Obama Arrives at G-20 in Russia: Surveillance (9/5)

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Sept. 5 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests: Robert Burke Associates CEO Robert Burke, Wedge Partners principal Brian Blair, Dartmouth College economics professor David Blanchflower and Weil Gotshal & Manges partner Harvey Miller.

This is bloomberg "surveillance." the president adds to a global summit in russia.

Little will be accomplice as the syria crisis is front and center.

Will he keep on ticking?

Samsung the first to launch a smart watch.

And lunch and then stop by -- the week descends upon new york.

Good morning, everyone.

This is bloomberg "surveillance ." i am tom keene, live from the fashion headquarters known as new york city.

Joining me, as always, back from asia, garlic who is here.

Start -- sara eisen, in further this morning is our senior west coast correspondent, jon "he has a smart watch" erlichman.

Is it 2:30 in the morning for you?

As is normal for me.

Hi.

where you been?

I was at a school of charm in asia as well.

What was the number one takeaway?

Everyone tried the samsung device.

It does not exist.

It does not exist.

-- is the boom there, or are they in recession?

It seems a little less frothy than it was last time i was there.

I want to start with the morning briefing right now.

It is a big day for central banks.

Overnight in asia, the bank of japan raising an assessment of the economy, as expected keeping its policy settings on hold, which is what it has done every month since april.

The full economic calendar, starting at 8:15 a.m., the unemployment number.

15 minutes after that, jobless claims, and the jobless report on friday.

The comfort index, and after the market index -- after the market opens, the measurement of the biggest part of the economy, the services industry.

A lot of economic data, no question about it.

Two days compressed in because of the four-day work week.

Also some earnings.

It :00 a.m., walgreens reporting, and i mentioned central bank.

A busy day.

At seven: 45, the european central bank comes out with its decision, and -- at seven: 45, the european central bank comes out with its numbers.

Let's do a data check.

I want to get through this quickly.

We have a packed show.

Tutors -2. -- futures -2. we are at three percent for -- the nymex crude very quiet.

As events around serious gestate and move forward -- as events around syria gestate and move forward.

The two-year yield, at 4.41% . it is higher.

We will touch upon this across technology, fashion, and america today.

Brent crude 115.40, showing that syria stasis.

Let's get to front page.

We have scoured the papers and the web this morning.

And what is important right now.

Our first front-page story, samsung unveiling the smart watch, the galaxy gear.

It not just tells time but it takes pictures come up makes phone calls as well.

Jon erlichman, you had it yesterday.

That is why you are in town.

Can i just highlight the colors that samsung decided to offer.

Mocha greg, wild orange, oatmeal beige.

We are at a new level of what a device really can be when you have oatmeal beige.

Oatmeal beige was a great band.

They were outstanding.

Oatmeal beige.

This is something that costs $299. and to get all the functionality you would like from a device like this, the kind of smartphones stuff, you have to buy the new tablet phone thing.

The price goes up a little bit.

What did google and apple learn from the soiree you went to yesterday?

You have to think of this as wearable devices, not just a rich watch -- a wristwatch or glass.

Everyone is saying we have the next great thing, but samsung gets great pr value out of this.

Are they doing this to make money?

Of course they are doing it to make money.

For global domination.

Scarlet just said all she saw was samsung devices.

We want to move to our second front-page story, which is auto gaining in the u.s. particularly.

2007 levels.

They purchased 1.5 million vehicles last month, up 17% from a year ago.

Detroit automakers -- chrysler, ford, gm -- making tons of money.

They have not seen this profitability since the turn-of- the-century.

Johnette guggenheim partners said 16 -- john at guggenheim partners said 16 million units.

We want to talk about blackberry also speeding up its sales.

This is on the cover of "the wall street journal." it is now looking -- it is not looking to complete the sale by november.

A special committee to explore strategic alternatives.

Are they done, jon erlichman?

Wouldn't it be nice to get this done as a board, quickly?

The book via -- the nokia boardroom discussions, they met more than 50 times to find out what would happen.

This is on the assumption there's somebody out there to pony up a lot of cash for the blackberry.

The pressure is on for blackberry to do something.

Those are the top stories on our front page.

More on these throughout the day.

The backdrop is political economics.

Hans nichols is in st.

Petersburg.

The president arrived yesterday from stockholm.

The record low temperature was in 1883, 33 degrees below zero.

The chill in the meetings will rival that frosty morning.

Is syria dominating the meetings?

Syria is dominating on one thing, but there is an emerging theme -- what the u.s. does on quantitative easing.

There is great concern that the u.s. will slow down, will taper too quickly.

Obama will get an earful from world leaders.

He does not control it except his choice for the fed.

Janet yellin does not have a lot of supporters inside the white house.

She may have a lot of supporters in st.

Petersburg.

I look at how the chinese have shifted the debate on tapering.

We see it in the markets with higher yields.

Is this the g 20 of economic optimism, or is it the g 20 of someone global recession?

It is an economic -- it is the g 20 of economic skittishness.

There is a great deal of concern and that if the u.s. does not hit the landing strip on this for both developing and developed economies, this will have consequential and huge impact.

It is the opposite of what we saw two years ago at a g 20 in korea where obama was criticized for the quantitative easing that he was not authorizing.

The fed is independent.

Now it has gone 180 degrees, and obama will get pressure to keep the floodgates open.

He cannot control it with one exception -- he gets to pick the next federal reserve chairman.

Janet yellin has more supporters here than larry summers.

It may be the one place.

Hans nichols, thank you so much, from st.

Petersburg, russia.

