brink and they are out of patience. thanks are closed, we could be just days away from default. european equities, falling more than 3%. u.s. stocks falling, money pouring into u.s. treasuries. >> here in the u.s. the supreme court is wrapping up at session and we are awaiting the decisions on lethal injections and gerrymandered congressional districts. ♪ olivia: good morning. stephanie: so much action going on today, i could not leave, unlike erik schatzker. olivia: pending home sales right now, for that we want to get to michael mckee in the newsroom. mike: everyone is watching

housing because they hope it will drive the economy higher throughout the year. we are getting these and numbers, though not quite what was expected in the month of may. the forecast was for a 1% rise. april, revised down a bit to a 2.7% rise from the 3.4% rise, giving some hope to people who think that housing is going to continue to recover, this is the fifth straight month we have seen a rise in pending home sales. but you cannot take them literally, some of these contracts wind of getting canceled. olivia: all right, thank you so much, mike mckee. are looking at that data and the news from around the world. china, greece, puerto rico. let's look at the stock market here, down across the board the s&p is down. the nasdaq. .ook at it, it is not even 1% if you look at this global -- i

won't call it a melt down, but this massively negative news, it's shocking. it is. i thought that the selloff was going to be a lot worse. you know where it was worse? europe. it is a bloody, bloody day. down by more than 2.5% right now. frankfurt, the dax is off 4%. the broad continental wrench mark, european stocks headed for their worst drop in nearly a month. greece sits on the brink. stephanie: this is why you need to be tuned in today of all days , because this organization has reporters all over europe, covering the crisis in greece. our partner, erik schatzker, is in athens. hans nichols is in berlin. eric, give us the latest. those of us close to the story might be inclined to think -- capital controls -- that is

when the greek government imposed that at 3 a.m., that it has to spell disaster. well, not necessarily. remember, greeks knew that capital controls were a possibility at the very least for weeks and probably months, which is why they have been stockpiling cash. athens you around will see lineups at the atms and there is this threat that atm machines will run out of cash, however greeks have been stuffing cash into their at the consumer level the economy continues as normal. from another perspective, the small to medium-sized business, they knew that this was coming and had not been able to stockpile inventory because vendors have not been able to give me businesses credit. inventory levels will be stretched. the third level is the investor. investors have been managing as antaking every bump up

opportunity to sell. look at what is happening with the gre k, the greek etf trading in america, down something to the order of 17%. traded in new york for the national bank of greece, down some 30%, giving you a sense of the three tiers of thinking starting with consumer moves to the business and finally the investor. there is no unanimity on the of these capital controls, but there may be a convergence in those points of during the week. more is coming to you later. nichols, berlin, is there unanimity among the editors? in the past hour we heard from the vice-chairman. what is your take away from what we heard her say? is she preparing the german people for this greek exit? hans: she is, but you wants to leave a bit of room for a new government in athens to have a

third bailout package. one thing that has been very clear is that greece now has to vote. what everyone is trying to do, they want to explain the deal that they have offered because they think it is a remarkably generous and open idea and offer that gives them quite a bit. if you have a vote in athens and they vote yes against the position, you could see how there is a technical agreement, a technical government that could potentially come back to renegotiate, but right now there is no daylight between merkel, her european partners or coalition partners in the opposite party. guys? that was- stephanie: hans nichols, joining us from brussels. let's bring in mark barton, from london. mark, how are european markets

looking? where are we really seeing action? mark: the big fall for the euro came at 11 p.m. last night, london time. get in here, look at the euro-dollar intraday chart. that is when the euro was down by 1.9% against the dollar. 1.0955, the biggest fall since january. around that time implied volatility for the euro-dollar, that was a measure of the beckett volatility over the next week rising to the highest and's may of 2010 with implied one-month volatility rising the most ever. both have since given up lots of those gains with traders sending a contagion to other euro area nations being contained. look at the greek 10 year yield, the biggest rise ever, the contagion has not really spread to spanish or italian bonds. getting close to the euro stock 50, every single stock is trading lower today.

