it is the new american banking on. jpmorgan reports tomorrow. we consider the future of wall street. and slovakia is not greece. sir howard davies, the former prime minister of belgium and hosni nichols from brussels. olivia sterns and david gora in athens as well. this is "bloomberg surveillance ," live from our world headquarters in new york. vonnie quinn is with us with the news. first, brendan greeley, what is your headline of the two hour cacophony? brendan: this is not a bailout. it is the discussion of the possibility of a bailout. tom: that is the theme for this hour. not a lot of answers right now, but a lot of questions. sir howard davies will join us in the next hour.

right now we need to get you caught up here and here are the top headlines with vonnie quinn. vonnie: alexis tsipras has run up the white flag. calling for immediate action to a -- with a bailout. plus, greece will have to transfer $55 billion worth of assets to a holding company. german chancellor angela merkel says it is about time for greece to take responsibility. angela merkel: trust has indeed been lost but we all know that what will the important is to implement what we have agreed on doing. vonnie: tsipras own party

mutinied when he asked for the endorsement of a new austerity program. a new deal on the iran nuclear program could be announced as soon as today. negotiators want to stop iran from making nuclear weapons. any deal would still have to be reviewed by congress. senate majority leader mitch mcconnell told fox an agreement would be a difficult sell. the crowded field for the republican presidential nomination gets bigger today. scott walker will join the race or he became the first governor in u.s. history to defeat the recall election. contract talks begin between the uaw and the big three automakers . the union wants to reduce the pay gap between new hires and workers with longer tenure. the industry says the two-tier system is why automakers have been able to add tens of thousands of jobs in the last four years. and golf, jordan spieth heads to

this week's british open on a hot streak. he won the john deere in a playoff. it would make him the world's top-ranked golfer. those are top headlines. tom: let me get to a data check right now. you are seeing a celebration, a pullback here. futures up 15. right now the euro, we almost got to 1.12. we pulled back nicely, one point 1081 -- 1.1081. i want to get through this so we can get to hans nichols in brussels. the vix that is where we close on friday. the big news is that the swiss franc does not move. that is an indicator of the doubt and the mystery of what is going on in brussels. this goes back to the tension over the weekend of finland and slovakia. here are slovakian bank deposits

from 2005. up, up, and away. nice solid growth. you compare slovakia to greece and you can see the train wreck of greece as well. brendan: over the weekend, another member of the schauble block, finland and estonia, these are countries that have dealt with their own pension reforms that have done the lowest work in the past 20 years and are looking at greece and wondering why they should help out. tom: is ireland part of that block? brendan: know ireland is somewhat -- no, ireland is somewhat different. they have been a little more receptive to the idea of changing the structure of the debt. tom: now we need to go to brussels. after marathon meetings, the modest chaos of this monday. olivia sterns and david gora will come to us from athens through "surveillance" this morning. hans nichols is in brussels and

joins us now. if you were to speak to a family member about the madness of the last three days and they said to you where are we right now, give me a hint -- where are we right now? hans: sort of the end of the beginning. we have a lot more to go. we are still in limbo because we do not know if athens will be able to pass these things, and we do not know how far mr. supers will travel at home. he has trouble -- mr. tsipras will travel at home. he has traveled far. will he accept the things he has agreed to hear? they are quite extraordinary. tom: brendan has a statement that has been printed out only moments ago. who put a gun to greece's head? who do you say did that? hans: more than one person in the room. we would be remiss if we reported it was just germany ganging up on greece.

we understand holland benevolence was quite firm as well. we are getting a picture -- we understand how holland, netherlands was quite firm as well. we are getting a picture. it looks like greece is going to lead. the and up rescuing it in large part because of the 50 billion euro fund. it is housed in athens, not luxembourg, the big victory for tsipras. brendan: the note that came out of the summit reads, "the euro summit takes note of the urgent financing reads of greece -- urgent financing needs of greece." there is a distinction between that and the possible much larger bailout. how do they make sure that these very immediate financing needs are met? hans: that is what they are doing in brussels in the next couple of hours. the bridge financing, the short-term financing. it does seem to me -- i do not

want to say a rounding a=error because the numbers are not small. we still do not know whether politically it is viable. will it survive in athens? we simply do not know. yes, there is optimism. yes, there is clarity, but we do not know if there will be clarity from athens. tom: i am baffled about where we are by wednesday. brendan: we are going to have olivia sterns in athens helping to understand whether or not alexis tsipras can get it done. also, the former prime minister of belgium, current rockstar on the internet, will talk to us about what happens next within the institutions of europe. this is "bloomberg surveillance ." a lot going on. good morning. ♪

tom: a snapshot of athens. it is the athens that brussels knows so well. this is the athens of people lined up at atm machines. good morning worldwide particularly on the continent of europe. rendon? -- brendan? brendan: a european parliament debate went viral. the former prime minister of belgium scolded alexis tsipras and made the classic liberal case on how to fix greece. he joins us now. you discussed a vision of a reformed, functioning greek economy. does this agreement get us there? >> partially, i should say. it is not perfect what is on the table now, but at least for the first time, the greek government is agreeing to do a number of structural reforms, a

system organized by the political parties in greece. also starting by abolishing a number of privileges, like is the case for shipping, the trade industry and for the greek islands. so it is a start. it is a start, and what is more important, we can fix now the greek economy and greece without greece going out of the monetary union. brendan: from your perspective what is the most important part of the agreement, the structural reform or the promise of future austerity through pension reform? guy verhofstadt: the most important is now structural reforms because we got already all the austerity measures in the past, and it did not help to solve the greek crisis. for the first time you see also reforms opening a number of markets, downsizing the public

sector. also ending another -- also ending a number of privileges that exist in the society, and certainly one of the most important things, ending the corruption because there is one billion euro going into corruption every year in greece. so i think it is a good start. the proof of all of this is in the eating. it shall be necessary that the greek government is implementing all of this, and that is the discussion in the eurogroup and in the u.s. summit this night, that is to have additional guarantees and neck and isms so that we can be sure that at the end -- and mechanisms so that we can be sure that at the end greece can have reform. brendan: can alexis tsipras

