er depression back in. san juan, we have a problem. now s&p slash its credit rating. and apple spots a spotifying killer. from our world headquarters in new york, it is tuesday, june 30. i'm tom keene. joining me, vonnie quinn. joining us as well, the perfect time to have her on, particularly with latin america and puerto rico churning as well. we get to top headlines beginning with greece. vonnie: it is deadline day for greece. the current deadline deal expiring at midnight. greece will miss a 1.7 billion dollars payment to the imf at that point. cash is running out. the banks are still closed and the greek government sets new limits on pension payments. alexis tsipras is daring

european leaders to throw his country out of the euro area. alexis tsipras: they will not kick us out of the eurozone. because the cost is immense. the economic cost, the financial burden. if the eurozone is dismantled, the cost of a country in default , often to the european bank with great amounts, is met. vonnie: how will the ecb responded greece does not make the payment to the imf? puerto rico wants to put payments on hold. the u.s. commonwealth has a population of 3.5 million and more debt than two american states. the puerto rican governor wants to delay payments for a number of years so the island can get its finances in order.

he says bondholders must make sacrifices, too. >> this is consistent with the responsibility of the administration to not provide a bailout but important advice and expertise that can be used by the leaders of order rico to address these significant ash of puerto rico -- of puerto rico. vonnie: a default appears to be inevitable in the next six months. fitch also downgraded the debt. the obama administration will raise the wages of millions of americans by requiring employers to pay overtime. regulations will cover 5 million workers making as little as $450 a week. many work in retail or in restaurants as managers. apple music goes online today. it is apple's attempts to take on spotify and pandora. they are streaming service is free for the first three months.

then it will cost $10 for individuals, $15 for families. donald trump says he will sue, but it looks like nbc is telling the donald "you are fired." social media exploded after he made insulting remarks in a speech. it wants to replace him as host of "celebrity apprentice." i know a candidate. tom: it just says me, doesn't it? vonnie: say "you're fired," tom. tom: i have to be careful here what i say. i will get two minutes in a penalty box if i say anything about mr. trump. let's get to a data check, and important data check. with the oddity of the market closed in greece come a the vix

closing at -- daniel will join us in the next hour. i want to get to the bloomberg terminal. there is the vix, 19. what an explosion. 3.9 standard deviations yesterday off the recent quiet. the greek two-year is ugly, ugly. euro swiss has not done much. that is important. brent crude at 62.70 as well. this is not the view of many, but i think it is important. here is the deutsche mark versus the greek drama. in 1999 they are joined at the hip and we get this equilibrium between greece and the drop,. this is what was -- and the drachma. this is what would have

happened. here is where we are right now. alberto gallo yesterday looked for a 50% depreciation. mohamed el-erian really out front with this. vonnie: they would still make an effort. their currency is worth, what, 50% of what it had been? tom: we need to begin our coverage, folks. greece spreads are wider this morning. hans nichols is in berlin, but first we go to erik schatzker as he continues coverage in athens. we saw significant protests in athens. give us the color of the protests last night in athens. erik: i would describe it more like a rally if anything. if there was a protest quality to the demonstration, it was against more austerity.

this was solid backing for the current government syriza, and the current governor, tsipras. this protest was staged. it was not spontaneous. there is going to be a similarly staged antigovernment pro-eurozone rally tonight at 7:30 at this time. that will give us the sense of what kind of popular support, if you will, there is among the yes forces. i say yes because that would be the alternative in the referendum this coming weekend. tom: i heard mr. tsipras' comments last night. what does tsipras do this day where they do not make a check out to madame lagarde? erik: a very important point because the expectation is very widely held that reese will not

make that -- that greece will not make that payment at 6:00 washington time, some 1.5 billion euros. to answer your question more directly, we do not know. there may be some back channeling going on between the greek government tsipras himself, and jean-claude juncker, president of the european commission. juncker reached out to tsipras last night, reassuring him that a deal could still be reached under the terms proposed by the troika -- and i use that term determinedly -- a slight softening of the bailout terms that the institutions, if you prefer, had offered earlier in the week, specifically a reduction in the hotel value-added tax. 23% that tsipras had called a nonstarter. if that is happening, all of a

sudden there is a ray of light. we hear from greek media that tsipras is reconsidering this offer from juncker and may take it to his party. he cannot do it unilaterally. tom: thank you so much. now to hans nichols in berlin. this is not just about germany. is it truly a unified union against mr. tsipras? hans: it seems that way. in some ways, matter merkel -- madam merkel's rhetoric has been the softest. we have some stronger words from the italians, who said this is coming down to a vote between the drachma versus the euro. in that respect merkel and her finance chief are the most measured from the european voices i have been listening to this morning.

vonnie: i am reading in "the telegraph" that greece would sue eu institutions and use all of its legal powers in order to not be expelled from the euro. hans: they can sue. that is well within their rights. they would have to find a court. i suspect that is a question for lawyers. it takes a long time, and they are going to have a banking crisis, a very real question of how you make payments inside greece the four you have any kind of finality. look at the omt, right? that wound its way through the courts for three or four years and we finally have an agreement. but it is going to take too long to get through the courts. tom: hans nichols from berlin thank you. we are thrilled to give you more

perspective this morning with a global chief economist at citigroup. that barely describes his contribution to economics, his ability to move the debate forward as he did in 2012. let's look at his comments in 2012, which changed the language of our european debate. tom: professor, wonderful to have you here today. will greece leave the european union? willem: there is a material risk now of grexit, but de facto leaving and legally leaving our two different things. there exists no procedure for exit from the euro. leaving the eu, yes, not leaving or staying in the eu. so this would take years of

judgments by the european court. tom: you are such a student of history on this. if helmut kohl saw what germany was doing right now, how would he respond? is this a new germany or is it a follow on from the formation of the european union? willem: unfortunately, the attitude of the creditors is disastrously shortsighted. they are trying to squeeze blood out of the stone. there has been a massive overemphasis on austerity and under emphasis on reform. the righteousness and self-righteousness of the creditors really knows no bounds. tom: and the trilemma is with restructuring debt forgiveness, and the idea that alberto gallo