4.8%, thewn by biggest fall since november of 2011. that was 14 minutes after the markets closed -- after the markets opened the current drop is the biggest since january. what a day we are having in europe today. stephanie: without a doubt. that was mark barton joining us from london. let's bring in our first guest of the more -- guest of the morning here. theis with us on set, and author of "the death of money." have thelly onset we director of currency research. mark was just trying to walk us through it this weekend -- walk us through it. what wasd not know happening, this is a good guy to cover. >> joe was pretty good. it is a mutual admiration society. let's start with you.

why is the euro holding above 110 as greece appears to step closer and closer to default? were all sitting in the office on sunday for the asian open. what we were really waiting for contagiont is the effect going to be? what is different from today and 2012 is that we have a lot of stuff back in place in the spanish and italian market and we saw the even if we opened those markets, we managed to recover. contagion was not as bad as some saw it around those bonds. olivia: what do you think? >> this looks like a german miscalculation to me. they have a history of doing that, but i think they will need to blink and back away. they are not that far apart. stephanie: what? jim: they are not.

para metrics between the 2.5% gdp versus the structural plan, para metrics are extremely close. for example, europe complains that greek pensions are too high as a percentage of gdp, but pensions have come down 40%. the gdp imploded so of course it went up and he is making some sense. i think that germany miscalculated and maybe pushed greece too far and they will have to back away from this. tom keene asked the question this morning, whose jim: theyll of this? got in trouble cooking the books early in the decade, but where is the u.s. on this? james baker? the bond rubin? they are a nato member.

the six fleet does not exist. greece has a pretty good maybe. do we want them cozying up to russia because of the relationship there? stephanie: should the u.s. be doing more here? jens: i think they are trying to get them to behave how they would like, but we already have a very complicated negotiation with troika. but there are a lot of parties at the table in the difficult for a fifth party to participate in these negotiations and are a few people are actually willing to put money there to work. stephanie: on many levels it does look like european creditors have figured out ways

to reinvent the risk. you are not seeing a huge move and italian spanish yield, like you did in 2012. but the biggest sellers are all italian banks and spanish banks. doesn't makeually the payment tomorrow, who is on the line? jim: the council on foreign relations described it as seeing in arrears, but there are a number of ways out. the central bank owes greece millions on security market transactions. that is one way out. the greeks might have voted yes, that's another way out. and the reason why we have big moves is that people got relaxed during the course of last week. bank stocks were up 30 sent us. i thought it was just a game of richmond ship? right, it really

was a shock to the people on the market. these are all basically penny stocks at this point. jens: you could do the same calculation with euro stocks. that next was up last and now we are down 3.5%. we are just giving back to gains from last he can in the scheme of things the contagion so far is pretty moderate. unless there is really a ifllover in a political way, we have to worry about the politics in spain and italy -- jim: it is a slow process. august, that was 15 months. 2007, 2008 with the bear stearns hedge fund and it did not 2008. these things can take a year or more to layout.

i would not underestimate contagion. olivia: haven't you seen the movie? we could all get ebola. [laughter] what is different is that we have had this contagion debate going on since 2010. we have had like five years of it, but the structure of europe has changed in the interim. stephanie: they are no longer on the hook for greece going bankrupt. jens: that's very important. when you look at the direct challenge of contagions, certain banks have big exposures and they need to get out. they are down dramatically in gross and net terms. one of these direct challenges has really been chopped off but it does not mean there will be no or action -- no action. olivia: how long before we see social unrest? jim: that is the real wildfire. you can manage the financial side of it, but military

responses? that ins out of control. i saw pictures on saturday of greek parliamentarians cure -- queuing up at the atm. craziness. jim: you have to get your money belt out of the closet. olivia: i remember the 80's. i have a german mother who has one of those. thank you both. stephanie: we will be back in just a few. the supreme court, issuing its final decision of the year. we will take you live to washington, d.c. ♪

morning, everybody. welcome back to the "bloomberg market a." let's go straight to giuliana. checking out the crisis trio. revisiting,is bears we are not seeing that deep of the selloff. the greek markets are closed, but you do have a couple of pro. you have the atf and adr. the etf's gr ek, tracking greek stocks. i spoke to our in-house analyst to clarify -- you know the underlying shares are closed, the etf's trade. you don't tend to have, obviously, a bigger basis from which to trade like you normally would, but this is a sort of rice discovery vehicle. he pointed out that at the time and it just in market closed for the arab spring, the egyptian

