It is monday.
Date number seven of washington shutdown.
Economists began to adjust their outlooks lower.
Invaluable data, the key to twitter's future.
Alcoa once again kicks off earnings season tomorrow.
Ordered america tries to it nor the shenanigans in washington.
The morning, this is "bloomberg surveillance." i am tom keene.
It is monday, day number seven, october 7, and the seventh hour -- no, it is 6:00 a.m. joining me as michael mckee and sara eisen.
Not a whole lot going on except for the government continues to be shut down.
10 days until the potential catastrophic deadline of the debt ceiling.
The world bank cut gdp forecast on developing east asian nations . it is a trend.
Also, speaking of asia, leaders from aipac our meeting this week to discuss ways to boost their economies, their trade, their growth.
President obama was supposed to be there but had to cancel his trip because of the shutdown.
In the u.s., a quiet day in terms of economic data.
At 3:00 p.m., we will get consumer credit report.
We're keeping an eye on washington, hope that something will be discussed or resolved.
2:00 p.m., the senate convenes.
Let's get a data check.
Alcoa is tomorrow.
We begin with alcoa.
Absolute top of the market.
10 year yield goes nowhere.
Equity futures get your attention.
Euro, 1.3573. a churn to the currency markets are not correlated with that equity decline.
You can see where the dow is, where the futures are, beneath 15,000. yen, continued stronger deanne, we have to put ash stronger yen, we have to point out.
There is inequity market.
There is some saltiness.
The most important stories, michael mckee, what a treat, joining us for the front page.
You say you have hope in washington.
Positions are hurting.
We enter the second week with no sign of resolution to the bitter stalemate.
Key republicans in congress yesterday linking the current budget impasse to the lemming conversation over potential to fought -- the fall.
John boehner saying he believes the country could end up in default of president obama doesn't negotiate with them.
Here's what he told abc.
We're not going to pass a clean debt limit increase.
There is no way we are going to pass.
The votes are not in the house.
The president is risking default by not having a conversation with us.
Treasury secretary jack lew: that reckless and dangerous for the federal government of your so closely to a potential default.
Airbus has announced $9.5 billion order from japan airlines giving the european aircraft builder its biggest rate through to date in japan.
Boeing -- this is a rival deal.
It is a big deal.
It is a real symbol.
There've always dealt with boeing, and you really wonder where this will mix technologically.
Getting off the assembly line -- the delay -- and maybe also the new linkage between europe trade in japan.
Is certainly is a big win for airbus.
We also have a flurry -- a plethora -- we hope we can get rid of the shutdown.
After the announcement of twitter's ipo, we tweeted about that a lot last week, the most anticipated heck ipo, potbelly -- that was amazing.
I love it.
If you would only listen to me.
I said they make the best chocolate chip cookies on the planet.
Where were the bankers?
How dare they underpriced that stock like that?
Maybe they did not anticipate that kind of demand.
These days you want to be under -- you don't want to do a facebook.
But it -- the opening?
I was adjust that is the failure of banking.
It is an imperfect science.
I don't want to be too critical.
Would it be bad to say, they were out to lunch?
It is really good.
Have you tried it?
Scarlet, where are you?
Day seven of the government shutdown, the debt ceiling deadline looms.
Peter cook is in washington.
How does this all play out?
It was interesting to watch john boehner on sunday, basically drawing a line in the sand a little bit deeper on almost every single aspect both on the continuing resolution, what he needs to see before the shutdown can and, and also on the debt ceiling.
You had this game of political chicken.
The vehicles are moving even faster in the distance apart is shrinking.
We're on a collision course in washington.
A couple of things to watch, mitch mcconnell.
When does he become a dealmaker despite the worries about his primary challenge in kentucky and keep a very close i also on paul ryan.
He is going to start to emerge as more of the point man for boehner in terms of budget negotiations and a deal there putting together.
He will be looking for cover.
Both of them have been very quiet during this whole thing.
The administration put out jack lew, treasury secretary, yesterday.
Have a listen to what he warned about the upcoming debt ceiling.
On the 17th we were run out of our ability to borrow and congress is playing with fire if they don't extend the debt limit.
We have a very short limit of time -- window of time before those scenarios start to be played out.
We have been through the shut downs.
We have not been very debt ceiling were u.s. default.
How will they try to come together on something to bring these two issues all into one and prevent a default?
It is interesting to watch jack lew as well.
He is just so call him -- calm and a budget guy, that it is hard to see them get that agitated over these issues, yet he and others of the treasury are nervous about where this is headed right now.
There is no clear exit ramp yet.
There still is in.
We are seven days ended the shutdown.
We are 10 days from the deadline that jack lew has set in place.
The one area where there is still some agreement, could be a bargaining chip, this medical device tax.
Oh, come on.
They could vote for repealing that tax as long as it is replaced with something else.
That is not the only bargaining chip out there that both sides agree on.
What was your sequence through this five-day work week as we get to columbus day a week from now?
Also, addressed the heart of the matter, which is they have the votes in the house right now.
That seems to be the theme this weekend.
That was an adjusting statement from john boehner because a lot of people in this town don't believe or do believe there are the votes in the house.
Those who would be willing to in the shutdown right now with a clean spending bill.
You heard chuck schumer challenge john boehner to bring it to the floor, basically call his bluff.
John boehner is not going to do that.
He was is he a combined deal that has both debt ceiling and the shutdown combined in a because that is about the best chance he is forgetting any sort of bargaining chip.
Peter cook, thank you for joining us.
We will keep an eye on mitch mcconnell and paul ryan.
We have heard little from both of them.
Our guest host this morning, michael holland.
He manages money.
How do you contain this new wall of worry?
How do you contain it as you go about buy, hold, sell?
