tv Bloomberg Surveillance Bloomberg July 16, 2015 6:00am-8:01am EDT
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will the ecb write the check? there will be a draghi press conference. a conversation with stravidis. can we trust iran? live in new york. thursday, july 16. joining me, bonnie karen and -- vonnie quinn and brendan greeley. brendan: 7 billion is not 50 billion. i think there is jousting about power within the european union. now the eurogroup finance ministers are getting together and saying weight approve it. it's a power struggle weight will talk about. tom: we need to catch up on the top headlines on greece. vonnie: early this morning in athens, the greek parliament
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gave alexis tsipras the victory he needed. lawmakers approved a package of pension talks and tax hikes. those had to be passed before greece could get a bailout that might deliver $94 billion in aid. tsipras argued for the plan from the parliament floor. mr. tsipras: during these past five months, we have fought hard. in view of this struggle, which had omissions. i take responsibility for this. i am not walking away. vonnie: the eurozone responded. officials had agreed in principle to give greece a 7.6 billion u.s. dollar bridge loan until the bailout. president george h w bush has been hospitalized in maine for a broken bone in his neck. mr. bush sell at his home. he is 91.
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a spokesman says he is fine and will be in a neck brace. joe biden seeking support for the nuclear deal with iran. after meeting with democrats, he said "i think we are going to be ok." many democrats are skeptical. most republicans are flat out opposed. so is israel's prime minister appeared president obama addressed critics in the news conference. president obama: for all the objections of prime minister netanyahu or some of the republican leadership that has spoken none of them have presented to me or the american people a better alternative. vonnie: congress has two months to review the deal to review the deal. lawmakers can pass a resolution rejecting it. the president can veto that. shares of netflix surging in premarket trading. the top stock in the s&p 500 reporting internet tv subscriber gains that the estimates. netflix's growth is being driven
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by programming such as "oranges the new black." its service has almost 66 million subscribers. in los angeles, espn honored the biggest and best stars in the world of sports at the espy awards. caitlyn jenner received the arthur ash courage award. she said she would push for tolerance of transgender people. the world cup soccer champion u.s. women or named best team. steph curry took top individual espys. tom: it is a big deal. it is where sports get together. it is just a big deal. brendan: derek jeter, renowned publisher. tom: he goes into the stands as well. what a morning we have. a terrific lineup of guests. particularly out of europe.
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let's do a day to check. futures up 7. euro near 1.08. a huge deal. here's the vote weaker euro. on to the next screen. an interesting day to check. equities resilient, dow over 18,000. greek two-year is there. as jon ferro noted, full faith and credit flight is there with the german two-year 0-0.22%. thanks for the response i to the article i did. this is ecuador in crisis in 1999. up they go. massive collapse. no, we'll peg to the dollar. if greece goes through the same
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thing and come back in off of what schaeuble is saying and repeg to the euro at a new level. brendan: you wonder whether this was something they should have done 15 years ago. pegging gives you options and the strength with the option of moving and devaluing if it comes to that. tom: whether it is argentine or ecuador. a shout out to mark chandler and john for some spirited critique. we need to bring you up to date on europe. some headlines in the last 10 minutes, attention moves to this thursday from greece to berlin. hans is in berlin. david is an athens. what happens today for mr. tsipras in athens? will he be the head of the government on monday? david: we've got no indication he will not be. he was able to muster 229 votes
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out of 300 members of parliament. we've heard there could be some government reshuffling today. we had the energy minister saying if asked, that person would resign. that could be the start of a reshuffle, something we've heard about. prime minister tsipras can emerge feeling somewhat victorious but there is a lot of dissatisfaction. it has to be seen what happens at the cabinet level. i would like to have a national unity government or a minority government, lots to figure out. brendan: we did have reports of protests outside parliament. how much significance should we attach to them? david: i went out there with my producer close to 9:00 local time, about 2:00 in the afternoon yours, as the debate was underway. they were peaceful for several hours. when the sun set it was a gathering of members of the communist party in greece. there were some anarchists.
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we saw some molotov cocktails explode. we walked past a white van. we had seen a cameraman a top it. one of the molotov cocktails went inside. police that had been barricading the parliament building moved out and teargas was exploded. that went on for about 30 minutes. definitely something that interrupted outside the parliament as the debate continued. tom: let's move to hans nichols and brussels. i want to know what the netherlands finland, the other nations around germany are doing. what are they doing thursday into friday? hans: they are either preparing for votes are going to have votes tomorrow. we have slovenia estonia -- estonia does not need a vote -- finland might be able to get it without a vote, austria and germany need votes. complicated by mr. schaeuble's interview this morning on german
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radio. talking about a temporary exit from the eurozone for greece because there debt is not sustainable. tom: you've been out front on schaeuble versus germany and the rest of the nation. brendan: schaeuble is an expression of the german id. he threw a molotov cocktail of his own. totally understand a bridge loan, 7 billion euros approved by the eurogroup. talk me through the difference of the measure proposed by the eu commission. hans: the 7 billion gets you through so you can have this big fight on the 86 billion. no one thinks the 86 billion esm fund is going to be easy. you need something to tide you over. the 7 billion, the way we think it is going to work is it is going to be from a 2012 fund the u.k. had initially opposed. lawyers have figured a way
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around that and will gloss over by saying ecb interest payments are going to be the collateral. looks like they have a bridge and will announce it tomorrow. brendan: does sound like the stumbling block of the fund is it is blocked by full faith and credit of all eurozone members. hans: if you have full faith and credit of all 28 eu members but losses come from the snp, there are enough profits in the snp to cover the 7 million. i think of it as a fund run out of the ecb. i've got to stop. we are going to be a parody of ourselves. brendan: i'm listening to all of the letters and thinking if you spend enough time in brussels you begin to figure out what they all mean. tom: "surveillance" breaksclus
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ive. david is in athens. thank you so much. a key topic for mario draghi. we will give you full coverage. the high ground on emerging markets and frontier economies. we are thrilled to be joined from london on our new york set. your book is "frontier." i think i have a handle on that. is greece part of an emerging market right now? >> it is not by most definitions. greece is delineated from the rest of the emerging markets because if you want back a few years or months ago, every shockwave from greece was was causing massive effects. the contagion effects. now you look at the eastern europe which is most
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vulnerable, take bulgaria, greek letters and almost a third of the bulgarian banking sector, it has put of insulation and created a buffer. the central bank reserves have increased by more than two thirds. tom: gavin has a rockstar gig. he gets to fly around the world. give us the back story of greece and the ancient relationship with turkey. how will that change given this crisis? gavin: greece and turkey are playing off each other. turkey is the country that should have been the one poised to benefit. it has low oil prices and is a big oil importer. turkey has not been a country of favorite during the past few months in the past year because of what is going on political. you have the election where erdogan has tried to increase his power and given an ultimatum