The president landing on air force one.

It is about an hour and 30 minutes from stockholm.

I guess air force one comes up and goes right back down.

Up and down.

How do you get a plane that big -- up -- he does not get lunch.

Engineering has a lot to do with it.

Magic on this thursday morning.

We want to bring in our guest host, robert burke, form your senior -- former senior vice president -- and brian blair, senior tech analyst and partner at wedge partners.

We are talking about the federal reserve and the tapering, hard as dampen the enthusiasm of markets -- as it has dampened the enthusiasm of markets around the world.

The meeting we have seen is some of the high-and smart phone market soften a bit.

We started seeing it early in the second quarter when samsung launched their galaxy s4. it sold 10 million units out of the gates in the first 30 days, lower than what samsung expected.

The concern is showing up in supply chain, the concern that all the volume is at the low and in the emerging markets, kind of the sub-$300 smartphones.

That is the extent we are seeing impacting sales of consumer electronics.

It seems to play into the potential storyline of next week and apple coming out with its latest device, and maybe an additional device that is meant to appeal to the lower end.

The 5c is what it will be called.

A plastic back in different colors.

I'm glad you brought colors up.

It is my favorite time of -- it is my favorite time in new york, fashion week.

The summer of color, they be 12 months of color.

Is everybody back in black?

Absolutely not.

You will see a lot of color.

People are not feeling so pessimistic right now, and it shows by what you see on the runway.

What is the backstory this year?

The backstory is that the fashion houses are seeing runways and fashion week as a platform to connect their consumers through social media.

You are going to see that in a new way that you have never seen with fashion week.

Breaking down the barriers, robert burke.

I will tell you about the new media.

Scarlet, back from harper's bazaar, the plane tilted.

Did you get on there with vote, harper's bazaar, and elle?

The president can use that "harper's bazaar" when -- absolutely.

Let's get to company news.

The treasury department may clear a deal as early as today . the $4.7 billion deal would be the biggest takeover of u.s. company.

The biggest jump on sale in five years.

Raising $6.5 billion in the offering, the money to be used for general corporate purposes.

Sales of junk rated debt have jumped ahead of last year cost pace.

Mcdonald's is testing a new version of the dollar menu that includes selling items for as much as five dollars.

The move comes as franchisees complained about the menu.

That is today's company news.

A lot coming on -- a lot going on.

Auto sales yesterday, we will come back from new york city.

Futures are a big -1. good morning, everyone.

Bloomberg "surveillance" in new york.

Sally smith, jon erlichman's favorite food group -- chicken wings, buffalo wild wings.

The buffalo wild wings president and ceo at 8:00 a.m. this morning.

Tom keene joined by scarlet fu . jon erlichman is in for sara eisen.

Good morning.

Good morning.

Let's talk about the u.s. auto industry.

Blockbuster sales numbers yesterday.

You were talking about 16 million, 16.1 oh yen, the annualized rate -- 16.1 million, the annualized rate.

It was not any one car segment that benefited.

It was not smart cars that did well, and then the big suvs -- small cars that it well, and then did the suvs not doing well.

A lot of people attribute american buying cars to the fact that we have this slow but steady job recovery, and the idea that the cars are more innovative than they have been in the past.

Jon, you are based in l a, far removed from detroit.

But it is a parking lot, which i am learning as an incurable driver who tries to get things done.

On this point, i was in torrance , recently, a honda facility.

They are one of the better players in the industry at integrating all the new stuff people want.

Pandora, for example.

They are selling 60,000 accords a month.

I think it is in the neighborhood of nearly half of all the radio listening in the car is through some of these new services.

So pandora, those kinds of services, that is what people want in a car.

Absolutely, and when you go to a show room, it is what can the car do for me, on the dashboard?

Brian blair, when you talk about apple and sir ius, so much of what they do is integrating their prices with the car dashboard, isn't it?

Apple just announced 14 manufacturers that will integrate some of their operating system into the car.

So if you had an iphone, you can walk into the car and have an integrated experience.

What we are seeing in cars that jon is touching on, you will see the smartphone move from your pocket to your wrist to your car.

We are seeing wi-fi, internet, the whole computing world extended to the automobile.

We know about people tweeting and horrific car accident and such.

How does apple and, let's say, honda -- it is critical.

One of the key features, everything will be voice based so that you are not looking down at a device, so that you can keep your eyes on the road and not look at a device.

Siri is the key to all this.

Robert book -- robert burke, i was at the detroit auto show five years ago, and there is ford with the new design to eat those, which pulled the american car design forward.

What is the american designed ito's right now?

We know the american, german, feel.

It is going back to heritage.

Carmakers harkening back to a key identifiable characteristic with their cars, whether it be chrysler, dodge.

There is always going to be a connection to heritage in america, so i think that is what you are seeing with the car.

They are certainly very cleaned up, very modern, but still some type of heritage element.

We have a lot to talk about in this hour.

Before a lot of economic data.

Also we are looking at technology companies making news, including yahoo.

It has a new logo, so what is next.

What does the company do next?

Bloomberg television streaming on your tablet, your phone, and bloomberg.com.

Good morning, everyone.

A busy morning.

Tom keene with scarlet fu.

Jon erlichman is in for sara eisen.

Right now he is going to do top headlines.

Good morning to you.

A divided senate committee voted to give president obama limited authority to use military action against syria.

The senate foreign relations committee voted 10 to seven to -- it blocks the use of american ground troops in syria.

It will be taken up by the full senate next week.

France has sold 10-year bonds, paying the most since their president was elected two years ago.

