Remembering D-Day: Surveillance (06/06)

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June 6 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests: John Herrman, Jeffrey Hayzlett, Nigel Travis, Alan Krueger, at Rick Atkinson. (Source: Bloomberg)

America is trading jobs.

Will your paycheck rise anytime soon?

Bnp paribas, deutsche bank, and bank of america single -- signal bedtimes for banking.

And d-day, june 6, 1944. remembering it.

It is friday, june 6. i'm tom keene.

Joining me, scarlet fu and adam johnson.

We will do much on normandy today, but right now let's get to our morning brief on economics.

Here is adam johnson.

We will start overnight in germany, where the inflation forecast for germany, affecting the euro area battle for price pressures.

From ecb head mario draghi, who put rates -- just amazing today.

Think about it, a -10 basis point deposit rate.

You pay them to take your money.

It is like a penalty.

Banks, we don't want your money, we will penalize you for it.

What else?

Economic data in the u.s. unemployment, first friday of the month, that means jobs.

Nonfarm payrolls -- bloomberg best for accuracy is with us today.

Consumer credit will be coming out.

A couple of earnings ash really just one.

Joseph a bank.

Go into the store, get one free.

That is joseph a bank, right?

Like by five, get one free.

On a serious note, today is the 70th anniversary of d-day.

President obama finished making the remarks at the ceremony.

That is a live shot you are looking at.

With so much to talk about.

The cemetery started two days after that he 44, later on.

You talk about on the unknown dead -- there are 307 unknown at this american cemetery.

One person from world war i, president roosevelt's son is from world war i. everyone else from world war ii.

Have you been there?

I have not been there.

I did not get there.

Michael mckee has been there twice.

The united states of america, you see the beach in the distance -- it is remarkable.

Rick atkinson will join us in the next hour.

We are thrilled to bring the great author to you to give scope and perspective in our next hour.

I was there as a boy, and the pillboxes are still there.

Those steel pillboxes that have been swallowed up itunes now, and you go inside the pillboxes number which was an eerie experience.

Pointing americans coming on the beach, incredible.

70 years after d-day, what is the best way to pay tribute to our soldiers.

Let's move on to a data check.

Currencies, commodities come up.

Record highs.

1940. i am not thinking s&p 500 yet, but there it is.

Quickly to the second screen, the vix showing those good market rates.

There is the dow.

We begin to look at the world cup, the real stronger in the next couple of days.

Here is the euro over the last number of days.

The drama yesterday, the market weekly getting it wrong with a weaker euro, then up we go, a bit of the surge.

Clearly the headline here, as we come right back to where we were.

Is remarkable how resilient the euro is because that is the central bank's possible to get the euro weaker.

Most of the pros we talked to, flows.

We scour the front pages of the websites today.

Our first front-page story, too big to fail banks are facing fines and regulatory pressure.

A shakeup, including a departure of a chief operating officer, negotiations with the u.s. to reach a settlement.

That continues.

The new york post had a summary with not a lot of citation, then focuses on the chief operating officer.

Bloomberg has another angle, a hodgepodge of -- we are looking for sacrificial lambs, so they are arguing over what will be involved.

It sounds like he is accepting of somewhat of a fine, but it sounds like an excise fine.

That is on the bloomberg.com website.

Arcos beat me about side fines, egg of america is in talks to pay at least $13 billion to resolve -- bank of america is in talks to believe -- it would provide at least $5 billion in release to consumers.

We talk of fines of $5 billion, $10 billion.

Deutsche bank is in the news as well.

The outlook for trading in the first quarter, second quarter, not so good after a 10% drop in the first quarter.

That is another headache for shareholders of deutsche bank.

Let's move on to our second front-page story.

U.s. stock markets begin today's trading, today's jobs report day.

Global bond yields fall to record lows.

We also should mention it is not just the u.s.. the german dax now trading on a record high after mario draghi made the bold move of not just cutting the deposit rate to a negative rate and lowering the benchmark rate, but also the package of stimulus.

The punch bowl used to be the atlantic ocean, and now it stretches to germany.

It does.

Maybe the pacific.

They will start -- they will stop sterilizing purchase of securities, and they will buy securities and that puts money into the system, and then they would buy back those euros via swaps.

That just puts more money into circulation.

8:30 a.m. this morning, the jobs report.

Record high wealth -- the net worth of u.s. households and nonprofits, including all assets minus debts and other liabilities, at an all-time high.

$81.8 trillion in the first quarter, when you do not include inflation or population growth.

This is a pretty substantial number here.

It is a big number.

I think it is misleading at the end of the day.

It is so skewed.

That is perfect.

Absolutely.

It is a number to be careful with.

Michael for rolling of jpmorgan, the economist, was quoted in "the wall street journal" saying that the wealth effect is only half as strong in the cycle.

Those are your front-page stories.

There we are.

The challenging market environment.

The too big to fail, bnp paribas beleaguered, scarlet just covering that.

Bank of america has a set of fines.

Brian moynihan has a headache this morning.

Then there is deutsche bank with some challenges to their trading business as well.

Liam cohan is a confusing editor, author of books on bear stearns and goldman sachs among others.

It does not end.

What is the effect of these fine?

They have become a blur.

$12 billion here, $13 billion there.

Do they have any effect?

They certainly have an effect on the coffers of the treasury, and they are definitely an implementation of what eric holder, the u.s. attorney general, had written about in a famous memo, that this is the way to settle with these big banks.

This is the way to move forward with these big banks to get them to settle as opposed to indicting them and putting them out of business.

It is a way to get it all behind us.

It does leave us all very unsatisfied, looking forward to accountability.

But it does get this behind them . when this is settle out, will there be ramifications for the american banks as we go after credit suisse and bnp paribas?

