francine: a mega merminger al ks down, and feedser and abegan scrap plans. and frontrunners falter. the primary's frontrunners are pasting the odds of a republican contested convention. we are actually watching the u.s. elections very closely today and something else i am closely watching are the yen.

tom: yes. we are going to cover what, four, five, six stories on "surveillance"? this morning? all i know is hillary is escaping new york. i like that image from last night. francine: yes. here's cynthia frelund. - here's vonnie quinn. vonnie: yes. cruz beat donald trump in the epublican race, 48-35. cruz still has a substantial lead in the delegates. and trump is also still on top in the republican race. has 433 delegates and

sketchtism could affect a treaty that even relations etween the eu and ukraine. but many in the netherlands say it's a tracer. and in the u.k. a flat pension program takes place today. affect is said to women and some say it would be less generous in the long run fixed irees to get a amount after 35 years in pension. foreign minister's head of the -- the chicago white sox investment projects that were blocked by -- could be revised. and the government of india is now investigating offshore

business of tycoons and celebrities. eaked documents show india's and vonnie quinn? tom: thank you so much vanya. equities are quieter than yesterday. here was a lot moving oil 3% h now and yesterday's modest currency. 110.41, careful launching. it is on a stronger support to break down to 1.09 will be stronger than that. francine, what do you have? francine: i have european

stocks unchanged. it's really energy producers that are lifting these. we all have a little bit of mma. cruz you see getting 37.4%. ringlet he malaisian in there and i wanted to show you copper. up a touch but only a touch. tom: and the ring sleth confidenced " indian row tia? roofy? rupee? krona, kroner. i don't know. francine: we are going to get ou on currency camp. let's do it on -- tom: good morning to all of you watching in poland this morning. let's this, this is the

optimism chart. we will do this with david medical paff in the upcoming hour. this is i'm out of a job. i've got to get claimed by a state to the number employed. the ugly necessary recently, d vonnie, here's what killed the destruction in the 1980's. this is about an america that is employed. and we are paying severe prices or will be. tom: francine, what do you have? francine: well, i got briefed by currencies and got this from jane foley who is on set but them the elling white line and the green line, so you're seeing an inversion, and for the fist time, tom,

since 2010, all of the transparency paras, i chose sterling, are more with price swings over this month and in the rest of your career. she is senior currency strategist at the bank. thank you for joining us. we need currency help. we are going to see a lot more volatility because everything is bench marked. >> the eu referendum, so there is that, but of course u.s. elections at the end of the year, that's a big risk and europe alone, yes, we've got the referendum in the uk but it's a bit of a concern that it's a lead, too, that they are of political concern, and i ey we could look and we have

seen movements towards far left and the far right. we've seen in. -- this is because of a this will come through in various selections as it has already done so, perhaps we can say in spanish and portuguese nd irish and others. fran: is it further east no matter or on the back of commodities? new ll, commoditys, 2007 zealand story and whether or not it's sustainable and what's going to happen with respect to china's yuan. if it doesn't, if it keeps going, then that commodity story isn't so good as perhaps

it seems right now. tom: jane, thank you so much for visiting our floor. nice to have you in the studio. where's the bet right now? i don't understand that idea of a one-way bet or a sort of one-way bet. where is the street? where is the speculation right now? >> to be honest i don't know the answer to that story. when we look at the yen we can start markets recovery and the ig drop as well as decline sooths market's concerns. it seems the yen market was not convinced. the yen market was quite concerned and it has remained firm. you had been talking about it and it seems despite recovery in the stocks we have had in the last couple of months, the market is just not convinced.

and if they do get better data then perhaps we cannot go elow that 110 mark to 109. tom: this is the trend of the yen and it shows how unusual the ony momics levy was between blue and red and that line and the red circle are. nobody con creeds like me and francine that the yen could lime to a 100 or 94. >> for the past 20 years it's a little bit outdated. the reason being is over the last 20 years or so, we have seen china's growing prominence. particularly in the asian region, now fetishes we started

to look at the dollar yen or japanese effective exchange rate, we see a completely different story. so one by the bank of japan and not the bank of england, it went to its lowest level since 1973 which means it's not as strong as the one i tried to plifmente and there's huge difference between the currency and pair. and from hsbc, we are doing a lot on the litmus paper of the global system with jane foley, durham air will join us from the hsbc and david medical paff francine t hour and lacqua with us. stay with us. ♪

tom: good morning, everyone. we welcome all of you to "bloomberg surveillance." francine lacqua driving the bus right now in foreign exchange. francine: thank you, tom, more asset squares trying to pay down billions in debt. trying to move to canada's as h pension fund and & m posts their first-quarter inmates. h & m predicts the situation will improv if i end of the year. and according to a person familiar with the matter,

fizer has decided to terminate the deal which would have given her a break down. that's our bloomberg business crash. and here's a person familiar with saying that. francine: he has had a research for intelligence and international senior and that travel bank, sam, thank you for coming on. -- nderstand by and >> we had a press release that we were going to be looking into this. they are complex rules. all aspects feed into whether

