guy: comey and the credibility questions. does this undermine the president's ability to pass this fiscal stimulus. reflation reaping. have we passed the peak in global reflation? as no budging at the boe, we await the rate decision tomorrow. will this remain on hold until after brexit negotiations have concluded. this is "bloomberg surveillance and i am guy johnson, alongside tom keene.

was made in washington and there are limitations this morning. i am having trouble extrapolating this. we have great guests to do this in "surveillance." i have a quote from john dean, from another time and place. guy: let's talk about these markets, figure out what is going on because we are starting to see a little bit of a sense of concerns in assets. tom: this is macron's chart, with the vix still under 10.92. and there is the euro-yen. is the riskrally, on trade still there? guy: i want to start with the two year, which we are starting to see move. we are at 133 this morning.

are we starting to talk seriously about two hikes from the fed? u.s. futures on the s&p, starting to flip a little bit. the bloomberg pound index trading at highs. tom: i just heard matt miller and berlin talk about the lack of reaction. i did this chart for stephanie, just for stephanie. here is the inflation-adjusted dow, back to world war ii, back to 1947. the red circle on the left is the massacre of another time and place. you can see the real world, the wealth creation from massacre to massacre. i would call it the tuesday afternoon massacre. it gives you the sense of generational change, guy johnson, from watergate to where we are right now. guy: i agree. we have had one mention of water gate so far in this

program. tom: two minutes into the hour, pretty good. guy: i will take you to the u.s. two year. the market has priced in june. my question is, have we priced out the reflation -- the trump reflation trade, and can we draw a line basically, between what the fed does next because they are looking through the weak q1 start and what is happening in washington with the politics? because if you start to see the politics changing significantly, does that bleed across into the fed's space? tom: i think it is a second or third order effect. it is about the economy and the doubts about the economy right now. let's move forward right here. to get you updated on the evening's news in washington, here is nejra. nejra: tom, you are talking about the two-year yield. federal reserve bank of dallas president robert kaplan says his best case for rate hikes this

year is still three, including the move in march, but he says he is cognizant of the fact inflation pressures have been more muted. meanwhile, the kansas city fed president reiterated her call for the fomc to begin shrinking balance sheet investments this year and says the process can start with reducing treasuries and mortgage-backed securities, and then leaving the runoff on autopilot. south korea's new president has taken office, pledging to unify the nation after nine years of conservative rule that culminated in the biggest protests since the 1980's and the impeachment of his predecessor. he took 41% of the vote. china's producer prices rose more slowly than expected in april, adding two signs to a potential easing of global inflation. and downed to 6.4% from a 7.6% gain in march. consumer prices in china rose

1.2% in april, slightly more than expected. probablyof england will not make any policy most before brexit negotiations are concluded according to the national institute for social and economic research. this comes ahead of the latest policy decision tomorrow, where no rate change is expected. but economists say they will lower the growth predictions. apple has become the first u.s. company with a market value of more than $800 billion. this is after the stop price rose to $159.99 yesterday. inle shares climbed by 1/3 2017. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. this is bloomberg. guy: thank you very much. the democrats have a juiced president trump of

catastrophically compromising an inquiry by firing james comey. believe the move undermines the investigation into russian interference during the election. president trump says the bureau needs new leadership to restore public trust and confidence. to be honest, the read across into the markets is not there yet. there you go. there is the futures. they are not signaling a great deal of concern. let's talk about this from a political angle. we will get to the markets throughout the program. let's bring in stephanie. we are also joined on set by keith wade. brutal. it was not sugarcoated. it was delivered, as mr. comey was on his feet, addressing an audience. put this into context. give me a sense of the magnitude of what we have witnessed. >> i think this is huge. and as we have seen from the reaction on the hill, you have republicans and democrats

criticizing the decision, saying and compromises the russian investigation and the increased calls for the appointment of a special prosecutor to take over that russia investigation, but the manner in which he did it is also very strange because the reason for his firing was his mishandling of clinton's emails, a case he had praised comey for. and jeff sessions had also praised his handling of clinton's email investigation. and then we have the letter to comey, where he says he thanks him for having said to him three times that he was not -- that trump specifically was not under investigation. there are a lot of questions that this raises. some people are saying it is so huge -- they are comparing it to firing of archibald coxe during the watergate scandal.

it is a huge, huge move. tom: stephanie, i have been up all night on this. i think the best service we can do now is to link together the events from 5:40 yesterday afternoon. do i understand correctly that we saw the firing of mr. comey and then just a bit later, cnn reported that mr. bente of the court in alexandria is going to move forward with some form of formal grand jury investigation off of russia and mr. flynt? can you link those events together? >> there is a series of events where you see trump intervening to try to put an end to this russia investigation and quiet it. we had the involvement of nunez, the house intelligence committee chair coming to the white house, getting a special briefing, not

informing the rest of the committee. there were various points that make it look like there has been some kind of cover up, or an attempt to cover up. tom: rod rosenstein seems to be the front of this. he is the deputy attorney general. and in 1973, the attorney general son, mr. president i will much do that. the deputy attorney general said, i will do that. and then the solicitor general said, i will do that. were you surprised that we did not see resignations last night i senior legal officials of the administration? >> well, i was surprised that jeff sessions involved himself in the firing of comey because he recused himself from the investigation. why he did not just park this decision with -- tom: rod rosenstein. >> right. rod rosenstein is a key figure because if there will be in appointment of a prosecutor, it is up to him to do it. does he have the guts in the

political independence to proceed? many people feel this is the only way to restore confidence in the investigation. tom: a critical distinction here is mr. rosenstein needs the senate republicans to cover his back. that is understood and we are beginning to see that overnight. francine: and the relationship between the party and the president -- tom: it is becoming a little confusing. guy: i'm still confused about the timing of why no? and thinking about where we are right now. i am also. us about the optics. -- i am also. curious aboutso the optics. >> this seems like an odd time to fire your fbi director, right ahead of a meeting with the russian foreign minister. and not call comey in. make it a public humiliation, not inform him personally, allow him to find out from the news

when he is not in washington, giving a briefing to fbi agents in l.a., and he would not have made this a quieter affair. so, there are a lot of questions about the timing and the motivation. we know trump had been considering doing it for at least a week if not longer. so why he decided to action now, those are many questions that remain to be answered. tom: we will have a great john dean quote overnight on all of this. it seemed to be, stephanie, almost elements of the rosenstein letter dictated by other people. i am not going to say the president. >> as you know, if you read that letter, a lot of it -- tom: it is long to begin with. >> very long, but a lot of the democrats would agree with criticalhey were very of his handling of the clinton investigation. and his comments in july and before the presidential

election. i think the white house thought the democrats would support him in this decision and are shocked they are not. out --d there is flat everything else, including islth-care legislation pushed -- it will all go. it will all continue, but they will be distracted. guy: which is why i am so surprised that the market has not reacted in the way you might have expected them to do, if you take that thought a little further. stephanie baker, thank you very much ended. we have not spoken with keith wade yet. we look at his take on what this will have on the u.s. and global economy. coming up, senator elizabeth warren. we have the interview overnight with the senator. we will play that out at 11:00 a.m. u.k. time. and we get a continuing sense of what really is happening in washington. "surveillance," plenty coming up.

