is suggested they will follow the rest of the industry. bonds try to find a bid. apple's developer chit was well, it took forever. apple wants to remind brendan greeley to take a copy of the top of his car. good morning, everyone. this is "bloomberg surveillance " live from our world headquarters in new york. tom keene and joining me, brendan greeley. take the cup of coffee off your car. brendan: siri has never worked for me. the only time i hear is when my children push the button to talk to siri. tom: just outcome a built uncle bert's team on small business -- bill dunkelberg's team on small business. a little rift in the german government. brendan: it is something we have

been wondering about, whether it was america playing good cop and sure able was playing bad cup. basically saying there is a coalition within the ecb you -- the cdu to be more lenient on greece. schauble is on the wrong side of that. fascinating. i think the high point of anybody's day is listening to the two of us. tom: let's go to top headlines with vonnie quinn. vonnie: next time we need that -- brendan: edelweiss means always true. vonnie: the small business index, better than forecast. other news this morning, the largest bank in europe hsbc announcing it will cut thousands of jobs in a move aimed at restoring -- they plan to remove 25,000 jobs.

another 25,000 will be cut through the sale of operations in turkey and brazil. stuart gulliver, the ceo, is trying to cut costs. he told the sale of overseas operations -- >> that is why we have made the announcements that we have. you will also see that 40% of -- we are going to a the separately on the following pages. i think the brazil and turkish transactions also prove the fact that there are no sacred cows. vonnie: since gulliver took over in 2011, he has announced 87,000 job cuts and reduce the number of countries hsbc operates, from 88 to 73. greece is taking another shot at unlocking bailout funds. bloomberg news reports prime minister alexis tsipras' government has submitted a new budget proposal to its creditors.

one report is that it is a vague rehash of other ones. "the wall street journal" says the two sites could extend the bailout program until x march, but that could fall apart because greece is rejecting lenders' demands to overhaul the economy. jeb bush is in eastern europe, meeting leaders in three countries. it is one of the last things he will do before declaring next week that he will run for the republican presidential nomination. before leaving, he shook up his campaign staff, naming a new campaign manager, gop operative danny diaz. apple used its much-hyped developers conference to roll out a number of initiatives. tim cook presided as apple announced plans for a music streaming service. demonstrated changes to software on the apple watch. and an update to its operating system called el capitan. but apple did not unveil a new

tv service. in soccer, the u.s. women won their opening game in the world cup. megan rupee no -- megan rupinao led her team to a win. tom: are we by far the favorite teen? brendan: we are not. we are about second in the world. american conditioning is traditionally better, so we ran faster and longer in the second half. megan really coming down the left side made a huge difference yesterday. here is what is exciting. i do not think my five-year-old girls understood that women played soccer. they watched last night. they were transfixed. tom: cool. and it is like a normal world cup that goes over the next couple of weeks. fifa is trying to move things forward. we have markets on the move. all i could find was a china headline, china and pushing back

against g7 on pacific water issues. futures negative six euro made a -- for 113 over 113. on to the next screen. the vix goes 13, 14. 15.29 on the dow. brent crude at 63.53. the dow jones transportation index is there because it is a correction. the bloomberg terminal, with three ideas come from year-end. this is the general market. these are the transports and the utilities. this was gospel in my house when i was a kid. it is not now. the green line is a transport index down to the correction. utilities struggled as well. brendan: what i love about your

household is the dow as gospel -- is this even an index that we pay attention to any more? tom: i get this question all the time. i do because everybody still quotes it and america is hardwired to 18,000. the pros look at the better math of the standard & poor's 500. a lot of people's compensation on the street is based on the s&p 500. i did not know anybody's based on dow. in the next hour, jeff rosenberg is with us from blackrock. it was quite a thursday and friday. that was between christine lagarde lecturing janet yellen on the jobs report. it is enough to make markets adjust. they have. jeffrey rosenberg has not slept in three days. he is trying to get to his research note for next weekend. what will you write about? i know you cannot release the crown jewels, but give us a tone. jeff: the tone was pretty

evident hopefully from the title, which was called "on the brink." we put that out on june 2. the end of this week, the most important data point will be retail sales. the missing picture has been consumption. if we see consumption trends validated in the retail sales report, you will take what we saw from last week's employment news and accelerate that. tom: let's take a bond market stuff to the end of the hour. mohamed el-erian picking up that note on volatility. lisa abramowicz talk about it -- talking about it in bloomberg news. do we foresee volatility? why do i care? jeff: bond markets have seen volatility, but equity markets have not had spillover impact yet. but global bond markets -- just talk about what is going on not just in the u.s. but what we're seeing around the world, particularly centered around europe, with very big moves off

negative interest rates. that is volatility. tom: german 10 year comes out at 0.88 this morning. brendan: you quote stanley fischer on the fed board state we are not the world's central bank, but it is disingenuous because he is part of the bank writing within the governor's board about whether or not we should pay attention to other markets. jeff: that was a speech that he gave a while ago, and it is a long-standing debate within the global policy community as to what responsibility the fed has, considering its actions on emerging markets in particular, but the rest of the world. the fed has come in for criticism on that because the emerging market economies throughout this environment of zero interest rates have suffered from those and had to deal with the consequences. brendan: this has to have been the most telegraphed rate hike in history. it has not happened, but when it happens, it will not be a surprise. why will markets not be a look

to adjust in time? jeff: policymakers have been out. you had last week, mario draghi pot significant comment about bond markets having to get used to more volatility. they are worried about financial market conditions because it is not just interest rates that transmit monetary policy in today's economy. it is what happening -- it is what is happening to stock markets, bond markets come interest rates. they are afraid of a repeat of the temper tantrum. they are trying to get in front of it, but the problem in the markets is there is a disconnect the between where markets are pricing. in bond markets, very low interest rates, and a shallow path, even more shallow than the fed might be indicating or what the market might begin to expect. vonnie: the move up in yield over the last couple of weeks has been linked partially to the moving german bonds. have we decoupled at this point?