The bond sale featured an average yield of 2.57%. in sports, the boston red sox slugged eight home runs in an offensive explosion against the tigers.

David ortiz hit two of the eight homers in a 20-4 victory.

His 2000th career hit, by the way.

Those are your top headlines.

Over the citgo sign.

Scarlett, welcome back.

It has been a lot of fun to watch.

That was part of the point of the a rod -- of the a-rod school of charm.

I learned a lot.

Give 110%, it is all heart.

Jon erlichman giving us a new look.

A tech approach where you get your must read from tumbler, where melissa meyer has posted on the new yahoo logo.

This is for you, tom.

We wanted there to be a mathematical consistency to the logo, really pulling it together into one coherent mark all stop -- into one coherent mark.

Let's see it.

There you go.

For those of you familiar with how the yoho -- how the yahoo logo looked before -- what is the difference?

As opposed to a capital y. talking about a chiseled look, a foundational look, kathy savitt, the chief financial officer.

Robert burke is with us.

I love it.

This stuff matters, doesn't it was to mark the logo of bergdorf matters.

The m.k. thing on a bag, that matters a lot.

Yes, logos mean everything.

It looks like yahoo really slimmed it up, it is much more clean.

Like me.

Yes, it has been on a fashion diet already on the runway.

It is a very clean look, and it does have some similarities to apple in its cleanness and it's elongated kind of font.

But i think it is distinctive enough.

I love it.

The purple y is a little bit off, not so symmetrical.

And the exclamation point.

Then we will see these companies go back to its vintage logos.

Unusual.

Yahoo, they have the o's going bigger.

So what should marissa mayer do yes -- do next?

? good morning, everyone.

I'm tom keene.

John ehrlichman is in for sarah eisen.

Two days of key economic data.

All you need to know on that screen is 2.93%. we see a higher in your yield and a higher two your note.

That is a celebration perhaps of a better economy.

It is what chairman bernanke is looking for.

Let's start out with hebalife.

The chief executive office of a company that makes raisin bran took a 5.2% stake in herb alife.

It has another ally in the fight that it is a pyramid scheme.

Etrade is up 8%. very cool.

Samsung launched a smart watched yesterday.

John ehrlichman, the senior and ehrlichman -- senior west coast correspondent arrived -- arrived in an armored truck.

We are supporting the new galaxy gear.

This is a more standard black color.

What can you do with this device?

That is what people will be wondering.

One simple thing you can do is take a picture.

Scarlet fu, give me a smile if you can.

What do you do with the picture when you get it?

All of the normal stuff you would do.

This is the other device they came out with yesterday.

I can get at my blue jeans.

I am sure samsung will help accommodate.

These are light phones.

They are between the phone and the tablets.

Brian, help me.

People do this?

People do that all over the world.

$1,100 for yankee cease -- seats?

You are out of your mind.

Give me some compare and contrast.

Am i looking at the next l .i.s.a. with this watch?

It is relatively low volume.

The watch is what is key.

This has to work with that right now on of the gate.

It has to be a companion to that device right now.

When i first saw the ipod, i was like, yeah, right.

That will sell tens of millions of units because it extends the smartphone to your wrist.

A lot of the key features, notifications, e-mails, he data that you get all the time is on your risk -- key data that you get all the time is on your wrist.

There is a big business story in the fact that people get tired with the smartphone story.

Brian started the phone -- started the show talking about this.

There is an army of big companies that is trying to lead the way with what will next excite you.

That is what they are trying to drive to the sales of smartphones.

Sam's song is -- samsung is encouraging people to buy the other device.

It will be an expensive purchase.

They will help use that to drive sales out of the gate.

Let's backtrack and put this into context.

Everyone is looking for the next big thing, the game changing device.

When apple launched the iphone, it may 3% of revenue.

By 2012, it made up 50% of sales at apple.

Even though this note device may not be the big winner, will it drives people to the other sansung suite of products.

Samsung needs to sell its other ecosystem most -- of products.

Eventually , the idea is they want you to buy everything samsung from your watch to your living room television and everything in between.

What is this new samsung going for?

Roughly $600 or $700 un subsidized.

The samsung make more money on the teardowns ? the galaxy products cost more than the iphone to make.

Apple makes it better profit margin on their iphone across the board.

Robert burke at robert burke associates.

Is this something that people at fashion week will be talking about?

Will they catch on and be talking about this?

You have seen them talk about the google classes.

That does not mean it will be adapted by the consumers.

I don't know how this will translate to the u.s. market.

When i go to my favorite website, models of the tuesday, they are not using this phone.

This phone is for kids.

They are 19 years old or 17 years old and they are serious business people.

From a fashion standpoint, you wonder is this something that can drive interest into the suite of samsung by launching its first.

There will be others by apple next week.

The u.s. consumer as a whole is not so here toward mars devices.

What about asia, you were just in asia.

People use phones over desktops and laptops.

Take your hand in your wrists with you.

Big forms maimed big room for selfies.

We have a lot more coming up on bloomberg.

We will talk about bankruptcy.

American airlines, detroit, and whole legal profession.

This is bloomberg surveillance on bloomberg television.

? good morning, everyone.

"bloomberg surveillance i'm tom keene.

Joined by and scarlet fu.

John ehrlichman is in force verizon.

The european central bank says mario draghi will try to overestimate -- try not to overestimate the value of the euro.

The bank of japan says it can roll out plan to stimulus in sydney's it after a planned increase in the sales tax -- rolled out a stimulus after its planned increase in the sales tax.

An analysis between contracts of national operators and overseas telecom companies.