and mohamed el-erian are talking about a new currency depreciation. vonnie: there is the immediate problem and then a far-off problem, which nobody is really worried about. you mentioned this kicking the can down the road scenario if they get another bailout. how can that be avoided. willem: it can be avoided if greece continues to be cut off from funding at the emergency facility at the ecb which means it's banking system remains effectively shut down. restore capital controls for limited transactions. the economy collapses, and at some point there will be funny money introduced as a parallel money -- as a parallel currency. tom: is there talk about funny money? willem: until it is more than

scripts, it will be funny money. if it officially becomes tender, and his contracts of greek law are renominated, it will lose most of its value. tom: alberto gallo saying 50% yesterday on bloomberg "surveillance." daniel yergin in our next hour. greece, greece greece -- will suppress resign? it will be interesting to see sunday night into monday, what our team in athens will have for us. stay with us. with willem buiter, this is "bloomberg surveillance." good morning. ♪

tom: good morning, everyone. futures are up 15. greece german spreads widening significantly. here is vonnie quinn with top headlines. vonnie: some two dozen washington state homeowners have nothing but smoldering ruins for their houses. a wildfire could not be stopped before it reached their town about 120 miles east of seattle. several businesses were also lost your the fire was brought under control after scorching four square miles. after four days of losses, the shanghai composite rose 5.5% and it had the biggest intraday swing since 1992. before today, the index fell 20% since the middle of the month. there is speculation the chinese government will take steps to defend market losses from worsening. at midnight, atomic clocks will

pause for what is being called a leap second. the earth's rotation is gradually slowing, so the second is needed to sink clocks. -- will synch clocks. it is a little bit like -- tom: we are also addicted to it on our apple iphones. vonnie: i do not plug my iphone anymore at night. tom: look, vonnie and i have matching cases. willem buiter is with us and we will have extensive discussion on greece as well. willem buiter, on challenges that greece faces. china is the big trend. their equity markets bounced

today. we will look at their swoon in equities. and we must look at puerto rico and the challenges of potential default there. vonnie: speaking of the triumvirate of apple phones, apple music is launching a streaming service. it will feature shows like that from pharrell williams and elton john. it will also share music with fans. will it add to apple's bottom line? here to answer those questions john butler. how on earth did it take apple so long? john co. when you think about it, they are already in music. they are in the digital download business, which is in the process of slowing. if you look at 2014, that business was down 9%. the streaming business was up almost 30%.

vonnie: others have been around for years. why now? john: it took time to get relationships set, to get the artists online, to make sure they had the rights to sell the catalog in a streaming format. and they are there now. the 800 pound gorilla is in the room. this is a big move for apple because when you think about their hardware business, they are running out of runway. the next move is -- this is the first step. tom: i only have one song on my iphone. i will play it in a minute. we look at apple revenues, net income. you have to convince me to get to a trillion dollar company, that green box in the upper right-hand corner they care about music. will they make money on this?

john: they will make money on streaming. i am going to stop. tom: that is area on a -- that is ariana. john: i am a lynyrd skynyrd man. vonnie: -- john: i really do not think spotify is at risk in the short term. they have 20 million users. people are signed up. that first mover advantage that they have, it is tough to unhinge people. tom: is apple going to beat spotify and the rest of them? john: i think in the long-term it will, tom. willem: i listen neither to spotify nor apple music. tom: we are going to come back

in three months on this to see how it is doing. because beats has not been successful, right? john: it has not, but apple is global. tom: coming up in our next hour, willem buiter. daniel yergin is with us in the next hour. his book "the prize and the quest." ♪

tom: good morning, everyone. "bloomberg surveillance peter: here is an important morning must-read. vonnie: talking about emerging

markets and economies, how they will be affected by the fed rate hike. many emerging economies have stronger fundamentals, which will give them greater resilience when the fed starts hiking rates. vonnie: i think that is the widespread fear right now, that there may be the expectation of stress to the economy, but we are not seeing it with greece blowing up. >> certainly. the truth is that currency mismatches are not as big of a problem now in a lot of emerging market companies. a lot of them are mining companies, exporters. the mismatches are not as bad as they were before. vonnie: we saw that the first

time around with some emerging economies. tom: the vix is 3.9 standard deviations. >> but china rallied. tom: we will have our single best chart on china in a bit. let me look at our twitter question. the twitter question -- will suppress resign? the imf -- will tsipras resign? stay with us. "bloomberg surveillance ♪." ♪

tom: did morning, everyone. "bloomberg surveillance peter: we are watching -- we are watching greece. vonnie: a few people expect

greece to pay the imf $1.7 billion. that is the money it does. thousands gathered last night in athens to show their support for prime minister alexis tsipras. great banks are still closed. people can take out the equivalent of $66 in cash. there is no way the euro area -- alexis tsipras says there is no way the euro -- that greece will be kicked out of the eurozone. alexis tsipras: the financial burden, if the eurozone is dismantled, the cost of a country in default open to the european bank with great amount, is immense. vonnie: sunday greece will vote on whether to accept creditors proposals for austerity measures. tsipras will probably call for

early elections. diplomats will not meet the self-imposed deadline on iran's . the u.s. and other global powers want to prevent iran from holding a nuclear weapon. economic sanctions would be eased. new jersey governor chris christie enters the race for the white house today. he returns to his old high school to announce he is running for the republican nomination or president. he was considered a rising star in the party, the polls indicate he has faded in recent months. the state department will release the next set of hillary clinton e-mails today. she used a personal e-mail account while serving as secretary of state. there is a big merger bringing together two firms. the company will be called willis towers watson.

it has more than $8 billion in revenue. a new report says netflix is on the verge of beating the four big broadcast networks. within one year netflix will have a bigger audience than abc, cbs nbc, and fox. the company spends less than major networks and is growing 40% per year. it is moving into more markets by the day. tom: i saw younger people's watching tv statistics and they were breathtaking. do you get -- >> i watch netflix. tom: it is amazing. we need to bring you further conversation on greece. we had a conversation yesterday with asinine co's orphan -- witha athanasios orphandes

yesterday. professor buiter says to focus on the banks are you are in company here with ben bernanke. his major theme was to get the banks in order first. what is the risk to all of european banking? willem: clearly the greek banking system being cut off from the european central bank the euro system. the greek bank unless the tap is open again, our bust. this immediately raises questions about banks everywhere. however unfairly and necessary. questions are raised if the greek sovereign defaults about the solvency.

