This is bloomberg "surveillance." democrats turn out in a republican primary.
The gop establishment stays off the tea party in mississippi.
Existing and new home sales surge, is the new normal a new housing market?
Gopro goes public this afternoon, filming how to tie a blood type.
-- tie a bow tie.
June 25, where did the month go?
Joining me, scarlet fu and adam johnson.
In japan, prime minister shinzo abe has declared inflation dead, is over.
Get back to growth mode.
We will get a third revision to first-quarter gdp and they are going to send a lower again, this time they are looking for -1.8 percent.
Have lowered it from about .10 this is old news.
The second quarter number will be robust as payback.
A lot of this was weather related.
Also at 8:30, durable goods orders looking flat.
Consumer demand is measured.
Capital goods coming out as a measure of corporate demand, looking up.
I will bite you.
[laughter] easy, easy.
Don't do it, i will lose my contract with adidas.
9:45, pmi, purchasing managers index.
A lot of earnings.
Apollo, barnes & noble, general mills, monsanto, bed bath and beyond.
I need towels.
Gopro is pricing tonight.
21-23? begins trading tomorrow.
President hosting shimon perez at the white house for lunch.
Beyonce and jay-z kicking off their first combined national tour.
Not only are they married, seeking together.
The summer concert series.
They are not the two that went to florence.
kanye counts them as friends.
Odds on how long that lasts?
This is number three, kardashians.
We look at the inner tame industry.
Stocks, bonds, currencies, commodities -- ugly yesterday.
Kerfuffle, down 100 points.
Yields have come in, 2.6 to 2. 58. nymex crude, 106.56. a mix, under 11 to above 12 on the vix.
Two year yield gets my attention, creeping higher.
Brent crude 115 to 113.91. one of the charge that matters, adam mentioned this earlier, the gdp of the nation 14 years.
It has been pretty good, pretty choppy.
A further revision down here taking it off the queen's visit to "game of thrones," under -- winter has went.
Labor related and problems with retail.
We always say that 70% of the economy is consumer, a citigroup advisor pointed out that it is 56% and the other 13% is health care.
It is only 56%. wisdom from adam johnson.
Let's get further wisdom from our front pages.
Scarlet fu was up at 2:00 a.m.. a couple primary election results.
A defeat for the tea party in mississippi.
Thad cochran nearly turning back his tea party challenger chris mcdaniel and the gop primary runoff.
He was backed by the chamber of commerce and health by blacks and other democratic party voters who crossed over to vote in republican primaries.
A huge deal.
This is an accountable/ this is incalculable.
Chris silizza wrapped this up.
It is important because of what happened with eric cantor in virginia.
He was surprised and so many people were surprised he was defeated and that primary.
515% to 49%. mcdaniel did not concede, he suggested he might challenge the results.
rangel in harlem.
Still counting votes a couple hours ago.
Absentee ballots as well.
I don't think we have a final determination on mr.
The idea of the gop establishment taking on the tea party.
U.s. taking a first step towards exporting u.s. crude for the first time in almost four decades.
Commerce department opening the door to exports if crude is lightly processed, schmitz could begin in august.
Give us the back story here.
The embargo was put in place in the 70's. oil is created a strategic national resource.
I want to point out two things.
We figured out how to get oil out of the shale so we have a lot more oil.
These exports are for condensate, a type of liquid natural gas, you can refine it very easily into gasoline and jet fuel.
I used to trade oil.
In theory, we can start exporting condensate.
What is the why that we can't export oil?
We thought we only had so much of it and opec was very powerful.
A legacy issue going back to the 1970's, why would we give up something we need to import?
Things have changed since the shale revolution.
The government ruling applies to just two companies, pioneer and enterprise half ite.
Google getting ready to unveil a set top tv box.
Trying to compete with apple and amazon, digital content at home as more and more people cut the cord.
Did we vacuum the carpet?
I want to control my living room.
It is set to resemble products like roku, it will carry another company's brand.
Think about how samsung uses android software on his phone.
I have zero interest in this story.
You watch plenty of content on television.
It is a way of getting content in a different way.
So you don't have to pay time warner or comcast.
Do you watch espn?
I watch biting.
How much do you pay for your monthly cable bill?
I pay $174 to time warner cable.
One day, adam johnson is going to get fed up if one of these setup boxes proves -- if google -- those are our front page stories.
Futures flat, vix closing at 12.13. jonathan miller is with miller samuel.
Also with us is kate moore at j.p. morgan private bank, senior vice president of courage.
What is your message to your investors, to have courage to stay in this market?
We have looked at every single asset and said nothing is cheap at this point.
We have told them they need to stay fully invested.
If they do not at this stage of the cycle they will leave a lot of money on the table.
There is a desire to take some profits, perhaps in equities or high yield, money into cash.
But when you do the math and you think rates are going to rise or you think economy is going to improve, that is not a productive use of capital.
That folds into your analysis of earnings.
High single digits.
Looking for 7% to 8% earnings growth in the u.s.. 2% div yealields.
Not much more multiple expansion, we are at about 16 point forward.
It is a well oiled machine, is not priced in?
Some of it is priced in.
If we got to july and had our 10% return for the year, we would have a different conversation.
There's a little more room to go.
You said at this point in the cycle, when i hear that that suggests that we are nowhere near the blowout phase, that is when you really want to be -- things are turning by.
-- churning by.
That is yet to come.
We are midpoint of the economic cycle.
This is a long cycle, you have not in capacity utilization hits high levels or a we have not seen leverage pick up.
We think we have some room to go in both earnings and asset allocations.