regain the trust of his negotiating partners, or is brussels quietly hoping that it fails? guy verhofstadt: we hope that he can deliver now. he could -- a few days ago, you remember that 251 of the members of parliament voted in favor of this, and i am quite sure that this majority including opposition parties in greece can sustain. that said, all this gives for us a lesson for europeans. this is not the way to govern a currency union. we need to fix it in another way. having these nightly debates between 19 ministers of finance and the heads of state. that is not the way to do it in the future. tom: the headlines are garnered

over the weekend by finland and slovakia, and i am struck by the cultural distinctiveness of each of these nations. belgium has an absolute history and culture that is about politics, is about diplomacy and discussion within a nation. what can the greek people learn from the belgium -- from the belgian people about getting forward in such a fractious moment? guy verhofstadt: we did these reforms already a few decades ago. i can tell you in the 1950's and the 1960's of the last century belgium had political parties weaving and dealing having clients as their electorate, and we managed to change that mostly in two decades. and we became a modern country

in the core of the european union. that is also possible for greece. i am pretty sure that mr. tsipras, if he uses his majority , the mandate that he has from the parliament and from the people in greece, the citizens he can manage to do so. we can push him in the right direction. brendan: you say that this is not the way to govern a currency union just now. so obviously changes have to be made to the eu treaty. how do you get from where we are right now to the possibility of a new treaty when it was so painful just to get to lisbon the last time around? tom:guy verhofstadt: that is more and more proof of the fact that we need to have a number of changes in the next year. first to solve the british issue . if we want to solve the british issue, maybe some treaty changes are going to be needed.

also to fix the economic governance in the eurozone is absolutely necessary. we have seen in the last hours the rising party from finland, and increase they were governing mainly the eurozone outcome are in that is not possible. we had to get rid of unanimity inside our treaties and inside the decisions in the eurozone. it is impossible to manage to govern a currency union based on unanimity where one country or even one small party in a government of one country can block the outcome. we need to come forward with a real economic government in the eurozone and we need to establish a treasury in this eurozone, and we need also, i think, a common governing depth

redemption fund. what is a far better way to resolve this crisis than these bilateral battles? brendan: thank you very much guy. guy verhofstadt. it is time for our twitter question of the day. it is the only possible question we could have asked. is this the last bailout for greece, if it in fact comes through? let us know @bsurveillance. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance."

i'm tom keene. brendan greeley and vonnie quinn with us this morning. let's get to the morning must read. i waited to get important announcement out of brussels this morning. a blistering known for ing bank -- -- a blistering note for ing bank -- tom: that really drives forward the dow. we have seen the markets with the swiss franc really not moving. brendan: the most important word of the weekend was "trust." they actually figured out how to break down the impasse and get to step by step by step by step trust building. seeing as how really, angela

merkel went into the weekend saying trust, trust. we have trust and verify. tom: we will digress right now and touch on europe with the chief is negative officer of kbw. the oddest thing is, it is no different than the star making machinery in hollywood. yet throw out any index and 90% of them flunk. the kbw banking index has become the basic watch of american banking. first, to launch the sequel if you will. the bkx deux. >> we are very excited about an announcement we made this morning ourselves, and our partners at nasdaq, launching the global bank index.

this will be comprised of 28 of the 30 globally systemic important banks across the world. with developments over the weekend, developments in china. it is time for an index like this to exist. tom: within that is the excitement, we are greece greece, greece this morning, but the backstory is that europe is doing pretty well. thomas: if you look at the biggest banks around the world, we are recommending more european banks than we are american large-cap banks. we think right now that europe is where america was several years ago, and we think stocks of the largest banks in europe are cheaper and more attractive to investors. vonnie: tell us about the components of this index. how many are american and how many are not american? thomas: the first biggest are the american banks, then the

second-biggest are the eurozone banks. then he goes to asia, where we have two chinese banks. what is most important is that 28 banks in our index comprise 45% of the world hot banking industry market -- of the world's banking industry market cap. that shows you how large these things really are. in china, 34% of that market are the banks. tom: are you jamie dimon's best friend? thomas co. as you know, we have been focusing on the challenger banks around the world. they are doing better, growing faster. they are more profitable and their stocks have done better. we are on top of those. we would rank the u.s. challenger banks. we like the larger european banks. bnp trades at 85% of book value. we like that better than the american banks, the largest american banks. and third we put the largest american banks. brendan: we will talk about the

challenger banks. in this index we will -- we have been talking about the larger banks. barclays, deutsche bank, going through restructuring. showing how hard it is to be a universal bank. this index that you have -- is it a moving target? thomas: we are going to use for now the banks that have been designated as these global ones. 28 of the 30 have securities equities that trade. we cannot put the other two in. some are behind the curve. deutsche bank, there are still questions of what they will do with their capital account, but many of the unders are -- many of the others are merging. tom: should mr. jenkins have been shown the door? should mr. jain have been shown the door? how come those guys were shown the door? thomas: it has a lot to do with the fact that deutsche bank, one

of the regional national champions, is behind the curve. tom: is barclays find the curve? thomas: barclays i do not believe is as far behind the curve. if you have not solved for your capital account at this stage of the game, it suggests that something has happened. tom: i love thomas michaud because he has answered tough questions. gary shilling will join us. stay tuned -- olivia sterns from athens. ♪

tom: good morning, everyone. "bloomberg surveillance" from new york city let's go to top headlines with vonnie quinn. vonnie: there is no face-saving

compromise for greece this time. after an all-night are getting session in russell's, alexis -- in brussels, alexis tsipras gave in. he tried to put a good face on things. alexis tsipras: the deal was difficult, but we have prevented the pursuit of a transfer of public property abroad. we have prevented the plan of financial asphyxiation and the collapse of the financial system, a plan that was designed up to its last detail perfectly. vonnie: tsipras still needs the greek parliament to sign off on the deal. over the weekend, his own party rebelled when presented with new austerity measures. in vienna, negotiators on the verge -- are on the verge of wrapping up a new deal with iran's nuclear program. congress should have to approve

any deal. mitch mcconnell says it would be a tough sell. in a sign that she is seeing growing support for bernie sanders, hillary clinton is urging higher wages for all americans. it is her first major policy speech since announcing her presidential candidacy in april. sanders is drawing enthusiastic crowds with his populist message as he challenges clinton for the democratic nomination. shares will be offered at 3% less -- sony shares will be offered at 3% less in a stock sale. the company is going into a growth phase, as promised. history repeated itself at wimbledon. just like last year djokovic beat roger federer. it is his third title at wimbledon.