jeff: now we are going to start to evolve the story. the last couple of months have been more about what is going on in europe. how can you have negative bond yields? what is the outlook there? you unwound a narrative that had been affecting interest rates. that is a longer maturity. as you move forward into the data, we will start focusing on will the fed start to lift off and have a bigger impact on short-term -- tom: in switzerland, we have -10 year yields now we have positive tenure yields, positive nine-year yields, still a negative seven year yield. brendan: that is what we are looking for in the european north. it has been pressure on denmark and sweden that they are worried about their yield keeping -- you -- about their yield dipping negative. jeff: germany, the core of

europe, those yields start to go higher. that story is turning because german interest rates have found significantly negative to 88 basis points. tom: robin harding had inventory -- had a report on inventory builds in japan. jeff: when we talk about the global interest rate backdrop japan has been a big part of that low global yield, and they are part of what drives -- what drives low global yields is economic data. the japanese yields stopped going down as well. their low point was reached on january 20, and they have contributed to the rising global interest rates. tom: we could go on all day about this. the effects of autonomic's -- of all the non-ex across asia. brendan: 87,000 jobs lost 15

countries exited. it is not over. that brings us to our critic question of the day -- out twitter question of the day. @bsurveillance. ♪

tom: good morning, everyone. "bloomberg surveillance." tom green -- tom keene and brendan greeley with vonnie quinn. vonnie: fema worker has in question in the -- a female worker has been questioned in the new york prison break. investigators are trying to figure out how they got power tools and used them without being heard. the trader blamed for the flash

crash faces a hearing in september. navinder singh sarao will be trialed on market manipulation and trial flood. tim cook has come to the rescue of cleveland indians player brandon moss. earlier this month, moss hit a ball for his 100th career home run. a ransom was demanded to give him the ball. yesterday at the apple developer's conference, tim cook held up the ball. he said it did not seem fair that moss would have to pay. so apple will deliver the goods and moss will get the ball. i could have thought of a bigger ransom. tom: i am seeing more of these watches. i do not know if they are going to last. brendan: i am astonished at how good this marketing is.

somebody should get a promotion for picking up on that list, passing it to tim cook and pulling this off. genius. vonnie: how did he get the baseball he? that is what i want to know. tom: to me it is the embedding of their ecosystem as well. the euro is well up through 113 today. there is the greek drama and the rest of it, and marginal phone calls that need to be made on greece. forget about it. banking is a massive terminal. richard is having a ball, in london on hsbc. we see deutsche bank and now hsbc, jpmorgan a few weeks ago -- do you just assume every bank is going to eliminate 10% of the bodies? richard: that could be a possibility tom. hsbc is looking to get rid of 25,000 employees globally. on top of that, they will be exiting brazil and turkey.

that is about another 25,000 employees. stuart gulliver the chief executive, since he came in in 2011, they have gotten rid of 87,000 people. tom: are these retail branch thanking people high paid investment bankers? who is being shown the door? richard: it is mainly the back offices, the support staff of people working in i.t. and infrastructure. there are different people on the front of the line in the retail banking business, perhaps not so much so at the investment bank. that is an area that is winding down some parts of it, but they want to focus on that. brendan: let's take an anecdote and turn it into a trend. bnp paribas and barclays restructuring -- is there any consistent line to the business that they are cleaning up? richard: there is, certainly. there are higher caps on the credit sides of these businesses. there is more intensive capital

they must hold against credit assets. so you are seeing that come out in many of the investment banks. barclays is doing that. deutsche bank the same to an extent. the back office is where they have a lot of employees across the board. tom: the british banks -- will we see the same cost-cutting from them? richard: royal bank of scotland is cutting back a lot. they are restructuring their institutional bank so it focuses just on the u.k., really. they will keep their presence in the u.s. and singapore and asia but doubt of their -- but get out of everywhere else. that will impact how much money they can make. they have to take out the revenue line to go with those people while taking huge amounts of cost. tom: well said. richard partington, thank you so much, talking about the line item on the income statement. let's look at the line item of

the twitter statement. can banks cut to grow? it is an existential question but there it is. can banks cut to grow? we are with jeffrey rosenberg of blackrock. stay with us on the bond market and much more. this is "bloomberg surveillance ." good morning. ♪

"bloomberg surveillance". let's get to the morning must-read. this is so good from a few days ago per it i thought we had to resurrect it today. lori stiglitz, you know what he is going to write.

-- laureate stiglitz, you know what he is going to write. jeff rosenberg is with us from blackrock, and the professor's major issue here on a network basis is all of the benefit was convergence. we have gotten the opposite, which is the virgins. jeff: the greeks for example all the periphery, got access to low-cost funding. the problem is, what do they do with the low-cost funding? there was a binge of debt issuance and leveraging because you could borrow it at rates that were not really reflective -- tom: with you living there, did it make a deal that it was the euro mark versus germany? brendan: it was a combination of the word in german for expensive and euro. we are talking about the

periphery, more money coming in. that money came from other euro denominated countries. it came from germany, france. when you talk to germans about this, they use a passive voice. this money flowed into greece. they gave money to greece and got their return on it. that is forgotten when we look at the background of the crisis. jeff: yes, it is, what it was also global investors. everybody played the convergence trade for a long time, and that fueled a lot of easy credit and easy borrowing. there was a breakdown in how bond markets are supposed to function, which is as disciplinarians come to signal what is the proper credit risk of the country and charge appropriately. we all believe once you were in the eurozone, you would have german-like credibility to you so you got to borrow at german rates. that was not the right rate. vonnie: what is european corporate doing? tom: the corporate --

jeff: the corporate debt has been definite -- has been beneficiaries of the collapsing interest rates, able to take advantage of the low interest rates on the government side to finance a lot of debt. you have had a lot of big issuance come into the european debt market. that is the consequence of the most recent story in terms of low interest rates in europe for corporate are aware's. brendan: to jeff and stiglitz's point the economics of this has never really worked out. you are seeing right now in the report that number has on the german government, there is a breakdown on the part of the ruling party that want to treat this as a political problem that must be solved, and a financial problem with discrete financial consequences. jeff: the economics of the greece tragedy, drama, have been

very clear for a long time. we are dealing with a political issue. do you want to be in? do you not want to be in? what are the political consequences of it and how do you want to manage that? the economics are clear that greece wants to fundamentally change its economic structure if it is going to maintain its infrastructure. tom: total in paris, 1.6%. brendan: apple unveils new plans involving music. we are also going to talk about apple cash, coming up next. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines with vonnie quinn. vonnie: hsbc ceo stuart gulliver plans to eliminate 10% of the

staff, as many as 25,000 workers. another 25,000 positions will be cut by selling operations in turkey and resilient. it is part of his plan -- and brazil. it is part of his plan to restore profits. hsbc will still maintain a large presence in the u.s.. >> biggest economy, biggest number of global headquarters there. and the world's reserve currency all require us to keep the u.s. presence. but the u.s. presence is logically linked across florida. it is not about domestic-domestic business. vonnie: since gulliver took over in 2011, he has reduced the number of countries hsbc operates in from 88 to 73. greece has come up with another plan designed to unlock the bailout funds. bloomberg news reports the government prime minister alexis tsipras has submitted a

plan. had has been called -- it has been called a rehash of previous plans. former house speaker dennis hastert is due to appear in a chicago court today, accused of breaking -- of lying to investigators are he is expected to enter a plea. the indictment against him says he played three point that he paid $3.59 to -- $3.5 million to cover up misconduct. the benefits were previously authored -- offered to only full-time workers of chipotle. she probably has only 50,000 employees. the stanley cup playoffs -- tampa bay came from behind last night to beat chicago 3-2. the lightning leaves the best-of-seven series 2-1 -- the lightning now leads the best-of-seven series 2-1. tom, are you still interested? tom: yes.

