Paging Dr. Obama: Surveillance (07/05)

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July 5 (Bloomberg) -- On today's "Bloomberg Surveillance," Tom Keene, Sara Eisen and Scarlet Fu bring insight on the state of the market getting you ready for the day ahead. (Source: Bloomberg)

This is "bloomberg surveilance." two hours away from midsummer jobs report and the markets look for a goldilocks recovery.

European central bank disagrees with the fed -- they will not taper.

Disappointment insole.

Samsung profit misses estimates.

Our samsung's as smart as it is going to get?

Even as it delays a key aspect of the new health care law, the united states government award a big contract to implement it to a british company.

Good morning, everyone.

This is "bloomberg surveilance." i'm timely -- tom keene live from world headquarters in new york.

Joining me, as always, scarlet fu . adam johnson loss of straw vote and he is in for sara eisen this morning.

We have adam johnson each afternoon 3:00 p.m. on bloomberg television.

Our guest host, howard lindsay, chief officer of a communications platform with 200,000 members, a great place to look for individual securities.

Good morning.

Good morning.

Also joining us this job stay is michael mckee, our senior economics editor who will help break down the numbers when they cross at 8:30 a.m. but first let's get you caught up on the morning briefing.

While you were out celebrating fourth of july, european central bank and bank of england a greater clarity on monetary policy.

Offering forward guidance for the first time saying they will keep benchmark interest rates low indefinitely.

China suspended the release of industry specific pmi data.

Big news.

On the date is -- data front, we get nonfarm payrolls for june and the unemployment rate, which is currently at seven point six percent.

Corporate earnings, nothing on the u.s. calendar but samsung just came out with luminary results and it missed analyst estimates as shares of the galaxy s4 fell short of expectations and shares her tumbling.

It's looking like an apple chart.

Let's do a data check on this jobs day.

It will look at equities, bonds, currencies, and commodities.

Here is the headline you need to know.

Europe moved the markets yesterday and they will continue to move it this morning.

Futures up 15 points.

16.23 on the s&p -- 1623 on the s&p futures.

Yield explode higher.

We go way up to 2.54. higher yields, lower note prices.

The dollar is ever stronger.

Nymex pretty much where it was.

On we go to our next look, and it is the vix, 1620. you have to look at that to drive lower with the market opening.

There is the headline -- the steepness of the yield curve.

All you need to know is you get near 2.20, a real mark of a sea change in the bond market.

They different in yield between the 10 year and the two-year.

The yen is weaker by a little bit today.

99.97. there is the dsy, one indicator of the strong dollar.

He is our chief economic correspondent michael mckee with us this morning.

Carney androgyny move the markets while you -- carney and mario moved the markets while you were -- and i were at the grill.

Carney seen as the savior of the british economy.

Too soon to expect breaking moves but he did have a time specific commitment to lower rates in the future.

Made a big difference in the financial markets there.

Mario draghi's problem is he has countries that are on the edge again, and he has to do something.

Rein in the gap in the jobs report this morning.

160, 170, squishy numbers.

Alan ruskin told you and me wednesday it was 220 to 120 market action bracket.

Above 220 or below 120 . is it the same as on wednesday or has it changed?

It may have new -- and narrow the little bit.

Kurtosis -- i am speaking keene . he can relate to it.

This view is toward the upside.

Most people think we will see stronger drop -- a job growth perhaps.

I never predict this but i agree with mike, the skew is on the upside without kurtosis.

On your fourth of july weekend, look it up if you get bored.

The first thing we have to talk about is what is going on with korea.

Samsung facing an analyst downgrade, reducing earning estimates after second quarter preliminary results missed analyst estimates.

The main reason is because sales of the samsung galaxy s4 , the marquee product, seem to have fallen short of estimates.

Operating income below the 10 trillion won level.

What it may mean is we are at saturation point for the high- end smartphone argot, which is huge implications not just for samsung but for google, apple, motorola.

Research in motion, blackberry -- the whole market.

The problem with the s4 , it is a fine product they are selling at a rate that is only 30% of what you saw an apple.

That is not good enough.

Let's bring in howard, his esteemed career with startups.

Are these companies just too big question mark samsung and apple with the samsung chart looking a lot like the apple chart, are they just too big?

A lot of large numbers, but it applies to samsung more than apple.

They make up 18% of the korean stock market.

We have seen it with a nortel in canada and blackberry in canada.

I guess the first time saw it with apple in the united states.

The of companies doing things that have never been done before and they seem to have hit a wall.

I firmly believe they will be a chilean dollar company.

We started talking about a trillion dollars a little too soon and now we are being slapped around.

But there will be one.

I do not think it will be samsung -- i think it will be apple, design wins.

But people want the bigger phone.

They have a lot of old friends, and they want the big phone.

They love their big phone, they need a few apps only.

We have to move beyond the smartphone.

Howard lindzon through this jobs they.

We have to talk about what is happening in egypt.

The muslim brotherhood calling for nationwide protest, protesting the new government installed by the military following the ouster of mohamed morsi.

You said ouster.

That is the thing, they call it an ouster because the u.s. and other countries have not yet dubbed this a coup.

You dubbed this a coup and that has all sorts of implications.

It is uncharted territory and everyone is trying to figure out what it ultimately will means.

A news flow on the twitter flow -- you talk about twitter vigilantes.

You see it in spades whether relations are -- releases coming from social media.

This is deadly serious.

What i learned over the fourth of july is how egypt has fallen behind economically.

That was the whole crisis.

It the old song in the u.s. about voters vote with pocketbooks.

Not that -- not to be trite, but if you look at egypt, you had stagnating growth, inflation, the worst of all situations.

A lawlessness in the street.

You understand why people wanted to change.

They just did not go forward in the election booths but on the streets.

