tom: after 31 that in brussels, 72 dead in pakistan on easter sunday. world leaders struggle with world terror. his decision time for european banking is american banks adapt and adjust faster printer in this hour, christopher whalen. it is friday, job state. good morning. it's bloomberg "surveillance." the quarter is here. vonnie: it's insane that it's

here. it's almost a recalibration. jobs day is never the first of the month. vonnie: it's almost like they are at the beginning of the quarter talking about a rate hike in april. as the fed meeting in april? i will have to get up to speed on it. week to,news of the here's vonnie quinn. vonnie: an offshoot of the taliban is responsible for a suicide bombing in pakistan that wounded0 people and 300. many were christians celebrating easter. syrian forces have an important victory over isis. they have overtaken and agent city of palmyra. first -- video shows

they destroyed many of the statues and monuments. a dozen raids had across the country. nine people detained. demonstrators marched near a shrine to victims of last week's attacks. they carried an anti-islamic state banner. the former head of the cia says it would hurt the fight against terrorism. exit -- bragsaid exit would damage the ability to fight terrorism. bernie sanders wants to debate hillary clinton on her own turf.

he says he has seized the momentum in the race after winning three states over the weekend. on vonnie quinn. you have breaking news. tom: michael dell is private now. they are moving some of their ntt, it's a $3.1 billion transaction. the challenges of dell have been widely understood in this transaction. it's been visible. it's there. it's another deal and we will talk about this. that's what it used to be. tom: is it ok to have three desserts on easter? let's get right to that. the markets are up a little bit. oil, that's a big deal. oil is pulling back 3975.

that's back over the last hour or so. on to the next screen. join us from nyu later in the hour. there is a reset of the dow after the three-day weekend. london is off today. let's get ready for friday. we are going to say this many times. it's jobs day on friday. it may be a proxy for european taking as well. but improvement. even if they are lousy jobs in america, it's driving the unemployment rate lower. vonnie: they're so much divergence among central bankers. this is 1998, that same cap. the overall is eurozone. tom: there it is. we will have a couple more shots on the labor market over the week.

we want to reset with a look that global markets. this is after francine's chiefiew with the executive of credit squeeze last week. christopher whalen has studied the reset. his book is one volume on american financial history. it's outstanding. he has a day gaining any bond rating agency. christopher: i am talking about their latest ratcheting up. it looks like they are going to start paying european banks to lend. tom: you have been a great about writing about the surrealism. that, what is mario draghi to say to get european banking to catch up with the creative destruction of american banks. chris: it's the same problem the

fed has been they have to get everyone in the game. the decision that merkel made after 2008 not to restructure european banks is why that employment chart looks so bad. they did not have the political consensus to move forward with anything like the way we restructured the u.s. banking system. he is the only player left on the field who is willing to do something. physicalhe u.s. can do way, in europe, it's almost impossible there. the governments are barely hold it together to enact stimulus and chris: our system largely healed itself. the industry cleaned up its own mess. our bond markets continued to function. the europeans are still trying to get things like securities and the corporate debt market back in some kind of shape.

they can finance growth. they have a lot of bad death -- that on the books. respect for what europe has been through in the last two weeks, you open up your book, is there an american dream? chris: they have never had a cohesive vision. the experiment is about not having another war. tom: i agree. you hear that from german allegiances. chris: tie the germans to the french and we won't have another conflict. look at what's happening between immigration, the lack of growth and the rise of populism. there are donald trumps all over europe. they are everywhere. they are in eastern europe france and is driven by the same at easiness. list?hat is your to do he has, with rhetoric about changing the culture and

changing compensation. we know that if you change compensation, people walk out the door. i believe that's history. chris: they've got to get the bank operations back in some sort of order. they have to deemphasize the derivative part of the business and see if they can make the banking part of the business banks, for most large it's the basic banking part that really doesn't make money. they have depended on it cap or market things of this nature. it's come back to bite them. europe, is everyone going to be in the wealth management business? chris: we can all be in that business. this goes back to why are the central banks keeping rates low or negative? we need to put income back into the system. giving me the opportunity to borrow it zero so i can them in

assets that yields a little bit more than zero is not a way to fix banks. you have to get cash flow moving through the system so they can have the capital and the buffer to clean up messes and move forward and expand their balance sheets. vonnie: is mario draghi doing the right thing? chris: if you want to let the markets that are low, there is no demand for credit. out we need to do is figure ways to get income back into the system. if you want to subsidize -- exactly. tom: this is the great. . capitalism is about profitability. one of these solutions that i will call the canadian solution is big banks with deposits and big capital. our big deposits evil? is there something wrong with bank of america bringing in more deposits? help me. chris: they would all like to be smaller. the people wells fargo, bank of

america would love to be smaller. tom: i don't see evidence of that. chris: they are turning away large deposits. they are using disincentives. there is nowhere else to go. is it safe? vonnie: i have a little bit more than that. chris: the deposits are safe. you have to make banks work. zero rates are the wrong thing to reduce capital. it reduces the incentives for banks to grow. a gives them the incentive to shrink. tom: i like that. entire with us for the hour. in our next hour, we will get agitated with citigroup. theill talk to him about end of the quarter and earnings. this is bloomberg

"surveillance." ♪

tom: good morning everyone. bloomberg "surveillance." francine is taking all of my vacation days. let's get to the bloomberg business flash red -- flash. itsie: dell is selling technology service. they are paying a little more than $3 billion. they are taking over a software storage business. they're pushing to close the deal after a month of delays. they are buying the japanese electronics maker for $5 billion.