pfizer can make this productive or not. i'm just going to hold tight and talk about a hypothetical. >> if they were not to members f the jury it would be a major setback. >> the o question is setback for whom? a yle has a 15%-16% earnings about 7% earnings are g.d.p. on the other hand pfizer was ooking very interesting when they had the slow-growing business they park all their old trucks into it. it actually pushed us back i

two years and some people didn't like that. so this is not perhaps a here k of -- sam, help me with the tax shield of moving to dublin and with the idea that it's a creative deal, well, whivente do a diluted deal? we used to do that for years and years and years. why not just do a diluted deal? >> that would be fine if at some point you got something out of the deal. the sure fit is not always -- tom: thank you. -- nd it really only made pfizer "not top 10" sure onetarily

i don't have see, if you're not going to get any appreciation then there's got to be something. i can't necessarily see what it was. tom: but this is the matter. transactions are being done simply because of the hancement you get from the geographical move of dome crimes. what's al can's identical? >> al can is already a good growth. and the potential of growth in front of it, hopefully if the deal with taber goes through, they will be essentially debt-free or potentially even positive cash. so that positions them nicely for further m&a and from an operational perspective, more

interesting. so that long-term game is still if he is not fed up with this maybe he can consider coming back and looking at glaxo. perhaps after that, the elevate the thing that closes all this down and makes it very difficult to make them work if the basic numbers just don't add up is you can't do earnings anymore. and you can't loan back and back.the interest francine: are we going to see m&a because of currency volatility get stronger? >> i think the first thing is the tax implications.

the u.s. is not the only government by any stretch of the imagination that wants to clamp down on the tax avoidance. the global financial chris circus the large deficit. they have cut the fat and really that they need to get eficit down and inflation. that's money that we -- the other thing we know we have lower levels of productivity and in the u.s. and they should be about raising up the economy and when they are not generally filled with that. tom: sam will give us more thofpblet sam, thank you for joining us today with bloomberg

"surveillance." peter greg of citigroup is outstanding on industrial america and specialty customers. we will drag coed into "bloomberg surveillance." with'll do that in 30 minutes, good morning. ♪

francine: i'm francine lacqua near london. tom keene is in new york and this is this morning's "must read." rights in bloomberg's view, the

antitrust vote -- and it's the his person bout press person. le to put it in simple terms it looks like the republican mom snation going to be chaotic and the convention is not only going to be chaotic but extremely contested. tom: yes. these things have become boring, boring, boring. and this republican convention in this late summer is it's going to be boring, and what's but senator me, cruz is probably the least loved republican senator by

republicans in washington. i don't understand how the g.o.p. gets behind either candidate. to me it's an absolute mystery and of course megan will help us in the next hour. francine: yes. but you can also understand tearing your hair out and that will have an impact on dollar. >> at the moment, because there's still he hasn't been too worried about this. but as we get closer to november, it's more for the u.s. dollar. if we again, look at u.s. politics. and either candidate's on the republican side and i was reagged we are -- this mirror that was the far left and the far right. as we were discussing before, there's a lot of disgruntled

republicans out there. assuming clinton remains up there, -- but there is some risk out there for some chalky implications. >> jane foley. the convention is -- i'm going to call it 25 days that small affair and we will go right from there and drive this conversation forward with megan and twont all due respect, at 5:00 p.m. good morning. ♪

tom: good morning. in the markets, the york still very cold, yankees crushed by the houston astros.

it was like 22 degrees, snow and ice on the pitcher's mound. googling i'm quickly in celsius, it was minus five. tom: i was exaggerating, but it was called that cold. we have our -- cold. we have our first word news with vonnie quinn. vonnie: let's start with ted cruz. he defeated them of trump wisconsin primary, winning 48% of the vote. he center dot republicans now have a real choice -- he says republicans now have a real choice. >> hillary, get ready, here we come. vonnie: donald trump is still on top.

capade no concessions fees -- speech, he called ted cruz a trojan horse. beat hillarys clinton 57 to 43 and has his eyes on the next prize. clintont tell secretary , she is getting nervous and i don't want her to get more nervous, but i believe we have an excellent chance to win new york and a lot of delegates in that state. vonnie: the new york primary is april 19. clinton still has a substantial lead in delegates. new zealand's former prime minister will run for secretary-general of the meditations -- united nations. --rent secretary-general term ends later this year.

no drama and this national championship game. swamped syracuse 82 to 81. tom, i know you are watching that game. i did a greater in the cavity -- men's a sensitivity -- greater sensitivity and analysis of men's sports and women's sports. it is a great story. i am not up to speed except to say it is enhanced, this year. you wonder what the dollar will be in five years. economics of the foreign-exchange. of --l meyer is the head

foreign exchange policy. darrell: it has been helpful for us because it has been part of our story of being more bearish on the dollar. steve has given us a bit of a lead which has played out pretty well. tom: where are you on the euro? i believe deutsche bank. 120ell: we have had euro-dollar for many months. tom: that is alone call. darrell: it is nice to be the gazelle on the edge of the pack. you know you will get noticed but we felt we had the right view. tom: this is such a global show. who would come up with giselle on the edge of the pack? francine: what is the gazelle's view?