We will talk to one of the great leaders and backers of sectarian egypt.

What else?

Steve cohen, billionaire hedge fund manager, probably will not be charged in july because prosecutors did not have enough evidence to meet the deadline.

This is on the front page of "the wall street journal." did we already know this?

We suspect it is because the sec faces the deadline in july.

The ratchet of limitations runs out on the beltre.

We know sac paid a fine due to civil charges because of one of its traders matthew martoma.

Six people have already pled guilty.

Is it just one guy that will not squeal?

Just as simple as that?

There is no way for us to know without actually having been in there.

And you and i both worked on wall street.

You talk to people -- you and i know them -- who have worked at s ac -- they give you money to manage -- money to manage.

If you like the trade -- steve would say, how much do you like nos and wink in code.

For those of us who have not actually work -- with all of your contacts?

The street is mixed on how they feel about it.

I think people in general read the news and say, well, it figures.

I think that is kind of the mood of the country is in.

We can't get a banker or hedge fund for a life of us.

But could still charge him on ric o -- not that it is over.

Dow futures up 139 as we look forward to 8:30 a.m. bloomberg television and radio with full coverage where we will go beneath the headline data.

Right now let's go beneath the headline data of company news.

We start with billionaire batista taking more steps to save his crumbling empire.

He is cutting jobs at one of his eye and ore mines.

A little over a year ago he was worth than $34 billion.

Now he is worth less than $3 billion and trying to sell assets and renegotiate the terms.

How the struggling game makers zynga laura way its new ceo from microsoft?

A compensation package worth more than fifth $2 million.

The man who ran the xbox unit will get $1 million in salary and $5 million in signing bonus and 25 million and restrict stock.

Other bonus is add another 27 million over the next few years.

Two big infant formula measures will cut prices in china after the government started a price fit thing investigation.

They will lower up to 20%. according to newspaper reports, the government has evidence the companies boost the prices for 30%. a lot of demand for foreign infant formula makers.

The uk has been waiting 77 years for one of its own to win the men's singles and wimbledon.

Maybe this is finally the year.

This is the big weekend for wimbledon.

If andy marreese breaks the losing streak this weekend he could wake -- ready for this -- $75 million a year -- if andy murray wins.

Most would, through endorsement deals.

But first, he has to make it to the finals.

He played jerzy ja nowics for today's semifinals.

Very cool.

I just know anybody lost.

A lot of upsets in the first week.

Take your pick.

But this is a big deal.

You have to read for the home team guy.

$75 million, a huge payday.

Coming up that you know mcdonald's latest menu item cost less than four dollars and take 60 seconds to make.

Why the mcwrap could mean big business.

This is "bloomberg surveilance " on bloomberg television, streaming on your tablet, phone, and bloomberg.com.

Good morning.

? tchaikovsky was in town.

This, of course, the nation's capital.

Celebration of our independence day.

Or the fireworks in new york city as well getting ready for the show.

There is the washington monument.

And tchaikovsky's 1812 overture.

John's day --jobs day.

Scarlet fu is with me and in for verizon, adam johnson.

Did you see the fireworks?

Yes, single washington one gave me goosebumps.

I saw the new york fireworks at the hudson.

Four or five barges up the hudson.

You could see it from anywhere.

I did not see any, just heard them.

A lot of fireworks in that movie, too.

We have to talk about food right now because it is 6:00 a.m. and we are all starving.

Mcdonald's have is a new product called itmcwrap, it takes only 60 seconds to make.

Some asking, why bother?

They have to, right?

According to a new survey out in "bloomberg businessweek" this week, for millennials , mcdonald's is not even in the top 10 restaurant choices.

You go to chipoltle.

20% sales growth over at chipoltle and 14% at five guys.

Here's the problem.

This thing is not mc-healthier.

Why are you looking at me?

We have seen you eating a big mac.

Big mac, the calories 550. crispy chicken wrap, 620 . more fat, more sodium.

The same amount of cholesterol.

Then you say, hang on, what about the healthy one, the grilled chicken?

Fewer calories, less fat, but a lot more sodium than the big mac and more cholesterol than the big mac.

Are you kidding me?

This is their solution to healthy -- you saw it and decided not to go out and get them.

I can put that in the temple.

My cholesterol is already too high, blood pressure is too high -- i can eat that stuff.

The perception is mcdonald's but not -- does not sell real food.

And the guy who had a hamburger for eight years and it looked and smelled exactly the same.

Howard, you are the guest host.

Looking at smaller stocks.

Any value in the blue chips now?

I think of the good market, i want to own the best growth stuff.

If the market is going up like the past four years -- sure, even pfizer.

Chipotles and growth stocks are doing well.

But you really want to find growth.

In this mark of a smaller growth stocks are easier to own.

Why the russell 2000 has been outperforming the s&p 500. by about 400 basis points.

I consider myself a collector in the sense that people say -- intermediate growth.

I am eclectic.

I like growth.

I am not so scientific about growth.

I use my eyes, i use relative strength, i use years of looking at the same stuff to see what is standing out.

And it is a lot of names nobody talks about.

Let's come back and talk about some of the names.

Irobot and healthcare.

Company news as well.

Be glad you are not a lawyer because on wall street some associates and runners-up feeling the pinch.

We will take you inside the lawyer bubble coming up in the second hour of bloomberg surveillance.

We are on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

Good morning, everyone.

"bloomberg surveilance." good friday after the fourth of july.

A lovely day in new york city.

The haze of the fireworks last night -- kidding, of course.

The east river, the hudson river as well.

I'm tom keene here with scarlet fu.

Adam johnson in for sara eisen.

Believe it or not, she is on assignment in italy.

How did she pull that straw?

Riding around in a for robbery.

Let's just put that out there.

On assignment.

Driving a ferreri in italy.

Let's go to top headlines.