On housing, has there been a change from the emotion, i am never investing in the stock market again and i'm only going into real estate?
Is that song and dance changing?
Im'm not sure.
Mixed messages about housing for the last six months.
It has been gloom and doom and now we are getting some unusually high numbers of new home sales and confusing messages.
I don't know if the consumer is really deciding what is better than the other.
Housing last year, no-brainer.
This year i'm not sure.
Two people yesterday asked me the same question, how can manhattan housing be booming, case-shiller shows new york numbers so lousy.
How do we get -90 day statistics on new york metropolitan area.
We know the zaniness in three blocks of the studio.
The case schiller numbers of new york reflects the market in december, before the polar vortex or anything like that.
There is a six-month lag.
It has nothing to do with new york city, it does not include co-ops, condos, new development.
All the things that are building.
There's the answer on bloomberg "surveillance." clarity from miller.
And a lot of times we will show the camera shot on top of our building and there is this building going up next to us over on park avenue.
I just read that a full floor one for $90 million cash?
Tom lost the bid.
Where's the money coming from?
That building is going to be 1400 feet high, 400 feet taller than the tallest building we have so far.
I don't know where that specific transaction, but a lot of the deals are foreign buyers.
I don't want to state that -- i don't want to overstate that, it is still in the new development space.
Foreign buyers are accounting for about 50%. 5-5? 50% of new development.
Do foreign buyers include people from westchester?
[laughter] jonathan miller, our guest host, along with kate moore of j.p. morgan private bank.
Gopro about to go public, is it a financially sustainable country.
What is the most disruptive technology product on the market?
Your apple tv box?
Tweet us @bsurveillance.
This is bloomberg "surveillance," streaming on your tablet, smartphone, and bloomberg.com.
? good morning, everyone.
Bloomberg "surveillance." coming up through the day.
A conversation with the former president of the u.s. bill clinton.
He will join "market makers" from the clinton global initiative america in denver.
11:00 eastern time.
Tune in to bloomberg television all day for more exclusive interviews from cgi america.
This is bloomberg "surveillance" from new york city.
I am tom keene, with scarlet fu and adam johnson.
As i put the thing up here -- the little camera on top of your head?
You can put it on your shoulder, too.
Gopro makes wearable cameras.
They are expected to price their ipo tonight and begin trading tomorrow morning.
Not everyone on wall street is sold on this company or its ipo strategy.
Leslie picker joins us now with a look at some of the biggest concerns.
Here is the thing, gopro makes mini hd cameras.
Is it a hardware company or a media company?
They earned $1 billion in revenue, all their revenue came from the sale of hardware and accessories for the gopro product.
That said, in their ipo they are valuing themselves like a media company.
This is how they are going to get growth moving forward.
It is not such a far cry, one analyst said it is kind of like taking nicole richie and her twitter stream and turning that into a tv show.
You have all this content and information and turning that into a media channel that people can watch.
Are they making money as a media company?
They have partnerships with microsoft, version america, and youtube.
They filter content and collect revenue from advertising based on that.
That is not expected to be material revenue in 2014. i get dizzy as i watch these things.
The video is so awesome.
Any talk of partnerships with red bull, that seems obvious.
They have sponsorships, they sponsor athletes.
Their bread and butter is surfing.
They sponsor those competitions and racecar competitions.
They have some sponsorship interaction.
As far as i know they do not collect revenue from that.
It is mostly the sale of hardware.
How has the roadshow gone, are they so arrogant they do not have a road showhow?
I watched their retail roadshow video, which was produced by gopro.
Very entertaining to watch.
Exciting looking at ebitda, are they going to make any money or is it -- red bull videos?
Guys doing crazy things.
February of 2000, right?
I would not say it is that extreme.
These guys are profitable and have been for four years that they posted financials and their perspectives -- in their prospectus.
Net income, gross margins at 37%, not horrible for media companies going public.
What i hear is that the roadshow is going well.
People are impressed by tony bates, the former microsoft executive they brought on.
Seen as the grown-up in the room.
Let's go to the grown-up in the room.
Former merrill lynch.
He is the author of a book.
Fabulous book on growth versus value.
Investors manic for "disruptor" stocks.
Kate moore, two-tiered market, disruptors on one hand and everything on the other?
That is fair, people are looking for story stock at this point in the violation cycle.
It is not that regular companies are unattractive.
Once you get to 15 times or 16 times forward earnings, everyone needs to feel like something is in a secular bull market, not just a cyclical bull market.
General mills at 7:00? is that sa story stock.
A few decades ago.
Kate moore, you've are a competitive skier, do you use at gopro camera.
I have never, but many of my friends do.
Watching some of these videos makes me dizzy after the fact.
Miller, do you use gopro cameras?
I don't but my son is a fireman, he wears them on his helmet going into burning buildings.
Why doesn't the camera mount?
I'm going to rip up the script, are you going skiing with julian robinson?
do you wear a helmet?
Always helmet, i have worn a helmet for 20 years.
Our twitter question of the day, what is the most disruptive tech addict on the market.
Tech perrouduct on the market.
Tweet us @bsurveillance.
Leslie picker will be there to report on the pricing of the ipo.
Coming up in the next hour, carly fureyiorino is our guest host, the future of hp and women in the gop.
Coming up on bloomberg "surveillance" in the 7:00 a.m. hour.
? good morning, bloomberg "surveillance." i am tom keene with scarlet fu and adam johnson.
Futures flat, up 1. morning must read.
And morning must listen, willow bay spoke with penny pritzker at the clinton global initiative in denver.
They were talking about the american export import bank.
Penny pritzker made comments about its role in access to capital in the u.s. take a listen.