Ramifications other than big fines on others -- other shareholders money, i don't think so.

It sounds like there will be some senior heads rolling, whereas you never hear that about jpmorgan or any of these others that are getting ready to settle.

That just does not seem to be part of the calculus.

Be on senior heads rolling, do these big fines affect behavior or operations?

Do we see less risk taking as a result?

I don't think we see less risk-taking.

I think now once again we find ourselves in a very poignant moment or risk is being mispriced again.

You have seen it with junk bond yields at 5%, with light loans.

We are seeing banks taking all sorts of risks again.

When you can write the checks using shareholders' money and your stock goes up and your ceo gets a raise, i am not sure that sends the kind of message about accountability that we would like to send.

It does send the message that it is possible to get this kind of litigation behind you, which of course is part of the goal if you are a big bank.

Bill cohan, bloomberg contributing editor.

It is jobs day.

America is creating jobs.

Looking back to 1948 this past month of may was a barnburner for private job creation.

John herman joins us with mitsubishi.

And also a bloomberg contributor, jeff hayslip -- on-the-job economy, when does the wage growth kick in?

You have to enter what we call a cyclical portion of tight labor markets.

And as the economy progresses through that episode, the labor markets tighten and the wages?

When are we off that?

If i was alan greenspan and that completed data hawkeye person, we entered it about three weeks ago and each year that we stay in it, the wage pressures gradually strengthen and build over the course of the cycle.

We had a cycle like this back in the early-middle 1980's. also through most of the 1990's and the last decade.

It looks like we could be in it for a three-year spell or more.

This goes against going out of front of the wage inflation debate.

We have to get out in front of it.

Is there any risk that all the clampdown we are seeing, whether it is bank of america, bnp paribas, that that somehow derails their ability and therefore the economy will grow?

At the end of the day, you are spot on.

At the end of the day, it makes it a very difficult environment for banks to lend.

They become much more cautious in their lending attitudes.

The underwriting process -- i don't know if in the last year you have had to dry to buy a house in florida, but the application process is unbelievable.

I would rather do a cash deal in florida rather than take out a $100,000 mortgage.

Right now, let's get to company news with scarlet fu.

We start with general motors.

It fires 15 executives following an internal review into why it took so long to recall cars with defective parts.

A vice president for revelatory affairs and a senior lawyer.

The report blamed a lack of urgency in the legal department but did not find evidence of conspiracy.

A new revelation about government wiretapping from data phone.

There is government agencies listened in on -- on vodafone.

The report covers a 12-month.

Through march of this year.

High-speed traders may be facing new roles.

The sec chair is ready manning that -- she says operators should have to provide the sec with their methods for matching buyers and sellers.

That is company news.

Wal-mart, the stock is 2% this year.

The s&p is up 5%. what does the ceo, doug macmillan, say at today's annual meeting?

This is bloomberg "surveillance" on bloomberg television.

We are streaming on your phone, bloomberg.com.

Good morning, everyone.

Bloomberg "surveillance." this morning, mohamed el-erian, the former pimco chief, executive officer, now with elian -- 9:00 this morning.

Tom keene with scarlet fu and adam johnson.

We want to start off with company news because walmart is kicking off its annual meeting in arkansas today.

It is usually a pep rally atmosphere.

You have 14,000 attendees including 3000 walmart employees flown in for the event.

The ceo, doug macmillan, will head up the event.

It will be interesting to see what plays out because they have so many issues they are battling, including disappointing performance at home.

Jeff hayzlett, our host for the hour, bloomberg contributor, former chief marketing officer eastman kodak.

Wal-mart's advantage does not seem to be working for them anymore.

They are starting to be the poster child for bath -- for bad jobs or that paid jobs, just like mcdonald's has become the lightning rod about everything for fast food or healthy food.

Look at walmart.

They are still 50% on the family.

When you look at the roots of the company, it is not the kind of thing you would like to have.

A lot of workers will be going on strike across 20 cities as walmart hosts is annual meeting.

Full-time workers on average earn $12.81 on average.

-- $12.81 an hour.

That is the average.

A lot of employees are still on minimum wage, and i think that is a huge debate.

When we take these that when we start to see these guys taking packages of $298 million for the top executives, and the normal worker receiving that a dollars $.62, it is a tough one to take.

They are still dealing from fallout from the bribery investigation at the mexico division.

A lot of executives secretly left.

They have been gone.

The new ceo has been around a couple of decades in walmart, and he is making a lot of the changes you are seeing at the top.

A new regime is coming in and looking at the company in a different way.

It is the ultimate aircraft carrier, 2.2 million employees.

The scope and scale is unimaginably with.

How do you do a marketing plan for something that is such a fabric of this nation?

They stick to a single message, which is a very important thing.

They have to do that.

Value of the day.

They are the largest employer in every single state in this country, the largest employer, other than the federal government.

You are a marketing guy.

You show up and say you are a marketing guy.

What is the prescription?

Overall what they have done, you stick to the tried and true.

They are a retailer and they will never get away from it.

I was at the walmart annual meeting today a year ago.

They had tom cruise there, they had the guy -- the aussie with the beard.

What is his name?

Hugh jackman.

They were trying to get them fired up.

Here is the team from brazil, from mexico, from france, from massachusetts.

Does that actually work?

It does because it creates that camaraderie.

That has been part of their core.

They start every morning with a pep rally inside the store.

This is what they do.

I have always done this.

When you come from that background -- i know some executives went in there to try to paint their office a different color at the headquarters than the gray, and she had to leave because there was such an uproar, such a scandal that she would paint it a bright color.

So you have got to stick to the formula.

Speaking of the formula -- do you have to wear a tie at walmart?

You can.

I don't know about everyone else.

The key thing is would you want to, i think is the bigger question.

Would you ever wear a bowtie?