etf still traded in the united states. the national bank of traded down more today by 22%. again, as investors tried to price out exactly what the events in greece mean. i wanted to take a look at my long-term bloomberg term chart -- chart. we have seen volatile trades in greece, down more than 70% over the past year, if you look at the five-year chart it looks even uglier, as you might imagine. almost the flat line over the long term. turning to china, entering a bear market overnight. perhaps some are betting on a rebound, however another etf is down 1.5% and the third leg of the trio are down sharply on this. officially no payments. i'm so -- stephanie:

that you pull up the chart, that is my point. yes, it sold off 20% today, but holy moly. olivia: times, they are a changing. julie, thank you for the latest. let's take you to the sea, where the supreme court is finishing up its session. one case just came down. justices voted five to four to uphold the use of a controversial drug that states use in executions. phil, give us more of a background here. phil: this stems from three notably botched executions over the last few we got out in may in oklahoma brought this case, saying that one of the three drugs used in the protocol to execute by lethal injection constituted cruel and unusual punishment during use. one of the keys here is that this was seen best seen as some

and for the first time you prior greater ginsburg said they believe that the protocol will continue for the injections. another note keep an eye on, affirmative action will be considered again in the next term. they did announce that today. stephanie: thank you, bill. we are heading back to athens to find out how ordinary greeks are responding to the crisis. erik schatzker is there on the ground. do not go away. ♪

stephanie: welcome back. you are watching "market day." we do not appear closer to a resolution for the greek that crisis area the payment to the

imf is due tomorrow. erik schatzker is in athens. we have got to focus on what life is like therefore ordinary greeks today. earlier you said that it was eerie. is that still the case? yes, and it may be yet for several days because they have been preparing for this. what greece is not prepared for is what might happen tomorrow. you talk about 1.i billion euros owed to the imf. the expectation on every level is the is not going to make it because greece simply doesn't have the money. heart of the reason they do not have the money is because the current aol program is scheduled to expire tomorrow. the trike a refuse to extend the program. the big question is what is going to happen to that banking system and if it is forced to

exit the euro. we would see lots of people with opinions this morning. mohamed el-erian was among them. he put the probability of a greek exit from the euro at 45%. rbs at 40%. bnp at 20% area there is a range of opinions that give you the sense, clearly, that this is a real probability and there is every concerned that between now and saturday when greece onposed to hold a referendum exactly what, nobody is sure, they are not sure what will happen to you now and then. i want to draw your attention a conversation i had with the president of the athens chamber of commerce. we were talking about the probability that this referendum would go ahead as a jeweled. listen to what he had to say. >> we are talking about six days away and we have not had the russian that the government was

going to pull forward to the greek electorate. at best i would call that frivolous. but it is becoming almost impossible for the ballots to be printed, cut, packaged and sent to greece. think about everything that has to happen between now and then. come up with a weston area find the paper. distribute the ballots around the country. it is an almost practical impossibility. so, the referenda may not go ahead as land. -- planned. back to the banks for four-minute, do we have any sense of how long the greek thanks can actually hold on? there are capital control -- controls now, but the ecb has frozen emergency liquidity, how long can they last?

erik: the liquidity issue is much more relevant. greek collateral may not be any good editors, rendering the system immediately insolvent. if there is no resolution on the political right these banks may close indefinitely beyond next monday or tuesday. it is an open weston, but the rubber is going to start hitting the road in a big way tomorrow. thank you so much, erik schatzker. stephanie: still ahead on "bloomberg market day," what diplomat is furiously negotiating with counterparts hours ahead of the deadline for -- deadline for a nuclear deal? that and more. stick around. ♪

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olivia: welcome back to "bloomberg market day." stephanie: this is a head of fixed income sales in the front,s, leading the

before that they were part of it and why is this so interesting? remember one month ago when the rest out there close ceo's and brought in the former ceo of ubs? is theyhe main reasons wanted to change the culture and direction of the organization. many of us said -- how do you do that? you're going to change the culture of a whole organization? --s than one year leader later you see these twenty-year veterans being pushed out. staying on for a bit longer but then i think you will be pursuing other market opportunities. not that there is a ton right now, but this is how it is going to happen -- if you are going to change culture you have to change more than just ceo's. a new ceo is coming in and they are saying -- guess what? those guys need to come out as well.