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to the turkish people, increase my power or elected the opposition. what you have seen is a reduction in support for erdogan. right now, you are in limbo in turkey. you do not know which way the coalition is going to -- tom: if we drug him, you could take over the gavin serkin life. brendan: i already have plans. tom: gavin serkin with us to give you perspective on the frontier economy. let me go to our twitter question of the day. a huge response yesterday. you nailed it with janet yellen on greece. what does mr. draghi need to say at today's policy meeting and press conference? your comments, please. stay with us, good morning. ♪
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tom: good morning, bloomberg "surveillance." vonnie quinn and brendan greeley with me. top headlines. vonnie: janet yellen returns to capitol hill for a second day of questioning. the fed chair delivered an upbeat message yesterday before the house financial services committee. yellen reiterated that the fed remains on track to raise rates this year. she defended the fed against republicans who said the central bank needs more on the night -- more oversight and amazon's prime dad boosted sales. amazon said by noon sales in the u.s. or up 80% compared to a year ago. not all customers or thrilled. some took to social media to say the deal's sold out to quickly. in pro football, two receivers assigned big time contracts. does bryant of the cowboys agreed to a deal that will pay him 70 million dollars. the marius thomas of the broncos
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got roughly the same deal. thomas caught 11 touchdown passes last year. this happened about an hour before a deadline that would have required them to play for less money. both were franchise players. tom: this is a big deal among people into this. a new level of silliness. 140 million -- brendan: nothing makes money like the nfl. nothing is designed for hdtv like the nfl. tom: it is the anti-netflix. vonnie: $10 million a touchdown. brendan: moving on, bank earnings week. goldman sachs will report in the next hour. michael is with us from bloomberg. the purity of goldman. : michael: looking for trading results. fixed income at other banks has been down, equities has been up . we will see how they do relative. they have been the ones that have stuck by trading saying we
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are not stepping back. we will see if that translates in a better market share. tom: james gorman is getting all the press at morgan stanley. the goldman sachs-morgan stanley chart. give me a report card on lloyd blankfein. he should be taking an industry victory lap, shouldn't he? michael: his stock has doubled over the last three years. tom: thank you. michael: they got out of the crisis quicker than morgan stanley. morgan stanley has bought into the turnaround story over the last couple years with the brokerage there. but goldman is putting up better returns and has been for the last five years. brendan: i was struck looking at the barclays preview of earnings season in general. i looked at a mix of revenue for the banks. revenue from m&a was higher for goldman. they are poised to take advantage of it. michael: last quarter they had almost double any other bank. they had over $900 million.
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people are expecting similar number this quarter. brendan: was this strategic or did they get lucky? michael: a little bit of both. they've had a long culture there but in the last year they have stepped up the gap between them and the rest of the pack. tom: they want to project internationally as well. gavin serkin with your expertise, are both of them acolytes? are they greeted in these nations? to the nation's want american banking? gavin: you are seeing more and more emerging and particularly frontier markets opening the door to investors, bankers. what you have got against that which i am sure we will touch on later, is the fed. which is weighing against it. tom: you mentioned yesterday panda bonds. i said is this a donation for the zoo? semi bonds. vonnie: i want to ask, why are
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there not more buy ratings on goldman then? something like all the analysts, most of them have a hold. 6 buys and 23 holds. michael: i think a lot are waiting to see trading pick up. we've had a slow decline over the last five years. goldman has done a good job of counteracting that with investment management revenue gains. trading last year for them was the lowest since 2005. people want to see that turnaround before they get on board. tom: were you surprised yesterday? michael: they almost hit their target. it shows how good of a court or you can have when you do not have legal problems. tom: looking at banks and particularly goldman sachs. brendan: it is amazing what you can get away with when you are not paying legal costs. tom: speaking of amazing, coming up in our next hour on the future of wall street, sallie krawcheck will join us.
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tom: we will keep you abreast of the headlines on greece and a major debate over a bridge loan. one step closer, at least in the rhetoric of the morning. the one i like best is, "eu says compromise on greek bridge loan is within reach." greek spreads very nice. we need a morning must-read. many last night.
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"the telegraph," a wonderful treatise on europe. the troika bailout in 2010 was intended to save the europe. at the same time, no defenses against contagion. greece was not saved, it was sacrificed. the roots of the greek spring can be traced to this original sin. further fed by the troika overthrew that followed. even on matters of common ground. i think the idea of common ground is important. the issue is in every debate there is common ground. brendan: i think there is more common ground. the problem is we have learned that the euro was supposed to be a political union. yet we have learned that it is a union of convenience. when the politics and compromise negotiation was important, the european union failed. hans nichols and i were going through the alphabet soup of mechanisms.
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through the bridge financing. forget the alphabets soup. what is going on is the institutions of europe do not function so you have to find legalisms to come up with money. the politics are not working. tom: within the headlines, we literally looks for this 10 minutes ago. out of the united kingdom, prime minister cameron and his team have discussions ongoing this is from a spokeswoman for the prime minister. this is george osborne in a heated debate on the u.k. exposure. this goes to gavin serkin's world of the interdependencies within europe. brendan: if you find yourself trying to explain the difference between esm and efsm and euro countries and eu countries, you are in trouble. gavin: the one contagion effect from greece that is noticeable is that this is scary stuff for those countries that were looking at the euro as the future. they are looking what has happened to greece. even if there is concern within
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government, within the electorate they are thinking do we want to be in the future having to toe the line of brussels. brendan: you've heard this from romania. vonnie: there's been a global slowdown in demand. tom: that is dead on as the backdrop. the continued depression within greece. a special announcement for you tonight with all due respect from secretary clinton's campaign headquarters. stay with us. ♪
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an ever weaker euro. speaking of headlines, top headlines. vonnie: before greece's prime minister won a battle in parliament early today, there was a battle outside. a protest turned violent. groups clashed with police. they threw gas bombs and rocks. police responded with tear gas and more than a dozen were arrested. inside, greek lawmakers gave prime minister alexis tsipras a victory he needed. they approved pension cuts and tax hikes. those measures had to be passed before greece could get another bailout. tsipras spoke from parliament floor. mr. tsipras: despite a fiscal measures and restrictions, we are capable of a lot in this country which will serve the benefit of the majority and will restore the injured pride. the injured pride of the greek society. vonnie: the eurozone responded.