do we have donald trump in the presidency, do we have brexit? and currencies, it is this wonderful cocktail. principal elements are we expect a relatively dovish week. we felt that they would be withrained -- constrained additional euro weakness. both of those things come together to try that reappraisal .f the dollar we realize that and we hope the market has. think it is the end of the dollar rally given what we have heard cherry hill and and what kind of thoughts are you expecting from the minutes by the fed unveiled, today? daragh: we called the dollar

rally around cointreau months ago and we argued upset through that period as well. december where there was for people saying we only needed to hike twice. now we have 10 of the fomc telling us that. this is despite yellen telling us her view of the economy has not changed, that much. overall, exports to be kind, are flat. see. an unusual thing to compensating, the newtonian mechanics of foreign-exchange fall into the fact that trade is down, dramatically? it feels they are a more trade reliant currency.

we talked much more about currencies and surpluses only go into the market. it has been a long time since we worry about the u.s. trade deficit. francine showing dollar malaysian ringgit in her -- what does it mean? daragh: one of the big problems is people want to this idea of china fears have receded and fed fears have preceded. e.m. relieswth and on that whole trade mechanics as you described it to get reinvigorated and that is not happening. everything we had. >> welcome back to --

[indiscernible] it feels like we have kind of a cease-fire for now, so i think some of the volatility should proceed and the china fear factor has gone into a retreat, so i would say that contributes to volatility. you do have patches of referendum and volatility, but the idea that we are in this broad trauma in general, that i think is a story that is so much -- no longer so much in play. you are saying that emerging markets and fx is facing a -- and it isour use wire telling me watch out for defaults in emerging markets. back in limastory

will recover the imf and it kind of petered out. do we need to worry more about the fault in emerging markets? daragh: this story comes around every so often. andheard many months back we have all heard the story. what happens is, the fashion seems to phase in, come back, and for the moment it is. i remember one of the big scare stories about leverage and the dollar exposure but we had a softer dollar over the last few weeks and that is going to be helpful, but we don't talk about these windfall gains for emerging markets by virtue of this dollar weakness. maybe an asymmetry in the coverage in terms of the market. at the end of the day, the key drivers will still be fed fear factor, china fear factor and

also whether we've got growth in a global environment. they will be the three elements, much more critical for e.m.. francine: thank you so much. we might be talking about another haven, next. coming up, conversation with the swiss national bank president. they're looking at negative rates and what that means for mortgages. ♪

tom: good morning. bloomberg surveillance, a jumble of ideas. we had not talked in ages about glencore. francine: we used to talk on a daily basis. share prices were down significantly.

we knew they had debt problems and had to get rid of it. today, they announced they were selling a stake in its agricultural unit for $2.5 million. for more on this, we are joined by our chief energy correspondent. they had to do something, they had to restructure. the share deal and price is down, is it a money problem or were the markets expecting more for the selloff or did they want a bigger chunk of this asset? that's going to help them a lot, to review the big pile of debt. the market reacted poorly is because people suspected there would be more in terms of valuation. the valuation is at the bottom of expectations.

weis a bit lower than what were expecting, probably why the market is taking it that way. -- between 20 and 30%, they could smell asthma -- sell as much as 49%. got this bighey check of $2.5 billion. francine: are they selling other assets? >> they have been selling all of their assets, but this was the big deal that the market was expecting. they also had equity at the end of last year. the share price has also come back from the lows that we saw, last year. a timid reaction from the market is reflecting in the share prices have recovered, significantly.

-- fromwas down 86% of 2011 and it has rebounded nicely, but is it all clear for glencore and the other companies like them? >> it's not and you are right because they still have two problems, one is the price of coal. very low demand in china is a big problem for glencore. the other problem and this is , copper prices are not recovering and francine had his interview yesterday with the head of the imf or he presented a negative view of the global economy. you are bearish about the global economy, you are bearish about commodity prices and you cannot be interested or bullish about glencore. tom: diddy have enough cash on hand? computer by aple

big margin. they have enough cash to whether the next fewr years. they are very exposed to cold and copper and those commodities are not recovering, yet. call is a big problem. with climate change negotiation's, with china slowdowns and every country trying to move away into more clean power, that is a big problem and glencore made a big bet on coal. coal priceses -- do not recover -- up, really looking hisard to this, dipping

toes into republican politics years ago, but david bell has on new, mediocre.

francine: i'm in london and tom keene is in new york, but first the business flash with vonnie quinn. -- techgermany companies taking minority stakes in the share digital mapping service. ben'sudi and were cities bought here from nokia last year. german automobile production fell with upsets in domestic demand. in norway, lawmakers are putting pressures only rose largest sovereign tax fun to quit using tax havens. one lawmaker says the norwegian fund has about $24 billion in assets park in offshore accounts -- parked in offshore accounts.