tom: does a default force restructuring? i cannot get a straight answer. if greece does something dramatic, does that forced the dialogue of restructuring? willem: if greece does not pay its imf obligations, they default to official creditors. there are no implications for the privately held greek -- tom: but don't we have to have a restructuring of all that debt as puerto rico? willem: there is no doubt that that money is gone. when they will end up doing is austerity opportunities. vonnie: a miss payment does not necessarily mean it is in default. willem: it is in default.

it is simply the imf's way of calling default. it is a default -- it has no implications for default in privately held debt, but it is definitely a default. vonnie: can i just bring in a confident -- a comment from joseph stiglitz? here is what he says. tom: let me translate that which i think is so important. what joseph stiglitz is saying is that germany is keeping bnp barry obama -- bnp paribas and socgen in with the greek people.

willem: it is a comprehensive restructuring of the greek sovereign debt and a significant right off of the debt that is privately held. among the major creditors of the greek sovereign were french and german banks. they were effectively bailed out. tom: that is the argument that greece has right now. i want to switch this to a discussion. a number of people have said that argentina matters. let's look at an important quote on argentina. should greece default? argentina is an apt analogy. tom: this is where your expertise in greece comes from. your father is an expert. have you ever thrown a roll at your father at the dinner table?

what does he say on argentina versus greece? >> first of all, argentina is an apt analogy. one of the worst crises in modern history. but the difference is that argentina grew afterwards because they could export. they exported soybeans and they reported all over the world that they had a bumper hardest -- a bumper harvest all over the world. tom: greece does not have the diversified economy that the rest of the world has, is that your point? katia: there is a mismatch that happens, where you cannot repay your supplier. tom: the distinction -- william rhodes at citigroup and others, worked through horrific debts. that is not happening in greece. why not?

willem: not 2001. in the ugly way that greece is looking now. the main difference is that argentina hit a commodity boom off a massive depreciation. tom: how do we get to the time of bill rhodes? if i talked to mohamed el-erian orphanides, how do i get to where we know we have to go? willem: we have to stick the greek sovereign debt back with the original creditors. bill rhodes has a handful of large banks. he did not deal with --

tom: this is like jpmorgan in 1907. they locked everybody in the room and said fix it. vonnie: argentina might have been ok for a year or two but now we are looking at 15% inflation officially. katia: the question is how you manage your accounts when the rain is falling. that is the problem argentina has. they spent, they spend, they spends, inflation flew up. they are locked out of international markets and are able to stay out of international markets because they had the ability to pay their debt. times are changing. willem: each of the disasters got trade back into trouble after a decade because the inflation changed. like argentina they never did. they had a short-term cyclical recovery, a part economic boom

boom, and they are in a mess now. tom: willem buiter is with us for the hour and katya courses can skate -- vonnie: this is "bloomberg surveillance" on television streaming on your tablet and your phone, and of course on bloomberg.com. ♪

tom: good morning, everyone. "bloomberg surveillance." greece-german spreads go wide. right now we get to the single best chart. vonnie: a 5% or so rally for china's main benchmark. the tech-heavy shenzhen index down 20% from its peak area this month after a plunge in the last two weeks. it is today's single best chart. i know that you actually had the single best chart yesterday. tom: there is china, there is a trend, and up we go. that is a regular old chart. we spike up and we come back. we have a long way to go to get back to trenton. -- get back to trend.

vonnie: they are still trying to buoy this market. tom: willem buiter is with us. is china a real system? greece has to work within a real system in europe. is the linkages of china government, fiscal and economics, over to the central banks -- is it a legitimate system or is it completely jury rigged? willem: it is a recognizable em style financial system with a liquid stock market. not much else by way of financial asset markets. the foreign exchanges are still controlled to a significant extent, so the markets are a liquid and thin. -- our -- are illiquid and

thin. it is an attempt i think, to deal in their markets. unless chinese government improve significantly. i do not think there will be a lot of voluntary takers. tom: we will come back with willem buiter in a moment. vonnie: we are starting with greece and athens. thousands of demonstrators rallied into the night. we heard erik schatzker saying 12,000 of them, but it was partially a rally that was organized. tom: erik was specific that it was organized. vonnie: the bailout deal expires today. next photo is uber passengers again. the company just announced a new speedboat service called

uberboat. depending on the route, prices range from $18 to $161. that is something i want to try. number one for our photos today this portuguese man-of-war jellyfish washed up onto the shore this weekend. they tend to grow from 10 to 30 feet long. marine biologists say that there potentially deadly sting can cause -- tom: this is in new jersey? this is on the shores of stephanie ruhle? she will let her children l there? it looks like a worn brillo pad. vonnie: where is snooki when you

need her? she would be able to do something about this. tom: coming up, we will look at something that will be top in the news. greece pushes it aside. not the flag of greece, the flag of puerto rico. the s&p catching up with fish on a c class default. much to talk about. stay with us. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." yields on the move, spreads wider in greece. let's get to top headlines. vonnie: two people are dead after a fire on a japanese bullet train. authorities say a man poured a liquid on himself and lit it. at least 10 people were hurt. the reason for the apparent suicide is not known. uber is expanding worldwide. bloomberg news obtained a document that uber has joined potential investors and generates $470 million in losses. it is growing at an annual rate

of 300%. phil mickelson reportedly is at the center of a money laundering, according to espn. the network says he wired the money to a man who wanted money in illegal -- in an illegal camping operation. tom: why do these discussions every two years circle him? i am not up to speed on it, but it keeps circling. vonnie: he is a beautiful golfer, but i question other things about him. tom: we move on to puerto rico. katia: a debt spiral. puerto rico has been troubled for decades, so why is the island and its 3.5 million people facing a greek like default? michelle caskey from bloomberg news joins us. when will puerto rico default?