the takeover has been delayed while advisors look at the finances. in california, there is in agreement to raise the minimal wage from $10 to $15 an hour. the would be the biggest in united states. it would not hit $15 until the year 2022. that is our business flash. tom: we greatly appreciated. this is on the border of pakistan and india. it is a focal point this time of global terror. we witness that on easter sunday. it involved many children. it was a brutal event. with the think tank. we are honored to have you with us.

uzbekistan ready for this? as another assumed terrorist attack in europe? : this is the 11th or 12th attack just on schools in pakistan. the order of magnitude is greater than we have seen in europe. time, what was lacking was the idea that the most hospira's province of pakistan, there would be an attack. they concentrated outside. this was unexpected. this is the home of the prime minister. vonnie: what about the timing of this? is it dangerous to drop any conclusions between this and the

europe bombings last week? sony: i think this is primarily a domestic affair. there are links to the broader international insurgency. this was done by a faction of the taliban. they are trying to establish themselves as the most cruel and effective faction of the taliban. element of domestic rivalry. this is dealing with the deadline that they gave to the government to stop passing a law that was liberal in terms of the rights. this is a domestic agenda within pakistan, the forces of islamic radicalization against liberalism. vonnie: the government isn't doing enough to combat these groups.

they have come out and said they will crack down on them. how much is there a blind eye this turned or does government in north these groups? , one of theically reasons pakistan has such a high concentration is many of these groups were cultivated by the previous military dictators. they were islamists and they saw this as an ally in the struggle having india as a way of proxy power within afghanistan. we have seen partly these groups that were primarily the pakistani secret services. in that sense, there has been a collusion. pakistan has belatedly started

cracking down, especially on these brutal school attacks. that was two years ago. the crackdown has been regionally concentrated. much more needs to be gun. tom: give us an update on india's response. it's amazing when we get out the .ap and look from kabul the closeness to the border with india, how will they respond to this? far, they have been fairly calm and levelheaded to the attacks, including the parliament. it has been quite remarkable. it is a center-right, fairly nationalistic government in power. case witheen the

richard nixon in china. it's not a center-right nationalist government, it seems to be strong on national security. that can make peace with pakistan. i think the response has been measured and calm. there is cooperation happening between the two countries. they are tackling a joint threat. tom: thank you so much. we are looking at another bout of terror, it seems to be endless and coming in bunches as well. the associated press says 72 dead in a pakistan. moving to india, the prime minister gives a keynote speech. he will have highlights of that throughout the day. this is bloomberg "surveillance." ♪

tom: last week, francine is off. she is recovering from our bracket. there was a window of eight minutes after midnight where we were actually rocking in our brackets. that when away. all of her lousy final four picks. we have an interesting morning must-read away from donald trump and senator cruz. vonnie: i thought after the sweep by bernie sanders over the weekend, we should look at

something. clinton's looming presidency, he talks about her winning 18 of 32 saint, she is likely to be the nominee. it would be a vicious battle that would bring little credit to democracy. she still lacks a coherent americansd most distrust her. tom: we turn to our expert on instability. chris: you can see the donald trump's all over europe. they are driven by economic measures. tom: is this year than the sedition act? chris: it's driven by popular

angst. in economiclking terms. careful. i think donald trump could beat hillary clinton. he's a much better candidate. i think hillary clinton is the weakest candidate the democrats have had in 50 years. campaigning. her desire for office. bill was a politician. chipotle ando have sits down with a pair of sunglasses on of been in the kitchen. tom: the president would have been in the kitchen testing the margaritas. chris: he would've bet everybody in the restaurant and remembered their names. he would've made those people his own. they were all supported him him immediately. vonnie: do they rallied behind

trop? chris: if they want to win. yes. imagine if donald trump makes new york competitive. if you're ain democrat? this is an interesting weekend of politics. we will have a lot of coverage on that. funds up, oppenheimer will give us a view of the u.s. economy. onhave the jobs report friday. bloomberg "surveillance." this is stay with us.

tom: job stay on friday. we will give you global news with our first word news. suicide bombing in

pakistan has targeted christians celebrating easter. the attack was in a park. 300 were wounded. an offshoot of the taliban says it's responsible. the prime minister has called for a united fight against terrorism. in syria, there is a defeat. syrian troops have recaptured almira. -- how myra. police and belgium conducted multiple raids over the weekend. they arrested at least nine people. they are trying to find out more about last week's terrorist attack in brussels. there were arrests in the netherlands and italy linked to terrorism. puerto rico's elegant to contrast is objecting to a bill debt crisis. it calls for aboard the would hire experts to help them restructure $70 billion in debt.

officials don't want to hand over control to the panel. they are pushing something to bankruptcy protection. sisi has nothing to with a story alleging ted cruz had affairs. the story was published in the national inquirer. donald trump says they were not involved. i am vonnie quinn. friday is jobs day, tom. weekend bliss like this on our american politics. it was cringing. his one of the most have inished academic the investment world. has to greece from

chicago and yell and teaches at princeton. orjoins us for a morning evening on the u.s. economy. what kind of jobs are we forming it? this is the cocktail conversation of the weekend. +++ jobs. this explains some of the hourly earnings slow growth. not surprisingly, some of us have been doing this for a few years. we get paid a little better than somebody who is 25 or 30 years old. the millennials rra just cohort. tom: he is making a huge splash

with his book. here it is. there was a little leg up. change in our sea labor market? jerry: i don't think it's a sea change. ass a gradual transformation better wages and using a big as youf the wage pool, expected through this expansion, you would see some people brought back into the labor force. dissipation would go up a little at. we will see. little jig any jaggy in the numbers. it should be sustainable. vonnie: where does the rate need to rise before there would be real pressure on wages? chris: if you look at the financial side, we don't have robust credit creation. jerry, is this the normal? we still have a banking system.