stephanie's is story, she is a rockstar. she broke it on the set. any idea where he might go? stephanie: doesn't have a job yet. we will see. but i'm sure that after working in banking for that long, you can probably cover your rent. or go to greece for the summer, probably a good vacation. thank you for having me. other big news that we are following this morning, a busy day of headlines, the supreme court is wrapping up its term today with a number of decisions. justices ruled in a case involving the death penalty half of an hour ago, saying states that can continue best thing that states can continue to use a drug that was indicated in several botched executions. it is being called highly unlikely that the death penalty is on comes to snow. they also agreed to consider

whether the university of texas race conscious admissions plan is constitutional. greeks are lining up to take money out of atms, but they are not walking away with much. those banks will likely not reopen till thursday. cash withdrawals are being limited to $66 per day. mohamed el-erian told us earlier what may happen now. mohamed el-erian: greece is going through what economists call a sudden stop. closing the banking system triggers cascading failure. when that happens it's very difficult for politicians to remain in control of the economy. my call about what happens next comes from having observed in the past what these due to policymakers and recognizing that it is actually very hard control your own destiny once you hit a sudden stop. olivia: as of now it looks like that referendum will happen on

sunday. minister plans to vote no. david cameron says the u.k. cannot hide from terrorist. 15 british nationals were among those killed when a gunman opened fire at a resort leisure, one of four attacks that day blamed on extremist around the globe. cameron says that terrorists have declared war on us. the fbi is warning of terror attacks targeting the fourth of july here at home. the counterterrorism subcommittee chairman spoke earlier on abc. >> i am more concerned now than any term -- than any time in september 11. remember, isis was a multilevel operation. it's not just lone wolves, there can be -- cooperation out there. there has been no specific threat of an attack.

sign of strength in the real estate market, pending sales of u.s. homes rose for the six months in a row, up 9/10 of 1%, just below the strongest sales in the northeast. those are your top stories at this hour. taking a quick look at what's happening in the markets right now, equities moving south near the session lows, the market not selling off his rally as we feared it might when futures opened yesterday evening. you are seeing a bit more action , not really that much. you would likely see more on the u.s. jobs day. just 2/10 of 1% right now. the place that you are seeing a flight to safety is likely in the treasury. the u.s. treasury, the yield is biggest10 basis, the decline in treasuries since october.

a thinly traded market over almost 4% yield is up right now. the final round of iranian new year talks is underway. the clock ticking tomorrow had been the deadline for reaching a deal to limit the nuclear program in exchange for an easing of sanctions. negotiators call it a little flexible, but not too flexible. >> the end of june, beginning of july, we will finalize hopefully in the coming days. olivia: we are covering the talks from vienna. in bureau laxman on -- in deirdre lockman on -- indira joins us now. how close are these two sides at this point?

it -- they have ever been. it sounds fast file, but it's true. the united states is adamant that they need to stick thate framework agreement they came by in switzerland. it was very hard getting there, with the nuclear curves and the way they would have to redo the plans and a heavy reactor to put them within what the iaea considers only for peaceful use. what they seem to be googling about now is the future for how they are going to verify past military dimensions of the iranian program and how they are going to answer the weston from this 12-year-old file that the atomic energy agency's has not yet been able to ascertain. to bring billwant in, former defense secretary. there has been a lot of criticism that president obama is too eager to strike a deal. what is your take?

we are closer than ever to signing? know we still don't whether the iranians are going to agree to the deal or outline that they agreed to back in april. so, i think it is too early to usedbut president reagan to say -- trust but verify. i think this case we have to say verify, then trust. because of the way that the coverts have inducted programs for many years, it's incumbent upon iran to earn that the verification regime is declared ok. there is a way to go and that way to go is that they cannot walk back from what they agreed to in april. if they do i think that president obama has to simply close up shop, walk away, say that we will with sanctions as imposed and try to increase them and that becomes the case because once i walk away from

the negotiation, iran will be free to try to continue to sell or a dinner your weapons program . meaning that there will be a counter reaction by the five was one with possibly israel and the united dates. it's very dangerous. i think that iran has to come forward to say -- this is what we agreed to in april and we solidifycertify and that, allowing you to have inspections from time to time whenever necessary on military sites or any other site, the international agency inspection would require it. olivia: there was this press conference over the past week where we saw the supreme ayatollah come out and it seemed like he was backtracking on the concessions that his nuclear negotiators had already agreed to. is the iranian government changing their position? it was last tuesday when the ayatollah made that speech,