As we have experienced in the past, you cannot underestimate the idiocy of the politicians.
I heard michael mckee earlier in the morning post the question, can they be that dumb.
Friday was the end of complacency.
They actually could be that dumb.
They have been that dumb in the past.
You always have to go into something like this was some all weather portfolio, some insurance, maybe some cash.
I can imagine the conversations over the weekend in homes across america on our 401(k), we are up, sort of up.
50% -- you actually have a lot of gains come as a people are giving up some of the gains around the world this morning.
It started in asia, with her europe for now coming to the u.s. we're going to open down a hundred points, 50 points.
But we made a lot of money.
A week from now, people are saying, you had to be prepared you get a surprise to the upside as well as the downside -- for a solution.
Michael holland with us.
Nick thompson is here as well.
We will talk about twitter.
Our question of the day -- top company story this morning weighs on the because it makes it harder to get to the shutdown in a weird way.
United technology counseling -- canceling furloughs.
Workers at the company will now stay on the job.
It means less pressure on congress to settle.
Coming up, warren buffett's investment and a handful of companies during the financial crisis paying off big time.
He has run up $10 billion from the deal.
Last week are char halfway making almost $700 million.
-- berkshire have to wait making him a $700 million.
Alan will always future will be determined this week.
Being considered for the top job at microsoft.
That is amazing.
I didn't know.
Speculation is becoming analysis, i guess.
Matt miller is in detroit.
Michael holland was there.
It is the 100th anniversary of the beginning of the ford motor assembly line and jan miller is there.
And yes a -- and he has a rare interview.
Coming up, $79 million.
How much twitter lost last year.
When does the company start to see profit as a braces for an ipo?
That conversation coming up.
? good morning.
"bloomberg surveillance." andrew card with the reagan years, sort of a gap there in 1995, 1996, andrew card with betty liu this morning.
Sara eisen here with tom keene.
Twitter is certainly hot.
Its revenues tripled last year.
Its ipo is the most anticipated of the year, yet the service is still losing money.
$79 million, to be exact, last year.
What is a long-term business prospect of twitter?
Can it make money is to mark let's talk with nick thompson.
It is all about advertising.
Twitter gets 80% of its revenue from advertising.
How desirable is twitter?
Twitter only started making money off its business a couple of years ago.
The first two years is very much about getting the product right and the users, now it is about making the money.
Some advertisers are starting to come in.
There is another level they are not exploiting i would have thought.
They're only making $47 million from their data.
They liken it to hollywood, -- maybe that is where they're going to grow?
I thought it was a jumble over the weekend.
There is nothing at twitter seals, at the times, is anyone nipping at their heels?
I as a twitter user don't observe that.
I see less facebook, interest, etc.
Based on social networks, not really.
If you look at competition as where do we spend our time on social networks, absolutely.
They compete with facebook and google plus and pinterest.
And in this space, companies rise and fall very quickly.
In this competition with facebook, it seems like tough competition with facebook more than one billion people and twitter with 218 million, why would they choose twitter over facebook?
Do you spend time on twitter and not on facebook?
Well, i do.
Twitter is chronological.
Everything just pops up.
Facebook uses an algorithm to determine what is relevant.
It is mostly pictures of children.
Without fail, i see fewer people using facebook.
I see more people using twitter.
Within the mumbo-jumbo now, is this thing going to go large by potbelly?
Is it going to pull a potbelly?
Is there a fever for this, or as some say, boring midwestern deal?
I think it is between those two.
It will not be zynga where it comes out and falls flat, but it also isn't going to be like facebook where it dominates the internet.
Michael holland is with us, long-term investor.
Some people call it boring, but is that good?
Do you want to do that is a company?
They don't want to pull a facebook.
There is a piece of interesting news within all of this boring stuff, tom's point earlier about potbelly, bad work by the bankers.
Goldman is not going to do bad by this one.
Have a boring document.
They're things like potbelly in front of them.
They have amazon, which doesn't ache a lot of money, which has continued at its all-time high right now.
They have a lot of wind at their back.
They prices in a way where they can make money for a company that doesn't make any money.
I say this with respect for all of your years -- watch out.
Do you have pressure from your clients, your customers, your shareholders are the people that invest with you, do you need to own twitter just so they see it?
Just the opposite.
They would be shocked if i owned twitter.
It doesn't make any money.
It doesn't have any prospect of making money.
I don't own amazon.
I do own google and apple.
Sexy, and tech firms, and then you have to own it.
Have investors figured out how the social media companies in general make any?
I think they are now that facebook is making money.
The prospects of twitter are far better because of facebook.
When group on went out and facebook, there was all of this baloney -- really.
But then the company's bumbled their ipos.
Twitter has come up with a straight one.
I think it will make people trust them a little more.
Are you allowed to say hello you write for "the new yorker was"? coming up, for thousands of civilian employees at the pentagon, back to work.
We will look at some ripple effect on defense contractors planning to furlough their workers.
Our twitter question of the day -- we want to hear from you.
? this is "bloomberg surveillance." scarlet fu is off today.
And top headlines, at least 50 people were killed on sunday during clashes in egypt.
Government security forces battled in cairo and several other cities across the nation.
The balance coming as the country celebrated a national holiday marking the 40th anniversary of the mideast war with israel.
Secretary of state john kerry says the u.s. will not stop its pursuit of terrorists around the world.
He was responding to criticism from libya's government.
A fugitive was captured wanted in connection with the 1998 bombings of u.s. embassies in kenya and tanzania.
In sports, carl crawford's home run for the los angeles dodgers ahead to stay in the team's 13 -- six win over the alanna braves.
It was a spectacular defense people were talking about.