roger federer has won seven championships there. on saturday, serena williams won her sixth wimbledon singles title. she will now head to the u.s. open with her chance to win the grand slam. seems like nobody wins just one anymore. tom: a lot of drama over the weekend. also, roger federer is such a crowd favorite. it is amazing how he has the crowd. a blistering five-page note on greece dovetails perfectly with what we are seeing in the financial markets and what we will see in athens. the greece-germany spread is in with a vengeance, but nowhere near the complacency of one year ago. that, as the estonian prime minister said, "trust is renewable."

maybe not in athens. athens will be the crucible for the next three days. olivia sterns is in an ugly greece right now and a very difficult athens. let me go to the tsipras agreement. how will this be greeted by his party and those that oppose him in athens? olivia: tom, with both relief and anger. relief that the worst-case scenario has been a verdict. a few days ago we thought that what happened last night to need that greece was going to be forced out of the eurozone. that appears to have been averted, but there is a lot of anger in his hearty, a sense that -- in his party, a sense that alexis tsipras surrendered. a feeling here that tsipras surrendered because essentially the package of austerity measures that he agreed to, by every way you measure it, is much harsher than the referendum

that was voted against. tom: brendan greeley was mentioning earlier that you wonder what the bailout aid, the humanitarian aid, or the banking aid to the greek people is. what have you observed on the streets as they begin monday? olivia: i would say that life is pretty close to normal here in athens. i would not describe the move as extremely tense or chaotic. this has been five years of economic contraction. people are used to this kind of thing, so for them, we know the banks are closed. we are entering the third week of capital controls. the bank holiday and the capital controls will once again be extend beyond today. they were supposed to be listed at the end of the day, but nobody really thought that was supposed to happen -- nobody really thought that was going to happen. anybody trying to import anything is not able to pay foreign suppliers, so business is grinding to a halt, and that is my take away.

perhaps this referendum gave tsipras a lot more popularity domestically, but think about the economic damage it has done in the past few weeks and the economic damage it continues to do as the banks remain shut. tom: and mark chandler states flatly there will be a change of government within greece. brendan: we will find out with these votes are. behind you in the parliament rolling, there will be a vote in the next 70 two hours. what is the timeline -- in the next 72 hours for what is the timeline as alexis tsipras returns to athens? olivia: he will face the greatest opposition from his own party, syriza. a cabinet shuffle now seems in never double. that is -- that could happen as soon as today. longer-term, a lot of people are talking about alexis tsipras having to call snap elections and perform -- and form a unity government. he has 72 hours to get this new

package of austerity measures passed, which is harsher than what they rejected in the referendum. brendan: olivia sterns in athens, thank you very much. we will come back to olivia all day long. some -- coming up, several big banks including jpmorgan reporting this week. this is "bloomberg surveillance" on bloomberg television. good morning. ♪

tom: good monday morning, everyone. "bloomberg surveillance." vonnie quinn and brendan greeley. let's get to the single best chart. is it on greece? brendan: it is not on greece. several bank banks -- several big banks are on deck to report. here is what we are looking at with the single best chart. this is the percentage of assets within the financial sector of universal banks. we are talking bank of america, citigroup, jpmorgan. you created this chart, and you call it a frown. it hits the top around 2010 and begins to slide back down. what is so hard about being a big universal bank right now? thomas: the regulators are your partner more than ever before.

there is the general theme that we need them smaller, simpler and savor. tom: but your global index goes right against that. what you just said, you push against. the international banks are ginormous. thomas: they have gotten to be ginormous. in the future, will they be allowed to continue ramping like they have? we think that is over and the challenger banks will start chipping away at their market share. brendan: what makes them get smaller and simpler? is it regulators or shareholders? thomas: it is both. most extreme capital ratio is north of 20% for global cities. that is extraordinary, and it is very hard for any bank to earn a rip -- turn it over and appropriate return on capital. investors will say what is happening, and if the stock is not trading above but value --

above book value, it should be trading back on stock. tom: back to the 1960's, now we have this new bank. is it just a redux? are we going back to gray flannel suit, utility-like banking? thomas: you are going back to more focused simpler regional banks doing better, and after all the talk of how you had to be big, you had to be diversified, and all the power of that, we learned it did not work. tom: where do the branch networks go? between where vonnie and i live there have to be 47 branches within eight blocks. thomas: about half of the challenger banks have a technology angle. i love what games from the -- what came from the wells fargo

ceo. he said we want smaller branches with bigger signs. brendan: i am looking at another chart. very simply it says that lending is growing faster and smaller banks than at larger banks. what is driving the structure? thomas: first of all, they're coming across a small denominator. i would start with regulation. three things because the banks are being pushed to get rid of the riskier asset classes, so regulation is one. the smaller banks are also more nimble, and you have this whole development now, this peer-to-peer lending, and the online lending. you look at suntrust today, and they have a wholesaler that is focused on the e lending business. tom: you are saying that at citibank they cannot be nimble? thomas: it is harder for them to

be nimble. remember, the cfp be has not worked its way all the way down the industry yet. tom: do you have any clue what he just said? thomas: i'm sorry. i try not to use too many acronyms. tom: vonnie quinn on what the hell thomas michaud just said. thomas: yeah g. vonnie: novak djokovic celebrated his victory over roger federer by eating centre court grass. we will get to that in a second. crowds cheering as he explained as a child, winning wimbledon it was always something he wanted to do. he also tried to rip his shirt off but was not able to.

it was kind of an unsuccessful hulk move there. brendan: that is life on the court when djokovic is there. amazing. vonnie: taylor swift was there. during her concert, she invited the u.s. -- did you come? no? in the middle of her hit song "style," they rocked out waving an american flag and held up the world cup. brendan: i would say the metadata on this photo is as ceo optimized. you have taylor swift, the women's world cup soccer team. tom: taylor swift did a thing with def leppard and she came

out as they were playing. she did not miss a beat. it was unreal. vonnie: the number one top photo today, olivia jordan, miss oklahoma the contest was aired last night. following donald trump's highly controversial comments about mexicans. he said he had to attend his presidential campaign this weekend. protesters across the country attended to his campaign, too. they equated trump to the ku klux klan and the confederate flag. tom: that may be the protest, but isn't he doing better than good in the polls? brendan: his rally in phoenix was extraordinary. people waited in line for hours. tom: great photos this morning. in our next hour we will speak with an important gentlemen, the finnish finance minister.