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officials agreed in principle to give greece a $7.7 billion u.s. bridge loan. puerto rico has its own debt problems. a government agency failed to find payments for bond payments. the legislature has not appropriated funds get. yesterday, chuck schumer proposed that puerto rican agencies be allowed to file for bankruptcy like u.s. cities. donald trump is claiming his net worth. his forms were not disclosed but staffers disputed news reports questioning trump's claims about his wealth. data compiled by bloomberg peg his net worth at just over $2.5 billion. xiaomi is the biggest seller of smartphones in china. how long before it starts selling in the u.s.? the company's vice president of
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global operations sat down with emily chang. >> we do not have a set date yet. selling phones is a big step up. it is a huge marketing undertaking. operationally it is complicated because you have to have after sales service, customer support. it takes a huge amount of work. plus, localizing hardware. we are going to work our way to that. vonnie: watch that interview with xiaomi's hugo barra at 7:30 p.m. eastern. the first look at pluto did not disappoint. pictures that came back from nasa's new horizons showed ice mountains as high as the rockies. there were canyons that appeared six times as deep as the grand canyon. tom: this is spectacular. ken chang in "the new york times" nailed it. i was stunned how people did not cover this. major credit for "the new york times" for putting this above the fold.
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this is resistance from new york to bombay, india, to mumbai. 7,800 miles away after going 300,000 million miles. excuse me, 3000 million miles. 3 billion miles to go see the -- you can see they are skiing down . vonnie: "the times" called it a toy store. brendan: what is the value of regaining a sense of wonder about the universe? tom has a sense of wonder. tom: it is the single biggest argument, my father has had over a beverage of our choice. manned versus unmanned. unmanned has hit it out of the park with the success. let's get back to the realities of frankfurt and washington. mario draghi will take the headlines today.
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yesterday, chair yellen did all to avoid headlines. she did speak about the strength of the u.s. economy. chair yellen: this economy might snap back more quickly, the transitory influences holding down first-half growth stayed. the boost to consumer spending from oil prices show's group more definitively. tom: phil mattingly is and washington. janet yellen not running as a republican candidate at the last response. how is chair yellen greeted on the hill? bernie sanders is not there. is thaere a new dialogue? phil: it is tension filled. i think this is a progression of what we have seen over the last five or six years. you think about the house committee chaired by jeb hensarling, a critic of the fed. 60 plus lawmakers and quite a
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few of whom are not well versed in these issues sometimes -- it is not -- i know, that is shocking. it is not the easiest place for janet yellen to have a discussion. she works to deflect and defend and that is what you saw yesterday. brendan: lawmakers focused on oversight. did anyone ask a question that had anything to do with the financial markets? phil: there was a little bit a democrat from alabama at one point delved into monetary policy. lawmakers look at this more on their oversight role. that is what you are going to see today in the senate and she speaks at 2:30 not her usual 10:00 a.m. you are going to have democrats people like elizabeth warren and sherrod brown, they are more concerned about the fed's oversight, transparency and regulation than monetary policy. one person noted that wall street cares about monetary
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policy, congress cares about what the fed is doing and how they are regulating. vonnie: probably going to hear about the leak investigation? phil: i think you got as much as you are going to get out of janet yellen right now. the fed is content to allow the justice department and expected -- inspector general to handle this. all that does is give more ammunition to jeb hensarling and republicans on the house side to go after the fed. the fed needs to be careful. they do have subpoena power and a willingness to dig in in the house. they need to keep the house at least somewhat content during this investigation. brendan: what you just heard was the echo of phil mattingly standing alone in the capitol dome. taking a look at russia. where to park your money in that country. this is bloomberg "surveillance," good morning. ♪
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tom: good morning, everyone. bloomberg "surveillance." euro, 1.0894. flashing headlines out of europe. part of europe is russia. brendan: where to park it in russia. gavin serkin is the source of today's single best chart. here's what we are looking at. this is how traders are shifting to bonds from stocks. trillions of rubles trading for
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quarter. ranging from 1.4 trillion to 3.6. they were in bonds before crimea. then they cross, help me understand that dynamic. gavin: this was a chart picked out a reporter in moscow who noticed this pattern. what you are seeing is that if you think back a few months to ukraine, oddly headlines were about the frontline the death toll, where the sanctions were going to be ratcheted up. you do not have the swings going on the micex. there's less opportunity for profit for traders and the stock market. they are going to bonds, more mundane stuff. interest rate cuts. here's russia not getting back to normal because they are still in recession and they still have a lot of problems. we are looking at interest rate cuts, 5.5 percentage points this
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year. the expectation is for more cuts. good news for the bond market, which is this year upon best performer in the world. brendan: as tragic as it is is conflict priced in in russia? gavin: you are pricing in the status quo of sanctions. business does go on. for a lot of the russian economy, it has not got sanctions against the company. companies can get financing but it is very limited. that's where we are at the moment. if you see any sign that russia could start to normalize relations, you are going to have a huge rally. tom: i look at your book "frontier" with the introduction by mark mobius. mark mobius would say the gavin serkin world is a great world because i get a nominal coupon and i actually make a real rate. what is your advice to viewers and listeners who are yield hogs and want to go to your world to
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pick up yield? what is the hazard? gavin: the hazard is looking at the markets as one asset class. you cannot anymore look at emerging markets or frontier markets as one block, stock and barrel place what you see from janet yellen this is not a market where you can plunge in widespread across the board. this is a time when the dollar is strengthening, when yields look more attractive. you've got to pick and choose. tom: is imf and christine lagarde, are they the friend or enemy of the gavin serkin world? gavin: they are the friend. they are trying to tell the fed think about emerging markets. is the fed going to have that is their priority? the fed's priority has got to be the u.s. tom: gavin serkin with us. the book is "frontier," exploring emerging markets. we have some top photos -- pluto, pluto, pluto? vonnie: we've been seeing a lot
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of pluto. we decided to keep it out of the top photos. tom: waited disney's shanghai yesterday -- brendan: coming up next, a three-hour report about pluto. vonnie: that might be later on. brendan: sorry, it is janet yellen. vonnie: president obama's motorcade in oklahoma city. tom: you are kidding? vonnie: he was greeted by confederate flags. the president landed last night ahead of his visit to a federal prison today. i guarantee they were not bought on walmart's site. brendan: i cannot believe that. i can, but i can't. tom: we are in new york. this is not public property -- i am thinking of charles taylor the acclaimed -- brendan: no, i do not think the we are in new york excuse -- tom: they have a right to show the flag -- brendan: of course.