He went tumbling into dodger stadium fans after making that catch of a foul ball.
That looked like you at our softball game this year.
The dodgers lead the series.
When we look at this, it is the los angeles red sox.
It is like two red sox.
How unfortunate for you.
I don't know if if it is good or bad.
I need a drink.
Let's look at the morning must read.
And we are not drinking.
Let's talk about washington on day seven of the shutdown.
You have to turned to al hunt writing a scathing piece about the republican strategy, the republican tactics which he called destroyed and self- destructive.
He says this was supposed to be be about deficit and debt.
Nick, we have gone two-minute show.
What does that signal?
We need to get some positive output.
I related to the cuban missile crisis.
Something the u.s. can give up -- this is how they found a compromise.
We need to find a compromise.
Maybe it will be, we will have talks about the debt after we agree for the country not to default.
We will test michael holland's view.
Herbert earnings kickoff tomorrow.
? this is "bloomberg surveillance." our economics of it or tackle mckee is in for -- our economics editor michael mckee is in for scarlet fu.
Equities, bonds, currencies.
S&p futures, down.
10 year yield goes nowhere.
Euro-dollar, 1.3573. i would watch yen as well.
Crude, 102 a barrel.
It is really in equities phot -- focus, which is odd.
But it is all being driven by washington.
We still don't have a new federal reserve chairman.
And forecasting lukewarm bank earnings as third-quarter earnings start to kickoff.
The market remains pretty much strong.
It is still up fractionally for the month.
Could this be the end of the optimism?
Michael holland has been here like 47 times before.
Various woes of worry out there.
Shutdown worries, earnings worries, jamie dimon worries.
The new york giants worries.
When are we going to learn to just invest?
It gets crazy toward the end of the week.
The meltdown around the world is very low volume.
It started in asia, went to europe, and here today.
What does that tell you?
Right now it is seldom without a great deal of conviction.
There are still some people worried -- there could be some good news a week from now and if you get caught short, you're in bad shape.
What do you do if we go down 284 points?
Do sit there on the phone and go, buy this or this, or do you go play golf?
One of the best advice that i had as a kid in the business when there was panic, if they are as dumb as michael mckee was saying, politicians, don't just do something, stand there.
Excuse me ipo the advice was, don't do anything right now.
It could go in both directions -- excuse me?
The advice was, don't do anything right now.
It could go about directions.
Ignore the whole thing.
It looks as if the world economic growth is still moving along.
We're going to get number starting with alcoa this week.
Outside the u.s., grudgingly moving upward.
The expectations for the banks now are so low a you could end up getting a little surprised to the upside.
You could end up getting overall and ok quarter in terms of earnings while the craziness is going on with the morons.
What a spooking investors is the whole debt ceiling debacle.
What is the betting now something will happen at 11:00 p.m. on the 16th, the final hour, work it out?
The london bookies have it at about a 20% chance of a debt default.
That may change as we get closer to the end of the whole cycle.
People say, it is impossible, it's not going to happen.
But now they're hearing, but just in case -- traders are working this morning, what would be after the default, how would they trade.
It is not a failure to pay, it is an unwillingness.
Mike, any earnings reports, we talk about the spirit of the organic revenue growth.
Sarah and i are going to the meeting in today's. we are going to see some gloom and the outlook.
How linked is your world to christina lagarde he's world?
What i care about our companies and their cash flow.
Books are there revenues linked?
But let's start with china.
The global numbers, economic numbers pay little attention over the last 20 years, pay little attention to what companies are saying, what revenues are.
New thompson talking about these companies were the top-flight stripper they can do funny things underneath.
I care about the health of the business -- where the top ones can do these funny things underneath.
I care about the health of the business.
The balance sheet.
The top lines companies in china -- what about the consumers?
Are people going to sit on the sidelines for this?
That is the whole point.
Could they be this stupid to let this happen.
Even their split the difference calling half the government have the consumer.
I got to make some news.
July carl icahn?
Is he beneficial?
I met him many years ago.
He is a very wealthy man.
There is a diplomatic answer.
You should work for the imf.
How bad do things have to get before you change your tune and you start to take money off the table?
It is the other direction.
We end up getting through these things.
We are very resilient.
I've learned over these different tremors in the market over the years that when people talk about the fragility of the system or how fragile, if i substituted the word resilient for fragile, it would have served me very well.
We will get through this.
The u.s. will get through this.
Mistakes i made when i panicked.
Every monday i'm wearing my national breast cancer awareness bowtie.
Is it ok?
Talking about democracy, we will get through this.
I am on the board of the winston churchill foundation.
I have on my task -- desk, "i am an optimist, it doesn't pay too much to be anything else." i gave kidded, but it has worked out ok.
We're not being bombed by the germans, but our government.
That is the difference.
We will continue this discussion with mr.
Holland and mr.
We will move from winston churchill to miley cyrus.
Everybody puts them together.
She was on "saturday night live" over the weekend.
I don't think she twerked.
Who was at that brought about the destruction of america?
Well, most folks say was the government shutdown.
Others blame obamacare.
I remember the exact day america ended.
It was the 2013 video music awards.
I remember it like it was yesterday.
You're on in five minutes.
Do you need more time to warm up?
I think this performance is going to be less about the singing.
She did get a little twerk action in there.
It was actually a lousy "saturday night live." how do you stay up that late?
You don't, you record it.
It is a saturday night.
You can't stay up that late?
I want to hear seth meyers.
He reminds me of you.
He is funny.
Tom is not.
How about those red sox.
Will allen will always stay of ford or be the next ceo of microsoft -- will alan mullaly stay at ford or be the next ceo of microsoft?
? this is "bloomberg surveillance." sara eisen here with tom keene and michael mckee is in for scarlet fu.
