house democrats faced defeat as a president outmaneuver some untrained. there is a key senate vote today the president may sign. putin has frenemies is belarus and kazakhstan. this is bloomberg "surveillance" . it is wednesday, june 24. i'm tom keene. joining me vonnie quinn and brendan greeley. they just reversed on a dime in greece. brendan: as of 13 minutes ago where still having trouble parsing the headlines that basically say that tsipras has told his own government not that the creditors have rejected his proposals but they have not accepted it. so we are not there yet. tom: german bonds lower. greece bonds higher. do i agree with you that we do not want to overplay this as major news? it is just an item of the moment? brendan: i think it is telling

us we are not area. reminding us, lest we put that aside, this news is not wrapped up. tom: now to our top headlines. vonnie: as you guys were talking about, the greek for minister will have to settle with the country's creditors on new proposals. today in brussels, tsipras will meet with the heads of the imf ecb and european union. he is trying to narrow the differences over his reform plan so greece can get billions more in financial aid. tsipras told his government the creditors have not accepted his proposals yet. he also has to persuade his own government to support more austerity. we asked a former greek for minister about his chances. >> there will be a widespread consensus beyond the confines of the government's party. prime minister tsipras himself have to put his full weight behind the agreement to pass it in his own party, but i think he

can do that. vonnie: the bailout expires next week on june 30. greece needs to make a $1.7 billion payment to the imf. president obama is expected to win fast-track authority for that asian trade bill today. the bill cleared the last major hurdle in the senate yesterday winning a vote by a 60-37 margin. final passage requires a simple majority. the abamazon is joining those retailers who are playing confederate flags and similar products offered shelves. walmart, ebay and sears have done the same thing. controversy around it when the suspect in a south carolina church massacre was shown posing with it. the cousin -- of one of the victims will be on display in the statehouse today. the best performing stock in the

s&p 500 this year is warning its shareholders. earlier this month, the ceo said a split would make the stock more accessible. netflix's market cap has soared. shares have double. google is now giving you a chance to think twice about some of those e-mails you sent. the new undo-send feature gives users up to 10 seconds to undo. tom: what took so long? brendan: the terminal has had this for a long time. tom: the retract button when brendan greeley send me a long email. brendan: we also have a do not forward. i suspect it will be within the gmail system. once it is left their service, they have no ability to retract. vonnie: if the person has already read it --

brendan: i like the plug-in that makes you do basic arithmetic before you can send a message. you are not drunk. tom: data check. futures deteriorated. in europe equities are down and they bounced a bit. within the drop of the last 40 minutes. euro-dollar 1.1209. crude showing enthusiasm for the american economy. the vix, that will be our single best chart came. euro-yen showing recent euro strength versus the yen. gold subdued at 11, 778. the american economy. this is brilliant from mitsubishi. the old american economy, he like our guest today, saying no there is a new vision.

the rate goes from 3-someiththing to 2.25%. so, america that we know becomes a new america. i don't think we are ready for this. brendan: we are not ready for this politically. administration's rise and fall on their ability to grow gdp. the standard model is all about three factors, productivity, labor supply, capital. labor supply and productivity are not where we are used to. tom: he3rrmann is adamant that if we can keep immigration going, that will use that -- boost that. i have been writing about that about the depression in greece. guy johnson is in athens. an incredibly difficult circumstance for the nation. first, hans is in brussels this morning. how important is this recent news? gauge the reaction in brussels.

hans: all morning my take is that no news is good news. and that has been upended because we have some news and it is actually been negative. whether or not this is part of the negotiating strategy by tsipras to ring better terms of a deal from his creditors, we do not know. we do know he he is telling his own people and they are putting the statement out, that it is strange his proposal has not been accepted. this other similar proposals, irlaeland and portugal, have been accepted. the most concerning part to me he's kind of being, i do not want to say insulting. but he certainly is not been conciliatory. he's question the other side's voters. and when you question motives, that makes it difficult to get to a solution and a final end. i think it is pretty negative especially if it happens this

early. that means there is a lot more time to get it back on. tom: spread s are moving in real time. the difference between a greek yield and the german is moving tick by tick. brendan: the source is coming from athens. what do we know right now? what was said and where did it come from? guy: what we understand that this was said to officials, and it was before mr. tsipras left for brussels. that was a while ago. this is coming out now. and it's this kind of equivalent comment i find interesting. what we have been hearing, and this is kind of tangential over the last three days, is concerned that this is too heavy on taxes. the proposals put forward are not heavy enough on cutting back on the size --

about austerity, that maybe the point. tom: this is critical. peter siegel of the sizing is tax heavy nature of the proposal by the greeks. brendan: help the markets calm down. this is not your first euro crisis. this news, how do you put this into perspective? this is just a we are not there yet, right? hans: in general, we cannot have any did -- anything definitive. something will come out at noon. we have a long ways to go on these negotiations. angela merkel the most decisive hours are still to co and that was a couple days ago. mone thing on the fuel oxygen mix on taxation and spending cuts, of the $8 billion over two years, 93% of that is new revenue. it is not exactly a way to grow the economy, to have that much in new revenue. so that is the imf's concern.

tom: guy johnson, have you observed anymore runs on the bank in greece? it is already wednesday. are we see what we saw on friday last? guy: well, the story is we have not had this confirmed yet, is that there was no ela requests may today, switch would seem to suggest that flow out of banks has started to slow. again tomorrow is another day. at least today we have not had that ela request being made. tom: very good. thank you so much. greece is about europe except it is not. when the markets moved, we see that affect in the united states. it is a small country in the depression but there are international ramifications, and washington certainly at the imf and the fed as well. we will bring you william lee at citigroup. bill, we can talk to you for three hours. there is so much to talk about.

