ukraine to russia. how has that affected your export of food and beverages? minister sturgeon: it presents challenges, there is no doubt about that. but given what russian is engaged with, given the issues

in ukraine, it is right that we maintain a hard line on sanctions in russia. vonnie: what do you hope to have a commerce by the time your first 100 days is up? minister sturgeon: i have put the scottish economy at the heart of my priorities, but also coupling that -- and this is something that the imf and the oecd increasingly talk about -- economic growth with greater equality so that we ensure the growth of the economy is enjoyed the many, not the few. scotland has a big challenge with those who live in poverty and depredation. tom: did you cost ed miliband the election? minister sturgeon: no, ed miliband lost the election because he could not beat the conservatives in england. brendan: in 2016, what are you

going to run on? minister sturgeon: there are still challenges we have to face up to, but scottish education needs to become one of the best education systems in the world again. i am visiting a school in new york later this morning to learn what lessons we can from there. also real vision and passion about what scotland can achieve. i said earlier on we are open for business. we are a great place to do business. i want to see our economy grow, tackling the deep and structural economies that too often hold it back. tom: vonnie quinn, we have scottish foot. vonnie: -- we have scottish photos. vonnie: edinburg features neoclassical architecture and is also the home to --

tom: it has a little touristy feel to it. do you want to change it to something different? minister sturgeon: edinburg is an international city, and we are headed to a season where it will come alive. anybody watching, if you have not visited edinburgh, go to the international festival. you will love it. vonnie: featured in "game of thrones," the capital in central scotland. this whole thing was picked up. the 13th century castle was also used in "monty python and the holy grail." tom: are castles falling apart like in france? minister sturgeon: know, we have fantastic -- no we have fantastic preservation groups in

scotland and we take great pride in that. vonnie: in u.k., kensington palace, sharing baby photographs of prince george. and prince charles p. the duchess took these pictures herself. she needs to prepare herself for years of teething. tom: first minister, thank you so much. minister sturgeon: thank you for having me. i thoroughly enjoyed it. tom: the bowtie was not planned. let's look at our twitter question of the day. "can the g-7 get anything done?" they have just gone to their photo op in bavaria within the hour. stay with us. in the next hour, we focus on

the changing of the guard at deutsche bank, an abrupt changing of the guard. stay with us. another hour of "bloomberg surveillance." ♪

tom: good morning, everyone.

"bloomberg surveillance." top headlines with vonnie quinn. vonnie: a crowd outside a hip-hop concert in new jersey. officials say people became angry last night when they could not get into the sold-out show. officers say bottles were thrown at them. authorities have not said if there were injuries or arrests. american media copies have worked with those at the center of the bribery scandal in soccer. the firm is were accused of -- the firms were accused of paying bribes for tv time. no one at 20 century fox has been accused of wrongdoing. broadway's biggest night -- the tony awards. the best new musical was "fun home."

there was a record-setting season grossing $1.3 billion. did you see a? tom: no. i am tone deaf on it. i have read a number of articles, and they had a banged up here. -- they had a bang-up year. a different tone with deutsche bank news. all the president's bankers. it is a sober affair. the ft calls in a calm reading. the panic of 2007 is on page 406. the panic of deutsche bank is not in the book. know menomi prins i am so glad you are here on this data drive forward. it seems like the modern formula is broken. what is your new formula for

maybe not goldman sachs or jpmorgan, but the other banks struggling? nomi: the shareholder to understand the model does not work. it focuses on risk, on leverage. it gets a lot of criminal fines slapped upon it. it is a deteriorating model and to a large extent balances that with a broader, longer sturm -- longer-term sustainable effort. tom: particularly the intellectual content of deutsche bank -- these are all world-class people so what is wrong with deutsche bank? nomi: part of the issue was transparency. doing deals that do not make sense, that are not transparent, that have components that are too risky to manage. that is what is happening now. we have seen it throughout europe, the evolution in the

