The president returns to washington.
He is in search of each and every vote on syria.
Our debt is up to the ceiling again.
What is different about the ceiling fight of 2013? victory lap.
They did not go bankrupt, ford motor returns to investment grade rating.
Good morning, everyone, this is "bloomberg surveillance." i am tom keene.
It is monday, september nine.
Joining me, sara eisen and scarlet fu.
When was the last time we were together?
It was like we were on recess.
We have a lot of news to talk about.
Overnight, we got some positive news out of japan.
Second-quarter gdp revised higher.
The parliamentary numbers showed 2.6% rise.
In china, better numbers, exports rose more than estimated.
Inflation stay below the government target.
That helps the premier sustainable rebound from a two- quarter slowdown.
Scarlet has a smart morning must reads from one of the top economic policy makers in china.
In the u.s., economic calendar is pretty light.
We get a read on consumer credit from the federal reserve at 3:00 a.m. -- 3:00 p.m.. we're watching hank paulson addressing the economic club of new york today at 12: 15 eastern time.
Five years since the lehman brothers crisis and the president will be reporting several interviews for trying to sell his plan on syria, addressing the nation tomorrow.
It will be interesting.
I am fascinated that the secretary looks forward or if it is just a look back.
Peter cook will be speaking to him as well.
That is very much the theme for us here on "bloomberg surveillance." five-year post-lehman, where are we?
Where are we in the markets?
Let's do an extensive data check.
After a challenging jobs report, japan is good, china, good.
Features go up fractionally.
10-year yield all over the place on friday, two 90 right now.
We touched three percent i believe early morning friday.
Nymex crude elevated near 110, that is american.
West texas intermediate, let's move on.
Brent crude elevated as well.
The two-year yield was .05 yield in that jobs report.
Gold turning under 1400. it is a real jumble.
How on earth could you not put in the dollar-yen that japan is going to be hosting the 2020 olympic games?
It helped sentiment, help the economy.
It is time for frontpage.
We scoured the the most important stories and of course, the markets and the world is watching washington.
Congress returns from recess with a very long to do list and a pretty short timetable as well.
The president entering one of his most critical -- little weeks.
He is trying to get congress to support air strikes against syria.
That means these other issues we have been talking about kind of get pushed off the table for a while.
The senate expected to vote on a resolution perhaps by the end of the week.
We are all looking for evidence of that.
President of syria disputed u.s. allegations that he used chemical weapons against civilians according to cbs news responded charlie rose who interviewed the president in damascus.
You can watch his entire interview with president bashar al-assad tomorrow night.
Would you say this is the most critical week of the president's two administrations?
That is why he is really going out there in the public because by all accounts, this is losing support at home all stop he has to sell this idea.
Find the vote.
How much political capital is he going to use while he does that?
Our next-door is about neiman marcus.
Close to an agreement to sell itself to air his management for $6 billion according to people with knowledge.
The luxury retailer had filed for an ipo in june, but it looks like it is not happening.
Any idea why?
Wasn't a problem with the ipo?
The sales haven't come back.
It doesn't have any overseas exposure.
That might be something that is holding people back.
There is no neiman marcus in new york city.
Books there is bergdorf goodman's, which is the same owner.
But it is not neiman marcus.
Our third front-page story, hedge funds cutting back on fees as pressure -- i am shocked.
That 2 and 20 model is being reevaluated.
These funds have a lot of pricing power back in the day when everyone was pouring money into hedge funds.
Not so much anymore after the financial crisis.
It will be interesting to see when it comes down.
There are the front page stories for you.
We will get to our top story, we have to take you to washington.
Peter cook is washington's correspondent.
What will the president be doing today and throughout the week to sell his pitch to invade syria?
He has his administration team once again going to capitol hill to brief members of congress, finally back after the 5-week recess.
Some of those lawmakers have been back in those classified closed-door sessions.
They interrupted the recess to get the information they thought they needed to make this decision.
Not everyone came back.
Some lawmakers it is the first chance to be in the room to hear these classified briefings from administration officials.
The administration is hoping you'll do something different, but the president is pulling out all the stops.
Pessimistic is the mood in terms of the president's ability to sell this, particularly in the house of representatives.
This will be a make or break decision.
Tell us who to watch that can move the needle for the president.
I would watch people in the house republican leadership to see if they do more than just support the president publicly in terms of saying, we will vote for him.
Will they start twisting arms?
One person is eric cantor, the house majority leader.
He said he would support the president on this vote.
He took out an op-ed in "richmond times," his hometown newspaper.
None of the republican leaders said they will wait for a vote.
They will go through their caucus and trying convince those folks to vote.
If eric cantor starts to do that, that can make a difference for this president.
There are a lot of democrats that are just as difficult to gauge right now.
The president has to make inroads with his own democratic caucus on the house and senate sides.
Where will be -- we be friday?
I think by next friday we will have a vote in the senate, but not in the house of representatives, tom.
Even the vote in the senate is not a sure thing, but i think the white house believes once the president has addressed the nation, once the senate has voted -- and they still feel better about their chances of the senate.
The president went to the vice president's house last night where joe biden was having dinner with about 8 republican senators.
The president dropped into the conversation, trying to rally support.
They think if they get a successful vote in the senate, that will turn up the heat on house members, particularly house democrats.
You cannot leave this president in the wind.
You cannot undermine his presidency by not voting for him, i think that is the message they want to say by the end of the week.
Thank you, peter cook.
It is going to be an eventful week for us here on "bloomberg surveillance." for the hour we turn to bloomberg contributor, former senior white house adviser to the president.