laying out the red line that reversed the commitment that iran had always made inside the negotiating room on april 2 in switzerland. secretary colin's right, the obama administration has to hold them to what they agreed to. there can be no backsliding. chief, you showed some tape of her earlier, not only did she say she felt it coming for the next few days, but she also asked if there was backsliding on the part of the iranians and she said no. the other thing i wanted to say is that the obama administration said that they took the reagan phrase and said they turned it on its head, distrust and verify, they are committed to making sure that they get a good deal or they will walk away. olivia: that is what i heard the president say a few months ago verify.ust, then i want to wrap this up with you, secretary cohen. is there a plan b? and if not, what should it be?

plan b would be to go back and intensify sanctions. if they are the ones holding up the deal, they are the ones not allowing the kind of inspection that was satisfied those who are concerned about the program, we are back to intensifying sanctions. iran has had a plan to try to excel aratus program and it is not a good direction for iran or the rest of the world. but that may be where we are toded unless iran agrees conform to what they already agreed to. olivia: thank you so much there, bill. also my thanks to indira, our state department correspondent. joining us there from the talks in vienna. still ahead, much more, going back to the global selloff the we are eating in stocks. europe, asia, the u.s., the curious thing is that the euro is not moving much, we will break down the market moves without expert guest, so don't go away.

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olivia: welcome back. we are one hour into the trading day here in the u.s.. top stories crossing the terminal at this hour, the field of republican presidential candidates just keeps getting longer. the governor of ohio plans to announce that he is running for the white house. he will make his announcement on july 21. there are now 13 republican candidates. there will be 14 after tomorrow when chris christie will announce that he is entering the race as well. uperal electric is speeding the sale of its finance operation. they agreed to sell the bulk of their vehicle sweet management business to the canadian company, ellen financial. they plan to sell off about $2 billion in assets in order to

refocus on industrial operations. the parent of the discovery channel showing that it is a lot more than shark week. a one point $4 billion payment for export -- exclusive european broadcast rights for the next four olympic games. those are your top stories at this hour. time to get you caught up on all the market action going on around the world. let's head over to mark, who joins us in london. what a day. you will see that in the stock market, the greek stock market. you know why? the market opening today, what a day, we have had the biggest kleins happening 15 minutes after the open. that is when the stock 600 fell its biggest drop since november. the dax was down by 4.6%, the biggest drop since november. by its 40 was down biggest drop in 2011. the biggest the klein, the psi

20, portuguese stock market, earlier, 6%. 2008.t drop since this drop is the biggest in two years. yes, the greek stock market is not open but the greek bond market is open. the yield, biggest increase ever , 389 basis points. these two markets are very interesting. earlier the yield on the 10 year was up i around 50 basis points. not as high as it was, but contagion has been held together year, similarh 10 story, about 50 basis points higher earlier, just up 99. the haven is the u.k. german market, both benefiting today from that save money. look at the euro against the dollar. almost unchanged. right here, a leaven london time

overnight it was down by 1.9% against the dollar after this selloff. you can see what has happened and spend, the biggest selloff since january. normally reach those losses and , 111par against the dollar to 61. i want to finish with the stock 50, every single stock is falling today. 4.5% earlier it was down 3.3%, the biggest fall since november of 2011. not nearly as sharp a fall as it is in europe, if there is contagion concern it is more muted here. looking at the major averages we have read falling to the lows of the session, but nonetheless the declines are not that, down 1% as the worst performer of the three major averages, looking ,round at various strategist

this morning they say there is concern but that there seems to be at least some level of confidence that contagion would be limited and in addition if indeed you have this dire situation in greece it would mean the federal reserve is not raising rates this year. the map on the bloomberg terminal, a map of the ittors within the us he 500, is mostly read. the one area of green is utilities. interesting, given that progression of rates. the vicks measuring volatility within the u.s. stock market is picking up not surprisingly with stocks lower. the biggest gain we have seen this year and the highest doubles and march. take a look at the 10 year note, we are seeing yields coming down with the buying of treasuries, you could do it one of two ways. the fed will not be raising rates as soon as it will -- was or people are looking for what

they perceive as safety in the risk off environment. you heard mark talking about the euro. a basket of currencies that is little changed, fascinating given the situation down 1/10 of 1%. olivia: coming out of asia, big moves with stocks tumbling, off by more than 25%, the shanghai composite falling by more than 3% after the chinese central bank stemmed recent losses by cutting interest rates. we have this report coming from hong kong. >> officially bear market territory after a trade on monday when the main index one from those gains of 2.5%, the largest swing since 1992. ending the longest ever chinese blue market.