bill: i'm a former imf staff are. tom: stan fisher has a heritage in these issues like know what else. what will he advise janet yellen? bill: one of the things about greece is that it is small but his stomach -- but systemic and it connected financial markets. the markets are reacting to do the reporting of what you guys are doing. one of the things about the next of programs that i'm concerned about is it is tax heavy, can we rely on them to get those revenues? the focus will be on more expenditure cuts. i think that is the credibility of the package negotiations. and it will not be in till midnight that we can really see the tensions tom: building to thetom: -- this is the heart of the matter. how do you collect the taxes? bill: i do not know because i am

not part of the negotiation. in the tradition of the imf, the credibility of tax revenue raising is on the line. greece does not have that reputation. vonnie: go in for -- come out and go in. if greece were to agree to have a staff of monitors there, would that satisfy creditors? bill: an audit trail is hard to develop. what you need to get a sense of is how is greece proceeding with reforms in a real-time basis? brendan: there is a point when the administrative becomes political. there was a tongue-in-cheek offer from germany to send tax collectors to greece to teach them how to do it. we have all sorts of historical resonance. bill: how consulting would that be? brendan: want to talk about the fed. i'm looking at in no.

you say a hike in september. maybe a second in december. then you said that my reasons are shifting. god forbid the dots would influence me. bill: janet yellen has said, do not look at the dots. yet the markets continue to look at them. best guess is never come true. brendan: coming up you hope. meeting with investors today -- coming up yahoo!. number one, alibaba. we will talk about that and what yahoo! is without it. coming up next on bloomberg "surveillance ♪

tom: markets on the move. market reversal this morning. greece spreads widening.

widening. let's get to our other top headlines. vonnie: a hearing for the marathon bomber is expected this morning. dzhokhar tsarnaev will be allowed to address the court. it is the biggest deal in the grocery business in a decade. ahold has agreed to buy delhaize for $10 billion. the companies own food lion and stop & shop chain s in the u.s. and the ball is now in the nfl's court in the deflategate saga. tom brady and his lawyers spent 10 hours yesterday declaring his innocence. the nfl says brady knew footballs were tampered with in the game that put new england into the super bowl. brendan: someday this will end, and so will your pain.

vonnie: 10 years? it sounds like a greece negotiation. brendan: moving to santa clara. shareholders of yahoo! will meet and search for meaning. the u.s. director of research for bloomberg intelligence. the strategy for yahoo! right now is how best to sell its most important assets. it is not about their core business. >> it is about making sure they can really get this alibaba spinoff deal done in a tax free way. orissa meyer -- marissa mayer structured a very shareholder friendly deal. this will be a great transaction. then eventually shareholder, the tension -- the attention will shift to the core business. it is. again, they structure the most shareholder friendly deal they could ask, spinning it off to

shareholders, giving shareholders the value for the alibaba share. yahoo! japan is another $9 billion asset that they need to monetize. then of course the core business . tom: bring up the chart of aol versus yahoo! i had not realized how well she done given alibaba. is her job on the line at this meeting? >> i do not think it is it she has some runway left with shareholders. one of the key issues is, however, shareholders are going to want to say, you are in a business internet advertising that is growing 15% a year yet, yahoo! does not grow its revenue at all. at some point, shareholders will say, what is the strategy? brendan: i've always assumed that yahoo! is alibaba plus something else that is not significant. i'm looking at research from ubs. yahoo! had the third largest

u.s. mobile audience. they are sneakily good at some things. >> however on the monetization of mobile,, by their admission, playing a little bit of ketchup. -- catch up. you think about facebook or google, issue number one has always been mobile over the last couple years. and facebook has been issue number one. for yahoo!, they have been playing catch up but they are making inroads. but we are not seeing on the top line. investors are saying, what are we going to get growth because we are playing at -- paying a big multiple? brendan: yahoo!, what does that company do? >> they are a media company. they are not a technology company. they aggregate a big audience and they have 800 million users that come in to yahoo! and they need to sell advertising against that audience. tom: can you run bloomberg

intelligence and run twitter at the same time? >> no problem. tom: just wanted to clear that up. paul sweeney is not going anywhere. running our wonderful shop at bloomberg intelligence. in our next hour, this is a timely discussion on hedge funds . they are actually doing pretty well, event driven, but what about the future of hedge funds in a reduced expectations world? greece is on the move. the creditors have spoken. we will have that for you when we return. ♪

tom: the only thing certain in

washington -- nancy pelosi will be wearing black and an important trade vote in the senate. there has been maneuvering by her president to outmaneuver her democratic house. let's get to our morning must-read. brendan: "the new york times" gave -- it to barack obama. he must use his trade authority to reach better agreement. because agreements are secret, it is hard to determine who is right. but now the burden of fruits will rest squarely on the shoulders of the president. and bipartisan support for trade agreements the administration needs to reach deals that address concerns raised by many democrats. we have phil mattingly with us in d.c. he has been watching the negotiations on a weekly basis. phil have we reached a point where we have moved out of congress and into the actual negotiation's, and do the democrats have any leverage over

the president and how those negotiations for the actual trade bill goes? phil: yes, to your first question. not really to the second question. what happened yesterday with the senate vote, it was procedural, but it was a huge deal. basically, eight days ago everyone was writing the super hot take on how trade was dead. how the obama administration's legacy had been crushed. all of those have been flipped on their head to the point where white house staffers yesterday took to twitter to start reach waiting -- retweeting ever reporters taken how the ministration had failed on trade. for the most part, trade with the fast track authority, to finish negotiations on these trade deals, it is on a glide path. it should be done. tom: i love the idea of a glide path. you are a student of history. do you equtate these trade moments to what bill clinton did

with welfare? is the president moving to a center, much like president clinton did years ago? phil: in a micro sense. more broadly, the white house is not taken this pathway trying donation or moving to the senate to reach deals. but on trade specific way, that is absolutely the path the president has taken. he has made clear that democrats moved to the side. his negotiations throughout this process has been with house and senate republican leadership, with the business community. the liberal and progressive side of the democratic party has not only felt left out, they have ethically fought against it. so, yes, tom, in this case specifically absolutely. brendan: nancy has three relationships she needs to manage. one with the business committee and one with labor and one with the president. which is the most important for her? phil: i think with labor, more because of the election and because of the 2016 election.