This is an important part of the credit spectrum that is offered.
Particularly for small and medium-size businesses.
There is a real problem.
When i talk to small and medium-size businesses, access to capital for exporting is a challenge for them.
Often, their only choice is the export import bank.
This is imperative that we reauthorize the export import bank.
What do you need to do to make sure that happens?
We need everybody's was to be heard, particularly the business leaders, small and medium-size business leaders.
So everyone understands the facts.
After eric cantor's defeat, he was a supporter of the export import bank.
A lot of noise about how they're not going to reauthorize funding for that.
Kate, eweigh in?
You can expect penny pritzker to say it is important.
It is important, not just about the export import bank, to make sure we are setting up mechanisms for small and medium-sized businesses to interact in the global economy.
One of the things that will take the u.s. economy to the next level is access to capital.
Asterisk the banks are more thoughtful about how they are lending, we want to make sure we have institutions in place to provide that funding.
It is going to be something important to watch.
This is about d.c. and how they facilitate business.
Not just after midterms but into the next election.
Tune in to bloomberg all day long for exclusive interviews from the clinton global initiative in denver, including a conversation with former u.s. president bill clinton, chelsea clinton, and former treasury secretary robert rubin.
You know who was absent from that group?
She's a little busy.
Woodbury comeback, the huge rise in new home sales.
We will be right back.
? good wednesday morning, bloomberg "surveillance." our twitter question of the day, what is the most disruptive technology product?
Send us your response.
The most disruptive tech product on the market today.
This is bloomberg adam johnson was hereby minutes ago and we will get the top headlines.
The most happening word in the english language today.
Here is the top news, a western iraqi town was attacked by syrian warplanes.
At least 50 people were killed.
Serious trying to back the shiite government in the battle against the rebels, but much of the country is conceded to insurgents and abacus want to defend the capital.
A cease-fire in the ukraine appears to be just talk.
Pro-russian militants shot down a military helicopter and all nine servicemen aboard were killed.
New sanctions by the west against russia may be delayed.
Obama administration officials say they need to see positive signs from russian president vladimir putin.
And politics turned upside down in this is that the, thad cochran edged a tea party member . liberals voted for him because they feared his opponent.
Those are the top headlines.
A shout out to the bloomberg news headline team and the syrian bombings in iraq.
The first report said this was u.s. trends, and the military denied that, and the sequence of headlines was remarkable, how they had clarity there, within the chaos of all of these headlines.
Equities and currencies commodities -- futures are negative one, 62 elevated here, and housing recently a little bit elevated.
Housing is indeed elevated.
New-home sales jumped the most and 82 years, but demand remains at record lows and with rates near record lows.
The president and ceo of miller-samuel, where is all this cash coming from?
New-home sale numbers, i think the spike is more of an anomaly, -- this is a one-month blip.
Permits are down and i would like to think that housing, we are seeing more new construction, but i think that that is a little bit, we go a couple of months with that kind of growth.
At least on the coastal u.s. it is foreign buyers, with about one third of the market is investors coming in and looking for a way to park their money, especially on the redevelopment side.
One of the other data points is the price index, austin and san francisco are correctly back to where they were in 2008. what do you make of those numbers?
Dallas and denver have exceeded their 2008 highs.
They are back but you have to remember the market with dallas, it did not fall very far and they have had a booming economy.
The last time i was on, tom alluded to the legalization of marijuana having something to do with it.
But it is interesting.
Boston also is about four percent off of its all-time high.
The all-time high is an artificial credit, that is not something that we necessarily want to aspire to.
This is new-home sales, and this is a regression.
Those blurred lines down at the bottom, when you wake up in the morning, john miller, do you see new-home sales as a proxy that will get back to what, 2003 levels, 2006 levels, will they ever get back there?
All of the above or one or three?
I will take a different answer to that.
Right now, new-home sales are about 10% of total transactions.
Historically business to be about 15%. i think that we don't normalize until we are at about 50% in terms of the volume that we are getting now.
I think that this is jobs and credits.
New household formation and simply, we are not making new houses because kids are living with their parents.
Student loan debt and the plummet rate for people right out of college is 50%. that is a big number.
New-home sales are 10% of all transactions for most of the activity in the housing market and where this takes place.
You like the release on existing home sales, what did you learn, about where we are in the cycle.
What you saw with these numbers is i don't -- and i don't know if i can articulate this on a national scale, but what you're -- what you are seeing is a step down from the euphoria that we saw last year, leading up to a burst of activity, we are talking about a year and a half of prices year-over-year, income is flat and credit, the math does not make sense.
You said $20 million, i am just getting folks.
The foreign import into the housing market, with cash -- do you have the same effect on the equity markets?
Are people from abroad loading up on u.s. equities like they are with john miller?
This is a great question and about six weeks ago we had the off-site in asia, we were talking to clients in hong kong and singapore, but one of the biggest questions we had is what sectors you would buy in the u.s. and europe.
We have a lot of numbers from the asian clients about diversifying their equity portfolios into non-asian markets.
I think that there is the move to diversify and i think that the u.s. and europe will be picking up.
I love how jpmorgan has an off-site.
We go to the monkey bar on 54th street.
I was is going to have that one thing you're seeing in urban markets, you see a tremendous amount of redevelopment, more so than in the suburban areas, wall street generated the sovereign wealth funds, and they are filling the void where commercial banking is still grappling with the legacy issues of our prior problems.
You are looking for people hungry for returns and this is sort of the wild west.
Build it and they will come.
It is interesting you bring that up to cousin looks like 3 world trade center will be finished using private financing.