we will talk about what is happening with the reflation trade and deinflation trade. then, markets and asset prices, and reference it back to what we are talking about. he will talk about the bank of england policy and how it is unchanged. remember, it is super thursday. this is bloomberg. ♪

guy: china producer prices. they are rising more slowly than expected in april, adding signs that this reflation trade we have talked about -- that chinese ppi went up vertically -- is starting to fade. it climbed 6.4% from one year earlier and that was below the

estimates and down from 7.6%. meanwhile, cpi prices rose 1.2% in april, slightly more than expected. let's talk about the reflation trade and join key keith wade. he is still with tom and i. the china factor is detracting from the reflation trade and then we have what is happening in the united states and the fact that the market has round-tripped on the reflation trade there. is it done? >> pretty much. i think it has been a case where the reflation trade kicked off after trump got elected. we saw a lot of improvement in the business survey. people began to price in the stronger world economy. i think the hard data will follow through. we think u.s. gdp will pick up for the second quarter. but i think the market has moved on and we are seeing that coming through in the commodity markets in particular. we have seen a selloff in oil

and industrial metals. and that is coming through into the china cpi. tom: there are surprises in the dynamics here. you studieddel at the london school of economics. we have wendy carlin coming on here later from ucl. if you look at the dampening of reflation, is it within conventional models? >> i think what has surprised people is, we have had the stronger growth coming through. we have not even see wages pick up, the labor markets continue. the conventional models are there, but they are being pushed to the limit. the economists don't really know -- tom: i agree. do the central banks not really know either? >> they don't know either. tom: does guy johnson know what we are doing? [laughter] guy: that goes without saying. draghi says he will only

withdraw stimulus when the economy can be sustained without stimulus. tom: that is right. guy: therefore, the pale on monetary policy will be enormous. >> the ecb and fed and other central banks have had loose policy. the fact that inflation stay low will limit how far the fed ultimately has to time. for the ecb, there is a real question about what draghi is doing because the economy is improving. two they need to have -- do they need to have -- guy: inflation got to 1.2, but that could be a blip. tom: as you have mentioned, guy, within the political cacophony at the moment -- was it eight days ago that we were in paris? guy: yes. tom: things are moving a little fast. we were with keith wade.

coming up, we talk to him about the dynamics of brexit, maybe not like the comey fire in washington, but there it is. the news each and every day. stay with us. this is bloomberg. ♪

guy: welcome. the bank of england probably will not make any policy moves before the brexit negotiations are concluded. think about the timing of that. this comes ahead of the bank of england's latest policy

announcement tomorrow, super thursday. no rate change expected. we are trying to get an understanding of what a very quiet carney things right now. not much news, to be honest. meanwhile, one month to go until the u.k. general election, theresa may has set out to woo the so-called middle england, whatever that means, using a jo inint tv interview with her husband, showing her softer side. rival, jeremyain corbyn, launched the labour party's program for "greedy bankers and heartless bosses, ripping off consumers." keith wade is still with us. how long will the bank sit on its hands. >> if it is until the brexit negotiations are concluded, that will be a long time, three or four years.

i think they will be moving upwards, but i think we are looking at two or three yeras as out. and we are looking at something that would come as the result of some fiscal stimulus. we have to see those negotiations concluded to some extent. but at the moment, the economy now is beginning to exhibit these signs of the brexit affect. it is beginning to slow down. we have seen a pickup in inflation and consumer spending come under pressure, the economy grew at 1.3% quarter on quarter in the first quarter. much weaker than what the bank of england expected. they have to factor that into the inflation report. tom: where did the weakness come from? was it consumption weakness, investment weakness? >> we don't have the full breakdown, but it looks like it was consumption weakness. restaurants and hotels got the brunt of that and that is understandable. it is hard to see where the consumers have been as strong as they have been because income growth has been squeezed as a

result of the fault and the pound. it was inevitable. guy: do you think anybody else would join the view that they have to come through now? >> there is some talk that he will do that. but, i think it is fairly unlikely. i think they want to keep their heads down, given the election coming up. they don't want to do anything that could disrupt markets. the pound is super competitive at the moment and we do see an improvement in global trade. the eurozone, our biggest market to trade, is picking up, and that could help u.k. exports. the consumer is 70% of the economy. if the consumer is slowing, you have to have a lot of export growth to offer. tom: when i look at brexit, i think of mr. juncker. this prime minister may going to focus on mr. juncker, or is he just a sideshow? >> he has been quite controversial, but ultimately, the decision will be with the politicians, particularly with

angela merkel, whoever wins the german election. tom: he did not mention mr. macron. >> and mr. macron. they will be driving the process. they have the most weight. tom: am i right, guy? mr. macron is old news now? guy: there is a nice piece about germany's enthusiasm for mr. mac ron. keith wade will stick with us and up next, we speak to the man who was taken a two year break from amazon to do some pro bono work for italy. this is bloomberg. ♪

guy: wednesday, nine: 30 in london. you are watching bloomberg "surveillance." tom: the markets are there. they are not moving off the major news out of washington. i'm not.

this goes beyond anything to do with the markets to the constitutional structure of the united states. guy: do you think it wants to figure it out like the rest of us? tom: this is almost a macron trade we are seeing. a little bit of an adjustment in the last hour. 113.83, yen. euro continues to show safe havens. feel, but that may amend as we go to the morning, particularly if the president tweets out in the morning to he tweeted lace last night -- late last night. president is hard to read. we get more tweets and maybe that changes people's views. tom: we are watching to see what the senate republicans do. we had six senate republicans really step on the affairs of last night. guy: let's run you through a few more numbers and give you a heads up on what is happening

broadly. e.u. futures are down. u.s. two year is significant. the market is pricing in june and increasingly september for the fed. the bloomberg pound index trading at a 2017 high. that is significant. european stocks going nowhere. tom: let's get to our first word news. nejra: president trump has fired comey sayingjames the bureau needs new leadership to restore public trust and confidence. according to the white house, his sacking was recommended by jeff sessions and is stepping. has been leading an investigation into russian medley into the election and into moscow's possible links to trump's associates. it is the only the second time in the fbif's history as chief as been fired. presidenta's new has taken office in place unify the nation after nine years of

conservative rule that culminated in the country's biggest protest is 1980's and the impeachment of his predecessor. the left leaning politicians win took 40% of the vote. china's producer prices rose more slowly in april. ppi climbed 6.4% below economist forecasts and down from a gain in march. consumer prices in china rose 1.2% in april, more than expected. apple has become the first u.s. company with a market value of more than $800 billion after its stock price rose to $159.99 yesterday as investors bet the axt iphone will sparure resurgence in sales. news 24 hours a day powered by more than 2600 journalists and analysts in 120

countries, this is bloomberg. i have been firmly focused on france over the last few days, but let's face it, italy is one of the subjects will spend a lot of time on in the next 12 months. it is one of the least digitized economies in europe. a concerted effort is being made to change that. senior vice president of amazon's international consumer business has been appointed the country's commissioner for the digital agenda. year hiatus two from his day job. the pro bono work is significant. he's done a few things that amazon and before that at apple. diego, good morning. we spent a lot of time talking about how concerned we are about the italian economy, an economy that had a huge youth on implement aspect to it.

you have been there six months. how big an impact could a massive push to digitize this is economy have on those numbers? whether it is led by me or the entire system together, the digitalization of the country is a massive opportunity. is undertaken because we do not have many more chances. though.d that we are having a small problem with your mike. the technology is leading us down. tom: diego's work with apple computer and onto amazon. they are bringing in an italian with huge experience in that linkage of doing business and the financial end of the technological. it is easy to bring in some technology guy. it is a lot harder to do it around the budgets and the

finance necessary. guy: we fixed the technology. diego: i need to repeat what we just said. guy: hardware is always harder to do. the software which is us is easier. to extrapolate on the thought you were just making about the thertunity, you have made, italian government is making a big push on broadband. what is the multiplier? diego: the investment in broadman, actually, it happened before-- the investment in broadband happened before. ra broadband in limitation program has been going on for a couple of years. it is to get to the entire population by 2020. they are on pace to do that. the biggest part is the government's investment because a lot of the population leaves

in an area that are un economical to reach for business. that is where the government takes in -- kicks in. the thing about broadband is electricity at the beginning of the century. it is the same thing. invest, andment can some of the areas, push it and have the market pick it up. tom: are there other governments that have successfully done this? we know the story of italy, north and south. you grew up in milan. there is a north-south divide. but other countries face the same issue. what is a template you can use? diego: i think that u.k., the northern part of the country and scotland. they have been doing investments and that your. you can definitely look into other countries like eastern european countries. they have been leapfrogging some of the western conference when it comes to investment. they were building from scratch.

one of the things i learned that sometimes it is much easier to build from scratch to try to impact the legacy. and that's one of the biggest hurdles we half with my job and people doing similar jobs in italy is impacting on an existing legacy. and changing culture, changing mentality, changing the types of investments. don't forget, this is very important, there is no turnover in the public administration. guy: that is the point i wanted to make. you can from amazon. you have got jeff. he goes, we are going to do this. it gets done. talk about the experience in rome, how different it is and what you can bring and can't bring in terms of the knowledgebase you have recruited amazon and apple into the job you're doing. you've got 20 people around you. what kind of difference can you make in this huge bureaucracy, this machine? diego: you mentioned 20 people.