that is where the money is. that is where her money will need the most support. her relationship with the president will always be ok. they have their bumps and bruises but legacywise they will always have a good relationship. labor is where you will see nancy pelosi focus. brendan: thank you. the tide has shifted quickly on trade. that is our twitter question of the day. when the tarade bill passes, who wins? this is bloomberg "surveillance" it is june 24. ♪

but moments ago, the imf does not accept the greek tax

proposals. you heard bill lee say that collecting taxes is at the heart of this debate. vonnie quinn has been reading up on this. our top headlines. vonnie: the greek labor minister said that on radio. so, there are a number of developments. the country's creditors have come up with a revised proposal according to a person familiar with the matter. and given it to the greek government. earlier, prime minister alexis tsipras told his government creditors have not accepted his proposals. he's meeting with the heads of the imf, ecb and european union. even if tsipras comes up with the deal, he may have a difficult time with his own cabinet. one of his minister says the proposal to not address the biggest problems. >> it needs to be understood in europe, too that without debt

restructuring, we cannot come to a solution. we will have the same political end mr. poppa day most -- and mr. papandreou had. vonnie: on june 30, greece needs to make a $1.7 billion payment to the imf. the senate is preparing to give the president a big victory entrée. -- victory on trade. only a simple majority is required. earlier this month, how stomach read almost killed the trade measure. president obama is changing a longstanding policy regarding americans held hostage. the president will clear the way to families of hostages to pay ransom to terrorists. that policy has been criticized by families of those who have been killed. starting next week, there will be a new ceo at the world's largest airplane maker.

beooeing has named their chief operating officer as the new ceo. he's 65. he'll remain on as chairman and will retire next year. it was the best catch of the night in major league baseball. he was not even wearing the uniform. the second inning at wrigley field. tom: oh! vonnie: >> down the first-base line. he reaches out. holding on to his 7 month old son. he did not even drop his bottle. brendan: this is amazing. tom: let's look one more time. vonnie: he was called out. brendan: he's still bottle feeding! tom: outstanding.

he is prepared to use the changing table. brendan: that guy is the best athlete on the field. vonnie: i'm so glad he was on the ground level. tom: he could drop the baby. brendan: never once dropped the baby. the two, when we had the twins the trick is having both twins s trapped to you. tom: they're so much breaking news it is not breaking news. let's move from greece to china. i'm going to suggest we will talk about this in the coming weeks. china proposes to scrap a 75% loan to deposit ratio. might that be about chinese equities? brendan: it might be, but it seems the policy in china is to expand m2. to get credit out there as best as they possibly can. tom: we are going to rip up the script.

everybody wants to know what a bubble is. i think we are living it. >> they keep insisting on pumping credit up. you have got to wonder when are they going to stop. tom: seeing a lot of this, do not do this at home, saying american should not invest in china. it is a discrete bubble. i have never seen anything like it. why is the chinese inflation in their stock prices so different? bill: you have to wonder why they do not use fiscal policy. that bubble was in real estate and now in equities. you have to ask yourself why they are existing on pumping up credit? tom: let's go over to fed policy. and get back on track on bloomberg "surveillance" steve roach suggesting we need a fed mandate. are we in a form of bubble in

the u.s., and should janet yellen make that a mandate? bill: we are already there but since the financial crisis, the fed has been on watch for where is the next crisis? vonnie: it's maybe not the official dual mandate but that was the reason the fed was set up in the first place. bill: long-term interest rates. financial markets matter. what we do not know is how much have financial markets lost their capacity to make liquidity. brendan: this is been an ongoing theme -- does the fed know enough about financial markets? bill: what i worry about is a lot of my colleagues at the fed were ph.d's in economics. they don't know financial markets. i did not know financial markets until i got to citi. i worked in the fed's financial markets division, and yet i'm learning about markets now. brendan: this is slow cultural change. 30 years.

macro economist -- finance was a dirty thing that happened. the l.n. curve. bill: the b.b. curve, the bond market curve was the residual -- tom: excuse me. are we allowed to talk theory on wednesdays? brendan: if anyone is allowed to do it. normally it is tom who first says it. tom: in the control room, stay with us, it is time for a nerd fest. paul krugman suggest we need go back to hicks on the i.s. curve versus the l.m. banking curve. do we need to think simpler? bill: we need the b.b. curve. we need the bond market curves. we need financial markets to be in. that is what is missing. what we talk about growth, we

have supply side, potential growth -- tom: but no demand. bill: where is that? that is the pathetic heart of our profession as we do not have the models. tom: did he show unusual courage to get us off the stereotypes looking for higher inflation? bill: he did. more power to olivier that he tried to shift the imf more towards it. vonnie: if we accept your premise that federal reserve officials do not understand financial markets, then what are they getting run? bill: they don't appreciate how the guts of the plumbing of financial markets may make it almost impossible for them to affect the gradual increases. vonnie: you are expected some kind of tomorrow when the fed raises rates. bill: think about taper tantrum. that was on the whiff of slowing down purchases. tom: shock is what happens when

you get into these tensions and jump conditions. what keeps citi up at night? bill: when we affect that slow and gradual increase, will the corporate bond market react in a slow and gradual way? tom: they will act like animals and do what they do -- all go over the cliff at once. bill: before the crisis, those reactions were with a capacity that is three times what we have now. tom: i have got a five-minute major high for minor deal. for ripping up the script three times. it is your fault. bill lee here. bill: i think it is still september. the dataflow is strong enough. i was december. tom: we will have a smack down in a couple weeks. that was maybe the best rip up the script block we have had in weeks. that was fabulous. brendan: nothing makes tom happier. tom: we got hicks and krugman in

there. olivier probably through a brick at his tv screen. brendan: the days of frantic buying or selling on wall street may be over. we are talking about volatility or lack thereof in single best chart. no action on the floor anymore. the good times are over. good morning. ♪

tom: good morning. tom keene, brendan greeley, and vonnie quinn. let's do single best chart and let's do it on the quiet out there. vonnie, the vix closing at an amazing 12.11. the vix 8 years before the crisis. this looks like it was made in chart camp. up goes the vix with all of that fear. down we go. and the regression in the lehman brothers lows. it's to a quieter market. a quiet in equities versus the noise we are seeing in bonds and foreign exchange. vonnie: in foreign exchange, you looking at the euro below 1.12 again. in the last 24 hours.