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there has been tremendous movement in america, social movement even in the last six months. that gesture of defiance is just extraordinary. vonnie: number two lays and you us a flavor come petition is nearing the end. -- lays' annual do us a flavor competetion. southern biscuits and gravy, greek gyro new york ruben, and west coast fries. they went is going to get when million dollars and have chips distributed worldwide. brendan: when they were testing a broader palate, they send a box to bloomberg "business week." one of them was cappuccino. it is as disgusting as you would think. tom: "surveillance" reporting. i'll have a bag of regular
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potato chips. vonnie: top photo, a hotel in japan has started a trend in weddings. alpacas. the alpaca walked down the aisle and posed for pictures with the bride and groom. they even come with trainers to care for them. the alpaca plays.a role in major religions in japan. i am not going to delve in psychology there. vonnie: what did the alpaca say when he was asked to leave the wedding? alpaca my bags. tom: on a more serious note james sturdyravidis on iran. stay with us worldwide. vonnie quinn, brendan greeley and tom keene.
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another hurdle. the proposal by shinzo abe was passed by the lower house of parliament. . opposition lawmakers boycotted the vote protesters say the plan is a break with pacifist policies japan has followed since world war ii. a change would let the alternative found in other countries under certain circumstances. regulators warning about a problem in boeing's latest 747. vibrations could happen in situations such as acceleration or sharp turns. operators are being ordered to make wing modifications. boeing is paying for repairs. in golf, the open is underway. jordan spieth off to a fast start, 5 under after nine holes. robert strap is at 6 under after 17 p or tiger woods bogied 4 of his first seven holes. tom: special in sight here.
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thursday night. brendan: at some point we will stop mentioning tiger woods as an afterthought. yesterday, the president dropped a challenge. president obama: for all the objections of prime minister netanyahu and republican leadership none of them have presented to me or the american people a better alternative. brendan: with us from tufts is the former nato allied commander admiral james stavridis. admiral stavridis: we've got to look at this agreement. it is 150 pages. very dense. they're dancing in the streets in tehran.
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the president of iran tweets " the prayers of the iranian people are answered." this has got a way to go before we start talking about an alternative. brendan: what other leverage might we have to get a better deal? admiral stavridis: at this point, very little. the other market returns are from the capitals of other nations involved. this is six party talks on the non-iranian side. it has been greeted with a lot of approval everywhere with the exception of the sunni world and israel. tom: after what we saw in iraq what would you expect would be the saudi response how should any administration respond? admiral stavridis: that is the
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right question. how do it mitigate the fallout. we have to get close to the sunni world. that means arms transfers u.s. presence. diplomatic heavy lifting. tom: but how do you show the flag? do you put an aircraft carrier off the coast of saudi arabia? admiral stavridis: we do that now. we always have a carrier in the arabian gulf. you do land exercises, you move jets into the area. it is going to require a u.s. presence to mitigate the downside. brendan: a lot of the analysis i have read has centered on israel and that relationship. many saying that should be our primary objective now. that relationship seems so broken. how do you begin to fix it?
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admiral stavridis: i'm going to reach for the defense weapon. increasing our already substantial military aid to israel. technology transfer at a high level. it is not impossible to conceive a world in which iran comes on strong. and that actually moves israel closer to the sunni side of this. brendan: is there anything coming off the back of this agreement, the ability to talk to iran constructively that could mean a better outcome in syria or yemen? admiral stavridis: low odds. it is better to have diplomacy at work. he ran is an imperial power. they are going to continue to push on all circuits. we are about to drop a shower of
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gold on them. that is like the u.s. getting $4 trillion added to its gdp. tom: we will go to the book on frontier politics and economy. he talks about the virtue and vice of the middle east. what is the virtue that the united states has to grab onto within the historic agreement? admiral stavridis: we have to find a battle between sunni and shia. that is the story in the middle east. it is the war of the reformation between sunni and shia. if we can find a way to create balance, that would be the virtue in the region. brendan: admiral james stavri dis, helping us understand a little better. tom: the word "reformation" captures the moment. brendan: he knows how to make
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you happy. tom: the long sweep of history is chapter eight of gavin serkin 's must read "frontier." give me the frontier emerging-market virtue and vice that we need to focus on. gavin: the virtue is that this is an area that has not been investable in the past. if i was writing this book right now, it would be the top 11. iran has great excitement from investors. it is a country the size of turkey but with a well-educated population. a very diversified industry. investors are waiting to get in there. it has a history of market relations and having a stock exchange having a record of payment. brendan: this is more than an oil economy. gavin: very much so. in the frontier markets, people
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are looking beyond oil. it is the story of rising wealth, disposable income starting to build. for example, saudi arabia the virtue and vice area they were looking at a book retailer, the idea of women earning their own income. going out and spending that money. tom: gavin serkin thank you so much. the book is "frontier" on emerging markets. we need to bring you up to date through our four x brief. -- our forex brief. euro, under 1.09 1.0883. swissie is flat. a stronger swiss franc indicating the flight to quality, including the british stir up -- sterling. canada with the shock announcement yesterday.
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tom: brussels and berlin must find a prince to posterity. -- austerity. there will be a draghi press conference within this historic chaos. in this hour, barry eichengreen of berkeley will join us. goldman and citigroup report on cost-cutting your ways to profit. vicious. good morning, this is bloomberg surveillance live from our world headquarters in new york. it is thursday, july 16. i am tom keene, joining the vonnie quinn and brendan greeley. vonnie: new developments and the rest to save greece from financial collapse. a compromise on a bridge loan is within reach. it has confirmed greece start its economic reforms and greece is expected to top the agenda for the european central bank. ecb president mario draghi will hold a news conference 90 minutes from now.