wake of the financial crisis unlike the united states. you can still do the deals, but you have to balance the complexity of what is going on the illegality of what is going on beneath that with a longer-term sustainable, more commercial banking approach as well. brendan: do you see in deutsche bank the same kind of national champion that you live written about in the u.s.? nomi: for management was there when all of these things were have -- former management was there when all of these things were happening. in the past in the u.s., the way past -- the 1930's in the u.s. -- that is when you had new leadership, more stable growth for decades. that is what you want to see. brendan: the goal they set for themselves as a gnarly -- as an roe of 10%, is that doable

without the kind of leverage that you are talking about? nomi: the problem with bad leverage is that when you try to do the types of dales -- the types of deals with the complexity the deals that are not managed properly, the deals that are not transparent -- if leverage is done smartly and broadly, if deals are done effectively, then you can have an effect. the leverage is not necessarily the issue, although they are going to deleverage. it is the complexity the problems that can because in a way that is too shady. tom: are there too many big banks? nomi: absolutely. five of the largest banks in the world are in the united states. in the wake of the financial crisis, our biggest banks are bigger. the rest of the european banks are smaller. tom: nomi prins, thank you so

much. all the president's bankers. nomi prins, with her book. stay with us this morning. ♪

announcer: this is "bloomberg surveillance."

tom: call it the sunday purge. anshu jain is out at deutsche bank. can european banks compete with j.p. morgan and goldman sachs? g-7 leaders meet in the area a demanding -- in bavaria, demanding that greece chart a way forward. jean-claude juncker looks for minimal rules. apple tries again with music streaming. good morning, everyone. this is "bloomberg surveillance " live from our world headquarters in new york. it is monday, june 8. i'm tom keene. with me, brendan greeley. brendan i was shocked yesterday when that headline came up. brendan: i am shocked that -- over what is made about john cryan speaking german. culture matters. tom: i have a formal black-tie breakfast in deutsche bank's

london office where the fireplaces. is deutsche bank a london bank or a frankfurt bank? brendan: it is a frankfurt bank. it is very important to the german government that they get this right. tom: here is top headlines with vonnie quinn. vonnie: deutsche bank shares are posting their biggest gains in more than three years as investors welcomed a management overhaul. john cryan is the new ceo of germany's largest bank, and he is the former chief financial officer of ubs. the move ends anshu jain's tenure as ceo. what investor says it was time for a change. >> of course, we were not asking immediately for heads to roll, but what we were saying is really for the supervisory board to take another look at the composition of the management board, and we were also not asked acting -- we were not

expecting changes within the next few weeks, but it is a good thing for deutsche bank. vonnie: deutsche bank's shares are surging in europe by 6% on the news. the group of seven leaders are increasing pressure on debt ridden greece. calling for a final solution before greek defaults. president obama and german chancellor angela merkel discussed the ukraine conflict. merkel says the -- says sanctions can be eased only if peace comes to ukraine. prime minister of turkey lost his majority in parliament. another election might be needed. apple is expected to unveil its music streaming service today. the company's conference for developers is getting underway

and san francisco. apple turns the music business on its head with its itunes digital downloads. its new venture will challenge spotify. the cavaliers take the home-court advantage in the nba finals. they scored an overtime victory last night over golden state. lebron james led the cavaliers with 49 points, while steph curry scored just 5-23. the series is tied at 1-1, with the next game in cleveland tomorrow night. those are top headlines. tom: hockey, basketball, game six, game seven. what a great time of year. the belmont stakes as well -- that was magnificent. a data check right now. i'm going to make this real quick because there is not that much going on. futures, negative two. oil is soggy this morning. the g-7, they meet in bavaria. traditional scenes are pushed aside. instead, the holes are alive with sounds of -- the hills are