in terms of taking them out? they have to have something to do with it. if the home is not the focus, what is it for? you have to have a reason to take on debt. i think most consumers are still conservative about paying off debt. tom: that is the male we get from our viewers.

this is less than half of where we were a decade ago.

jerry: it's a yen yang. we probably got -- we certainly got ahead of ourselves. of that was created on an asset the did not have the collateral of value that the lender thought that it had. don't want to be back in that situation. if you look it debt creation starting in the early 1980's. a big part of the expansion we saw was fueled by credit creation. normalizes, that's healthy. chris: the big purchases now a car. something,ou rent somebody has to own it for you to rent it. vonnie: what about the banking ystem? how does he retrain it? jerry: i think that's right.

we see people moving into different parts of finance. finance is a critical part of the economy. it's possible that some of us would take our skills. one of my kids works for a spin off from an investment banking firm. it does infrastructure for companies. it does their health care, travel. it's figuring out how to do things more efficiently and a lot of industries. tom: the gig economy is small business. i think of it cibc world markets. its definitive on this charade as anll business equivalency to a full-time job. it's improving. is it so what? jerry: the economy probably is changing.

people talk about that. it turns out that number has come down almost parallel with the headline unemployment numbers. it's always there. it's coming down. basic idea here of bank employment. help with what the bank industry is going to do. chris: they are rightsizing. see -- you're going to the fed handed them a five-year boom in asset classes like autos and credit cards. that's over. they are going to have to rebalance. most banks are going to cut that out entirely. i think only the japanese are looking to get into fixed income right now. vonnie: the hedge funds are

getting into treasuries are in -- treasuries. sony: isn't it amazing how much money they have lost on that train? jerry: we will see. we need stronger numbers and we have seen for them to raise rates. why april? there is no compelling reason. tom: this is been great. thank you so much for getting us started. this is my cheat sheet. vonnie knows what the hell is going on. is my one page cheat sheet on the fed as i try to keep vonnie quinn and michael mckee. thank you so much. we will have you back soon. coming up, we look at the equity markets. we are going to get a handle on

the end of the quarter lose. bloomberg "surveillance." ♪

tom: from new york. francine is off today. u.k. excepteryone the prime minister is off today. barclays,quote from from six month ago. this is an all in article. concerns.g the universalf robust banks gaining market share broad while strengthening their positions at home. i thought this was a great

compendium to european angst over the best practices of u.s. banks. is he doing a best practices? there.he's getting it's taken a long time for bank of america. they have better capital and core profitability than their european competitors. it's very hard for the year begins to compete. is the dividend of the quality it used to be? do you buy a first stock for the same reasons you did 10 years ago? the uncertainty we will see this year which is going to drive up credit costs, we don't see any downgrades coming for the banks in our rating universe. which traded off in january or february were tremendous opportunities. if you like boring, cash flowing investments that was a good

thing to be in. tom: this may be the most unfair chart we do. the white line is like a lot of lousy american banks. normalized back at the beginning of the crisis. what is the single dynamic there that makes that spread? is it the guts to fire a lot of people? chris: it's not just that. even through the crisis, bad loans in the u.s. only got to 5% per -- percent. it was higher than that in europe. hasn't restructured the american banks of gotten through that. we are having the luxury of holding reserves again. we see trouble on the horizon with oil and commodities. overall, the banking book is very solid in the u.s.. beware of 2018.

that's when a new raft of regulations come in. changes to international accounting rules. if you have a bad loan in europe, you can pretend that they are paying you. to stopu.s., you have accruing interest after 90 days and write it down to fair value. you don't have to do that in europe. financial disclosure and investors don't have the confidence that they have in u.s. banks because they don't know what's going on with european banks really under the surface. vonnie: they are necessary so. you are still going to go to the european bank if you are a european country. chris: it's the only place you can go. vonnie: they will find ways around this. chris: if you don't have the growth to fix it, what do you do? you asked mariota rocky to buy assets.

-- mario draghi to buy assets. how close are we to where the u.s. banks do a -- what credit squeeze dead? chris: they're doing now. tom: do they need to accelerate that? chris: people go on and on about breaking up the big thanks. they are going to shrink slowly. why are they so big? tom: are they shrinking? i don't see a shrinking bank. chris: i think you will see single digit shrinkage over the next five years. because they are going to get out of residential mortgages. that's why these banks are so big. those funds sit there for a month without interest until they have to send it. tom: who gets in? chris: nonbanks. tom: not the government?

chris: they are backstopping all of it. there is no credit risk here. tom: nothing has changed. we will be right back. changed economics and the measurement of our change. and ♪ going to talk do our square.

tom: robert angle will join us from new york university. economists ares more pessimistic about the u.s. economy. that's according to a survey. growth than weaker they were last year. basic corporate earnings will rise just 2% that's down from traders arest area bedding compound will keep falling past the u.k. referendum on the european union. it has dropped 2%. suggest losses will continue beyond the june 2 vote.