michelle: it remains to be seen, but it looks like it is getting closer. their main utility, their main provider, has a july 1 deadline. tom: there is the commonwealth of massachusetts and the commonwealth of puerto rico, but it has a different rule book. is that fair to the american taxpayers? michelle: they cannot go bankrupt. they do not have the legal ability -- their entities do not have the legal ability to file for chapter nine. tom: i am curious what happens to them if they continue the spiral. michelle: if they do a payment default, then you will have a rush of different creditors

heading to different courts suing the commonwealth. katia: what is the argument for them to be able to file for bankruptcy and what kind of people are making this argument? michelle: they are congressional representatives. he has crafted the bill to allow for the filing of chapter nine and that would offer a legal framework, a blueprint, and that would make this an easier process to get through the debt restructuring. vonnie: can't they just put it off? tom: they have been doing that for 30 years. willem: they cannot file for chapter 9. it also cannot call the imf to come in and provide them with funds. it is the worst of all possible worlds. tom: bring up the chart here. i do not -- madame lagarde is

not going to come to the rescue here. this is just one of their bonds from 100, down to 40. they cannot call on madame lagarde or president obama. who do they call on? michelle: they call on their citizens. their citizens will have to endure less public services and pay more in taxes and fees. they will have to learn to live with -- tom: don't they have the limitation of a minimum wage structure? issues where their hands are behind their back tied, because of washington? washington will not bail them out. what is the outcome now that we are finally at this point? michelle: the outcome is that they are going to have to -- they are going to have to start some austerity measures, cut spending even more, and maybe something can come out of washington in terms of -- you mentioned the jones act. maybe that can be changed.

changed from federal minimum wage restrictions. katia: they are going to have to go through some negotiations and it could be painful. what kind of recovery are people expecting on these securities? tom: the bond goes from 100 to 30. where do i asked what do i get? -- what do i get? michelle: their main utility provider their closest entity reaching a possible default -- moody's has suggested a recovery rate from 65% to 80%. tom: that is phenomenal. willem buiter, is this part of the new mediocre? whether it is the philippines or argentina, as katia mentioned earlier? willem: this is a very old

problem and i think is part of the old mediocre. the new mediocre affects a whole lot of countries that were previously viewed as sound. it is a global issue now, no longer an issue specific for countries. vonnie: about half of mutual funds are possibly invested in puerto rico. will some be mandated to get out? michelle: no, because puerto rico has been at a grade for a number of years. tom: michelle kaske, thank you so much. willem buiter, thank you so much. let me do a forex report. what a shock -- euro stronger yesterday. a reald linkage -- a real delinkage.

the euro doing better at 1.1177. from new york city, this is "bloomberg surveillance." ♪ . .

>> this is "bloomberg surveillance." tom: this is the day greece will

not pay the international monetary fund. greece will decide its future. greek yields ever higher. default and oppression back in. san juan, we have a problem. s&p/their puerto rico credit rating to credible default. and a new economy this hour, for the entire hour, daniel yergin will join us. good morning, everyone. this is "bloomberg surveillance," we are live from our world headquarters in new york. it is tuesday, june 30. vonnie quinn, brendan greeley is off, katia porzecanski joins us from bloomberg news. the president of brazil will dine with the other president at the white house. very important. when he to give you an update on greece without top headlines this morning. here is vonnie quinn. vonnie: the fed widening because it is the day greece loses

the protection of the bailout. demonstrators are protesting the austerity measures. the government says it will miss the big payment to the imf that is due today. the current bailout runs out at midnight, but the prime minister is daring its european neighbors to push his country out of the euro area. >> they will not kick us out of the eurozone, let me tell you why. because the cost is immense. the financial burden -- the eurozone is dismantled. the cost of a country and default open to the european bank with great amounts is immense. vonnie: tsipras is telling people to vote no. the government says new limits on pension payments.

puerto rico wants to put its debt payments on hold. the governor says bondholders must make sacrifices, too. puerto rico is a u.s. commonwealth, but there will be no rescue from washington. >> this is consistent with the response ability from washington to not provide a bailout but important advice and next her teeth that can be used by the leaders of puerto rico to try to address the significant financial challenges that they face. vonnie: puerto rico's debt has been downgraded by both faith and standard & poor's. many americans will see more money in their paychecks thanks to a presidential order. the president is requiring employers to pay more over time to workers, many of them at retail or restaurants. they do not get overtime now because they are classified as "managers." apple has a streaming music

service, free for the first three months after that $10 per month for individuals, $15 for a family. apple says that supplies unlimited access to tens of millions of songs. donald trump says he will sue. the network nbc is telling the donald "you are fired." he made disparaging remarks about immigrants and a campaign speech. nbc will not air either of trump's beauty pageants, and it wants to replace them as host of "celebrity apprentice or." tom: poor donald. the price he has paid -- vonnie: what do you think -- tom: i have never seen it, to be honest. let's look at equities, bonds, currencies, commodities. the euro, the real story has

been immune so far. mario draghi doing a wonderful job of being silent as we look at the greek chama,. yields are higher greek spreads have widened out as well. markets are open, they continue to deteriorate around greece. our hans nichols is in berlin this morning, and he continues his coverage. erik schatzker in athens. erik, anything going on from your view? erik: i would not describe it as negotiating. it is still posturing, tom. an hour ago, your call, it seems there might be a reason to believe the door to a was cracking open. i'm not sure i would describe it that way any longer because we learn things from the european union an official spokesman saying that alexis tsipras, the greek primus or, did place a call to jean-claude juncker last

night, and he told him the deal is still possible, but it is the deal we offered you over the weekend, and furthermore, here are the sticking point. you, mr. tsipras, would have to write a letter explain how you would get this done, and beyond that, tom, you would have to campaign for a yes vote in this weekend's referendum, a u-turn from the no vote that he has been calling for thus far. tom: erik willem buiter said if we saw depreciation the people of greece would be armed. in your walks around athens, is a nation preparing for depreciation? erik: they have been preparing for something like that for some time. remember, greece has been hurdling toward some kind of an up for several weeks and months already. i would say this, tom, that pensioners are beginning to feel it right now and the reason i say that is that as of