And john sununu from new hampshire.
Congress comes back to work, looking at some of the issues that are out there.
Let's talk about syria.
What do you expect to hear from republicans, democrats?
You have to break down both chambers.
I think the chamber will be -- senate will be closer.
All eyes turned to the house.
The big key here is public education.
I think what people don't understand yet because they think this is, are we going to war again?
You have to educate people about what this is and what this is and.
That is why the president interviews today and address tomorrow are so important.
I think the senses that syria may turn into another iraq.
John, haven't we seen this?
I've seen lots of education in the last 10 days, let's call it.
David is right.
That is the case you have to make.
Unfortunately, a lot of members have made up their mind not based on whether the weapons were used, but based on whether what is being contemplated will be meaningful, effective, richard astra security interest.
They've have come to the conclusion -- many are on the public record already.
No matter how persuasive the president is, for 99% who have named a publicly, you're not going to switch them.
Is there any discussion about the military?
Is anybody paying any attention to what the pentagon actually thinks?
Frankly, the pentagon has been fairly reticent about being clear and forceful and specific on the policy.
General dempsey and his hearing when asked specifically what the ramifications would be, what the outcome might be, what he was hoping to achieve, he was vague and at times even avoided answering that question.
Tier porn and education, this mark september 11 on wednesday.
We still have very uncertain future in egypt.
Mideast policy has been very murky for the administration.
Is there a discernible strategy?
What is murky is what is going on.
This is sort of an unprecedented time were you have tomahawks all over the region.
I think one of the messages being talked about is if we don't take action here, what message does that send to iran and hezbollah?
A lot of these things are tied together.
I think it will be quite influential.
David plouffe and johnson are new.
-- johnson are new.
In the meantime, we have some company news.
Let's start with fannie mae and freddie mac, federal officials said to cut the maximum size loans the two agencies will back according to "the wall street journal" to reduce government support an increase private capital.
Critics of the plan say will lower the number of eligible homebuyers.
Centauri looks beyond japan.
Buying to drink brands from glaxosmithkline for $2 billion.
Selling the energy rink and one and for children as part of a restructuring to focus on the bigger business of developing new drugs.
They're spinning $5 billion on deals reducing its independence on japan's beverage market.
Time warner shifting retirees to private insurance exchanges.
The media giant will move the former workers off its insurance plan as of january 1. time warner will set aside money that retirees can use to shop for insurance covers are private health exchanges.
Ibm making a similar move.
Both are upcoming changes due to obamacare.
That is today's company news.
I thought it was interesting that ibm and other giant companies are moving the retirees to this private exchange-based system.
They lived plus, you have been there with the president on obamacare.
-- plus you have been there with the president on obamacare.
This is going to be a measurable thing.
October 1 is the key deadline.
I think it is a small but of coffins blue -- confidence.
It won't match with the critics have said, which is you're going to lose her health care.
I think in some cases, the republican party will pay for that.
There is no doubt there will be hiccups.
When you try to implement something this big -- there is been a political perspective.
Where does this debate stamp for the republicans right now?
Are we going to become overcome by even?
Look, this is about cost.
Let's go back to these examples.
These companies are taking -- retirees, in this case -- author company health care plans because it is too expensive.
That certainly sends the message that insurance costs are going up, not down as was promised.
I think that is been the fundamental failure of obamacare today, the the promised savings really hasn't taken place.
I see the "yeah, but," going on.
Coming up, we moved from obamacare to lyrical football, and that is the weaker their predicted jobs market after pretty weak report.
This is "bloomberg surveillance." ? good morning, everyone, "bloomberg surveillance." market makers.
Sallie krawcheck on the debt ceiling.
Look for that at 11:00 this morning.
I am sara eisen here with tom keene and scarlet fu.
We have to talk jobs.
Penultimate rate dropped to 7.3% . looks good on the surface.
Some pretty weak numbers buried within that number.
Suggesting the labor market is still pretty sluggish.
It was a sluggish report.
It was a picture of two americas and two views.
It comes down to part-time america.
Let's start talking about that now.
Johnson in the with us and david plouffe.
-- john sununu with us and david plouffe.
What is the correct way for the president to move on from this jobs report given he is now well into his second term?
I think the first thing you need to look at is, what can washington do to help the situation?
I think it shows the economy is still not strong enough to deal with the nonsense that could come out of washington if we default on the deck, shut down the government.
What are the things we can do right?
Studies show passing the regression reform would be significant.
It gives people confidence for a few years at least.
We need to get those jobs north of 200. i'm going to go 13 months.
Any discussion of economics and jobs involves the election, doesn't it?
But if we go back to the economic issues they were mentioning earlier that are on the front burner, as it were, farm and the budget things, even immigration reform, that is not likely to happen.
You will get some sort of budget agreement.
I think there'll be stability there, but the longer-term economic issues like tax reform and being much mark cautious with our regulatory environment, those are not front burner issues and regulatory uncertainty and the -- complexity in our tax code continues to put the u.s. and us-based companies at a competitive disadvantage.
The unemployment numbers are falling for the wrong reason, drop in participation.
What is concerning to a lot of investors and americans out there is this wobbly labor market is a result of structural issues than cyclical issues.
The administration doesn't seem to be pushing that angle.
If you look at it report to a report may be wobbly, but the number is and where we needed to be.
I think we had 48 or 46 straight months of job growth, but not at the numbers we need.
The question is long-term.
Immigration reform would pay into that, clean energy, structural stability in terms of fiscal -- that would all help.