the latest superhero movie had a supersized opening. batman versus superman took in $170 million in north america. it made $254 million around the world. that was in line with estimates. did either of you see the movie? tom: no. i didn't. .hris: we will get to cheti want to see the baker movie with ethan hawke. these are adult movies. people aren't being blown up every three minutes. talk about blowup. right now, we will make you smarter for your global wall street week. christopher whalen is with us. it's been 13 years since his nobel prize. we are honored to bring you robert angle. we make jokes.

he reinvented the measurement of how we look at dynamics in the market. he has been thinking about it. uber way out front. how great is our systemic risk right now? in at: we follow this high-frequency weight. we have a way of doing our own stress test we do for about a thousand banks around the world every week. how does the capital adequacy work. you can see that on the lap. we are seeing that europe has improved its balance sheets moderately.

it is particularly true in germany. and -- they have stayed pretty flat. you're not seen much improvement there. tom: do we get a quality c today. robert: american banking is in a lot better shape. we had this conversation last summer, i would say we were really out of the woods with american banks. the turbulence we have seen in the summer in december and january has knocked them backwards something i think the stress tests will be tougher on the banks. deal with theyou differences in accounting? there is no incentive in banks in europe with bad loans. they continue to accrue interest. they don't have to put up reserves. what do you do?

robert: we make an adjustment for the accounting system. understated. we are valuing these banks the way investors do. value letting investors them rather than the accountants. what we compare is the market cap to the liabilities of the bank. if the market cap is too small. extent, we are immune to that problem, at least if investors are aware of it. vonnie: i know tom is going to pull of the fixed chart. he is really hoping that when market pricing resets that it reflects what the fed's intentions are. robert: that's right.

predicting volatility is pretty easy if you are only talking about predicting it in the short horizon. if you're talking about predicting it in the longer horizon, it's a lot harder to predict. there are a lot of factors that come in. the global economic position as a path -- factor. he knows what it's going to be in the next few months. tom: we'd need to move on to something far more important. chart, are at this we any smarter about black swans? predicting offt a distribution? robert: by definition, we cannot predict them. a lot of the volatility we have seen recently has been inspired by factors we have been

looking and worried about. we've been worried about china for a couple of years. we saw the bubble in the chinese stock market prices. it's coming back up again. need to keep an eye on it. i think there are other causes for volatility that we do know about. it's not a black swan. a black swan it comes completely out of the blue. tom: thank you so much for visiting today. we might point out the white swan. that's the villanova. he was the only one who predicted villanova. we hope they do well. we will get you up to speed on this monday. ♪

tom: after 31 dead in brussels, at least 72 dead in

pakistan -- this on easter worle with world terror. the first quarter -- it will end, we promise. .loom and doom tobias levkovich with us this hour. and, april fools' day a jobs day "bloomberg surveillance this friday. this is -- this is "bloomberg surveillance," live from new york. francine lacqua is on assignment with the restive the united .ingdom -- let's get started with our bloomberg first word news. here's vonnie quinn. offshootn pakistan, an of the taliban says it is responsible for a deadly suicide bombing. the bomb killed 72 people and wounded more than 300. many of them were christians celebrating easter. it is the worst attack in pakistan since 2014. syrian forces have scored an important victory over islamic state, retaking the ancient

state of palmyra. video shows islamic state destroyed many of palmyra pot statues and monuments. raids conducted a dozen across the country. at least nine people were detained. police in brussels used water cannons to disperse hundreds of protesters. an anti-islamic state banner was carried through, with nazi slogans shouted. it is said that the u.k. leaving the european union would hurt the fight against terrorism. a brexit would do great britain's ability to influence local and european affairs. debatesanders wants to hillary clinton on her own turf. sanders is calling for a debate in new york before the primary

on april 19. andashington state, alaska, hawaii, bernie sanders won. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, i'm vonnie quinn. tom: there was a lot more ink politics going on than anybody believed. vonnie: and obviously in basketball. the bernie sanders tweet was -- tom: to the control room tell you we are not talking about basketball? vonnie: yes, and not about hockey, either. tom: coming up in our fourth block with tobias levkovich, we will talk about the greatest collapse in sports history, the montreal canadians. let's get to our data check, right now --equities, bonds, currencies, commodities. oil, we are watching. 39.80. on to the next screen. the vix showing complacency.

below high with grinding rates in germany. i want to show very quickly -- karen, this is a different chart this morning. this is the vix and the volatility here. the angst of another time, structural complacency in good times. and up we go with important landmarks here. we rolled over as well. that is a good way to get into tobias levkovich of citigroup, writing must-read research for all of global wall street. we will touch upon the state of the equity markets. do you link our lack of volatility into a better market ahead? tobias: i do not even look at the bit -- i do not even look at the vix, to be honest. we look at a relative to the 90-day volatility to get a sense

of people being short-term, one month versus the three-month volatility. there you get a little more detail. we track our own model to capture the. the market. tom: what is great about you is that you cover individual stocks. there is a real concision to what you do. how hard is your job, given low nominal gdp versus a normal america? sure whatam not quite a normal america is. i'm canadian. we have faster growth. what is really happening, at least when we look at the data for the s&p 500, which is different than looking at u.s. gdp -- there were two things really holding back the revenues . the first thing has been the real collapse we have seen in energy and mining. that has dragged down revenues by about 30% plus in those areas. then you have the dollar, the