yesterday, the government told pensioners that those without a debit card could go to a bank on thursday, banks were going to open, they could go to a bank on thursday and withdraw 240 euros per week. now they are being told -- so remember, individuals with a debit card can take out 60 euros per day. the pensioners were being told they could get 240 euros per week. the government then backtracked and as of this morning, the banks will open tomorrow, 1000 branches, and those same pensioners will only be allowed 120 euros a week, so two days' worth of atm transactions. you can imagine the hardship of these pensioners, who already only get something north of 600 euros a month. and what is it that is motivating this? it is not entirely clear why the government is fumbling these discussions and leaving its most solid base of support in such a depressed condition. tom: ok, erik schatzker in

athens this morning. let's turn our attention to berlin on the other side of this equation. hans, what will go on in berlin today if greece misses its payment to the international monetary fund? hans: well they are waiting, like everyone else. parliament will have a big meeting tomorrow. a german government official completely snuffed that out and set it is far too late for talks to be starting. as far as a practical matter, it is too late when the payment is due. looking cosmically at the situation, you had mr. tsipras reject a proposal, then calling campaign for a formal vote against it. there's no way that mr. tsipras is going to turn about and write a letter to angela merkel and say, "as a matter fact, i was wrong." guys? tom: hans nichols, thank you so much. erik schatzker in athens, hans

nichols and berlin. right now, daniel yergin joins us. vice chair at iss. that does not describe his literature, "the prize" from years ago, and then "the quest." you are a little experience with this. i think of madame lagarde's "new mediocre," do you think greece and madame lagarde's new mediocre is a paradigm for the economy? daniel: i think the term "new mediocre" -- i asked her about it, and it cannot of a document termed "new mediocrity. " it basically describes a world that is not performing the same way. tom: are there elements of the chernin we have now and that so many feel with what you wrote about of the 1930's?

daniel: 2008, you could sort of feel the banking crisis of the early 1930's was is a few years earlier. i think we do have a very turbulent summer culminating in that period in august where you often have financial crises. tom: ok, so he is setting his calendar to it. vonnie:! august! daniel: people are on vacation and things are building up. the reaction you're getting, and you saw from the imf them a talking about childish behavior, the people running greece now are not serious. they would not play these risks. someone suggested that actually the greek government would do much better if they could outsource its negotiations to the iranians. tom: i like that. we will talk about that later in the hour with indira lakshmanan. katia, is not like you need to take the month of august off. katia: i would love to. dan, do you feel that the issues

going on in europe and greece could interrupt that trend? daniel: absolutely. i think slower economic growth the uncertainty of what is going to happen to the economy could certainly be a factor, combined at the same time this wave of iranian oil may come back into the market. tom: daniel yergin with us for the hour. we will streak of oil and particularly the visit of brazil to the white house. we will discuss brazil here later in the hour. we have a twitter question of the day -- of course not all puerto rico -- pushed aside by what is going on. the crisis in greece -- will tsipras resign? good morning, everyone. ♪

tom: good morning, everyone. "bloomberg surveillance." justin fox joining us yesterday on the show, of bloomberg view he wrote an important economic pace yesterday on uber. it would be one thing if they were all a zero-sum game in which uber cars simply displaced existing taxis. but it seems like -- i do not know a lot of hard evidence that one can point to just yet -- uber and other app-centric, easy to use car services are actually

increasing the size of the available market." the first thing i thought of was jacob viner in chicago and mercantile it he and his classic 1946 paper, which is zero-sum is not the way we look at things. you capture this beautifully in your writing. it is not a zero-sum world, is it? daniel: no, no. is a world in which it is so interconnected and the benefits flow back and forth, and problems here way down. there is a tennessee for weaker times to try to maneuver the -- there is a tendency for weaker times to try to maneuver the merck until is mercantililitty. i think the germans made a political decision about these euro not really an economic decision, but it was to tie what is still addressing the problems of the 21st century. vonnie: we are headed toward

globalization, embracing capitalism, so forth. that is turning, a little bit. daniel: on the one hand we are more globalized. just look at the instantaneous connection. how quickly a firm like uber will spread across the world. but on the other hand, the rebellion, more government intervention, it controls the economy either directly or indirect like him and when you have a financial crisis, this is the way -- this is the issue. tom: katie, jump in here. reinventing brazil economics, where is that today for greece? katia: you mean the central bank's president? tom: a great guy. where is the fraga fof greece? daniel: i do nothing grace is

there. they're playing a game of chicken, and the consequences tsipras has taken it over a brink. tom: daniel yergin with us, yes we will speak of brazil. coming up david côte talk of cumberland advisors. on puerto rico. good morning, everyone. this is "bloomberg surveillance." ♪

tom: good morning, everyone. good morning, "bloomberg surveillance." we welcome you around the world and coast to coast. here is what he top headlines. vonnie: -- here is vonnie quinn with top headlines. vonnie: a wildfire could not be stopped before it reached a town to about 120 miles east of seattle. several homes and businesses were lost. the fire is under control after scorching or square miles. stocks in china faced the rig's

rally in more than six years. after four days of losses, it is five point 5%. it also had its biggest intraday swing in 23 years. the index has an pulling more than 20% since june. investors are waiting to see if the chinese government will intervene to ease those losses. and you can get an extra second of sleep tonight as midnight's atomic clock will pause for what it calls a leap second. traders and tech firms are wary of computer glitches. three years ago, reddit mosey zilla and others crashed for the leap second. tom: we have got breaking news right now. of course not a surprise official. they will not pay the imf.

yanis varoufakis of greece says a check will not be cut to the international monetary fund. this is very important, certainly to sunday's referendum and then on to july 6 as well. greece, well, there it is, the moral hazard of not paying a check to the imf, or to be accurate, mr. tsipras has redefined banking efforts. san juan has its own moral hazard this morning. david kotok of cumberland advisors, his update on greece and his important comments on puerto rico where he spent a lot of time. david, good to see you. we've heard from daniel yergin and others about the moment. what are you focused on? are you focused on athens brussels, or is there another geography? david: i think greece is re-fenced and contain. if the united states lost rhode

island, we would not like it. tom: without mean we would not get near again narragansett lager beer? david: the baklava will either melt or it will not. tom: you look at this 2.9 standard deviation. this is an opportunity to acquire shares? david: right into northern and central europe germany is available, for sale, it is cheap for stuff you want to own a company like siemens when you can buy a cheaper. tom: when you look at us, you have to work out currency dynamics. what is your call on euro away from the game on greek depreciation? david: euro's headache for weakness, our view is parity then $.85 long run. tom: daniel, we have much more floating exchange rates -- i think of the adamant of the advantages of floating currencies. daniel: it gives you adjustments much more quickly.