brendan: when i look at that i think about models that are built on the assumption that low volatility means a safe bet. bill: that makes me very worried because people are focusing on the wrong thing. quality is the second -- i'm worried about these fourth moment. skew the third moment. brendan: what does that mean? bill: volatility has come down. but the likelihood of a big event, that is bad has gone up. vonnie: i do not think we have mentioned car ptosis for what? tom: i had to work 10 hours a week. seriously, this goes back to a different curve. versus the bell curve. we are setting ourselves up for what all of our viewers fear which is a jump condition. brendan: the rare veevent.

bill: a big consequence, low likelihood event. tom: is greece event? bill: greece could be a catalyst. tom: what is important, bill le e's got real world experience at the imf or we want from 1994 and everything was fine until it blew up. bill: where are we now? one bet, long dollar. tom: there we are. we will get the greek letteres in s in our next hour. let's go to photos. vonnie: number three in our top photos, we are in our media. six-- in armenia. 6000 demonstrators protesting energy costs. 230 journalists have been

detained in the most widespread public demonstrations is 2013. tom: protester not make the headlines around europe. it is part of that diminished real economy of a gereater euro asia. brendan: economists say the fuel subsidies are bad they are over the long run. in the short run, it is what people in democracies pay attention to. you take away subsidy, it is painful. tom: great photo. vonnie: number two, pakistan the heat wave has people cooling off in the arabian sea. temperatures in karachi have reached 111 degrees this week. 200 people have died so far. officials said. the government has called in the army to tackle the widespread heatstroke. tom: in india a two weeks ago got rain finally. bombay has too much rain. vonnie: after severe

thunderstorm's across the northeast last night, beautiful sunsets made the weather worth it. a sunset from fenway park. during the game. baltimore won 6-4. sunset over new york city. and sunset over washington, d.c. there is new york city. brendan: to whom does the copyright on the picture belonged? ? vonnie: we forgot to put #nofi lters. brendan: lexie levin took that picture. tom: she's in my ear. send the check to who? coming up, an important conversation with the central bank leader of kazakhstan. on international relations and economics of cause extent - of kazakhstan. the new view putin has to the east and the southeast. futures negative 5.

♪

tom: good morning. we welcome you all of you. let's get to our top headlines. vonnie: thanks.

the baltimore man who died in police custody suffered a high energy energy. the baltimore sun said the coro ner believe the van slow down suddenly and gray was handcuffed. six officers are charged. they are pleading not guilty. gray's death sparked protests and writing. a new report says sicsco will drop its planned merger with u.s. food. a report order the damper i called to the proposal. -- ordered a halt. the company is likely to walk away from the deal. and in france, the government has been rocked by a report that the u.s. has spied on the country's last three leaders. the national security agency spied on hollande and his two predecessor. the obama administration says it will not comment.

tom: sort of percolating. you wonder where it is going to be at a week. vonnie: governments monitor each other. brendan: we are going to move east now. cassocks down as a member of the world trade organization. -- kazakstan is a member of the world trade organization. your currency is pegged to the dollar but you have been writing the ruble down and up. you said it needed new currency but what is the future now of your currency? kelimbetov: we adopted a new policy. in the meantime, we not to move to a new monetary policy. which means greater flex ability. we are moving from a fixed exchange rate to more flexible exchange rate. brendan: summon your business

community have said it's overvalued. is it? kelimbetov: no, i think it's in equilibrium. we are in good position. we depreciated last year and this year. so it's fine. tom: you were buffeted by so many things. the history of the region, the resources, but there is a political calculus as well. when you are advising your political leaders about finance, how do you fold in what is happened in ukraine, and the relationship of kazakhstan and moscow? kelimbetov: you probably know -- this year, if you talk about our trade in global terms, 50% of our trade is european union. 20% is china. 20% is russia. we are more focused on exports in e.u. in importing, we are mostly

russian. tom: what is the greatest misunderstanding we have about kazakhstan. you went to georgetown. you are very conversant with our stereotypes of urination. -- of your nation. kelimbetov: we have the most competitive economy. tom: in february, i am going to get warm weather in kaza hkstan. brendan: the conflict in ukraine was about a central question -- could an economy be part of global trade? is that possible? can that needle be threaded? kelimbetov: from the beginning when we established the economic union, the first was a pragmatic economic agenda. the idea was say in the future to kind of create three -- free trade zone with e.u.

from lisbon to bloody rostock -- vladivostock. brendan: you believe it is just in the european union. tom: what is your mandate? is it janet yellen of kazak hkstan? what is your mandate to from any other emerging market? kelimbetov: you mean, central-bank? tom: central-bank. kelimbetov: we are moving to inflation targets but we have also -- we have fsa functions. we have a very strong central bank. we are responsible for developing a financial center. tom: is your targeting going to be like new zealand? kelimbetov y: yes. we have a commitment that we

would like to bring english common law and english language. among all c.i.s. countries who started the structural reforms. tom: it is amazing how nouri' -- norway's central bank has immense clarity as a benchmark. brendan: looking at the 10-year now what is the more significant factor for you movement in the ruble or the future of janet yellen's fed policy? kelimbetov: we are watching both. we are seeing what dr. yellen is saying. we have a southern wealth fund under our management. $100 billion which is 30% of gdp. wait what is going on. tom: bill lee? bill: as a singapore of the region, what financial markets -- are used mosstt? kelimbetov: we want to focus on