Coming up, in the next hour of "surveillance," alan krueger, former chairman of the president's council of economic advisers, will be our guest host.

We will be right back.

Good morning, everyone.

"surveillance" with tom keene and scarlet fu and adam johnson.

Here is adam johnson.

A 26-year-old man armed with a shotgun opened fire at a small christian school, killing one, wounding three before being pepper sprayed and subdued by students.

A second mass shooting on or near a campus in two weeks.

And sylvia mathews burwell has been approved by a 78-17 vote.

Remember the democratic caucus voted in favor of her.

She will have to fill the -- she will have to hit the ground running.

A variety of legal challenges, some new, some old, this fall.

And the 70th anniversary of d-day is today, landing on the beaches of normandy.

In an early-morning ceremony on omaha beach, veterans who barely were out of boyhood when they fought that day, returns to honor the memory of their fallen comrades and give thanks for victory.

President obama delivered the speech , saying it spurred democratic movements around the globe.

Right now our morning must-read with scarlet fu.

My morning must-read ties in with the respect for soldiers with the controversy to release sergeant brough bergdahl -- sergeant bowe bergdahl.

"president obama is right.

It does not matter if he is a confused young man.

The debt that we owe to fellow americans is not based on individual merit but on citizenship and loyalty." i will suggest this issue will not go away.

Every day it is just tumbling forward.

We will talk about this, in 20 14 and 2016 as well.

It is one of those things that is hard to prove, actually what happened.

There are one million series and more opinions than that.

I would also suggest the military system.

This is not new.

In other words, we have seen this before, where there are american soldiers who have been sadly disenfranchised, and there is a system for dealing with this.

It all comes back to the fact that we do not have a draft, so those who serve our country are doing so on it voluntary basis.

Is -- it is something we will continue to discuss.

Coming up, what should you focus on in today's government jobs report?

John hermann tells us what he will be watching.

This is bloomberg "surveillance ." the president of the republic of france, he is hosting world leaders today, including queen elizabeth ii.

There with the prime minister of the united kingdom.

Rick atkinson will join us in our next hour.

We are really honored to bring him to you today, the continuing pageantry on the shores of france.

This is "bloomberg surveillance." we say good morning to you from new york city.

This job stay.

-- jobs day.

S&p futures up.

The euro, a bit of a bid off yesterday's gyrations.

Suddenly, optimism and out right ugly -- out right glee.

Our guest host, john hermann wrote a spectacular note two days ago on the granularity of this quarter's gdp.

He joins us now.

Do you join bill gross with the new neutral?

Yes and no.

We have within our ability as a country to implement the right kind of policies that can really get us back to 3% and beyond.

We are not quite doing it because we seem to be embattled without to resolve all the issues from the mortgage crisis and so on.

The longer we stay in the end zone, the longer it takes to implement the things that get us . you presume that the optimists will pull back to a middle range?

It is not just about this year's growth and so on.

When we look ahead, our concern is that we have this enormous wave of retiring baby boomers.

We are talking about an excess of 300,000 per month legally with full rights to claim their retirement and exit the labor force beginning 2016, 2017. that is going to dampen growth.

Unless we start to replace them in the labor force -- the offspring is just too few.

The headline here is john hermann needs immigration to get back to 3%. every decade, you go back to the founding years of the country, we need it now again and we need it more than ever.

Carlos gutierrez would support that.

Any number of people would.

Imports, we found that on wednesday, a new record high.

We are consuming a lot and yet you are lowering gdp.

When we import from abroad, that says that our domestic production is less.

Our overall gdp is less.

We are meeting our needs abroad.

So it is stealing away from domestic.

We are not meeting our own turns -- needs internally.

Scarlet you mentioned a boom american economy.

What you are really seeing on the north dakota side, a big huge boom.

Who knows how long that will be relapsed.

You are seeing jobs being created by the shell oil expiration.

If you look at the job growth amongst drillers and people who work in that area, it has been spectacular since 2007. that is one of the real bright spots.

They are building housing, they are boasting -- building cafeterias.

Do you agree with bmp para bought that we are not going to get -- paribas that we are not going to get projections?

The global world gets back.

There are a few important things.

When we look at a nonseasonally adjusted.

Data print, month on month, we have the eighth best may since 1948. there's a good chance that we print the force -- fourth best may.

But it's a quality job growth?

Tom, that is another issue.

Lots of qualifiers.

We are leading driver of the world in terms of knowledge-based economy and we produce tremendous jobs that pay well.

We have a shortage of manpower to meet the needs.

At the high end.

When the rest of us go out and we make our money and we spend it, we are so cautious.

We spend money on vacations and this and that.

Hospitality jobs go up.

We criticize that.

That is where we're spending it.

We by the ipads.

We by the iphones.

When you look at the commerce department and you say, is apple a retailer or a producer?

They say apple is a wholesale retailer.

They manufactured overseas.

You are talking about the consumption side of the equation.

Should we be focusing on wages as the best gauge for consumption?

Consumption is a very big pool.

The people at the top or saving a lot because we are a very costly environment.

You have to look at it broadly.

There is a wide range of pay scale and performance results.

For the lesser skilled, no question.

Bill gross gets the headlines with the new neutral.

How do you define it?

The best way to think about it is that the economy's potential is a growth in the labor force plus a growth in labor productivity plus innovation term.

That is the simplest formula.

In that, our labor force is going to be stagnant.

Historically, we averaged 170,000. we currently have 04 labor force contribution and productivity is dan.

-- damp.

Labor force participation is the lowest we have seen.

We need to start moving forward and think about how do we really grow and bury the hatchet on a lot of the other things.

It would be great to focus on growing again.

All because of the trade balance report.

A lot of issues.

A lot more nuance.