tom: much more of an adjustment and what we saw pre-world war ii, right? daniel: right. vonnie: if it floats away, it is gone doesn't that make a mockery of monetary unions everywhere you go david: sure, but the mockery was made when it admitted greece come it became the 13th country and then it failed. then it raised the gdp by raising services, which is a new estimate. otherwise the sales again. daniel: david, you do not see the other southern countries and some ways be affected or following suit? david: it's greece say then, it is a can kick, it goes on, and we see this again in a couple of years. if greece is out, then the rest of the peripheral countries look at greece and say -- do we want to live like that? a real, severe recession, no capital -- tom: 50% appreciation. just because of time, david, we have got to move to puerto rico. katia you have really look at this. katia: absolutely.

there's so much going on -- ukraine greece, puerto rico, argentina isn't the fault -- what are your thoughts about whether not puerto rico will be able to declare bankruptcy? david: they do not have a legal way to do it. that has got to be resolved. they have got to restructure debt. there was a huge move in those markets yesterday. it is important for people to understand are many institutional holders under a nondisclosure agreement trying to negotiate a restructuring with the agencies in puerto rico and because of the nondisclosure agreements, they cannot trade. they are under insider trading rules. they can trade with each other -- tom: do you trade the paper? david: only if the structure in the bond gives us -- tom: are you are sure to frisk this morning? i've heard they are not at risk before and then oops. daniel: how did this come from? david: it has been going on for years.

the issue is this -- and i think the most important issue is we are getting new pricing of hazard. we know the banking system price is 10,000 euro for every greek citizen. that is what the ela balance is for 11 million. tom: daniel yergin, what is the moral hazard to angela merkel? speaking of the political mandate of the euro, axel weber speaks about the euro experiment and such. what is their moral hazard? daniel: i think for her, also the question is german taxers want to be paid back. they do not want their money to disappear, so that is a very fundamental thing she has. she has a lot of pressure, keeping this together, the french government, and she is interlocked with putin, so she is dealing with two sets of crisis at the same time. tom: there is too much going on. you just brought in putin.

david, thank you so much, with cumberland advisors. a really real-world perspective on tax-free bonds. vonnie: that is for sure. coming up, the latest on the iran nuclear talks it in vienna coming up here on "bloomberg surveillance." ♪

tom: good morning everyone. "bloomberg surveillance." i am tom keene, katia porzecanski with us this morning, and vonnie quinn. top headlines. vonnie: little quote battle up -- political battle lines between greece and its creditors. the government says it will not

make a big payment to the international monetary fund that is due today. demonstrators are protesting the austerity measures that european creditors are demanding. the chi greek -- the chief greek economic spokesman said there is a huge gap between what is proposed in what is needed. >> we have to have an agreement and that must mean that there has to be an agreement on fiscal issues, on structural reforms, on investments, and on financing, and that the whole package puts to the side -- vonnie: premise or alexis tsipras is telling people to vote down the austerity plan is up for referendum on sunday. things are close, cash is running out, and the government set new limits on pension payments. diplomats say they will not meet today's self-imposed deadline for a deal on iran's nuclear program, but negotiators in vienna says there could be an

agreement within days. u.s. global powers want to keep iran from building nuclear weapons. if iran agrees to it economics engines would be used. new jersey governor chris christie is launching his political campaign today with a rally at his hometown high school. he is the 14th in the declared republican candidates. the latest poll shows he is supported by less than 1/3 of the state's voters. and the next chunk of hillary clinton e-mail survey, using personal accounts while serving as century of state. your electric is moving quickly in his plan to divest most of ge capital. the european finance unit, the buyer is a japanese company. ge wants to shift its primary focus back to manufacturing. a new report says netflix is on the verge of being theating the four

big broadcast networks. and a year, it will have a bigger audience than abc, cbs nbc, and fox. the company spends less on content than the major networks, and netflix is growing 40% a year. tom: the combination -- vonnie: i have watched nearly everything. they will have to start spending more soon because i have watched it all. tom: let's go to the terminal. with yergin, with buiter, the greek drachma, this is the euro the euro with a disadvantage degrees. is this sort is where they are. this is a 50% appreciation that alberto garlowllo at rbs said will completely crush all of greece. this is the mexican

depreciation katia. compare and contrast what happened with mexico and what happened with argentina more recently. katia: more recently? mexico is doing what it needs to do to gain investor confidence. argentina is doing the exact opposite. it is not negotiating, it is not doing anything creditors wanted to do, and it is in all the wrong economic things. tom: daniel yergin with us. i think raghuranm rajan quoted perfectly, the roles of the game -- "mexico wants to play by the rules of the game, argentina does not." what does greece want to do? daniel: it wants to go its own way for stub and degree, in a fantasy world, which imposes a great cost on its population. they are playing a political game, and they do not know what the conclusions are. vonnie: if we do end up with a new script, we were speaking with willem buiter earlier, it

is not mean greece will not be able to buy anything imported at that point. daniel: it means that every thing will be a lot more extensive because they will have a depreciated currency as they bring back the dropachma. the only benefit is for bringing interests. -- in tourists. tom: very quickly, how do you respond to the stigma that germany is not playing by the rule of the game? daniel: that is the viewpoint that is germany's trying to keep the complicated machinery going, and in terms of our relations with russia or the economy, it is germany's foundation. tom: only yergin would say "complicated machinery." that is fabulous. can i steal it from you? let me do a data check here, equities, bonds, currencies, commodities. it is an odd data check. we rebound off of yesterday

futures up 11. the two year yield, higher yield euro returns the man with strong yesterday, but they lit miss paper, the tea leaves of greece go the other way. greece spread widening out right now. it is a tale of two markets as we go into this tuesday morning. vonnie: this is "bloomberg surveillance." i am vonnie quinn here with tom keene, and today katia porzecanski is sitting in for brendan greeley. talks aimed at easing international sanctions for iran have a deadline today. the iranian president's brother, meeting with secretary kerry. bloomberg news reporter indira lakshmanan joins us, and -- via skype from tehran. indira, are things inching closer to a deal?