They demanded an explanation from u.s. documents.

Those are your top headlines.

It has been far too long.

A single best chart read by scarlet food.

-- by scarlett fu.

The nfl season begins tonight.

This is for all of those fantasy sports players.

If you have already drafted yours teams, people are ready to get started.

40 million people participate in fantasy sports.

Tom, i know you are not one of them.

77% of these people play fantasy football.

13% of americans and 12% of canadians.

Can the cfl be included?

There are two teams called the rough riders in a small canadian league.

This is mainly about nfl teams.

On average, fantasy sports players spend $111 on league- related costs.

Nine hours a week and consuming fantasy.

18 hours of sports a week.

This brings up a good question.

In economics, it is understood.

We have only so much leisure time.

Where are we choosing to leisure right now?

What is happening with these fantasy sports leagues is that you can keep up with them.

You can train on the back of a car or -- in the back of a car or on a train.

We are taking it in 5 minute increments.

We are taking it to work as well.

It is an issue at the bloomberg.

Sometimes you see people have their fantasy sports leagues up.

You are a redskins fan, right?

I grew up around washington, d.c., so i grew up watching -- watching the redskins.

John can make a good case for them.

5 yards, 10 yards long there?

We have much more coming up on "bloomberg surveillance," not just canadian football.

Fashion with kicks off.

We will tell you why this is make or break for brands.

? good morning, everyone.

"bloomberg surveillance." i'm tom keene.

Scarlet fu.

Jon erlichman is in for sara eisen.

A lot of tech headlines to tell you about.

After months of offering logos that did not make the cut, yahoo!

Is offering its new logo.

Microsoft gets a court win over google.

Google's motorola mobility did not act in good faith.

Microsoft was awarded $40 million in damages.

Another nasdaq technology glitch.

A mess -- a malfunction in a trade feed was resolved in six minutes.

That is the second malfunction in a month's time.

It is fashion week.

I made it a point to return.

Fashion week hits new york city twice every year.

This one is different and we have technology to thank for that.

Live streaming of shows.

It is much more about the consumer driving everything.

The show can make or break a brand because of in some consumer reaction.

We will be following this carefully -- the show can make or break a branch because of consumer reaction.

We will be following this carefully.

Why the september vogue is 872 pages.

Robert burke launched a record 42 consecutive days at their seventh floor restaurant.

You go up to the seventh floor.

You have the doubleday's. there is the magic of vogue magazine.

Are you telling me twitter and facebook are going to destroy all of that?

It is giving more access to people as a consumer.

Going to fashion shows in the mid-1990s, there were about 80 or 100 of us.

We gave the direction.

It was like going to a dinner party and being served.

Today, it is like a buffett.

The red coats i saw in the magazine is over $4,000 -- coat i saw in the magazine is over $4,000. that is not accessible.

Think of the leather coat for 4000 or a leather purse for $400. it is about setting an image and creating an attraction.

The brands are realizing that three social media, they can connect to the consumer and like any other time that they had.

There was a runway show last season.

At the end, you could go on and order a coach and you could hit it in eight weeks.

You got it three months before the store had it.

They are all over instagram.

Michael kors was what you were looking at.

One of the most successful ipo's in several years.

The show is being live streamed.

The amount of people -- we think it will be in the millions -- will be watching their show.

Why does no one smile?

But there are some that definitely smile.

There has got to be a little attitude.

That is why you go to the model blogs.

There are a lot of models wo ho tweet.

She was kicked out of the show because she was too large in certain areas.

They are driving people to certain shows.

Everybody has a voice.

The fashion houses have been able to complete the control that image.

They realize they cannot control it.

The ones that are raise and bring those people in, the people have an opinion -- the ones that are brazen bring those people in, the people that have an opinion.

Why don't they bring in people who can buy.

I am not thinking about spring 2014. i am thinking about winter.

I use the example of being able to go on and buy something.

There is a brand where you can go on and by days after the show.

-- buy days after the show.

I do not know what he is doing right now.

How to resurrect a brand and taken to a new level like michael kors did?

Those designers are reaching a level of exposure that has never happened before.

I was at the sachs store in europe.

People are coming up and asking for the runway clothes.

Google glass making its way onto the catwalk.

They have miles and people wearing google glass.

It makes it sexy.

What is different in "the devil wears prada "? the difference today is that you can live stream every show.

You can have an opinion just like an editor and a buyer.

The retailers are reacting.

That is the big difference.

Before, it was forced said to you and the lead time was three months.

I remember having slides in a hotel room in paris.

Where's the fashion capital of the world right now?

New york city because we are growing young designers.

We are supporting them and you are seeing young talent, out of new york unlike any other place.

These stocks are moonshine.

Michael kors, stray up, a huge success.

Thank you for throwing that in there.

Some more i can do with a first look at some photographs.

A close reaction to a new monument of joseph stalin that was erected in a town 60 miles east of the georgian capital.

It is a nearly 7 ft statue that was desecrated hours after it was unveiled.

The best in show parade.

This is a three day event.

Over $95 million in total.

I got the snow tires off a couple of days ago.

Mississippi alligator hunters bagging a huge haul.

Two of them.

A 723-pound alligator.

Are skins back?

Alligator, lizard, python have taken center stage.

They have sales like no other time.

I am soul into python.

-- so into python.

Starling is stronger.

Dollar-ruble.

Coming up, harvey miller will join us on bankruptcy.

This is "bloomberg surveillance ? ? this is "bloomberg surveillance." the president has landed in st.

Petersburg for a global summit.

It is the size of the empire state building.