ge doing their financial transaction, widely anticipated. this is a big transaction of $12 billion. there it is. brendan: it is not news, but it is further news of consolidations in all aspects of banking markets. tom: we will have much more on this as jeff immelt moves on to a true industrial company. speaking of a dow industrial component, apple. brendan: finally we get to talk about apple today. it introduced a news reading app that looks like clipboard. and a service that looks like spotify. it is priced like spotify, too. music labels do not want any streaming service to cost less than $10 a month. so apple has no more power over

them than spotify in that regard. tom: it is amazing that artists will not get any more out of apple than they will spotify. it was very ecosystemy. brendan: itunes has always been a way to keep you within the apple ecosystem. i thought this was going to make this available on android devices. that is un-apple. reno is where braeburn capital is based, and it turns out that apple is sitting on $171.3 billion. cannot bring it home, cannot spend it, so it has turned into a whale. bloomberg's mary childs has been looking at this. mary: that is exactly right. apple and oracle are leading this charge. when companies come to issue new securities, new debt securities, you used to have firms like blackrock and pimco taking these

deals to source the rest of the deals to other investments -- to other investors. that increasingly now is going to apple and oracle because they need somewhere to put their cash that will get them yield. underwriters love it because they have a buy and hold buyer. tom: in the next 90 days, they will develop almost $11 billion they do not know what to do with. right? mary: exactly. tom: $11 billion in 90 days. brendan: i was amazed at how this was restructuring the profits. banks are moving closer to reno. mary: you go buy and you do your roadshow andromeda interests, and say this is the best company ever and you should invest in it. that used to be new york centric and now it has started to incorporate reno. vonnie: where is the next big

underwriting opportunities? mary: that is a great question. i am not sure i know the next opportunity for them, but the opportunities within those technology firms is expanding in the sense that they are looking further out the maturity curve further down the risk spectrum. tom: when you are reporting where was that new duration? mary: they seemed to like two to three years. tom: i will say it. mary does not have to. we go to jeff rosenberg chief pick strategist at black rock. i am looking at the ford 10-year peace there it i am apple computer so i go out to ford motor, i buy a bond at 100, now priced at 123 to yield 4.3%. that is your world, isn't it? jeff: it is. let's put this conversation in context. you are talking about corporate cash.

as corporate cash gets larger and larger, we have the big story about the trillions of dollars of corporate cash sloshing around the marketer and where does it go? he gets invested, and typically in the short end of the curve because these are not necessarily permanent investment vehicles. this is cash to be deployed either to pay dividends or to make capital expenditures. how far out the curve these cash pools are going to go remains to be seen. tom: you are reporting they are getting creative. jeff: we have been through this before were the corporate financial side of an industrial corporation got creative and the risks they took in their portfolio became bigger headlines. there is a limit to how much risk they are willing to take. tom: i look at this and the reporting, apple, apple. but the real headline to your story is there are a lot of

other companies doing a tim cook. mary: absolutely. i have a secret theory it is part of a money market farm reform and regulations have pushed people into other areas. as you look for yield and you go farther out you are trying to get the return on the cash. tom: when janet yellen and mario draghi ad, i am going to take a capital loss, cash flow or my incomes. jeff: you take a corporate market loss. there is a question as to whether or not you will account hold to maturity for cash you want to use. tom: that is the arch question. jeff: to answer your question the regulatory reform from money market funds forced the de-risking. tom: what is so great about this is that jeff and i got in four level one questions in the last three sentences.

brendan: i am honestly slack-jawed by this hold story -- on this whole story. look who wandered onto mary childs' beat, tim cook of apple. thank you. if you were a person hoping to get in on the real estate market in san francisco and new york, you already knew that. bloomberg has created an index for you to show you how priced out of the market where you are. where you should move. hint -- buffalo. this is bloomberg surveillance. good morning. ♪

tom: a little improvement to the tape this morning, negative eight, now down negative three on futures. a little bit of this today. we have a smart single best chart because i cannot afford anybody in san jose. nobody can afford to live there. brendan: don't worry, you cannot. that is the subject of our single best chart. wanted to figure out how much money millennials would need to earn each year to live in the largest cities. san jose, san francisco, los angeles, san antonio, new york.

salt lake city -- if you earned immediate -- the median millennial income and you buy a home, this is what you would have left over per year if you move to salt lake city. that gets better as you move down the list per las vegas, you have 6000 left over, until you get to, tom, detroit. buffalo is down there, too from your beloved upstate new york. this is an amazing index because it quantifies how unaffordable all the places you want to live our. tom: what is great about it each of those cities has a store . las vegas is its own world. if you look at the different -- texas is like a cool place. brendan: austin is amazing. honey, we are going to move to austin. baltimore, nashville, relatively high on the list.

baltimore in particular, surprised i that in terms of housing prices. they are relatively high, get affordable. vonnie: so if they all move there, prices will come down here and then new york will be affordable again. right, brandon? tom: jeff rosenberg is with us. i know you cannot speak for lack rock management. i think of goldman sachs with their huge salt lake city platform. there is a pressure of commercial bankers less the black rock asset managers. they have to find those hubs in america where they can move people to your staff functions. jeff: some of the economic importance of housing with the overall cost of living and data centers and places to operate, you want a low-cost operating center. . tom: in the next hour brendan

has an essay on cpi. do you believe the cpi numbers, or do they not capture our big real estate bill? jeff: there is a huge bill about what cpi captures. there is certainly a difficulty for the statisticians to capture what is going on in terms of housing. it does not capture housing inflation in terms of assets. it sort of impudence the owners equivalent rent. tom: are you allowed to say him puke on the air? george carlin said it was out. -- to say impute on the air? george carlin said it was out. brendan: there is a huge step down from $36,000 deficit in san diego to $6,000 in new york. tom: still, new york is up there. brendan: $80,000 deficit in san

jose, $6,000 deficit in new york. we complain about housing here. that is really all about the tech double. vonnie: a nice segue to our top photos of the day. number three, in portugal -- tom: the a bigger tory -- the obligatory really chart. vonnie: an all-women's crew is currently in the lead of the volvo ocean race. it will end in sweden. tom: is this just rich guys playing? brendan: there is in all chinese team now. there is a little bit of national pride. tom: is there a technological advancement? brendan: all the technological advancement has moved to the americas. i love this stuff, but sailing is trying to make it more attractive to people. they tried to do and in harper