alive with the sounds of athens and greece. what is the backstory, hans nichols? onhans: mr. suppress -- alexis tsipras -- it seems like a fair amount of trust has been lost between alexis tsipras and his european partners especially jean-claude juncker the perhaps only champion on the creditor side of the equation. brendan: can anything get done on greece in this summit, or will they all just with their heads in their hands and wonder what next? hans: you know, in some ways they are really beholden to athens because they had said the next move has to come from athens, and yet nothing has come from athens. tomorrow, madame lagarde and angela merkel have another meeting. they have said they are going to give their last final but not

really last final offer to greece that was quickly rejected by alexis tsipras. he gave the fiery speech to parliament. i'm not sure how they plot around what the next steps are. if you have nothing tangible from athens yet. maybe they just wait around the phone for athens. tom: i am going to brendan on this. french official -- obama says the strong dollar is a problem. eight headlines later on bloomberg, obama did not say the strong dollar is a problem. that is a classic g-7 as the headlines go back and forth. brendan: it is only a matter of time before they pose together wearing creative shirts. what is on the agenda for the president today? he's meeting with the iraqi prime minister, right? hans: what do you do to sort of keep the pressure on russia but also showed there is an offramp for russia? the consensus seems to be you want to have something where the

sanctions would be increased if there are more incursions into eastern ukraine. in iraq, it is a status check information, sharing, and what you do to infuse the iraqis with a little more fight. we will see if president obama needs to clean up the comments that ashton carter made a few weeks ago, criticizing iraqi forces. tom: the president is speaking from bavaria at 10:00 a.m. this morning. we will bring that to you on bloomberg television, with good reporting on bloomberg radio as well. it is our habit to speak with michael holland about well-run banks. i cannot call the last time we spoke about deutsche bank. this morning, on the collapse of well-intentioned plans -- it is real simple. tangible book matters. even bank of america does substantially better. what is the triage you would recommend for john cryan?

michael: i think he has already done it. he already did a stint at ubs where he did credibility in the financial community particularly in germany. so the german market opens up 10% today. with financial services industry, it is all about confidence. if you lose confidence, you cannot fund overnight. tom: part of this, you have to get in front of people. deutsche bank is learning you have to have a big new york platform. will they have a lesser new york platform and try to run it out of london? michael: the quick answer would be yes. i do not think he will do anything bold and different. he has been part of this plan for the last two years, bringing up what they are about to do. they will implement that in a way that is not pleasing to the disgruntled shareholders. on the other hand, he is the right guy to do it. brendan: what did john cryan get

right at ubs? michael: he took them through 2008, and they were a mess. ubs is doing very well today. he shrunk it all down and made the wealth management losers become -- brendan: so he did the restructuring that deutsche bank needs? michael: absolutely. tom: the chart is simple. jpmorgan with massive outperformance over deutsche bank. i rarely use that work. vonnie: does deutsche bank hang onto their retail operations? michael: i think they do. everything is to keep deutsche bank from shrinking each of ubs away from the risk stuff and said we are going to be protectable. they are the premier bank in germany. brendan: this is an important

line of questioning, the idea of the relationship between germany and deutsche bank. i have had german bankers tell me that the problem with deutsche bank is it is not completely free to restructure the way it wants. michael: they might just be a little bit less big. and a little bit less expensive. vonnie: would you buy michael? michael: i have no shares of deutsche bank, but when you look at the numbers, every dollar you put in today, -- every $.60 in today, you get a dollar. that is better than american pharoah. tom: co-ceo's. it does not work. can co-geographies work? frankfurt, london -- it has always been -- it is like shell oil years ago, between wherever in the netherlands and london. it is just confusing.

michael: but i think good people can do that. i think it can be done. i think the co-ceo thing has not worked. one of them was spending a lot of time in court. tom: we will adjust -- we will address china later on. michael holland. the president is speaking at 10:00 a.m. i believe angela merkel speaks near 8:00 in the morning. can the g-7 get anything done? we will get some lively answers to that. stay with us with michael holland, from new york city. and from bavaria. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." mr. greeley has the morning must-read. brendan: jing june the professor of economics rights "china's pursuit of a new economic order."