indira: this building right behind me, the palace, all of these meetings are taking place, secretary kerry a lengthy visit this morning, not only with the iranian foreign minister javad zarif, but also with the head of the economic energy agency, and also the brother of president rouhani. it will be a group of different meetings among foreign ministers here today. we are really getting down to the crunch. they are unlikely to meet today's deadline, but the signs are more and more they will come up with a deal in the coming days. vonnie: gola i go to you in tehran. the delegation that has gone from tehran to the and a, what will they have decided it upon in tehran?

gola: i did not get the last part of your question. vonnie: what will they have decided upon in iran before flying back to vienna? golnar: i think it is a sure sign that there is a sense that the deal is imminent. i day that is the interpretation from here, the fact that they are planning to vienna like indira said rouhani's brother the head of the atomic organization, that is a very interesting sign. obviously there is a sense of eminence that within the next few days, you know, there is going to be some crucial meetings going on, and i think you sense here that the deal feels -- tom: golnar, thank you so much from tehran. daniel yergin with us with indira lakshmanan. it is 94 miles from dubai.

it is an iran you wrote about at links in "the prize." what is the report is about what secretary kerry is trying to accomplish given the new geopolitics? daniel: well what he is trying to do is a really big thing, and the idea of that is that if it works, it opens way for a lot of other things to happen. i think the fact that the head of the atomic energy commission, former phd of m.i.t. of physics they are down to be fine point. i think they have a view that if this works, this opens up a wider range of collaboration or communication with iran. that it's really the bottom of this. the other point is the view their argument is if you do not do it, it is going to be worse because they will go ahead anyway and have lots more centrifuges.

the thing is that the arab countries are worried not only about iran going ahead with a nuclear program. what is really worrying about as that iran can get up to $150 billion out of this and people say oh, they will spend it on infrastructure -- tom: how does the united arab emirates response that 94 miles away? daniel: two ways, one with great nervousness. one minister said we have to maintain our military edge. on the other hand, because of their history, they will see a lot of commercial opportunity if this thing opens up. a lot of the dubai population is iranian origin. vonnie: it is not even the oil at the end of the day, it is about the hard cash. daniel: it is the hard cash. iranians might put up to 600,000 by barrels a day. has blood costs -- hezbollah costs billions of dollars to run. extra money could cause mischief. tom: daniel yergin, stay with

us, yes, we will speak with professor juergen about -- professor yergin about brazil. futures up 11. it is another quiet morning. stay with us. "bloomberg surveillance." ♪

tom: we have breaking news.

sometimes it is not what you do say, it is what you do not say. chancellor merkel speaking -- you would think it would be on greece. there is a little bit on greece, but much, much more on eastern european relations. she will travel to eastern europe here in a coming days. she takes a moment out to try to run a country away from greek crisis, and of course chancellor merkel has been more than busy with the back-and-forth with brussels and with athens as well. so much more there, vonnie. vonnie: it helps that we have daniel yergin on set with us because an hour, "market makers" with special covers on climate change -- coverage on climate change. matt: we're going to talk with a guy who is the ceo of a company whom electric buses. they have projects in seattle

nashville, tallahassee -- the company called pro terra. they're looking to expand, and they are in the process of raising more money to do that. tom: daniel yergin, copenhagen was an absolute disaster. they say their surface is a better world. -- word. michael bloomberg writing yesterday on paris. give us your optimism that something can be done in paris. daniel: i think the momentum is there, and what you're going to do is get a little parallelism. today, president obama and president rousseff of brazil will announce a climate dialogue like president obama did with the chinese, so everybody's kind of working to get there in parallel, not with a master agreement but rather all countries. tom: maybe some humility has crept into the dialogue. what are you going to do on greece, matt miller?

matt: obviously greece is first and foremost in our mind, but in the headlines as well. we will be talking to someone of the brookings institution about what he thinks the possibility are, that a no vote means it is over and they start issuing ious''s in drachma. tom: i have not seen anything that there will be a no vote. matt: i have not seen any predictions -- daniel: the question itself is very complicated. you need a masters in economics to understand it. vonnie: it will be basically a short yes or a short know, do you accept either of the two proposals? tom: matt, you and i cannot fill out this referendum. matt: just a checklist of the question is -- what does the check mean? on the one hand, ts ipras says a no means a stronger bargaining. vonnie: i want to hear about the grateful dead concert. matt: it was all that i expected and more. tom: was this team coverage? matt: a number of bloomberg as

cory johnson was there as well. [laughter] it was a little reserved, i thought the second set, the second night was really the cap. vonnie: you have to go back for the second night because he was not quite sure for the first night. matt: i may go back next weekend in chicago. tom: you were not expecting this, did you? vonnie: we were not expecting the twitter answers. we asked -- will tsipras resign? keep tweeting us @bsurveillance. ♪

tom: good morning, everyone. "bloomberg surveillance." let's get right to top headlines with vonnie quinn. vonnie: indonesian authorities say at least 37 people are dead after a plane crash today. the military transit or to plunged into a neighborhood in the country's third-largest city. the hercules was carrying 50 people. it had engine trouble just after takeoff. uber is losing hundreds of millions of dollars as it expands worldwide. it says the country has $470 million in operating losses on $415 million in revenue. the timeframe is not clear. the prospectus says uber is

growing at an annual rate of 300%. a new report is linking golfer phil mickelson to a gambling case. espn said the store wired nearly $3 million to an intermediary who runs an illegal betting operation. that man is being charged. mickelson is not charged. he is not commenting. i wonder, is the pga commenting? tom: what we've seen a baseball and others as well. a lot of people have been waiting for this -- i thought it out on twitter as well. the bricks -- they are broken. much of it has to do with collapsing commodities particularly oil. after a private or of the martin luther king memorial monday, the president of brazil will dine with the president of. energy near independent america. all will be well except it is not. the great questions of the coming decade, the quest by