tom: sometimes you get lucky in journalism and you said to do an interview, in this case you move from result to panama and if you are blake schmidt keeps track of the wealthy in latin america and asia, you interviewed two lawyers. he nailed it last year by interviewing the two lawyers at the absolute nexis of the penama papers. dressedidt joins us now like a latin american billionaire. have you on the show. when you walk into the office of this firm, but was your reaction ? office ofinto the this firm, what was your reaction? any lawt looks like firm, people pushing papers and waiting for me on black leather furniture. we sat down and drink some coffee and started talking about

their offshore creation business. tom: i can't get the answer out of vonnie. how much to these guys till on our -- bill ab hour? -- an hour? blake: they say they charge fees when they sell the company and an annual fee after the company has been sold, of legal services to keep up with taxation and respond to inquiries. a feway that they charge hundred dollars to sell a company and annual fees of maybe a few thousand dollars. tom: what is distinctive -- about panama as opposed to the other tax havens? panama,hat is unique to its geographical location, its history as a location for shipping. penama has a long history with the canal.

of ships using the flag in panama. lawyerslved into -- the set of legal mechanisms for companies to also set up, using the same laws as delbene protect -- asrom ownership delaware to protect them from ownership. they ended up moving most of their business to the british virgin islands where it took off. you spoke to the two lawyers, did they have any idea this was coming? i imagine their business is now over. hints, one gave some of their consultants mentioned a story coming from bbc and they thisdefinitely aware that

business of selling offshore companies in mass was sort of a thing of the past. they had been trying to diversify into providing more legal services and even asset management and their business is changing, but it is now under fire after this leak was released. francine: if the money has been earned illegally and taxes have been paid them ethically, it is fine for it to be offshore. we are waiting to see how many jurisdictions decide that offshore accounts should be illegal or much more transparent to see how much business will go away. blake: that's the thing. we are still wrapping our heads around the size of this thing. firm, theree law are set -- several others in panama, london, they -- the u.s. and other countries.

we are still understanding how big this thing is. tom: thanks so much for being with us. congratulations on the terrific article. cannot say enough about your work a few days ago. an article on the principles of the firm. this is about money moving around the globe. at the end of the day, the .ollar is a reserve currency it comes down to suitcases of dollars or euros. jamie dimon was upset because you could get hundred dollar bills out of the atm. do we know where they all are? daragh: remember -- remember you -- if you addout

up all the world trading goods and services, it's about 2% of the daily current -- daily turnover in currency markets. on in currencys markets is unrelated to trade goods and services. it is related to capital and banking flows. is banking which flows and that is where you have to get a grasp if you want to be currencies because that is the big swing factor. tom: there is your lesson for the day. francine: there was also huge read across. when you look at implications for david cameron, there is also this offshore firm set up by his dad. him out ofing to put power, but this does not play into his popularity ahead of it --ast -- brings brexit. daragh: it's an awkward position to be on the list, so iceland's

prime minister resigning, described as the first casualty. is aay, maybe it distraction because cameron wants to focus on the issues and he sees this as a sideshow. by the time we get the june 23, we will probably have forgotten about panama. tom: thank you so much. asset and take an focus on an hour across the other news as well. in our next hour, on the american economy and american politics. david malpass will join us and we look at dublin and taxi version with peter tague.

♪ america stands alone with a new global mediocre. david malpass on what the next

president must do. while donald trump takes a thumping in wisconsin, clinton escapes to new york. the dublin show game is so over. the transactions and combination game has a new set of rules. this is bloomberg surveillance, live from new york. francine lacqua is in london. the politics of america, it gets more interesting as he jump to the conventions after new york -- as we jump to the conventions after new york. probably that will have an implication on the dollar and we will watch the energy commodities like glencore and an opec meeting about seven days from now. tom: i love how in three weeks we get brexit and they cleveland republican convention -- the cleveland republican convention.

first word news with vonnie quinn. vonnie: setback in wisconsin for the front runners, challengers ted cruz and bernie sanders were the winners in tuesday's only primary election. ted cruz beat donald trump 4835. sanders because hillary clinton with 57 to 43. clinton still has a substantial lead in the race for delegates. trump is still on top in the republican race. skepticism about the european union may affect the outcome of the referendum in the netherlands. other 27 nations in the block have okayed the agreement, but many in the -- in the netherlands oppose it, saying it is a precursor to allowing the ukraine to join the eu. bloom -- the movable

benefit women and self employed by giving them greater security. some analysts say a little less generous in the long run. ofirees get the equivalent two hundred 20 u.s. dollars a week after 35 years of contributions. open a newg to chapter in their sometimes strained relationship. china's foreign minister has the ruling national league for democracy. -- chinese investment projects that were lost for the former military government could be revived. the remit of india is now investigating the report of offshore accounts of business tycoons and hollywood stars. more than 500 indian accounts described by the penama papers leaked documents. global news 24 hours a day. tom: tabloid data check is what

we had, yesterday. fire and brimstone. yields in a minute, oil with a bid after the cars on the next screen. i want to focus on the bottom, at the german 10 year yields, 0.125%. we really reset yields lower, yesterday. francine: it is important to watch out, but there is an auction coming up. i wanted to show you malaysian ringgit. it is leading a rebound and emerging-market currencies and attacka is a very structure. tom: it's a very cool chart and it's rare to -- the dollar and

get moving down as we talked to -- earlier. ,his is the optimism chart claims down versus employee, we have never seen such few claims to unemployed going back decades and decades, this is a real indication of an america that is more than fully employed. . vonnie: it's pretty unbelievable and all of the debt. this falls into -- i have -- it still falls into what cheruiyot is looking at. for the first time since 2010, let's bring you over to this chart, the sterling volatility three months in the white, you can see the inversion and what it tells us is that for the first time in six years, traders of all fives -- all five of the most active currencies --