brendan: michael holland is with us. i know you spent a lot of time. michael: i actually gave a class at fujian university -- at fudan university. brendan: should the renminbi be included? michael: it is in extra. -- it is inexorable. brendan: so the u.s. should not exercise that power? michael: who knows? it is such a mess with china and u.s. relations right now. however they want to play that game. brendan: what is the relationship going to be between the renminbi and the dollar in

international trading? michael: it is quite clear that among the international aspirations of the chinese leadership, it will be a reserve currency. brendan: will we price the oil with the renminbi? michael: i think they are trying right now. there is nothing in the recent 20 years to show that we should doubt this. tom: but don't they have to flow, by definition, the extra collation -- the extrapolation the 5.70? and the function of age and currency -- of asian currency dynamics is extraordinary. is it tenable? the answer is no. vonnie: maybe at that point we will get the renminbi at -- michael: they have complete -- it is pretty simple. you look at their self-interest

what they said they are going to do, take those two things, and they do it. brendan: this has been fascinating to watch. anybody who knows anything about international currency rates knows that the u.s. is foolish to talk about -- airederdogan lost his bid to continue his party majority in turkey parliament. ♪

tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines with vonnie quinn. vonnie: police in new york say two escaped murderers could be just about anywhere. the pair are in their third day on the run after using power tools to break out of a prison near the canadian border. there is a $100,000 reward for information leading to their capture. alibaba and chairman jack mize

coming to chairman -- jack ma is coming to america to talk about u.s. business and his e-commerce company. he wants to boost revenue to 50%. the world's top tennis player -- stan wawrinka of switzerland took the french open. he deleted djokovic. -- he defeated djokovic. tom: it is interesting. this guy is out of the blue, to say the least. women's is just a little more predicable. brendan: it was a blow to president erdogan, voters denying his majority in parliament for the first time since 2002. elliott gotkine is in istanbul.

what happens next for president erdpogan? elliott: he made a couple of presidential sounding statements saying that the situation we are in right now in turkey should be assessed in a healthy and realistic matter by all political parties. we have some comments from the opposition party saying they will not go into the coalition government with the ruling party. the most likely scenario is a minority governor ♪ment, that they would not cause the government to fall. a coalition government with the nationalist mhp is the most likely scenario. brendan: your shot speaks for itself. i did not feel i needed to

comment on how beautiful it was. but if they rule as a minority party, they will take it issue by issue. what do the issues look like? elliott: i suppose right now you have quite a divided electorate. there are clearly a number of economic performers that need to take place. the economy was already slowing before these elections. there is hope that perhaps now president erdogan's powerbase is weakened at some point. he was publicly harangued and told to cut interest rates. right now the focus is on the political issues and the need for a coalition. they have 45 days to try to thrash one out. brendan: nicely framed in istanbul. i want to bring in our guest on the set. we have the cofounder of foreign policy interrupted. what do we make of this?

is the death of southern turkey exaggerated? >> yesterday what we saw is a referendum on president erdogan himself. he has been in power for more than a decade. during that time, he has become more increasingly authoritarian. in 2003 he had an inclusive message. he told me when i was in a meeting with him shortly after he came prime minister that he represents 72 million people in turkey and he represents each and everyone. he talked about minority rights reaching out to the kurds, and in fact he was probably one of the only leaders in turkey that has gone as far to reach out to the kurds and bring them to the table for peace and reconciliation. what we see over the past four or five years, what we saw in 2013 with the protests, was erdogan playing an authoritarian

and heavy hand. that is what turkish voters/out against. tom: i had to do an interview in new york once on the kurds because they did not want me to do it in istanbul. that is the tension there. how will he and the new turkey adapt to that? >> foreign policy is on the table right now, but as elliott said internally there are a lot of political issues in turkey that need to be addressed. the economy and the question of the kurds. with the atp very weakened there is a question about what happened to the peace process. that can be something that brings the coalition together. if winning the htp can come together and resume those talks, but it is probably more likely that those talks will be turn on -- will be put on the back burner.