alexander stub making headlines all through the weekend, blistering in his criticism of the present greek government. howard davies as well in the next hour. a smart conversation on the drama in europe. stay with us with tom michaud kbw. "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." right now, difficult news. vonnie: outside paris gunmen broke into a discount store for a robbery. 18 people were trapped inside. the gunman got away. walmart is telling amazon anything you can do we can do better. walmart is launching a sale wednesday to rival amazon's prime day. 2000 items will be discounted online, and walmart stressed anyone can get the rollbacks. amazon's sale is open to only those who have a $99 a year prime minister. and minions was the big winner at the box office over the

weekend. it was the second biggest animated film debut ever in north america. only "shrek iii" has done better. i cannot wait to see it, guys. brendan: they were always the best part of those other films. i am glad there is a pew are minions play that we can watch. tom: there it is, movie guidance for the day. we have seen a number of research notes this morning with listerine comments on what the politic -- with blistering comments. swiss franc barely news. swiss franc hasn't moved. why have many currencies and many other indicators not moved on this news? >> i think there is in decision firstly, we have learned to wait

for deals to actually be delivered as announced in europe over the last few years, so we have to see if these proposals make it through, particularly the greek parliament, but then into the statute books. then i think there is a mix of people saying good there is a deal done, and people saying is this a mistake and will the greeks be able to pass these reforms and also carry out the privatization of reforms. if they have austerity, is that good? tom: one question we have yet to address this morning is the future of the imf in europe. this is a major sticking point with greece. how do lagarde and her team regroup after the rebuff overnight? kit: i think they know that they are needed for this to be credibility. the europeans do not want to just do this without the imf. the difficulty is that the imf has come firmly down on the side

of the need for debt restructuring in greece, and therefore more widely in europe, and at the heart of the european -- of the euro projects, get relief and default certainly are not something that are tolerated. it would be a pandora's box to do that. we are going to have the imf back in the deal but they will have to make up their minds where they stand on debt between them. brendan: looking at the note that came out this morning, what is the possibility that there would be an extension or a reorganization of the debt, if not an outright haircut? kit: anything other than an outright haircut is possible, in the sense that extending maturities, and interest holiday, anything that does not look like just a haircut or reduction in the debt is more tolerable than that. this is really about not

creating a precedent. i do not think anyone things we can get to a position where the debt can be repaid in full but how can i do a good deal on debt reduction for the greeks and not for other people, and what does this mean for the country pushed through, crippling austerities to join the euro? tom: thank you. let's move to what we talk about in july, which is getting the kids a job. let's suggest that your offspring is newly minted out of newberry college vermont and let's suggest the child has good people skills, can get up and count to 10. sounds like she is qualified to work at kbw. tom michaud joins us this morning. is there a future for the kid out of middle barry -- out of

middle barry on your -- thomas: it is the largest sector in the world, and that is why we -- it is critical that it works to make the whole economy -- tom: what skill sets are needed, though? they do not need to run a branch bank, do that? thomas: i think it is old school there it you need to be bright. you need to be able to add value. you need to be able to think on your feet. what the future of finance is going to look like is that the industry will be more focused on profitability and not on size. you have emerging players that are growing. i mean growing assets, but also growing customers. you have the bank and the internet silicon valley. the best acquisition you can do is organic growth, one customer at a time. vonnie: what are you doing, and what do banks in general need to

do to attract talent now that you are competing with seneca valley and all the startup geographies? thomas: we do have a very active internship program. tom: that is a surveillance break exclusively. kbw. thomas: we are not catering lunch at the moment. tom: taylor swift tickets? thomas: no taylor swift tickets. we are just working down the fairway in terms of locking and tackling -- of blocking and tackling with performance. we love being one of these midsized growers that is growing faster than the overall industry. it is happening at kbw. brendan: you talk about challenger banks, regional banks. this kid out of middlebury -- how do you sell her on a regional bank and not wall street?

thomas: you have to introduce it to them. when i started my career there were like six banks. when i walked in, i thought kbw was a law firm. i had never heard of it, and so what i am encouraging -- and frankly, i have spoken at schools -- i have encouraged them to do the work and find the growers. tomorrow's growers might not be yesterday's big names. it was fun to see him pull the slide rule out of his pocket and use it. tom: thank you so much for being with us. tom michaud at kbw. they have a new bank index to overlay upon the huge success they have had with the bk x index as well. we need a forex report, and the massive headline is it is a non-report. euro-swisse barely budgets -- barely budgets.

again, in our next hour, howard babies will join us. he will be the new chairman of rbs. stay with us. another hour of "bloomberg surveillance." ♪

announcer: this is "bloomberg surveillance." tom: as citrus capitulate -- as

tsipras capitulates, he must face parliament in athens. it is a new american banking as jpmorgan reports tomorrow. we consider the future of wall street. slovakia is not greece. in this hour sir howard davies the finance minister finland, in moments. and olivia sterns and david gora. we are live from our world headquarters in new york. it is monday, july 13. i'm tom keene. joining me, brendan greeley. what have we learned in the last hour? brendan: that the most important money are smaller amounts in billions that are coming in in the next two or three weeks. this is a package, they sign it it is done. vonnie: the ecb may have to increase the ela later on today,

too. tom: let's get to top headlines to get you up to speed. here's vonnie quinn. vonnie: the greek parliament must decide whether or not staying in the eurozone is worth the price. early this morning, alexis tsipras was promised a $95 billion bailout, bringing them back from the brink of financial collapse. the country is already suffering under austerity. tsipras says it will be worth it to keep the euro. alexis tsipras: the measures that it includes what are the measures that were voted for by parliament, measure that will create unavoidable recessionary trends. i have the hope that the package that we received will hold the structure of the debt, and create the feeling for the markets for the investors that grexit is a thing of the

