tom: april in the second quarter, oil goes in search of a bit. just a bid. madame lagarde suggests it is nonsense and greece, they are incensed over speculation. iceland into russia, as a tax haven, it is over. i am tom keene in new york. out, carolinea is hyde is in london. i do not know where panama is on

the map but every elite in the world does. this tax haven story is really remarkable. caroline: absolutely sensational, so many months in the making and embroiling presciently as well as the islamist prime minister. 10.3% is your number for the eurozone unemployment, the lowest since 2011. clearly showing slow but steady improvement in the unemployment level of eurozone. 10.3% still a high level but overall we are improving. bpi is getting producer prices and they are getting -- coming in, still stagnating. tom: as we start the second quarter, but difficult economic. unemployment in europe versus the united states is something. here is vonnie quinn. vonnie: our flights are scheduled to leave the brussels

airport a day after it reopened. only three flights departed yesterday. the brussels airlines has flights scheduled to the u.s. and africa. he has of damage caused by the attack on march 22, they have 20% of their normal passenger load. linked to2 members the paris and brussels attacks are still at large. officials told the journal that many of the suspects have been involved in previous islamic state attacks. british prime minister david cameron is denying the referendum over eu membership is splitting his government. cameron accuses reporters of getting overexcited in their hunt for political division. his culture secretary argued increasing the minimum wage would drive up immigration and less the u.k. leaves the eu. azerbaijan has cleared a c-span -- a cease-fire after fighting

azerbaijan says its forces have responded to provocations by armenia. are fighting a war over an area after the breakup of the soviet union. a new report says world leaders, criminals, and celebrities use shall companies to hire their wealth. at least $2 billion in transactions involved people and companies linked to vladimir putin. they say their information comes from files from a law firm and panama. head of arview, the major russian owned state bank dismissed the allegations as nonsense. >> yellen said mr. putin was involved. it was not his name registered. some people say he has certain offshore business. what is wrong about this? kremlinlast week the accuse journalists of preparing a time -- an attack on putin.

i am vonnie quinn. it dwarfed wikileaks. tom: that's been we just heard from the good gentleman at ctb, it really shows -- the tb -- the tb -- vtb. vonnie: a big tied to the u.k. as well. tom: we will have to see how that goes. we will have much more on bloomberg throughout the day. let me get the data check started on a monday. where are we? not much going on here. crude oil i would notice, cannot find a bid. west texas bears close scrutiny. on to the next screen. the vix, 13.10. the dow, i am still not on record dow watch but nonetheless we grind higher in a punch bowl is full kind of way, 17,792 on

the dow. the yen will be front and center today, 111.54. caroline, tell us about your data check. caroline: we are tentatively in the green in europe. remember last week's selloff? today we are being led higher and seen by some of the main telecomsgroups, but down 9/10 of a percent. this is what happens when consolidation does not get through. down goes the telecoms sector in france. look at the greek government debt, yields spiking up 20 basis points, the worst day in two months. leaks we the weeks -- are seeing an wikileaks. tom: we now bring the show to a complete halt. how do you say that?

uyges? bouyges. there is about 17 consonants. where is the french francine lacqua when you need her? tom: it is like the china. -- you learn something new everyday. really on the litmus paper for the global system, we're, leave a -- lena komilev. evaluation,lmost and here is a little bit of a rebound. it puts to scale how much this yen is strengthening, yen versus dollar. vonnie: five currencies, yes trillion dollar and canadian dollar. tom: they are all mixed in. caroline, introduce our first esteemed guest.

caroline: you are just teasing of her, lena komilev. she will be with us for the hour. always great to have you on the show. we were just saying that yen strength once again. we have seen calls going out from goldman sachs saying the running an asian currencies is over and you will see each stimulus from china and japan and now it is time to start shorting. do you agree? lena: i think it is a sign of our initial times that three of the world's major central banks are at the opposite end of the inflation curve. the ecb and boj are worried about that deflation where is the number one central bank of the world is worried about exporting a global uncertainty, so it is a sign of how unbalanced the global economy as. weakness hasen's

been so unrewarding with respect to inflation. that the mj do little about the environment but it is an environment where there is little leverage. the result is, in fundamental growth, underges inflation. terms, is guys were just saying, the markets are driven by momentum. that means that the next swing and the market risk cycle is just behind us and we are just seeing the greek debt this morning. caroline: look at the ongoing weakness in the u.s. dollar. is that substantiated? when you have the likes of not just pimco but blackrock all worrying about inflation, they are saying get into tips, get into treasury protection on inflation. do you agree? lena: when is the

uncomfortable matrix as we have seen a powerful decline in the u.s. employment rate and the u.s. is running out of production capacity that it can exhaust and recovery while global growth is slowing down. consider to be an adequate test of the global economy, clearly not in the world today. tom: li na, i love what you did in the report coming off the jumble of the first quarter news. let's bring a quote. -- there are no signs of runaway excesses building in either u.s. growth were domestic inflation. herein lies the dilemma for the fed. stag-flation?a, a 25 basis point rise is

not going to make much of a difference in the context of the strength of the labor figures for the last course and at the end of the day, the u.s. labor market is stronger now to container its decline in unemployment rate or rising consumer income growth as more people rejoin the labor flanks. it is an environment where we do not know whether the u.s. labor markets are strong enough to protect the economy. tom: i like they do not know. you filter in all from cross asset, equities, bonds. quarter, the second how full is the punch bowl right now? did yellen last week in her speech, is the punch ball full to the brim or are we becoming more adult as we get into this quarter? lena: this is really the question because i think the