development of capital markets. in three years we expect that prices will be privatized. vonnie: a quick question on the common currency. that is going to come into effect in 2024 what if you learn from europe's common currency? kelimbetov: what we learned is that before to move to common currency, you have to do a lot of -- in terms of more integration of the trade regime and coordination of the macro economic policy. tom: thank you so much. bill lee thank you so much. let me do a foreign-exchange report. in the last 70 minutes, it's change in greece with spreads wider. the german 10-year coming into .83%. a weaker euro. much weaker than that 45 minutes

ago. 1.1197. stay with us in our next hour. much to talk about, including the state of hedge funds in global wall street. stay with us. ♪

tom: an abrupt shift in tsipras of greece as the eu rejects his roses. house democrats are in for a change. a critical senate vote. the president may sign a trade built by the end of this week. global wall street considers another trading mess. this is whom -- bloomberg "surveillance." we are live from the world headquarters in new york. i am tom keene. joining me is brendan greeley. greece is never boring. brendan: i am slowly coming to the conclusion is the noise that happens when you make a deal. martin scholz says he is confident on a solution for greece. we are slowly dancing toward the end. tom: we will go to athens and

brussels in a moment. vonnie: the top headline is with greece. some fast-paced horsetrading today. bloomberg news is learning that the creditors -- an admission from alexis tsipras that some creditors did not like his latest plan. he will speak in brussels with the heads of the imf the ecb and the european union. a former greek prime minister talked about his chances. >> there will be a widespread consensus beyond the confines of the government's party. prime minister tsipras himself will have to put his full weight behind to the agreement to pass it in his own party but i think he can do that. vonnie: six days from now greece

must pay the imf $1.6 billion. president obama is expected to win fast-track negotiating authority today for the asian trade bill. it cleared the last major hurdle yesterday in the senate. final passage requires only a simple majority. amazon is the latest retailer to stop sales of confederate flags. the internet giant is joining walmart and a sears. the charleston massacre revived the controversy. in south carolina's capital, the church pastor -- the s&p's best shareholder is making a change that could attract more. the ceo of amazon said it would put them within the reach of

retail investors. shares have doubled this year there is google wants to make its e-mail more goofs proof. that gives users up to 30 seconds of defending methods. 289 million users. tom: i would go back to netflix. rich greenfield with a huge price target on netflix. i got this wrong, why is that flex doing so well? it is the volume. brendan boy -- brendan: because it works. cable providers have trying to do video on demand for years. netflix got it right. vonnie: it is the world's biggest online subscription service. brendan: something close to 30% of runtime on light traffic goes to netflix.

tom: this idea that it is a 30% suck of our technology. let me do a quick data check. it doesn't show the movement we have seen off of greece. let's get to greece and the changing moments that we have seen in the last two hours. what we need to know this morning is that taxes keep coming up. guy johnson is in athens and hans nichols is in brussels. the basic idea here, that it is about tax collection. do you buy that line from brussels? hans: it is the line you were hearing out of athens. as athens tries to criticize the imf for their insistence and not accepting the proposal. of the 8 billion in cuts that they have, 93% is from new taxes

on the wealthy but crucially on businesses. we saw the chamber of commerce come out and there was a concern it would choke off recovery. tom: do they still tax people in grace -- greece based on the swimming pool in their backyard? >> i'm not sure but i don't think that will be coming back anytime soon areas there are a bunch of taxes coming through the balance is wrong and we have been hearing noises about this all week. it looks like the counterproposal is a little bit more growth friendly. they are trying to make the taxes more progressive rather than regressive. the imf once a better balance. this is never going to be a straight line. it is a negotiation not an acceptance and that is ultimately what we are seeing

today. brendan: one of the things we learned in the last hour is that amateurs talk tax rates and pros talk tax administration. we need to make sure the rates are right but that the collections happen. hans: the collection -- it is difficult to make sure that that works. one of the proposals out there was to enlist tourist to make sure no one was cheating. that is why there has been so much of an emphasis on cutting spending, because you can never be certain how much revenue you will capture with whatever rate you submit in some official paper to the imf. that's why there has been this emphasis on trimming spending and that could be where the big difference is coming. it looks like the greek strategy split the imf from their creditors.

i am not so sure that will work. tom: guy johnson in athens, hans nichols and brussels and brendan greeley how can lithuania or spain support this? >> this is one of the things i had heard in estonia three years ago. their frustration was the difference in retirement age was 10 years. tom: how do they do that? how do spain and lithuania performed a miracle? hans: the argument their political leaders can make our we have to suck it up in europe. spain cannot necessarily be bent over the barrel. spain does get offended by the argument. it is very difficult. the weight you harmonize 16% of greece gdp is in the pension

program. everyone wants to bring that down. you make a good point. that is what the eu is about. it is about fiscal transfers. tom: the last word to you. what do you hear on the streets of athens in the last 48 hours? >> i would say that this is a deeply divided country. there are those who want to remain in the eurozone. this country is a paradox at the moment. they want to pay taxes and don't want to pay taxes. they want to stay in the eurozone and don't want to deal with the consequences of that. tom: hans nichols in brussels, guy johnson in athens, thank you to the london team for the great technical hurdles.

with sky bridge capital we will talk about hedge funds later in the hour. this is an event. is greece a good thing for the investment community? >> it has been an opportunity for quite some time but i think it has taxed all of our patients. we came in february 1 with the expectation that those extreme low prices, you could make a lot of money. as time goes on you see the tremendous economic damage. even if a deal is done your upside is more cap. tom: is it an upside for the industry for guys looking for an event moment? >> per -- clearly they would prefer greece to have a solution. you want less taxes and more pro-growth policies.