past. vonnie: the plan includes tax increases, spending cuts command asset sales. capital controls are still in place. greek banks may not open until wednesday. a nuclear deal with iran could be announced as soon as today. the struggle to stop iran from building atomic weapons goes back 12 years and has led to economic sanctions. any deal must be reviewed by congress, and senate mitch mcconnell is saying it is a tough sell. the crowded field for the republican presidential nomination gets a little bigger today. wisconsin governor scott walker joined the race. he gained compton that he gained -- he became the first governor in u.s. history to defeat a recall election. jordan spieth is heading to the british open on a hot streak. he got his second straight win yesterday, taking the john deere

classic in the playoffs. a win next week it would give him -- a win next weekend we give him three legs of the tour. he caught a shark last week. he would not give it to anybody else. tom: let's do a data check right now to get us to brussels and athens. futures up 15, now a little lighter. after marathon meetings, the modest chaos of this monday, athens awaits. olivia sterns is in athens. hans nichols is in brussels. hans, let me go to you quickly before your important interview. when we talk about the mystery of getting from brussels to athens what is the number one message mr. tsipras will carry with him from brussels? hans: that i saved the bank

that i saved the country from exiting the eurozone. that is the only argument he can make because on so many other fronts he capitulated. in so many other ways, you look at what was on offer two weeks ago and what mr. tsipras accepted is actually much harsher. in the all-night meeting they were very close to a greek exit. brendan: olivia sterns, you are in athens overlooking the parliament building. what is the next step in that building as alexis tsipras returns? olivia: the next step is for the prime minister to try to get his government behind the new package of austerity measures that is tougher than what was rejected in their referendum. particularly controversial is the new 50 billion euro fund that will accelerate the process of privatization. people on the streets want to know when the banks will reopen. wednesday is the latest. the government has said they will keep them open.

one executive said the banks can open wednesday or thursday and hope that some of the commercial capital controls could be lifted as soon as next week. brendan: ♪tom: olivia, thank you so much. with our question, there were two names over the weekend. one was the slovakian prime minister, and the other is the finance minister from finland. he joins hans nichols now. hans: i am joined by the finance minister of finland, alexander stubb. tell us what the most crucial aspects of this negotiation are. alexander: i would argue that he goes quite further than what we saw in the greek referendum in terms of conditionality with three baskets. number one are those that need to be pushed through by july 15. number two are the tough conditions for taxes.

i think this is important for us -- it has to be approved by the greek government and the greek parliament before we can start opening negotiations. cons: you are confident that you will get that through the finnish parliament this week. alexander: we will have to see the passing of this bill basically in the greek parliament. hans: how hard did you make it for mr. tsipras? alexander: it is not a case of being hard. it is based on institutions and laws. you have to stick to the rules that we decided upon. hans: the bridge financing we will have momentarily, will that need conditionality as well? alexander: we will have to see if there is a bridge. hans: so the bridge is still to be discussed? alexander: many states have a problem of this because we

cannot give money without clear conditionality. hans: how much are we talking about for bridge financing? alexander: that has to be decided by the bridge institutions. hans: so north of 7 billion? alexander: i will not give quotes or a number on that because it has to be decided with the experts. i would like to stress that we have not decided on bridge financing yet. hans: it seems to me that cash -- that there is a catch problem with greece. there will be assets fast enough to prop up the banks. how do you probably banks in the interim? alexander: i think short-term survival will happen. we will find a way to help the greeks on the way. we have the imf dealing with this and the ecb. it is the credibility of the eurozone, the european union, and it is also about living trust.

so far we have had big difficulties in trying to bridge the trust between the eu and greece. hans: so you are not concerned about where the money comes from for bank recapitalization? what is on the table? alexander: number one, we have not decided on bridge financing. we will look at this this evening and this afternoon. number two, if we begin negotiations on esm, we need to see that the greek parliament and government approved the whole package. hans: so it does not mean that the banks will reopen in greece anytime soon. alexander: it is not the finnish finance minister that makes that decision. that is up to the greek authorities. hans: but if you are not providing bridge financing there will be no way the banks can reopen. alexander: what we have decided is that based on strict conditionality and a vote in the greek parliament to open perhaps

the negotiations on esm. i stress a short-term greece will probably find a way. long-term we need to start bridging confidence. hans: i think i heard a little bit of news there. no esm financing for the banks? alexander: we are not looking at esm financing for the banks right now. that is absolutely clear. hans: well, thank you very much. we will toss it back to you in new york. what i heard very clear, no bridge financing unless maybe there is conditionality. this is not over just yet. tom: thank you so much. they have to have a government to speak to in greece. what is the likelihood within your reading and reporting, the fact that tsipras will be in power 30 days or three months from now? brendan: the most important number for them is 17, the number of syriza in parliament who did not vote.

we did not know if he could hold onto the parliamentary coalition. i have to say what really jumped out to me is what jumped out to hans nichols. we have not decided on bridge financing yet. he said it twice. alexander stubb -- as he said it is not over yet. tom: pretty grim about certitude this morning. we need to do a twitter question right now on the never-ending drama. is this the last bailout for greece? that is not a comedy question, that is a straight weston. -- that is a straight question. @bsurveillance. ♪

tom: good morning, everyone. let's get to the morning must read with brendan greeley. brendan: the former chairman of the u.k.'s financial services authority -- greece for grown-ups. he says --

brendan: we have gary shilling with us on the set. he almost does not need an introduction. you know who gary shilling is. europe is not a static system. one of the things we have seen in the last five years is that as things go poorly in spain, in greece, in portugal, the youngest and the brightest leave and go to berlin in many cases which leaves those economies they have left worse off. gary shilling: well, 400 years ago when people left europe and came to this country, obviously people go to where the opportunities are. if you have a situation like the club med south of europe where they do not see any great reason to change the economy, to change the culture, obviously the best and the brightest are going to leave. what else is new? brendan: the u.s. has automatic stabilizers that are governed at the federal level.