Larry silverstein had a lease on the original buildings before they were destroyed on 9/11. according to people familiar with the matter, he will work to line up private financing.
This is the trend.
There is money in people's pockets burning to be lent, we see that with rental and condominiums.
There seems to be shadow banking that is growing, this has been very damaging to the chinese property market, what does this mean to us?
A product being built in most of the urban markets around the country is skewed heavily towards the high-end of the market.
I think that the chinese situation is much more broad-based, what is being dealt here is 10% of the market is being addressed and the balance of the market is extremely devoid of new products coming into the markets.
This is a challenge and that has to be corrected.
What you're basically saying is the top 10% -- financed by the top 10%? bingo.
When we come back, lebron james ops out of his contract with the miami heat and is a free agent.
Wherever he goes, he will be under paid.
We will explain why, coming up on surveillance.
Good morning, everyone.
Rent crude, elevated a little bit.
That is back on the radar and oil is up a little bit.
I am tom keene and with me is scarlet fu and adam johnson.
Here are the top headlines.
A court ruling could lead to a rewrite of the flight rules.
U.s. citizens may be able to challenge the designation of a finite that they are on the list.
The current rules are said to be unconstitutional, they were composed after 9/11 to keep suspected terrorists off of airlines.
A passenger was killed and 2 flight attendants were winded after an airliner came under fire.
The airline spokesman says that the jet was hit by as many as 12 shots when it approached the airport.
The military is fighting taliban forces in that region.
Lebron james will be wearing a purple lakers jersey next season?
That is the question.
He will be a free agent on july 1 now that he has opted out of his deal with the miami heat.
He could get a max contract with the lakers, he is one of only 2 players right now.
I want to know if he would go back to cleveland.
If cleveland would want him.
Chicago is an option and the houston rockets and the l.a. clippers, because they have a new owner.
Think of the change.
One phone conversation and think of the change brought by like -- brought by that.
And he could simply re-sign with the miami heat as well, he could get a new five-year, $129 million contract and has a lot of leverage right now.
The issue for lebron james and carmelo anthony of the new york knicks, the mba is the first sports like to put a cap on player salary.
Wherever he goes he will be under paid.
He is paid about $20 million in salary, and makes $40 million in endorsements, but in terms of the value he brings to the franchise, he is priceless.
Look at the miami heat franchise.
Before he came and they were working hundred $64 million, 12 in the nba and this year, $770 million, seventh in the nba.
If they are sold for $2.2 billion, those numbers are understated by 50%. the miami heat is a valuable franchise right now because he brought over his two friends, the wayne wade and chris bosh.
Thank you so much.
John miller, you are a knicks fan and you are watching the same thing with carmelo anthony.
They have the rocky relationship with them -- he is a great scorer but not great on defense.
We are grappling with losing him, maybe.
Is see under paid the way that lebron is underpaid?
I don't think he is as much of a media darling.
I am sure he feels he is underpaid.
They don't call him king anthony.
$42 million in endorsements from nike.
Kobe bryant makes more money in terms of salary but in terms of total income generated, that is just remarkable.
Are you guys ready for some photos?
Let's do it.
3 photos today.
Today marks the five-year anniversary of the king of pop.
We are start -- talking about michael jackson.
The new album is number two on the music charts.
This is pretty amazing.
And the cirque du soleil traveling show keeps that legacy going.
Michael jackson still sells albums five years later.
And the family is probably still squabbling over it.
No comment there.
Queen elizabeth is visiting belfast in northern ireland.
Is that the game of thrones?
She is visiting the set of "game of thrones." who is that?
That is john snow in the background.
He came down from the wall.
Did she sit on the throne?
This is the lancaster's and the yorks.
I don't think she actually sat down on the throne.
She is totally fascinated, as are we all.
Look at this.
She is coming into seeking joffrey.
King joffrey is not around anymore, i think.
What do you think?
Based upon these pictures -- i would say it is too risque for her.
She actually made a contribution to the war effort in 2000 -- in she made a new country to the war effort in the 1940's -- there she is, walking up the stairs and she is in it.
Are you ready for the number one photo this morning?
Luis suarez sinking his fangs into giorgio chellini.
This is the third player that has been bitten.
He is being investigated now.
The new york post had the best photo.
"eatily." and a reference on the restaurant.
I thought it was weird when mike tyson bit of banter holyfield.
This is just -- why would you bite somebody else?
There is something wrong with that.
I love that evander holyfield tweeted about this as well.
Great photo today and when we come back on "surveillance," when will the bull market turnover?
We will discuss.
We are streaming on your mobile device and on bloomberg.com.
We will be right back.
I am scarlet fu here with tom keene and adam johnson.
Futures are higher but this is mixed on growth point m&a. the markets have 119 points -- that gets your attention at a time of near zero volatility.
Away from the day-to-day.
Let me try to say that again.
Away from the day, how do you invest in the middle of a five-year bull market.
Jpmorgan bank, doing a lot for them in strategy, we talked about this earlier.
I loved the note that you put out for us here.
Bring this up, the note on investors being reluctantly -- reluctantly bullish.
Earnings season is critical for sentiment as investors look for confirmation that first-quarter weakness was an aberration, and that growth is on track.
I love your earnings-per-share view of 7.8%. to the upside or downside, i would suggest that it would be even better.
We are trying to be -- and our investments and we would love to see some moved to the outside.
First quarter was little bit weird with the weather and the softer data, and we saw a sniffing a number of buybacks, a lot of confusing data over the last three or four months but we want companies to say that we feel optimistic about the future.
Remember those plans we promised, we will start actually taking part.
Jeff and melt was adamant that the single factor in the regression equation is almost rising.