particularly technology players over the past six months. olivia: now, let's stay on what's happening in the markets. let's bring in mike reagan. just another day at the office, mike? mike: it is looking like that, i hate to say, for the u.s. market, which has been trapped in this range for several now. we have had this sort of ping-pong action up and down. as of now we are still in that range. the s&p has not dropped below its lowest level from earlier this month, let alone the lows that we saw in this and march. so, a lot of what i'm reading from strategist and invest her's be bumpy thisl week. there are so many unanswered questions.

olivia: plus the early thursday jobs report. ake: it is shaping up to be exciting week. bottom line, i was reading a note from thomas lee who said -- does this change might a list thesis on the u.s. market at all ? not really, there is not enough here to really change the economic outlook or the u.s.. at the big? were a lot of people is -- we this we know that contagion is quarantined, contain, mostly in government. is there a big exposure that we don't know about? a hedge fund or a bank that has some kind of exposure where that shoe did not hit the floor? olivia: mark was just showing us the portugal market. well.that as it will be an interesting week. olivia: and we have not even

mentioned order rico. mike: it is pretty amazing that the market is doing what it is doing now, given the hit it's been taking. like this can sometimes take several days to flesh out. perhaps, but as of right now? mike: it's the look i can other day in the office. discovery, paying $1.4 billion for the european broadcast rights to "the olympics." i will be speaking to the discovery ceo about the details, no. -- next. ♪

pay $1.4iscovery will billion for the european broadcast rights to the olympics. including digital rights to the next four olympic games. this the first time a single media company has held all the rights, much like nbc universal

in the u.s.. the discovery ceo joins us now on the phone. david, great to have you on the line area congratulations on the news. how are you thinking about how you will make money on this? ,owadays all the big events it's all on free to air tv. how does discovery make money on this deal? david: first, thank you for having me. hello from luzern. this really is a unique opportunity for us. in this case we are able to get the olympic rights to all the flat is. there is a requirement of offering some of the olympics on free to air, which we will do, but similar to the way it has been offered for years in the u.s., euros boards reaches 130 leadinghomes and is the platform like espn is here and we will be able to hold back a significant amount of right for

the sport and we plan on offering a lot of the olympic direct to consumer on every device and every platform. when you think about the limits as ip, there is no more unique ip that were you -- then the olympic games. it appeals to all demos and we will own that for the decade. we will be able to sublicense to some of the broadcasters in europe. but remember, we are the leading international pay-tv company and in europe we have real strength. 10 channels in every market with free to air channels in the u.k. , five in italy, two in germany or spain. olivia: anymore acquisitions for tv rights?

david: it is profitable. half of the content is olympic rogue rimming. with the olympic rings, euros or together with the games i think we are pretty well taken care of. we expect -- olivia: i have 30 seconds. do you have any interest in resuming negotiations on a stake in formula one? speak ultimately about our other investment negotiations. olivia: all right, we will leave it there and we are on the phone with you and i don't want to run out of time with you. thank you so much to the ceo of "discovery communications." we have continued coverage of the selloff in equity markets. ♪

olivia: good morning. it is 11 a.m. here in new york city. it is 6 p.m. in athens. welcome to the bloomberg market day.

carla: european leaders say they are out of patience. we could be just days away from an actual default. olivia: jeffrey jackson says he for greece, go ahead and default, but find a way to pay in the euro. scarlet: and there is no way to repay $72 billion in debt. ♪ olivia: good morning, everybody. i'm olivia sterns. scarlet: and i'm scarlet fu. let's took -- a look at how things are shaking out right now. certainly not as bad as some had anticipated. for -- of a a climb decline for