a great chart of showing the tension as we go to the end of june and brexit. we have to recalibrate after wisconsin and the american economy, everybody knows that the elected gdp is molding numbers for q1. we need to bring in david malpass, he can write up a storm, and he is always controversial on his optimism on the american experiment. let's do the horse race in our next section. i want to focus right now on the two americas of john edwards. this terminal and -- this terminal chart shows one america that is doing well. how do it right the other america into the good news of this terminal? david: this is the hardest thing to accomplish and one problem is these are people who already had claim,so as they file a

they are often on their way to another job, leaving out the second america which did not get the chance at that first job. people,a lot of young minorities that really have not gotten into this part of the economy. the way to do that, you have to have more small businesses, and i've been complaining a lot about the small business lending not being there. remember what the fed is doing is buying only bonds, that benefits people who issued them. that means the government and big corporations, the elites, the establishment, wall street are getting the giants of cities from the fed and that squeezes out the people that can't get to this point. tom: are they in anger? are the people and mr. sanders and mr. trump represent, that anger that's out there, did you ever see that on the campaign trail?

did you see that anxiety and anger when you were in the trenches? david: yes, and it has been growing. the concert of america is supposed to be you are supposed to have equality of opportunity and there are lots of people were left in the second economy who don't get to see that at all. there was a story about the woman who finally got a mortgage after eight years of not being able to. tom: this is what's so great about david malpass, i love the phrase second economy. you are suggesting that we don't have a just problem, but we have is inequality and that is, you believe linked to bond buying. say thatr to inequality cannot be tackled until we have a normalizing a great? david: i really do think and people have different views on

this, but the point i make is that the fed is buying bonds quickly by borrowing money from banks. who do you think gets squeezed out on that? banks are normally in the business of lending to smaller businesses. there is not another mechanism in the u.s. that provides inventory loans, accounts receivable, working capital, so that creates this giant problem of how do you get commercial loans to the little guy when the fed is borrowing, they borrow every day, $2.5 trillion from the banking system, that is money that should be going into the economy and that is not letting it. it's controversial because people say the fed creates money, they haven't created any money, the m2 growth rate, money supply growth rate, has been dead slow. japan's has been declining. the more bonds they buy, the slower the economy goes. francine: the idea of qe,

worldwide crates inequality is amended getting a lot of traction in europe as well. how do you tackle inequality in this environment. t? david: the ecb is going to be buying corporate bonds, i don't think he can work that way. a programso doing which is direct lending from the central bank to small businesses , so that is a heavily government centered system that i think would work, except it's purely government. tom: we'll want the united states of europe -- we don't want the added states of europe. i was stunned when i brought this chart of, u.s. nominal gdp, back to the crisis and euro nominal gdp with all the challenges that madame lagarde mentioned yesterday.

the animal spirit is unprecedented coming out of this crisis. david, weat that don't want to become like europe, what do you need to see out of president clinton when she is elected? what do you need as a republican to bring president clinton to the mainstream? david: one issue is whether she is going to divide or sell from the obama policies. there hasn't been a feeling in the u.s. that the federal government wants smaller businesses to do well. they don't even give much lip service to it, much less policies that would make it operate. we are talking about the complexity of the tax code. it would be helpful if president clinton came out and said we will support by the tax code. it is a policy attitude that we

can fix this problem, but we have to make major changes in what's been going on. at the fed, a critical -- i wanted them to stop paying the banks so much for money. the fed is outfitting the whole rest of the market and paying the banks $14 billion, but that alone on its own authority, paying 14 million to the banks this year for them not to lend. that does not make any sense and can be sucked right away. tom: david malpass with us for the entire hour, later today, on bloomberg television, the st. louis fed, he has been very visible recently and also very nuanced on where the central bank is heading. ♪

francine: tom keene is in new york, let's get to the bloomberg business flash with vonnie quinn. vonnie: more asset sales a glencore, they're trying to pay down billions of dollars in debt selling a minority stake in its agricultural unit to canada's largest pension fund. american international may be cutting jobs in the united kingdom. they may eliminate about 125 jobs, about 5% of its workforce. aig has been backed -- scaling back and moving jobs to lower cost locations. -- part of ause plan to save more than a billion dollars a year.