John kerry commends serious president al-assad for starting to destroy his chemical weapons.
He called news that syria is moving to get rid of the weapons "a good beginning." he said the u.s. and russia are pushing up a peace conference in turin the country civil war.
Cutting east asia's gdp growth.
It is down from an earlier forecast of 7.8%. the world bank citing the fiscal deadlock in the united states and the slowdown of investment in china as two main reasons for the change.
At the box office this weekend, "gravity" took the number one spot.
$55 million in sales over the weekend.
"cloudy with a chance of meatballs 2" was second.
I heard "gravity" was good.
The single best chart.
Michael mckee is here.
Ben bernanke talking about, when are these companies going to spend his cash.
Investment still lagging.
Put some numbers to it, here's the chart that shows exactly what the problem is.
In the 1970s, american companies were investing 15 times as much passion as they distributed to shareholders.
In recent years, the ratio dropping below 2. according to an book, it is management incentives.
Now with executives largely in bonuses tied to their stock rise to so they are afraid to take risks.
They don't want to cut profit margins of the short term in order to make long-term gains.
The incentive is to keep the money on the books were given to shareholders to boost the stock price from a to boost their own compensation.
Smithers is really thoughtful about this kind of thing.
Michael holland with us.
A guy like you loves this vogue we're in right now.
Is it vogue or permanent?
It is a reflection of the times.
Part of the truth.
But another part, they're just like the rest of us.
Very few people are investing the stock market.
People in china are buying real estate.
Prices are up today in china.
People are not investing the people who run companies.
It is much easier -- it is a smart thing to do, given where we are right now.
All this that we're talking about washington.
It is a reflection of the times.
A great chart as we go into earnings season.
Some of the photos making news today.
We will begin in egypt were celebrations turned violent overnight and over the weekend, hundreds of people gathered in cairo on sunday to commemorate the 40th anniversary of the 1973 arab-israeli war but supporters of the deposed president morsi took to the streets in protest and clashed with security forces and at least 50 people were killed.
Still going on.
Not to keep an eye on the geopolitical situation in the middle east.
-- got to keep an eye on the geopolitical situation in the middle east.
We have some shots of beer.
How they closed it out, the traditional red area and rifleman ceremony -- bavarian rifleman ceremony.
I have never been.
I don't like here.
But people don't behave.
They had a bit of trouble in munich.
Guess how many liters of beer were consumed?
Sounds like a patriots game.
I hate those little outfits they wear.
Nobody has explained why oktoberfest starts in september and ends in early october.
The germany chamber of commerce wants to speak to you.
One more shot, we will go down under to australia where light displays celebrated the international fleet review were over 20 warships around the world.
In the city to celebrate the australian royal navy.
They last for a week and ended here with an enormous fireworks display sunday night, which is what you can see just over the opera house there.
A gorgeous shot.
Showing the flags.
There you go.
Coming up, did you miss not getting the jobs report on friday?
We certainly did.
That is, there's more economic data likely to be put on hold because of the government shutdown.
Michael mckee has the impact in all the details coming up on "bloomberg surveillance." ? this is "bloomberg surveillance." futures down 16 at this early hour.
I am sara eisen here with tom keene and michael mckee.
Dish network under fire again for its takeover bid for light square.
Dish shareholders say two directors appointed to evaluate the bid up close ties to its chairman.
The shareholders allege the ties could compromise the director's independence in considering the bid.
The clock is ticking on samsung.
Some of the older phones and tablets are locked out of the u.s. come midnight tuesday unless the white house overturns an import ban.
The products were found to infringe on two apple patents.
Samsung says it could just affect a small portion of its handset.
Forecast for the evaluation on twitter keep moving higher.
Valued at about 13 million based on its ipo filing, but some investment firms say could rise as much as $20 billion once treading begins.
Lawsuit projections come despite signs twitter user growth is slowing.
That is today's company news.
You wonder if they can get to 148. to me it is fascinating.
I love the perspectives.
We were robbed of our jobs report on friday.
The labor department could not put it out because the government remains shut down.
Here we are on day 7 and mike, given looking at some of the other data points that we are not going to get.
We won't get any data from the government until this is settled.
We will not get the price reports, the retail sales report, the wholesale inventories report this week.
It is a light data week, so it won't be too bad this week.
But as bank of america make clear, they don't have their data to do the tracking indexes.
The biggest problem is, if this continues, we won't have data next month, either.
This is the week that we reference for the labor department's october jobs survey.
Next week they'll start calling people task, what were you doing last week?
That is how they put the unemployment report together.
If they don't have anybody to make those calls, we won't get the survey.
We could go into november not knowing what happened in october.
My key question, this is the buzz this week in, goldman sachs as well, but ethan harris, bank of america, merrill lynch, with the markdown on gdp for this year, even for a mark downed into 2014, our base case for the two-week shutdown or more, week growth and damage from washington, lowering 3q. these are subpar numbers.
We can even be sure of that.
What we do month-to-month is compare our growth figures to the prior month.
If you don't have any figures for that month, then you've got a real problem.
This can really be seen in the price indexes.
While ppi is where companies are paying on that day, one day, generally the 15th of the month, but cpi's, people go shopping all month.
If they can't do that, there may be some prices that don't get recorded and we could have holes in the data and you don't know how the economy changed month- to-month.
I wonder if this will be the new weather were you jesse economic reports and companies blaming every thing on the government shutdown and all the disruptions that it caused.
You know that will be the case.
Michael holland and nick thompson with us this morning.
Let me go to you first, michael.
I know you care about economics.
But at the end of the day, it is mostly removed from what i'll call it does or jpmorgan does, isn't it?
Aluminum prices have a lot more to do with what coco is going to report.