it is not true in europe. gary: it is and it isn't. they have a more socialistic approach to begin with, with more government involvement and much less room for individual decision-making and individuality. obviously that encourages people to leave who have the inner spark. tom: i just look to greece's inflation. they have 4% deflation since 2012. to the classic gary shilling work on deflation, is it good or bad deflation when you have a depression? gary: it is bad depression because -- bad deflation because greece is in the eurozone. they have had internal the, which is what you are talking about, in other words wages are cut, prices are cut, they are noncompetitive, productivity is low and not growing. that is the way they could carry off a devaluation.

tom: howard davies is scheduled to join us. he will become chairman of the royal bank of scotland here in a bit. sir howard in this hour along with sir gary. stay with us, from new york city. "bloomberg surveillance." futures up 15, dow futures down 1.22. stay with us. ♪

tom: good morning, everyone. a wild morning here on "bloomberg surveillance." right now, top headlines with vonnie quinn. vonnie: without a trace, mexican officials say drug kingpin walk-in guzman -- joauquin guzman has vanished without a trace. he ran a smuggling network that reached three continents.

about 1000 companies make smart phones, but apple gets the lion's share of the profits. a world management firm says the iphone accounted for 90% of the -- samsung was a distant second. the others broke even or lost money. the man who jumpstarted nintendo with the w console is dead. he had been president of nintendo since 2002 and was suffering from bile that cancer. he ups nintendo triple its revenue with the wii and game boy advance. he was 55 years old. brendan: i was little -- i was a little too old for that. we had some that does not even exist anymore. in vienna, negotiators have been at it for 16 days dealing with iran. indira lakshmanan on has been there the whole time.

indira, looking at body language includes this morning. how close are we to a deal? indira: if you say we are going into day 17, which is absolutely unprecedented. to give you a little history -- and i know tom keene loves history -- this is the longest time a secretary of state has spent in any diplomatic negotiation, and that includes camp david. if by the end of this we do not have a deal, we will be at the rear end of the biggest shaggy dog story in diplomatic history. it will not be pretty. now on day 17 we are seeing some grim faces on the part of john kerry and the iranian foreign ministry. when we tried to ask questions on how it was going, they both refused to answer questions. at the same time, we hear from sources that the deal is entirely done, and the last haggling is over language. brendan: that is what i was

going to go to, the last hurdle so far as we knew being the arms embargo, the u.n. arms embargo. help us understand -- if it was overcome what could possibly be left? indira: we did break that story last night that according to diplomats the arms embargo issue was overcome. but it seems it is not just about that. russia is happy now, but it is now essentially between the u.s. and iran. if you are talking about a 100 page document, that are literally thousands of places -- there are literally thousands of places where you could argue about commas and particular words. they have to work out, and language even for just a fact sheet or an announcement of the deal and it has to be something each side to take own and be proud of. that is not easy. brendan: not a lot of support with the pending deal from republicans in congress over the

weekend. what evidence do we have that there will be support with iran if it is inked? indira: a similar law has been passed with congress saying they have to approve the deal. if the ayatollahs behind the deal then -- they wanted to just flex the muscle and show that if congress is going to be sticky about it, they were also going to be sticky about it. one of the leading indicators that we have is that iranian president rouhani has said if there is a deal, he will give a speech this afternoon. we have heard rumors of a speech at 5:30 p.m. we will see if that actually happens. it is not clear if they will get all their t's crossed and their i's dotted by then. brendan: gary shilling is with us on the desk this morning. are the markets waiting for a deal? gary: i think they are and

particularly the oil markets because iran has a lot of potential production, including a lot of storage, oil that can hit the markets very rapidly. you already have downward pressure on oil because if you look at it, but opec is a cartel. cartels are formed to keep prices above equilibrium. tom: where is the equilibrium right now? gary: i think where we are going to end up is saying $10 to 20 bucks above marginal cost. tom: many agree with you directionally on where oil will go. what does it do to dollar dynamics when the great parts of your newsletter is talking about the dollar. is there a strong dollar that awaits us in 2017?

gary: yes. the whole world is evaluated against the dollar. japan and the ecb are deliberately reevaluating the dollar. tom: so if i get gary shilling interest rates, told has to go what, 10 bucks announce? gary: if it is a commodity commodities are falling. tom: are you -- where is your store value? gary: the dollar. tom: does that mean you need multinationals in the united states? gary: multinationals, if you want to look at stocks, domestic companies that do not have for exposure are probably better off than multinationals right now. tom: gary shilling. in our next conversation, howard davies will join us. he will be the new chairman of rbs.

the founding director of the fsa. howard davies on the future of europe. brendan greeley and vonnie quinn with me. it is "bloomberg surveillance." ♪

tom: good morning, everyone. "bloomberg surveillance." brendan greeley, vonnie quinn. let's get to our top headlines. here is vonnie quinn. vonnie: one of the greek parliament's accepted that deal

voters rejected. early this morning, alexis tsipras agreed to a plan that would save greece from financial collapse and keep it in the eurozone. but it called for more cutbacks in a country already suffering under austerity. he talked about the deal after leaving the marathon meeting. alexis tsipras: the deal was difficult, but we have prevented the pursuit of the transfer of public property abroad. we have prevented the plan of financial asphyxiation and the collapse of the financial system, a plan that was designed up to its last detail perfectly. vonnie: the agreement ended a six-month tug-of-war between greece and its neighbors. it includes tax increases, pension rollbacks, spending cuts and asset sales. a similar plan was rejected by two thirds of voters eight a's ago. greek banks closed for two weeks now might not open until

wednesday. diplomatic talks in the and a are reportedly close to a deal with iran. the u.s. and other world powers say they will drop sanctions if iran promises not to build atomic weapons. the congress is still having to sign off on any deal. saudi arabia is acting as though it is already swimming in oil telling opec members it has record demands for june, 10 million barrels. they expect demand to rise. the current glut is pushing prices 50% below year ago levels. it is a sign that we are seeing growth for bernie sanders. mrs. clinton is scheduled to appear this morning at a school in manhattan. it is her first major policy speech since announcing her presidential candidacy in april. sanders is enjoying news yesterday crowds -- is enjoying

enthusiastic crowds. for the world's top tennis player, the suite test of a wimbledon -- the suite taste of a wimbledon victory. he beat roger federer yesterday. serena williams took the wimbledon women's title. a u.s. open when we give her a sweep of this year's four major tournaments. tom: it was a sports weekend, to say the least. david gora is in athens. the chanel dresses in brussels can have their moment. nowhere have we seen it more than in a fragile banking system in an absolutely brutal economy in greece or david, you have been there to look at the pharmacies and the great medical business. how bad is it?