employeesabout 55,000 . -- with us again and will leave new york for weeks. megan murphy of bloomberg's washington office, our bureau how big of a when was this win was this for mr. cruz? go forward from last night, the calendar is not as emily to him unless he can take what we saw last night and make some really interesting trend. if he can sit together that sort of constituency like he did last night and if it is a real breakthrough where people sort of strategizing to vote for him,

that could be a big step. tom: is the sender from texas and establishment candidate? be an he will never establishment candidate given what he has done in the senate and what his colleagues think of but given the alternative, given the options they have, there is a voice among many that better to potentially lose with ted cruz that it is to have donald trump as the standardbearer. tom: that has a ring to it. megan: potentially rupture the party for a decade. francine: contested and chaotic will the convention be? megan: we have the clearest indication was cap -- why wisconsin was important, we look at the outcome this morning with ted cruz taking the delegates in wisconsin, it becomes difficult to see the path forward for donald trump to get to the magic number by the end of the primary

calendar. it looks more like the like were going to have that -- more likely that we are to have that contested convention. if we can see him racket that huge win, the momentum may shift again. francine: bernie sanders has massive momentum and it does not look like he's going to come back. absolutelyrk be detrimental to one of the candidates? megan: a lubricant and cannot wait to get back to new york, her claimed home state. for has been a bad stretch her campaign and whether or not bernie can actually meaningfully close that delegate gap. we've always wondered when she will track to the left to bring on these bernie voters. tom: i get the soap opera, but what percentage of sanders

voters would vote for the secretary? megan: what is interesting is when you look at his supporters and where he draws the most, what if those lines in wisconsin. are they going to wake up and say they will vote for hillary and i think a lot of people say the answer is no. what did you most get wrong in the primary season? i think we are rounding third base. , i gotu look back and go that wrong, what is it? megan: what did we get right? it has been one twist and turn after another. one thing you want your enough about is john kasich and the collapse he showed last night. that enough people are talking about that. tom: people like you say kasich collapsed. did he ever have -- he was like 3%. megan: he was going to have to

take more of those voters, those voters seemed to gravitate towards ted cruz in a way that he was not thinking. tom: does donald trump have an organization to readjust and calibrate for new york? megan: he needs to bring in major talent and rethink his management. his campaign manager has been arrested and charged with battery. he needs three of i await his message, going forward. trying to get megan murphy in trouble, thank you so much. this conversation driven forward five days a week. this morning, our labor secretary. this is bloomberg surveillance. ♪

francine: tom keene is in new york and we talk about regulation in our morning must-read. dimon --op-ed, jamie jamie dimon. believe i can say on behalf of most of the nation's ginormous banks, that we are byportive of the efforts small and regional banks to work

responsibly with the regulators and if necessary to congress to address new rules and requirements. david malpass has worked for 2 big toworked for too fail. this is what you were talking about earlier with regimes of regulation. david: i call it ineffective regulation. are 100,000 regulators looking at the banks all the time, so one of the problems at the big banks have. i'm not a giant supporter of banks, i want to see jobs and growth on the ground all businesses. one of the problems of the big banks face is that they are not so popular in washington. i have not read this op-ed, but i take it he is saying a lot about lobbying power to fix this regulation has to come from small and regional banks. they're the ones that can talk in each congressional district around the country and try to

get some rationality back into the regulation. the problem from washington standpoint is its giant fund to regulate the bank's and you don't care about the effectiveness. they are still trying to write the regulations that were passed in 2010. muchine: if you have too regulation, it will actually hurt the smaller banks because they don't have the lawyers to deal with it. david: that's right and some people say that washington wanted that, to force the small banks to get taken over by bigger banks so they could be under the thumb of washington more. tom: david malpass with us. i'm looking forward to this. coming up, we speak to a gentleman who knows a lot about mergers and acquisition -- and acquisitions, peter tague is an expert on industrial and chemical america and also doing much more across all of citigroup's global m&a perspective. we've got equities, bonds,

currencies and commodities. let me do a data check on it right now. futures are up 6%. i want to mention german yields really signaling something about the malaise. we heard that from madame lagarde, yesterday. in theng everybody hydrocarbon space is watching, andican oil, $37 a barrel brent crude, $38.75 a barrel. a frigid new york city, this is bloomberg surveillance. ♪

tom: good morning. let's get right to our first word news with vonnie quinn. vonnie: ted cruz calls it a turning point in the republican

presidential nomination. he defeated donald trump in the wisconsin primary. ted cruz says republicans now have a real choice. >> we are winning because we are uniting the republican party. bella ray, get ready, here we -- hillary, get ready, here we come. donald trump made no concessions -- concession speech, he issued a statement calling ted cruz a trojan horse. sixth sanders won his caucus or primary of the last seven contests beating hillary clinton 57 to 43. >> do not tell secretary clinton, she's getting nervous, and i don't want her to get more nervous. i believe we have an excellent chance to win new york and a lot of delegates in that state. vonnie: the new york primary is april 19.

clinton still has a substantial lead in the race. in mississippi, protesters gathered outside the state house at the governor signed a law that allows businesses and religious groups to ban gay and transgender people. the governor said he is protecting religious freedoms. there was no drama ended national championship game. tot's jesus want syracuse 83 51. the win gave the uconn coach a record 11 titles. tom: this is a good thing. peter tague joins us. discusses the reality that someone who is actually working in the trenches of transactions and combinations of ross america with a real focus on the

chemical bills -- business and industrial energy. peter, wonderful to have you. what is the catalyst besides citigroup burning incense in his office to get m&a back to the fossil that it had, last year -- bustle that it had, last year? peter: 2015 was a blockbuster year by any measure. it was driven by the very largest transactions. we had 10 transactions north of $50 billion. tom: money is nothing now, it is dirt cheap. i don't understand the slowdown if money is still cheap. peter: money is cheap, but at the end of the day, the largest transactions are driven by confidence and ceo confidence and we have had a volatile start to the year. if you think about just the stock market, as it did, we came