Coming up, "oranges the new black" is back for season 2. the number of real prisoners is falling.

? good morning, everyone.

"bloomberg surveillance." it is a very exciting weekend for anyone who is a big fan of "orange is the new black." season two premieres today.

We want to give you a real-life glimpse at the real-life prison population in the u.s.. after rising every year for more than three decades, the size of the u.s. prison population has been dropping for three years in a row.

Kind of surprising, given that prior analyses but the total prison population size.

He is looking at admissions per million residents.

We are at a two decade low in the prison admission rate.

That is curious.

The economy is coming back.

It is nowhere near where it needs to be.

Crime turning down, i don't know what to make of that.

That is actually good.

It is not necessarily what you would expect.

What i know for certain is that it is a hugely contentious issue.

The percentage of people behind bars, the demographic issue -- make up.

There have been allegations that prisoners are producing goods for companies that we end up buying.

What does it say about this television show?

This is another example of tv outpacing the movies, isn't it?

Jeff, what is it?

I remember when hbo introduced "oz." what is this fascination about what happens behind bars?

I don't think it is just about behind bars.

I think it is the glorification of bad.

I think it started with "the sopranos." now you are seeing these cult hits that are just online or just by demand.

You are able to see "house of cards." these series that are coming out of the woodwork and you get to see them all at one time.

The damaged hero.

We like to see the knotty -- naughty and be able to compare it to those guys.

I think nudity, sex, it sells a little bit.

[laughter] we should think of that here.

[laughter] futures up.

Dow futures up.

It is d-day.

Adam johnson gets us started on photos with three images.

We're going to start with the first one here.

A world war ii veteran saluting as he looks at 20,000 british legion union flags.

Planted on the sand the gold beach.

If like for every british soldier that died.

-- a flag for every british soldier that died.

The effort by the canadians, as well.

They really stick out for a full commitment, not only on d-day, but the many months afterwards.

They certainly did.

Our second photo, a father and his young daughter at omaha beach.

The site of the commemorations.

We forget.

There really are people living there.

It is a real beach.

All of these years later.

Having gone back there myself, it is a real beach.

Amazing, isn't it?

Our number one photo.

U.s. assault troops landing on omaha beach during the invasion.

Incredible.

130,000 allied troops.

By the end of the day, more than 10,000 people had been killed.

The distinctive feature in the early morning hours was we drop a lot of bombs and they did not meet their targets because of the terrible weather.

They were off by football fields.

That meant that it was a much more difficult landing.

The complexity.

156,000 people planted on the shores after that first day.

Some places there was room movement inland and other places it was a question of just yards.

My morning must reads from "the new york times." i tweeted this out.

I urge everyone to read this.

It is amazing.

Right?

He is now in sweetwater, tennessee.

Jeffrey hayzlett, so much of this goes to the mechanization of the process.

Metal overwater.

I think about what it would be like to be there.

My father served in the military.

My uncle was over there at the same time.

You think about this.

You see that picture there.

What are the digging up even today?

I own a place in south dakota.

I'm still digging up wide and wheels from the 1880's. i can imagine what they are still digging up.

One of the most amazing things of this was roosevelt and george marshall's support of dwight eisenhower.

There were like 18 general senate room fighting like cats and dogs.

Patton gets the press because of gene hackman in the movies -- excuse me, george c scott.

Americans love a battle and will not tolerate a loser.

Very good.

Americans love a winner and wilma tolerate a loser.

There were so many others involved.

In different cultures.

He was dealing with all of these different generals from different armies and different cultures.

That is not an easy thing.

Imagine just dealing with americans.

It was patton who had to hold back and could not go into paris because they want to de gaulle to go into paris and reclaim paris.

My father was in north atlantic and talking about the doorman u-boats -- german u-boats firing.

I was working in london a couple of years ago and i was close to the va hospital and i go over to the post office and i see the older guys.

There was something very traditional amongst all the different -- that age around the world -- they had so much character, these people.

Very humbling to be around.

It is the perfect segue to our twitter question of the day.

What is the best way to pay tribute to our soldiers past and present?

I would suggest a handshake between mr.

Putin and mr.

Obama.

Tweet us.

We will be right back with more.

? good morning, everyone.

"bloomberg surveillance." "bloomberg businessweek" goes tech.

It is a smart issue.

Thought-provoking.

Look for that.

It is job stay and -- jobs day and d-day.

Adam johnson is our most -- has our most important story of the day.

It is national doughnut day.

We are joined by the dunkin' donuts ceo.

I am degenerating -- dedicating the next 10 minutes to their most portal customer, tom keene.

[laughter] we have a pool about how many donuts he will lead.

How many did he eat last time?

Four, over a short period of time.

You are opening stores in southern california.

Why so much all at once?

I do remember the four.

It is global doughnut day.

I must say, we have a great brand.

We're expanding around the world.

We're going to california.

We are moving california up.

That is exciting heard -- that is exciting.

Texas, germany.

We broke our own world record.

The thing is, you are expanding in a lot of places.

I know you are making a lot of money, you have been growing scales -- sales up to 20%. is there a point when you grow too fast?

A lot of investors do not think we are growing fast enough.

It is interesting to hear the other perspective.

We grow where we think franchises are going to make a lot of money.

I am obsessed with franchise economics.

We have moved the number of stores who make money in the first year up dramatically -- we have doubled it.

We want to make sure that we maintain.

Continue.

Please.

[laughter] we want to make sure that our franchises make money.

If we go too fast, we fear we are going to open up some markets that don't work out.

It is a check and balance.

This year, we think we have the right balance.

Don't talk.

Your mouth is full right now.

Can tom wander into a dunkin' donuts anywhere in the world and expect the same thing?

We actually do customize it.

On global doughnut day, we have this doughnut that is in front of us.