Signs are coming out of washington that give the american people concern.
Democrat or republican, three-month moving average, 148 thousand, three hundred 33. that is the nonfarm payroll.
That doesn't get it done.
There are revisions.
The participation rate, the number of people -- back to august 1970 8 -- the lowest in over 30 years.
Frankly, we don't know why that is.
There are not a good -- a lot of good explanations.
I strongly agree in that there are theories, but there is a huge mystery as well.
But it is incredible importance to our economy and getting the economic growth trajectory back to where we expect it to be.
Is a september 18, said de?
German elections, and the red sox clinch.
Eight years is how long it will take to get back to pre- recession levels.
That is the sobering statistic.
In the next hour, we breakdown the culture of apple and the are of steve jobs -- nice bow tie.
Many more leaks ahead of tomorrow's big announcement.
This is "bloomberg surveillance." ? this is "bloomberg surveillance." top headlines, president obama launching a two-day campaign to make his case for military strike on syria.
He will have media interviews today and address the nation tomorrow night.
The campaign is an effort to win backing from enough lawmakers for resolution to authorize a strike.
The chinese navy makes its first visit to pearl harbor and seven years.
Three ships will take heart in search-and-rescue exercises with the u.s. navy as the countries look to build military ties.
All of this part of a buildup to a major international military exercise next summer that will include china for the very first time.
In sports, did you see this?
Serena williams wins her fifth u.s. open title.
She beat number two seed to win the open for the second straight year.
She is now 117 grand slam titles . what is great about this, when you serve and throw the ball in the air and there is wind, it is harder.
Serena williams had trouble with the wind.
And she is a power hitter.
This was huge.
It is all about power hitting.
She came back and nailed it.
It was great.
There was a lot over the weekend.
It is from the number two guy in china, the premier.
He is writing about the economy and how china is staying the course after exports rose more than anticipated and inflation how below the target.
I found interesting this point.
He writes -- i bring this up because the president is trying to seek support not just from his constituents in the united states, but also -- coming from a divided g 20. fairplay, david plouffe, what is our nation's foreign-policy?
Do we have an obama doctrine?
First of all it was to get us out of the wars, which is ironic given what we are talking about this week, which is the one of the complications.
I think it was to be more involved with diplomacy around the world.
It is clear the world still needs an american elite, but i think economically, image and china, china is deep and africa, deep and other parts of the world that are emerging, and we have to watch this.
David plouffe with us today.
9 days -- this is "bloomberg surveillance." it looks like monday morning is going to start on a high note for u.s. stocks.
We saw the craziness at 8:30 friday morning.
We continue higher features up.
S&p, 1657, getting toward 1700. 10-year yield was all over the place on friday, we had three percent and then plunged, a little bit higher yield off of friday afternoon, euro-dollar 1.3191, and crude, 110. congress is back in session today.
9 legislative sessions to go.
It is like a scarlet fu august.
Short month for lawmakers.
It was supposed to be when they could solve the debt ceiling, raise the debt ceiling and prevent the default.
That is pushed aside by an imminent decision on syria.
The budget knocked out of the headlines.
I wonder if that could be a good thing when it comes to making a deal?
The make-believe crisis every three years.
He is a republican from the hampshire and a democrat, david plouffe and john sununu joining us.
My mother would sit with a scotch in her hand and start going on the debt ceiling.
I reading this before 1974. it actually mattered.
Why do republicans get lathered up about the debt ceiling?
In short, one reason, it is must-pass.
It is a piece of legislation you have to do in order to maintain a full faith and credit in the lending the government does.
It is an opportunity to either attach other things or try to address other policy matters.
They recognize this is an opportunity.
It is a chance to talk about the need for fundamental structural budget reform, deal with entitlements, reform the tax code -- other things that ought to be priorities, but have been pushed aside.
If the president does not win this vote on syria, will he pay a price when it comes to negotiating over the debt ceiling?
I don't think so.
Things move so quickly.
In other words , is he using the political capital with al hunt's to the international issues like syria, it's no one really has a stomach for, and threatening some of the more important issues?
On the flipside you hear people say, if he is successful with syria, he can grease the wheels.
Nine days congress is in session.
They better be careful, they will be considered part-time in the next jobs report.
But he could work to the benefit because it is out of the news, on the back, that the notion -- senator john sununu is right.
We should be dealing with things on the economy.
That isn't going to happen.
Can a shorter term deal be put together to avoid the worst in terms of self-inflicted wins to the economy?
Usually deals come together a little faster if you compress the time in which you have to negotiate.
In congress, people negotiate better with a little bit of a time pressure around them.
It probably means the white house won't be able to deploy a lot of its -- good staffers, to try to craft a better deal insofar as they are concerned, it probably have some sort of a debt ceiling increase tied to a continuing resolution to keep the conversation open.
Where are we act now here's the chart.
We are really doing quite well, up here about -4.3%. should the president take a victory lap?
We have cut over $ 2 trillion.
The real savings long-term our entitlement and tax reform.
All we have dealt with his spending which has been sloppy.
Is the president more frugal than republicans?
the short answer is no.
You can look at different areas, talking about social security, disability that has exploded, areas where there's not just a great deal of spinning but even some -- where they have been successful is in the limited part of the budget done is to discretionary spending.
That is been due largely to the sequester.
The white house wants to get rid of the sequester and take that discretionary spending back up, but the fact is, republicans are going to say, this has been a very blunt tool, but it has been effective.