strength being so significant, chopping off 6% or 7% revenue those, and both of factors will clean themselves up at the months progressed. you are looking at a much better story. vonnie: what makes you think the dollar problem is going to go away? tobias: you had a 20% move in the dollar, and third or fourth quarter you had a 13% year. year comparison, dropping somewhere in the area of 8%. by midyear, it is probably around 2%. vonnie: is that because emerging-market currencies will not weaken as much? tobias: a lot of people are watching china, particularly the you want, and every seem -- every time we see the dollar moving into the yuan, they change it back. you get these kinds of reverberations in the market, which does not help to change the economy a lot. they have figured that out. vonnie: so u.s. companies will see better profits due to fewer

currency headwinds? tobias: both the currency headwinds and the energy and mining thing. tom: i have to make some money this morning. this is the xo i. here is the great tobias levkovich bear market. i thought it would be down lower. are you even on speaking terms with ed morse? tobias: yes. tom: a lot of times strategists do not even talk to each other. he is one of the greatest colleagues i have worked with. vonnie: they were just onset together. tom: when does ed morse tell you to buy the xoi? gives your ranges. the underlying fundamentals of

energy -- we started with the rate count down. tom: which part of oil do you buy? do you buy exxon or chevron? tobias: we stick more with quality names. we do not want to go too deeply into less quality names. they have too much debt, they expanded too much. with the price recovering, it is only in the next few months we will see the real -- oilas: we are excited that prices have gone from $26 to $39 or $40, but they have been up around $100, and that is where people have taken on debt. i have heard numbers in the hundred-plus range, but a lot of them are things that nobody has ever heard of. tom: there is excitement over industrials. people are talking about the

transformation of ge. is there enthusiasm in is just rules and consumer stocks? byias: people are surprised how hard industrials have bounced off the bottom. i do not think many have been positioned for it. positioned inen the stables areas. staples areas. our senses that as you start to believe there is growth elsewhere, you do not have to pay for growth in the names, and you do not have to believe that you have to totally be defensive. that is where investors have been kind of hiding out. vonnie: how do you view the u.s. consumer? tobias: the consumer is in better shape. isis not the economy wonderful. the economy is ok. but people thought it was going to be far worse than ok. they were talking about recessions. my favorite statistic is the pmi

numbers from manufacturing, having broken below 50. in the 14 time since 1990 that we have broken below 50 for a time, i look at this stuff and the prior 13 periods, only three of them ended up in recessions, and 10 did not. 10.three beats the orangemen and the tar heels would not feel so good this morning if that were the case. the lower score wins, somehow it does not work out. i did not even fill out a bracket. past, ime i did in the got knocked out in the first round. cricket matches have lasted longer than my relationships. the short duration works. tom: the only reason my bracket even has oxygen is francine lacqua said you had to go with

the light grew -- with the light blue uniform. i won only because of francine lacqua. vonnie: if you want to see basketball news at bloomberg, do you know what you type in? help who. isn't that a great -- help hoop. isn't that a great command? tom: we will continue with tobias levkovich. we have a different perspective on media, the chief investment officer of gamco. "bloomberg surveillance." ♪

tom: with a focus this hour on

equity markets, "bloomberg surveillance." we welcome you on this monday morning. let's get you a bloomberg business flash with vonnie quinn vonnie: -- with vonnie quinn. vonnie: ntt is paying a little more than $3 billion. dell is selling assets before a $67 billion takeover of emc. pushing to close a deal after delayed whileys, foxconn advisors study sharp's finances. and in california, lawmakers and labor unions have reached a tentative agreement to raise the minimum wage from $10 to $15 an hour, making it the highest statewide minimum wage in the u.s. according to "the los angeles times congo the minimal would according to the

"los angeles times," the minimum would not hit until 2022. it: that is the one state may be could work into it what do, go to new hampshire? 2022 is six years away. wages lowerminimum the amount of people -- tobias: the bigger issue is, how many people really get paid minimum wage, and what is the real impact to the economy? if you are one of the people receiving minimum wage, you will get that confidence if you believe that is coming six or seven years from now. ultimately, it is a really small percentage of the workforce. vonnie: bernie sanders wants to debate hillary clinton on her own tour, calling for a debate in new york city before his primary, april 19.

kevin joins us from d.c. will we see an historic new york debate? kevin: i think that we actually could see the clinton campaign agreed to a debate. senator sanders is saying that having some momentum after winning big in hawaii, washington state, and alaska are the hillary clinton is still on task to clinch the nomination. vonnie: wisconsin is next, and it is a largely white state, which people say should do sanders well. kevin: yes, and that all heads into the april 19 primary for new york. hillary clinton's campaign headquarters is based there in new york city, so she seemingly would have the advantage there. the sanders campaign is also eyeing california in mid-june.

that they think she should be able to clinch the nomination before california votes. tom: i don't know with the ratio is of republican news in the headlines and social media blather versus democrats, but i will say it is about 40-1. what is the angst right now in the clinton campaign? is it to act presidential? is it remedial? give us an update on the inner circle around the secretary? kevin: i think what you have noticed is that she has been selectively going after donald trump. they werewhile ago kind of aghast and they did not really think donald trump could ever be the nominee. but clearly the republicans are headed toward some type of contested convention. but donald trump is very much in a position, the clear possibility now that he could get the nomination, which will be a bloodbath between clinton and trump. you,is the assumption of

mark halperin, and john whoemann, that everybody votes for sanders will by definition vote for clinton? is that a given assumption? kevin: it is, but the question is, are the younger voters motivated to get to the polls? senator sanders' supporters are fired up, typically leaning younger. they view him as a revolutionary candidate. we'll secretary -- will he have that kind of enthusiasm getting to the polls? are you anticipating any kind of change in the town or even the momentum on the republican side? we saw a very ugly weekend. it is not seeming to help ted cruz much. kevin: i think ted cruz has to continue to make the argument that he is the only alternative. i am not sure everyone in the republican establishment circles