It is a ship, but it is bigger, better.

American airlines, detroit, and beyond.

Harvey miller joins us for the entire hour.

Good morning, everyone.

This is "bloomberg surveillance." i'm tom keene.

Joining me as always, scarlet fu is back.

Jon erlichman is in for sara eisen this morning.

What are you west coast or los angeles?

It all sounds good.

Give me a big territory.

Our guest host this hour is the preeminent expert on bankruptcy in america, harvey miller.

Good morning.

Let's start with the morning briefing.

The bank of england holds its assets purchase plan unchanged.

It keeps its benchmark interest rates at 0.5%. that tops our morning briefing.

We also want to mention that the deal lg has expected to maintain its policy-setting.

-- that the doj has maintained its policy-setting.

This is also another comment in terms of headlines coming out on the bank of england rate decision announcement.

We are pleased to bring you right now from hanover, new hampshire a former member of the bank of england committee.

Professor, good morning.

We have so much to talk about.

There will be a different bank of england.

What is the distinction right now?

The pmi's have been positive.

It is good news.

A slight turnaround in the economy.

Maybe he is the magician people say he was.

There is a successful america in recovery and everybody else.

How do you interpret the next two days of data?

The next two days are important.

The labor market data of tomorrow is especially important.

They are looking for a number of around 200,000. they are going to push for laser tapering.

Tomorrow's numbers are going to be crucial.

The labor market is improving a lot.

It is crucial tomorrow morning.

Every interview i do have one idea.

It is a good private economy and the elements of sequestration and slower government growth.

Is it fair to separate the two and say america is in recovery, or do we have to include the changes -- challenges in washington?

The information about tapering relates to what is happening in the federal government.

I look at 2009 and countries across the world were fiscal policy was working together.

To what extent can monetary policy, but what is happening on the fiscal front?

-- complement what is happening on the fiscal front?

They are contradicting each other.

David blanchflower , thank you so much.

Company news.

The mario draghi news conference coming up.

Betty liu will be covering that.

We want to get to some company news.

The buyouts of smithfield foods could be cleared as early as today.

The $4.70 billion deal could be the biggest chinese takeover of a u.s. company.

Blackberry has held preliminary talks and has narrowed the list of potential bidders.

The process is expected to begin soon.

You can call it the dollar and up menu.

Mcdonald's is testing the dollar and -- the $1 and a menu.

The $1 made you was introduced more than a decade ago.

That is today's and company news.

It has been a busy corner for bankruptcy.

Our guest is harvey miller -- it has been a busy corridor for bankruptcy.

Our guest is harvey miller.

It is out of chapter 11, but it is still being administered.

Next week is the fifth year anniversary.

Since the chapter 11 plan was confirmed to back in december, there has been almost $43 billion a distributed to creditors.

Some compare your business to something out of a dickens novel.

It takes forever and everybody gets in an uproar about the fees.

I saw one billing that was when 8 $40,000 a day.

-- i saw one building that was $140,000 a day.

We do wonderful things with fees.

And they are are many things -- there are many people involved.

With lehman brothers, there were 150 people involved.

150 smart people.

Is there an ending to lehman brothers as one example?

Lehman brothers was a huge enterprise.

You had assets all over the world.

You had 80 insolvency proceedings around the world.

It was totally unplanned.

You have to nurture those assets to create value.

If you went back to september 15, the projection was that creditors would get zero.

Now they will get over 20%. is this a five-year or 10- year process?

It has been five years.

In the context of this kind of case, it is very fast.

There will probably be a recovery in the area of $80 billion.

That is not a big percentage.

So much to talk about with harvey miller.

Detroit and the airline business.

The day after samsung launched its galaxy watch.

Everyone is wondering what will be the next big consumer technology play.

Wearable devices.

These are not the first to hit the market.

People said, hold on a second.

If this is a device that can be paired with your smartphone, maybe they have got something.

Samsung said they would pair it with the latest note device.

The last time they did this, it was a flop.

What was the mood?

People were curious.

Samsun g has a seat at the table.

Maybe it puts pressure on other players to be thinking about what sumsung is doing -- samsung is doing.

Apple might be taking a page out of the samsung book.

" bloomberg west" tonight at 8:00 p.m. are you going to buy a samsung watch?

Yes.

I want to get an endorsement.

The enterprise, imported market for samsung.

Blackberry the home to a lot of law firms over the years.

Let's do a data check right now.

Ecb will be out in about 35 minutes.

Tomorrow morning, jobs data.

Yields are higher in celebration of a better economy.

Let's run on to a second data board if we can.

Brent crude $115. i am watching the two year yield.

It is a big deal.

Higher yields a celebration of a better each time.

Tomorrow's jobs data, we will have a number of television and bloomberg radio.

We have employment changes and 15 minutes after we get the jobless numbers.

It is a nerdfest for you.

We have much more coming up on "bloomberg surveillance." the big bet on global shipping coming up.

? good morning, everyone.

This is "bloomberg surveillance." this is must watch, must listen.

Harvey miller.

He is watching detroit.

Not the detroit tigers.

They lost last night to the red sox 20-4. mr.

Miller is focused on a serious matter of a city that is flat broke.

The misconception of municipal bankruptcy.

What is the thing that drives you nuts about the recovery -- the covers of detroit bankruptcy?

All of the speculation of what will happen to detroit.

Chapter 9 is not a process that has been used much.

It is a very different case from birmingham or harrisburg, pa., which had unique problems.

Detroit is the result of years and years of benign neglect.

It seems that people want to make the law before we do the law.