It was in front of us.

[laughter] we have a smiley face doughnut around the world.

On our website, we are featuring different doughnuts from different places around the world.

I did a show as part of c suite for you guys.

You talked about moving into fast casual.

How has it been to expand to more than just doughnuts?

Most of your sales come from coffee.

How is it going with the fast casual?

The move into a broader menu has been going on for a long time.

The area that has developed well is breakfast sandwiches and bakery sandwiches.

We launched a new grilled chicken flatbread sandwich.

I have been moving around a lot this weekend i have had it three times and it is fantastic to read it is a great sandwich when you are on the go and you want to pop it in.

The coffee is going very well.

Now in the summer, it is cooled off.

Dunkin' donuts is famous for those.

On behalf of the investors, if it is going so well, you have 25% profit margins, net profit margins, why do you up your dividend again?

You could afford to pay more.

Come on.

We possibly could.

Some investors mentioned that to us last week.

We will continue to look at that.

We tend to review our dividend once a year.

Don't be a stranger.

In honor of d-day, i will go for the french curler here.

Before i do the forex report come let's go to the forex report will it take my first bite.

I can't do both.

Scarlet, do the forex report.

Euro versus the dollar.

As tom finishes.

Coming up, the princeton professor alan krueger will be our guest host.

? america is creating jobs.

It will your paycheck rise?

World leaders and those that thought are gathering in normandy to remember d-day, 1944. good morning.

This is "bloomberg surveillance." it is friday, june 6. i'm tom keene.

Joining me as adam johnson and.

Our guest host for the hour is alan krueger, he is the former chairman of the president's council of economic advisers and professor at princeton university.

Let's get to adam johnson.

They are lowering their own rates in germany.

It is in part why the head of the european central bank lowered interest rates to a -10 basis points.

Go make loans and stoke some growth.

This is what we have got.

At 8:30 a.m., we have the jobs report.

We are looking for a headline number.

John herman was just talking about that.

We will talk about it again in the next hour.

At 3:00, we get consumer credit.

We should point out that it is also the 70th anniversary of d-day.

Do we collect a celebration?

I don't know what the right word is.

I think there is a touch of that.

There is no word.

I thought the president's comments was just outstanding.

That brings us to our twitter question of the day.

70 years after d-day, what is the best way to pay tribute to our soldiers must mark lee's between this.

This is a bank driven company news.

The pressure is mounting.

Banking regulator's are pressing the france bank.

They want another executive fired.

It is part of negotiations with the u.s. over sanction violations.

There is a $10 billion fine possible.

Bank of america may give $5 billion as a settlement.

That is according to a person familiar with the discussions.

U.s. prosecutors are seeking $13 billion from bank of america to resolve mortgage backed securities.

Deutsche bank sales come with a warning.

They're telling investors about a trading slump and possible damage to business currency rating.

They are seeking to raise a leaven point billion dollars.

This a special on a job stay.

What is a fair wage?

This has to be applied.

Nigel travis is the ceo of dunkin donuts.

We have both of them here this morning.

Let me start with professor krueger.

Is a $15 minimum wage in seattle not something that can be handled?

I think it was unprecedented.

They had a nonpartisan group put together the came up with a $15 an hour recommendation over a. of years.

That could set a model.

I think would be better to have a more reasonable national minimum wage and i would prevent some these local movements.

In seattle, they can handle relatively high minimum wages as long as it does not go up too quickly.

What we have seen the last couple of days, state-by-state minimum wages.

If you look at a chart, we have come back from the abyss of 2005. we are still nowhere near some of those federal minimum wages of the 80's and 90's. nigel travis, you are in the trenches.

Are you going to get crushed in seattle?

I think it is out of a normal range for minimum wage.

You mentioned a state-by-state, i think you also mentioned what the local economy can stand up.

We support a state-by-state minimum wage.

$15 is higher than the california.

Does that automatically lead to other wages coming up as well?

There is an element of that.

The real discussion is about jobs.

There is an element with businesses, small businesses, are you going to stop people from expanding?

Are you going to stop businesses?

A company like ours is going to grade 8000 jobs this year.

We support minimum wage.

We support them wage state-by-state.

We don't support the federal idea.

You have to pay the correct wage on a state-by-state basis.

The correct question is getting people into the workforce.

Youth unemployment is never discussed.

If you take the age range between 16 and 29, it is 15.8%. that is nearly as high as europe.

What this industry does is creates jobs for people coming into the workforce and gives them the experience.

70% of people who come into our industry are promoted within one year.

You wrote the paper on studying the impact of higher wages for fast food workers in new jersey.

You found that it did not destroy jobs.

Can you respond to nigel on this quest to mark --? i don't think the federal -- i think the federal government should set a floor.

What we found them but others have found is that when the minimum wage goes up, the franchisees and fast food restaurants and other low-wage employers can adjust by improving productivity, seeing turnover declined, reducing food costs.

They have very high turnover.

Most of the workers are not teenagers who were for two before.

They tend to be workers supporting a family and getting a lot of government support.

There is a lot of assistance for the government to provide.

The minimum wage is well below where it was when ronald reagan was president.

People don't have enough money to go shopping.

They see more customers with the minimum wage goes up.

That is good for business and the economy overall.

I wanted you to pick up on that point.

Many meet workers who make minimum wage are not teenagers, they are supporting families.

I don't think there are too many disagreements between us.

It is undoubtedly true that there are older workers.

The point i was making was we forget youth unemployment.

The point you are making is true.

We have older workers.

Remember that number, this is a great way for people getting skills and the national restaurant association has a campaign about getting people into our industry.

It gives you skills about customer service in dealing with people.

At the same time it, they get higher wages if they progress.

Retail in general is a great way to get to higher levels.

We have a shining light here during.

This is what gets us going.