Egypt possible muslim brotherhood is calling for nationwide protests against the new government appointed by the military.

They'll crack down on islamist after ousting president morsi from office.

There is a travel down on morsi and other officials.

San franciso's commuter train will be back in operation today after the end of a four-day strike.

Employees of the system known as bart, they area rapid transit, are negotiating and are holding off for 30 days.

The strike forced thousands in san francisco to commute by car, bus, or ferry or just a home.

It was a mess out there.

The bull on bicycles actually crowding the streets.

A little farther south in southern california, at least 28 people were heard at a fourth of july fireworks accident.

A wooden platform holding live fireworks tipped over and the fireworks shot sideways, frightening, into the crowd.

Four people are listed in serious condition.

The accident took place in see me valley, california, 40 miles northwest of los angeles.

And those, by the way, are your top headlines.

Futures up 15, dow futures up 144. central banks in europe at changing the landscape before the jobs report.

A huge move globally and equities, as we say a stronger u.s. dollar.

With that as a backdrop it is time for our morning must-read.

It goes back to adam's top story, which has to be egypt and the events taking place.

Alastair newton at no more international right to that by ousting a democratically elected government, the army risks turning egypt into a latter-day pakistan.

That is, a country where the army is using its position as the ultimate arbiter of power of any elected government.

The change will not resolve any of the mid-to long-term problems, the deep economic problems, and the risk of becoming overall negative for economic the relevant.

Superb reading the last 48 hours, the divide between sectarian egypt.

We will talk to a supporter of the sectarian group in the next hour.

You have something on egypt as well?

From "the washington post." michelle dunn trying to put perspective -- what it means for americans.

"the best option for the united states is to return to core principles.

This was a military coup against a democratically elected president.

U.s. officials should call it a coup, while acknowledging morsi had himself taken undemocratic steps." the reason this is important -- if the u.s. calls this a coup, there are laws on the u.s. books that prevented the u.s. from continuing to support the egyptian military.

They may not want to do that, that is why they are not calling it a coup.

But you always have to go back to what you are in core principles.

We are a democratically elected people.

Especially on independence day.

There is a shot of tahrir square.

A quieter square this morning.

Our twitter question of the day -- should the united states called the event in egypt a coup d'etat?

You can tweet us.

A foreign policy question this morning.

It is free.

Coming up, most important economic data out in two hours.

With the market get the goldilocks recovery they are looking for?

? this is "bloomberg surveilance." i'm scarlet fu, as always joined by tom keene and adam johnson sacrificing some sleep this morning, in for sara eisen.

Tom, an interesting day for the market especially given what happened overseas.

Big moves overseas.

While we were celebrating the fourth of july day celebrated with central-bank action in europe.

Futures up 15, dow futures up 141. cable.

Carney moves and makes a splash in the back of -- and the bank of england.

Here is the moment where bank of england says we are dovish.

Here is a new leg down this morning.

That is the backdrop for the attention that we will see at 8:30 a.m. you know chairman bernanke spoke a few days ago and it has been one big fog of rhetoric toward this morning's jobs report.

I hope that the numbers will provide may be guidance on the economy and what it means for investment.

All of that blown up in the past two days.

Bruce kassman, chief economist at jpmorgan, working straight through independence day.

Never dull.

Not when you have central banks moving and data coming up.

You have central banks saying no.

What this chairman bernanke you want to see in the jobs report?

What is his best outcome?

To see strong job growth, breadth and the numbers and a picture with job growth is not pushing the unemployment rate now -- down because people are leaving the labor force.

He would like to see the partition -- participation rate stable.

We have a chart, the threshold chart, which is the glidepath of unemployment.

Down somewhere in the vicinity of seven percent or six point five percent.

How critical is the unemployment rate number this morning?

I think it is important in the context of thinking about supply and demand separately.

We want to see strong growth -- a job growth and also strong labor supply growth.

If the unemployment rate is down because people are exiting the market there is a more conjugated decision.

If it is going down because we -- people are being hired and entering the workforce, that is a strong and positive message.

June is notorious for being a seasonally divergent month.

You got teachers coming out of the workforce, college grads and high school grads entering the workforce.

There are a lot of things to keep in mind as an outlier.

You always have to look at it in context and it is a very volatile number.

June is a big month around the summer.

Exiting usually the workforce.

But i think the basic message is, we have had two quarters since the fed began qe with over 200,000 payroll gains.

The last few months we move down to about 150,000. that is the forecast for this month.

If we have the kind of outcome today, you will feel the economy lost a little momentum.

A trade-off of the forward- looking message versus the better news up until now plays out.

What is your take on ben bernanke talking about tapering?

Do you think he got ahead of himself especially given the fact you are forecasting weakness in labor?

I think he is trying to tell us two things.

One, the fed wants to taper.

It does not want to continue to increase the balance sheet at this pace in an unlimited fashion.

I think financial conditions have also had an impact on them.

But i think at the same time he is telling us -- there is plenty to go before anything about rates.

Howard lindzon is with us.

Howard, chairman greenspan loves a good stock market.

We have a good stock market.

The markets telling the chairman once to do or will the chairman telling what they want to do?

The stock market is not as big as the bond market on the currency market.

So, i think the stock market, i think right now we are driven by these massive blows to etf's so guys like me and people left buying and selling stocks have to realize where they are in the food chain.

I tell people, be in front of these gigantic money flows.

Catch these trends, which are not driven anymore by price and earnings, but they are driven by moves from bonds and currencies.

The mood over fourth of july, howard, is there is no way to growth in this country.

Our viewers and listeners who are not sophisticated about economics, they just know the paychecks are not going up.

Average hourly earnings, two percent, one percent and after inflation there is nothing there.

When does it change?