brendan: what has changed in turkish politics? >> what we saw yesterday was very much the turkish people said i think turkish voters like everyone, votes with their pocketbooks. brendan: who is it who actually left his side? >> number one, the atp got a lot of votes for the kurds. that is where a lot of his votes came from. in 2011, when he won by 49%, the majority of those votes came from the kurdish southeast. those votes clearly defected to the htp. but you had a lot of secular middle-class urban turks who support the people's republic party, which is the party of the founder. a lot of those people and the liberals defected to the htp to support the head of the htp. primarily because erdogan has been casting this very anti-

establishment anti-gay, anti-woman rhetoric. brendan: i have to jump in here. we could stay on this topic, but we have to move on. stay with us. ♪

tom: we welcome all of you to our studios in new york city. lexington and 59. the bloomberg terminal -- something arcane. housing affordability in london and scotland. one of divergence here. it speaks to the challenge that

scotland has. brendan: i would disagree. we both see the divergence, but this is a london story. this is -- i would guess that if we did the rest of the u.k. that it would look very similar. tom: what have we learned? brendan: what we learned was interesting. the one thinks he really wants is control over corporate taxes and scotland. we followed up and said, d anticipate a model like ireland when you lower taxes and you look for the irish model of encouraging foreign direct investment. that is exactly what she is going after to diversify the company. tom: compare and contrast with ireland on something coul. vonnie: scotland is dealing with the austerity of forced upon them. a billion pounds worth of cuts to social welfare for it hasn't had a good social safety net. tom: the biggest mistake as you

have done so much for bloomberg news and radio over the use is that we perceive england and ireland as a much bigger economy than it really is. vonnie: size was, they are pretty small. england is much larger, but in terms of the types of companies that each place attracts, it is massively important in the global economy. brendan: it focuses on its intelligent workers and a little bit of tax income as well. but i think we are going to find out what the irish economy can do. the listing of these agricultural caps -- you have massive day farms that are getting ready to export everywhere. tom: michael holland came over on this boat. my family is down here.

here is brendan greeley's family. [laughter] tom: this is "the new york times pick." this is really cool. this is where we all caps on. brendan: we had a guest on from islands about two months ago who was a distiller. it turned out that we were related. like literally related about three generations back. tom: let us rush the top headlines this morning with vonnie quinn. vonnie: germany's biggest bank share storing -- soaring. the shares are higher in the u.s. markets. on today, stepping down after three tumultuous years as ceo, the other co-ceo will stay until next may. the new chief executive is a former potential officer at the ebf. he has his hands full as it faces billions in legal costs.

german chancellor angela merkel is sends a giant signal about the ukraine. they agree that sanctions against russia will stay in place until players and -- president vladimir putin holds to those peace negotiations. more people have died from the middle east rest of choice syndrome. about 2000 people are quarantined. the virus can hold respiratory failure or shock. there is no vaccine or cure. general electric is on the verge of a $12 billion deal. bloomberg news is reporting that it would sell more than half of its private equity arm. ge is trying to unload assets worth about $200 billion. an american pharaoh is getting a vacation of sorts.

he is back in kentucky after winning the belmont stakes becoming only the first triple crown winner and 37 years. he may run again in two months before retiring. when people ask you what are your retirement plans, to haven't asked you. brendan: tom will mama five sitting in that chair. vonnie: apparently studying is one option. tom: i know nothing about it. brendan: it is amazing to read people who know about horse racing that this is not just that this is not just a fast horse, but a beautiful runner. tom: i cannot say enough about the coverage. i think it is just great on nbc. let us do a data check. currencies and commodities has that post jobs they deal. one turn we saw thursday and friday.