focus of the market and the fed has transition very subtly but importantly in the last several weeks whereby the process -- focus is not so much on the strength of the recovery but the stability of the foundation. the topline line of yield an attitude of growth for the bottom line of how structurally sound this recovery is. the markets are saying there are some signs of caution here. that means that ultimately we are still in an environment that is quite shock prone. we have geo financial, geo economical and balances. and slowdown in china is competing with a very difficult deleveraging in the eurozone, and the u.s. is very much on its own. that is unsustainable to the extent of strong dollars tend to coincide with high volatility. tom: one of the big decisions we will here is the currency market

and whether the dollar over the next 90 days, do not forget brexit as well. coming up later, oil is weak this morning. oil, not a supporter, key support, but nonetheless eight difficult week -- a difficult week. usy chilling will be joining -- very chilling will be joining us. ♪

caroline: welcome back, i'm caroline hyde in london and tom keene in the work. our bloomberg business flash, here is vonnie. the british government will not rule out a temporary nationalization. secretary does not think nationalization is the answer.

last week he said it is considering a sale of its u.k. seal division -- steel division. for the six times and less than three years on that will conduct a recall of its best-selling company. the are recalling more than 83,000 cars. the problem, a power stealing -- steering defect. france, -- that is hope for a reduce in the position and the french wireless market. that is our latest bloomberg business flash. i think they are trying to trip me up this morning. isn't orange or orange? caroline, help us. tom: it is a rosetta stone moment. uyge, lagarde would be

laughing at me. let's get a first quarter briefing on what is going to rise just drive me nuts over the next couple of days, that is brexit. what did we learn about brexit in the first quarter of this year? lena: i think the markets are still not reflecting the risk that are commensurate to the economic state because there is this sort of rational assumption that at the end of the day, it does not matter how close the if it is fairly stable we are going to get a stay result from the referendum and that means that things go back to normal. not so, i'm afraid. the bigger picture is that in the u.k., the world beyond the borders of the eu there's this drive and national policy towards isolationism and protectionism to the result is that central banks or sort of the only guardians of international financial security -- stability around.

tom: i like how you put that in a was working on my new book list. i am doing a book list on amazon. i put ian bremmer's book on sero.about g did we get more as we wandered into 2016? lena: i love this, you are talking to mrs. g plus economist and you are talking about g0. i am worried about you globalization, is what i think you are alluding to. whether 2015 was about grexit and now about brexit, there are calls about referendum from spain to germany. in financial terms, we have seen the end of globalization and capital flows with this massive accidents is of investments from emerging markets. in economic terms, we are seeing

global trade flows the lowest level since the global -- global recession. i'm worried about this g0 world because it is a zero-sum game, a negative sum game. with us. komileva coming back, we will speak with angus blair of the segment institute. after an important interview with the deputy crown prince in saudi arabia, angus player on egypt, on saudi arabia. stay with us, bloomberg surveillance. ♪

tom: within the quarter, brexit, london, look at that. what a gorgeous shot. congratulations to our technical team, that is a spectacular shot. our new office building in a year and a half is off to the right side. i am tom keene in new york, caroline hyde noticing the gorgeous shot, she is in london this morning. an important conversation, john nichols weight in conversation last week with the deputy crown prince were saudi arabia, we thought we would get a more holistic middle east perspective. angus blair owns that watch and he is in cairo with segment institute. -- segment institute. angus blair, what is the fear,

the ancient fear that riyadh has of tehran? mentioned, new in terms of the development iranmically spurred on by being brought into the full with the nuclear deal, as well as the spreading of a kind of proxy war across the region in iraq, in syria, in lebanon to an extent, and definitely in yemen. there is a geopolitical shift along those lines and certainly religious lines. tom: i look at the response that we will see from saudi arabia. depending on what oil does, i understand that. if oil is stable and finds a trading range as many suggest, how will that change the relationship in the middle east of saudi arabia and iran? you have been mentioning

this already this morning, the iran ist watching what doing in terms of how much oil it is pumping. more oil out despite low oil prices. what you are seeing now is a proxy fight, weathers -- whether you see it geopolitically or in terms of the oil field in trying to maintain the ownership, trying to determine the price. it is not an efficient work, economically or militarily but it is something that riyadh, the deputy crown prince resetting the way it is in. it is phenomenal transparency that we are trying to now gauge of saudi arabia. a seismic shift going in -- on in terms of the economy.

tell us if we are an investor, and it's a net i know you spend et, will i beign wanting to get into saudi aramco anytime soon? with: we talked about this the team in december and i think again in january. a considerable number of ipos in the market, because governments need to raise finance. aresaudi arabian government having to make a change because of the oil price and the budget deficit, so we are going to have ipos. i think the expectation for an is highlysaudi aramco optimistic, given the changes that have to be done internally, but it is doable. tom: angus blair, thank you so much.

it really goes to the heart of this new kind of capitalism that we may see from the saudi royal family. i urge you to look at this story. it was not a video or taped interview for -- with the crown prince, but important issues coming up over mr. mikel plate's interview. .e will look at oil last week and into this week, it is the lead to global story. deal, butc, not a big nevertheless once again oil cannot find it big. 36.69,xas intermediate down 11% -- $.11. ♪

caroline: welcome back. "bloomberg surveillance." caroline hyde in for francine lacqua. let's get to vonnie quinn. saudi arabia is planning

the biggest economic shakeup. the measures are outlined in an interview with bloomberg news. the saudi's would speed up subsidy cuts. the measures are aimed at raising $100 million per year by 2020. there is talk that greece could be pushed into the full and out of the euro area. the prime minister has not made much drug rest in talks -- progress in talks with creditors. tighter security on french trains. armed marshals will be passenger trains and they will be allowed to shoot if necessary. amtrak plans to restore train crashe after a fatal

disrupted travel. two workers were killed when a construction tools that were left on the track. kasichtrump says john should drop out of the race. cruz show trump trails ted in wisconsin. bloomberg news, 24 hours per day. i'm vonnie quinn. caroline: thank you very much indeed. we have to check out what is happening in the oil markets. continuing to see oil trading lower today. we have a buildup in bearish bets. good morning.