-- and in-harbor race in lisbon. it is hard to watch. i love sailing, but it is hard to watch. tom: there it is? vonnie: number two, yesterday morning, four velociraptors emerged from containers. this is all to hype up "jurassic park," which opens friday in the u.s., and we took the bait. brendan: so this was a marketing ploy, and we have fallen into it. tom: the guys of black rock of five basis points. are you going to see "jurassic park" or whatever it is? brendan: do we think it is an effort -- do you think it is and ask senate that this was in waterloo station? vonnie: you can explain later.

number one, in new york -- one it is the world's smallest deer species. it is native to south america. the font has yet -- the fawn has yet to be named. it is only six inches high. tom: some daughter of a hedge fund manager is going to be walking this thing down madison avenue in six weeks. we want a kennel to take it on the weekends. thank you. brendan: i am being told to move on from bonds to bear markets. we are going to figure this out with jeffrey rosenberg of lack rock next. this is bloomberg television. good morning. ♪

tom: good morning worldwide, everyone. "bloomberg surveillance" from midtown manhattan. let's go to top headlines with vonnie quinn. vonnie: a white police officer's confrontation with black teenagers is in texas.

the incident was caught on video. the officer can be seen pinning a 15-year-old girl and pointing his gun and other teen spirit he is placed on administrative leave. a key, richmond says china is waging a cyber -- a key congressman says china is waging cyber war on the u.s. the chairman of the house homeland security committee blames china, saying the chinese is trying to blackmail top government officials. china has denied the allegations. for the first time in more than 101 he five years, a new distillery for irish risky -- for irish whiskey is opening in dublin. it will not just make whiskey at the distillery. there is also a visitors center and cafe. a closed during the 1970's. tom: greeley demanded this after

all the talk on scottish whiskey yesterday. brendan: about 20 years ago they sold that distillery. they sold it to jim beam. they used that profit to then invest in a new distillery. i love it, capitalism. tom: when will the first -- vonnie: when will the first bottle be out? brendan: not for five years, and they will blended with other stuff. right around the corner from where the guinness brewery is. tom: are you happy? we have done sailing and whiskey in the last five minutes. brendan: and no soccer. tom: let's bring back deathless bring back the show to a more serious manner. michael for rowley joining us, looking to june september december. we will look forward to a common

theme of discussion in a moment. and at 7:20 with a bond bear market. and an important discussion about the privacy with facebook, a heated debate. no one believes it, and i mean that. a certain certitude this moment of lower bond prices and higher yields, it is not a bond bear market. it is an opportunity to take advantage of new higher yields. we have been here as alien times before. i looked at one black rock blended fund, down 3%. we are nowhere near correction are we, jeff? jeff: i would not characterize it as a bear market. we are dealing at what happens when the fed begins normalization, and what to interest rates have to get to in order to be more normal. you think about a normal rate. it was a 2% real rate plus compensation from inflation. we are far from that, but getting from here to there will not be perceived as a normal bear market. tom: do the people of black rock

that a bond bear market means money flows to bond equities? jeff: the typical correlations, on the same pages, we expect bonds to go up when stocks go down. we expect the balance, the offset, the diversification benefit in your portfolio. coming from zero interest rate environments makes that tricky. we saw that in 2013, where big increases in yield caused a lot of concern. you saw equities and bonds moved down at the same time. a correlation of assumptions has to be much more treated -- has to be treated with a lot more uncertainty. tom: that is the most important thing we will say on the show this week. what he just said about correlation of assumptions. a big deal. vonnie: when will the fed raise, and how are you positioning? jeff: our expectations remain that september will be the time when we get first liftoff. we said all along this year our little funny theme to capture

this idea was all about that pace, and it is not so much liftoff, it is more about the whole path of expectations, how we are positioning. we are positioned with less duration interest rate sensitivity in the portfolio. now going forward, we think as the shift, the conversation moves more toward timing and lift off and paste, that it will be more about -- and pace, that it is more about short duration exposure in that part of the yield curve. brendan: i want to put this into perspective. this shift in correlations -- is this like up until now it has been newtonian physics and then finance went non-newtonian? jeff: in some sense you can think about it that way. the correlation has been robust in the sense that you can build portfolios with an expectation that bonds could reduce equity risk. there is an entire business built around that called risk parity. it has worked well.

it works really well in 2008 and that put more money behind this kind of strategy. when you get to such low levels of interest rates, the intuition is simple. can you go that much slower, and can you have bonds offset equity risks when you are at such low levels of interest rates? it forces you to question your certain to -- your certainty around that assumption. tom: jeffrey rosenberg, thank you so much. jeffrey rosenberg is with black rock. it will be a major thing for us this week. we got an e-mail from switzerland -- apple-spotify -- americans are totally transfixed on apple-spotify. cardio is a lot cheaper. brendan: emily chang had an interview with the ceo and he said that what you traditionally pay for music is what you pay for at ardio. tom: second day in a row the

turkish lira gives way to weakness. stay with us. in our next hour, michael for rowley of jpmorgan. good morning. ♪ . .

>> this is "bloomberg surveillance." tom: hsbc shows deutsche bank

the "how to cut costs" playbook. 50,000 jobs will go. the rest of the industry may follow. america in the slow lane. in this hour with michael feroli of jpmorgan, we consider your slower economy. and in lockstep, markets correlate, which signals market south. good morning, everyone. this is "bloomberg surveillance." we are live from our will headquarters in new york tuesday, june 9. i'm tom keene. we will do a little ungreased too -- on greece too. brendan: you never know how to determine the chatter from the news. we are movement on the german side, a real evidence of a rift in the german coalition, which might move things forward. tom: right now, must watch, must listen. here is vonnie quinn. vonnie: sunday is a real deadline. greece taking another shot of

unlocking those bailouts. prime minister elect's budget proposal to his creditors, one official tells bloomberg it is a rehash of earlier ones and is still not credible. the "wall street journal" says the could -- the two sides could defer until next month. europe's biggest bank is cutting thousands of workers as it tries to restore profits will stop hsbc announced this morning that up to 25,000 jobs will be eliminated in the next two years, 10% of its workforce. another toy 5000 jobs will be cut by selling operations in turkey and brazil. hsbc's chiefest try to cut costs by about $5 billion a year. >> brazil and turkey have limited value to the franchise and that is why we have made the announcement that we have. you will also see that 40% in

the return market, we will address this separately on foreign pages. i think the brazilian and circus transactions have prove the fact that there are no sacred cows. vonnie: since gulliver took over four years ago, he has announced 80,000 job cuts. jeb bush is off to europe where -- it is one of his last steps before announcing that he will seek a republican presidential nomination. he named a new campaign manager gop operative danny diaz. he is lining is lead up to a formal announcement appeared apple has used its much hyped developers conference ceo tim cook presided, demonstrated changes to the software of the apple watch and unveiled in up date to its operating system called el capitan.