I think what is happening now -- and this is what we hope for -- we have a weak labor market in bargaining power in a situation where companies are hiring.

Households are seeing confidence go up because we are seeing jobs created, housing prices go up.

The housing market is connected to the labor market.

But we are not yet seeing wage gains pick up.

I think it is premature to expect that.

Is that good or bad -- is a good or bad?

It keeps the spiraled down.

There is the music, tom.

You get lower unemployment -- and you hope over time it begins to build bargaining power.

But weak wages now are a reflection of the last five years.

We cannot change that -- when do we see win --when do we finally see this, what we saw in the late 1990s. is it there or is that a one-off event?

I think the late 1990s we should look at as an event onto itself.

But the hope is that if the what is holding back the economy are drags related to fiscal policy and external forces and they fade, we could be six months from now and a much better position.

But we are not there.

The economy is growing less than two percent right now.

We are not there in terms of unemployment.

Seven percent is the number that has been thrown up there by bernanke in bond repurchase.

What about 6.5%? talking about 6.5% as a threshold for thinking about rate movements.

If inflation and wage pressures a low i think they will go beyond that before they think about raising rates.

Howard, jump in.

I kind of look at wages with a snicker in mind because the tools today, whether the plumber usingyelp or hotels using apps like hotels tonight.

I used to come to new york and watery and now i, and flip a button and get a hotel at a lower rate.

It is the individual taking control.

We are talking about the eggs and flows of massive numbers.

An individual under these numbers are people taken advantage -- there is a huge body of americans who cannot figure out yelp.

Not just talking about yelp.

We talked about samsung numbers, the saturation.

Everyone has the tools.

The hammers are sold.

Now it takes time for people to understand how to manage them.

Responsibility, is what you're saying.

A brave new world.

The big list i look at as a stock guide, and 300,000 people owning it, take responsibility for information we pared down to them.

We know stocks.

I know the currency and bond market is important -- buffer stock people, what is important.

The tools are delivered.

Now we have to educate people on the language of the markets.

People need to start speaking which is an use these tools.

Bruce, thank you so much for coming in.

We greatly appreciated.

Mr.

kasman will be working until 5:00 p.m.. 70,000, how many large employers must start providing health insurance under obamacare and 2014. that is just a little more than one percent of the nations workplaces because most already be provided.

More on the household -- healthcare discussion on "bloomberg surveilance" on bloomberg television, streaming on your tablet and phone and bloomberg.com.

? good morning, everyone.

"bloomberg surveilance." i'm tom keene, as always joined by scarlet fu.

Adam johnson is in for.

Futures up 14. dow futures up 133, excuse me.

Big moves in the market before we get to 8:30 a.m., which means we need a big post fourth of july single best chart.

Companies using the government as a bigger risk than ever to doing business.

This is a chart based on bloomberg government data.

Strategas included it in their latest report.

They looked at and will report of the past 60 companies, and the recent data is from on d 12. they found that more than a quarter of the companies, 27%, cited government risk.

They discussed the risk factors to the business overall.

It could include regulation, intervention, unprecedented involvement by the federal reserve, political paralysis in washington with the debt ceiling, sequestration and fiscal cliff -- you probably had a big role to play.

This is certainly not going away going forward, either, given what we have seen so far this year with healthcare reform.

Douglas holt eakin will join us in a little bit.

Bruce kasman join us and we have howard lindzon.

Dr.

kasman, if you look at the risk level of government, it would be solved quickly if we had better nominal gdp.

No doubt.

But it obviously -- it works both ways.

If you go back to last year, the combination of avoiding the fiscal cliff, the better policies in europe , the bank of japan shifting away from deflation, we have actually had -- and i think markets reflect the -- a shift toward better government policy, including what we saw yesterday coming out of the european central bank.

Are you a raging bull, howard?

I am.

I am never a raging bfear -- raging bear.

The thing that keeps me bullet is the fact that big companies like nike, big companies like irobot and under armour is benefiting from the technology.

The flipside is, yes, technology is helping but not creating jobs.

All of us do different things.

My job is to help people make money -- your job is to go out on the golf course.

[laughter] my job is to help people make money and understand the markets.

What i see with the nike is people look at it as a shoe company i look at it as a new data company ,fashology -- fashion and technology.

They are the new data companies.

You where that abband, take 50,000 steps, come an index of the new super conglomerate company.

"bloomberg surveilance " you heard it first, a new word.

Fashology from one howard lindzon.

Five years old, if you read my book.

Let's take a first look of photos making news.

A special fireworks addition.

In honor of yesterday's holiday, we have an independence day photo.

We start with the view of the washington monument and red, white, and blue fireworks lighting up the night.

Beautiful.

Live video of what happened in washington as well.

Did anyone catch it on tv?

Trust me, working on three hours of sleep right now.

Let's head around the globe to tahrir square in cairo -- hold on.

It is what we saw in new york city.

And this is tahrir square, egyptian celebrating something akin to their own independence day with fireworks because of course mohammed morsi ousted from office.

He has been toppled by the army.

This is what ensued.

The iconic square and certainly this will be something that we all remember in history.

You wonder where that will be in two weeks or two years.

Or even this morning.

We saw a picture showing it thinned out, the crowds.

We end our fireworks addition with tom having his own independence day celebration.

In the spirit of july 4, triple fisting hot dogs while socializing with lady liberty at bloomberg headquarters.

This is actually the day before.

I think we were quoting cicero or howard lindzon.

Liberty island reopened yesterday for the first time since hurricane sandy.

People got a chance to go and visit her personally.

I think -- i tried.

That is what counts.

Coming up on "bloomberg surveilance," after the obamacare employer mandate was delayed for a year we discussed specific implications for businesses and for the president.

As former director of the cbo joins us next.

This is "bloomberg surveilance " on bloomberg television, streaming on your tablet, your phone, and bloomberg.com.