i accepted the jump on the condition of i wanted to build my own small team. -- i accepted the job on that condition. monthshe first few dedicated to that. i'm not a technology person. i worked for a technology company but i needed to hire technology people. you can get a lot done. say i have been impressed with the level of freedom i've been left with doing things. wallso i meet rubber every day? absolutely, but i thought from the beginning -- in any company where you manage manufacturing process, operational process, you have defects. and i look at bureaucracy, the negative effects of bureaucracy as a defect and work around. guy: we will carry on the conversation. we need to talk about what is happening in europe.

and what you see in the world in terms of the technology opportunities. there are a lot of people talking about a.i. diego is going to stick around. he is the italian governor commissioner for the digital agenda. his c.v. looks longer than that. andey inthe penalty box espn continues to lose subscribers. more from our interview with bob eigen. and stay tuned for a conversation with elizabeth warren at 11 a.m. uk.k. time. it is a sunny day in london. have not seen that for a while. this is bloomberg. ♪

tom: bloomberg "surveillance" from london.

i'm tom keene. there is no other story than the news out of washington of the firing of james comey. coming up later today, noor feldman will talk about the constitutional aspects and kevin in washington with his conversation on the hill, the ramifications on wednesday after a most historic tuesday. now we switch gears and go back to the message by disney. they have been doing that without sports -- with sports. guy: what you think of e spen. tom: it still is dominant. there is no doubt. they are trying to figure out -- i do not know if my cell phone -- they are trying to figure out use ofith guy johnson's a cell phone. that has changed everything. guy: the way the sports headlines are distributed. disney has failed to be

concerned about what is happening with the business. lost news has subscriptions and spend more and televised games. the ceo -- take a listen. >> this was an important project for me. i worked on it for 17 years. what ournally proud of team ultimately designed and created, but i'm also very proud of how it has been operated over the first year and proud of how the chinese people have taken to it. we are a few days away from hitting 10 million in attendance. it had been our target to hit 10 million antennas for the first yera. -- tennis for the first year. we are running ahead for of where we had hoped we would be. 2/3 of the attendances from outside shanghai. that is very interesting. i suggests thatt this is a national destination. we thought about 2/3 of the

antennas would be from within shanghai and on the opposite has been the case. has been attendance from outside shanghai. we have a piece of land that is larege and a willing partner to enable us to do that. we announced expansion before reopened. so, we're building a large toy story land as we speak. we have not announced a specific date but is already under construction. we believe that, given the success of the business already and given the size of the land and interest of our partners to continue to invest, that you will see substantial expansion of this particular facility over the next 5-10 years. that, i think, is very, very encouraging. believed their other opportunities in china but our first priority has been to

open this one and do it right. since it is less than a year old, it would premature for us to speculate about anything more we might be doing in another market in china but we hope it some point that opportunity presents itself. guy: they also talked about espn. china is interesting. let's continue the conversation. disney is a technology company these days. it's going to be interesting to see what his future is and where it is, because let's face it, there are and have been for a long time rumors about apple's relationship with disney. diego, italy's commissioner for the digital agenda still with us on set. this division of content is fascinating but there are bigger things happening in the world of technology now. big companies such as yours, are as alphabet and appalle spending huge quantities of money on a.i. now. where are we in the lifecycle of how in terms of kind of

the learning process is happening, how quickly, what the delta looks like? diego: we are at such the beginning of pretty much merything that it makes optimistic because what we're trying to do -- for the government, invest and start understanding that big data, and all of the data is not something to be feared that something to embrace. guy: it creates jobs. -- it takes jobs. theo: let's focus on positive and this implication of the technology. traffic. those are opportunities that governments will receive a huge amount of benefit if they stay in the driving seat, not just in the complaining seat. governments need to build the expertise. see, the point is that in the

future, we are going to have different breed of politicians. there is no doubt at 20 years from now we are going to look back and say our politicians were this way? to be moreg technology in humanity's competence, the hybrid of those two. tom: that describes mr. trump. very importantly with all of the types of your italy, if jeff bezos parachuted into the italian government, what would he have to do to bring that amazon initiative to the government of italy? diego: so, i think that one of that definedgs amazon's long-term thinking. the long-term thinking is something that government, the italian government, or governments in general - it's, i mean, artificial intelligence is something that requires trial and error, expectation. and usually governments are not designed for that.

it is trying to change the long-term thinking is what governments and politicians will have to -- tom: i just got a great idea. amazon could start a bank. you could start the bank in italy unfold everyone into it. guy: one quick question. restrictionsvisa of the united states for people who want to work in technology. you have seen theresa may talking about restricting labor. how big an impediment is that? going definitely is not to be healthy. at the same time, with new technology, you can work remotely. you can build remote development centers, technology. you can stay in seattle and have a technology people developing somewhere else in the world. havean say in rome and people developing it in other countries. technology at the same time also helps you to do things remotely in a different way. so, 30's to be a balance. guy: as the area scope -- diego: technology finds a way to

get around those barriers. guy: been fantastic to spend this time we have had. coming up, seeking support from the shareholders. prepares for his first public meeting since the whistleblower scandal. we'll preview the agm. next. this is bloomberg. ♪

the early early in washington morning. they are waking up and preparing to give you the coverage on bloomberg. on the shocking news of the firing of the federal bureau of investigation. we'll do all of that in a bit in washington. other good guests to come. with our briefing, our business flash. nejra: president trump has fired fbi director james comey saying the bureau needs new leadership to restore public trust and confidence. according to the white house, his sacking was recommended by jeff sessions and his deputy. comey has been leading an investigation into alleged

russian meddling in the election. it's only the second time in the fbi's history is chief has been fired. tell you to has forecast a drop in annual profit on expectations for a stronger yen a sales slow in the u.s. the carmaker announced it will buy back $2.2 billion of it shares. eurostar international has seen quarterly sales rise 15%. passenger numbers on cross channel trains advanced 2% to 2.7 million. the company benefited from an increase in visitors from the u.s. we'll speak to the chief executive officer at 10:30 u.k. time. and that is the bloomberg business flash. guy: thank you very much, indeed. let's talk about what is happening with berkeley's. -- barclay's. for more, let's join the u.k.

finance reporter stephen morris. good morning. how difficult is this experience going to be> ? >> he faces several votes on compensation and his own reelection, of which he needs to get 50% of the votes cast. while no one thinks he will dip under that, he's going to get a bloody nose. he is going to see about 20% votes cast against him. after that, it made damage -- may damages credibility. guy: how damaged is it already? fewlays has been through a management changes. how critical is the legacy of that to what happens next? >> bob dimon was the last person to suffer a real revolt, 27% of shareholders in 2012 voted against his compensation packets. we may not see the same level today but certainly this is another headache for barclays ceo's. tom: help our global audience.

i have no clue where barclays fits into premier banking except they sponsor soccer. where do they fit in five years from now. in your chair yesterday, sir howard davies was asked the same question. >> this is what he has to address at this moment. they have an investment bank which is sub scale and losing market share. they have a great credit card business which many people think is at the peak of the cycle. we'll start seeing repayments. what they can hang their hat on is a really good u.k. retail bank which is what rbs aspires to be. tom: i have clarity of what the banks do. as an outsider i do not have that here. guy: i think that barclays is an institution that is in two

halves. you think about lehman brothers and the acquisitions made around that in the creation of a u.s. businesses. tom: maybe like dlj with credit suisse. guy: the risen historical context. my question is, is you don't have management and the ability of management to be able to execute at the moment because you are distracted answering that question is a problem. that is something he will have to deal with right now. thank you very much. " surveillance" continues. ll talk about what is happening in washington right now. this is bloomberg. ♪

tom: tuesday afternoon massacre. the president fires the director of the federal bureau of

investigation. they do not resign. how will republicans respond? washington is in political crisis. the president signals a cover-up. kevin cirilli on what the white house will to this wednesday. and his risk on. good morning. this is "bloomberg surveillance." francineon is in for lacqua. we have great guests but there is no other news than a shot last night, the true shock yet we saw in washington. uy: it was interesting to see the language that was used. by clinton.oring 1973it isn't about the