caroline: he spent six years at the international energy agency. harry: i did. caroline: give us a sense. is the rally over? are we done? harry: i think we were almost done before the saudi announcement. the fact that they are reasserting conditionality puts a nail in the coffin in terms of the rally. we are going to end up with a lot of production anyway. for the market, that is not very constructive. caroline: are we just going to stay within this trading range? is there a lower bound? how much will the supply glut continue to push lower? harry: our view is for a $30 floor. a range between $30 and $40 seems to be reasonable. tom: harry, i want to bring up the oil chart.

where is support on brent crude? recentlyad lower highs . i know we are not down to record lows. head -- a point in your where is the tip point to lower prices? harry: what we are really looking at is where the two dollar differentials to wti's. we think that brent could fall to $33. tom: i like that. how will that reinvigorate the oil debate? in thell be the new new second quarter if we enjoy $33 brent again? harry: all eyes in the market are going to be looking at company earning reports. how much will be slashing capex.

the first indications for this year are quite hefty. average, -25% globally. if the oil price falls back to the lows we saw just a couple months ago, that idea of how much reduction is going to take place is going to be pivotal. the phrase is "creative destruction." creative destruction had we had so far? harry: i think we have had quite a bit. when you think back at when all of this started, when saudi arabia implemented a new supply strategy in 2014, the long game for opec was to crowd out the higher cost producer. we have had lower prices and significant cutbacks on expenditures.

oil companies are really looking to retain cash and pay dividends. in hereant to get lena because of time. benefit to europe? where is the benefit to the united states? lena: i think you have nailed it. it is all about creative destruction. the markets will move to a more constructive balance with destruction and supply capacity development. point, i'm this worried about the fact that oil prices are both a testament of the fact that we have no return and,safe haven investments secondly, that week oil prices have been symptomatic of the whiplash of deflationary asset

prices because of lack of liquidity of cash flows in the high-yield credit sector, in particular. when you have too much volatility in equities and not enough return in the negative yield world, you are squeezing investors into parts of the credit market that are more shock prone because they are beyond the reach of central banks. i'm concerned about financial stability in these markets. we want to get to a more stable financial system. iden it outarry, w for us. we have copper down. is this pressure we are seeing on the supply and demand side going to continue? harry: absolutely. like any number of industrial commodities, oil is the big one, but when you look at copper, aluminum, you are looking at metals that have a supply side that is overwhelming.

this is in the context of slower growth in china and concerns about china's economic prospects. when you put those two together, it is hard to see copper exceeding $5,000 per ton. in terms of pipelines for most industrial metals with a few exceptions, that is what we are looking at, absolutely. overrun on supply and weakness on demand. caroline: brought an out on an economic perspective in china. his demand part of the equation when it comes to china? are we just going to be looking at smaller demand? orkin stimulus rectify that part? is that we have a misdiagnosis of the china problem. chinese authorities have treated this is a growth problem. the reality is that it is a debt problem. there are too many excesses and

overinvestment in the economy. i think -- the concern is that as china transitions, the demand function we have been used to in the bubble years of the last seven years is simply not going to be there in the future. we are looking at a commodity market where the demand and supply side -- it is like trying to capture a falling knife. harry will be staying with us and lena is staying with us. but coming up, a conversation with the u.k. ambassador to the u.s.. that is at 7:00 a.m. in new york.

stay tuned for that. ♪

tom: good morning, everyone. "bloomberg surveillance." it is the worldwide story for caroline hyde in london and myself. vonnie quinn has been correlating what we have been seeing in news sources. let's go over to bloomberg. it is a little hard to see. i have headlines depending on what it is. all of these are newspapers lining up with interpretations of 11.5 million documents. this is what we see from iceland. here are the french finally stepping in. panel motte tax revelations to be studied by authorities --

taxah mann -- panama revelations to be studied by authorities. caroline: we should mention that even though there are companies and individuals -- a lot of those are legals. tom: right. vonnie: even business people in russia and ukraine trying to protect their money from criminal rates. there are also possibilities for negligence. tom: "the guardian" did a great job of showing the norm or business of a safe haven or a tax haven, obviously for tax advantage, but then you have the "telegraph" headline where they immediately go to the salacious angle. caroline: the political fallout is going to be huge. the icelandic prime minister is involved.

david cameron is being called on to take real action. we understand that six peers in the house of lords and three tory mps and dozens of party donors have been cited as being embroiled within the scandal. lacqua's namene involved? [laughter] the u.k. has more than half of the tax havens involved here. vonnie: it is interesting because david cameron was asked to take one of the leads on this and he has said that the anonymous company structures are going away. tom: what is separate from this is the use of estate planning. i don't even know where guernsey is on the map.