all you want is a solution because ultimately they will trade lower deals. >> the point you just made up was that the economic situation does not remain stationary while negotiations are going on. you are watching that degradation within the last six months. >> that is the tragedy. what they have been haggling over is 25% of gdp. they have caused more damage from that in the shenanigans. that is a little frustrating. brendan: the justice department is looking into possible fraudulent manipulation of the u.s. treasury market. that shoe is dropping. ♪

tom: the senate to pass in a stored trade moment and then on to a bill. champagne is already out at the white house. maybe it will have a bill signed by the end of the week. in the summer it was a sleepy washington. now july beckons and with it legislation for the president. phil mattingly has follow this

i had to read four articles today to understand the strain of where you live every day. who is maneuvering in washington and would you please explain the maneuvering of the maneuver areas >> -- maneuver. >> john boehner -- a group of people who do not talk very much are the ones who made this happen. they will vote to give this president fast-track authority on these trade agreements. it is absolutely necessary to move forward on the transpacific partnership. that 12 nation deal. the biggest in history. those maneuvers -- a week ago this was dead. two weeks ago nobody thought this had a chance to move through. it is been the procedural

maneuvers that had a chance to work in the near term. tom: it is like another time and place. brendan: it is and they are hard to do and the deals happen once every decade. it is a key legacy. >> how important is the unwillingness to give the president a law? >> they made a statement. they felt like they hadn't been paid enough attention to and they wanted to let the white house know that we don't need you for elections. i think the white house look at this and calculated bet it was more valuable -- i don't think this is the be-all end-all but i think democrats made an important statement.

she matters, her leadership still matters and the white house will always have to pay attention to her. >> when does the president signed the bill? >> one week. >> truly the moment here for the president. with all due respect i will have more on this tonight at bloomberg television. >> our twitter question of the day, when the trade bill passes who wins? ♪

tom: greece spreads out to intraday wide right now. a little bit of tension as it drifts from brussels and athens. vonnie: dzhokhar tsarnaev will hear a judge pronounce his death sentence today. a formal hearing is scheduled this morning in a boston courtroom. nearly three dozen victims are expected to speak.

a european merger could affect millions of american shoppers. the old stock deal is worth more than $10 billion and the merger would create the fifth against supermarket retailer. the ball is now in the nfl's court for the deflategate saga. they spent 10 hours with tom brady yesterday while he declared his innocence. the nfl says that brady new the footballs were tampered with that put new england in the super bowl. tom: i am so worn out on the story. brendan: more on this story then greece. there is no information on greece. greece heels important. tom: we have an interesting story.

brendan: the body of clement to pinckney -- clement to pinckney -- clementa pinckney -- hillary clinton took up this struggle of race. >> we cannot hide from hard truths about race and justice. we have to name them and on them and change them. brendan: ken goldstein joins us right now from washington. you wrote about whether or not hillary clinton can reassemble the obama coalition. it was in carolina where she began to lose the black vote how do she recapture at this time? guest: hillary clinton and barack obama were basically breaking even with

african-american voters and then president obama has his recount victory. a proof of concept that he can actually win and then a couple of weeks later, barack obama gets 90% of the african-american vote. i think african-americans are a firewall for clinton in the democratic primary which does not look to be particularly competitive. then in the general election it is crucial for her general election prospect as well. >> we used to effort to bill clinton as the first african-american president. is his legacy important for her now? guest: you start of smile when you say that but then we had the african american president in barack obama and what we saw with that in terms of the performance was african-american turnout was the highest ever and

african americans comprised the highest proportion of the electorate. and they were phenomenally loyal to democrats. there was some ill will in 2008 but i think that is mostly forgotten. the question is, can the democrats turn out african americans when barack obama is not at the top of the ticket? tom: do you see a cogent strategy by anyone on the other side to gain latino or black votes? guest: not so far. simple eighth-grade algebra makes it very challenging for republicans if they do not do better with hispanics and african american voters. i was really focusing on hispanics but when i got to the geeky numbers what was clear to me was latinos are important but they generally live in states that are competitive.

keep your eye on african-americans as we go forward. brendan: is this a new move for hillary clinton, has she taken up race before or can we look at it as a purely political move? guest: you look at her history and you can see that these are the issues she has been involved in. i am not sure when this particular event was scheduled. we had incredibly tragic and fast-moving events in the last week. i think she can talk to african-americans. i don't think that there is lingering bitterness from 2008. it's not so much that i think she would be against them but how do you re-create that phenomenal performance that barack obama had. for every percentage of african-americans that vote, it is almost a one-to-one additional percent for them across. >> does the black vote matter in

ohio? guest: the black vote matters in ohio. it is about 14% of the electorate, but the democrats are getting 95% of that vote. so in that way, the democrats can lose white voters almost 6040 and still win a state like ohio. vonnie: in 2012, the turnout among african-americans was the highest group, what is the main concern right now? guest: i think african-americans care about the economy and the care about jobs. all the data shows in the last eight years african-americans have not done as well as everyone else. there are certainly these cogent racial issues and they care about issues that everyone cares about. brendan: ken goldstein in

washington, we stay with the democrats right now in time to answer the twitter question of the day. we ask when the trade bill passes. who wins, let us know. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage all of taylor swift's music videos interviews, and more.

xfinity is the destination for all things taylor swift. tom: let's get to our top headlines. vonnie: rapidfire negotiating happening right now in the greek debt crisis. a revised proposal today after revelation from the greek prime

minister. talks today in brussels with the heads of the imf, the ecb and the european union. if they win the deal he will have to sell his own country on the required performance. one criticism says the proposals do not address the biggest problems. >> it needs to be understood in europe that without debt restructuring we cannot come to a solution. we will have the same political and that the others had. vonnie: six days from now the bailout expires and greece must pay the imf $1.6 billion. president obama's trade plan is expected to be approved today. it needs only a simple majority. the plan was repackaged to overcome democratic opposition.

a new report -- the associated press says the bargaining to high-tech reactors and other state-of-the-art equipment to the report is based on a draft document. a new chief will be taking controls. their nominating dennis as the new ceo. he perceives james mcnerney. the 65-year-old has run the company or a decade. he will stay on as chairman and retire next year. it wasn't by a flare. top stone the first baseline he grabs the ball holding his seventh-month-old.