that it is the clinton sessions moment. i wouldn't relate this to watergate but there are solutions there. guide: let's get a first word news update with taylor riggs. democrats are republicans are blasting trump's decision to fire james comey. fired into the investigation into hillary he wills use of an server. >> the administration had exceptions to the way that comey granted the investigation. hey had them from the moment got into office. but they didn't fire him then. why did it happen today? theor: cut short

investigation into the russia investigation. and trump is a fused forces in syria. the pentagon says the only force used is in rocca. syria is likely to be discussed when president trump meets with russia's foreign minister today. the talks are prelude to the first face-to-face meeting with putin. which is expected to take place in several months. pledging toident is push for peace with north korea. was elected in a landslide election. he also said he is looking to the u.s., china and japan to

broker a peace bureau -- a peace deal. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. coverage ofn our what we witnessed last night. gura sent me ad message. seen cirilli, when will we some form of special investigation or special prosecution? kevin: the question today becomes how many republicans ask for special investigation. i spoke to a senior aide within the congress who called the entire situation "bizarre." the timing, according to this source, has ruffled feathers among republicans who are faced with defending the white house

or calling for a special prosecutor. tom: is this such a distraction that it moves away from any solution to other legislative initiatives like health care or tax reform? there are at least three hearings scheduled today. the house is in recess. in terms of the political capital that trump gained the other week for passing health reform through the house of representatives, any political capital heading into the senate really took the wind out of the sails last night with his firing. guy: does the meeting with the russian foreign minister inside the oval office go-ahead today? kevin: all systems are go but there will be more questions about what they will talk about. the timing of this cannot be under -- cannot be overstated in the. this is something that is coming fresh on the heels of several

senate hearings and senate testimonies that again, we cannot overstate the timing and uniqueness of this situation. guy: talk to me about the hillary clinton story here. that is being used as the background for this. what is the feeling in washington about that relationship and accusation. is this smoke without fire? kevin: democrats to not believe this at all. twooke last night with democratic strategists who didn't just rolled her eyes at can't even put into words the frustration they feel about that. "being anat trump's obstructionist." we can see that statement coming up frequently from democratic members last night. areblicans -- some

defending him. i would say 70% -- 30% are criticizing him. why didn't we see any resignations last night? the deputy attorney general didn't resign. does that describes -- does that surprise you? no, he called for james comey to resign. some republicans are saying that is draining the swamp. kevin cirilli will be with us all day through the platforms. noah feldman writes for bloomberg view. let me bring up his essay from last night after this firing. "james comey's firing is a crisis of the american will of law."

"comey'sman says -- act of political station doesn't justify trump's decision to make the firing of the fbi director into a political act. it is a classic case of two rounds not making a right." what will he say, forward here? noah: i will be watching to see if there is any effort by congress or by the department of justice to take away the extremely political effect of this decision by appointing a select committee by appointing a special counsel. in the absence of that, the whole world will inevitably see ae firing of james comey as break from the idea that the country's chief law enforcement officer should.

-- enforcement officer should be neutral. the eastern district of that court finally is going to ofgrand jury investigation the russian affairs. are you surprised by that? are the two stories linked? i'm not surprised the investigation is going forward with the subpoenas. it isn't surprising that the news media did get hold of that story edited come out. it it it is more likely timing care was intended to change the subject from sally yates' testimony the other day. firing james comey was an effective way to do that. you're not able to effectively leave the euro. between thistion

letter and the one before under the clinton administration. what are the parallels? are they significant? it is fascinating to see the language being mirrored. kevin: -- fbi employee has ever been fired before -- fbi director has been fired before. sessions, the use of private fpi planes to visit france. in the letter that bill clinton used to fire that director of thefbi, clinton said that person could "no longer --ectively leads up your lead the bureau." not a coincidence. but the reality is that these situations are not analogous. in the case of clinton, there

and thatar violation is not the case here, for obvious reasons. news know ifmberg feldman commented on what happened last night with the firing of the fbi director. let's bring in our guest host, stephanie flanders. is this a market story? stephanie: it just respect to the rule of law story. everything they say will be related to this or concerns about what might be tracking the resignation. but if you start to call into question the president's ability to work with congress and continue with the progress that ruleeen made or, the basic of law in the u.s., it does become more capricious.

less predictable. and that does matter to any investor in any business. guy: how do i price that in? lotmarket had priced and a when it came to text. the vector would have -- the impact it would have. nevertheless, we do have an expectation that the administration will deliver some of that. it is a mostly the market becomes like the fed cup data dependent. law depended. you have to see that the president is able to push through the priorities and not listen to the rhetoric. rule oftion about the law, clearly that will be something that you roots over time. america's attractiveness as a -- if that is gradually eroded by a culture in

which single companies are singled out in tweets or an fbi dismissed, that isn't something you will be able to see in the markets. tom: the noise level is off the charts. clients heads, are spinning. what are doing in the mix of equities and bonds? we are looking at the fundamentals. overall, it is a market that is favorable for equities but we do optimisticupbeat and expectations about the potential for the u.s. and they are feeling more positive about europe. getting us up to speed here. stephanie flanders as we continue with the coverage from washington. she is with j.p. morgan asset management. coming up, we will bring you eli

lake. he has been controversial as a bloomberg view columnist. his perspective on the history made last night. from london, stay with us. this is bloomberg. ♪

guy: from deutsche bank this morning, if you days ago we heard we were hearing an increase in shareholder ace. now the qataris are seeking approval to increase the deutsche bank state. this is what we're getting. we're hearing that from the german regulator. we will come back with analysis on this news. qataris is seeking regulatory approval. let's catch up with what you need to know. toyota is forecasting

annual profits will drop. the reason is the stronger yen and a slowdown in the u.s.. the biggest market. auto sales have fallen more than forecast this year. meanwhile, the company says it will buy back shares. the second-largest insurer in europe is planning an ipo of the u.s. operations. to list -- u.s. company mayand the also return money to investors. editor bloomberg business flash. guy: thank you. the boston fed presidents has noted decision has been made over whether to begin shrinking the fed balance sheet. shein cleveland, she says doesn't think that the fed bank is way behind the curve. oft impact could the firing

james comey have on all of this and the trajectory of the fed? let's get back to stephanie flanders. -- the to make it clear fed did make it clear that they are on track and they are comfortable with that track. june is pretty much a done deal and september is looking like a done deal. but there is noise in washington , concerns about the direction of policymaking coming out of the administration. does this impact that? stephanie: the only way it impacts as if it has a realistic process of changing the course of fiscal two. guy: what have they discounted, now? stephanie: they have made it clear that they are not aparting a great deal from what they have already built in. which was cooked in before the election. your credit rate that they've put themselves on a path to so whatterest rates

constitutes a crisis? the past, reasons relate to china or other concerns about other places in the world but i don't think they want to put china -- they don't want to put the u.s. on the list. and you would have to see market reaction. what is interesting so far is that we have had a loosening of financial regulation. and this is not given them any --son to pause when it comes this was offset the next day. tom: stephanie is going to stay with us across the hour. finance and investing. it is well time. with elizabethn warren. look for that in the next hour. the news flow is so intense.

i'm not even sure where we did this interview but it is a conversation with the senator from the commonwealth. from london, this is bloomberg. ♪

new york and22 in it is 10:22 in london. i am in london with tom keene. german exports are rising for a

third month in march. a sign that the economy is benefiting from a global pickup in trade. this can only be a boom to germany's chancellor angela merkel. bye on this, we are joined stephanie flanders. still with us here on set. let's talk about what is happening in germany and get a sense of what is happening here. global trade is picking up. germany has a relatively cheap currency right now. being has risk premium removed in foreign politics. walk us through whether the data continues to accelerate from here? you have pmi in the high 50's? good morning from frankfurt. exports are picking up and also, imports are picking up.