? this is "bloomberg surveilance." i'm scarlet fu them is always joined by tom keene, and adam johnson is this morning for sara eisen.

There is a report that hedge fund billionaire steve cohen is expected to avoid insider trading charges, according to "the wall street journal yuriko the paper says prosecutors have concluded they do not have enough evidence against him, the founder of sac capital.

The statute of limitations expires later this month.

Another hedge fund billionaire has a speed bump trying to rebound from bad calls on gold and the economy.

Funds managed by john paulson posted losses last month, but though they are up for the year.

He is trying to recover from money-losing bets over the past two years.

It is marissa mayer's summer shopping spree.

Three days, three acquisitions -- the latest, the developer of contact lens management software . earlier it brought up two other companies.

Futures are up 14 right now, dow futures up 132. at 8:30 a.m. this morning we will bring you, of course, the john's report on bloomberg television and radio.

-- the jobs report.

It will suggest where the economy is going and whether we are part-time america or full- time america.

Health care benefits are expensive, and some would suggest, a john sculley.

Douglas holt aegon served a tour of duty at the congressional budget office and supporter of senator mccain's presidential bid and he suggests i told you so -- doug holtz-eakin.

The good intentions, they have one into an economy, to weak of an economy to affect obamacare or the affordable care act.

Was this a surprise to you?

The decision to defer enforcement mandate shocked me.

I did not see it coming.

It is well known there are a lot of problems in the implementation, and their regulatory initiatives have been that way behind schedule.

Problems with the exchanges.

But i do not see this one coming.

It really sets up an interesting situation for employers who have all sorts of mixed incentives now.

On the insurance front itself, this basically amounts to a one- year sale of getting rid of health insurance.

If you were thinking about getting out of this business, and all the surveys suggest about half of the employers were contemplating no longer offering, the one-year you can do it without penalty.

It will be interesting to see how it plays out.

This fourth of july at this job today, we are struggling to figure out how to have a more vibrant job economy.

What should be the republican prescription if we aren't stumbling with obamacare?

I do not think there is anything good about obamacare as an economic policy.

A trillion dollars of taxes, largest entitlement spending program anytime we cannot afford.

These are big regulatory burden.

I never expected to be helpful to the economy.

You would not do this if you wanted to create jobs.

There are other issues involved.

To really get the economy moving, there are a whole set of core reforms that are necessary.

They would start with tax reform where we really have a tax code that is anti-growth and we could do better and raise the revenue we need in in an efficient fashion.

We need entitlement reforms.

Education, immigration reforms.

And i think we need a real regulatory reform in the united states, for the first time where we look back and at the question is this still a good idea.

If we do those five things, we are set up to grow for the 21st century.

Those are a lot of ifs.

How can we get there in a congress that does not seem to get anything done?

I would not pretend we can get this done between now and christmas.

We have a good start with immigration reform in the senate.

We will see how the house plays out.

Tax reform will be the next thing.

The president, max baucus, and the chairman of the house ways and means committee, they all said tax reform is important.

Now we can get down to the details.

If we do those things it could be quite beneficial.

Structural, permanent reforms.

For healthcare -- the latest development is a british company was awarded a $1.2 billion contract to administer the rollout of the healthcare law.

This company has done work with the federal government but new to the insurance industry and healthcare.

As if the obama administration rushing things to meet a deadline it cannot possibly need to begin with?

They are scrambling.

They woke up january 1 of 2013 with one job only, how can we declare victory on january 1, 2014 -- despite all the problems with the law?

This is part of what they want to do that.

They want to advertise the exchanges, they want people to take up the insurance.

But they face real headwinds.

And the head when -- headwinds are substantive policy problems.

, opened this talking about full-time versus part-time.

It will be interesting to see how 2013 plays out.

Will employees -- employers look at the one-year reprieve and not worry about reconfiguring -- or looking at the long-term incentive.

These are things you do not massage by hiring someone for a rollout.

You are out of princeton where chairman bernanke was holding court before fed duty.

How coordinated is central-bank policy right now?

We see the action by carney and draghi.

Are they acting in cahoots or separate institutions?

I think the europeans are in fact looking at each other and trying to coordinate a little bit but europe remains behind the united states.

You look at europe, they are running the federal reserve playbook from at least a year ago are probably longer.

It is overdue, quite frankly.

They have not dealt with the structural problems of the financial system.

These moves will give them time to do it.

We will see if they take advantage.

Douglas holtz eakin, thank you so much, former director of the congressional budget office.

Guest posted this hour -- out on twitter.

Look for it, a font of smart people on individual equity purchase.

Howard lindzon with us.

One company you are talking about is irobot, not affiliated with the iphone, is it?

Before the iphone.

Irobot ford of this.

Billion dollar company.

All time highs.

Most people are scared of that.

But i believe that stocks that are in motion tend to stay in motion because of the way wall street and money flow works.

At the low end, you see marc andreesen, venture capitalist, pouring money in robotics business and the talk of drones and irobot, just like i felt intel inside in the 1990s, it will benefit in the next foreseeable future from people talking about robots.

Money managers in the world that i think are not that bright.

They have to put things on the books that abuse their shareholders.

One that everybody knows, that is the easy one.

What are some of the others?

I try not to go too deep into it until the one -- to me,irobot is who they grab it.

I want to keep things simple.

I do not want to own eight stocks in that sector, because i am planing on a very big trend.

But if you want to just own drones, there are stocks on the list, if you look that up you will find other stocks.

But i am trying to connect the docs between private equity, venture capital and public markets and irobot with the consumer and the tv ads, that is the name on top of mine.

Under armour -- thank you so much.

Howard lindzon with us.

We have the big lead up to the john's report.

However markets trading had of that?

A little soft, isn't it?