i will look it up. does the canal go north-south or east-west? [laughter] seriously, every american kid in the fourth grade has to answer that question on an exam. my point is that there are some serious things here involving senior political officers and the financial crisis. again, these are allegations. russia come in right away, don't they? vonnie: absolutely. there are 11.5 million documents. tom: caroline, it goes to the icelandic prices. they had to redo their banking systems. one of their senior officers walked off a tv set this morning. caroline: it is alleged that the prime minister of iceland's own

wife was holding some of the assets. out ande already come said it did not affect the way they treated the assets. on a day where we also get a haveain of leaks, we also greece. the imf may want more debt relief for greece. we are seeing yields blowing out on the back of all of this when it comes to the greek finance. yields are of 21 basis points. ♪

tom: good morning, everyone. getting your second quarter started. onoline hyde was not crushed april fools' day. ruthless. if they did april fools in the netherlands. i'm glad you are not here to see the carnage that ensued. it is the beginning of the second quarter. you need to get up to speed on a

bloomberg business flash. the euro area unemployment rate has fallen to its lowest level since 2011. the jobless rate dropped to 10.3%. germany's unemployment rate is 4.3%. spain's is over 20%. alaska air is close to buying virgin america. they say negotiations are done. alaska air and jetblue have both made offers for virgin america. apple's latest attempt to crack india's smart phone market is running. they want to sell used phones in india. they say it would jeopardize indian phone makers and make a farce about the government's made in india program. caroline: thank you very much. let's have a little check on

what we are watching and preparing for this week. the greek prime minister will meet with creditors in athens to review the latest bailout. he still needs to cut a deal on pensions, taxes, and the budget deficit. kashcariri -- neil will hold a press conference. christine lagarde will present her agenda for the imf spring meeting in a speech in frankfurt. i think my pronunciations are lacking. tom: caroline, thank you. lena is with us from g plus economics. harry is with us from bnp paribas. lena, let me start with you. when you see oil move and the dollar move, how correlated is that? do you have it in your head?

how tight is that relationship? lena: the two have been going together in investors minds for over a year now. markets fact that the -- if you look at it in the context of the fed's expectations -- the markets have basically sized down expectations even though inflation expectations are very much changed. rates u.s. real interest means there is no room for a stronger dollar here. that is very consistent with the conversation you are having with harry about the underlying fundamentals that are going through this constructive destruction in a weaker demand environment. tom: bring up the chart of

dollar yen. this is the actual currency pair. harry, the red circle is when the boj happened two weeks ago. you come as a commodity guy, interpret some of these brutal moves we are seeing in foreign exchange? harry: i think when it comes to foreign exchange and speaking of correlation data returns in particular, there are times when we are going to see a tight fit and times when we are going to dislocate a little bit. currently, the dollar is weakening. people are pricing in less rate hikes. tot should, in theory, help avoid the whole commodity complex and lift oil, but it is not the case. the supply-side is overwhelming.

until such time that we don't work through excess supply inventory, maybe that relationship is going to be a little stretched. malaysia has been significantly bound to what is going on now. but it has outperformed. asians currencies are starting to come into their own. are we going to see countries affected? harry: i think the immediate answer is russia. if you want a view on russia, you want a view on oil because that is pretty much the economy right there. when you look at oil and the ruble, you have a tight correlation between the two. lena, do give us your view. we have saudi arabia putting it bearish view on the fallout. the market is saying it is diversifying. they are looking at seismic shifts.

they need a sovereign fund to diversify faster? lena: this is the question, indeed. while we have been looking at the risk of commodity exporters through the trade side, it is really the capital side of the balance, the fact that countries like russia have allowed the currency adjustment, as opposed to the expense in foreign exchange reserves, to exchange -- take the brunt of the hit. the impact from oil prices is probably felt with the second derivative through liquidity conditions. it weak domestic exchange rate tends to exacerbate credit liquidity because of concerns about the companies' ability to service their debt and concerns about companies' liquidity. a, would you please explain to me draghi's next step?

last week, it was yellen, yellen, yellen. we spent the last hour not mentioning the most important person in europe and possibly the entire world. what is his next move? lena: i think the fact that mario draghi has been so keen to move ahead of market expectations is a signal of the underlying nervousness that exists in the governing council about falling behind on the deflation curve. when you look at mario draghi's context, you talk about the domesticgling and the cycle is moving back into a deflationary mode. the feds, seven years of zero handle policy rate has just about created a policy of low inflation.

there is certainly no surplus of inflation that can be shaved off through higher interest rates. the idea here is going to be to try to power through and overcome the effects of a cloudier global outlook and with the regulatory tightening of domestic bank capital, to get credit reflation going. tom: we are going to have to leave it there. $33, 33 to who -- $32 have been suggested on brent. coming up, on global wall street , sallie krawcheck joins us. ♪

april. abenomics.rnational

madame lagarde suggests it is nonsense that greece is incensed over default speculation. the biggest of leaks for the global elites. ma as ae haven of panan tax haven is so over. good morning, everyone. i'm tom keene. it is "bloomberg surveillance." francine the quad is on a short plane to panama to check out her tax haven. the european impact of the panama announcement is really something. caroline: the political ramifications. you have the icelandic prime minister being embroiled. you have u.k. peers, you have a tory mp. andeally will have global

huge seismic effects within each country. tom: absolutely. it is something we are going to be talking about four days. the ramifications are already being felt. vonnie: thank you so much. more flights are scheduled to leave the brussels airport a day after it reopened. says flightsines -- the airport can handle less than 20% of its normal passenger load. at least 22 members of the terror cell linked to the paris attacks are still at large. officials tell "the wall street journal," that they have been involved in previous islamic state clots. security services are on alert. minister david cameron denies that the referendum over eu membership is splitting his government.

he accused reporters of getting overexcited in their hunt for political divisions. bloomberg news 24 hours per day. i'm vonnie quinn. tom: this is really quite the announcement. this is something about the west coast of america and canada. this has been widely anticipated. jetblue and alaska air battling over that elite airline, virgin america. alaska air wins and they will buy virgin america. this has all sorts of symbolism for the west coast out of san francisco, out of seattle. they will combine their frequent flyer miles and all that. this really says something about the recovery of the airline business, the recovery -- david kush has done miracles with virgin america over the years --

keeping it going through thick and thin, demanding excellence and an upscale kind of thing. here we go with a merger. caroline: it looked to be in official. vonnie: $4 billion is the price tag. jetblue was hoping to win out, so it is interesting that alaska is the one. tom: 27% revenue pop off this merger. that is really something. i must admit. that is really something. let me do a data check. equities, bonds, currencies, commodities. i want to get through this quickly. oil cannot find a bid. onto to the next screen, please. , that better than good stock market. the yen is stronger this morning. caroline: the stoxx 600 is holding onto gains.