german economy is booming at the moment and we are heading towards -- we're heading forward. i hope will see reduction in the trade surplus. but at this moment, the economy is growing strong. guy: do you expect the french president to tell your chancellor at the german economy needs to consume more? achim: yes. first of all, i think the election result is good for germany. we need a strong french partner. u.s. andf that -- the france, they exports. german will say to the government that we are exporting too much and more has to be done. it will be antion issue. tom: there are profound criticisms -- i will go to your

abouts background here -- the physics of germany. the behavior in germany. the desire in germany to create demand to move things forward. what does germany need to do in the next 2-5 years to jumpstart europe? germanyet me say that is an aging society. part of these effects are two to the fact that we save. there is too little investment. when we will see is that the government is going to invest more. -- what we will see that the government will invest more. those lanes are open but they are not implemented. what we will see is that i suppose we will get a tax reduction after the election. we will have more cuts inside germany. so just because we have become richer, a progressive taxes have become more and more but that

will be scaled down -- that is what i will assume. what is important is that we get companies to invest in germany. liberated the parts of society where investors are not going. , thank you sobach much. you loved the euro store, didn't you? tom: it was great. we will talk to the man who runs to it. come to america. guy: nicolas petrovic will join a select. -- will join us next. this is bloomberg. ♪

tom: carries now with her story this morning. -- there is no other story this morning. eli lake is scheduled to join us. we will speak to him, always

controversial with a bloomberg view about the event -- james comey has been fired at the federal bureau of investigation. many other guests will be with us through all of "bloomberg surveillance" this morning. with your first word news, taylor riggs. taylor: democrats call it a move reminiscent of richard nixon. trump says it is needed to restore public trust in the fbi. the president has fired james comey. the white house says it is because of the way he handled the investigation into hillary clinton siemens server. nash hillary clinton's email server. planning a are secret health care debate that may take place this month. mitch mcconnell held a private meeting with republican senators who will shape their own version replacement.are

they will probably increase protection for people with pre-existing conditions. members of the un security council want to know more about rush peace plan for syria. they have setup a safe zone in an attempt to end the war. moscow once the u.n. to endorse the plan. in china, producer price increases flows more last month. that's a chests that the stronger chinese industrial profits may be harder to sustain. that theuggests stronger chinese industrial profits may be harder to sustain. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i'm taylor riggs. this is bloomberg. tom has been dying for this conversation to take place. star sales have risen.

i don't know if you count as a tourist. but with the terrorism story and theimmigration story, -- ceo of the company, nicolas petrovic, joins us now. is a weak pound having an impact? there is a weak pound at a relative weeak euro. we were surprised by the numbers. u.s.,he election in the they don't travel too much in the u.s. the first quarter was strong. guy: is this sustainable? nicolas: we hope so. we do see people coming back from asia, southeast asia especially. where they didn't come last year to europe for tourism because they were scared about the news

around here. so people are coming back to europe now for tourism. tom: what is your prescription for the horrendous american market? what would you do to make passenger travel letter in america? well -- guy: you were not expecting that question. [laughter] thelas: it is true that in u.s. market, they could do so much. there are so many corridors where -- i'm thinking of the northeast corridor, san itncisco, but it seems like is always -- i don't know why. tom: type this into james comey. we have been having this discussion since nixon was president. full disclosure -- i put this on twitter yesterday, i was dazzled.

tarou trying to run euros almost as a nonprofit or is it to maximize your return? nicolas: we are a private business so we can want to make money. we have been making money over the years. to maximize shareholder returns -- there is also a sense that we want more and more people to use the service. so to find a balance between the two. tom: i told people waiting that i would be interviewing nicolas almost droppedey the bottle. tom: -- guy: and then they poured a glass. what is macron for your business? nicolas: he is very good. he is good and young and has optimism. good president for the

country. it is good to have somebody with optimistic expectations. guy: a lot of people have been commuting backwards and forwards .etween london and paris do you expect people to come back? paris henken and london, two cities that i love. maybe we will have more british people commuting? how you have handled price discrimination? stephanie always goes first tar, cai and i were away in the back, like the titanic in storage. classic microeconomics. how do you handle three ticket levels? nicolas: it is important.

the economy class, a very good class. competing with low-cost airlines which are efficient and powerful, the first price is 29 pounds. at the other end, business class. where we try to give the best experience for this is passengers. really, we try to discriminate pricing on what the consumer is expecting. when you, you could travel business because you want to work so you would pay the price for that and we will look after he very well. family,u go with your we offer you a good deal but it is adapted to what you want. stephanie: it is about the behavior. than three lot more categories.

you are trading off with her unique of flexibility. but i have to ask, aren't you going to feel rather helpless at the center of these negotiations over brexit? the border issue is contentious and it is something that macron to changee would like that agreement that keeps the border on the french side. anyyou able to have influence on that? so far, we have a very good engagement with u.k. government. what macron will do when he is in paris. he said he will review the treaty. thetreaty is not linked to eu around quarter control. my view is that hopefully it will be magic. nobody wants upper service to stop. with the border, how

did that affect the journey time? you gain time. if it is done on the departure, you gain 15-20 minutes. we don't do freight. just passengers. -- talkingu worried about the agreement. when you travel on that side of tunnel, with the security, if that were to be abandoned, do you worry that he would see problems being experienced in tunnels? it would start to affect you? are you modeling your planning and thinking about what you look like? the next president will be taking this stuff seriously and will be high on the agenda. nicolas: we're looking at that carefully. the channel, of people are conscious of the consequences of going in one direction or the other.

nobody wants to create a big issue and nobody wants to have the same issue that we have had 18 months-two years ago where the situation became very difficult for the people who would come there with the conditions being awful. for the people living there and had activity.o so it will be interesting to see with the different countries but i think it will be a pragmatic outcome. guy: let's hope so. euross petrovic, ceo of tar. stephanie flanders is going to stick around. coming up, we have a conversation with the baroness. that is coming up. this is bloomberg. ♪

guy: welcome. i'm in london and tom keene is here. let's talk about what is happening in china. the week chinese data persisting , prices had been rocketing higher but are beginning to slow now in the wake of regulatory crackdown. shares of shanghai conference are down by 2% this year. let's get back to stephanie flanders. private -- i am told that private business has almost come to a halt. they are watching the politics. is this a temporary blip? isphanie: i think it overstating the concerns you

have on the macro economy. there's always a disconnect between what the shanghai is doing and what they say they are doing and what is happening on the ground. fardata that we have had so this year shows the second consecutive quarter of accelerating growth. we haven't seen that in many years. producer prices are rising. a sense that you have gotten past the worst on deflation. general, there is a question about the lending activity and how much the regulatory restraint will overshoot and cause issues. see on thewhat we ground isn't as gloomy as the picture you just put out. know that ceos are trying to do business there and they say they will just wait for the time being. can you put the commodities on overlake for me? they have come down in iron ore

and with the complex in copper as well. ,hat part of what we're seeing again, the china connection, how significant do you think that is? we did have a reflationary mood at the start of the year. when we started you have , one of the fingers that was pointed was to china. and then people say, where has that come through? the good news is that it isn't just china and that china is not pushing up commodity prices as it was and commodity is not playing the role that it was. but that doesn't mean that you don't have it as being grossly upbeat -- are we accelerated -- are we excited about growth? no.

but we now have a large number of countries growing better than we have had in quite a while. days, myhe last two data check has been around a safe haven. give china an opportunity to put the house in order? if things get better here, now is the time you fix the challenges they have? stephanie: maybe are seeing a little bit of that at over the last few years, whenever there ,as been a choice or a question they have not pushed through with the kind of reforms and i likect that as much as we them to push faster, they have never ever made that growth. tom: where you in the partition between the emerging market ownership? interview to interview, there is a nuance. it isn't just simplistic -- buy

france or the philippines, for example. stephanie: we think this is a world that is good for emerging economies and it has been successful for the start of the year. there are opportunities growing in places like europe. it isn't just buying in france. we are buying european upside. tom: stephanie flanders, thank you so much. management onset a most busy morning of "bloomberg surveillance." coming up, marvin barth. this is bloomberg. ♪

taylor: this is." "bloomberg surveillance." the royal family of kotter once to boost their investment in deutsche bank. that signal may be seeking greater control of europe's largest investment bank. they made the request to regulators several months ago. earnings that disney are being hurt by espn.