apple did not introduce a new tv service. bloomberg news is reporting it is not ready. u.s. women's soccer team wins its opener in the world cup. megan reviewupino scored twice. next up, sweden on friday. those are the top headlines. tom: can i ask a dumb question? do the women fall down and fake their hurt? brendan: not the u.s. women. either of the teams men or women. you were talking earlier about whether the women's world cup is important. there -- the league in the u.s. is very popular come even globally, there is not much popularity for women software. i really think for me at least and for a lot of people with young girls, it is aspirational. what these women do is amazing and it is amazing to watch. tom: there it is, women's world cup. is it part of fifa/

-- fifa? brendan: it is. tom: a data check, the euro $1.1269. greece percolates. there is a movement of three-page memos while germany and too many others steam. our athens bureau chief joins us now. to get to the chase, does tsipra s have the support of the greece people? correspondent: he's not the support. that is what opinion polls show. it has taken its toll on the government's popularity, but the opposition has not gained. of course we will see what will happen if talks with creditors fail, which may mean that greece will default on its debt as early as july. brendan: nikos, these proposals from greece have been getting shorter and shorter.

the last was three pages long. what was in it? nikos: the greek government has said it is a supplemental proposal. the government made a 47-pages long document. now there is anyone in exchange for emergency loans. these were invested by creditors once again, so the government admitted today a supplementary today, a last-ditch effort to use emergency loans, which reminds viewers of the bailout expires three weeks from today. if no agreement is reached until then, then the government will be left with no financing backstop whatsoever on july 1. tom: ok, through the weekend at least. nikos, thank you so much, nikos chrysoloras from our athens bureau.

christine lagarde suggested that janet yellen delay a fed hike. michael feroli is chief economist at jpmorgan. he fell off his chair when he saw that bloomberg headline, and he joins us today. i want to first congratulate you on your call of a slower terminal growth rate for america. christine lagarde caught up with you with a new mediocrity. this morning, you really reaffirm a new growth? michael: below 2%. we have it at 1.7 5%. we are concerned that might be too optimistic. we agree that the demographics are slower than it used to be. the big question is how fast is productivity growth, and what has been realized has been very slow, so to get our view which is below consensus, really an acceleration from what we have seen. tom: your writing is hugely influential. when you ellis on friday, it immediately moves the dialogue

in the zeitgeist. do you think the fed will bring down their forecast? michael: we have been hearing a lot from the fed over the past few weeks on various fed speakers, noting that the nativity growth looks slower, and this is something they will have to account for. we think there is a good chance next week. they will have a new forecast for the economy, new forecast for interest rates. it is like when they bring down there long-term gdp growth forecast, right now that 2.2%, we think that can bring that down some. tom: under 2%? michael: around 2%. brendan: i am looking at michael's note right now, you graph the midpoints of the fomc estimates on long-term gdp growth. it started at 2.6 in a 2009, and what you see is the actual depiction of slow acceptance of reality. tom: this is a political statement by the fed.

they cannot go below 2% -- it is not politically acceptable. vonnie: let's let michael weigh in on that. i'm not sure that is completely true. michael: i'm not exactly sure about that. they have been reluctant. i do not think they need to be cheerleaders for the economy but i do not think any twos right pessimism. they are trying to be realistic, but they are updating a fast as they get them, and you do not change on a single quarter. vonnie: at some point, then productivity is not going to increase. why we see continued rate growth and jobs? michael: that is a good question. we think, look, over time we think the trend growth in job growth is about 75,000 consistent with a stable unemployment rate, so at some point, we will have to downshift, 200,000, $250000 -- 200,000, 250,000 to 75,000.

we cannot have the on implement going down forever. equities, bonds, currencies, commodities -- we cannot have the unemployment going down forever. vonnie: that is insane. michael: if we continue to have 200,000 jobs from other and what is sustainable is 75000, the fed needs to slow the economy to get into something more sustainable. in a way, slowing trend growth has offset implications or somewhat offsetting implications for the fed. it does not mean we reach capacity sooner than we would otherwise. the fed should be normalizing policy. brendan: as we look at these new rates, trying to figure out what happens next, we have been talking about politics. it does seem a little bit like the imf and the fed do not completely know what their job is to stop do you think they are certain that they know what their job is right now? michael: i think the fed knows what their job is. i think the imf may have a little bit of a different mandate here in terms of they

are probably a little more worry -- tom: what you see on a set one i think away from them replacing olivier blanche. michael: look, a possible spillover, for the imf, that is looming a little larger in their objective function. tom: ok, michael feroli with jpmorgan, lots to talk about in this hour. brendan: hsbc, banks all over europe, adjusting to that reality as well. thousands of job cuts, billions in cost cuts, that brings us to our twitter question of the day. we asked -- can walmart hope to compete with amazon? tweet us -- we asked can banks hope to cut to grow? tweet us @bsurveillance. ♪

tom: good morning, everyone. "bloomberg surveillance." we welcome all of you. hsbc of course with the news of further cuts. vonnie, it speaks of european banks the irish things went down in flames, then the british banks we spoke with first manager sturgeon of scotland yesterday on this word it follows right over the continent, doesn't it? brendan: everything in a while wanted to be a globetrotting -- we are finding that out about hsbc this morning.

one of the things i was shocked by on that call is that they are really moving out of the u.s. market. they have to be there because that is where the couple is -- the capital is. tom: we go to london. our richard is knee deep in this. richard, and your day today, do you assume others will follow hsbc, or is this a separate story? richard: they are already being followed. we see these job cuts coming scotland here in london have already said they can cut significant jobs across the world. there has been speculation that could be as much as 80,000 employees. they only have about 20,000 in the investment bank as a whole. that is a huge number for the world bank of scotland. tom: are they cutting to the bone, or are they cutting fat? richard: they would argue they are cutting fat. it is a big number, though 25,000 jobs point 5000 more will go with the sale of turkey and brazil. they say they can keep doing

what they are doing by investing in technology to do it instead. brendan: richard, when you walk to the city and you walk past pubs, what are they doing? are they crying into their bill and make -- into their beer and making plans to move to shanghai? richard: i wonder. they have empty trading floors. these are big cuts that are coming. where these bankers going to go? who knows. the difficulty is taking your business to many parts of the world. hsbc one of those considering where to go. would it be welcome in hong kong? perhaps. would you want to be there? you would be regulated by the chinese essentially. vonnie: richard, does this mean we might actually see the housing bubble in london improve a little bit? richard: it could potentially. that is one obvious drive in the market, bankers coming in from around the world, working for these global investment banks.