They will be reluctant to make any changes to the sequester unless they see some real commitment and movement on the entitlement side.
We should mention, house republicans are set to unveil a temporary spending measure as soon as this week to try to kick the can at least two december.
We don't know exactly what they will attach to it, but do they get as a shot at passing?
It will pass.
Some sort of resolution will be passed.
It will probably be consistent with the sequester numbers taken out over several years that his legislation, spending caps proposed by the white house, signed into law a couple of years ago.
It will hold.
The republicans will say, this is the best thing we have in terms of ending restraint and we're not going to move off of it in any significant way until the white house shows is truly willing to negotiate aggressively on entitlements.
I want to move to corporate debt.
S&p began the last of the credit rating companies to upgrade forward, restore their investment grade rating.
Auto sales have recovered to the highest level since 2007. they have been minting money like never before.
My question, to the carmakers now that they're making so much more money, didn't have any obligation to help of the city of detroit, more because there's a stark contrast between the big three and detroit the city.
My guess is, i don't know the finances of the auto manufacturers, but there horribly done a great deal to help detroit, probably more than any other industry.
I don't know it has been well publicized, but as tax payers, employers, and as philanthropists, they do a lot of philanthropic work, have done as much or more than anyone else.
Detroit has fundamental problems.
Some of which are of their own making, some aren't. witty of demographic changes were you have a city like that -- st.
Louis is another example.
It changes the fundamental tax -- i remember as a child sitting in the middle of nowhere and the highways ended.
The basic idea, the interstate system of this nation was built on democrats having a vision.
We have forward and the rest of detroit salvaged because there was a vision.
What is the republican vision going into 2014 instead of no, no, no, no?
I think i got a good handle on what david's party's vision is.
What is the republican vision right now?
Living outside detroit, broadly speaking, it it is reform our tax code to make it competitive with the rest of the world.
Second, stop using regulatory agencies without congressional approval to try to pick winners and losers in the economy and arguably, to execute a public policy that is not authorized.
Case in point, there will never be another coal-fired electricity plant built in the u.s. because of what the epa's doing.
Congress can pass legislation saying we don't want it, congress did not -- legislative prerogative.
It is about these unelected bureaucracies using the powers and levers of government to effectively manipulate and change in the streets.
This is why it is so valuable to have these two on the set september 9 because washington comes back in this is debate 14 months from now.
And a debate on going right now.
David plouffe, we just mentioned about ford restoring its credit rating.
Does washington need someone like alamo lally -- alamo lally -- alan mallally?
Where were we four years ago?
The automotive industry was on the verge of collapse.
At intervention pulled worse than serious does.
Is our economy stronger ? no.
But you look at certain states, the automotive industry's revival has been a key part.
What is great, they're making great products.
I think that was the bet played -- but about politics, republicans had a great 2010. they won everything.
Then electoral disasters.
That message is not going to work.
They need to go back to the drawing board.
You got the memo on the purple and magenta tie, that is the only thing you have going on.
You are styling.
We have a lot more in common than that.
We are on the house floor back in 1997, 1998. david plouffe and john sununu with us.
Coming up, certainly game changing wicker the president and for tim cook, apple debuts two new iphones tomorrow.
We will talk about what could make or break this announcement on "bloomberg surveillance." ? this is "bloomberg surveillance." top headlines, japan's economy grew faster than previously estimated in the second quarter.
Gdp expanded . the strength coming from private capital investment according to the japanese cap next office.
In china, exports increased with an estimated last month.
Inflation stay below the government's target.
Exports rising from a year earlier.
As for inflation, producer price index fell 1.6% in august from a year earlier.
At the box office, the number one spot, a sci-fi thriller took an $18.7 million over the weekend.
"the butler" slipped to number two after three straight weeks at number one.
Those are your top headlines.
The japan story is a huge deal, nominal gdp turns positive.
It is a massive statement of the success of abenomics.
This idea there is this resurgence and enthusiasm in japan.
You have heard me over the years go to the deflator and nominal gdp in japan, and this is a positive number on the animal spirit of japan.
Let's get to the animal spirit of the single best chart.
We talk about how serious is pushing important issues off the musty list of washington.
Corporate tax reform is one of those must do items.
Bloomberg calculated permanently reinvested overseas earnings, these are not subject to u.s. federal taxes and less their repatriated home, jumped by 183 billion dollars from 2011 to 2012, an increase of 14 point four percent.
These holdings are increasing because of tax increases -- incentives.
Apple got heat for this, tim cook even had to go to testify.
Apple is not the biggest offender.
It is only number 10 overall.
General electric is the biggest quarter of offshore cash.
-- hoarder of offshore cash.
Guess what number apple lizzie eiko if you are to the companies, would say it is not an incentive for hoarder offshore, it is a penalty for bringing it back home.
But for last time the president also gave them a little of a holiday to repatriate the cash, but it didn't really go anywhere, that effort.
In part because it is a short-term window.
These are investments that have to be planned overs series of years if you want long-term certainty and what that tax -- david plouffe and john sununu with us.
This is 1.4 there is no debate, everyone agrees this has to get fixed.
Scarlet made the point, the last repatriate holiday did not go that well.
The president wants to do it, most members of the house and senate -- it is the one common ground.
It is part of the debate he was having with republican senators.
Right now the prospect doesn't look great, unfortunately.
It looks like washington is going to do the lowest common denominator again, which is a shame for our economy.
The president wants to lower the rate, most of washington do.
You would think we could find common ground and move forward.
I would just like to create jobs.
I want to show you some photos.
Feel free to weigh in.