the sports network keeps losing subscribers. bloomberg iger told is not worried. bob iger: we are optimistic about it. i think the reaction to it suggests otherwise but that is not the case with us and three of taken a number of steps to contend with what we are seeing. this is not something we're just getting too. it is something we have been working on for few years. it is high time that people look at espn in a positive way and not a negative way. think about how mobile devices are being used and what for. taylor: overall, earnings in disney were better than expected thanks to theme parks and movies. firedonald trump has james comey. --it the agency's regulation amid the agency's investigation last year. exasperate gop

upsetting, it has democrats. joining us now is baroness kennedy. this seems to have been a decision that has been made and it fits with the process that we have seen being rolled out through this administration thus far. that things change and change on a dime. give us your read on what is happening here? baroness kennedy: this is the nature of the man. he basically decided he wasn't comeyto have james conducting an investigation that he was not satisfied with and it is partly that he has learned through reality television, by that youou are fired,"

are a man of action who is firm. it shows that, --, well, i think it is impetuous behavior and i think we should be alarmed here in britain. because it is worrying when someone -- guy: so the rule of law is important? baroness kennedy: and the process is important. today, the new york post trump names chris christie before the controversial governorship, does he want to bring in a new director, who is more politically tinged or "his guy?" does he want to go the other way with an operative fbi director? he's temptededy: should is always to go with "his

guy." tom: maybe you could make the u.s. general the director of the fbi? baroness kennedy: the best person running the fbi is someone who is slightly arm's-length who will give advice that you don't want to hear. theproblem for me with president is that when he hears advice on certain issues that he toriled by, he will listen that kind of independent advice. and it happened with sally yates. she held the fort as attorney general her role is to protect the rule of law and she was giving advice over certain appointment where she thought there was a risk of certain possible coercion if people were given that role and went you gave that advice to the president he said "out." and that instinct -- guy: we are waiting for the tweet to follow. let's go to the rule of law for

.he ecj can brexit happen without a action fromlevel of the ecj? baroness kennedy: no. if you have trading arrangements with anybody, you are trapped somewhere that is recognized -- you have to have somewhere that is recognized to deal with dispute. there has to be a panel, a court, a tribunal. you need to have that. guy: theresa may feels she has had a bad relationship with european courts. she has.kennedy: she has had a run-in with the court of human rights. are two different legal regimes. the european court of human rights is to do with our membership of the council of europe. our involvement with the european court of justice is only about the in union and is about our trading relations and

holding that together. itput it into one side and is a red flag to her. tom: who will she speak to in the negotiations? is it every nation, government by government i government? can she get a dialogue with brussels or luxembourg russian ma? beeness kennedy: -- has traveling a lot. doing a kissinger. i suspect he is trying to make friends and win support. i sit on the european union committee and i chair the justice part of that. and we have been having delegations from people of all of the 27 coming to visit us. because they have their own brexit committees. they come and by and large, they say they want a soft exit. they want to remain friends with britain. but they have the lines well developed.

they want to make sure that we don't cut and run on the financial regulations. that is around pensions and members of the european public that have pensions and we're attracted -- we are attached to that. a bill attached to pension rights. we persuaded -- we were a prominent voice in persuading a way from thee baltics down to spain. tom: baroness, thank you so much. coming up in the next hour. washington and james comey, eli lake. this is bloomberg. ♪

the tuesday afternoon massacre. the president fires the director

of the federal euro of investigation. this time, the attorney general and the deputy attorney general do not resign. this morning, how will republicans respond? washington in political crisis. none other than john dean says the president signals cover up. kevin cirilli will join us in a moment on the white house on the hill this wednesday. and in france, the macron rally continues. currencies weakened. good morning, everyone. this is "bloomberg surveillance." guy johnson is in for francine lacqua. what a bombshell. guy: it fits the highly volatile situation that we now have in washington. surprises come from left and maybe they should be surprises because of that. tom: the best wording was apolitical this morning about the fire over the last week as

the president came to this determination. we will touch on that in the next hour. eli lake will join us right now -- eli lake will join us but right now, here is taylor riggs. decision to fire james comey is threatening to backfire on the white house. some republicans say the decision can't be justified. lastings were united in the move. >> trump called me and informed me he was firing director comey. president -- "mr. president, with all due respect, you are making a big mistake." the first question the administration has to answer is -- why now? taylor: the white house says james comey was fired for the way he handled the investigation into hillary clinton female server -- hillary clinton's female server. e server.

server. anzabeth warren is saying independent inquiry is needed. meanwhile, we sat down with bloomberg before james comey was fired and she was asked if she would run for president. >> i have to put this in a temporal place. for president. i'm running for reelection. i will announce early because i want people to know that i am all in. taylor: in a few minutes, we will hear more from elizabeth warren discussing whether a new version of glass-steagall is needed. syria is likely to be discussed sergey lavrov meets with trump at the white house. this is a prelude to the meeting is expected tot take place in several months. in south korea, the new

president pledges to push for peace with north korea. he was sworn in after a landslide victory in a special election. he repeated the campaign promise to visit north korea under the right conditions. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i am taylor riggs. this is bloomberg. tom: thank you. kevin cirilli joint us from washington. congratulations on your interview with the senator from massachusetts. we will hear much about that. to the republicans right now. who are the republicans most the actions? kevin: senator ben staff, someone who is a rising star in the republican party, he has positioned himself as someone to be critical of the administration. he joined the likes of mccain

and lindsey graham. but he represents a new era of republicans. someone who is late to get on board behind trump. so you do have emerging dynamics now. -- again, prescient today and again, pressure today will for congress to weigh in on that. tom: did the president make this decision by himself? kevin: yes. but ultimately, he was referred by jeff sessions. even shut to the attorney general's -- i reached out to the attorney general's office and they referred me to that memo. at the end of the day, the president is saying they stop on his conversations with the attorney general that he arrived at that conclusion. again, ultimately, the bus stops

with him. guy: how does the russia investigation proceed from here? the investigation is ongoing. internally in terms of the intelligence community and with congress. with the firing did last night is that it being called the investigation on capitol hill. there will be more public outcry to get to the bottom of this. investigations behind the scenes by the fbi are concluding, this administration will not be able to put this behind them. lavrov be ingey the oval office later today? do you expect the meeting to go ahead? all is go.f now, this is a private meeting. that said, you never know with this president. he seems, judging of his

twitter, to be sure to get out and comment on this but he could have an opportunity to do so at the press gaggle later today. beyond that, it is unclear when and how we will be hearing from the president himself. tom: kevin cirilli, thank you so much. i began reading all of the different theme and discussion and nothing stopped me in my tracks like a good essay by james frankel in the new yorker magazine. this quote from a name in the last-- this is john dean night. raisedg this, they have so many questions. how can you conclude anything but that trump knows he's got problems? every move they make keeps signaling "cover-up."

he goes on to elude back to the moment in 1973. joining us now is eli lake, who has written terse columns on president trump. --'re feeling when you might you're feeling when you heard of it? eli: i couldn't believe it. i read that james comey was the most powerful person in washington. that is on the assumption that after announcing an ongoing investigation into the trump campaign and russia, it would be politically suicidal to fire the man who was effectively in charge of it. and yet, that is what just happened. and i do think it creates a political crisis. not a constitutional one. the president is within his rights to fire the fbi director but it is something that has only happened once in american history. tom: i misspoke -- i said resignation.

i should have said firing. what will happen when we have some form of special prosecutor? that will happen. how will things change? eli: i don't know that we should assume that will happen. i think it is more likely to happen but i could see it going a lot of different ways. what changes is that it thattutionalizes the cloud james comey confirmed was over the white house. you have an fbi probe that is known to the public on the record from the fbi director. what a special prosecutor would do, it would institutionalize that end he would have something .hat could not be touched i don't know what that would mean. we are still so early in the presidency. in some ways, what it would do hanginga further thing

on the legitimacy of it. and what trump needs is the support of a bipartisan, 9/11 style commission, that would look at all of it. guy: this will sound like a strange question. a president that made his former career by literally saying the words "you're fired." can we draw a line between one life and another life? eli: no. showected a reality tv star who fired people on television and made a lot of money off that. i think that is a fair point. let's not shed too many tears for james comey. he badly mishandled the hillary clinton investigation. it was probably inevitable that hillary clinton won the election , she would have fired him. his latest hearing was a disaster. we found that yesterday that he did mislead congress on exactly

how many emails whom gravity -- how many mills were forwarded. james comey has made a number of mistakes and one of the mistakes that he announced in march that there was a counterintelligence probe into russia and the trump campaign. at the same time, he didn't say what trump said in the letter, that trump was not being investigated. that is exactly the point who wanted to go to. the three times. the implications of that are what? that caught me by surprise. the implication is that james comey as someone who presents himself as this ultimate boy scout. inis totally beyond politics a town that is heavily politicized and that is his reputation. but he is politicized.

he makes political decisions all the time. one is to confirm an investigation on one hand and not say publicly what everybody knew behind the scenes about trump. tom: put fossils like myself into place. we love to make allusions to 1973 with sam ervin and mr. baker from tennessee. is this like watergate? are we being nostalgic? too soon to say it is like watergate. it,rgate, at the heart of it was a president abusing his power to go after the opposition party with the powers of the surveillance state at the time. they were all ex cia. what we really have is someone in reverse. the perception of the trump white house is set the surveillance state was turned against it and its associates, by the party that just lost

power. so i think it is too soon to say that it is anything like watergate. but the one parallel that there is is that you have a president who is taking hold, unprecedented actions, and you are starting to see -- at least we saw from the statement of republican senators -- losing support within his own party. i don't know what the impeachable offense is. and watergate, i could tell you it was a burglary covered up at the highest level in the white house. eli lake, thank you so much. we greatly appreciate it. we will move forward with marvin barth. we will begin our discussion on economics, finance and investment. we do that next. thank you to washington for great coverage this morning on the comey announcement. this is bloomberg.