-- alcoa is going to report, rather than john boehner are barack obama.
A year ago, we had hurricane sandy coming up in a few days.
Year-over-year, companies are going to be reporting some comparisons that are probably going to be a little bit of a surprise to the upside year- over-year because this is a weak period.
As i do in china and have done for 20 years, pay attentions -- i pay attention to what companies are saying another government.
My morning must read, i thought conservative voices were very, very quiet this weekend.
In the washington post -- there is clearly a column in in the opinion.
What is the pushback right now?
We have economic data we can see, markets that are still open.
What is the since this is you have all my the conservatives will do?
The conservatives -- the suicide caucus, the people entirely protected in congress, will continue to bush and save you don't repel obamacare, we will go over the edge.
Peter king, for example, fighting back hard.
We will see who ends up getting leverage as the week goes on.
The little brown will say, we need some way out -- the middle ground will say, we need some way out.
Are you focused on the president and the speaker of the house or congressman king from liberal new york and some tea party guy from kentucky or kansas?
I think the whole focus is on boehner.
He is the one who is juggling and saying, how many people are on this suicide caucus in the other side?
What can i do?
Can i keep my job if i make a deal?
The economy for the moment, we haven't mentioned the fed.
They are not going to get the day -- data, either.
They figure they won't know enough to make a decision.
We haven't mentioned the fed.
That is the most important factor in this whole thing because of what we have been discussing.
They will be even more accommodating for longer than anyone suspects.
It may keep on yields lower.
And the stock market surprisingly lower -- higher.
The fed is open.
I'm going to close it out with the report.
The dollar weaker against the euro, which continues to march higher.
Keep an eye on that, as tom said.
That is jiving with the global market selloff.
Coming up in the next hour, wall street shrug off the first few days, but what happens next?
? . . it is monday, we enter day seven of the washington shutdown.
Will allen mullally stay at fort or will he be the new chief executive officer in the land of bomber?
-- of all murder -- of steve ballmer?
Could twitter break facebook's ipo stigma?
They have to do it right.
It is bloomberg surveillance, i am tom keene live from our headquarters in new york.
Owning me, as always, sara eisen , our chief economic correspondent.
Michael mckee is in for scarlet fu.
Joining us on set is chief market strategist at rcb capital, jonathan dollop.
He will join us through the hour.
Let's kick it off with a morning brief.
A continuing theme we have seen a, soccer emerging-market growth.
This comes as justice leaders at the asia-pacific economic cooperation group -- president obama was supposed to be appearing there and joining those talks pretty canceled it because of the government shutdown.
Here in the united states, very little on economic data.
At 3 p.m. we will get a report on consumer credit.
Senate convenes midst day seven of the shutdown.
Don't you hate it when you get bumped from first-class for someone with more miles?
That is what boeing is dealing with.
A deal worth $9.5 billion.
It is the first order with airbus and helps the playmaker in the japanese market, where boeing has dominated.
Warren buffett are paying off big time.
He dug up $10 billion out of the deal.
Berkshire hathaway made almost $700 million when mars paid a 2008 alone.
United technologies canceled thousands of furloughs.
The company had planned to put as many as 4000 workers on leave this week.
The pentagon said it was recalling most its civilian employees.
Workers of the company will now stay on the job.
As today's company news.
It makes it harder to put pressure on congress.
It is day seven.
The war of words over the government shutdown is continuing.
It continued all we can long.
Either cook is in washington dc.
The two sides are still divided.
It is a bitter fight.
Who makes the next move?
The sunday shot -- the sunday talk shows give a status quo.
John boehner once again saying he will not throw in the towel now.
At the house is going to continue to pass the individual piecemeal bills.
The first one up is the fda.
Watch for the house to potentially put out a debt ceiling increase, that would include a laundry list of gop priorities that have been flatly rejected by senate democrats.
It corrects the real news came from john boehner, looking ahead to the october 17 deadline for the debt ceiling, he said there will be no clean debt limit increase.
Corrects we are not going to pass a clean debt limit increase.
There's no way we're going to pass -- the votes are not in the house to pass a clean debt limit.
The president is risking default by not having a conversation with us.
Really standing firm there.
What is the likelihood that the president or harry reid or the democrats come to the table with some sort of negotiation that ties the shutdown and the debt ceiling them it issued together.
-- ceiling limit issued together.
Don't be surprised to see supercommittee pardons.
It is going to make people skeptical in washington.
Jack lew was just as adamant on the other side that they will not negotiate over it.
The game of chicken is a cliche at the moment.
Anybody who studies game theory knows that wildly complex -- there's the snowdrift model.
What is the game of chicken in washington that you perceive right now?
I see this between house speaker john baker -- john boehner and his own party members in the house republican congress.
At some point he has to consider what the alternatives are, how can he get out of the box canyon that here's been put in.
Is not clear this point how he does it.
Harry reid is not blinking either right now.
I can't even begin to tell you -- what is different this time is there's no clear roadmap in the timeframe.
One thing that happened over the weekend is chuck hagel called back workers to the pentagon.
That changed the political calculus as well.
As and it's take some of the pressure off?
The lawyers looked at this and said there are more of our workers that are essential.
We are going to bring them back.
It is half of the 800,000 workers that are for load.
United technologies did not have those layoffs.
We are waiting to hear what lockheed martin is going to do.
Now we are waiting for the other wild card, the markets.
At what point did they tell you that washington is making us nervous?
Nobody has seen that yet and they are not even talking about it on the hill.
Peter cook, james -- peter cook, thank you for joining us.
U.s. equity futures down a little bit more than 15 points.
He is chief market strategist at rcb have a markets.
-- rcb capital markets.