A little bit soft but coming off wednesday -- hi year yield and higher future prices as well.

Coming up in the next hour, the executive chairman of orascom will join us to discuss egypt on bloomberg television and radio.

? this is "bloomberg surveilance." market to look to this morning's jobs report for a signal of the goldilocks recovery while in europe arnie and draghi say no to bernanke and keep rates low for years -- carney and iraqi.

Smartphones making for series saturated market.

Feeling the pain in seoul as overnight samsung misses.

Is cupertino next?

Let's kill all the lawyers.

Not shakespeare.

Fewer billable hours to go around inside the lawyer bubble.

We will talk about the job market for lawyers.

There isn't one.

Good morning, everyone.

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

Live from world headquarters, it is jobs day , friday, july fifth.

Scarlet fu.

Adam johnson is in for sara eisen.

And our guest host this hour, from "business week" paul barrett -- from "bloomberg businessweek," paul barrett.

The european central bank and bank of england gave clarity on monetary policy.

They offered forward guidance for the first time saying they will keep benchmark interest rates low in definitely.

China has suspended the release of industry specific pmi data, as that economy slows down.

And of course, today is jobs day in the u.s.. 8:30 a.m., nonfarm payrolls numbers for june as well as the unemployment rate, which currently stands at 7.6%. corporate earnings -- samsung came out with luminary -- limoneira -- preliminary results overnight.

Here is some more for you.

There's is a report that hedge fund billionaire steve cole hen will avoid insider trading charges.

"the wall street journal" says prosecutors concluded they did not have enough evidence against him, the founder of sac capital.

Earnings come up short for samsung.

Talking about it all morning.

The company selling fewer galaxy s4 phones than expected and it is leading to more concern in the market for high-end smart phones, nearing situation.

Hard to believe anyone does not have a smart phone.

Like easy pass.

Why would you get on the highway without easy pass?

That crazy.

It has gone for bad to worse for baptista, the brazilian billionaire whose fortune has shrunk i more than 90% in a little more than a year.

Now he is suspending production and cutting jobs at one of design or mind.

Batista is trying to save his crumbling empire.

Like brutal.

Pennies per share, dollars per share.

He was worth about $35 billion personally and now down about $3 billion.

Still worth 3 billion, but 90%. the emerging a market -- the emerging market ibaka we have seen.

Paul barrett with "bloomberg businessweek." a terrific, brought -- perspective.

By basic idea is this is getting old.

The seventh year of this financial crisis.

Yes, it is better, yes, there is a recovery.

But for a lot of americans, we have not recovered.

Not only we have not fully recovered for a lot of americans but particularly people invested in the stock market are utterly baffled.

I know im.

I don't know what i exactly should be be doing personally in terms of approaching the stock market with these bizarre conditions particularly with fixed income and the ability -- inability to find decent returns.

You see the market turmoil.

The actor out of the jobs report, the central bank action.

"street smart" at meclose, everyday it is a mystery.

And it becomes so binary.

Excuse me, you can say binary at 3:00 p.m.. we don't allow that.

I'll just say it can go one way or the other.

How about that?

Remember when individual stories matter?

It will be nice when we can get back there and talk about individual company earnings.

I'll cola --alcoa kicks off next week.

How are you approaching it?

With other puzzlement -- utter puzzlement.

I am actually very much paralyzed at the moment.

The companies you cover.

You talk to all sorts of executives.

They are dealing with the tough economy with very little visibility but no promise of things changing quickly anytime soon.

I actually lately have been focusing a lot on the energy industry, big oil, and their prospects are quite good.

The shale revolution.

Companies who have seen enough in the future to be heavily invested in this country actually have quite bright prospects.

I go back to the "bloomberg businessweek lowe's quote article from three years ago which was robert schiller, peter or zach and henry kaufman and others talking about the new markets and the economy -- robert shiller, peter orzag.

The companies are doing well, but are the employees doing well and is the american jobs the economy doing well?

Or are corporations discrete and separate?

There are individual sectors and companies that are thriving, but overall we have the structural problems.

We have the persistent high unemployment.

We have structural problems like the problems with the tax code, our immigration system, and because of the logjam in washington, a lot of these things are not getting solved.

Does the government have the potential to help the process?

So far we have seen it hurting the process.

It has a lot of potential to help the process.

If we pass immigration reform and open the door to more skilled and high tech people from other countries to come in, it would be a huge step forward.

If we simplified the code.

The question is whether the partisan foolishness and washington will allow it.

As you read the tea leaves, let's start with immigration.

The senate said yes.

The house of representatives, that is a giant question mark.

Unfortunately i am somewhat pessimistic about the tea leaves.

I think the house of representatives has demonstrated over and over again, at least the republican leadership, that the primary goal is to stop president obama at every turn for purely political reasons.

If that happens with immigration reform, i think it will be a tragedy.

We have a number coming out this morning, and we will have all the data.

It still speaks to the structural problems you spoke of.

What is the prescription you would see to begin to jumpstart helping that underemployment rate in proof.

It is easy to say regulation or tax reform.

What is the to do list for the government here at 7.5% unemployment.

What we need to do to get almost anything done, to change the dynamic that exists in washington right now.

Unlike one of your prior gas, for example, i am not as to the mystic about healthcare reform.

-- unlike one of your prior guests, for example, i am not as pessimistic about healthcare reform.

We need to get a few things done to the political system gain some sense of momentum.

It has to build confidence.

Exactly.

But as you pointed out the republicans make clear they will do everything they can to stop obama in his tracks.

What we missed over independence day.

Carney speaks in london, gerard e speaks -- mario draghi speaks, and julia coronado -- we see an adjustment of how we treat the jobs report.

Julie, what were they trying to tell chairman bernanke?

I think they were trying to distinguish where they are versus where the fed is.