Are these the cincinnati reds?
i heard they won last night.
We're starting in northern japan.
Workers are planning to scrap this boat, 200 foot fishing boat that was swept inland by the 2011 tsunami and has become sort of a symbol of the deadly quake and tsunami in fukushima.
3, 2, 1, blast off.
The latest robotic explorer launched into space friday night.
280 million-dollar mission.
A few hours into it, there was technical trouble, but back up to full health.
Here is one in japan.
This is the shot of the weekend, residents going wild sunday after tokyo was named host city of the 2020 summer olympic aims.
The announcement was made around 5:00 a.m. local time, but there were celebrations all throughout the weekend.
They are hopeful it will help revitalize the country economically, psychologically a big deal.
Let's hope it was better for them than for greece.
50 years visit?
-- is it?
Back in 64. what?
Before your time.
It was during your time.
Another exciting event, september fed meeting is approaching.
? . this is "bloomberg surveillance." i am sara eisen here with tom keene and scarlet fu.
The anticipated new apple iphones will test the loyalty of customers at at&t and verizon wireless.
The new models are expected to be the first to be available on t-mobile u.s. and bigger wireless rivals.
You want to watch "bloomberg west" for that apple announcement tomorrow.
Don't look for a phone from amazon this year.
A spokesman says it has no plans to rollout a phone in 2013. recent reports a amazon has been developing a phone to go head- to-head with the iphone as well as android devices.
Google makes a new offer to settle the eu's antitrust investigation.
The european union says it received the new proposal last week.
Google previously offered to relabel.
That plan was rejected by the eu.
That is today's company news from the files of bloomberg west.
The federal reserve is meeting next week, fear of what ben bernanke will announce, who the next fed chairman will in fact be.
We are distracted by syria and a weak jobs report of august only adds to the uncertainty.
Former senator john sununu and senior adviser to the president david plouffe joins us.
When does this announcement comeback a it will obviously not be in the next week or so because we have to deal with syria.
Late september or october.
I find it hard to believe whoever the president is, their pick to run the fed would not get confirmed.
I don't think confirmation issues will be the chief decision-maker here.
I think he's going to have to say -- this person will serve under his successor.
Do you agree with that?
Look, i think secretary summers could have some trouble.
Much more than janet yellin.
There are some fundamental reasons for that and i think they're not without merit.
The biggest one is institutional integrity.
The fed is intended to be an independent entity.
I think there is an argument to be made that larry summers is much closer to the white house than janet yellin.
Concerns he would be truly policy-independent.
I think janet yellin from the institutional perspective is viewed as been sort of consistent, more independent, and that is a healthy thing.
You don't want a fed chairman that is necessarily identified for lying from a policy standpoint with the white house and more susceptible -- the other knock against larry summers, he is too cozy with wall street.
Talking about some of the conflicts that arise -- arise with citigroup and larry summers.
He should be asked what he would do if citigroup or to face the same difficulties as in 2007 and 2008, when he sighed again with the view that citigroup shareholders and creditors must be protected at all costs?
David plouffe, do you see this as a potential concern, his relationship with some of the big banks?
Not as far as confirmation.
Those questions will be asked.
On independence, i think whoever gets elected to the said, whatever the party, once they're in that office, they are going to exert that independence.
There is an absolute wall here.
There is not going to be white house influence.
But to john's point, decided that larry summers is in with the president in the white house , when looking at advisers and who the president takes advice from, what degree of importance does the white house for the president, give to the optics of being cozy and being with only the small circle of people he trusts?
It will not influence his decision.
Some argue it already has.
Who does he think day in and day out and this in or mostly important role to do the job?
That will be what will guide his decision, not optics.
It is more than just coziness or personal relationship.
Let's be clear.
He has been in a policymaking role -- alan greenspan.
Within the same administration at a higher level in more recent times.
But so has been bernanke with president bush.
I wouldn't call that a policymaking role.
He was in an advisory role, but people would argue he was a policymaker, crafting legislation.
I want to go back to david plouffe's comment, what is important is the selection of a confirmation.
How many votes right now have come out and said they will not vote for secretary summers?
I don't think confirmation will be a problem at the end of the day.
It might be a little more resistance and more critique if you were to select larry summers, but i don't think confirmation will be the problem.
The last word on the independence, perception matters.
Especially around the world where you're dealing with central banking peers.
That is not to disqualify anyone, i'm simply saying it is an important issue and one that is important not just externally, but within the fed, within the institution itself.
This is just what we wanted for this monday when washington comes back.
This was smart, smart, smart.
And now we want a report to show you what is on the move.
The dollar-myanmar just ward 100 as we speak.
Weaker yen on the back that japan will host the 2020 lyrics, boosting sentiment, this whole idea of abenomics.
How is your rupee doing?
Not much of a reaction, the aussie a stronger against the u.s. dollar, moving to conservative regime in terms of leadership.
And the chinese data probably helped.
We got a bit on the indian rupee.
Coming up in the next hour, five years post-lehman, is the financial system any safer?
? good morning.
The president is back in washington, seeking each and every vote he can find on syria.
Five years on from lehman's collapse, the state of too big to fail in banking.
The samsung smartwatch was so last week, apple launches 2 phones this week.
Good morning, this is "bloomberg surveillance." i am tom keene.
It is monday, september 9. join amy, for the first time in like six months, the sara eisen and scarlet fu.
This is wonderful.
We're wondering when you are going to take a vacation?
In 2018. it is planned.
He is taking a car trip across america in his nash.