believes that, but clearly donald trump is going to make the case, that if he has the most delegates heading into the convention, even if he does not pass, the magic threshold number, that he should be the nominee. his supporters, 40% of the republican base, you cannot have these people disgruntled after a brokered convention heading into a matchup against clinton. , with ain cirilli briefing here. tobias, i hate the research pieces linking politics into the equity market. it drives me insane. is there any linkage? tobias: there is, but there tend to be broader linkages, things like the defense industry does better under republicans. environmental stuff does better under the democrats. i think you have to see who the candidates are, what the goals look like, what the policy

programs are. late august or early september is when most americans really pay attention, when most investors pay attention. i read an article recently that said that more people are worried about brexit, which happens in june. you have to think about what is ahead of you. tom: i like the idea of worrying about brexit, worrying about what is going on with the terror attacks and europe. tobias levkovich is with us from citigroup and will continue with us through the hour. don't forget, "with all due respect" -- john heilemann and mark halperin. books getting credit as being the must read for american literature. ♪

tom: good morning, everyone. "bloomberg surveillance." economics, finance, international relations. tobias levkovich is with us from citigroup. here is a morning must-read with paul krugman. --had paul angle on

tom: i thought this was brilliant from professor krugman, and that it speaks of the unspoken right now, which is a new globalization. how are multinationals dealing with new globalization? tobias: they look for the cheapest sources of materials, and that is where they invest. for thereat sympathy view in this regard where the competitive nature of opening up your markets globally is going to put real downward pressure on the lowest end of lower curves because of their lack of skill sets. in other words, they have very basic skill sets that can be shaped elsewhere. the question is, what do you do with the workforce? do you retrain them? summer probably too old to retrain. -- some are probably too old to retrain. that in thedo textile industry in canada when

i was a kid, and they probably would have done better to retrain workers in an advanced economy. i am shocked that i am being put in the grouping of elite circles, but i feel like i have to straight know my tie for that. vonnie: is off shoring next? tobias: they have already started doing it? they have extended manufacturing to vietnam, to thailand, where the costs are cheaper than they have been doing in china. by the same token, the u.s. is still doing that with mexico. -- jeffwe all assume ge johnt, with his colleague rice in hong kong -- if general electric is the new multinational, do you assume the top 50 or 60 american companies become national or multinational in the next 10 years? tobias: industries do consolidate. eventually ityers or lose share or get gobbled up

by the bigger players. you do get more consolidation in the top number companies. the last point on this, global trade is a global good, but it can be a specific bad. that is the real difference. there are vulnerable segments of the economy -- there probably is some better policy objective and agenda then you are currently seeing. tom: did i see you on donald trump's foreign relations seen? tobias: i was not invited. tobias levkovich is with us, and we will be joined by chris marangi. "bloomberg surveillance." ♪

oh, hi! micky dolenz of the monkees here, getting ready to host the flower power cruise. (announcer) we're taking the love generation to the high seas and reliving the '60s. we'll celebrate that unbelievable era with the music that made it so special. there'll be over 40 live performances featuring eric burdon & the animals,

micky dolenz, the monkees lead singer and cruise host, the 5th dimension, the lovin' spoonful, rare earth, spencer davis, three dog night, and many more! imagine enjoying all that great music on the fabulous celebrity summit, leaving fort lauderdale and making ports of call in jamaica and the bahamas. you'll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 fun-filled celebrity interactive events. cabins are filling up fast, so come on, relive the era you remember so well. the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. tom: good morning, everyone. after a three-day weekend, "bloomberg surveillance," in new york. here is vonnie quinn. vonnie: a suicide bombing in

pakistan appears to have targeted christians celebrating easter. the attack at a park killed 72 people. 300 others were wounded. an offshoot of the talib and says it is responsible. pakistan's prime minister has called for a united fight against terrorism. syria, syrians have recaptured the ancient city of palm era. it is famous for 2000-year-old ruins. police and belgium conducted multiple raids over the weekend, arresting at least nine people. authorities are trying to find out more about last week's terror attacks in brussels. there were also arrests in the netherlands and in italy. puerto rico is objecting to a proposed bill aimed at resolving the island's debt crisis. helpts would be hired to

puerto rico restructure $70 billion in debt. want toico does not hand over controls to a federally appointed panel. republican presidential front runner donald trump says he has nothing to do with the story alleging ted cruz had extramarital affairs. has denied the allegations. trump says his campaign is not involved. he also says the inquirer -- the enquirer has a record of being right. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, i am vonnie quinn. is a real treat. tobias levkovich of citigroup is with us. joining us now from gamco, chris , looking at the media twist. i love the gloom of media -- we are all going to die, it is terrible, a total failure. cash flow is terrible, nobody is going to watch us, we are all

going to be on snapchat, and yet we are glued to basketball. tv is not dead. chris: it shows the power of live television. ratings keep going up, advertising is ridiculous. cord cutting, court shaving, -- they are real trends. they are happening. it is still very big and very profitable for the networks. vonnie: have the forecasters figured out that you might want to watch the final four? chris: the programmers have figured that out and they are bundling their product as a result. they are not letting you do that at the moment. this universe will continue to evolve and has already evolved quite a bit in the last five years. maratobias, help me with ngi's worlds here. we are all losing money. opportunity, or are