The fed is starting to signal that maybe they will be providing less accommodation . the ecb and bank of england stressed that we are not anywhere close to the exit or reducing accommodation.

In fact, the ecb is biased to provide more.

They don't like what they see and financial markets.

They think it poses a downside risk to their economies and i wanted to arrest that dynamic.

We go into the jobs report with futures up 13. the markets have already spoken.

Will they be satisfied?

What do you expect to see at 8:30 a.m., and will it drive equities higher?

The job market has been amazingly stable, and certainly we are expecting more of the same as far as that goes.

I think it would take a bitty -- pretty big surprise in either direction to really shake markets up.

A very positive surprise, something 250 or a bove would bring forward expectations of fed tapering and possibly be negative for the markets actually.

Likewise, something very weak might push back the expectations.

Kind of an inverse day -- that news is good news, good news is bad news, i think.

What happens after the jobs report, after the tension and drama of this friday's jobs report?

Next week, what do investors focus on?

Next week we do have a speech from chairman bernanke on wednesday at a big monetary policy forum.

We don't know what the topic of the speech is, but we would suspect he would use the opportunity to kind of recalibrate and set it to own and clarify where they are, especially against the of the jobs report.

I think that is what we are focused on next week.

Thank you so much.

Julia coronado from bnp paribas.

She is one of the economists that simply does not agree with the optimism -- she looks for a more tepid gdp.

Coming up, 45,000, the number of law students graduating each year in the united states with the average of $100,000 in debt.

Once they have their degree, -- there are layoffs happening at the law firms.

You come out with all of this debt and not only can you not get a job -- big law is shrinking.

That is coming up on "bloomberg surveilance" on bloomberg television, radio, streaming on your tablet and phone and bloomberg.com.

? good morning, everyone.

I'm tom keene.

Our guest host, paul barrett year that "the wall street journal" and now with "bloomberg businessweek." he draws our attention to the gulf of mexico.

The story moves forward.

We know lewisfreeh is involved in the drama "days of our bp." trying to resolve the massive liability from the terrible disaster in the gulf in 2010 where the company admitted it was making terrific mistakes.

We have moved from a situation where there is a dispute where the money should be moving out and to whom it should be given, to a potential corruption situation.

A federal judge in charge has been forced to a point lewis freeh, the former fbi director, to investigate allegations of kick back within the settlement facility paying out these billions of dollars.

While it has not gotten a huge amount of attention, i see it as a potential scandal of tremendous proportions.

Is it something discrete to new orleans and louisiana and the south or just business of usual?

Not necessarily discrete to louisiana.

We have a five-state region and one of the strange aspects is bp agreed to pay out money to people even if they were very far from the gulf of mexico.

They do not have to prove tight correlation between this bill and her economic damages.

However, the company said the claims facility has been paying out what they call fictitious claims.

Once you have a former fbi director on the scene you will eventually turn over rocks that will show ugly stuff.

Your reporting, with fienberg involved, who went down there.

He was involved in the first phase of the claims process and by most reports did a very, very successfully.

He got $6.7 billion out the door in about 18 months.

But as a result of the further settlement, the effort to move things forward, plaintiffs lawyers were unhappy with feinberg.

They thought he was too stingy.

That the federal judge to appoint a new man, and it is that new man now under the spotlight.

Iq so much.

-- thank you so much.

Coming up, the deadline to submit bids for hulu.

Disney and fox are selling their stakes.

We will tell you who is in the running.

This is "bloomberg surveillance " on bloomberg television, radio, streaming on your tablet, phone, and bloomberg.com.

? good morning, everyone.

"bloomberg surveillance." it is jobs day.

I twitter weston looks at clinical situation in egypt.

Should the president called the events in egypt a group.

Should the u.s. call the events in egypt a coup?

It is "bloomberg surveillance." i'm tom keene, as always, joined by scarlet fu.

Adam johnson is in for sara eisen, who is on assignment in italy.

And we also have paul barrett from "bloomberg businessweek here colette have top headlines right now.

Egypt's muslim brotherhood is calling for nationwide protests against the new government that was appointed by the military.

The army has cracked down on islamist after removing president morsi from office.

A number of muslim brotherhood leaders have been arrested and there is a travel ban on morsi and other officials.

The islamist are rallying in cairo now trying to, in effect, counter the protest we have been witnessing over the past week.

Moving to san francisco -- the computer -- commuter train system will be back in operation at the end of a four-day strike.

They agreed to extend the current contract or 30 days.

The strikeforce thousand in the area to commute by car, bus, ferry, or by bicycle.

It was an absolute mess.

A lot of people, as you can imagine, simply stayed home.

Moving down to southern california.

Sorry to say, at least 28 people were hurt in a fourth of july fireworks accident.

Apparently a wooden plaque or carrying live fireworks tipped over and then the fireworks shot sideways into the crowd.

Hard to imagine that horrific.

For people are listed in serious condition.

The accident took lace and see me valley, california, 40 miles northwest of los angeles.

Those are the top headlines.

Let's look at the industry on jobs day -- the ultimate grad school bubble.

Lawyer bubble.

No industry in greater distress.

The path from associate to partner is the least of a young lawyers worry.

Stephen harper is the author of "the lawyer bubble" and he joins us from chicago.

Good morning.

How did this industry get to this moment?

Obligated question.

I will try to make make it as simple as i can.

Perverse market -- complicated question.

I will try to make it simple as i can.

We have a record number of law school graduates graduating into one of the worst markets ever.

That is happening i think in large part because, first of all, you have undergraduates with confirmation bias to view the world the way going to view it and you have the means of -- deans feeling the bias with deceptive information about the employment prospects.

Of the 46,000 kids coming out of law school -- i say kids because they really are -- about half of them will find full-time long- term jobs that require a legal degree and they will have him as he also mentioned before the break, six-figure -- six-figure educational that.