david: we heard anecdotally yesterday that people avoid public hospitals as much as possible. a lot of doctors have moved on to private facilities. i was in a pharmacy this morning talking to you and s papadopoulos this morning. everyone i talk to, be it a taxi driver, a pharmacist says that are is hurting him or her the most, but he said he is an independent business owner. it is just him and his wife, so he is feeling this acutely. brendan: david gura, were the greek people watching every second or have they even of understanding what is going on on a second by second basis out of brussels gekko david: people have been following it. after the deal was announced, people seem to be talking about a deal if not perhaps the deal. the details are still coming out. this pharmacist i spoke with new

what was coming in broad strokes. maybe he did not know how much the sales tax was going up or how much it will affect his business in granular detail, but he was aware of what was going to happen down the line act of. brendan: are there any other supplies that are in -- any other commodities that are in short supply? gas, for example? david: greece says that they have about nine months worth of petrol left. that does not seem to be a problem. people are not drive is much -- driving as much as they had. tom: david gura, thank you so much. the data check is simple -- celebration of a modest level two to three hours ago. futures up 15, the 10-year yield as you would expect, better. 2.46 percent. my major focus is on foreign

exchange, and the euro shows it. yes, a stronger euro for a bit, and then we have really given it act as well. -- given it back as well. nymex crude a little bit soft this morning, 52.31. brendan: this is "bloomberg surveillance." tom: there is an agreement, and most certainly it is within the most fractious parties. the divine in europe is tangible this monday morning. sir howard davies is chairman of the phoenix group. he joins us from london. not only a student from the european experiment but he has lived it at the london school of economics, and of course with his new duties of coming at the royal bank of scotland. sir howard, good morning. is the european experiment broken this morning? sir howard davies: yes, this is not a good outcome. this was a plan put together by

president hollande of france. one good decision rule i have found in the last two years is it resident aland is in favorite -- if president hollande is in favor of it, he cannot be good. it is a further kicking of the can down the road. i do not think it is a stable situation where you have one country's administration being run by the european commission. this is not a stable position. tom: within the stable position what would you presume the game theory is here? what you have been good at out of oxford over the years is the movable target. sir howard: it is not clear that this will go through, but i think you are also going to watch the european parliament over the next few months because here we have the technocrats, if

you like, in charge of what is clearly a major political deal. i think increasingly people are starting to realize that there is a dislocation here between politics and economics in europe . i think that is not only the case in greece, because there are a number of other countries worried about getting into similar positions. we are going to face a very difficult political year or two, people trying to get a grip some -- a grip on what it means. one member state is essentially under the tutelage of another member state. that is something new, and the political consequences are incalculable. brendan: is europe, the european union, capable of making the institutional change it needs to make to fix this? sir howard: my view is that it would have been better had greece left the euro now because i think that would have

created a need and also a desire to do what you need to do to preserve the rest of the eurozone. at the moment, it is practically impossible in germany or finland, to go to the population and say, look, we need a common european protection theme, to solidify this creation of single currency that we have. you cannot sell that while the greeks are there. because people say, what, we are going to guarantee all the greek banks? that is impossible. if greece had gone, what would have happened is that the rest would have been done -- would have done what they could to make it secure. tom: as we see the exit of chief executive officers -- esther jane mr. -- mr. jain, richard jenkins at barclays -- what is the new banking that you

envision as you take new banking duties at rbs? sir howard: a number of banks are having to recognize perhaps belatedly, that their strategy has got to change. it is going to be difficult in europe to be a universal bank in the sense that it was possible before the crisis with the combination of retail, commercial, and independent banking, and particularly in the u.k. you have to ring fence where you have to put your banking into a separate entity. what we're seeing is banks wrestling with this. rbs did so last year and decided to pull out of most of its investment banking, so there the strategic change has been done. it is quite obvious that at deutsche bank and barclays, the boards are wrestling with how they can reshape that. that will happen in the next year or two. tom: howard davies, thank you so much. our twitter question of the day addresses greece.

maybe they are mixed together and we cannot untangle that. is this the last bailout for greece? is this the last a lot for greece? @bsurveillance. stay with us worldwide. "bloomberg surveillance ♪." ♪

brendan: good morning.

this is "bloomberg surveillance ." this is a tweet from mohammed al gergawi and. -- from mohamed el-erian. brendan: he is referring to the european practice in the 19th century of getting diplomatic concessions with actual gunboats in harbors displaying strength. tom: where are they pointed at this morning? brendan: i think on guns are pointed at alexis tsipras as he returns to athens. what sense do you have this morning that he can get done what he needs to get done in athens when parliament is next in session. erik: there is a famous example of gunboat diplomacy in the port of greece. in 1850 the british navy

blockaded the port. tom: gary shilling was there. erik: the negotiations that tsipras had late last week, early in the week the opposition parties suggested that it is highly probable they will get a deal done with the support of the greek opposition. even if all of syriza does not participate, there appeared to be enough members of the party, plus the opposition, to get the bills passed. then what happens? the promises he made to get elected in january -- can he continue to govern the way he has been governing until now? tom: you wonder what we're going to see. brendan: it is highly possible we may see a deal, but we may not see a syriza-led coalition. my most important number of the morning was 17, the numbers of

syriza parliament that voted against the measures that tsipras took in brussels on friday. you had on the air this morning the mayor of -- erik: i spoke to him 10 days ago when i was in athens. at that point it was all about the referendum. george caminos spoke to the yes side. -- george kam. he and his associates lost. the no side won. that looks to have been one of the most catastrophic errors ever. this idea that you could have accepted the bailout extension and now first of all you have to get the greek parliament to agree to the onerous terms put on the table before you can even get to negotiations. gary: even if they agree to all this, one of the odds that in a banana republic like greece that

they will approve all this? why would all of this be implemented? brendan: gary shilling calling greece a banana republic -- his words, not mine. coming up next, the former greek finance minister. he will be there on "market makers" this morning. this is."