Is rbc -- because of the shutdown, dampening down their economic forecast and how does that play into your optimism?
I did not see it.
Everybody i am talking about in the economic side and our clients and investors think this is short-term noise and ultimately this passes.
This is why the market has been choppy.
The market is not falling apart.
What is the date you would change that analysis?
Is at the 17th?
Sometime after that?
Ultimately if we have a debt ceiling issue than the market is going to start do it they did a couple of summers ago and they are going to take it on the chin.
We are not there yet and maybe the real risk here is that everyone believes this will not go badly.
What are you seeing that makes you so optimistic?
Is this a signal from corporate america?
We look at the numbers and economists are where more optimistic than analysts are.
-- way more optimistic than analysts are.
Michael mckee brought up the strength of the u.s. consumer.
We got some weaker guidance from walmart, target, some of the big retailers, 70% of our economy.
If you separate retail from the consumer, you have autos where sales activities are improving, housing activity is improving, media is doing well.
When you look at the entire consumer suite, what you are seeing on retailing is that consumers are shifting their basket away from things like -- from traditional retailing to smart phones.
I hope you get a raise with your new job.
That is the key.
We have a huge wealth affect.
The cost of financing your household is down substantially.
The surprise in the last four years is that the consumer has done way better than anyone thought.
What you do with the consumer stocks?
Everything is a moonshot.
Have kate -- health care a moonshot, technology less so, what do you do?
The earnings have been really strong on the consumer side.
I'm pretty comfortable they are not ahead of themselves and have a way to go.
Corrects it is amazing how that does not dovetail.
The consumer analysis of steve roach or and everybody else out there -- we watch what they do, not what they pay.
In terms of industry groups, what do you like?
I would say restaurants and traditional brick and mortar are probably the areas that are avoiding the consumer space.
I am comfortable with the group -- online is doing very well, media is doing well, homebuilders, auto.
It is a broad consumer by.
Other groups, like industrial, should also do well.
You have seen a pickup in some data like the idea some data that should support that.
To deceive or did i know we are going to continue this conversation with the technology environment around twitter's ipo.
Our twitter question of the day is on washington, who will give him first on the shutdown talk?
Is it a person, is it a party?
Equities, bonds, currencies, commodities, equities on the chin.
They'll futures -127. -- dow futures -127. euro-dollar lawyer that she euro-dollar in.
-- the euro-dollar in.
It has been a strong one for technology parties.
Twitter is about his -- about to join that celebration.
Next on "bloomberg surveillance." good morning.
John golub, world bank of canada.
Tell me about the economy, we are in the top -- we are in the dreaded middle innings.
It sounds like a song from the 1980s. what are them middle innings?
If you look at the markets, not the economy, gdp has advanced only nine percent off of the lows.
We are early in the cycle, not late in the cycle.
You showed immense disparity between what economists are job owning and what market types are job owning.
I think it is in the middle.
I think the economists are more right than analysts.
Analysts are normally the optimistic dies.
They take their cue from company management and company management has just given very we ak conservative guidance and therefore the estimates are too low.
I know you don't talk about individual stocks.
Hockey stick move up, how does health care continue?
Cms are predicting a three percent moved to a seven percent move in growth in health-care spending across the country.
It died does not go to the doctor -- a guy does not go to the doctor, there are areas like hospitals that are going to be big beneficiaries.
You have a 1950 s&p target.
That is stunningly bullish.
The fed stays engaged for longer.
They told me they are not going to move past two percent fed funds until 2017. we have easy money for a long time.
What do i want to avoid?
Cooks energy is going to be a weak spot this earnings season -- energy is going to be a weak spot this and earnings season.
Are you fully invested, are you playing around with your allocation waiting for a better point?
I think you are fully invested in the only thing that may keep you off the markets, no one knows how the stuff is going to go in washington.
Confessional investors are shrugging this office noise.
-- professional investors are shrugging this off as noise.
John gall of -- jon golub.
What kind of ipo will it be for twitter?
Coming up, the current initial public offering environment.
All of that on a monday on "bloomberg surveillance." good morning, everyone.
He is in charge of the dashboard at ford, where you put your ipad in to listen to bloomberg radio while you are driving down the road in a ford.
Was that a shameless plug?
1 p.m. this afternoon on bloomberg.
This is bloomberg surveillance.
Michael mckee is in today for scarlet fu.
And jonathan golub is our guest host.
50 people were killed on sunday in clashes in egypt.
Government security forces battled supporters of the ousted president that was in cairo over the weekend.
The violence came as the country celebrated a national holiday that marks the 40th anniversary of the arab israeli war.
Secretary of state john kerry says the u.s. will not stop its pursuit of terrorists around the world did he is responded to chris and assume -- around the world.
He is responding to criticism from the libyan government.
And crawford's home of the los angeles dodgers ahead against the atlanta braves.
It was the spectacular defense people were talking about.
The left fielder that the left fielder -- the left fielder went tumbling.
The dodgers leave the series two games to one.
He traded to the daughters from the red sox.
We are aware of that.
And the bengals -- he traded to the dodgers from the red sox.
We are aware of that.
And the bengals.
It twitter -- twitter's ipo is coming up.
Facebook is back above its ipo price after a to mulch was a few months since its public debut.
Is back in style, net books as well.
Investors are hungry for tech stocks.
Twitter is joining the party.
What does it say about the ipo environment for sack -- for tech and social media?
Let's look at the broader view of twitter and facebook.
Chief market strategist at rcb -- at rbc, he cannot directly comment on then ipo.
Reporters come acquisitions, and roadshows, cristina alesci is with us.
John, let me go to you first.
You mentioned businesses are less confident.
If you look at m and a cap -- mnj activity -- m&a activity -- ipos are a play on investor willingness to buy-in, which is quite high.