We have to invest money into any kind of job.

What we found in the 1980's a missile that drop in the value of the minimum wage.

Anglin has a minimum wage well above ours.

They have seen no reduction of employment.

Employers can handle a minimum wage that is higher.

I think it would be good for the economy overall.

What is the right minimum wage for dunkin' donuts?

I think it's on a state-by-state aces.

California is going to nine dollars in july.

New york is going to $8.75. most pay above the minimum wage.

If you took those two states and some have lower wages, i would say eight dollars is probably a good number.

You don't agree with that.

I can see alan krueger falling off his chair.

The president proposed a nine dollars an hour and there was a lot of support for that.

I think it does cost businesses some profit.

I think they can afford it.

They are making record profits.

We are quite clear.

$10.10 is too high.

I think.

We're going to go to break year with a fist fight over the minimum wage.

Every month there has to be a donut.

We'll be right back.

? i am tom keene.

Our guest host is alan krueger from princeton university.

Ofcan there be any confidence in draghi economics?

This is fascinating.

People say this is a way for alan krueger.

We would have to write a new textbook for the european crisis.

Draghi has been writing it.

The problems europe is facing are different than the ones we are facing.

I think she -- he has done a remarkable job keeping the euro together.

It is remarkable what they have been doing.

This goes back to world war ii and the to unify.

I have heard many germans talk about the need to stay solidified.

It was at risk two years ago.

Drawdy said he would do whatever it took to keep them together.

He has done that.

I have been surprised by the commitment.

Portugal, spain, italy, they have gone through tremendous amount of payment to stay together.

What is your confidence that we can move from money and banking over to the real economy?

That draghi can actually help growth and job formation western mark --? i think he is done everything except the kitchen sink.

The most surprising and impressive thing he did yesterday was issued the negative rate.

This $400 billion euro fund is in the real economy.

We will have to see how that is implement it.

We had a much smaller program than that called the small business lending fund in the obama administration.

It was successful.

I would like to see how that works in europe.

Can you state all clear for the edit -- american economy?

Have we moved on?

We still see the scars from the crisis.

Ec it in a weakened consumption and long term of implement.

It is recovering.

If we don't have a real shock, and external shock from abroad, we will continue to recover.

He is a former chairman of the president's council of economic advisers.

We will take a look at the course of the moment, california chrome.

This is the belmont stakes this saturday.

Stay with us from new york city.

This is "luber surveillance." ? good morning, everyone.

It is june 6. i am tom keene.

With me is a scarlet fu and adam johnson.

Our guest host is alan krueger.

Let's get to the top headlines.

We're going to start in seattle.

Another on-campus shooting happened at seattle pacific university.

A 26 euro man opened fire at the small christian college.

He killed one and wounded three.

This is the second mass shooting on a campus in just two weeks.

The senate has confirmed a new head of the department of health and human services.

She has been approved by a 78 to 17 vote.

More than half of the republicans voted for her.

She will have to hit the ground running.

World leaders joined veterans and commemorating the 70th anniversary of the d-day beaches landing in normandy, france.

That are into her rarely out of boyhood with a font that they returned to honor the memory of their fallen comrades.

President obama gave the speech at the american cemetery.

It has spurred seven decades of democratic movement around the world.

I am awestruck.

The images are powerful.

You realize, wow.

We will go to normandy this hour.

Alan krueger is with us from princeton university.

I have a story about the invasion which i think is remarkable.

There was an economist from stamford who is in the military then.

He was in the weather forecasting unit.

Before the invasion, he was asked to make weather forecasts.

His response was that is a long way off.

We are generals, we'd weather forecasts the plan.

Economic policy is like that.

You need to make forecasts of how the economy is going to work 10 years out to make a budget.

The weather was a key factor.

One of the advantages the allies had was we had better weather forecasting.

There would be a storm and that would make it more difficult to invade.

Those factors mattered in the invasion.

We will talk to rick atkinson coming up.

Our twitter question today deals with normandy and the festivities there this morning.

70 years after d-day, what is the best way to pay tribute to our soldiers question mark the news continues.

We have some breaking news from ups.

They have appointed the coo as the new ceo.

Both of these moves are effective on september 1 of this year.

He becomes the ceo starting on september 1. the chairman will remain but he will retire from the ceo role.

Deutsch bank and bank of america are in the news today.

What we you need to see on monday and tuesday?

That is difficult to say.

What we want to see is some kind of settlement.

We would like to move on.

We would like to lay out our strategy.

This issue is hanging over them.

Even the $10 billion, moving on would be positive for the stock.

They seem to be the challenges industrywide.

Is that true?

I can say that these issues at bp and other banks are universal.

In terms of libel and a foreign exchange and money laundering and sanctions, the list is endless.

You have your own problems in terms of the mortgage market as well.

$10 billion, this is five quarters were the profits.

As an analyst, do we look at this as a one-off look the on that and the 22016? i don't think litigation is a one-off anymore.

We we leave it in there.

It should not occur again.

And as a major impact on capital.

Fortunately, this is a bank with large european banks.

They can afford it.

When we talk about these two big to fail banks tom a --, who benefits from all this?

Is it the japanese banks?

They are openi to buying?

I hate to say this, it seems not so much to big to fail but to big not to afford.

I think in the main, the big banks will be hit and hold onto the market share.

We have seen some things from the investment backing market.

People like ubs and barclays, we can make returns anymore.

Thank you so much.

We greatly appreciate it.

Terrific perspective on the european banks.

The equity markets shrugged off.

Futures are up as well.

Right now we are about 50 minutes away from the jobs report.

What happens next?

Are we geared up for economic activity?

We will discuss on "surveillance." ? this is "luber surveillance." i am scarlet fu here with tom keene and adam johnson.

We start with gm.