If you have nominal gdp, that solves all sorts of problems and that is a best friend to investors.
I think policymakers are the best friends of investors and this is very supportive for risk-taking.
This is being cautious -- even with inflation picking up a little bit.
The bank of japan is on watch, and emerging markets central banks need to tighten because inflation is not much of a problem.
We have policymakers supporting not just a growth story but overall investor sentiment.
And that is one of the main reasons we are constructive on equities.
Earlier on we use the expression, where we are in the cycle.
Sectors in the s&p 500 -- oil and gas and basic materials show the highest earnings growth.
What does that tell you about where we are in the cycle?
Earnings growth, we have to member where the base is or was.
Resources in general have struggled to recover with a lot of excess capacity, a lot of production growth on the mining site.
And a sniffing and amount of production growth, in order to get tightness in the sectors and to be the next leg up, growth needs to be broad-based and we need to see a rebound in the sector.
Michael for role he has been out front in measuring the pulse of the nation and the potential gdp.
Do you disagree with bill gross about -- then bill gross?
We are more optimistic and a lot of anecdotal evidence says that people feel more optimistic about the future.
I mentioned this thing about policymakers, policy uncertainty has a very inverse correlation with how people spend and what we expect to happen in the economy.
I think that policy -- as policy uncertainty dissipates on the monetary and fiscal side and as we get to elections, we see more company spending and this will create a more self-sustaining cycle and we disagree that we are in a stall out, we believe we can grow in the next few years.
That is a raging debate right now.
Growth on the one hand.
And merrill lynch is there as well.
We have a pretty narrow range that is taking place, and very light following as well.
These are the highlights of the current bull rally.
Given that they are sitting on the sidelines and waiting to commit some sort of consolidation -- i think a lot of institutional investors raise cash and in the last four weeks people put more money to work but as you look at the overall flow, they have not been outstanding into equities so far this year.
The bond funds outpace what we have with equities.
There is still money in the sidelines in the expectation that people have is a pick up in volatility the summer that may not actually coming to that.
What do you see for institutional commercial real estate?
Will this make skyscrapers happen?
The problem just like in the residential sector is there is not a lot of products to buy, there is a lot of jason developments to these and this is just not there.
So what you see is cap rates, absurdly high prices being made -- being paid for products the runoff revenue they do not support.
Thank you so much and safe travels with j.p. morgan private bank.
And now the forex report -- with the euro and the you -- the rupee slightly weaker.
The bloomberg news contributor will be our guest in the next hour of "surveillance." this is "bloomberg surveillance." democrats show up at a republican primary, and on women and technological progress.
Carla fiorina joins us.
This is "bloomberg surveillance ," we are live from new york.
I am tom keene and joining me, scarlet fu and adam johnson.
Our guest is the former chief executive officer of hewlett-packard.
Also with us, mark o friend, the head of bloomberg politics.
We have a lot today.
Overnight, prime minister shinzo abe declared inflation dead.
We are looking for other lower revision of first-quarter gdp, to -1.8%. we will also have durable goods orders, the measure of consumer demand and capital goods orders, at 9:45 we get the u.s. market purchasing managers index and in earnings before the bell, general mills.
General mills reporting earnings-per-share of 6.7%, but the numbers they did report include a nine percent charge on the venezuelan valuation.
For your sales in the mid-single digits of revenue growth -- full-year earnings per high single-digit growth.
They will bring out more when it comes to the bottom line.
Here we are, six years after the crisis and companies are still finding a way to improve margins.
41,000 employees, i always thought more.
At general mills?
Do they make cheerios, i can't remember.
These are good for your heart because they lower cholesterol.
News that you can use.
You are full of health was in today.
I have to be good for something before i switched economics.
A few more earnings before the bell.
The hedge fund is short, although a little bit less than it used to be.
Monsanto and bed bath and beyond.
Go is going to price tonight.
President obama is hosting the israeli president for lunch, and scarlet fu, beyonce and jay-z are kicking off their first national tour.
If we can get tickets i think that we should go.
Surveillance field trip.
That is her alter ego.
That is your morning brief.
What do you have?
General motors is planning broad payouts to those injured with cars with the faulty ignition switches.
They will pay for anything -- it will be paying for -- jeff him out has the blessing of -- for his deal with alstmston.
The european union killed his merger with honeywell, but since it may have approved of his mergers.
Charges relate to that big phone hacking case in london.
Rebekah brooks was found not guilty.
Prosecutors raised the prospect of charging news corp.. that is your company news for the morning.
No question the top story, the politics of this nation.
The differences democrats as thad cochran meets democrats to vote during a close republican primary to hold off tea party supporter chris mcdaniel, here is what mcdaniel said.
There is something a bit strange and unusual about a republican primary that is decided by liberal democrats.
Mark halperin is with bloomberg politics.
I thought this was history making last night.
Was this about democrats in mississippi or cochran and the establishment getting out the vote?
It is extraordinary, we have not seen this in decades, to have turnout increase.
Some of this was african-americans, smart tactics but this is really the republican establishment saying, we are not going to lose this senate seat.
If they lost the primary they might -- but they found a way to turn out a lot of voters.
John mccain visited, haley barbour, from mississippi.
How does this affect the entire u.s. senate and across the nation?
If he had lost the primary, democrats would have gone to try to win the seat and that may give them a pickup possibility.
Someone who wants the republicans to take back the senate -- and gives the republican establishment a way to argue that not only can they stop at the tea party -- but they got african-american voters and that is something that the party wants to do, nationally.
What are the best practices the establishment has learned to take on the tea party?