We're going to take the chains off in the summer.
Our guest host is robert wolf . he is a personal friend and advisor and golf buddy with president obama.
First, we will kick it off with a morning briefing.
Over the weekend, an upgrade for japan's growth prospect, positive news, second-quarter gdp revised higher to 3.8%, the pulmonary number had shown 2.6%. exports rose in china, increasing more than estimated and worth noting, inflation stayed below the government target.
In terms of economic data, today in the u.s., very little in the way of data points.
Watch out for 3:00 p.m., read on consumer credit from the federal reserve and a significant earnings on a schedule, either.
In new york, hank paulson will be speaking at the economic club of new york at 12:15 eastern time.
The president is out front today, recording six interviews with television networks to sell his plan on syria and address the nation tomorrow evening in a speech.
There is a morning briefing.
It will be a busy week.
Scarlet has some company news.
We talk about neiman marcus because it is closer to an agreement of selling itself.
Negotiating and what could be a $6 billion deal.
This is according to people with knowledge of the matter.
Revenue at neiman marcus has not returned or prerecession levels and shoppers have been slow to return to its stores.
A deal could be announced as soon as today.
Time warner is the latest company to shift retirees to private insurance exchanges.
They will move the former workers off its insurance plans as of january 1. they will set aside money that retirees can use to shop for private health exchanges.
Ibm making a similar move and both are part of the upcoming changes to obamacare.
Big changes to loan limits from sandy -- sallie mae and freddie mac.
This is according to "the wall street journal," reduce government support.
Critics of the plan say it will lower the number of eligible homebuyers.
That is today's company news.
Secretary of state john kerry this morning said "unbelievably small limited military strike will be enough to hold syria's use of chemical weapons and help bring up local sediment to the 2.5-year civil war." if you want to send iran and hezbollah and assad a congratulatory message, you can do it you want.
You would say, don't do anything.
We believe that is dangerous and we will face this down the road and some more significant way if we are not prepared to take some kind of a stand now.
The administration's pitch to the public.
That was the latest from john kerry.
Peter cook joins us now.
Syria has taken center stage, pushed back the already in porton agenda -- crowded an important agenda.
How does a play out this week echo critical week for the president.
This is a make or break moment.
This president knows he doesn't have the vote right now.
He has the speech to the nation on tuesday.
Not just internationally, but here in congress.
Though skeptical members of his own party.
The hope is that his speech to the nation, 9:00 p.m. we're being told, to the nation on tuesday night, and a potential vote in the senate where the administration believes that a better chance to sway the house, ultimately.
You are really trying to focus on those houston mcgrath's -- house democrats.
They're being told, you risk imaging his presidency if you don't back him.
You have nancy pelosi helping them out.
Who is the republican nancy pelosi in this debate?
The republican nancy pelosi right now, there isn't one that has emerged on the republican side at all.
We talked about eric cantor being someone who stepped out and said he will support the president, took out the op-ed in "the richmond times." on the republican side, john mccain and bob corker in the senate.
Those folks don't have a whole lot of sway with her house republican colleagues.
It remains to be seen how many house republicans go along.
More pressure will come to bear on democrats to deliver the margin for the president in the house will stop right now he doesn't have it.
There are only 9 legislative days.
The president was supposed to be focusing on the debt ceiling, spending, immigration, the farm bill, the list goes on and on.
What happens to all of that?
If the president loses this vote, does it take away some of his political clout with these domestic issues?
It would raise rural questions about his presidency over the remainder of the second term if he doesn't win this.
What would more likely happen, they would pull this from the floor to try to save him that embarrassment.
That is where the stands right now.
You are right, there are huge issues.
It was already a crowded calendar before syria popped up on the radar screen.
Ethical issues in terms of the budget battle, immigration has been kicked to 2014. the fed with black the fed is the fed is another issue.
This is hard for john boehner as well.
It complicates his life as he tries to work out something that mike at the debt ceiling raised.
High-stakes week in washington.
Peter cook, joining us with the is the agenda for the president.
Robert wolf is active in politics.
He was with ubs americas, now chief executive officer of 32 advisers, but he too is the number he wore the great back- to-back ivy league championships of moving the football down the field.
He will be out on the field for the new york football giants.
Great to have you here.
I am a patriots fan, though.
Folders closure there.
My fault on that.
When we see the soup, what is the new democratic message?
As the democratic party tries to get to 2014? it is not that different than what sara eisen was saying, you have to focus on jobs, immigration reform.
Obviously, syria is the news -- but at some point that will go away.
The middle east effort never really goes away.
I think your cigna pro israel lobbyists out for military interventions, so i think it is always going to be part, one book and will be the economy and the other will be making sure america is safe and our allies are safe.
I think between those 2, republican, democrat or independent, that is where you're going to be.
Let me ask you the elephant in the room question.
You're out on the golf course, if this house or that house votes against their president, what will the president then do?
To me that is a great mystery.
I don't know what he will do.
My only guess is he and his few advisers know.
There are a few things that are starting a bit of rhetoric in washington, one, if the senate passes it -- which is the upper chamber -- and you have boehner, cantor, and policy supporting it, maybe there is an houseboat.
I don't know.
I haven't spoken to the president about syria, but my guess is this week is very critical for getting confidence in all of america, that this is something that should happen.
Do you think the president made a mistake in calling on congress to approve this decision?
He could have gone about it on his own.
It was a complete 180. now has to use the political cover and capital gekko if you look back when he was then senator running and throughout his political days, he has been very clear that he thinks the military action should incorporate the general public as well as congress.