Did you get shares in potbelly?
Clerks we will work on it next time.
What does a single to see the twitter frenzy?
Clicks this whole ipo environment is a story about -- this whole ipo environment is a story about investor confidence.
You also want somebody reputable.
Anthony noto is who it is, he has been in the business for years, you know him out of west point where he is a major football player.
This guy is one interesting guy.
He reads like the hollywood version of an alpha meal.
-- an alpha male.
He is number two to mike mckee.
There is something for everyone.
He is an almost -- an all- american football player.
He graduated in mechanical engineering.
This guy's resume is goldplated.
He does not get but better than this.
What i am hearing from tech clients, he is also into technology.
He is very much a geek in the best form of the word.
That really put him up against -- go-ahead.
I don't mean to interrupt.
This would be a more measured deal.
Is that the belief?
Believe that is what is endearing.
How did he get the twitter ipo?
Clicks that is an interesting story.
At that -- that is an interesting story.
Goldman sachs has a reputation of coming in later when it came to ipos and demanding a spot in a because they are goldman sachs.
Anthony noto was keen on winning a big deal.
He was in there for any other bank, pitching, back in april he was having discussions with the executives of twitter.
Is this a profitable deal for goldman?
Badge of honor.
They do not have any kind of specialty like they do with the facebook offering.
Airing the facebook offering they got private placement before the ipo actually happened.
There is no deal like that emerging.
We could see the standard fee come down a little bit because you do see the seven percent come down to three percent or four percent.
The roadshows two and a half weeks?
Two and a half weeks potentially.
Goldman sachs will be on it.
You will have the twitter executives.
This is a very experienced management team.
I am worried about chicken or pasta.
Is it like a steve jobs kind of thing?
Clicks it depends on the client.
It depends on if you are going to have a one-on-one meeting.
Those are the meetings twitter wants to have with investors.
Those are the meetings that can seal the deal, not the big rooms that you are talking about.
They wanted to be able to close the investor on that meeting.
Ed is ultimately how goldman sachs will be judged.
Thank you so much.
She is roadshow bound on twitter ipo.
A rare interview with ford executive chairman, bill ford.
"bloomberg surveillance," luber television, and bloomberg radio streaming on your phone, tablet, and bloomberg.com.
I am sara eisen, here is always with tom keene.
We have a special guest joining us, betty liu with a special guest written we rip up the script on "-- with a special guest.
We rip up the script on "bloomberg surveillance." i want to bring in someone who knows a lot about trying to bring in parties together over budget and deficit talk.
He was the former chief of staff to george w. bush.
He advises the first bush and also president ronald reagan.
He recalls some of the struggles that occurred during debt ceiling fights in the past.
Andy, great to have you with us up and early this morning.
There has been a lot of rope ring going on behind the scenes.
What could break through this gridlock?
Clicks it takes leadership and it takes leadership not just from congress but from the president.
I remember 1991 when there was a significant crisis of confidence and negotiations over a budget, and the first president bush gave his "read my lips, no new taxes," and put everything on the table.
Not only did he get a deal on the budget, he cut a deal on fiscal disc plan that lasted for 10 years, a decade, and made all the difference and gave country the ability to function with a fiscal system the people understood, had confidence in, and brought discipline to the members of congress.
It was a 10 year deal that allowed for economic growth and fiscal stability.
It could only happen with leadership from the white house.
On the flipside, the white house and democrats say the leadership is awry on the republican side.
You have the democrats saying we are not going to go ahead and link to obamacare.
Where do you find the common ground here?
We call the president and say , sit down, ba, -- be an honest broker.
It is not realistic to have the executive branch of government say they will not participate.
It is not unusual for the senate and house to have disagreements.
It they live through disagreements.
It is the president that has to lead.
Most people will not know who one member of congress was.
I am glad you bring that up.
You are from massachusetts and you know edward brooke.
I cannot believe he died in 1979. it was a certain republican at another time and place.
Are they on the path to jeopardize the future of the republican party?
The american political system has gone through many changes after elections.
Clearly the bull moose party movement we witnessed it, we have the whigs and tories.
We had a lot of lyrical dynamics.
-- of political dynamics.
We can get through this.
I happen to believe the tea party is valuable in introducing perfection, a form of perfection to the debate.
I want people to work for perfectly good.
I am hoping all members of congress -- andy -- i hope they will make the system work.
It is a good point that tom brings up.
You turn it around and say, what about those moderate republicans who said they will vote for a clean spending bill?
What about the dozen or so of them?
Are their careers over?
It is the job of washington, and the job of speaker of the house.
He has to not only lead a congress and provide directions to the united states but keep the conflict viable.
The real leadership has to come from the white house.
If president obama said, "i want a grin departed, i want to talk -- a grand bargain, i want to talk about that ceiling and continuing resolutions," if he does not want to participate there will be a stalemate.
Andy card, joining us.
Like baker and other elder statesman, this is a leadership challenge and it is on the president.
He is the ceo of america.
Thank you so much.
We grant -- we greatly appreciate it.
We are going to get some data checks.
John boehner is hardening his position, democrats are hardening there's. another weekend goes by and we are day seven in the shutdown, 10 days until the october 17 deadline.
U.s. equity futures, under pressure.
15 ahead of the opening bell.
Good morning everyone.
Bloomberg surveillance here on bloomberg television.
Bloomberg radio plus on itunes and android.
I am tom keene.
With mia sara eisen this morning.
-- with me is sara eisen this morning.
We are talking about business government and social enterprises.
We are going to talk about ford right now.
Ford motor companies, the stem blue line, turns 100 day.
The great-grandson -- assembly lines, turns 100 they.