a lot of money comes in, we have the wealthy sheiks of the middle east, we see that come up in price. we will see. tom: richard, to ivory much, richard partington with bloomberg news. a really important question -- can banks cut to grow? stay with us worldwide. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." the gorge eos city -- the gorgeousity of new york city, tampa bay beating chicago last night. let's get to our top headlines with vonnie quinn. vonnie: thank you so much, tom. a prison worker is being questioned in a jailbreak in upstate new york.

hundreds of officers are hunting for them. investigators are trying to figure at how they got power tools and use them without being heard. an extradition hearing is being held in november for the 2010 flash crash. u.s. prosecutors want to try him on wire fraud and market manipulation trying to his -- market manipulation charges. and a car that does some of the driving for you, a self driving car at highway speeds. the drivers will start to hold the steering wheel, and the system will not handle sharp turns itself. it will be out next march. tom: i am a little skeptical. ok, folks, it is major shout moment to one major l. abramowitz. -- l. abramowicz.

mohamed el-erian chasing after l. abramowicz. lisa: i woke up so i can hear tom say that. i have heard it is my last. brendan: and a good sailing picture, control room. you can sleep at night. that sleep has become less restful. debt and equities now positively correlated when the fed considers raising rates. we see debt raising with equities. you join us now, lisa abramowicz, to help us figure this out. here's our chart, you cannot see it on radio, it is titled simply "nowhere to hide your." lisa: yes, the scared. typically, when your market is doing well stocks do well, bonds do less well we are talking about government bonds particularly in places like the u.s. and germany, however

during the latest selloff that started at the end of april, what you saw was bonds sold off and stocks sold off, and if you look at the daily correlational returns of a global index, they were highly correlated as correlated as they were during the taper tantrum of 2013. what is the same? -- what does this say? during volatility, bonds will not protect you, bond volatility is increasing more than the volatility of stocks. tom: michael feroli is with us. what lisa is talking about, how does that sift through the feroli prism. how does the bond point guide affect your work? michael: it is not directly. lisa: we don't care. [laughter] michael: when we take our view of the economy, we have to take into account financial

conditions, and these are conditions that are affecting the economy. right now, they do not seem to be of the magnitude that they are really changing along the forecast. obviously that was not the case when we had big moves in the dollar, and that clearly affected growth. it is probably not moving the needle on growth yet but if risky moving higher, we could have a situation like late 2013 where the interest rate in the economy get hit really hard. brendan: this is a simple rule have a stable portfolio, stocks and bonds in equal proportion. lisa: the risk parity fund invests in stocks and leverages of their investments in bonds to offer a sort of amplified, protected shield. those funds -- tom: that is what the marketing materials say. lisa: exactly, which are getting hammered the most because they have a double women wear the protective boxes doing the exact opposite and flaming returns. people investing in those types

of funds will get hammered, but this is why there has been such a huge rush into unconstrained funds and to sort of go anywhere type of strategy because people are saying look, we do not know what the right allocation is, can you figure it out for us? the problem is the mother are only so many bets right now, and i was looking at returned last night because i am that cool and i was finding that almost every single slice of the debt market lost value so far this month. tom: this is the money question brendan. how can you have a bond bear market with michael feroli's view? i do not know how you can get to a high-yield space with a terminal variable under 2%. brendan: the problem is using bonds as a hedge. i have to apologize, i leaned into lisa's shot right now because i was so excited i was writing down "amplified protective shields. " no matter what aspect of the market we are talking about, it is things people previously held to be true that have been completely upended. that chart you showed -- there

are times in the past when bonds have moved into correlated territory with stocks. is there any idea when i can talk down to negative correlation again? lisa: right now, everything is being driven by the fact that central bank's are either going to lean into their stimulus programs or lean away from their stimulus programs and whether inflation is going to pick up or potentially drop-down. there is macro factors affecting everything, and they are pushing around markets. tom: should we trust anyone doing a six axis spider chart? lisa:} [laughs] tom: this -- i would not trust a six-axis spider chart. brendan: you say this on air, then off air, you make the most and comparable chart. coming up, is it a good deal to get on facebook, give up your data in exchange for having marketers find you better?

possibly that is not in fact true, we do not know what we are buying when we sell our privacy. that is coming next. this is "bloomberg surveillance" ironically enough. good morning. ♪

with xfinity from comcast you can manage your account anytime, anywhere on any device. just sign into my account to pay bills manage service appointments and find answers to your questions. you can even check your connection status on your phone. now it's easier than ever to manage your account. get started at xfinity.com/myaccount tom: good morning, everyone. "bloomberg surveillance." we usually go to the terminal right now, but this is to important. axel weber at ubs writing an important essay. brendan greeley gave this to me, i think he is dead on.

tom: what a touchstone. we talked to michael for feroli of jpmorgan. this is the struggle of monetary policy trying to do too much. he is begging for structural reform. do we need structural reform, or can janet yellen get this done? michael: we always a structural reform, but i do not know what that has to do with the criticism of cpi-based monetary policy, as he put it. i know that ends with the value of money -- we always think about the value of money, proxy by cpi or other measures, so it is hard to understand -- at least from me being a saltwater american economist -- what he is talking about. brendan: it is so non-german like in fact. it is not that we need to worry about monetary stability when

you do structural reform. what he is saying is cpi is a bad proxy, and inadequate proxy because if we focus on that, we may get asset bubbles. we need to value money using all of these various proxies. tom: we'll most twisted herself into an austrian economics for a moment with the value of money. what economics does janet yellen believe in? she is not believing in the whispers of a germanic field that we got from weber. michael: i guess when he is trying to say, and if i put it atlantic terms, he is entering the side of the debate about should monetary policy address asset markets and asset price bubbles. i think that is a legitimate debate to have. i think the way he phrased it is confusing. tom: he is saying should mario draghi reflate europe. michael: i think he is saying

should mario draghi worry about asset inflation and whether it is getting to copy. -- too cocky. brendan: alan greenspan said can you spot a bubble -- not only can you, you should. michael: we know that the fed approach has been -- it is very hard to spot bubbles. even if you can't spot one it is not clear that raising interest rates is the best way to address it. a legitimate debates, but i think he is coming into that debate in a sort of oblique way. tom: very cool. we will continue our discussion with michael feroli here in a bit. let's get to top headlines with ronni -- with vonnie. vonnie: hsbc ceo stuart gulliver plans to get rid of 50,000 workers, cutting $5 billion a year and costs. 25,000 positions will be cut by selling operations in turkey and brazil, but hsbc will maintain a large presence in the u.s. mr. gulliver: biggest economy,

biggest exporter to the world, and actually the world's reserve currency all require us to keep the u.s. presence. it is linked cross-border and is not doing about domestic business. vonnie: since gulliver took over in 2011, he has announced 87,000 job cuts. he has cut operations in 15 countries. greece is offering another plan to unlock bailouts. prime minister alexis tsipras has announced it, but one official says it is only a rehash of previous greek plans. former house speaker dennis hastert is due to appear in a chicago court. he is accused of breaking banking laws and lying to investigators. he is excited to enter a plea. the indictment against and says he paid someone $3.5 million to cover a past misconduct. general electric is selling another finance unit as it moves on to focus on fracturing.