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this coming after the greek parliament passing the cutbacks creditors are demanding in return for $94 billion in rescue money. the prime mister fought for the tax hikes and pension cuts. >> i wish to say that during these past five months, we really fought hard and personally, in view of the struggle, which had omissions and mistakes, and dies i declared -- and as i declared, i take this responsibility, i am not walking a way from them. vonnie: demonstrators protested the new austerity steps, protesters threw molotov cocktails outside parliament. george h.w. bush is hospitalized after breaking a bone in his neck, q was hurt in a fault at his home in maine. a spokesman says he is fine and will be -- joe biden is seeking congressional support for the nuclear deal with iran, after
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meeting with congressional democrats he said i think we will be ok. many democrats are skeptical, most republicans are opposed. so is israel's prime minister. president obama addressed the critics. president obama: for all the objections of prime mister than yahoo! and republican leadership that has already spoken none of them have presented to me or the american people a better alternative. vonnie: congress has two months to review the deal, lawmakers can reject it that the president could veto such a resolution. shares of netflix are surging in premarket, the top stock is reporting subscriber gains. netflix growth is being driven by original programs such as "orange is the new black." it has almost 66 million subscribers. in los angeles, esb and honored the years biggest and best stars
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in the world of sports. caitlyn jenner stole the show receiving the arthur at greater work. she says she was pushed for tolerance of transgendered people. the world soccer champion u.s. women were named best team and steph curry and ronda rousey took top individual honors. tom: within the headline flow the euro under a 109 with flight to quality feel in europe. on this thursday, not wednesday we saw greece act, hans nichols and berlin, and david is in athens. david, let me go to you on the follow-up to the history of last evening. what is mr. citrus's next action? david: he has to figure out what to do with his government. he has reported -- there has been reporting about the cabinet
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against the energy minister. he has said he will resign from the opposition. we will see how that shakes out and see what happens with the government overall. will there be a minority government or i more effectively a national unity government. tom: the protest, or demonstrations last night look like a bat out take from a movie . when i look at these demonstrations, does anybody in politics pay attention? david: they had to have noticed they were mostly peaceful for several hours and then they turned here it we were with cameras trying to fill a people with signs and pamphlets and these molotov cocktails went off and a crush of people ran in every direction. it lasted for about 30, 45 minutes. this morning, everything cleaned up. it was a dramatic moment. today is a new day. tom: brendan this goes how the
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dialogue shifts to continental europe. brendan: we move back and forth between berlin, brussels, and apples -- athens. hans, a bridge loan for greece. who is paying the money -- what is it backed by? hans: i will try to explain this with only numbers, 7 billion euros. what you have a group of 28, the entire euro zone, you have 19 that uses the actual euro within the group. those 19 have agreed to 7 billion financing with money that was pledged from the 28. the 19 have signed off the 28 have not. we are waiting to hear if the 28 will sign off on it. if they had been given assurances that they can put this out the door. i do not think i used an acronym. brendan: you handled that
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beautifully, the most important voice within these wider 28 is the u.k., right? hans: they seem the most vociferous about having any of the money, because they are negotiating their treaty with brussels. they do not want to be on the hook, there are domestic challenges. mr. osborne has said they will not foot the bill for greece. tom: thank you so much, hans nichols. and david. barry eichengreen will join us in a bit, but first sally is the chair of elevate network, she has provided truly outstanding leadership to wall street, and particularly to women. we talk to her about a number of topics this morning. are you a greek expert? are you up to speed on this massive distraction? dalsally: what a shame, what a tragedy. tom: the idf humanitarian aid
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part of that is the financial system. take us to the u.s. banks who want to do an international projection and the people in washington, to a person, across both parties say no, jamie dimon, you cannot help romania, you cannot help greece, how does that fit in in 2016? sally: they manage risks, so in some ways this we hope is par for the course for them. they should be looking at these events there will always be events like this around the world. they manage and plan for them. it does not get away from the human crisis. they do not have food on the shelves of their stores. brendan: we have to watch it carefully, diplomats in brussels stumbling into each other, that is funny, but the real consequences is not at all funny. this idea from this morning saying we should handle grease
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the way we handled argentina, managed by the paris group. if they want a haircut, they can have it, but they have to have a d. wade emergent economies get it -- is that the right approach? sallie: it is an approach, but think of the unemployment rate the individuals who have not worked in years and years. we do not have a culture of working and the lessons they are learning. i think, we are headed toward the conclusion. it feels like -- a fine conclusion, the banks have had plenty of time to get prepared. tom: barry eichengreen to join us in a bit for the hour. we will dovetail your finance with his command of international economics. i have to go to goldman sachs and the state of your wall street. is this cost-cutting different when you have the night in your hands -- nice in your hands --
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knife in your hands? sallie: it has been going on for years, if you look at this quarter for the banks, if you cannot earn your cost of capital for a quarter -- i think it is hard because the interest rates be better, short. the credit overall is not getting any better. as we look at the banks, and say i would not take this as a normal quarter, this should be a good quarter and give us a view of what these institutions look like when they have a good order. tom: you are too modest about your past as a security analyst which goes to the value of asset management. lawrence think knows that with ernie schwarzman knows it as well, asset management, is it the new core banking? sallie: smith barney -- tom: are you on speaking terms
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with mr. gorman? sallie: let's look at that during the commercial. these are dusty what management business are very good business. the growth potential in wealth and asset management as the population ages are much better of a shareholder perspective in terms of lower volatility and good results. tom: a nice overview of what we will accomplish in this hour. coming up, barry eichengreen without question our giant in international economic. i'm now are set in new york, stay with us, it is bloomberg "surveillance." ♪
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tom: brendan greeley with his conversations with the finance minister of germany leads us into an important conversation. brendan: poking around the german press, it is an op-ed, a professor of law at the university who writes, who made germany the judge? germany, he writes, has much to thank in europe as your came together it became an economic how it, the germans in the east without it to be the much that are germany, because this new
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germany was not the old germany. this creates an obligation, one we have to meet, it demands of germany more than we have seen in these negotiations. we are lucky to have barry eichengreen onset with us. his work on primary surpluses that were demanded in the last two agreements of greek, and just how hard they are to reach. when you look at this conversation in germany, there seems to be little recognition of what they are asking of the outside world when this was imposed. barry: what they are asking is extraordinary. not unprecedented. there are three or four countries in history that have run primary surpluses that large, more than 3.5% of gdp for that long for one or two decades. there are exceptional countries under exceptional circumstances against the backdrop of a strong economic growth.