we lost 2% yesterday. 0.8% higher. no good coming from the telecom industry. check this out. down 15%. it was a french player selling its telecoms unit, but all the telecoms units being sucked down today. they are concerned about not getting the consolidation in the market that they were hoping for. they are all trading lower. the greek government bonds are also trading lower. believes leading us to that potentially the imf was looking to be pushing to get more debt relief for greece. some inflammatory comments coming from both sides of the equation, alexis tsipras and christine lagarde. tom: stronger trade weighted

yen. here is been on a. -- abenomics. somebody asked me over the weekend why we focus on the yen and i said we forget how big the japanese economy is. i strongly feel that day-to-day we don't have a clue how dominant the japanese economy has. vonnie: and how important it is with capital flows, safe havens, all the history that is involved. tom: let's go back to the airline business. we have alaska's are an virgin america. there is really no u.k. equivalent on that right now. caroline: it does involve a u.k. entrepreneur, richard branson, of course, who first backed virgin america. it will be interesting to see what sort of take away he has at this significant deal, coming in at $57 per share. 47% premium is really a big premium. and whether or not the oil price

-- that has been a favorable wind for the airline sector. tom: let's go to the chief economist in high frequency economics. the secondu begin quarter, what are you focused on? karl: the world economy is decaying and we want to look for those trends, to see whether they are going to continue. i think it is all related to commodity prices. if they stay where they are, we will continue to see headwinds. jim o'sullivan is writing about how the fed is increasingly concerned with what is going on abroad. tom: this is a really important question. let's dovetail your work. atlanta gdp is under 1% for q1 in the united states. is that a one-off or do you extrapolate that out into the rest of the year? carl: they are looking for good economic growth across the country. there will be pockets of

trouble. higher cpites figures and wage figures coming out of the atlanta region in his notes on the united states economy this morning. employmentng for gains to persist at a high rate. despite potential regional issues. do you have concerns about inflation risks? we have black rock am a morgan stanley, bill gross saying we should be more worried. carl: jim did a micro detailed breakdown of the sources contributing to the cpi. right now, it is concentrated in health care. it comes from nonhealth care. jim has an i on the fact that there are inflation pressures

starting to appear. the theory tells us that we don't see much inflation pressure until we get that level and we are creeping up on that right now. we are expecting to see continued acceleration of prices. as we move forward, it is going to be very gentle, but it is going to be very real. as stanley fischer warns, we don't want to have bigger, more aggressive action later. vonnie: you are saying this is also global concerns may be feeding into the fed. janet yellen is central banker to the world. about restructuring bank loans back in the 1980's. we have the greek crisis continuing. how much is the greek debacle to affect global growth?

carl: the sparring between the imf and greece has been going on since the last restructuring. thelast staff knew that greek situation was unsustainable. the european creditors plowed ahead and did their deal without restructuring or giving a haircut to the creditors. the battlentinuing they have continued all along. noise in as is more broader picture. i think there are bigger fish to fry in the world economy right now. tom: when i look at the world economy, it is about central bankers adapting and adjusting. are they are exhausted? are they theoretically exhausted? carl: i think monetary policy is reaching the limits of what it can do. i think central bankers are very willing to accept that point. they have pushed interest rates as far as they can go. while they might insist that they still have more easing they can do, the reality is that they are limited.

we are hearing calls coming for fiscal policy responses. do ins a hard thing to the current global environment, but i think that has to be the next move. tom: right. can there be a trade policy response? bring up the chart again. this is exports. the answers -- we are flat on her back like we were at some point in the 1980's on global exports. what is a policy maker to do? carl: a policy maker recognize and admit that world trade is totally in the garbage can. that youee the chart are looking at where i am, but i do have my own chart showing the drop in world trade and the january figure that was lower 12% year over year is the biggest decline we have seen in the postwar. other than the 2008 shock.

i think this is what policymakers are missing right now. this drop is not a windfall for the world economy. it is a profound event that decreases world gdp and world income and provides a shock of potentially historic consequences. tom: that is why we love to have you on. carl weinberg with high frequency economics. the conflation of income and wealth effects. minorityberg taking a an outlier view that the commodity movement down in price affects the top line, if you will, of the global economy. talk about the top line. global wall street does not have one. stock jen with layoffs today. we need perspective. will displayeck wisdom. it is "bloomberg surveillance." ♪

caroline: good morning. i'm caroline hyde in london with tom keene in new york. here is vonnie quinn. vonnie: the british government won't rule out a temporary nationalization -- the business secretary says he does not think nationalization is the answer. tata could jeopardize 40,000 jobs. hopes were crushed or reduced competition in french wireless markets. expectations fell. more consolidation in the airline's business.

alaska air has agreed to buy virgin america. the deal valued at about 4 billion u.s. dollars has allowed alaska air to take a 40% premium. it is unreal. we have four carriers controlling 80%. tom: we will have one frequent-flier mile. i can't keep track of them. the kids use all the miles. what is all that about? i don't think there has been an ipo since nexen was president. global is trying to get it done. caroline on the imf, what do we have? caroline: fascinating headlines coming out now that the eu is working in good slave -- good faith to finish the greek review. words from christine

lagarde to alexis tsipras. achievingcerned about progress in an environment of extreme sensitivity. wikileaks released a transcript of the imf looking to want to push more debt relief toward greece. let's get more on this story. it is a fascinating one. let's talk to bloomberg news in athens. set the scene, if you will. arguments between creditors and greek politicians and heated words from either side. yes, well this weekend has been a game changer in our of how the talks were going. if you asked me on friday, i

would say we are a week away from an agreement between the two sides. now, the imf has stated that we i ways away. the greeks are not ready to meet the fiscal targets that the imf and their european peers look for the greeks to hit. ally greecehe only has on debt relief. this has been tsipras' holy grail so far. tom: i like what you said about the imf he and the only ally. where are we in the crisis? is the crisis over for athens? >> i think this is more of a play that is intending for greek inner politics. i think we are seeing another play by the administration's. it went to a referendum.