out of january with a strong get downward and we pulled up a bit. oil we have seen drop down to as low as $30. that volatility is unsettling for the market. we had a wonderful conversation in our last hour about how this is financial engineering. are you a financial engineer when you do a tax in version deal? peter: you are using the existing regulations and working with them in -- within them to maximize for the client. it is only one tool among many. we think about the totality of the financing structure. that would include companies currencies. basis that a the

good deal is one that starts from a strong strategic area. francine: the tax rules around the inversion have changed because the obama administration. if we do see pfizer walking away, does it mean any other m&a based on a version of tax won't work? peter: there is no question that the rhetoricrsion, out of washington around inversions has definitely had a chilling effect on transactions and that type of transaction. said, inversions are just one aspect of the current of the regulatory landscape and we will continue to do transactions within the context of what we were is legal -- whatever is legal. i think that the direction of

which and the speed with the government continues to pile on the rhetoric around these types of transactions did catch me by surprise. francine: can companies challenge these new rules by the u.s. treasury department? peter: is rules have been proposed, we will see what ultimately ends up happening and we will roll it forward. the directionthat of travel around inversions is one which is going to have a chilling effect on that type of transaction, at least over the near-term. it by no means suggests that all types of tax driven transactions are going to be abrupt. francine: how do you factor in potential market instability and the environment, going forward. ? peter: the market instability

takes a number of different forms. we have seen both that movement or lack of movement. we have seen volatility and commodity prices and a great deal of rhetoric around exit of late. whether it -- around brexit of late. volatility and instability is terrible for my business. francine: that is why we have not seen so many. peter: that is very much part of the story. tom: you are a police officer in helping corporate offices do the right thing. consumer products are priced almost at 50 perfection. i'm looking at 23 multiples, 25 multiples, it is insane. what is your advice to them? with stock valuations rise, it typically gives confidence to boards about the perspective that the market has on their own equity and therefore they feel more

comfortable about the position they are in, within their own industry. a strong stock price is hardly the basis for caution. gdp,week, nominal everybody out there is looking for growth through your desk. there is no end to that. peter: you touched on the critical issue, which is that what has driven the merger activity in 2015 is the search for growth. in an environment where cost-cutting has pretty much run its course from 2008 through 2013, that is all companies did. in an environment where investor sentiment to put the demand on companies once again to return to growth and growth in earnings, if you can't cut cost any farther end if the world at large looks highly volatile and therefore a frightening place to invest in organic projects, m&a comes to the floor. problem, david is

that people are sitting on cash and that is that it is very true in the u.k.. what will it take for these ceos to either do buybacks, dividends or be little more aggressive on the m&a front? david: it will take faster growth and the problem is, we saw this with lagarde. japan is still in the water. their yields are all the way out to the 10 year, which means they do not expect much nominal growth. companies like that in consumer staples, there needs to be some sense that in the next -- within the next five years, there will be some global growth. i'm critical of both the tax code, there is this giant problem with big government and the federal reserve is gigantic. central banks around the world are trying to stimulate by ,uying just one type of product bonds, and they are using bank loans to do it.

that does not make any sense and until it stops, it is hard to see nominal growth rates going up enough that you want to use your cash. francine: thank you so much. coming up, we have a conversation with the swiss national bank president on bloomberg . we talk about currency havens and negative rates and the impact it has had on swiss mortgages. ♪

tom: good morning. we are talking to peter tague. we will continue that can cite that discussion about the hour. francine lacqua is in london and does not know where hamilton college is. north that in february,

the polar bears come down to the lake to get warm. francine: i even have a capitals puck at home. tom: that is very impressive. you should have a complete our on the washington capitals. right now, the bloomberg business flash with vonnie quinn. vonnie: luxury carmakers in germany are in talks with microsoft and amazon. the discussions could lead to the tech companies taking minority stakes in the digital mapping service. german industrial production fell less than forecast. the slowdown in global trade offset domestic demand. more asset sales at glencore, the commodity trainer -- trader

trying to pay down billions of dollars in debt, selling a minor stake in its agricultural unit. price, $2.5 billion. francine: now for more on glencore and the trials and tribulations of a stock with a lot of? by investors and analysts. here.to have you they sold off part of the agricultural business and my first question is, they are selling off one that is not doing is that as the others. what are they left with? >> a majority of their business, obviously. this gives them the opportunity to expand. what everyone is focused on is this great big pile of cash they are getting out of it.