Is there a distinction to be made between graduating from an elite law school?

You get.

There is a huge this insipid and there are about a dozen schools where they are able to put their graduates in jobs that are among the highest paying jobs.

80% of them are putting their graduates in jobs that actually require a long degree and there are full-time jobs.

But the overall unemployment rate for all graduates is dismal.

Let me bring in paul barrett, who has really looked at this issue for "bloomberg businessweek." good to see you.

Good to hear you, too.

But in this formula the role of the big law firms, those that get all the attention.

They changed their business model over the years and how does that factor into your analysis?

Start with the premise that mostly young people who go into law i think initially starting out not expecting they will make a lot of money doing it.

It changes pretty dramatically because by the time you are in law school a couple of years you realize you will come out with pretty significant debt.

In that kind of scenario, the most attractive options look like a big firms.

Big firms employee roughly 10% of all lawyers in the united states.

But they have an outsized influence.

The way the model has changed in recent years has actually created fewer opportunities for advancement within the firms.

So, the odds of becoming an equity partner in those firms, for example, are really quite small.

Maybe one out of 10 out of a graduating class.

That used to being what the situation was in the so-called toughest law firms back when paul and i were in law school many, many years ago.

Now that has become really the norm at most big firms.

Call it what you want, but the end result is pulling up the ladder on the entire generation of young people.

I want to talk about disruption from technology.

You have services like legalzoom that provide help with a document preparation.

At what one could they pose a real threat to the big law firms in their ability to build 5 -- bill $500 an hour?

Legalzoom is probably not one that is a big threat, but there are other kinds of services that are increasingly popular.

For example, there are services that will now on a computerized basis review documents for you.

It used to be you could stick associates in a room and four $300 or $400 an hour you can charge alliance.

Clients are increasingly pushing back and saying, what is going on here?

The dirty little secret that no one talks about is that somehow or other, equity partner profits at these places have soared.

They have tripled and quadrupled.

Even adjusting for inflation over the last 20 years.

So, it is coming at great long- term expense to the profession.

Thank you so much.

Stephen harper's must read is "the lawyer bubble." 40 years, scarlet, since "the paper chase errico that was a great movie.

-- since "the paper chase." 40 years.

Samsung earnings next on "bloomberg surveillance." ? . good morning, "bloomberg surveillance." an important interview, the outgoing chairman of the president's council of economic advisers.

Alan krueger with eddie lou -- betty lu.

Adam johnson in for sara eisen on this july 5. the jobs report is what you are fixated on.

Real movement in the markets.

Futures up 12. a higher yield, risk on feel, the dollar much stronger.

You see it in the euro dollar.

That is the middle of america crude, 101.77. the market dramatically on the move.

We can expect big moves after the eight: 30 number as well.

Did you know the deadline to submit bids for hulu is tonight?

The first round of bidding produced seven suitors including yahoo, directv, time warner cable and others.

There could be fewer this time around.

Why fewer this time around?

This has been a complicated and messy process from day one.

We of seen a couple of bidders, maybe not the -- as interested as they once were.

William morris was looking at hulu as a potential distribution for some of their productions they were creating.

We have seen them fall by the wayside.

Yahoo, maybe not as interested.

It has been busy doing other things.

Given the diversity of the bidders, it really would have made or it makes a big impact on the future of hulu, depending on who buys it at the end of the day.

Content is mostly everything.

You would think hulu would be -- it would be easy for them to have more interest coming in.

Why isn't that the case?

There is strong interest, but not as much as before.

The reason this is so complicated, it is like if you were to sell your house but you still have to negotiate how to get water and light and it.

Hulu is the front and, packaging other people's content.

What are you really buying?

Exactly.

The very people selling hulu 11 very significant stake in it because they are the ones providing a raw material for the distribution, so they have to work out potential profit sharing agreements and untangle this thing.

It is complicated.

What will this go for?

There is a lot of talk on both sides.

The sellers are talking the price up and the buyers are trying to undercut that.

We could see a price tag in the billions --in the billion.

But that includes debt and also paying fees for additional premium content.

Remember, there is hulu plus, which is not the ad-supported part of the business.

It is still not profitable.

Hulu has to buy premium content for that side of the business.

There are reports about senior management leaving hulu, and i cannot help matters.

It creates quite a bit of a problem.

They could not sell hulu a year ago, and now all of a sudden it is seven bids.

Who knows.

We will see tonight.

The bids will come in tonight, but it will be some time before we know who the winner is.

It will likely be someone with the pockets.

To be continued story.

Something you won't see on hulu but we'll see right here on bloomberg television, the nathan's famous hot.

Eating contest.

What a mess.

They have a new victor.

This was yesterday over at coney island.

Joey chestnut took on the prize.

How many do you think he ate?

69 hot dogs.

And buns?' yes.

The nearest competitor, a near 51 hot dogs.

The mean letters, they are un-american, unhealthy.

I love hot dogs.

Not 69 of them.

And they are not disguised as being healthy.

Struggling game maker zynga , a compensation package of more than $50 million.

Other bonuses and stock grants could add another $27 million over the next few years.

John paulson has hit a speed bump while trying to rebound from bad calls on gold and the economy.

Good morning.

It is "bloomberg surveillance." everything is out on our platform of media.

Ipad, radio on iphone and android and bloomberg.com . i am tom keene, adam johnson and scarlet fu are here.

I will be here at noon and 3:00 p.m. we will be here to pick up the debris after the jobs report.

Paul barrett is with us with years of perspective on business and investment.

I 12 -- tell people there are 12 super bowl's, one of them is the jobs report.

The structural issues are really front and center.

Anxiety in america.

Is there a lesser anxiety as the stock market recovers?

We are in a much better posit

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

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