I don't think this was a surprising move.
It happened suddenly, but i think if you see him, it wasn't a surprise.
Robert wolf with us.
Not only on finance and investment, but politics of washington.
Let's do a quick check.
Typically after a jobs report, the news out friday, futures up 3, crude is at 110. the publisher of the grenville market letter, died, at the age of 90. he moved the markets with theirs calls in the 1970s and 1980s, sparta two point four percent one-day decline in the dow jones industrial by subscribing -- dow jones industrial by -- my grandfather worshiped every word this guy wrote.
He was out of kansas city with a midwestern voice.
He was congenitally bearish, which is like the hands of the clock, -- he used trading and price patterns rather than economic data in earnings terrific for the market would go.
Joseph granville, one of the great letters of news in the equity business at 90. we're futures up about four points.
We will talk about the markets.
? good morning, "bloomberg surveillance." what matters to our guest host robert wolf is neither democrat nor republican do we need to make america a more attractive place to invest for big money around the world.
He has been an active supporter of obama politics and plays a better golf game than the president and also on the president's export council.
This is about exporting money in from abroad.
Why do we do such a lousy job?
First of all, the president is a better golf or -- golfer.
35% of our country's gdp was foreign direct investment pre- 9/11. it is a must about 13% now.
We have gone down two thirds.
Protectionism, regulation, lack of immigration reform.
We need to make sure we get a foreign direct investment into this country.
The more people come into this country in a best in us, the better our economy is going to do.
We will not be so export dependent.
I think we will be able to buy and invest in this country in a better way.
Fort investment means we create jobs and yet we are worried about majority ownership of key a strategic resources.
Is that the roast him in block e i think the stumbling block -- not everyone is looking to come in and necessarily take over companies.
They could build a plant.
We actually have some 32 advisers.
Exactly what you think it would mean, select the usa.
Its companies coming into texas will stop we have an electric transmission company or digital media company coming in from switzerland.
We have the ability to bring a lot of companies in here to join enters with u.s. firms.
Is this a political debate?
Is there a democrat and republican view?
Everyone is for investment into america, ok?
Are is no question we have the city is process that allows to make sure certain investment in america by foreign institutions is what we were deemed kosher.
We have a process in place.
The question is, why aren't more foreign companies coming here?
Part of it is immigration reform and part of it is the regulatory environment.
You can get your people in.
One day, i believe it was the ceo of alcoa, could not get in.
It is a beast issue?
We have improved the visa issue.
Oteri clinton -- it is more the whole idea of, you can't only have build, buy, and invest in america.
America is global, so we have to make sure companies feel comfortable coming here.
I have golfing questions as well.
Robert wolf with us.
Coming up, "bloomberg surveillance." washington returns.
? this is "bloomberg surveillance." i and sara eisen here with scarlet fu and tom keene, our guest for the hour is robert wolf.
The highly anticipated iphone release comes at 1:00 a.m. eastern time tomorrow.
We will be all over it.
This year we see a few key differences from the past, including the fact we know some details about tomorrow's release.
Is the fact that we seem to know so much before the official announcement, photos of the anticipated iphones have gone viral.
What we can expect or multiple colors, plastic cases come also a fingerprint scanner on the home button and perhaps even different sized screens.
Interestingly enough, products have been coming from an australian teenager who claims he purchased new iphones from factory workers and posted pictures of new gadgets online.
By the way, he has got no feedback from cupertino, which is a far cry from the steve jobs stays when a programmer was sued in fired after he left a prototype of an iphone on the bar.
Barely a peep.
It is a big week, perhaps smartwatch-free.
Let's discuss the trend -- changing dynamic of apple.
What we look for tomorrow?
Quite honestly, i don't think there'll be any surprises tomorrow, but i think the only thing that would matter would be a somehow apple has retained the capacity to surprise us with anything.
What is more interesting at this point is really whether or not apple has enough control over its supply chain in its design engineering that it can still produce products and surprise us i don't think -- do they have to be safe?
Are they so don't nominate -- so dominant, and profitable, they're on the edge of innovation or is it about protecting the franchise?
In the business where apple operates, which is this where ejector section of technology and leisure products, you really have to retain this capacity for surprise.
It is about saying, we have a design sense, this is the direction we need to be going, and people who are sort of murky research-driven like samsung will never figure this out in time.
That is the advantage.
It is not clear that is what apple is doing anymore.
I don't see you with the gold iphone.
I see sara with a gold iphone.
I don't see paul.
Whether it is a champagne or gold iphone, hall, apple will be hosting a smaller event at cupertino rather than san francisco.
Does this matter for consumers or matter for investors?
This is a company that is negotiating with activist investors in a way that steve jobs never would have.
I think that is important and really important because it says this is a highly tactical series of releases.
These releases are in response to what the market has declared to be holes in apple's product line, not saying we're going to change the rules by which we can keep in the smartphone marketplace.
Sort of the heck with you sam sun.
This is being played.
Having tim cook on top of apple, he values this up right chain so much that even when leeks come out of it, you doesn't say, you're out.
Which is what steve jobs would have done.
Instead, he alluded to leeks are much -- more or less ignored.
That tells you these kinds of releases are increasingly tactical and not strategic.
Another leak that came out of the supply chain, is where those new iphones are going.
Reporting they're going to china mobile, which is the big kahuna when it comes to the chinese subscribers, 700 million of them him away more than anything in the united states.
How much of a game changer could business for apple?
This is a bizarro moment in the last quarterly call when cook was talking about the weakness they were saying, dow 3% on units in china.