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taylor: this is "bloomberg surveillance." as's get the bloomberg is flash. the royal family of cutter wants to boost its stake in deutsche bank to more than 10%. that is a signal that it may be seeking greater control of europe's largest investment bank. they made the request to german regulator several months ago. that is the bloomberg business flash. guy: thank you. we haven't done this much, let's see what is going on with the markets this morning. this is the picture. s&p rate hikes, the futures, futures going nowhere.

things are happening in washington, why are these things not moving. stocks -- they are moving by less than .1%. what is going on? marvin barth is the barclays head of ethics strategy. draw a line between what is happening in washington and what is happening in the global asset market? marvin: eli lake at the nail on the head. ?hat is the crime unless you see something that will actually threaten the government, what is the issue? what we learn from this is that trump is predictably unpredictable -- we already knew that. and this is a program that markets have been having all year. dealing with these political issues that is a totally new environment for them. guy: we priced in tax changes and all kinds of things that would come out of the administration and we have had to go back aggressively on all of that. now we don't what to think.

eli: but that is the point. we thought we knew -- tax policy , stimulus. but now, all of this other stuff. herepolicy newspapers today are out of tune with how graphic the news flow has been. does this overwhelm everything? does it become a distraction? it just doesn't get done? eli: i don't think so. -- so.in: i don't think i think people have learned that there is a certain number of noise coming out of washington. isthe earlier point -- what the signal out of this? tom: we talk about the euro and the yen. what is the dollar call? marvin: we think the dollar is nearing the multiyear rally. a buy theobably be

rumor and sell the fact type moment at the end of the year. we expect to get some sort of tax passing coming through. that is really when the dollar store to peak. if the fiscal package doesn't come through, with a lot of infighting in congress, the president's ability to operate in washington, maybe that doesn't happen. this chart here which is the humans two-year which is starting to price in the hikes we will see from the fed. september is beginning to look like it is being priced in. can get a politics and push it to one side. nadal are going to do what to say it will do? -- why is the dollar going to do what you say it will do? more hikessee two

this year. we actually think that they will pass june. guy: the markets have june at 80%. marvin: right. ultimately, we think the final strength will come through at the end with the rise in the fed funds rate. and you have monetary policy priced in well everywhere else. this is one of the problems for you see and why unconvincing price moves across markets. what is the divergence we are looking for? is 9.82, a little bit off. we continue with marvin barth's. . a conversation with elizabeth warren with kevin cirilli. this conversation occurred just before the james comey firing. we do that in a bit. this is bloomberg. ♪

tom: always beautiful. the director of the federal bureau of investigation. just before that, kevin cirilli had an important conversation with the senator from massachusetts. elizabeth warren. on mr.the topics was glass and mr. steagall. >> so far, we have had good conversations. that is what i want to see

happen. i'm ready. this is one of those basic things. the folks on wall street may resist this but most of the american people get it. there is what kind of thinking that is the pouring checking account and savings account and it ought to be separated from high risk gambling. smaller banks would easily compete against the big banks in those circumstances and smaller investment companies will be able to go against the investment companies. tom: this will never go away. everyone in america wants to go back to the banking act of 1933. guy: bill clinton repealing that. my question is about bandwidth. does the administration have the bandwidth to do all of this? tom: every interview says no. when you get more focused on what is happening here you get less focus over there. does he get the kind of time to

be able to make the decisions that he wants the president to be able to make? i don't know. an important point that we haven't figured out the lines of communication pre-james comey. but marvin barth from barclays is here with us this morning and it is a signal of a new wall street? , will your. macron move to paris? marvin: i'm highly confident that the city of london isn't moving. some jobs will move outside of we have way too many examples in history of once you get human capital in place, it is too hard to dislodge. tom: i love -- guy: the rule of law is part and parcel. marvin: if you think about every international debt contract, the two laws it is written under -- the u.s. law or u.k. law. much friendlier

-- guy: are the u.s. and you capable of law in question? arein: i don't think they in question. in the u.s., we have seen a series of checks and balances that highlight even when you hire someone and to be the chief executive, there is controlled in the system. here, i see no sign rule of law in any way under question. tom: marvin barth from barclays. let's look at the data. the futures are -4%. while percent -- oil is a bit of a bid. ♪ .

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cable rate is trading at 1.29. let's get a first word news update. democratsthe u.s., called it a move reminiscent of richard nixon. president trump said it is a move of new leadership. the president has fired fbi director james comey and they said because of the way they handled the investigation and to hillary clinton's email server. democrats call it a way to into thethe probe russians into the election. a secret health care debate that may take months. mitch mcconnell held a meeting with republican who will shape their own health care bill. they will probably limit the deep cuts to medicaid. and members of the united nations security council want to know more about russia's peace

plan for syria and agree to set up -- safe zones. increases more than expected. falling short of estimates that suggest a stronger chinese industrial profit may be harder to sustain. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am taylor riggs this is bloomberg. ,tom: thank you. this is a real treat. we digress from the going ons in washington and in the markets to making smarter on economics. a poll out there showed a high interest in getting economics don't write. -- don't write. -- done right. nobody has done more than wendy carlin, she is a professor of

economics at ul. how about this doorstop? , and the mother of all books. look how thick it is. even taylor riggs cannot get through it. the most intimidating book for undergraduates was out for. wendy carlin. we are going to talk about economics in high schools. economics for people that need economics. your program is leading the way, what needs to be done? wendy carlin: to make economics really exciting and accessible to a wide audience and that indeed means kids in high school . the poll suggested that most of the people polled thought economics should be a subject that all kids encounter when

they are in school. the program has been, it has been thought of, especially at the university level as a july, typical subject. thata core curriculum everybody runs from, even people who end up being degreed. how do you make it exciting? passing of -- of carnegie and melon? how do you do it? wendy carlin: we make use of narratives that economics have simply failed to do. one of the big issues that really animates students when they come into the classroom is, how do we notice, we ask them, another aspect is to collect data from students. we ask them to put down what is the most important question, pressing question?