They fired a executives after an internal investigation on why it took so long to recall cars with defective parts.

Gm blamed a lack of urgency in the legal department but did not find evidence of a conspiracy.

Luxury cars is a three-car race again.

Toyota's luxury marquee outsold them for the second time in five months.

They tightened the gap with bmw.

Lexis has its first compact crossover coming out later this year.

Jcpenney is convincing creditors it is not going away anytime soon.

They have dropped below the price of protection.

That relationship has been inverted.

They are trying to date their way out of $2 billion in losses over the last three years.

Let's go on to something i know everybody is getting ready for.

The belmont stakes.

Will california chrome take home the trickle -- triple crown?

For more on playing favorites, we bring in eric cham he.

He is the favorite going in.

One thing we find is there's so much more money in races like this.

You are looking at $100 million this saturday.

That is two to three times you would see in the entire country in a horserace.

You have all these casual founds -- fans at making stupid bets.

That is where the opportunity lies.

What, mistakes two people make?

There are four things that were pointed out to me.

The first was betting on the favorite.

They do that more than the odds should suggest.

The longshot, everybody wants the lotto ticket.

Give me a couple of bucks on the worst possible course.

There are some superstitious things.

People will bet on whoever is in post position seven.

Regardless of what course is in that position.

These are things that work against you.

You don't want to make those rookie mistakes.

I am sure there is something mathematical, -- my dad.

My dad.

-- my bad.

We are sitting here with alan krueger.

These are the only people that i know but got permutations correct.

I don't think it is a vice in moderation.

The research suggested people don't bet enough to show, they bet to win.

Coming in the top three is good enough.

The odds of winning are higher.

That is one tidbit i have you -- learned over the years.

There are people who get carried away.

This is what i want to get to.

In the preakness, california chrome paid the same amount for winning as well as placing.

Statistically, where is it?

That is the option.

This is a rare opportunity.

California chrome is a big brand.

Everybody bets on him to wind.

People forget about the horse that comes in second.

The betting pool is so focused on him winning and so against him and finishing second that the odds skew toward each other.

It might be best to lay some of the top two.

You get the first or the second.

You get that second option for free.

You mentioned post a seven.

He will be racing from post two.

For people like us who are not hard-core racing bettors, we stay out of things like that.

Those get you caught.

Look at the free trades.

We understand in vegas that the house wins.

Who wins here?

Is it the track?

The track wins for sure.

The state of new york wins for sure.

The people who get the right bets, they win the most.

My money goes to the guy doing better mathematics and i were could.

What do you think?

I think california is going to win.

What time is the race westmark --? california chrome.

Let's get you a data check right now.

We have the jobs report coming up in just under one hour.

Ahead of that, futures are trading higher.

The 10 year yield is up.

Good morning.

We are on bloomberg television and radio.

Look for our interviews on a digital media.

I am tom keene.

This job stay.

Our guest doses the former chairman of the president's council of economic advisers, alan krueger is with us.

We expect a robust report on job formation.

We will put a measured and positive spin on the report.

After leaving the white house, he is the former advisor to the president.

That is the word of the moment, slack.

I like to use the word effective slack.

There is a lot of slack.

My concern is that many of the long-term unemployed are getting increasingly discouraged and dropping out at a higher rate.

We saw the last month.

Labor rate persist patient got worse.

-- participation got worse.

The amount of slack is declining.

More of the unemployed are getting jobs.

Do you have the confidence that we will get below six percent?

That the structurally unemployed will find work?

I am somewhere in between.

Some will find work.

We need to help others come back and prepare them for the jobs that are available.

We need to create jobs that are appropriate for them.

As we talk about labor force participation being low, people have given up and they are not being counted.

The population is getting older.

There are fewer people.

It can you separate those?

The estimates are low -- over the map.

This is a result of the workforce getting older and people retiring.

That was anticipated.

When you go back to the economic reports under president bush, they were anticipating that happening now.

It is happening at an accelerated rate.

Many of the long-term unemployed are older and get discouraged and they do retire a little bit earlier.

As we look at the numbers and move away from them, there is an essay in the or times about why you hate work.

There is one art of astronomy.

The mind -- a demand for our time is exceeding our capacity.

Technology is a burden.

We haven't learned how to deal with the technology around work.

You're always in touch with work, with your blackberry or iphone.

People have a funny relationship with work.

It is important.

People are satisfied with their jobs.

At the moment they find it stressful and unpleasant.

It is a challenge for companies to make it more engaging and raise productivity and make it good for the company and worker more out.

It is good for the company it -- country of the long run.

These things seem commonsense.

Companies sell for a lot of stock in doing it.

It strikes me as curious with the lack of talent options out there.

Companies are learning.

Hopefully they will learn more quickly.

We need better sources as the population growth slows down a people retire.

Companies have a short time of perspective.

Don't think about investing in morale for the long-term.

Some companies are doing that.

You are going to teach a freshman seminar this fall.

What would be your major message to the best and brightest of our 18-year-olds?

I don't know how i claimed it will be yet.

You mentioned a key problem, the hangover from the recession.

We will look at the budget deficit.

We will look at economic development issues.

We will look at any quality.

I want students to appreciate how they think through a problem.

It does not give you one answer.

It gives you a very powerful method for analyzing the pros and cons.

You are very welcome to come.

I am all over that.

We want to bring our twitter question are they.

What is the best way to pay tribute to our soldiers?

Tweet is.

? good morning, everyone.

Next week, the world goes to rio for the world cup.

Have exclusive coverage from the global sports event of the year.

All of that next week.

I believe the canadian schatzker will be attending the world cup.

Our favorite place is putting up a big screen on the wall.

If they are going to have every game.

We will go up 69th street here in manhattan.

Before we go up and have a beverage of our choice, what are our top headlines?