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what they are asking for greece is unrealistic. brendan: there is difficulty in recognizing this, this was asked in a 2010 come of these primary surpluses, and the imf has admitted that his models are not as accurate as they thought they were since 2010, but still part of the negotiations. barry: the definition of insanity is doing the same thing over and over again and thinking you will get different results. step one is to make knowledge the mistake, step two is to implement a different policy. tom: you have been a euro critic for decades, then the experience survive? barry: it has to because the alternatives are too dire to contemplate. there is a scenario that points to survival. earlier today they said no haircut, no serious debt restructuring within the monetary union. i think he has to recognize that
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tom: good morning. let's get to our top headlines. vonnie: janet yellen heading to capitol hill for a second day of questioning. she delivered a nubby message on the economy yesterday. she reiterated that the fat is on track to raise interest rates . you can follow her testimony live tony 2:30 eastern on bloomberg tv. amazon says it's prime day was a big success but customers
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slammed the event. calling it an online yard sale. the company says u.s. sales were higher than last year, 80% higher. critics say amazon used the event to push its own products. brendan: i saw one thing, a swiss army knife attachment you plug into a cigarette lighter. vonnie: no more rocking in the free world, neil young says he is removing music from all streaming services. he says streaming is the worst audio in history he writes on facebook that analog cassettes extracts and am radio all sounded better. he is an opponent of death proponent of quality audio launching a service of his own. tom: he is one of the most qualified people to speak about this. he invented how you might an acoustic guitar with graham parsons -- mic and acoustic
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guitar with graham parsons. brendan: no one cares. except neil young and possibly you. vonnie: young people do not care, they just listen to their iphones. brendan: having it right there and listening whenever you want is so much better. tom: we have sallie krawcheck and barry eichengreen with us. it is the conundrum of our time. whether the new mediocre of international economics at the imf, or the start challenge america aces, animal spirits are diminished with tepid growth without the illusion of adequate inflation. we struggle to find that self fulfilling lift. sallie krawcheck knows a banking industry that is cost-cutting is way too animal spirit and barry eichengreen knows there must be a new technological progress to rekindle our growth.
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mr. yellen, with bob shiller, wrote a fabless book called "animal spirits." how did we get to this low nominal gdp moment? barry: we have a problem that the animals are depressed. lacking in spirit at the moment. i worry that all we are experiencing is impatience, that the technological revolution will deliver results but there has to be a lot of adaptation. tom: that is the inherent optimism of barry eichengreen. do you have any idea what the new-mnnew is? barry: it is that the government has to do things to broaden the employment growth, low interest rates, provide an opportunity for infrastructure investment. the case for that is very strong. brendan: we talked with sallie
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krawcheck about the importance of asset management, there is more wealth than there ever was. is that part of the problem -- is there too much wealth looking for a return and not enough return looking for wealth? barry: that is the problem in part. people worry about secular stagnation. they worry about a high level saving relative to investments and we see evidence of that and low interest rates. tom: you and i study this for 12 minutes in school, where interest rates within the real economy and interest rates are within your banking world, you need to get away from this zero bound to create the animal spirit. sallie: sure, it is hard to get a return these days and thanks are looking for rates to go up. that is the richest kind of earnings that have. tom: the great distortion has to
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end, would you advocate a rate increase in september? sallie: i am not in the fed, but we have rates that are abnormally low and we have to watch what is going on in europe, in china in terms of the impact of the economy. and whether the economy continues to move. brendan: we almost have a disagreement, it's like we have the academic world saying there is too much savings that is driving interest rates down and the finance world saying let's make a move. sallie: the banks should be a little careful what they wish for. if we go into a bond bear market as rates go up, the banks will have a long afternoon. tom: the idea of globalizing capital, americans are afraid of globalizing. afraid of globalization. why are americans within your book should not fear the chinese and should not fear globalization. barry: globalization is
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irreversible. there will be continuing fears but the problem we have had in the united states is spreading the benefits that not everybody has benefited from the globalization of the world economy equally. if we can do more in terms of opportunity education infrastructure, i think those fears -- brendan: has there been a change , we talk about trade, in public policy -- a shift away from averages? when we have trade, the averages are better but the distribution is bad. barry: it is bad in the sense that unskilled workers find themselves competing with a billion chinese. we have to do something about that in terms of giving people the skills. sallie: with technology, you are seeing technology to write research. it is not just the unskilled
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country to cash it needs to stay afloat. a bridge loan is within reach. the eu says greece has started economic reforms. greece is expected to top the agenda for the european central bank, they beheld to reopen its banks. they closed -- the banks were closed 18 days ago. the greek parliament passed the cutbacks creditors want in return for 94 billion u.s. dollars worth of u.s. rescue money. alexis tsipras pleaded with lawmakers to pass it. >> despite the fiscal measures and restrictions we are capable of a lot in this country which will serve the benefit of the majority and restore the injured pride of the greek society. vonnie: demonstrators protested the new austerity, police say crowds through molotov cocktails outside parliament. puerto rico has its own debt problem, a government agency missed payments, the legislator
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has not appropriated the funds. chuck schumer favors letting them file for greg rossi the weight u.s. cities can. donald trump's campaign is claiming is that what tops $10 billion, he and the rest of the candidates -- staffers disputed news reports questioning his previous claims about his wealth. data compiled by bloomberg hank is now worth at under $2.5 billion. the biggest seller of smartphones in china will that enter the u.s. market and wind become is vice president of global operations sat down with emily chang. >> we do not have a set date. selling phones is a big step up come a huge market undertaking and building a smartphone brand. it is very complicated because you have to have an after sales set up and customer support.
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it takes a huge amount of work, plus localizing the hardware. we will work our way to that, but we are not ready. vonnie: you can watch the entire interview tonight on studio 1.0 at 7:30 eastern right here on bloomberg tv. the first close-up from pluto did not disappoint, pictures sent show ice mountains as high as the rockies. it also has canyons six times deeper than the grand canyon. those are the top headlines. we are still waiting on goldman sachs earnings. tom: usually pretty smart. one of the great themes have -- has been cost-cutting. with us is barry eichengreen. and ecb meeting in 15 minutes and sallie krawcheck is with us a former security analyst. she had a few jobs after that including a small start up company, merrill lynch.