and they tend to put down the word "in a call it the -- "inequality" and that's all around the world. it turns out that we have got a good data on how the booty was divided up on a pirate ship. we can show students how to represent inequality on a pirate ship and turns out to be very loved. the next step is to say, what about the ship's chasing the pirate ship? we can also figure out -- so great is we are talking to the giant of algebra exposition, can we do it without the math? me and thy quaked with? wendy carlin: i think you can be really drawn in, if you're really into pirates. tom: johnny depp economics. wendy carlin: there are so many

other great stories, another story, sick about -- think about the one price, think of india and fishermen. all of these boats going got to fish and then they have to decide which market to come into on the shore. what happens, some of them would get into the shore and really no demand for the fish so the fish will get thrown away, and efficient. when mobile phones arrived, the fishermen out there fishing could figure out which market needed fish so they went into the right market. they gained most of their catch and less waste and we move towards the lower price. an example of where new technology really affected the way and market worked. guy: lets me make it about the u.k. for a moment. we are being told we need to

diverse of five economy away from financial services, how does that fit with what you are saying? wendy carlin: that was one of the big lessons of the financial crisis, which was the british economy had been pretty much oriented towards the financial sector. that was considered to be a well performing sector in the economy. what's with learned during the crisis -- we have learned during the crisis,.the u.k. is performing very poorly -- you can't performing very poorly and we need a much more diversified industrial base and leading down the food chain, suggested the array problems in terms of education that we needed to take action. guy: let's talk about how smart are economists are. one thing the british public has things is economists get

wrong and on a pretty spectacular basis. we were told everything was going to be a disaster. now, we are told it isn't. how does the science portrayed itself as adding value when it cannot get the big numbers right? wendy carlin: people identify economists with forecasts. most of the forecasts came from city economists and the treasury. if you look toward academic economists, they were suggesting that the effects of brexit would be bad but looking further into the future where evidence-based is much stronger. they were suggesting 1%-3% loss of gdp five year is out. 15 years out. based on what we know looking at what happened with the deregulation of trade and what

happens when trade increases, we can be much firmer about the five-year, 15 your horizons than the ones that really picked up intensively by the media which was largely coming out of city pundits, city forecasters rather than people working. , you are a forecaster and have a really good track record. [laughter] guy: what went wrong? when we think about -- marvin: people were projecting a lot of their own views. carllin's point about the longer run views and shorter run views is a lot of people were projecting their own

biases having been city employees and thinking they eu was such a good thing for them and did not think it was having the same effect on the rest of refer tomy and they academic studies and said, it will happen much sooner than academics expected. i think there was definitely an error there. 652, the game where professor carlin decided in a pup what they will do -- pub, do you have the beer or quiche. you go to real-world explanations with mathematics. i go to work do you introduce a math that you are world acclaimed for her, when do you introduce that into the curriculum? wendy carlin: we can introduce that into different levels of sophistication and really quite early. you put your finger on it which

is one way to do it in a palatable way is to introduce games and game theory. when we talk about interaction with people, you can have the students playing games. that can see how they have to ring strategically about how the other person will respond and we can translate into a more soeral mathematical format they can see how to use that in many different contexts. warning from the first page, this is heavy lifting. guy: i am getting nervous of you brandishing this. wendy carlin, one of the giants of academics and we will continue our conversation on "bloomberg surveillance" radio with the david gura. we have so much to talk about not only washington but the different politics and linkage into economics. tomorrow, our guest at the 6:00 hour and stay tuned through the

day for bloomberg on washington. ♪

taylor: i am taylor riggs. the bloomberg business flash. earnings at disney hurt by the unit they used to boost profits, espn. the network is losing subscribers. the ceo told bloomberg he is not worried. bob iger: we feel optimistic about it. the reaction suggests otherwise, that is not the case and we have taken a number of steps. this is not something we are just getting too, something we have been working on. it is high time people look at espn in all positive way and not

a negative way. think about how mobile devices are being used. taylor: overthrow earnings at disney better than expected thanks to theme parks and movies. tom: excuse me, guy. i am sorry. i am sorry. guy: you jumped in. tom and i am fired up for wendy carlin. guy: some suggested she should be on npr. daybreak is coming up. we have ferro. david, a great interview. will out the highlights. david: the highlight is espn. years, said it will slow down and they continue to lose subscribers. he is trying to bring in a with digital as fast as he can. the question is, how fast? and movies and theme

parks including shanghai. the other thing we will talk about on the program despite -- besides disney is a big investor, very outspoken. totally off agenda of the rails with this comey news that broke before we talked with bob iger yesterday? the news broke he had been fired. quite extraordinary. tom: thank you. up ask on disney coming well. right now, the new york conservative, he was heated, i think it was from "the atlantic" and i saw it a couple of hours ago. the question has to be asked about every trump law enforcement appointed, where are your resignations? stands firing stance -- -- from as a heated note republican.

greg.ak to a your reaction when you saw the firing of mr. comey? >> shock like everybody else and i began to think, what does it mean for trump's agenda? it does not mean anything good. one of the clear conclusions is that tax reform is dead this year. good on the word dad, what do you look for form republican -- dead, what you look for from republican senators? >> will it be mccain or people like apple abandoned him? from what i heard, at least a dozen senate republicans will abandon him. tom: let's come back to the innda and how dead it is terms of tax reforms. the financial markets have not reacted in any meaningful way. is that a mistake?

greg valliere: i think if the markets were hoping for a tax bill this year, they will be disappointed. i do not think a tax bill is dead. distraction,an a this comey story and maybe a special prosecutor. guy: give me a sense of volatility. volatility in the financial market, the vix on a nine handle. in washington, trading with a significantly higher handle. how do i put the volatility of washington with wall street? greg valliere: you have to view it in context and say everywhere you look, goldilocks, moderate growth, interest rates, good corporate earnings. all of that stuff persist even with the comey stuff. tom: talk about the resignations

that mr. frum talked about. what will you look for from the internal general -- attorney general and the deputy attorney general? greg valliere: in a word, a special prosecutor. if they do not appoint one, it will intensify suspicion. it will deepen the crisis. tom: greg valliere, thank you on short notice. marvin barth with us in london. , look at the bloomberg, a little bit of movement. dampened yields. to guide's wonderful point on the resiliency of the market, when you hear mr. greg valliere, if you do not have a fiscal solution in the u.s., it affects the markets. marvin barth: it definitely should. i would respectfully disagree on some of the points. it is not like we do not have coincidence investigation into russia going on in the house and

senate and not like the rule of law has been undermined that mr. frum suggested. f is shocking, politically in to move, it appears. let's look at earlier this year, president trump tweeted about former president obama wiretapping him. he not only survived that but evidence showed that they were being surveilled. i do not think this derails tax policy. , housethose senators members who may be -- ultimately, they have a self interest themselves in getting reelected. we jumpvin barth as between political and economic space. we will continue with mr. barth. maybe the celtics will come out. capital in conversation

today. go, isaiah. this is bloomberg. ♪

tom: the single best chart. the balance sheet of three fun dream banks. the fed ugly in japan. blue is the better than a good ecb, mr. draghi. guy: to the dutch parliament. tom: marvin barth with us. do you share mr. bernanke's calm? marvin barth: i am probably more so in that direction. i think that qe operates through expectations channel as long as you are buying bonds my you cannot think about hiking rates. that is how it has its impacts and that is why the taper tantrum meant they can think about hiking rates. if you think about it now, they

are on a path. what signal are you getting? guy: how do think it will work for the ecb? it is going to happen soon. think, oneh: one, i lesson they have learned subduedn is much more and the global environment than every body thought. you can wait longer. number two, they have a different situation here in europe, the portfolio balance channel at some of my ,olleagues, antonio, have shown there is more of a portfolio channel because he were talking about different sovereign and they have an impact on the buying and sprints. -- spreads. there will be more of an emphasis of keeping -- guy: wouldn't it be nice if they go by one bond, let's call it a eurobond, do think it will

happen? marvin barth: i think they love that idea. the chance of it happening is incredibly low. this is interesting. if you look at, well everybody said the eu won and globalization won that election, look at the first round, 67% of voters voted for a candidate who wanted a changed relationship, a delegation of more sovereignty. see guy johnson in a bow tie? marvin barth: we will work on it. one?u can type one -- tie >> the way we progressed down that road is different. >> are you going to bring the one? >> he did not get the memo. look at this excellence. guy: i will not make any judgment. >> he has way more flair.

>> in beautiful pattern. tom: what a crazy day. barthl continue was a mr. , "bloomberg surveillance" on radio. there has been a movement with futuresnd futures -- in looking at foreign-exchange. the little bit of a shift in the wind in the last hour. stay with "bloomberg surveillance" through the day, including kevin cirilli, important conversation with senator warren ban. this data war in -- senator warren. this is bloomberg. ♪

>> it has a very strong operating culture which allowed us to build tremendous team here. >> opportunity thailand, be a part of it.

jonathan: president trump fires fbi director james comey and

they say scrutiny from democrats and some republicans. u.s. equity futures little changed. on china.ocus the latest data that global reflation fueled by the world's second largest economy may be easing. good morning. you are watching "bloomberg daybreak" i am jonathan ferro. let's go through the market action this wednesday morning. features a little softer but no drama to match what is happening in the seat -- d.c. treasuries with a move. yields lower by three basis point for all eyes on the data out of china. a question mark. david: more softness to china area time for our morning brief. u.s. imports and