Who decides the pension questions and the more sophisticated questions?

The legal questions will be decided by the bankruptcy court with oversight by the district court.

The 10th amendment preserves states postal rights.

The chapter nine court is limited in what -- the 10th amendment preserves states's rights.

The chapter nine court is limited in what it can do.

They had to change the whole plan.

The problem with detroit is that you do not have an economic base.

Somebody has to come up with a plan that creates a foundation under chapter 9. you have a declining population.

You have very few real taxpayers.

It is almost an insurmountable problem.

Do you presume that some of this will end up in the supreme court because it is our original lot?

It may very well in the believe the supreme court.

That is a long process.

You have an emergency situation right now.

People who have jobs and can move elsewhere will get out of the chart.

You have all of these areas where you have those two or three homes in a subdivision and the rest is wrecked houses.

Harvey miller on detroit.

President obama and mr.

Putin will be in the same place at the same time since a most intense meeting.

Good morning.

It's "bloomberg surveillance." ? good morning, everyone.

"bloomberg surveillance." i'm tom keene.

Jon erlichman has our top headlines.

Congress vote to give president obama limited authority for action in syria.

The resolution blocks the use of american ground troops in syria.

It will be taken up by the full senate next week.

The bank of japan says it can rolled out financial stimulus if it needs it after the failed sales tax.

The tax increase is scheduled for april.

The bank will act on monetary easing in the first half of the year.

The boston red sox got eight home runs against the detroit tigers.

David ortiz hit 2 of the eight home runs.

Those are your top headlines.

July 4, 19707 was the last time you saw that many homers.

-- 1977 was the last time you saw that youhomers.

The world's biggest ship.

/ it is the size of the empire state building.

The shipping giant is betting big on them.

It will ship 182 million ipads.

The yac ht races the cover of this week's bloomberg business week.

This is not going through the panama canal.

Too big to fit through the panama canal.

It will fit through the suez canal.

I thought your story was must read.

In shipper, bigger is cheaper.

Take the 180 million ipads.

You can ship from shanghai to rotterdam for about 0.003 balance an ipad.

-- gallons an ipad.

Who set the this was a better?

This is a china-europe string.

There is a bet that there will be enough coming out of china to fill it.

Everything about greater thanshi -- this ship is ginormous.

How many people are peoplea triple e ship?

It will have a crew of about 22 people . is this thing see where the?

-- seaworthy?

By all accounts, it is.

There was one bad sank -- that sank.

There were these dramatic pictures of it getting slammed by waves.

It is as big of the empire state building.

Tell us about the construction of these mammoth and devices.

How long does it take to put one together?

From steel cut to delivery, it is one year.

They have to argue from the shipyard about everything.

Once you start bending and cutting steel, it is a little over a year.

The price tag.

One 8 $82 million.

That seems really low -- -- $182 million.

Now was a good time to buy a container ship.

Harvey miller, stepped into this.

Why did they drop the option for a potential 10 ships?

They saw an uptake in shipping rates.

Now they have collapsed -- collapsed back down.

They wish they would have ordered it now when it is cheaper.

They did not pick up the second option.

They are not going to run the thing at full capacity for a while.

Why are we building a big ship when we have in the ship's resting off of singapore?

-- ship s resting off of singapore?

In 2010, there was a little bit of a rebound.

This is about china- rotterdam.

Why is it about china-long beach or china-southeast united states.

Why is the united states not screen the ship into its ports?

We do not have a point in this country like rotterdam?

No, norfolk is the closest.

We do not have the cranes that can load and unload one of these.

I would be on one of the chain links.

Bloomberg business week is out on your ipad.

Did it in all of the different formats, including the s amsung galaxy watch.

? good morning, everyone.

We will get to chaos in same petersburg in a minute.

-- in st.

Petersburg in a minute.

Jon erlichman is in.

Let's get some company news.

The sale of lloyd's could be delayed selling almost 8 million shares.

A potential tapering by the federal reserve and syria has not affected things.

It is the biggest junk bond sale in five years.

Sprint is raising 6.5 ilium dollars in the offering and will be used for general corporate purposes.

Sales is topping $240 billion.

Madison square garden is launching an artist management firm with irving azoff, the former chairman and concert promoter of live nation.

They will manage artists and manage music rights.

Let's go to europe.

Hans nichols is in st.

Petersburg.

The president has just arrived.

They are already playing politics.

President putin is very busy.

President obama seems a little alone.

He is a little isolated but has an ally in enrico letta co.

Announced that italian warships are off the coast of lebanon.

There are two different conferences going on here.

One is unserious and it is largely about syria but there is also an economic component.

Ban ki- moon is arriving today and will make a big political push.

The head of the european union is also talking about the need for a political solution.

The lines of the debate are very clear with those who want a political solution and those agitating for some sort of military response.

We know where obama is and we certainly know where vladimir putin is.

We look yesterday at vladimir putin talking about the un security council being involved.

Is there a new idea that something can be done constructively at the united nations?

From the perspective of the u.s. administration, no, because what the un will find is that of chemical weapons have been used, not on the question of the chain of command as to who ordered them.

That is where the debate is splitting apart.

The u.s. says that the un is not in a position to adjudicate who authorized the use of those chemical weapons.

President obama came as close as he did far laying at the feet of bosch r al-assad.

Obama has to pay lip service but his challenge may be back on capitol hill, getting enough votes for the use of the authorization of force.

Who is the president most focused on back in washington?

Who is he playing to drum st.

Petersburg?

Who is he performing for?

For the republican side, he he is relying on his staff, mainly senator hagel.