>> the degree of difficulty. we don't know if it is right-handed or left-handed. he is not just holding the baby he is feeding the baby. >> the bottle does not leave the baby's mouth. that is extraordinary. >> look at them high-fiving. >> if you are listening to the radio absolutely have to find a way to see this on the internet. >> this was made for matt lauer. it is the greatest thing. let's do something for it. go to bloomberg terminal right now. back to world war ii, 1948 and here is the american economy that we know that guy ascii -- that troy gayeski grew up with.

but herman says there is no way there is a subdued level of economic growth. what i want to new -- no, troy gayeski, if i look at the macro level it is a single digit world. guest: it is an environment where there is not a lot of low hanging fruit. the economy is making progress but very slow. the days of 4% to 5% are behind us but we hope we get to three to four in the next few years. tom: does the hedge fund world need an economy that is booming or do they not care? guest: long managers would refer stronger growth to confirm these valuations and to confirm that the event cycle continues but on a relative basis. relative to equities, hedge

funds do not need economic growth to be as powerful. brendan: but it will rest on productivity growth so do you have a bet on what productivity growth will look like? guest: our view is that it will gradually increase but with slow productivity. labor market improvements as opposed -- as opposed to significant part of the improvements. tom: i want to do an extended data check. you have the usual. futures at negative four. that does not explain the drama we are seeing out of athens and brussels greek spreads widening out. we are up 18 aces points just as we started surveillance this morning. you can see on the second floor, some of this expressed in the foreign exchange market. there is the greek bond up 66 basis points.

that is gone 30 to 21 and even down to 20. the u.s. markets are immune to all of this closing. gold is quite essence at 1177 per ounce. brendan: we have some amazing bloomberg reporting right now. tom: it will be traders, e-mails and chat rooms. the government bond traders -- how about libor? i think that is still ongoing. now many consider government bonds to be the new territory for regulators. kerry does some terrific reporting on this with bloomberg news. within your reporting do e-mails exist where 25 euros or

32-year-olds said four stupid things that will cost billions of dollars? >> we are not exactly sure what the chats and e-mails said but it is a possibility. those cases were about conduct issues to people talking internally or with other people at other ranks. those are largely unregulated industries. so you are seeing conduct in these unregulated industries being low hanging fruit. >> the issue here is contained auction process. they get a look early at the different bids and desires of their customers. are you saying that they are talking to each other? >> we are definitely getting conversations through that there

is chat rooms riot to the primary treasury auction. as you know it is one of the largest financial -- daily, yearly monthly. it is a big deal. tom: it is back 30 years. brendan: they changed the auctions. that is when the introduced the dutch auctions. walk us through the dips. those were call markets, compared to this, this is something slightly different. what is the mechanism that we think happened? >> it is less about the difference in more about the similarities. what you have is people comparing notes before sales aligning orders, comparing notes and a gearing up demand and there talking about this in chat rooms. brendan: between primary dealers or within? >> probably both.

the issue there is that the department of justice has viewed that dimity -- pleaded guilty a month ago and with libor and a couple of banks who have pleaded guilty already. we have more banks coming up with that and that activity could be considered cartel like behavior. it is very similar to the type of conduct we have seen previously. vonnie: have any of them responded? >> we talked to several of the primary dealers and the and obviously said no comment areas -- comment. some of them have very strict rules they were part of the investigation so it makes sense. tom: am i naive to think that

the previous fines were because 28-year-olds said stupid things in e-mails? >> i think that would be a small sliver of the larger picture. but the justice department doesn't like when you talk about orders before they are placed collusion is when you break the sherman act. >> this is not a standard regulatory regime. in the past we talked about fcc enforcement and what you'd laid out in your article is this is antitrust behavior. >> that goes back to what i said earlier. it is about conduct and the conversations are the conduct they are looking at and that can be considered cartel or antitrust behavior and some people are criticizing this is saying it is low hanging fruit for the department of justice and others saying that the bank should know better.

>> on the treasury auction process. there are important meetings. not greece and brussels nato and the containment and russia. our secretary of defense is at the nato meeting. ♪

tom: good morning everyone.

brendan greeley and vonnie quinn with me this morning. a phrase of another time, what about credible deterrence. maybe the new nato goal a little bit like the old nato goal. ons nickless has been more than busy in brussels but he and we and you must consider these important meetings. i love paragraph four this morning. two days before a b-52 dropped nine dummy bombs on the ground. 180 miles from russia. hans, you are too young that is out of my junior high school period. hans: except the latvians were not radioing them in at that point. here is the most important number.

the number of troops in europe. right now there are about 65,000 troops and in the mid-90's there were 300,000. you talk about what he actually announced in estonia, he is in brussels today -- 250 tanks mobile howitzers and armored the occult. that is not a lot. it is symbolic but this isn't a massive force restructuring. brendan: it seems that this is less about actual deterrence and reassuring allies from poland and latvia and lithuania that article five will be invoked if push comes to shove. hans: the problem with assuring them is that you need to have other nato allies stand by it -- there are a few comments over the last 48 hours but no one will go to war for estonia. it

is a concern and center in nato -- you have a two tiered nato system. it is also this question of what is nato? we went through libya but it was nato running the operation in libya. if nato turns into something that is just rapid response for the entire globe based in europe that is something different than what it was designed to be. tom: this feels like a bad movie script. there will be a confrontation on these new borders. something stupid will happen should i worry? hans: in the universe of things to worry about, it is up there. but i don't have any particular insight on how close we are. i have no and i do think anyone has any idea of how close we are to a midnight moment when we have some kind of accident. one thing about it is ash carter

in terms of generation. when president barack obama was thinking about his third secretary of defense he wanted somebody who thought long and thought big. tom: our twitter question of the day, let's be careful on trade. the senate, when the trade bill passes, who wins? coming up, much more. ♪

tom: good morning everyone. let's get to our top headlines. vonnie: the president of france called an emergency meeting after learning the u.s. spied on him and two of his right assessor's. francois hollande called that -- and two of his predecessors. francois hollande called that unacceptable. a new report says that cisco will probably drop its planned merger with u.s. foods. the judge agreed with regulators who said it would hurt consumers.