Don't spend all of your money on television ads.
Center cochran with an anti-tea party message.
He said i have enough establishment and credibility that idea funding for education and disaster relief.
That is trying to redefine the republican party.
That message in a southern state like mississippi played well.
The victory last night was only 51% to 49% and the tea party is still alive and where -- alive and well.
They challenged that and i don't think that they will get far, there is no recount.
A win is a win and cochran turned out a lot more voters.
Close does not make much of a difference.
The tea party has the part of the republican party.
If they stand for lower taxes and less government, that is part of a big message.
They want those tea party voters but they don't want them to define the republican party.
If the republicans are going to be a national party and compete in mississippi and states like california.
One of the ramifications is the candidates for the gop.
You have to have a strategy and messages -- a message.
The staff turned it up but the republican party has to have a message that appeals to after american voters.
Cochran got help with african-american voters and when i look at the final numbers, turning out suburban voters -- this is the bedrock of mississippi.
He improved a lot for counties with that she approved to a lot of counties and voters he would not usually.
What a strange primary, yesterday.
His ability to convince a democratic constituency to be for him despite every democratic consultant believed that mcdaniel give the democrats a better chance to win the seat in the fall is remarkable.
Scarlet, there is that tension that goes over to california.
We want to bring in the former ceo off of the senate for california and the republican party.
The republican party as a whole faces a two front battle when it comes to women.
They have difficulty recruiting female candidates and attracting women voters.
The democrats appear to be doing better on this.
What did they do right?
I would challenge those facts a little bit.
The gop has some fantastic women candidates, in the u.s. senate we have 2 fantastic female candidates, one in iowa and one in oregon.
But not as many women as the democrats do.
But in the senate there are four democratic women against three republican women.
In the last election met romney did well with married women and less with single women.
I don't think there is a problem but i think that the democratic party has run a narrative that says the gop is waging a war on women, which is ridiculous.
What the democrats are doing which may backfire is pigeonholing women, described women as a single issue special interest group.
We are not a special interest group, we are half the nation and we care about every issue.
Every issue is a woman's issue.
What you will see the gop do is say that women care about health care and education and the deficit.
An important question, is secretary clinton pigeonholing women when she goes off on the book tour?
She has a pretty broad message and does well with working-class voters.
Carly is right, gender gets a lot of attention, but married versus single is a big issue.
How has the republican party reduce women to a stance on abortion?
That is the democratic narrative.
But the defining issue has been controlling that narrative.
The democrats have been controlling that narrative but that is not what the gop has been doing.
What we need is to stand up and say, excuse me.
All women don't agree on these issues.
I happen to be pro-life and i understand that not every woman agrees with me, but i understand the vast majority of women are not single issue voters.
They care about the health care and their families in the education of their children, their husband's job and we have to speak with respect to everyone, but we have to speed on the entire range of issues, and not allow the democrats to pigeonhole us.
Give us the game change for republicans as we get ready for november of this year.
Outside groups can spend a lot of money but they have to be effective in this campaign, the most effective ad in the race was using brett favre to go after his -- after him, -- we will come back with carly thierry no -- fiorino, the former ceo of ge.
We will be right back.
? good morning, everyone.
Our guest, carly fiorina of hewlett-packard.
You have ole miss, depreciate his stuff.
Are these companies being thrown to the local landfill or are they giving us to businesses that need someone out computers?
This is an original idea.
We have been around 30 years and distributed $8 billion of services.
This is a great opportunity for customer -- companies with obsolete inventory, because they get a tax write-off.
Jpmorgan chase gives us their computers.
What we do with that is having to warehouse that and having the platforms to match those goods, 240,000 charities around the country.
Do you go to apple and say, those ford phones, give them to me.
We would love every company including apple to join with us here.
This is about mutual benefit.
Employees love this one of our great partners, home depot, it was their employees who brought home depot to the table, what is so important here, and tim cook, if you are this morning, call her.
You are solving laziness.
It is a question of why take inventory, which is sometimes hard to get rid of and expensive to get rid of.
Why not do something good for the bottom line?
Be a good citizen and the employees care about that, help the environment and help these 40,000 charities.
If you get clothing that a veteran can put on for their first job interview, that is huge.
Diapers and mattresses and building materials, computers, books, toys, backpacks.
Personal care products are huge.
Whenever a company has there is a charity that needs it and we take on all of the technology platforms.
How are you financing and able to do this?
Companies provide us with their goods.
Charities pay a very low price to get these goods and we have donors who are helping us by providing for shipping.
In september we are going to turn up a new aspect of the technology platform that allows individual donors to go on and help with shipping.
This is called the giving place.
Coming up, the twitter question of the day.
What is the most disruptive out on the market?
The hp 12 c, -- ? good morning, everyone.
"bloomberg surveillance." our twitter question of the day, what is the most disruptive tech product on the market.
Tweet us at bloomberg surveillance.
Good morning, everyone.
I am tom keene and with the -- with me is scarlet fu and adam johnson.
Our guest, carla fiorina, former ceo of hp.
A helicopter was shot down in the ukraine and all nine servicemen were killed.
They say russia is helping the rebels and the sanctions against russia have been delayed.
Obama administration officials say that they see positive signs from russian president vladimir putin.
Politics turned upside down in mississippi as six time center thad cochran retains his position because of democrats.
Liberals voted for cochran because they fear his more conservative opponent, and what else do we have here?
We have a western iraq account controlled by sunni forces attacked by syrian warplanes.
Syria is trying to help the baghdad shiite government against rebels.
The prime minister is ready to concede much of the country to insurgents and now just wants to defend the capital.