nations to control their oil or let big oil in. brazil and petrobras being one of them. daniel yergin with us, his must-read of course "the quest." is it a metaphor for where the oil economy is going in the next 20, 30 years? daniel: i think it is. yesterday the meeting here in new york with president rousseff, the very definitely shamanic there, she said it publicly, china was to a large degree driving the brazilian economy, and certainly driving the cost of oil, and the recognition -- that is over. it is a different era, we are in a new era dominated by u.s. shale. tom: the economy independence of america, changing this is oil adjusted for inflation. for those of you on radio, i will put out this chart, katia porzecanski, in 1986, there we are down again today are cheap

prices on oil. katia: absolutely. with brazil, they cannot cut a break. with petrobras, they have policies that are strangling it. will rise as go up they lose money -- oil prices go up, they lose money because they have to selling cap prices. he said brazil is going to be the powerhouse of oil by 2020 in latin america, but mexico is opening up. has your opinion changed on the matter? daniel: yewahah, yesterday the new president petrobras announced a much lower budget, lowered their estimates for what the 2020 production will be because they got themselves into this and where petrobras had to be in everything. 30% of every deal, way too much debt on its shoulders and beyond its capacity, and they have these local content rules that drove up prices, meaning that you know i talked to the ceo of one oil company who said brazil is not on our agenda. tom: all of us have read cover

to cover, mentally like the advent of shale petroleum was out of a suitcase. it was a guy traveling, working out of a suitcase. the romance of that is over. are these institutions in charge of their destiny? is russian oil in charge of its destiny, or as exxon? daniel: i think right now what is in charge of the destiny is this new country, the swing producer in world oil, which happens to be the united states, hundreds of producers in the united states plus wall street plus financers -- that is the swing producer right now. tom: is there enough humility there in case edward morse gets his lower oil prices? daniel: there is already been what john d rockefeller would call a good sweating. they will bounce back from it. the thing about brazil, to go back for that, remember, three years or four years ago when president obama went down to brazil, he talked about giving money to brazil to produce oil so that the united states could imported.

that is how quickly things can change. katia: speaking of petrobras, it has great assets, but it has got a huge debt burden and it has the profit branding policy. do you think it will ever regain its status of being a well-run national oil company? daniel: technically, petrobras is. it is at the forefront of the offshore -- it discovered the pre-fault, which people did not think was possible. technically it is a very accomplished and capable country, one of the pioneers of the offshore. i think they have to cut through the debt problem, they have got to get away from the policies they have, and the new president -- by cutting the budget, they will divest resources. they have got to get back to focus. tom: mexico is doing that in their own way. are you optimistic about russia doing that? daniel: i think russia was opening up to western

technologies, then ukraine came and it shut down. no russia is saying we are going to reorient to china. russia is now overtaking saudi arabia of the largest war and supplier of oil. tom: in 12 months, everyone wants know what yergin guesses the price is. daniel: with all the caveats about iran -- next year, i think prices will be in the mid-$60-i sh range. check back in a year, and it depends what happens in the world. vonnie: i was going to ask you -- what is the most interesting debate for you going around the world? energy in u.s., exporting oil, iran, iraq coming on mine again? daniel: of all of those come exporting oil is still a very hot question. we are the largest exporter of oil products, but we do not export crude oil. we want to balance the system. i think it is iran coming back into the market and the impact that has and how the iranians want to manage that. vonnie: all right, it is time for our agenda now.

of course i will go because i have been talking about something you have been mentioning, the exxon bank is losing its charger today. it is a big read in the "financial times," if anybody is interested. tom: jeffrey uimmelt of ge is heated by this. vonnie: of course, he is one of the benefactors. a classic boon -- daniel: i talked to a republican congress that who is against it. ge, boeing, but what about all of the small companies that also depend upon it? he said they should be able to get it, but if there is no bank no one gets it. tom: of course, a conscious agenda is south of the border. which country? katia: i'm looking at puerto rico. i am always looking to see how countries handle their restructuring. how countries treat their creditors and it restructuring and how creditors fight among themselves.

where is the money going to be allocated, who is going to get paid? tom: is puerto rico buffeted by the new cuba? the new cuba coming. what does that mean for the commonwealth of puerto rico? katia: i am not sure, but nothing is going to happen with cuba anytime soon. that is going to take a while. tom: my agenda -- we save greece for the last, and of course it will not go away. my major agenda on greece is the disagreement over some form of new currency or whether it will be restructuring forgiveness or a new drachma and depreciation. i thought mohamed el-erian is on this. he really stuck his neck out. daniel: what did he say? tom: that we will see some sort of depreciation. a very high probability. vonnie: speaking of, our twitter question of the day, we asked -- will tsipras resign? here is the first question we

chose. he would have to resign after a yes vote but we will not as he will get a deal done before sunday to save his job. i'm not so sure about this. second answer -- if it goes off he should, but then junk cker, lagarde will not be far behind. tom: that is the pessimism. vonnie: leave the euro and returned to the drachma. tom: that is the view out there. vonnie: i would hesitate to guess that might be a greek person. tom: i don't know. i would go to where willem buiter was, which it is about pensions. vonnie: does greece have a destiny? tom: i do not know. the red sox had a destiny, and it was terrible. daniel yergin, his new book is

"bequest." we continue on bloomberg radio with our discussion on international relations heard "market makers" next on bloomberg television.

announcer: live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. stephanie: it is tuesday morning. you're watching market makers. i'm stephanie ruhle.

matt: eric is in athens right now. there is a lot to talk about concerning greece. the potential default in puerto rico. the governor revealed his latest plan to revive the economy late yesterday. we'll talk stephanie: i thought you came to tell us about the dead show this weekend. matt: probably throughout the next few weeks. stephanie: describe it in one word. matt: it was all i expected and more. stephanie: we will get that for the next two hours. maybe the next two weeks. the top stories of the morning. so much talk about a last-minute deal. greece will not be making that $1.7 billion payment to the imf that was due today. the greek finance minister confirmed that this morning.