i think it has more to do with tsipras' problem back home rather than a big escalating crisis with the creditors. give us a sense seeefore of whether we will the terms -- what still needs to be ironed out by greece to ensure that the bailout needs to remain in place. what are the key stumbling blocks? >> it is the same old story. it is the pension reform, government spending. the imf looks at greece, that the greek government is looking to increase taxes, especially to the middle class. it is the same red lines over and over again. the progress isn't there. we are stalling once again. caroline: and once again we see nerves screen pub in the market. thank you very much. on "bloomberg ,"

stay tuned for that in 7:00 a.m. in new york, 12:00 p.m. in london ♪

"bloomberg surveillance." the nation's capital. all riveted on villanova, unc tonight. a basketball game. caroline hyde in london.

vonnie quinn in new york. tom keene in new york. we could care less. [laughter] tom: our next guest almost canceled. sallie krawcheck joins us from chapel hill. this is fun. sallie: i give everything. yesterday, i thought maybe i would go to houston. i could not do that to you. you own me. big time. tom: big time? i have unc in my final bracket. sallie: i have them winning it. makes february and march bearable. you've dealt with a lot of employees for years. these kids are employees. should they be paid? sallie: they work hard. those kids work hard and they generated a lot of revenue for these universities. it is not my specialty, but these kids work hard. tom: let's talk about the state of global.

in bank of the world america merrill lynch, it is blowing up. where is it in five years? sallie: it has been. this is not anything new. you watch the industry. are they were -- earning their cost? tom: absolutely not. sallie: when was the last time they did? tom: a long time ago. sallie: we always tend to look at the good times and think, if. will get better you have to take it through a cycle. it has been a long time. tom: bring up the chart. we did this for sallie. here is bank of america corporation. it is not deutsche bank. not the best practices displayed by jpmorgan. transport best practices

over to other troubled press forms? sallie: here is the challenge. do you need a jamie dimon? 0.01%the top intelligence. to earn cost of capital? they are enormously complicated and systemically important. i want them so safe that my brother-in-law stanley can run it. he went to harvard. it is no university of north carolina. in wall street, it has all gotten to be, stan o'neal was isolated and jimmy kane smoked flawed.those guys are we need jamie dimon. jamie dimon? there is only one jamie dimon. tom: these are great challenges. we will talk about them in our next half hour with sallie krawcheck. let me do a data check. how coined. a second quarter data check was

not much going on except oil. oil has come back and little bit through the morning. certitude of seven or 10 days ago. dow futures up 25. churning.-- on your global wall street, on the future of american and european banking. we will do that with sallie krawcheck next. it is sort of cold for the dreaded new york yankees in new york. they will get the baseball season started. this is "bloomberg surveillance." good morning. ♪

show me movies with explosions. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away.

call or go online and switch to x1. only with xfinity. show show me more like this. s. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. tom: good morning. at the 11we look million plus files coming up. some of the headlines coming out

our extraordinary. the associated press saying the russian media do not mention the panama leak. different ways mr. putin is brought into it. a lot of it is speculation. someone that was helping him with gazillions of dollars. charles pentane out of london the -- on the king of spain's and kerry at my guess is it was document from 40 years ago. vonnie: she is the head of the firm in fact. the king of spain's onto is the head of the firm. tom: it could have been regular business. vonnie: a lot of legal stuff in here as well. not just illegal criminal activity. most of it i would say is legal. all of the premiers are reacting. iceland is calling for snap elections. news.t to the first word saudi arabia planning the

biggest economic shakeup since the country was founded. mohammed bin salman outlined the measures. saudi's will impose more taxes. measured are aimed at raising an extra $100 billion a year by the year 2020. more than triple non-oil revenue at a time when oil revenue is shrinking. talks that greece could be pushed into default and out of the euro area. officials say prime minister alexis tsipras has not made much progress with creditors. we still need to cut a deal on pensions, taxes and its budget deficit. it tighter security on french trains. armed marshals will be allowed to shoot if necessary. a team of copilots will survey security -- looking for suspicious behavior. -- two amtrak workers were killed when a train hit construction equipment left on

the tracks south of philadelphia . about 30 people on the train were injured. republican presidential candidate donald trump is back on the offensive of trying to make up ground for tomorrow's wisconsin primary. trump says the u.s. is headed for a massive recession and he says john kasich should drop out of the race. polls show trump trails ted cruz by about seven points in wisconsin. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. quinn.nie tom: sallie krawcheck with us. michael moore joining us as well with bloomberg news as we look at the beginning of the second quarter. the obvious question is what is the voice of -- what does deutsche bank do? what is the action plan for european banking to compete? it has been mostly about cost-cutting so far. you're starting to see some bigger chunks, some big job cuts

within deutsche bank and credit suisse. trailing back businesses to a significant degree trying to bring up our italy's because that will be the ultimate way that they compete with u.s. firms. tom: i look at the elephant in the room. m&a activity in europe. where do we expect that? 2020? michael: it has been slow to come around certainly. we have seen across the globe in the first quarter things were down. rbc coming out and saying rbc is down 30% year on year in the first quarter. they are expecting a pickup in the second quarter but not nearly as much as we had last year when you had a record year in mn day. one more thing that is dragging the bank. vonnie: we have notes coming out.