it is selling its finance business for $12 billion. the deal is the largest ever for that board a $3 billion portfolio is part of the agreement. and tampa bay rallies to go ahead in the stanley cup playoffs to beat the blackhawks last night 3-2. it gives tempora a lead in the best-of-seven bank series. game 4 is tomorrow night in chicago. tom: i am all blackhawks, but tampa bay is phenomenal. their owner, steve yzerman, general manager, they have got a line, i think the average age of their line has been 19 years six months or 20 years. they have got a harvard guy way outperforming as well. tampa bay -- a lot of fun. let me get to a data check right now. equities, bonds, currencies, commodities. futures -8-earlier now -2.

i'm watching oil. oil elevated this morning after two weaker days. it will be interesting to see within the correlations other how commodities and gold correlate into the other markets. brendan: this is "bloomberg surveillance." i am brendan greeley with tom keene. our public conversation about privacy has always rested on assumption and as people are empowered to make a choice to give up data to get discounts or more targeted ads. that may not be what is going on. joe touro of the university of pennsylvania joins us now. we are not rational that our data. we are resigned. what is resigned mean? joe: we ask people -- do you feel you have -- if you want to have control over your data and how much to you feel you have control of your data, and if the ball said they want to have

control and they do not think they have control, that is resigned. resigned means i need to do something, but i cannot. brendan: how is this at odds with what people who own the data are saying publicly? joe: historically, markets have always said people are given up there data they know what they're doing, they do it willingly, and that is why they get so much stuff from stores through ads and all of that. brendan: professor, my coanchor and i, tom keene, and i had an argument about this -- joe: that is great! brendan: he says people are adults and know what they're getting into and you cannot tell them otherwise. helping splinter him why he is wrong. joe: i would ask if you guys really know what is going on. it is very difficult. it changes by the week. i try to keep up on the stop every day, and everything is new. we are in a transitional era now, transformative era, and what is happening this week in a year will be very

different, stuff going on in the stores, online, off-line. tom: professor, what is your goal, if you were to look up five years or 10 years as the industry reinvents his health every two years where would you like facebook and twitter and the rest of them to be? joe: we have to be in a situation where people feel they have some handle over what is happening with their profiles. it is not just about data -- it is about how our companies making pictures of us that end up even changing the price is that we get? when you have a situation where people are walking through the marketplace saying, am i really getting what the guy next door or even next me is getting, they began to have a very caustic view of what is happening in a society. it may end up hurting the marketplace even while it helps individual companies. brendan: professor, this is not just about facebook and twitter. this is also about grocery stores, gas stations retailers -- joe: exactly.

people call it big data -- it is really predictive analytics. the stuff that is going on on wall street and dna biology is coming down to marketing. all of this is transforming the way we look at people. brendan: is there a regulation a law that could change this? or do we need to be aware of what the market is doing so we can make better choices? joe: laws can help in some ways for transparency. in the end, has to be the relationship between marketers and people. the way that has to happen is maybe shaming and praising. it is impossible for most people to read privacy policies. that is purposeful. that they are legal documents, and if we help people get to know what companies are doing, what target is doing, what walmart is doing in terms of their data, maybe it will shame some companies to change that. brendan: tom when i read this

report, the professor was told off the record by a couple of people that these privacy policies are not designed to be understood. they are designed to be an conference of all. tom: i cannot even figured out my -- they are designed to be incomprehensible. tom: i cannot even figure out my settings on facebook. what about a brother? joe: he is not interested and looking at you because he wants to, he has wanted to sell to you. vonnie: it is on the white house agenda, right? joe: absolutely. when you get to stuff like payday loan, and when you do to stuff like employment, that is where the road. essentially that is where you are going to have regulation, and the more squishy stuff. what happens when macy's charges me different because it knows that i will accept that price and my neighbor won't? that is the stuff that will be hard to regulate. brendan: professor turow at the university of pennsylvania

thank you so much for that. it is a fascinating report. i recommend you read it. it changed the waay i thought about privacy. our twitter question of the day -- can banks cut to grow? tweet us @bsurveillance. ♪

tom: good morning everyone. "bloomberg surveillance."

i am tom keene with brendan greeley and vonnie quinn. they do it lighting need, the youngsters of tampa bay surprise all in hockey with a terrific and consistent spirit. it helps to have a six foot seven inch goaltender. it also helps to have mr. zanuck 's checkbook. hockey legend stephen either men is providing the brainpower as -- hockey legend stephen yzerman is providing the brainpower as general manager. brendan: last year series was not fun, this years series is great. we are going to talk about -- erik: how do you make a hockey team thrive in florida? if you're in the sunbelt and you are losing money because the estimates are anywhere from 12 to $20 million a year that the

lightning are losing, if you do not make it to the finals every year, long run, can you survive? they have a real estate plan, developing 40 acres around the amalie arena in tampa, believe there is no piece of property in america like it, is that enough to say the tampa bay lightning financially, even if they win the cup? brendan: hockey is not a game it is a destination. erik: no tampa is a destination. hockey is just an excuse. tom: it is religion up here versus their. what i want to know, is gary bettman's strategy, which has mixed results, does it keep a team or two from your canada? the answer is that is the theory, if i have got a tampa bay or a phoenix, i do not have that team in peterborough or wherever they want it, hamilton wherever. that is the arch debate here gary bettman's strategy to boost

u.s. tv ratings. erik: for a time, if you do not make it in the south you're right, there is a welcome home for you north of the border, and i need to know from jeff vinik what is the strategy long run. how do you make a teamwork in a place like florida? to you know why they are called the tampa bay lightning? tab a is considered the lightning capital of the world -- tampa is considered the lightning capital of america. tom: he is legendary. erik: he certainly knows his stuff. tom: he made a bond call a million years ago that worked out after he exited from fidelity. i would love to know what he thinks about the low interest rate environment which correlates to michael feroli's low gdp call. that is where vinik was able to write the check. erik: he has been with us for

a while. he has got steve yzerman for a little bit, which is a plus/plus. jeffrey vinik, look for that around 9:30 this morning with erik schatzker and stephanie ruhle. dell futures -16. let's do a twitter question. it is existential. it is a haiku. can banks cut to grow? stay with us. "bloomberg surveillance." ♪

tom: we say good morning, everyone. "bloomberg surveillance." let's get our top headlines with vonnie quinn. vonnie: a white police officer's confrontation with black teenagers is prompting protests in dallas texas. protests in mckinney north of dallas, the incident at a pool party last week was caught on video. the officer can be seen pending a 15-year-old girl wearing a swimsuit and pointing a gun at other teens. the officer has been placed on leave. china accused of cyber spying on the u.s. data was asked last week. the homeland secure to committee blames china. china may be using information