The great-grandson of bill ford -- 04, the great-grandson of the founder, joined us.
Alan mullally has done a great job.
There was tremendous skepticism.
I remember one reporter said to me, we just signed the death warrant of the ford company by bringing in a non-car guy.
He has done a wonderful job.
Art of what we have done over that.
-- over that time is bill a really strong team.
As good as allen was we knew that he wasn't going to last forever, nobody does.
We have the best team today that we have had in my working career and i feel really good about what we are doing going forward.
Does he earn through contract -- it is funny, he does not have a contract.
There is that amid -- here's how i would like it to happen.
We are also cognizant of training the next generation and getting them ready to go as well.
The plan as he is going to stick around.
I am happy he is going to stick around.
We also feel really good about where we are in terms of succession.
To share a vision that you discuss with him.
Do you share that same vision was someone else in the company?
-- with someone else in the company?
I worked with all of them for many years.
Whoever the next ceo is, it will be seamless.
I will also say this, they have loved working in the style with this vision since 2006. there is no appetite for deviating.
We always adapt to business conditions.
Who's the next bill ford.
I have a little bit of runway left.
I'm going to be doing this for quite some time.
I absolutely love this company.
We do have a next generation starting to come through.
They are all off to a good start and we will see.
That was bill ford, speaking to our very own matt miller.
Matt miller joins us now.
He is at a ford assembly line in wayne, michigan.
It is an interesting time to be reflecting on ford's future with this question about alan mulally and 100 year anniversary of the assembly line.
Very interesting stuff, especially considering what the manufacturing looks like today as opposed to what it looks like just a few years ago.
There have been so many innovations.
And then the question of alan mullally, which has really re- created this company's corporate culture, is a great want to discuss with bill ford.
Part of bill ford's real legacy is bringing in alan mullally, choosing him to run this company and preparing it for the future.
It is a little noisy with the assembly line going behind you.
I know you spoke about the bankruptcy on detroit, what did he tell you?
Clark's detroit is very close to his heart, obviously.
While his number one job was to make sure that everyone -- make sure that ford got through, they are focused now on the city.
They own the detroit lions and a couple of other local businesses.
Certainly a number of topics that we will be including.
Thank you for joining us.
Don't forget to tweet us, who will give first on the shutdown talks yack at that is our question of the day.
This is "bloomberg surveillance." . it is a monday, some excitement in the market.
The yen is stronger.
It is day seven tension.
With me is michael mckee in for scarlet fu.
And bill akers is with us from deloitte.
We need perspective on how companies and policymakers are reading this decision.
We know you are the head of policy for deloitte.
You speak with companies around the world, what are the methods when they look at the situation and think it is awfully dire?
My first book came out about two weeks after the last government's shutdown.
What is different about today is government is not alone in terms of solving society possibly problems.
We have seen an entire economy of social enterprises, big companies, big investors, people have signed warren buffett's billionaire pledge.
They are crowd sourcing and crowd funding, and trying to find innovative solutions.
You talk about solution markets, government can use its power to create solution markets.
What is your solution market for capitol hill?
I think you need a bit more competitive districts.
How do you do that?
You look at states like california, which have moved toward the left partisan.
Most people are already locked in.
If we need competitive markets -- we go around government instead of working with government?
There is a whole economy phil -- economy filled with millions of social enterprises area walmart is opening up 500 stores and food denizens for those that cannot wait for fresh products.
I wonder what you think of the new health-care exchanges that have opened up last week.
With every major government initiative like this, whether it is medicare part the, you see a lot of glitches early on.
It is still too early to say in terms of the health-care exchanges.
One encouraging thing is we are seeing a lot of new people get into the market.
In texas alone there are 50 insurance companies that are actively involved.
Hopefully that will lead to more competition and eventually reduce costs.
You for joining us.
The book is called "the solution resolution -- the solution revolution." mohammed el-erian on what to expect at the imf meetings.
Sara eisen and i will attend.
He will be with us tomorrow.
Pimco's ceo will join us for a lengthy conversation.
Bloomberg television, bloomberg radio, at 7:00. he put out a list of what to do for financial leaders.
None of this is going to get done.
We have tom keene and michael mckee is in for scarlet fu.
Mike, i know you have some company news.
A lot of people following news.
Dozens have shutdown.
-ish network is under fire.
-- dish network is under fire.
According to cart documents -- to court documents, the directors are considering the bid.
The clock is ticking on samsung.
Some of the older phones and tablets will be locked out of the u.s. on tuesday unless the white house overturns an import ban.
The products were thought to in fringe on to apple patents.
And forecasts for a valuation on twitter keep moving higher.
The microblogging service is valued at $13 billion based on its ipo filing.
Some investment firms predict it could rise to $20 billion once trading begins.
The loss of projections comes despite the user growth may be slowing.
It is today's company news from the files of bloomberg west.
It is time now for the agenda, where we look at the top stories shaping the day.
The markets are on.
Moving right now, you can see the bloomberg terminal, the tension read the yen is stronger.
We have taken another length down.
You wonder where we will be a day eight.
Was thursday -- what is thursday?
We do get jobless claims that they.
There will be some economic data to trade him.
Every day we get closer -- the deadline is october 17. he said this is not a hard deadline.
Describe for us secretary l ew's focus.
They use extraordinary members -- extraordinary measures to keep us under the debt limit paid the bills coming in could be as high as $60 billion.
They don't know that they can cover the bills.
The pens on what comes on individual days and most wall street houses doing the math, they think they can get through the first of november.
Fascinating when you see the market deterioration.
This is the litmus paper.
I wonder where we will be thursday.
The markets start soon.
That is the headline.
They're going to be talking about the impact on the economy.
We have little progress.
I would say the headline over the weeke