tom: good morning, everyone. "bloomberg surveillance." mr. roberto gallo has been out front of what is happening in greece. he's many, many things. what did angela merkel say -- step-by-step? it is like a three stooges act -- inch by inch they will go as they tried to move forward. we go to top headlines with vonnie quinn. vonnie: pope francis is headed back to the vatican, ending his weeklong south american trip. after visiting ecuador and bolivia, his last stop was paraguay. his speeches throughout the trip

urged more respect for the poor. walmart is launching a sale wednesday to rival amazon's prime day. the company says more than 2000 items will be discounted online, and distressing that anyone can get its rollbacks. amazon's sale is only open to those who pay $90 a year for prime minister. at the box office, there were millions for minions. universal feature top to the weekend with $115 million, the second-best north american debut ever for an animated movie. only "shrek" did better. tom, i think you do a great animated voice. tom: not minions. why do i think i will be seeing this in some form or another? this does have to do with greece and the inflationary proposals across europe. i will be direct -- gary

shilling is way out front of where americans would change in how we would get there. elements of outright deflation. he was called a fool thanen. people would say, how can you be optimistic on america even if you look for a dampened animal spirit? gary: because so many people are pessimistic, they are taking the slow growth and assuming it will last forever. that is an easy sell because, right on, brother, that is what i see. tom: are you looking at technological progress, or is there something else? gary: we are working off of deleveraging. i think we will go back to strong growth, and it will be, as usual, led by new technologies. many of the now are in their infancy.

look at the internet, how that has blossomed in the last 10 years. anybody who says that is over has no idea about what new technologies do and how long it takes them to develop to the point that they would push the economy, not just grow rapidly. tom: gary shilling was called an absolute fool in the early 1980's when interest rates were 10% and 12% and 14%. it has been a massive global moderation. brendan: one idea is that they are driving the dropping rates. the other is, responding to economic conditions, with no under choice. gary: i think it is the latter. if you look at the spillover from fed funds, 10 year treasuries, 30 year treasuries -- if you get 100 basis points moving in fed funds, it is only 25 basis points in the 30 year and 35 basis points in the 10

year on average. it really is deflationary forces , excess capacity, globalization. all of these downward depressing factors on inflation that are really driving interest rates. to say this is the fed assumes they have a lot more power in the long end, and the fed does not work in the long end. they work in the overnight rates. vonnie: we are up quite a move in the last few days on the 10 year. do we move in that range? gary: i still think we could see 1% on the 10 year and 2% on the 30 year. let's face it, it had a tremendous run prior to going up late last year into january, and then it has backed up some. one of the things going on here is there is so little liquidity in markets. ever since the fed got out of the queue business, you simply have not had all that liquidity and that is affecting virtually all markets.

you can see the volatility, and it really means you have -- in the portfolios we run, we hold a lot of cash because of the tremendous volatility right now. right now you are seeing the selloff in treasuries, and i do not think that is going to last. vonnie: our twitter question of the day -- thanks so much to everybody writing in. is this the last bailout for greece? here is our first answer. yes. more debt will not solve a solvency problem. another day closer to the drachma. brendan: i do not see how this debt load makes greece anymore sustainable. gary: maybe they will call them draculas instead of jack ma. vonnie: a good sentiment there. our third answer -- it will not be the last greek bailout.

this will go on and on. greek -- or the last agreekment. tom: a report that mark mobius truly the legendary manager of temples. he will stay with templeton global step down from being the leader of their emerging-market help your that is really a passing, a changing of the guard . i had a fascinating conversation with him about eight months ago at the waldorf, and he will stay with templeton, which is wonderful news. but mobius moves on from leadership at templeton. that from "the telegraph." my agenda -- greece -- i do not know where to begin, other than the focus is on mr. sit russ and -- with mr. tsipras and what happens with the domestic policies of greece. brendan: the newest headline,

domestically from greece, greece to extend the holiday and capital controls today. for today they are still in place. the other date it looks like on the 17th when the germans will possibly vote on the greek bailout. gary: if they get to 60 euros today, what happens to that? is it leaving the country? tom: your agenda. what have you got? vonnie: i am watching the iran deal. we may even get it this afternoon. brendan: and indira lakshmanan has been there for weeks now. my agenda is the election. scott walker, the governor of wisconsin, announced today. he says americans deserve a leader who will fight and win for them. that is pretty much what every presidential candidate says.

right now i think he is about at 5%. some people are tapping him for at least one of the top three or four in the race. phil manning lee joins us from washington. hillary clinton will be speaking in new york at the new school today. are we expected to hear a lot of bernie sanders in her speech? phil: no. what he will -- what she will do today is lay out a broad policy perspective on the economy. it will not be super liberal, but not centrist in any way, shape, or form. you will not get a lot of details or hammering wall street. she will lay out her three top principles she will be following up with policy proposals going forward. it will be about expanding the workforce and incentives for corporations, addressing the big fundamental shifts in the economy over the last decade here it i think it will be interesting to watch. she will not directly take on

sanders but she will take on her own past with this speech. brendan: you will look to see if he can drag her out to the left. i want to talk about donald trump third so much energy at the rally that he had in phoenix. should we taken seriously? phil: the republican party has to take him seriously right now. he is going to be on a debate stage, and how candidates respond matter. the republican has to be concerned about pushing him to the point where he decides to run as an independent. he has tapped into a vein of the far right of the republican party, one they can never win an election on its own, but one that actually has movement and motivation. he is something people need to pay attention to. brendan: get ready to spend the next year and a half with phil mattingly in d.c. tom: gary shilling, thank you so much. gary: good to be with you as usual. tom: the 10 year, under 2%?

gary: yes. tom: he will never give up. we will continue on bloomberg radio. and "

>> live from bloomberg headquarters in new york, this is "market makers." with erik schatzker and stephanie ruhle. erik: good morning.

it is "market makers. on erik schatzker. matt: i'm matt miller. crisis averted in greece, for now. it is not a done deal. that still has to come from the greek parliament and all the other parliaments. erik: another agreement needs to be reached on a bailout. matt: a new term i heard, "agr eekment." erik: it took me long enough to get my head around "grexit." two real estate developers will be with us. mort zuckerman william rudin and adam newton will be here. alexis tsipras the greek prime minister, surrendering to european demands for action. a