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we talked about cost-cutting before, what is the nature, and particularly this denial at the end of retail banking as we know it. that was your area. sallie: it is very tough. retail banking has to innovate and change. we know in 10 years, 20 years 30 years, the bank branch will not exist. not nearly to the numbers it does today. if you are an existing bank, it is hard to take a way every tell branch. tom: why is that? sallie: i only went there was a year, once a decade, but customers get upset. you can come and is a new bank and not have the branches. it is hard to take away. tom: how do you respond that the new vice-chairman and now running it mcfarland, wants to do a dovetail of retail
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banking's to spin it off from barclays? we are going back to glass-steagall where we have retail separate from banking? sallie: someone will try something different, because if these banks -- if you're cycling through ceos if we just do the right ceo, we will get it. they have cost got, but the -- cost cut, but the real fundamental change has not occurred. you are waiting for someone to say, forget it, it has been a number of years, 8 10, 20 since the downturn and we are not earning our cost of capital so we will cycle. sometimes the entry looks at the peak, it is 50%, no, we are and 50% through the lifecycle. boards have got to look at what the normal returns are. tom: show barry eichengreen's
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book. brendan: he literally wrote the history on this. do we need to separate retail banks from universal banks? barry: we had half a century of stability. the 21st century world is more concentrated, but there are a variety of things we can do. the brits have the rule -- tom: doug erwin at dartmouth has written a book on this, do we need to be more canadian-like? barry: they had the advantage of having built up trust, but the disadvantage that they have a concentrated banking system. tom: what do you see a berkeley? does everybody want to be the next sallie krawcheck? sallie: gosh no. barry: they want to be the next mark zuckerberg. sallie: it is not necessarily
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the glass steagall these businesses are complicated. look at the earnings results, the plus, the midas, the plus d-, these global businesses, the underlying issue is not institutional plus retail, it is the complexity. tom: we have our earnings out finally from the small smart up -- start up bank. vonnie: $1.90, litigation provisions reducing interest for sure. equities revenue, $2 billion. the estimate was for equities coming in at $1.7 billion, would have been up 6%, much better. on equities revenue, institutional client services revenue $3.6 billion. investment banking, up 13%. $2.02 billion for goldman sachs.
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a very good quarter for goldman. compensation ratio for the first half, 42%. second-quarter earnings per share $4.75. it was up six cents of her percent, the stock, in premarket trading, that has been reduced, trading flat. even when it beats shares. tom: any fixed income currency and commodities institution, was $1.6 billion, 28% down. would you recommend sallie krawcheck a graduate from berkeley go into the rough and tumble of trading? is there a nicer way to waste your time? sallie: it depends on who they are, there is not a blanket answer, wall street can provide a tremendous career and training ground. for anyone.
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depending on who the kid is. vonnie: mary was mentioning technology and how it will change things. how many generations -- what is patients? barry: if you look at electricity or the internal combustion engine, the answer is decades, it takes several decades to roll out an important new network technology. brendan: our network computers as computer -- important as the power or electricity? barry: casual observation suggests yes, we are just beginning to figure out how to apply them. tom: goldman sachs has higher expenses, they have to retain their people. how does a goldman sachs or egg of america-merrill lynch defend against the advantages of lazard ever-glory and the smaller boutiques? just stealing. sallie: that is always going on. tom: is it more accentuated now?
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sallie: i do not know, if you look at the wealth management business the financial advisors are staying in their seats. the talent has always moved, the real challenge our young people wanting to go to startups. they think, two years laying foosball and i am a billionaire. that is the big mentality. tom: would you explain, barry, how you extrapolate how ouuber comes in at a gazillion dollar value? barry: blame stamford. tom: barry eichengreen with us as we look at the west coast day challenges. a programming note or tonight, a special programming, mark halperin and team, hillary clinton campaign headquarters brooklyn, new york, and ortiz in a campaign headquarters.
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day, thank you for the huge response eurocentric with the ecb in moments, what does draghi need to say and today's policy meeting and that important press conference as well. do that @bsurveillance. vonnie: the rate decision, a few minutes from now, thomas joins us from london -- john joins us. anything greece related from the ecb? >> everything greece related not expecting any change. to be at a rate -- for everyone, it is all about greece and financial stability. will that be increased. whether they increase -- that will be the one question on everyone's lips on a news conference in about 45 minutes. vonnie: we will be back to shortly. barry eichengreen of uc berkeley, what can ecb do?
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increase ela to keep the banks liquid for a day or two, what data do to help the overall situation? barry: i would be surprised if they did anything other than stood pat, they have to wait and allow the politicians to take the first step. once they do, they need to get the greek banking system open which means the political side needs to inject capital and the ecb needs to do more in terms of providing emergency liquidity. tom: is the key that mario draghi has to stay, we are in a mess, now we need fiscal leadership, fiscal responsibility? is that his main message? barry: he needs to send a message to both sides, there is fiscal responsibility and a bill through the greek parliament last night, now there has to be support on the other europeans to signal they will work together. vonnie: how political can he get -- what can he say? barry: that the greeks have
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taken the first step and now the other europeans need to take the second. brendan: i am going to once again plug his book, looking back at the sweep of different central bankers who have had to deal with these questions, how do you rate mario draghi? barry: i would give him high grades, higher than his predecessor. the ecb has moved from being part of the solution -- being part of the problem before 2013, to being part of the solution. vonnie: you have been shocked that the ecb has not increased the ela, almost criminal you say, why is that? barry: the way the ecb cap's ela close down the greek banking system and that is not a decision that technocrats should make, a decision for political -- tom: the new relationship between germany with the ecb? they have been the ecb surrogate for years it seems that is
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drifting away. barry: the two german members on the ecb governing council have been critical of what the bank has done. they would have wanted it to be more conservative, which under the circumstances, would have been faster. barry: the issue is the idea of the secondary nations and what they would do, the netherlands, finland, or how they asked to tell germany what to do. barry: the french have stepped up, the other europeans need to step up and reminded the germans that there are larger things at stake besides the german pocketbook. tom: we can continue that discussion here we have headlines. vonnie: the ecb decisions leaving all three rates unchanged. that is what we were expecting. let's look at market reaction. what is happening in the european markets? >> the euro, still trading a little bit lower, dipped below
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one dollar 09. a weaker euro. to build on the theme you have been discussing, the banks influence decision on the ecb on a monetary policy, the germans clearly lost the monetary policy argument on qe. what they own in europe is the fiscal policy argument. they are not letting go of that german discipline. tom: that press conference -- the french have not gotten much of the discussion. brendan: we have been speaking about germany, do we lay too much blame on their doorstep? can the dutch hide in their shadow? barry: the dutch are hiding, the finns are hiding, it is a monetary union of nearly 20 countries. i think we heard a lot of voices