to blackmail government officials care to china denies it. for the first time in more than 125 years irish -- is opening in dublin. dublin's last distillery closed. tom: is it really a contract? brendan: i think i am grumpy and they're doing is to make me feel better, and i appreciate it. either way, i recommend there rum -- their rum-aged blend. tom: let's look forward to the next hour. "market makers" will help you with apple. all the non-news yesterday this is an important banking news. erik schatzker with an important perspective on hsbc and how that rolls over to american wall street. also, voicemail -- i agree voicemail is dead. very, very controversial. a lot of firms began to

eliminate voicemail. you remember when you fall off a chair, i remember hitting the floor and bouncing when jpmorgan said growth expectations well below 2%. they made worldwide headlines at that time. they were out front in understanding the performance of our slowdown. michael feroli with us on the terminal rate and the productivity chart back to world war ii says it all, michael. if you look at the idea that slope matters out of world war ii, great productivity, and in the carter malaise with a flat productivity and then great productivity again. are we in a new malaise right now? michael: certainly the data have been trending that way. the last arguably 10 years look a lot like the 1970's. tom: very unfairly to jimmy carter. michael: yeah. the difference between now and then is the demographics. now we are combining slow productivity with slow demographics, and that is why we have at least had trend gdp

growth recently. whether that will continue if the big question. right now, we do not see any reason why it is to change anytime soon. i do not want to be too pessimistic so we could have a new technological wave, a burst of innovation like we did in the 1990's, but right now, it is not like that is in the cards. tom: net felts at the bank of international settlements saying just that, he said we need technological change to give us that technological progress to spur productivity. it is not nanotechnology or cloud computing, is it? michael: we are not seeing that in the data because when we look at things like been business spending on things like i.t., it is nowhere leaner the 1990's when we did see that last surge of prince of the growth, so never say never, but when we have seen in the data is not consistent. vonnie: the gap is almost closed right? so we are not even looking at flacco there anymore. michael: not a lot of slack in

participation or employment, so we have a little to go in terms of cyclical boost and above-trend growth because of the slack in the economy, but not a lot. vonnie: the data at the end of july will be revised, and we will see a whole different picture for the quarter. michael: yep. there has been a lot of talk about seasonal factors being inappropriate for q1, and we continue to see weak q1's. you have to remember, we are redistribute and growth across the year, so it is not the average level will necessarily get revised. brendan: the traditional growth models talk about three things -- innovation, which we have been talking about, population growth demographics him a but also growth and capital stock. is it possible that maybe this would change, that we need to stop focusing on innovation demographics if there was a different use of capital, if companies were more willing to spend money?certainly, but there

is nothing michael: we see in the data now suggesting -- in 2011, we had a lot of catch-up capital spending, since then, since 2012 or 2013, we have had pretty that he, solid but unspectacular capital spend rates. tom: the arch thing, i think of someone like alan krueger of princeton, who served in public office, the chairman of the president's council of economic advisers -- brain freeze, excuse me. if we have quality, do we have an enhanced two americas, two michael ferolis cautious view on growth, do we polarize john edwards' two americas? michael: they do not necessarily have the same causes, so i think a lot of researchers now feel that in some ways globalization has something to do with the growth in inequality, among other factors.

that is not necessarily what is driving the slowdown in u.s. trend growth. another way to put a is this growth in inequality has been a crying since the early 1970's. there are periods where we have strong trend growth in the 1990's and early 2000's -- tom: does bruce cadman take your view with a global mediocre? michael: definitely. we see slowdown in the u.s. and the em countries. there may be some global specific, some global common factor. tom: this is brilliant. can we do this all morning? brendan: can we get three hours to talk about this on radio? vonnie: you did your best. tom: agenda brendan, do not tell me this irish whiskey. brendan: no, we are looking at angela merkel, and throughout this entire conversation, one of the things that is important is the coalitions within the

countries that are giving the politicians the slack they need to negotiate. we had some good reporting out of our berlin bureau saying basically between wolfgang schaeuble and angela merkel he is the finance minister, she is the chancellor, she may have a caucus within her own party, the cdu, to negotiate a little more with greece. that is not what schaeuble wants. tom: he is a traditionalist. brendan: he is not looking at this as a political question. he is looking at it as economics and finance. can germany survive economically so he says yes, so the politics do not really matter. angela merkel is a disciple of helmut kohl -- tom: i liked your picture of merkel and the president with julie andrews. brendan: yes, "the hills were alive" yesterday. vonnie: on my agenda after the

close today after 4:00 p.m., you may see china shares included. tom: this is to put the shanghai market into the index. vonnie: shares listed in hong kong already are in there as are some shares trading in the u.s. that are chinese companies, but it's china, is really interesting because there is $1 trillion worth of money to track emerging market index. tom: i am looking at jobs. this hsbc thing is a big deal. we saw jpmorgan a few weeks ago, now we see deutsche bank as well. you really wonder where this is heading. i still say it has a lot back to the digital technology and its overlap into retail banking as well. this really, really is a big deal in these careful views through 2015 as well. vonnie: my ears are bleeding a little bit from that rendition of edelweiss. ccan banks cut to grow?

here's the first answer -- the board approves. tom: there it is. vonnie: second answer -- no, they need to change, ideas are the new seed. brendan: wasn't the problem of the banks had too many ideas? tom: this goes to silicon valley. the huge thing at davos about how the traditional banks are behind. vonnie: financial innovation. anyway, the third answer -- yes, to get driverless cars, we need driverless banks. brendan: i asked for thou to be included. i have no idea what it means. vonnie: i think it is retail banking -- brendan: is that what it means? tom: i don't know. brendan: you go home at 6:00. isn't that the rule? tom: we agree we will not get michael feroli -- brendan: in the control room

they're are asking for different cut from "sound of music," [si nging] ♪ the sun has gone to bed and so have i ♪ tom: good morning, everyone. ♪

arket makers," with erik schatzker and stephanie ruhle. stephanie: good morning. happy tuesday morning. i'm stephanie ruhle. erik: i'm erik schatzker.

hsbc makes it cuts. deutsche bank is overhauling and gets rated. stephanie: also ahead, new apple music. yes. new apple tv no. fresh from a game three victory the tampa bay lightning owner on the stanley cup and building a successful nhl business in what other state but florida? jeffrey vinik in the 9:00 hour. erik: it is time to share some of the top stories of the morning. greece has come up with another plan designed to unlock bailout funds. alexis tsipras submitted a three-page proposal of fiscal targets. one official says the plan is a rehash. there is a report