His audience's house democrats, progressive house democrats.

There is a strong view in the caucus not to get involved in foreign entanglements especially in the middle east.

In many ways, his most important audience is the house democrats and some and the senate but it looks like the senate is moving toward passing this but house democrats are very earned by the iraq war.

You are talking about how the un secretary general will be at the g-20 meeting.

Who is the leader that ever when wants to talk at the meeting?

I suspect obama.

They want a better sense of the timing on any certain action unserious.

The other crucial question is they want to know what direction president obama is heading in on who he picks for the next head of the federal reserve.

There is a great you look concerned that the federal reserve will taper to quickly and cause global chaos, potentially another recession.

They will want to make sure -- the other foreign leaders want to make sure that taper does not happen to quickly.

Thank you so much from st.

Petersburg.

The president is flying from stockholm to state -- to st.

Petersburg.

He arrived about 40 minutes ago.

As we take a look at how the markets are going to get ready to open trading, futures are somewhat lower.

You have been talking about the two-year yield.

He far i left, it was comfortably in the 34 basis point range and now it is above 50 basis points.

This has to be an optimistic signal of economic growth.

The 10-year yield has been moving up but what has been staying steady was the short- term yield and now that is starting to backup a little bit and this comes before the big jobs report.

Good morning, this is " bloomberg surveillance," streaming on your phone, your tablet, and bloomberg.com.

Scarlet fu jon erlichman are with made.

-- are with me.

U.s. airway was set to merge with american airlines.

Many people talked about capping off the big merger in the industry but after a challenge from the department of justice, the merger would've created the world's biggest airline is now under threat.

Doj says it would raise ticket prices and reduce competition.

The airlines contend they need this combination to effectively compete against delta and united.

U.s. airways is down 10% and american which is in bankruptcy protection is down.

The trial begins november 25. how credible is the lawsuit and how seriously should investors take this?

We have one of the main players in this drama, harvey miller, our guest host.

Is it safe to say he represents american airlines?

It is safe to say that.

What did the government get wrong here?

It's a question of the analysis of the effect of the merger.

The problem is that the merger comes after the other three majors already have completed a merger so you have a record of the effects of all those mergers.

Is it a serious issue?

Yes, it's a serious issue but both companies are confident that they will succeed.

The judge who has the case in dc has put it on a fast track to get an antitrust case tried in november of this size is a move forward.

I think the judges pressing the parties,, hoping there will be a sediment.

Very few antitrust cases get tried.

For americans who look at higher airplane fares and packed airplanes and lousy service, why is the government wrong here?

Why should this merger move forward?

The airline industry for years was in terrible shape.

Because of consolidation, it is supply and demand -- the airlines have learned that if you keep the supply down, planes will be full.

Now size counts.

Bigger is better.

American alone can't compete against delta and united.

That is their case in court.

Writes, -- right, you said american is bankrupt, it is in chapter 11 and making money.

The doj is saying american can stand alone.

What can you tell us about the district judge?

She alone will probably decide the fate.

Initially, yes, she has a good reputation but i don't know her personally.

She set this thanksgiving day trial because it puts pressure on all the parties.

What does that say about her inclinations?

I don't think it says anything.

It puts the doj under pressure because the doj generally would stretch this out with a loud discovery and now they have to do it on an accelerated basis.

We believe in creative destruction.

What is distinctive that we can learn about this case that is good for american business?

Chapter 11 can work.

If you take america back 1.5 years, it was really crumbling.

American had not provided amenities for its business class passengers.

Its revenues were going down.

Like all iconic american companies that have been existence for a long time, it gets encrusted with structures and procedures.

The chapter 11 process allows a company to clean up and become more efficient, more effective, go back to texaco -- you can read to have billeted a company -- you can't rehabilitate a company so they can compete.

Very good, this is fascinating.

November 25 is the trial.

And speaking of viability and competition -- our twitter question of the day has to do with yahoo.

What should marissa mayer do next?

? good morning, everyone.

I am tom keene with scarlet fu and jon erlichman fort sara eisen.

It is boneless thursday.

Betty liu is doing buffalo wings?

It's your preference, whatever you like.

Why should friday get all the love?

We are all eating more chicken wings supposedly given the kickoff of the football season.

Buffalo wild wings ceo will be joining us to talk about how the season will shape up.

We are all radio personalities here.

Lou dickey from cumulus did a deal with dial global which will make him the biggest syndicator in radio.

We will ask them why interest in radio?

Why not invest in pandora?

This is got some real splash.

Betty liu on buffalo wings later this morning.

This is boneless thursday.

It is time for boneless morning movers.

Zillow, falling and the premarket by more than three percent after morgan stanley cut its rating on the stock to underweight.

It is trading at $97.40 per share.

We are watching groupon, upgraded to an overweight rating.

The folks at morgan stanley think the north american business for groupon is improving and mobile business.

Shares are up over 100%. one of the founders decided he will be the ceo, andrew mason is out.

Maybe the company is more focused.

This is a whole new company?

This is a more focused company and wall street likes that.

Let's talk about general motors moving higher in the premarket after the u.s. auto sales translated to an annual pace in august of 6.1 million cars.

They are make more money -- they are making more money at lower sales volume.

It is a huge contrast to 2007. they were struggling to make money but now the big three are profitable.

It is a different wage rate.

Employing less people.

Another mover, maybe less about stock movement, but changing your look -- yahoo unveiling a new logo.

Yahoo shares are up 40 % this year.

Marissa mayer changed everything.

He says yahoo differently than we do.