you under the desk? onias: we are overweight media, and we favor some of the bigger companies because they will figure out how to manage their way through this process. they are not going to necessarily give you the options that you want to sit there are cak car -- to sit there a la rte. there's an analyst who covers media who says it will cost you more money to do that than what you are getting in packages. tom: should i add up what i am spending her month on entertainment? chris: you should do that. the average consumer pays about for an hour for a tv bundle a broad selection of content. so it is a pretty good bargain if you do the math. vonnie: what about netflix? it is going to continue

to grow, mostly internationally. netflix is a cheap option for the segment of the population, but inevitably their growth will slow down. to talk aboute yahoo! as well. so much speculation. what is your outlook? chris: there is a tremendous amount of value there. the stock is worth $36. then you have another $10 in japan, and the core businesss -- with media and yahoo! and the rest of it, the arch theme is consolidation. you end up with consolidation, right? tobias: the survivors thrive and the failures ultimately die off. it is a horrible way to put it, but it is true. that is what economic challenges are about. tom: in your world, batman, superman, whatever is called --

whatever it is called -- that was the big hit over the weekend. what was the disaster that happened in the movies? what was the one that just came out that was a total crater? like the ishtar of 2016. chris: there have been a few. superman" had a tremendous weekend. $250 million overseas. it is not so much about the u.s.. now -- $15ed at hbo per month to get "game of thrones" when it comes out in april, season 42, they all die. that is $180 per year, right? they get, what do they call it, to build the wall?

chris: time warner, who controls hbo, decided to make their content available over the top last year. they have had some limited success. the vast jordy of hbo subscribers are getting it. tom: i do not trust the guy with peter dinklage there. i am still not convinced that international audiences are the key. let's be honest, none of them saw ben affleck in "daredevil." chris: time warner would be a great example. most of the value in time ,arner, 5 million of ebitda comes from cable networks. then you have the warner bros. studio. -- ie: are we waiting for

chris: you are talking about distribution. ,ou are seeing consolidation the charter time warner cable deal should be approved in the next couple of months, we hope, and then you will have two large cable companies. wireless is getting better every day. tom: i went to saint bright's church in london. there was a fabulous basement items.eir world war ii mr. murdoch just got married there. what is foss going to do, as time moves on, particularly -- what is fox going to do, as time moves on, particularly with the disaster we have seen with viacom? at fox, james is very well ensconced at fox are they made a move two years ago against time warner.

that was not successful. i could see fox being a consolidator. rupertre is mr. murdoch, , with his new bride in london. i look at this and i look at the way his family is doing it as adults. is that a buying opportunity for you? we are very comfortable with media investors with family controlled companies. in many cases, the argument is made that they have long time horizons. the what is great is that -- there is a rumor that the murdochs will buy the montreal canadiens. the collapse of his and my montreal canadiens. there is no collapse in gold. it has held up quite well. james steel was early, on a more optimistic tone on gold. he has looked like a genius the

last six months. we continue on the equity markets. "bloomberg surveillance." ♪

tom: bloomberg surveillance from new york. the london market is closed today. vonnie quinn has the bloomberg business flash. there is more pessimism about the u.s. economy. weakersts are predicting growth than they were early last year. they say corporate earnings will 2016, down from their forecast of 5% in december. traders are betting that the pound will fall. the sterling has dropped 2%,

versus all of its counterparts. options pricing will continue beyond the june 23 vote, whether the nation will stay in the european union or not. and it is paying a little more than $3 billion, dell selling before it's $60 billion takeover of emc. tom: moving the deck chairs around. tobias levkovich and chris marangi with us, to make you smarter on the trends we see in 2016. on a broader equity market, let me start with you, chris. on the general phrase "financial engineering," it is all the rage right now. how do you know when the use of cash is constructive use versus moving things around just to prop up the stock? share purchase is good

when you are purchasing stock below intrinsic value. it is difficult to tell what that might be. warren buffett has an interesting plan. he has put out a ratio against book value, where he would repurchase stock. everybody knows where that number is, so he is a bit more systematic than other companies. tom: tobias, you do my new work on this. tobias: the biggest argument out there, it is less about knowing the price to buy it. concept this mythical that companies are buying back more stock and not investing in their businesses. capital spending for the s&p 500 hit a record. another record in 2012, another one in 2013, almost another record in 2015. capital spending was leading buybacks by significant amounts. tom: alan greenspan strongly

agrees with you. unfortunately, 99 percent of investors do not. i do not understand why, because apparently they are not looking at the numbers. companies want to announce whatever they want. are they actually spending the cash? when you have these big breaks in stocks, it probably makes some sense. with the 10-year high, it is probably not the smartest move. chris: company's can reinvest, reduce leverage, pay a dividend, by a stock, or convert m&a. sometimes buying stock is the least of those options. vonnie: what happens to the new business growth? i am talking about yahoo! as well. do you see more consolidation? what about yahoo!'s billion users?