oil is a little bit soggy this morning. we are watching the turkish lira weekend after the defeat. the turkish lira a bit lighter. brendan: it is "bloomberg surveillance." i'm brendan greeley with tom keene. tom: deutsche bank sellers at a level that is absolutely unsettled. what has become of germany's perennial laggard? he is on the board but he is an outsider. let us get his perspective. he was the lead quote across numerous newspapers over the sunday. christopher wheeler at atlantic equities. what are you smarter about today than you were yesterday of the future? what do you suggest we will see in the coming weeks? christopher: you'll remember

that it was one of the big houses before it was bought. a very careful man and considered man. he was asked to step in to be the cfo and the darkest part of the crisis in 2008-2012. a lot of technical stuff had to be dealt with. he did a bit by bit. i think that is what he is thinking about now at deutsche bank. tom: the age-old debate is shrink new york. that always comes up. will deutsche bank shrink new york? christopher: i was in the states last week seeing a lot of u.s. banks and they were getting quite excited. it was saying they will do that under the new ceo. i imagine that will be part of the story. obviously they have an incredibly healthy franchise and they were able to float that away. brendan: one thing i've been trying to understand all morning -- what is the relationship

between the german bund and deutsche bank? christopher: one of your colleagues called me about this allegation a money laundering with russia. i would imagine the chairman got a call from berlin. i think it is a national champion. i think in this the camels about. i think angela merkel is hosting g7 and having one of her leading institutions is now one discussed alongside allegations of sanctions busting is not attractive. vonnie: 39% of the base that did not get behind it will they now get behind them? christopher: i think he has a reputation for being a measured man. he is not a guy who was very charismatic. he will tell the team what is going on and get around of applause. he is much more measured and it will take a long time. it is born to say that he will take this one step at a time

but deutsche laid out a strategy for weeks ago and it promised to be back in 90 days with some details. the question is does john say, we go with the same plan or does he say i need a bit of time to look at this? brendan: you've made mention of their goals for 2020 to the arlene. was that an unrealistic goal over they not the right people together? -- to get their? christopher: i've tremendous respect for both gentlemen, but i have to say that the problem with deutsche bank unlike barclays is that they have not got a core comfortable business to fall back on domestically. so deutsche is always having to build a very strong investment bank, but one that has to have so much more capital. tom: you've got it all figured out.

other just too many banks -- are there just too many banks? christopher: i don't think so. i think there is healthy competition. i think the joke is going that we will end up like wimbledon where we will host the banks, but at the end of the day, the u.s. thanks will dominate the european market. i'm not sure that is the right way to go, but i think it is heading in that direction. i think they still want some degree of choice. tom: is an opportunity for french banks? christopher: absolutely. french banks are never known to step back when they see a chance if they have been talking about moving to a 5% legislature when the european norm is the percent. wants to compete alongside jpmorgan. the french keep saying that three present is fine by us. that makes a big difference. brendan: chris wheeler of atlantic equities, thank you very much for helping us figure this out. we will be on this all day. you are on to china in the next block.

we will look at the shanghai composite. do you see a bubble? you probably do. we will look at that coming up. this is "bloomberg surveillance" on bloomberg television radio. good morning. ♪

tom: good monday morning. i'm tom keene.

brendan greeley and vonnie quinn with us as well. apple, brendan. brendan: apple is expected to unveil and music streaming service expected to compete with spotify and pandora. sam is with us and he will talk about it. but first, streaming. how freaked out is apple? sam: pretty freaked out. they are not a services company. they want to sell devices. but services are a way to lock you into those devices. as a result, as people keep moving over to a streaming service, it moves owning music as a locket. it used to be that if you bought an iphone, you're not switch to android because where would all your music come from? with a streaming service, you can switch. that is what apple wants a streaming service. brendan: as an editorial comment, i have always found the itunes experience awful. there is a culture within apple