Former vice president dick cheney talked to charlie rose about president obama's strategy.
The president did not want to have any forces in iraq.
He drowned he campaigned against our forces, and promised to bring them all out during the campaign and i don't think that he wanted that.
You can watch the full interview tonight right here on bloomberg.com and you can also listen to charlie rose at 7 p.m. eastern on bloomberg radio.
If you go to the hewlett-packard website, it is remarkable, a little history is on display.
The obligatory photo of the acclaimed karachi, the birthplace of silicon valley, but that is about it.
They were just as soon forget the recent years.
Carly fiorina was the ceo to a stormy 2005, and she joins us this morning.
I think that the world wants to know, you are rooting for meg whitman and hp.
What is on your to do list?
She was dealt a very difficult and because her predecessors failed to invest in r&d and marketing.
If you are a technology company you have to be innovating.
The calculator was a huge innovation at the time.
Michael mckee would help us as well.
We are total geeks.
You are so emotionally attached at this innovation and every technology company has to be a true innovator.
They market those innovations to consumers.
When you had a five-year issue investing -- the problem now is that when meg whitman says they are in the middle of a five-year turnaround, the question for any technology company, microsoft and hp, is, do you have that much time, because things are moving so quickly.
You were a piÑata for 2 years.
How do you send them a message right now?
You are one person who has to get the troops motivated.
How do you do that?
I think any large company requires a very consistent communications process.
I was a piÑata but we got the largest merger in tech history done and integrated in a way that people now say was the best merger in the industry.
It was a necessary thing to do because we needed to consolidate our cost structure and innovate at the same time.
Would you give high marks to michael dell in bringing dell private?
I understand in some ways why he is doing this but what he may find is it is not any less pressure.
He now has a situation where fundamentally they need to diversify.
They only have a limited amount of time to do this and they have leveraged the company up pretty substantially.
I am not sure his creditors will bring him that market -- it is no longer just a turnaround, this is a turn and if you look at ibm, they go from hardware to server businesses, to the cloud and now consulting.
This is true of a lot of companies.
How does a ceo have a whole turn to a new -- if you talk about systemic change and making the turn, you have to be explicit about what you want to preserve and what you want to reinvent.
I say preserve first and reinvent the rest.
Preserve first in any company.
There is the spirit of the garage.
That spirit is what is innovated.
On the other hand you have to face the future.
What happens in a lot of very successful companies, kodak used to be a great innovator and disappeared beneath the waves.
Because they could not get rid of their past.
They were so attached to the products that made them great they could not see where it was coming and inside the labs they had everything that they needed to lead in digital photography.
But they didn't. talk about the five-year turnaround at hp.
I am not, meg whitman is.
She is a professional manager who has worked with these companies -- do they need a technologist?
That is the buzzword.
I am not here to go into great detail on hp.
I do not follow this company but -- not necessarily.
I think a lot of times what happens depends much more on the person and less on, you need a technologist and some technologists turn out to be great and some cannot be lousy in a big company, and some managers can be great.
The former been co--- the former pimco ceo joins us to talk about how investors should play europe.
? this is qut bloomberg surveillance." i'm scarlet fu with tom keene and adam johnson.
Time for company news, the headlines -- florida is taking advantage of its growing global advantage in sport utility vehicles.
The company unveiling a redesigned version of its edge mid-size sufficient.
Ford says the new edge increased fuel economy and keeps drivers connected.
Investors are now taking a second look at american apparel following the ouster of the c.e.o. shares originally rose on news that the board had booted him, but now they've fallen 23% in two days.
American apparel has hired an advisory firm to find ways to raise cash.
One option could be a stock sale.
And airways to breeze to take a 49% stake in italy's airline.
They've been in the red for years now and is cutting thousands of jobs much the airline has been looking for a new partner since air france k.l.m. bowed out of a possible rescue.
That is this morning's company news.
This is the airline of abu dhabi.
Separate from emirates.
The growth in that area of the world has been staggering, at least for aviation.
First there was apple tv.
Then there was kindle fire tv.
Now there's actually google android tv.
The company is expected to unveil it today at its annual developer meeting.
Our senior west coast correspondent jon erlichman is up very early, and of course he's there.
What does google hope to attempt with this new box that isn't already available?
Well, this android tv thing, adam, is basically the evolution of their tv strategy.
They were thinking about the future in tv long before a lot were.
This is more of a software play.
If you think about what google tv had been, some people had experience with that, they basically teamed up with tv manufacturers.
They bought google to the television.
Their hope was you'd have a more interactive experience.
One of the early challenges was that some of the media companies were a little protective of their content.
They didn't want it to be more interactive.
This is essentially going to the next generation of their software.
There's been a lot of discussion about whether there will actually be a set-top box.
It's possible that there will be a set-top box, but it might be one of their manufacturing partners.
I think this is really more about them getting android-type software into more devices, in this case television.
In other words, jon, it's not just a land grab, but it's actually trying to expand the whole ecosystem, is that the way to look at this, the way apple has done?
I think google has learned, first of all, that when you have your own hardware, it can be challenging.
At this event a couple of years ago, for example, speaking of television, they unveiled something called the nexus x. it was high prismse the content choices weren't great, and it bombed.
And then they came out with something called the chrome cast.
We've been talking about apple tv.
We've been talking about roku devices, the success they've had.
Chrome cast has had a lot of success, too, because it's been cheap and cheerful.
But more importantly, it gives access to a lot of stuff.
You can access netflix and a lot of the different programming.
In the world of android, they're very much about working with everybody.
Today they'll talk about android that can be used for television.