By the way, i have no idea why, which is pretty remarkable concession for the ceo of a major public company in the largest parfum market in the world to not know why your units for contracting.
They have to do something like this because apple's products are perfectly suited to the chinese market because they were aspirational luxury branded products, kind of the prada a smartphones.
Rebounded 400 up to 500. everybody is dumaine gloom on apple.
Here's what we like.
Scarlet just got back where she saw samsung, samsung, samsung in asia.
Could agree with your knowledge, can apple compete on that emotional point in asia?
People are entirely missing the point.
Apple is the branded halo product to people by not just because it satisfies some the they have her communication, but because it says something about them, but the kind of person they are -- even in asia?
Even in asia.
This has become very clear -- like htc or samsung.
And these are all seen as the stuff that everybody buys.
This is not a halo britta product.
Luxury products have done an increasingly and do well in china.
Apple missed the boat by not having this product array that samsung has.
That is coming now.
Take you so much.
Greatly appreciate that.
Our guest host this hour, very, very quickly.
This is about the innovation of america, isn't it?
Lines out the door again.
I think people will be interested in, why should i upgrade?
What are the apps that will be on this?
How does it change the speed?
I'm not going to change for change.
I got to go, my phone is wearing out.
Because they're coming out with gold.
That is so you.
Our twitter question of the day -- that discussion coming up.
? here is company news.
New charges about nsa spying, a report from a brazilian tv network says the agency spied on petrobras.
No word on what they were after and that was based on documents released by edward snowden.
Ford wants to sell 8 million cars per year which would be a sizable gain.
This is according to an interview with alan mullally.
He said the automaker is striving for a profit margin of 8-10%. centauri looks beyond japan's as they buy to drink bands rands for two -- to drink brands for $2 billion.
Centauri is preparing to spend $5 billion on deals as a looks to reduce its dependence on the japanese beverage market.
Did you have time to catch the fall yesterday?
Everybody was watching football.
This time for our bloomberg sports pick of the week.
Who might be the best asset on your team this week?
This week, his top three picks are terrell pryor, julian edelman, and winslow.
You are looking at pryor as the most underrated player of the week.
He is under earned by 10% of fantasy football league owners?
The story is about what kind of plays are being run in the nfl and the read option has taken over.
They call it a copycat league every couple of years.
It was a wildcat offense a couple of years ago and now it is a read option.
Different players have the mobility and the arm and can take advantage of that.
Terrell pryor had to walk off that team and the raiders picked him up.
The style of offense being run these days allows a player like this to come in and make an immediate impact.
He had the most rushing yards of anyone as a cornerback.
I love theedelman pick.
They are using two slots and with them being a throwing offense, you will see both of them double digits each game.
You are right and people like to look for the statistic that tells the story.
It is not just about the catch is, it's about who the quarterback is looking at.
Last year, les welker did not start.
Edelman had been injury prone but this year, he is heading the starting opportunity.
We want to talk about presidential golf.
These are the handicaps of former residents and the current president.
The current president has a handicap of 16 which is run-of- the-mill to john f kennedy who had a handicap of eight.
Ronald reagan had a handicap of 25. presidents need to get out and get their escape and g is the perfect setting.
These statistics are very unofficial.
There would be great debate over when they can stay the course.
Back to football -- when i look at fantasy foot all, does it take the focus off the teams, it is about the individual.
Does anybody care about the actual teams anymore?
You are right, it allows people to watch it aims in addition to their favorite teams and have them become relevant.
Even though your best players are not on the team you're watching, it is still allows you to have an interest.
Does the president talk about football on the golf course?
We talk about sports all the time.
You are with them on martha's vineyard.
We played together and i did not play too well.
One thing about the presidential scoring, he does not do many gimmes so everything goes in the cup.
It's not the same as clinton.
I am fascinated by the fantasy football.
I'm fascinated by what happens on the golf course.
We will be seeing you more often now that nfl has kicked off.
We want to look at how the markets are trading.
We have u.s. futures pointing to a fifth straight day of gains for the s&p 500. there was data overnight that helps the risk on mood.
China topped analyst estimates and inflation is officially under the target for now as everyone looks for china to continue moderating its growth.
This is " bloomberg surveillance, go all of our interviews are on tv -- bloombergtv + andy android as well.
Our guest host this hour is robert wolf, supporter of the president and his 32 advisers.
We need to talk about where we are in the financial system.
The sundays the five year anniversary since lehman brothers filed for bankruptcy sparking a financial crisis we have not seen since the great depression.
There were bailouts worth hundreds of billions of dollars.
Robert wolf was there at the new york fed at that tumultuous weekend of september, two 2008 and advised the president.
Generally, are the nations banks safer than they were five years ago?
Absolutely, leverage has been taken out of the system with the financial services, the banks, at home, and the consumer.
That was really the cause of this entire collapse was the leverage in the system.
We saw the birth of the dodd frank rule.
Many say that has not been a success and it is not completed.
I am a supporter of regulation reform but i like it when it was an 85 page blueprint rather than 10,000 pages.
It is important it has principles but if you look at the five pillars, systemic regulation, resolution authority, derivatives, consumer protection, and the vocal role, those are sensible types of regulations.
You were with ubs america.
Do we have a lot to learn from the swiss?
Is it about more capital on the books?
At that point in time, the firms were highly leveraged and ubs have a balance sheet of 2 trillion dollars.
After that, switzerland has been out front and been the most onerous with respect to making sure you have real capital meaning equity underlying their risk.