providing them with a good experience. sam: history has not been helpful for apple in this case. had itunes music and the cloud and there was music that you owned and then you could sink it if you wanted. if you didn't have a roug by apple id, things can be very confusing. steve jobs had the position that people wanted to own music. it turns out that steve jobs wanted to own music. brendan: steve jobs wanted to own people's experiences with music. tom: "the new york times "has the story. i guy it bought this for a couple hundred box. -- box. this is john lennon's. this is going to sell for under a million dollars fee here are their matching this= guitars. we have gone from that emotion to the sterility of spotify and

itunes. i would suggest that apple can pick the artist and take over the business. am i wrong? sam: apple has a hundred million dollars -- 800 million cars on file -- credit card on file. it is song by song and the album. tom: taylor swift leaves in that she doesn't go to spotify. sam: she already didn't go to spotify. brendan: one of the things that we have heard is that apple is cutting harder and better deals with the actual labels. it is pressuring them to back out of the contracts with spotify. what is going on there. ? sam: there has been tension with apple in the labels because apple wanted a lower price and the labels said no. we going to charge the same price as spotify and pandora and others. they are trying to navigate that territory coul. tom: could a new john lennon be paid today with rents?

sam: perhaps maybe with more money. tom: but not with digital. brendan: the new john london cannot live in the f it -- i. tom: china coming up. michael holland will speak about his recent visit. i believe there are some level of some sorts in china. good morning. ♪

tom: good monday morning. after jobs day on friday, what a jobs day that was. thanks to all of our team for great coverage. we move on. let us get to our top headlines. vonnie: police using tear gas dispersed a crowd outside of a concert in new jersey. people got angry after they cannot get into a sold-out show at metlife stadium. authorities not said if there were injuries or arrests. u.s. media company is reportedly in works to export marketing firms linked to the national soccer scandal. directv and 20th century fox have been top sponsors of the firm.

directv pimm fox aren't accused of wrongdoing. and today productions took top honors in broadway's biggest night, the tony awards for the best new play went to "the curious incident of the dog in the nighttime." the best new musical was "fun home" adopted from a graphic novel. they had a record setting season boasting $1.3 million. i haven't seen either, but i will be rushing to see both. tom: let us move on this morning to our 8:00 hour. what we are going to see this morning -- how about deutsche bank? we will see the new coverage that of which a bank. the president speaking at 10 a.m.. the oil market has been raids bound. precisely eight opinions. and for that and the 8:00 hour on bloomberg television. brendan. brendan: 141% -- that is how

much the shanghai composite has gained in the past 12 months. making a mo most benchmark index. should investors keep buying into beijing? our guest of the hour is who we go to understand china. it is fair to say this looks like a bubble. how long is it going to last? when is it going to pop? michael: there was a five-year bear market in china. the shanghai index was the victim during that period. five-year carnage -- the economy continued to grow as you reported month after month and year after year. the market went from 60 times earnings to nine times earnings. we have reached traced a chunk of that as you point out during the past 12 to 18 months. portions of shanghai particularly are bubbling.

there's no question that there are large squads of the chinese market that are reasonably priced given history and prospects. i should say that "the curious incident of the dog barking" is very good. brendan: give us the distinction between the shanghai composite and the index which is really just a hockey stick right now. michael: you have this portion of the market which was priced always higher. and it really got slammed. it was because the supply demand characteristics. the chinese government has continued to do and we talked about this in the earlier segment is going back to self-interest. they want to do what is good for china and themselves and the party. they've actually figured out a number of tools, not just money. the reason the market went up 2% in china and shanghai overnight was because the government was going to do so.