the company is likely to walk away from the deal. and something to say about the show about nothing. a recreation of jerry seinfeld's apartment. it was built by hulu which just bought the rights that seinfeld reruns. those are the top headlines. brendan: it is fascinating to me. i never lived in jerry seinfeld's new york. vonnie: i lived across from the diner for a while. brendan: but the actual apartment, the actual a set -- was in it in l.a.? we were instructed by the control room not to sing. explicit instructions. tom: fallout boy took it from suzanne vega. ok, whatever. let's get back to hedge funds. thank you rob copeland for

quoting troy gayeski. with inflation that comes in, it can elevate animal spirits. that is not happening. so hedge funds have to turn to something else to make it to two and 20%. call it deal making or m&a, call it whatever you want. it is a better than goodyear. you are always looking at the hedge funds. i guess mr. paulson was off two years ago and now mr. icon is doing what he is doing, is it just starting to get lucky and that is all this has come down to? guest: at this stage in the cycle you have tons of corporate activity. teams are looking for a way to do a creative deal through shareholder returns. part of it is managers getting active to drive constructive change and reward long-term shale -- shareholders. tom: a hedge is a trade.

is that what this is really about? i will bet on time warner and leverage up? guest: the difference for those types of positions is that guys will be long to be acquired or in other cases, is mylan going to be bought by teva? tom: do they take both sides? guest: these days they tend to take one side because of the deal breaks and you are on both sides you get double blasted. tom: is that a hedge fund? guest: that is a hedge fund strategy. hedge funds define a lot of different things. the majority of their hedges are against etf's or indexing. tom: i love what you say. all it is is the application of leverage. guest: it is very target focused. driving the change as an

activist or trying to look where consolidation will take place like in the health care industry. brendan: we have been talking about equities, in your notes you have a move into another asset, a much less liquid asset. what is your position? guest: it is one of the few things out there that is extremely rewarding. long story short, these are companies that went bankrupt in 2010. the fcc auctions created tremendous value and if those things trade anywhere near the value of the option there are lots of upsides. brendan: there is no secondary market for spectral metal. -- spectrum at all. guest: not for secondary companies but the key is it is only worse what someone will pay for it.

you need a strategic acquirer to pay for that. tom: nothing has changed in 40 years. you're just trying to game who will get taken out next with the application of leverage. guest: we prefer strategies that use the actual value of leverage. tom: here is the quote. it is always like oh this celebrity guy is making money or losing money, who is losing right now? guest: the year started out great for macro managers in the past three to four weeks, it is been very romantic some most of them have given back. tom: in your experience can they shift from short psychology to long psychology? guest: very hard. almost impossible. going to bear market, very few guys get that right.

they basically give up their entire gains from being short in the first three to six months of the following their market. tom: is it solid or still down to 1.12. guest: we are trending and the right direction and a hedge fund industry understands that they have to offer more competitive fees. tom: he could sell me a used car. guest: you are too kind tom. tom: let me translate. two and 20 is dead and the new thing is 1.3. guest: thank you for pointing that out to dan. brendan: we are talking but everything that troy gayeski could sell. both on tv and in radio you cannot see his cufflinks. he is put together. guest: a gift from my wife. brendan: the subtext of this last lock was, i want to talk a

hedge fund. i want to talk about spectrum. tom, no, we are going to talk about hedge funds. tom: michael mckean is wearing drachma cufflinks. brendan: he has been waiting to the right day to bring them out. today is the day. tom: mckee, the soul of greece. vonnie: and they are on the radar so he is sensing something. our twitter question of the day we asked when the trade bill passes, who wins? the 1% of wall street and the cronies. tom: there are a lot of people who agree with that. >> who loses, everyday democrats, the working classes. tom: we have selling them pushes against these two? brendan: this is what phil mattingly said.

they're looking to the next election and they do not need barack obama. vonnie: if you are scared of free trade you are probably not competitive enough. tom: it is -- it is history and it saves him from two weeks ago. brendan: if you can sum up everybody's presidency in two sentences we have the health care bill and the trade bill. the time when everybody begins to think about the future. vonnie: what is on our agenda today? i will tell you mine. president obama is coming out later and he will look at changing the way the u.s. deals with hostages. the u.s. is no longer going to prosecute or punish families

that try to communicate or negotiate with captors holding americans. brendan: because some families publicly complained. vonnie: they have never actually prosecuted. brendan: it is a huge break from american policy. reagan made a point that we don't negotiate. bobby jindal is announcing at the center near new orleans. what you have this morning is lots of speculation on why kanner outside of new orleans but not the city itself. tom: does that make 20 candidates? brendan: i think he has a better shot than we think. tom: greece continues. i thought it was boring at 4:00 a.m. and it got less boring at 6:00 a.m. this morning back-and-forth between tsipras and creditors. sorry to beat up with you on 1.3

at 17% -- whatever a hedge fund racket. brendan: i think you through a newspaper at him. tom: stay with bloomberg radio, we continue with "surveillance." worldwide starts next. ♪

vonnie: olivia: eric and stephanie are off. matt: we get new headlines and new terms for grace. olivia: we will go live to athens in just a moment. new ceo from boeing and a new investigation into collusion in the u.s. treasury market. bloomberg wrote that story overnight. matt: that does not sound good. other top news. first of all, the prime minister of greece says he cannot believe that his proposal to end the bailout impact has fallen short. alexis tsipras in a meeting in brussels today with the heads of the imf, it eat cbn european union brady is going to pay for money. he told his -- in fact, the creditors have given the greek government to revise proposal. they made a counter offer and