twitter is now a prime news vehicle that donald trump has used very well. you will see changes the news business. you saw the news about cnn combining their news operations with cbs and others. it is expensive to have reporters on the ground in far-off places. tom: you mentioned debt, tobias. where are we on debt exposure? tobias: some industries are doing it better than others. the health industry did that, and their debt levels have been moving up meaningfully. thecan kind of see where debt is occurring. it is not as much the buybacks, it is far more on the m&a side. what is interesting, we survey our clients every quarter. early january, we asked the question of investors, what our customers telling you that you are doing -- that they are doing

with the cash that you want them to do? there is the desire to continue, and that will bring on debt. tom: is tim cook a media mogul? is apple a media company in disguise? that is where they are heading? chris: in some ways, they are. they have a growing, recurring revenue base. that is a platform for the consumption of media, through itunes and other things. the radio streaming business has been quite successful so far. i think in some ways, it can be considered -- he can be considered a media mogul. point is yahoo! not considered a media company? i think marissa mayer has a pretty difficult case to make. she has done some things right, and she has done some things not as well. the key question is, is yahoo! a

growth company or not? to make it a mobile first company, it is very hard to do that and she has had limited success. tom: tobias, do you even look at these companies echo yahoo! -- do you even look at these companies? i cannot talk about stock because of disclosure issues, but i tend to look at it a reallyhe lens of strong analyst that we have. you have to care about media companies, the migration of news and media and information flow, where companies are releasing information through the new social media spectrum, as opposed to the old media structure. you have to be silly -- you would have to be silly to ignore it. coming up tomorrow, this is one of the most interesting people in international

economics and policy. boy, does he speak his mind. he will join us tomorrow in the 6:00 hour. this is "bloomberg surveillance." ♪

tom: foreign exchange. let's look at it right now. 1.1153.er, -- 113.53. if he was in the united kingdom, he would have the day off, but jon ferro is working like an american. we are going to make you an american, jon. what do you have today on "bloomberg "? : do not before because we have all the ingredients for quite a big week on wall street. payroll is coming out on friday. all of that with king dollar back on top. and some special guests on vonnie quinno>,"

and alix steel. that is coming up. tom: let's go over to our single best chart to frame an equity discussion. -- inflation-adjusted dow made it too early in the morning. the inflation-adjusted dow, we are up to new records. tobias, did you know stocks go up? the red line is going up. tobias: i wish that was happening in my personal portfolio. tom: what say you about the bull market that we have had? tobias: i call of the rodney dangerfield of markets. it gets no respect. people are still questioning, do we have growth? do we have earnings? will we ever have growth again? moderatewill have growth to below moderate growth, but it is not as good as people suggest. vonnie: first of all, we have gone nowhere. second of all, a lot of what we are seeing is due to cost cutting and consolidation. tobias: let's talk about two

specific items. consumer spending is at record highs, so i do not understand why we are saying it has gone nowhere. was 11% of gdpg in 2009. it is over 11% now. 13%, from 11%to -- up to 13%. in we retreated 10% with the s&p. tobias: people got very frightened in the early part of the year. there was something disastrous going on. then the narrative became that the market's down, so there must be something to that, so that the fed is totally data dependent, but now shifted to market dependent. i do not think they only look at markets, which is the way the

argument has shifted. tom: i am going to run off to radio to get ready. chris marangi, how do you find value in this market? chris: i look at a duck that calm on top but underneath his paddling furiously. you are a swan but your feet are paddling furiously. radio, whereto these two fine gentleman will be joining him. let me come back to you on this, tobias. i was reading this morning that the slows in bull markets, the type of low that we have seen, in the less -- in the next 24 months, there will be a 25% increase. with seven problem times or 10 times or 15 times is that they are anecdotal. they are not statistically

verifiable, and it is nice to know this information but it does not necessarily tell you the future economic direction. i think we will see earnings grow again in the second half. vonnie: given the gdp figure that we saw on friday, is there any concern there? tobias: they bumped it up, so it is positive. i do not know if 1.4% is that exciting. margins fell less year for the s&p 500. the first quarter is going to be more challenging. you will see more difficult earnings trends in the financials and materials, not just in energy, but other areas are growing. be seeing ald better trend once we get past the first quarter. vonnie: chris, you are coming from a different point of view. picture isjob improving, the housing picture is improving slightly. the u.s. consumer's balance

sheet is healing, getting better, and that should support modest to positive growth in the u.s. thank you so much. our thanks to tobias levkovich and to chris marangi as well, from gamco. tobias of course is from citi. "bloomberg " is up on television, and "bloomberg surveillance" continues on radio. we are back at 6:00 a.m. in new york and 11:00 a.m. in london. ♪

oh, hi! micky dolenz of the monkees here, getting ready to host the flower power cruise. (announcer) we're taking the love generation to the high seas and reliving the '60s. we'll celebrate that unbelievable era with the music that made it so special. there'll be over 40 live performances featuring eric burdon & the animals,

micky dolenz, the monkees lead singer and cruise host, the 5th dimension, the lovin' spoonful, rare earth, spencer davis, three dog night, and many more! imagine enjoying all that great music on the fabulous celebrity summit, leaving fort lauderdale and making ports of call in jamaica and the bahamas. you'll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 fun-filled celebrity interactive events. cabins are filling up fast, so come on, relive the era you remember so well. the flower power cruise, february 27th, 2017. let your freak flag fly. don't miss the grooviest trip at sea. jon: the fed chair speaks in new york, and payroll is due. revised gdp numbers show consumer spending is up, but plunging company profits may be

a cause of concern. japanese corporate culture is under siege. warm welcome to "bloomberg ." i'm jonathan ferro. vonnie: you never know what they might say. jon: king dollar back on top as well. 30 minutes away from the open here in new york. europe has a day off. futures here in the u.s., the s&p 500 futures a little bit firmer, up by six points. dow futures up 42 points. china closing lower, down 7/10 of 1%.