it is not just money that they are throwing. they are doing links between the mainland and hong kong. it was an arbitrage. they got really smart traders in china. the individual traders in china -- they go crazy. they borrow lots of money. tom: away from the bubble as you call it, has your perspective on the emerging markets changed over 20 years? is it more structural where it used to be widely cyclical? is it a different world in emerging markets? michael: it is. the world continues to evolve. india isn't what it was 20 years ago. and china isn't what it was 20 years ago. russia, by the way, is what we used to call part of the emerging market. i think the emerging market -- sri lanka malaysia are still the same. tom: buying holders at a buy in

price strategy? michael: none of the above. you go to find someone on the ground who can sniff out the opportunities for a really good story. but no. i think it is always risky dangerous, and very, very profitable. tom: my experience is that is a great way to reduce your retirement. brendan: it is the deal as old as time. local traders always fleecing people from the outside world. you say going back to shanghai that's what we need to do is not look at the index as a whole but distinguish among industries that are listed there. how do we make those distinctions? michael: don't laugh. this is not a joke. the banking industry -- as we talked about with a 60% tangible ratio with deutsche bank you have the same thing going on around the world. it is certainly true in china and of the bank. when the banks -- i'm sorry,

shanghai went from nine times the four-time. tom: i don't rip up the script. -- i have to rip up the script. martin good belly age 20 read that. goldman sachs is lecturing corporations on use of cash. michael: they don't want them lyin buying through their trade sector they want them to go to the mna and buying their fees. the companies that i pay attention to have done a pretty dam good job of the last six years. i'm thinking of companies like apple. the biggest buyers right now and corporate bonds are companies. they have done eight great job with the cash. the economy around the world is a very good runner. tom: this is like every eight months of using cash is debt. vonnie: it is true. there's so much overseas as well. it is not really growing a

company to buy back your own shares. it is not really growing the company to give out bigger dividends. what are companies going to do to achieve growth? michael: in addition to investing and people i pray to god that we end up with more wages in the future. pay more people more money. we are not doing that right now. so that could be a change. i hope that is part of the future. i hope part of the future is investing and capital equivalent. i hope part of the future will continue to be mna. tom: that is a perfect example. brendan: one of the things that we've been trying to find out all morning long as what is it allowed to be? it has a problem which so many other investment next don't is that it is forced to be an international bank without domestic support. michael: this new guy will do a

decent job of figuring out what is possible. and back to the question as secondly up about what u.s. companies can do their only summary things they can do. one of the few things they can do is buy back. it is not a great option, but it is out there. for the new management, i think among the things that he can do is invest in the business is that he thinks gross, but they are national champion so they can trade off of that. vonnie: we have got our agenda now. brendan: tom, you're switching and opted -- it out. tom: those days are on gone. it's all about greece. have you been to the very -- abovebavaria? brendan: no. it was billed as an artist retreat. you should just go there and play the guitar, tom.

[laughter] vonnie: says that obama attends. tom, keep going. it has been negative over the last couple months. i'm sorry. i can't concentrate. [singing] brendan: while you guysvonnie: while you guys keeps saying i will keep going. brendan: we were singing idolize. michael: with the sound of music. brendan: thank you. michael holland, our resident broadway critic. my agenda is the women's world cup. amazing soccer was played over the first weekend. canada beat china over the

weekend. germany beat the ivory coast 10-0. tom: ok. stay tuned. bloomberg television and bloomberg radio. more on this monday morning. ♪

kers," with erik schatzker and stephanie ruhle. stephanie: here we go. good monday morning.

this is "market makers." i'm stephanie ruhle. erik: i'm and schatzker. there is new leadership at deutsche bank. world leaders are meeting in germany at the g7 summit. stephanie: we are talking to some of the leading venture capitalists at the great summit. it is also happy ocean day. erik: filet of fish anybody? mcdonald's has its latest sales. here is vonnie quinn with the breaking news. vonnie: it is the last monthly seals we are going to see. down three points at -- 3%. the estimate was to be down 9%. in terms of individual breakouts, japan's sales were around 2.2%. a terrible performance in japan, partially currency related. europe sales were up 2.2%. much better in europe. not so gre