In 45 minutes, betty liu and i will have the important headlines.

Coming up, we will look at the ecb.

? good morning from new york city, " bloomberg surveillance." we will have a press conference from bancfirst, germany at eight 30 a.m. -- from frankfurt, germany at 8:30 a.m. the ecb decision was widely expected but that does not color how the markets can move with two days of huge economic data.

The bank of england also came out this morning with its position with no change.

We have already seen at the g-20 meetings, this is a topic of what our bank will do.

Let's get to company news.

From the files of " bloomberg west," after a month of offering logos that did not make the cut, yahoo has rolled out a new look.

It last tweaked its logo back in 2009 but has been mostly the same since 1995. microsoft got a court win over google saying motor road of mold billeted did not -- motorola mobility did not act in good faith.

Microsoft was awarded $14 million in damages.

Another nasdaq technology glitch -- a malfunction in a price because trading in some companies to be halted yesterday and the nasdaq said the issue was resolved in six minutes but it was the second malfunction in two weeks.

A big surprise yesterday with the nasdaq.

In business economics, finance, and investment -- we start with jon erlichman, no doubt on samsung, apple, google, toys, smart watch, smartphone -- we need to move the on what samsung announced yesterday which was a smart watch which gives them a seat at the table of the next big discussion along with google and its glass.

Now it is apples turn.

Apple will have the worlds attention next week week at its big event well it will likely unveil its latest iphone.

Is that enough and is there pressure on apple to come to the table with new devices?

What does samsung fear from the announcement from apple?

The possibility that apple will grab more market share around the globe.

The samsung strategy is to offer any and every kind of model it can to grab the smartphone share.

It is the largest player in the world and if apple comes out with a lower-priced phone, that story starts to change.

The stock has moved from $400-$500. it is a well-run company with a lot of money and maybe there was too much hype and things might be getting back to normal.

Where is blackberry in six months?

This company has been trying to sell itself for a long time.

The fact that they want a speedy trusses of a sale is a very challenging thing.

Maybe i will introduce them to harvey miller, our guest post today.

Let's continue the agenda forward and talk about your world of bankruptcy law.

It is just fascinating, the state of the legal business.

Should anybody be an associate today in the law firm hoping to be a partner someday?

It is a much harder route today.

Legal education has become very expensive than people who go through law school come out with huge loans.

There is no assurance of a job.

We have had a proliferation of law schools being created.

We over expand like everything else.

Technology has finally caught up with the legal business.

What is the gradation of the law schools?

The top schools put out students and how is that different from a second or it or tear?

You have a higher probability of getting a job but secondary law schools, you have a difficult time for that graduate to get laced.

If you look at the percentages, they are not placing the people, less than 50%. a top law school probably 85- 95%. a legal education is general and you can use it in anything.

A lot of hedge fund managers went to law school.

You can use a legal education to move into another area like finance, management.

You can get that training on the job, too.

Yes, but you learn to think in a good law school.

People are looking at graduate school at other things, how many people are going to law school?

Do they do it because they don't know what else to do?

That used to be a very prevalent theme tummy tuck.

Because of the cost of law school, it is not so true anymore.

I think people would rather go to business school.

We have changed the way you get an education.

You can get a law degree and an mba in three years.

You mentioned that.

If you get into that program, you graduate with your law degree and an mba.

That is worthwhile.

What did a law school due to their curriculum?

What do they do to make their education more valuable?

Law schools are making a more practical with more courses that are on a seminar basis, clinical.

With your decades of experience, respond to the national consensus that we need to stem education.

Math, engineering -- bill bennett suggests you must combine it with a broad liberal arts education.

These are the people you are hiring every day.

How important is it to have a broader education versus calculus?

I believe in a liberal arts education.

We don't teach history in school and people have no basis what this country was founded upon.

Ask people what happened in the first world war and they did not know there was one, forget about korea.

Are you suggesting the fundamentals are in the elementary school and high schools that we have to bring in history?

Our educational sees some -- system needs a lot of improvement.

You need history and liberal arts -- you have to know philosophy.

It is not only calculus and physical sciences.

What is your agenda today?

Besides sleep.

The g-20 in st.

Petersburg where president obama has just arrived.

He will be meeting with the other leaders of the industrialized nations and there is focus on what happens because syria has taken over everything.

What will the president say as he tries to get congressional action on this important topic?

He is there and this is the first report where there is a little bit of sweat.

There is a real tension here between vladimir putin and the europeans looking for a political process.

The united states is working on a lacunar lateral basis and everyone is watching on the sidelines.

You mentioned the italians with a ship in the eastern mediterranean.

Ban ki-moon will be at the g-20 and is pushing for a political solution to this.

Issue.

Putin will be there as well.

Apparently, his dance card is pretty full at many people are angling to talk to president putin, not so much to obama.

He is playing poker on his phone like senator john mccain.

Try -- time to answer our twitter question -- we asked about loco.

What does the company do next?

What happens after this?

I agree.

Our second answer is -- this is the core issue.

The stock is up 40% this year and the debate is how much of it is the intangible of marissa mayer and how much is the assets in asia that yahoo has.

As far as ceo's that get involved in logos, a lot of them will outsource this from a specialized company but this is a ceo that rolled up her sleeves over a weekend with the design team and hashed this out.

Does microsoft need a new logo?

They would probably screw it up.

Possibly.

Jon erlichman, thank you.

He is up there at 2 a.m. la time and will be in new york for " bloomberg west." we will continue on radio with lots of economic data.

?

This text has been automatically generated. It may not be 100% accurate.

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