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over the weekend, but the french and the italians, and others have stepped forward. tom: how do they go to the next step? if they are going to do it, how do they advance in the next few days their discussion of forgiveness in real profiling? barry: they have to go to the level of leaders, we made more progress over the weekend when mrs. merkel stepped directly into the picture. and this false argument that you cannot have a haircut inside the monetary union, that needs to be addressed head-on. the french and italians need to take that on. tom: you agree with bill rhodes that we have to have that haircut? barry: it will come, the question is when. tom: let's do a data check, off what is not news for the ecb but can't move markets. futures where they were, the euro is a major news with the
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quality. bonnie mentions that goldman sachs struggling off of their earnings announcement. crude oil a little light, hundred $52 -- under $52. vonnie: a plan that would extend military reach clears another hurdle, the proposal was passed today by the lower house of parliament, opposition lawmakers boycotted the vote. odessa state the plan is a break with pacifist policies that have followed since world war ii. uber is hit with a $7.3 million fine in california, a judge says the company is withholding information from the government. raiders want to know when their drivers turned down writers and if cards are accessible for the
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disabled. the battle of britain is underway, the world's best golfers are battling scotland's old st. andrews course at the british open. jordan spieth is two shots back and david ling worth finished the front nine at seven under par two tied the course record. play continues through sunday. those are the top headlines. we mentioned at tiger bogeying earlier holes. tom: arnold palmer emotional at the golf match in the last few days. we have so much to cover this morning, greece, the ecb, but first here is the reality. let's bring it back to the united states. women live longer than men. women make less than men, that is not funny. a toxic cartel for all of america. our failing retirement planning, we know that. for women, ever more important. women are running out of money as they migrate to 87 and men in
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the vicinity of 83. sallie krawcheck has provided true leadership on this debate, chair of elevate network. what is your to do list to help all of america with this idea of what women need to do. sallie: the retirement savings crisis is trillions wide, so big and so ugly we stopped talking about it. you do not hear the presidential candidates talking about it. if you put in an overweight desolate -- overlay that women live longer, it is a female crisis. once you have that, 80%, 85% of nursing homes participants are women. walk through a nursing home, it is women. tom: what policy would you like from washington? barry: if you start -- sallie: mandated paternal leave is no longer has he women having pesky
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children, it is an investment in closing the retirement savings gap, with a mandated maternal leave, you see women stay in the workforce longer, the longer the lead they have, the longer a comeback. brendan: this has come back to my generation, my wife works full-time, i work full-time, and we do not feel like women's issues, they feel like family issues we both deal with. sallie: you gentlemen will not have the savings crisis to talk about, you will be dead. how do you solve it in keeping women in the workforce and in my own business, wealth management helping women invest more, go there underinvested versus men. keeping them in the workforce investing more mandated parental leave, those are the solutions. tom: the employment retirement income act of 1974 did not see this coming. what policy, tax policy prescription can help men and
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has few women -- pesky women the law is a disaster. what policy decision would you like to see from resident clinton or president trump? sallie: mandated parental leave we are the only country in the world except for new guinea who does not have one. i recently surveyed the women of elevate network, 95% of them believe we should have a mandated parental leave. you can get not -- you can get 95% of professional women to agree on anything. brendan: i will sing in that choir. barry eichengreen let's move that back to europe, it -- is it a retirement crisis? so much of his argument with greece around the weight is
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tony's -- estonia handles its pensioners and greece does? barry: they had a retirement and demographic crisis. they are older than we are. they are -- they have a women's participation force crisis. they have all the same issues we do. they grow more parental leave, but on all other issues they have a bigger problem. tom: your book is authoritative. on that cultural shift in europe, what do you perceive as the new europe in greece, in germany, and elsewhere, different from five years ago let alone 40 years ago. the behavioral difference? barry: the europeans are getting their minds around the fact that they have to compete globally. they do not want anglo-saxon capitalism. tom: will there be an
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anglo-saxon europe? barry: the answer is no. the alternatives of social market economy are simply too well-established. tom: do you agree? brendan: i wanted to ask a different question -- within europe, one of the things it is not is a transfer union. as you can movement of people within europe, you have lung people leaving book. greece spain, going to berlin, not paying into their own retirement funds back home. does it need that kind of retirement transfer? barry: it needs a common pension system and they are beginning to move in that direction. it needs to recognize that migration and the american-style creates problems in europe as well as solving them. tom: gold raking down the new
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those, l --ows. barry: it is an indication of continued low-flation. tom: gold has lost his luster? barry: i will keep saying it until i am right. tom: what a set of topics. on twitter, i think we picked the right one. vonnie: the prize conference coming up -- the press conference coming up, we asked you what draghi needs to say in the meeting. first week, there are limit to what monetary policy can achieve, the ecb cannot save the world. brendan: -- what they want him to say. vonnie: new transformation
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mechanism, covered all great to 100 your paper with zero coupons. brendan: do they need a nominal haircut? barry: they need a real nominal haircut and europeans do not have a mechanism yet. brendan: what is it definition of a haircut between extend and pretend? barry: extend average income of the debt is still out there, better to make bygones bygones. vonnie: so long greece, thanks for all the volatility. tom: that goes to the heart of it. do you agree, we have to see a greek exit? barry: it is better for greece to stay in the eurozone, but policy needs to change europe-wide in order for that to happen. tom: barry eichengreen the debate of the moment. let's go to the agenda, we have eight of them. my agenda is the draghi press conference. every word matter and we will
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bring that to you at about 8:30 and into those real critical headlines at 8:40. brendan: the president is in oklahoma the first sitting president to visit a federal prison, that is extraordinary. not on the radar five years ago, prison reform, and now the platform of some republicans in congress. vonnie: tom just canceled pluto. tom: we did a lot on pluto. vonnie: earnings out at 8:00 eastern, goldman sachs shares up. tom: can we give a victory lap to all of banking's with the fines, america did what he did. it was ugly. i would give our society a victory lap, we are not shut down by greece. it is that simple.
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york city, i am erik schatzker. matt: another busy hour at 8:30 eastern, mario draghi will host a news conference in frank for how will the ecb support the reopening of greek banks. eric: we have breaking news citigroup has reported earnings of $1.45 a share. julie has details. citigroup's revenue appears to be slightly ahead of analyst expectations. julie: very slightly. $19.2 billion on adjusted basis, very slightly ahead of what analyst had been estimating. if you look at on an adjusted basis at earnings per $1.45 $1.34 is what they had been anticipating.
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