135 jobs today. the likes of kbw saying european .anks adopt syntax i want to speak to sally about -- you have a digital online platform at the moment. this is about innovation. still back in merrill lynch or smith barney come how would you be adapting to the syntec area to keep banks at the date? sallie: i think they have to recognize these banks have not innovated in a long time. you tell me, tom, the last innovation you saw in consumer banking the atm? when i was at these companies everybody thought cdl squared's were and innovation. they turned out to be increased risk and complexity. innovating is not part of their culture. tom: not derivatives and innovations. this is about the actual technological progress. they got everything going but the quill pen from the 19th century and to their great credit they are doing digital banking better.

where is it in five years? sallie: they have these old proprietary systems and every time we would go through, can we just replace them, it is billions of dollars. huge risk. client data and every time you look you say, we cannot make it work but we have -- it is going to the point where they have six guys who understand the programming. i'm not kidding. one of the banks was worried about them dying. tom: that is great. there is the reality of sallie krawcheck in the trenches like a lot of these people. we forget about that. opinion, all the meetings you gone to over the meetings over the years after your work at duke university, -- sallie: he went to duke? tom: we wanted to get you going this morning.

we will get to duke and unc in a minute. how have the meetings, the desperation, the sweat, how has it changed with senior bankers? michael: to sally's point, deutsche bank last year said we have 30 tech systems and we need to bring that down to three. you have so many platforms at these banks it makes it tough. you are starting to hear some things that are not just about changing around margins. it's like a radical rethinking of the banking business. there has been talk that some banks are going to have the client relationships and they are going to do that solely through tech and some will be balance sheets that other banks rent. they will be these pools of capital that don't have any interaction with the ultimate client. that is a major shift in the way people are thinking about how banks work. tom: caroline hyde looks smashing this morning wearing unc blue.

i don't think that is villanova blue. we have michael moore from duke university. sallie krawcheck of unc. does villanova have half a prayer against the chapel hill gang? michael: i have become a big villanova fan today. if they shoot 75% again they have a shot. tom: for those of you worldwide -- i don't know what the equivalency is at rugby. help me. the level of hatred here is off the charts. caroline: off the charts. tom: that first duke unc thing you go to, it is part of the fabric of the south isn't it? caroline: it is everything -- sallie: it is everything. evil versus good. devil versus angel. private school versus state school. new jersey versus north carolina. it is big. where is duke in the tournament? what happened? michael: we are still polishing

our trophy from last year. [laughter] sallie: you keep at that because we are playing tonight. there.t's leave it michael moore, thanksgiving so much are you the duke backdrop of the river thames. dartmouth has not played in a final four since time began. david lynch flour will join us with important comments this weekend on a need for fiscal stimulus. from new york, chapel hill, this is bloomberg surveillance. ♪

caroline: good morning. it is an up day. a look at the business flash now. much.: thank you so

the euro area unemployment rate has fallen to its lowest level since 2011. february jobless rate dropped to 10.3%. report shows a huge divide. germany's unemployment rate, 4.3%. attempt --est spain's over 20%. apple wants to become the first company allowed to sell used phones in india. a growing number of industry executives are opposed. they say it would jeopardize indian phone makers and make a farce out of the government's made in india program. more consolidation in the airline business area alaska air has agreed to buy virgin air. the deal is valued at 4 billion u.s. dollars. you can expect to see a lot more alaska air on the east coast. slots in jfk, laguardia. tom: you think they will. it is all over twitter, the hope and prayer of a lot of people

. diminish whatot made virgin america virgin america. what would you pay, 15% premium for a ticket? for a lot better service. sallie: much better. tom: even economy in virgin america was perceived to be better than many others. vonnie: you hear great things about alaska air too. sallie: i don't know. [laughter] vonnie: let's get off anecdotal evidence. tom: here we are with airline analyst sallie krawcheck. vonnie: the stock is up 36% in the pre-markets. tom: let's talk seriously about the savior. there is only one thing to make for the salvation of banking. not the net interest margin, not global gdp, but we will bundle assets together. everybody in, and make a percentage on equities and even

smaller percentage on bonds. sallie krawcheck has lived this and joins us now. howdy respond when you see everybody say we are going to be like ubs or blackrock and run money? sallie: these can be terrific businesses. the wealth management businesses take very little capital. still learning pretty good returns. the challenge for these businesses are that the financial advisors -- and i love every last one of them, they are getting a little bit older. i actually was with someone six months ago, said they had more financial advisors over the age of 80 than under the age of 30. the challenge is bringing in financial visors and training them is so expensive so a lot of these companies are letting the mage. tom: it used to be you made 100 basis points. but $1 million in 1% of one million. sallie, you have lived personally the budgets -- the balance sheets of those coming down in equity.

bonds are miniscule. let's start with bombs. can any but -- start with bonds. sallie: let's back up. if you take up each individual business separately there is pricing pressure and profitability compression. the surprise of my professional life is how the profitability, the wealth and asset management businesses held up. when i went in to run merrill, the roa, revenue on assets, had been flat for 15 years. while the bond business would have constricted, they were actually moving more into wealth management, more into the banking business. they managed to shift their value proposition to keep operability strong. vonnie: how behind the curve are european banks in terms of we have ubs leading the charge, moving much more into wealth management. willis become more of a theme or will we see the likes of credit suisse holdback and not admit wealth management is where it is? sallie: the same as it ever was.