Classified military says boberg doll has a history of leaving his post.

He walked away from his post of his own free will.

It stopped short of concluding that he intended to permanently desert.

North korea is said to have detained a third u.s. citizen.

An american male tourist was seized in mid-may before he left the country.

The man was held by authorities for leaving a bible in his hotel room.

The miami heat did not live up to its name.

They lost to the san antonio spurs in the opener of the nba finals.

That is the core temperatures soaring.

The conditions took lebron james out of the game.

He sat on the bench lift -- wrapped in ice tiles.

They couldn't play because it was too hot?

He won the game.

It was ugly hot.

As an aside, we were showing earlier pictures of the california chrome with those puffy things around his legs, they do that with courses as well.

They wrap ice for the same reason.

We do that on bloomberg radio all the time.

We wrapped our legs in ice.

Let's move on to betty liu.

I have my dunkin' donuts coffee.

Thank you guys.

I have my dumb it's as well.

Speaking of sports, the nba and the nhl and you have the world cup, the former ceo of img is going to be join us as our guest.

He is going to be on with the jobs numbers.

He is now the interim ceo of bacardi.

The confounding pattern that we have seen in the bond market has been incredible.

Betty liu, "in the loop" starts in about 15 minutes.

Coming up, oh well california chrome win the triple crown this week?

Do you think he is going to win?

Yeah, why not.

This is "bloomberg surveillance yuriko ? good morning.

I am tom keene with scarlet fu anatomy news -- johnson.

We have breaking news.

It it has to do with the british market regulator.

They're looking to find a joint bank trainer -- traitor.

They will find him for 10 million pounds.

This goes back a few years.

This of the largest penalty ever against an individual.

Deutsche bank is warning investors that this is a difficult operating environment because of issues like the international currency rating and interest-rate rating.

This is separate from the actual financial crisis.

You have to wonder, this stream of news we have had in this friday.

When will it peter out?

We will wonder what the numbers will be.

They are held in some countries launder money illegally.

Bank of america this morning as well.

If you aren't executive trying to deal with all of this -- it doesn't seem to be changing their behavior.

And has not led to less risk-taking.

Alan krueger is with us from ricin universal -- princeton university.

The man in the hot pink shirt will step into the limelight.

He is a likely choice to run the combined company if the merger with sprint goes through.

The agreement could be announced as soon as july.

Twitter is boosting its mobile ad power.

They bought namo media yesterday.

They will bring the technology of native advertising to twitter.

Barnes & noble is teaming up with samsung to make note tablets.

The full-service tablet will be able to access barnes & noble's collection of 3 million books.

The seven inch model will debut in august with a 10 inch model two months later.

That is this morning's company news.

All of the jobs report will be on in about 40 minutes.

It is d-day.

What the germans knew about the approaching flotilla that was out there.

We will never know.

That is from rick atkinson's book.

I can't say enough about this book to give color and character . it the book is 600 pages long.

D-day in normandy is only 85 pages.

There were 150 6000 people who made it to shore that day.

I think to use -- star with the scope and scale, maybe only queen elizabeth understands it.

She is the only remaining world leader who was somewhat involved.

That is why she was so beloved in the years afterwards.

She worked as a mechanic.

The woman who is now the queen worked as a mechanic.

I had the chance to glimpse charles de gaulle in 1968 in paris.

It was telling throughout the book that the gaul was livid that the french were not involved.

It had very little to do with honoring.

It they carried with them such an anger for the way they were treated by eisenhower.

There is a lot of emotion.

Especially considering the contribution of the french underground.

They provide a lot of intelligence.

It was a historic time.

To see it today, to see president obama and his speech.

He spoke earlier this morning in front of world leaders.

Let's take a listen.

Do we have that sound?

We are working on it.

This was democracies beachhead.

Our victory decided not just a century, but all posterity.

We worked to turn old adversaries into new allies.

We stood once more with the people of this continent to a long twilight struggle until a wall tumbled down and an iron curtain as well.

That is president obama this morning.

It is d-day in normandy.

World leaders are attending.

There has to be politics intruding as it always does.

Ukraine as well, it slips.

Let's look at the world leaders who were gathered.

The modern politics can speak volumes.

Her majesty is in the middle.

Standing next to president along . the canadians rf -- represented as well.

President putin and president obama are in the front row, but they are separated by three people.

President clinton is for leaders apart.

I would hope we get a handshake here at some point.

Also with the president-elect from the ukraine, they are trying to find some common ground.

Rish -- rick atkinson is showing the russian contribution.

We asked everyone, 70 years after d-day, what is the best way to pay tribute to our shoulders?

Raise pensions and facilities.

This comes on the heel of the disturbing revelations of what happened at the v.a.. remember that freedom has a human cost.

I like that the word cost is what atkinson wrote about.

The wounded was unimaginable.

Parents at home who lose their children.

Help all of our vets get jobs.

That comes from our very own a stephanie ruhle twitty then.

That folds into our agenda nicely.

We are looking at the big picture making news.

I am looking at jobs they.

Alan krueger is with us, the former chairman of the president's economic advisers.

And was part of the job.

It was not the highlight of the job.

The highlight was advising the president.

It went with the territory.

Is he engaged in the debate?

How does he listen?

He was a delight to advise.

I have worked for a number of policymakers and i have been pleased work for all of them.

The president is a tremendous listener.

He would greet me at the door at the oval office when i walked in with the jobs report.

It was important to him.

If he was traveling i would call him on air force one.

We would get the information the day before.

He always stays calm.

It is remarkable how even-tempered he is.

When the unemployment rate start to fall, he got excited but he tells himself not to get too high with the news is good.

He retained his equilibrium.

He was a pleasure to work for.

You have got to skedaddle off to radio.

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

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