the fact that the debt is coming down is a huge plus for them, even if the deal itself is not quite what everyone was expecting. francine: this is in terms of what money they get back. >> a percentage. people were expecting possibly less. they were given in turkey -- a large margin in terms of wyden's. -- if you look at the share prices, their relative to the last few months unchanged. this is no great calamity or positive, it is in line with expectations from that point. francine: are we expecting more selloff after this? >> there is an expectation to sell off another 20%, literal and. -- later on. peter:, when you look at global m&a, we were talking

about tax inversion, what does that -- what does this piece of m&a tell us? m&a as the more commodity space -- we were involved in the transaction so i will talk in generalities. you are right that the commodity related companies are under a great deal of duress and for all the reasons we understand in terms of the downdraft and the underlying pricing environment. the need to do letter is something that is primary in the boardrooms of all the large commodity players. that need is translating into the on sale of assets and a transaction like this one is a good example. i think the other thing that is see theing is to pension fund stepping forward as an acquirer of that asset. thatis a pool of capital

we expect to do quite a few more transactions. tom: we have a headline coming out. you may have artie known this before you stepped on the set. pfizer terminates proposed accommodation with elegant -- with -- allergan. supportive of the thesactions, do we risk tensions of the 1930's between government getting in the way of what finance needs to do? it's got a little bit of that when you see pfizer terminates transaction come across the bloomberg. peter: the regulatory environment -- fundamentally, i am a believer that it is good for companies and countries to encourage a robust transaction environment.

a big portion of foreign direct investment is driven by m&a transactions. i think we want to see a transactional environment which is supportive. tom: this is the heart of the matter, david, is finance good for america? a lot of people don't agree. david: we have to have focus on jobs and how do you create jobs metal gets what about a natural engineering. what we've done is created this very artificial environment with the rates as low as they are. quote recovery out of 2008, but it's bit what -- been one of the weakest on record, that's why all of the attention switches to m&a transactions, when what you should be talking about is gdp growth. the bottom line is, synergy is an evil word. how do we make synergy a

constructive feature for america? david: you need more organic growth. the reason companies are combining is because they can't find growth in their own lines. thatverriding problem is the world is growing, even slower than the u.s.. first quarter u.s. growth, we are only looking at half a percent growth in that is after the fed has been trying for eight years to create stimulus. what is happening right now is working -- not working, so you need a new policy that creates or allows organic growth. in any time, you are stuck with financial -- coming up, we are thrilled to have david malpass and peter tague. will look at the new world of transactions, finance and the american

economy. ♪

vonnie: official news now that

the pfizer allergan deal is now over. allergan is down 1.2%. pfizer is up less than 1%. title, mikeup the mckee noting it is nothing compared to what we saw in this year decline. let's do a foreign exchange report. yesterday, the yen dramatically stronger. strength, ins that would note the dollar index is stable with a dollar -- dollar four cents handle. coming up shortly, it is bloomberg . david, what do you have on the show? david: we talked about the aftermath of the pfizer allergan and what it means for other companies and investment banks right to put these deals together.

we are also joined by the secretary of labor announcing big sweeping rules about responsibilities for brokers and retirement accounts. outspoken -- by an since you love ice hockey in some people have who raised $1.6 billion to turn general counsel's offices into profit centers, cannot wait to get for that. tom: surveillance correction now, the number trotted out for wasfee on this busted deal $400 million, there has been a adjustment. -- $450 million. -- weilling to get lucky like to get lucky with our guests. peter tague and david malpass, they run -- peter, what i look at this transaction, how will warren buffett react and people like him?

the big dealmakers, the brazilian money that has assisted and the chinese mystery money. how do they adapt and adjust to an anti-m&a washington? peter: i'm not sure it is anti-m&a washington. it is certainly an anti-inversion washington and there is a difference. tohink the need to continue support a transactional environment with the regulatory environment that is both stable and good for the country and good for the best interests of the broader population is all important, but i don't think it is an anti-transactional environment. rules areso these good for the u.s. or you think they are counterproductive? peter: policy is not my department so i can't comment as to the specific rules that are being posed or the ones that affected this transaction. clearly, these rules were bad for the transaction.

i'm not sure we can generalize beyond that, but i do know that dealmakers will play within the rules, whatever they might be. tom: david, our final thought, the historical perspective. are we becoming like the late 1930's? is this such a dysfunction between our government, our finance and our actually doing in the real economy that we have elements of what they knew? david: i don't think it is quite like that. my feeling is it is drift. clarity on the inversion issue and it was shut down and shows you the u.s. government has this gigantic our when it wants to use it and where it wants to use it, but the guidance has not been really clear on whether you want to have growth in the country or going back to our original conversation on two tier economy, what washington keep signaling is they want to get a one tier economy when he wealth to do -- where the well-to-do can afford lawyers to weed their way through and that

leaves a lot of the country and happy and that is what's showing up in this political environment. tom: thank you so much. francine, as always, thank you. particularlysting, the politics of the u.s. and what that means moving to the new york primary. bloomberg is next. we will continue with david malpass on radio. tomorrow, you've got stephen case will join us. he will update us on his view of silicon valley. the future for american technology. from new york and london, bloomberg surveillance. ♪

david: new treasury inversion rules put an end to the pfizer-allergan merger. what does this mean for other deals in the pipeline? crude is up after kuwait says an

agreement could be made without iran's participation. speaking of deals, glencore akes another step within multibillion-dollar deal about pension funds. welcome to bloomberg go. i am here with jonathan ferro and stephanie ruhle. stephanie: what is interesting about thisam here with jonathano and stephanie ruhle. stephanie: what is interesting about this deal is when you think about everyone involved, there is nothing they hate more than the government walking in and sidestepping them. >> clearly see decision has to be made to not push the deal. they have made the decision to say no