They'll talk about android that can be used for wearable devices, the same way that it can be used with smartphones and tablets.
Jon, i'm fascinated.
When do these toys get critical mass?
Is it this quarter, one year out, is it five years out?
Where's the tipping point for google and, for that matter, for apple as well?
Well, i love that question, tom.
You know, we're all waiting for this iwatch from apple.
A lot of people speculating maybe later this year.
And the demand is really there now that we've all gotten so used to fitness apps and there have been a few smart watches out there.
The interesting thing about google, they've already got the software out there, android wear, and it's very possible today they're going to show off some of the hardware from their hardware partners.
They've got partners like l.g., motorola, samsung, h.t.c., who were all working on smart watches that will be fueled by the android software.
I think in some ways we're already there.
In terms of your point about everybody wearing this stuff, if android and google are making their push now and apple is around the corner, i mean, by the holiday season, you would expect that smart watches are going to be a big focus point.
Yeah, they sure will be.
Jon erlichman in front of the google developers conference, thanks, jon.
We'll check in with you later today.
Carly, google completely redefining itself.
You talk about a left turn.
Is google articulating the vision to the rest of us clearly enough?
You know, i'm reminded when i listen to this story, back in 2001 i gave a speech in which i said the next 20, 25 years would be defined by a movement from physical and analog to digital, mobile, virtual, and personal.
And we've seen the transformation to digital and mobile, and now what we're seeing is virtual and personal.
And i think all of this wearable technology is an example -- and we used to think this was personal.
Now it's getting really personal.
But i think the next big wave is virtual.
So i think it's pretty exciting, and i think it's going to be defining for the next 10 years.
Google is ok.
I want to get a quick data check in here, because we have a lot of data coming up.
Durable goods, g.d.p. revision.
Futures up before those numbers.
Good morning, everyone.
This is "bloomberg surveillance" on bloomberg television and radio, streaming on your tablet.
All of our interviews on digital, on apple tv as well.
I don't know if we're on google tv.
Google tv, interesting to date, we'll be on it tomorrow.
I'm tom keene, scarlet fu and adam johnson.
Carly fiorina joining us this hour, formerly of hewlett-packard, a political disease in california a couple of years ago as well.
The news, and the price of brent crude, well, they're quiet as we await news of current event in iraq.
A bloomberg contributor has a unique perspective on the middle east.
Doctor, i spoke to you a few days ago, the news flow is so extraordinary, we need an update.
I would like to know from you how you would suggest saudi arabia and the rest of sunni middle east will respond to iraq.
Oh, gosh, tom, that's a really difficult question.
I'm not sure how they're going to respond.
What i do know is that the situation in iraq is getting worse, and that the regional repercussions are getting higher, and that's what the markets started worrying about yesterday.
This is ancient, ancient battleground between shia and sunni.
The new word is califate.
I know you looked at that, how do you describe what could be new borders within iraq?
Within iraq, syria, kurdistan, and jordan?
Once you destabilize it's actually very doyle regain it, and that's what you're seeing right now.
There's talk about splitting up the country, but exactly how you would do that and talk about coming together in a unity government, and it's not clear.
So this is going to remain uncertain for a while, and it's going to remain especially uncertain, not just for iraq, but for the countries around iraq.
Mohammed, so many of the borders that are on the map when we look at that part of the region were effectively created because western governments were involved.
How does the west in this day and age, where so much has changed, now straddle that fine line between being involved and letting the region sort it out itself?
You know, i had that discussion with tom a couple of days ago.
The critical thing is to get buy-in from the ground.
If you don't get a solution from the ground up, it is impossible for anybody to impose a solution from outside.
I think it's right that the west is now focusing on bringing together the different parties, hopefully in order to negotiate some national unity approach.
You talk, doctor, about a need for a ground response.
Michael knight writing overnight on the sunni response actually on the ground in iraq.
If we're not going to recapitulate 2003 or 2006, what should be the u.s. response?
There isn't much room for maneuver.
You know, it goes back, tom, to what we were talking about in economics.
What's desirable is not that feasible today, and that is the world we're living in.
That's the geopolitical world we're living in, and that's the domestic political world we're living in right now.
As you advice allianz, do you have a tipping point on brent crude?
Is there a number for brent crude where things begin to unravel?
No, there isn't, but what i do know is that crude has this issue of being a tax in europe on both producers and consumers.
So a move in oil is ken quen shall, because they're both impacted in europe.
Why is it do you think oil hasn't broken above the 116, that somehow the world is saying this will get sorted out, even as the headlines are unfathomable on sunday?
I think it's the other way around.
What they're doing at 114 for brent when the global economy is so weak.
I think if you put into any equation the global economy that is as weak as it is today, you'd never get 114 in terms of brent.
So it is up there because of the geopolitical concerns, not only from iraq, but there's also geopolitical concerns coming from ukraine.
Now, they've come down, but they're still there.
Mohammed, what's your fair value for oil?
That's such a tough question.
What i do know is 114, there's a big premium in there.
The global economy remains weak.
We're going to have another g.d.p. revision today that's probably going to bring down the u.s. growth rate in the first quarter, and this is not a global economy that's functioning on all cylinders, and therefore, the impact on oil price is less than it would be otherwise.
Mohammed el-eriian with us today.
Brent crude, scarlet, 113-67. coming up, we focus on working moms in today's chart and the women's role in technology, with our guest host, carly fiorina.
? good wednesday morning.
It's "bloomberg slainls." i'm tom keene, scarlet fu and adam johnson decided to show up to work today.
Thrilled with that outcome.
Futures up one.
Dow futures, negative two.
Adam johnson tried to take a bite out of mile a