wheree firms look over at the profitability is better in depending on where they are in the cycle say we are going to go into that. when fixed income starts to fly, if and when and as it does, they go back to what they are strong at. it looks easy. someone at citigroup said it is easy stuff. tom: can you banner that. ? its arts and crafts. this chart is a little messed up. ubs with a simple change. the red line should move over to .he right side everybody including credit suisse wants to be like ubs. be 10 major banks all doing the same thing and all win and asset management. sallie: brands can really matter, particularly if it is what we call high net worth. that brand that has been around

for a while and often times that person, i used to say bank of america should send thank you notes to every merrill lynch financial advisor because they were the ones who kept the business going when other businesses were in bad shape. tom: do you ever take a swing at ken lewis? sallie: no. tom: within that you had the whole mating of your world with bank of america. his asset management per se better as a separate business? is merrill better? sallie: you are hitting the third railsallie:. can i go back to whether bush -- [laughter] sallie: if these folks approach as we want to bring additional capabilities that can be a good thing. if it is cross sell, which the industry talk so much about, a person who has a mutual fund also have a mortgage, never worked. tom: give me 30 seconds on your ellevest.

how will that be distinctive? what will be the distinctive feature? sallie: in this country we have a gender investing gap. women do not invest to the same extent as men. it cost us more over the course of our lives in the gender pay gap. whether then ask the question wall street has asked, how do we wanted to women. we are asking how do we better served women. we have put in hundreds of hours of research to see what women like this lovely lady here are looking for. tom: you cannot handle her. all of her affairs are in panama right now. sallie krawcheck with us. caroline hyde in london. on bloomberg radio, john brown. former british petroleum ceo. john brown, coming up on bloomberg radio. york.snowing in new sing a song about april.

that is not panama, that is new york. it is snowing. yankees baseball. go rangers. ♪

tom: christmas will come soon. there it is. the blizzard went away. one of those spring snow showers. almost a white out in new york city moments ago. it was there for a second and now it is gone away to a relatively cold april to start our second quarter. good morning to all of you worldwide. foreign exchanges greeted yen leads away. stronger yen. not a big deal but it has profound ramifications. sterling puts on a bid after an ugly week versus the euro. a 0.80 down to four digits. significant and weakest in the least two years. let's have a look at what is coming up shortly. david westin, stephanie ruhle and jonathan ferro. stephanie: with john farrell here but not getting to spring

break. we are bring on the u.k. ambassador to the u.s. jon needs to feel a little u.k. love. we are also talking to michael singer. 4 trillion invested in hedge funds. this guy seems to think macro is the place to be read extraordinary if you cannot fortress shutting down their macro business. we will find out from mr. singer why he likes macro so much as well as the head of merrill lynch investor office. vonnie: tuning in to go at the top of the hour. some headlines now on the kremlin coming out speaking about the panama papers. notimir putin saying he is mentioned in any of the alleged documents concerning offshore transactions linked to the panama law firm. the spokesman is telling reporters this is because putin, russia, our stability, our upcoming elections are the primary target to destabilize the situation.

what is interesting is the global sentiment. two headlines on the bloomberg back-to-back, one from bloomberg , india's finance minister comments on panama paper. as from the washington post, the panama papers are awkward for beijing. this is not just about rich people in the west. vonnie: 143 politicians, families and close associates. go to the international consortium of investigative journalists website for a map. tom: let's finish up what has become interesting second quarter. sallie krawcheck. women not only investing on wall street but the whole idea of a reset for women. part of that is a catalyst of aaron callan. if you read the wikipedia of lisman you will find a soap opera that aaron callan parachuted into. when did you first meet her?

sallie: i have never met her. tom: i would never have guessed that. she parachutes in as a competent maelstrom.nto this what are your thoughts on her new book out and the idea of women coming out of the financial crisis to where they want to be, which is some really outstanding executive work. sallie: we all know the glass ceiling, women bumped into this in business. there is the idea of the glass cliff. things get bad come out goes the woman. quickly, who was the cfo of bear stearns during the crisis? you can't name him. who was the cfo of morgan stanley? name one of them. fault.n, it was not her tom: we knew that at the time. sallie: she was savaged and her life was forever altered. it was not her fault.

i loved the fact she has written this book. coming back into the public eye telling her story. phenomenal work in europe as well about the financial rewards from looking at companies that actually are led by a high proportion of women. there seems to be actual data out there now. we don't need to just talk about the good that can come with females running businesses you can look at the financial rewards. sallie: it's not just beginning. there has been research for a wild. lower risk, high returns on equity, greater innovation. greater long-term focus come a greater clients focus. , theruth is, wall street diversity has not moved forward over the past decade. it has moved backward in many instances. the research is there. the only research i have seen about what makes for a great management team. the action is not quite there. tom: i go back to the core

academics and women are way out in front from what i can tell with stem, math ability, science ability. shift inliterally a stem excellence going on now. sallie: the point i would always make is it is not women or men. it is diversity and having different people with different backgrounds coming together to make decisions. here on championship day, the you want a basketball team with all point guards? they are the most important player but if you have five point guards you're not going to win. tom: thank god we had a blue backdrop today. go unc. ♪

stephanie: concerns over a break that have been dividing the u.k. government and pushing down the pound. the country's u.s. ambassador joins us. exclusive saudi arabia lays out plans to raise $100 billion in

new revenue and what will be its biggest economic shakeup ever. a new report is rocking leaders of countries from russia to argentina over allegations they used shell companies to hide wealth. welcome to bloomberg go. we are here in world headquarters for opening day for major league baseball. good luck new york yankees. i'm stephanie ruhle here with david westin and jonathan ferro. david: stephanie is back. stephanie: thank you. almost as important as opening day for the yankees. david: absolutely. we're also joined by nick collis, good have you here. jon: stephanie missed fed chair janet yellen because she was on vacation.