Return of the Yen: Surveillance (08/07)

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August 7 (Bloomberg) -- On today's "Bloomberg Surveillance," Tom Keene, Alix Steel and Scarlet Fu bring insight on the state of the market getting you ready for the day ahead. (Source: Bloomberg)

This is bloomberg "surveillance." will disney mrs.

On revenue.

Espn and eight-rob save the day.

It is all about sports and espn.

-- espn and a-rod save the day.

You cannot afford to shop and neiman-marcus.

They have stocks they would like to offer to you.

August summertime blues.

A lot moving to the markets today.

Interesting day.

Good morning, everyone.

This is bloomberg "surveillance." it is wednesday, august 7. joining me is scarlet fu.

Alix steele is with sara eisen.

Time for the briefing of the morning.

A jumble of a day.

Take up the bank of england, mark carney speaking right now presenting quarterly inflation report.

We are getting headlines linking the outlook for the interest rates of unemployment and inflation, keeping the current policy at least until the jobless rate falls to 7%. this is a big change.

It is a historic deal, the visibility.

Talking about the escape velocity.

Here is sterling.

Down we go.

This is the gloom.

Weaker sterling and then up waco.

Markets react to each and every question much like they do with ben bernanke.

Saying the biggest risk is unwarranted tightening.

Trying to provide clarity.

Has not said so far that i see, the word tapir.

Has not mentioned a-rod.

If you want to watch the whole conversation you can watch it at for the live feed.

Here at home we get an mba mortgage applications and consumer credit later.

A lot of earnings we're watching before the bell.

Members from time warner, a well, ralph lauren and duke energy.

After the bell numbers we will be watching as well.

German industrial production booms over the previous month.

The survey was really flat.

They do a very big 2% number.

There is a conundrum a pretty good economic data out of europe as well.

We saw that yesterday and the markets did not necessarily take it.

They were ignoring that.

Also, president obama considers the west coast trip.

You talk about housing, financing.

Arguing mortgage lending becoming more important.

To go we will talk to the former senator of new hampshire in the next hour.

Data check.

Equities, bonds, currencies.

Down eight on futures.

The euro , one 32.85. weaker.

Nymex pulled a back.

A much weaker canadian dollar.

Moving over to the next screen.

It has a commodities-feel to it.

The journal with the big summary on what other sections, dollar- and much stronger.

96 handle.

There is the canadian at one of three.

Weaker canadian dollar.

Did not predict gold.

Down about $5. -- don't forget about gold.

Front page.

Discover the newspapers and some of the web.

Scarlet fu has selected things that matter.

President obama talking about the mortgage market yesterday saying private capital should take the lead role but with the government providing backstop against catastrophic risk.

Here is what he said.

I believe our housing system should operate with there is a limited government role and private lending should be the backbone of the housing market.

That includes community-based lenders who view it not just as a lender but as a name.

We know they make up the bulk of mortgage financing in this country, but he adores -- and in -- the president endorsed a remake of fannie mae and freddie mac.

Washington steps were early on housing.

I think the president is stepping it.

This is more like a soft.

Take of the federal government guaranteed about 87 percent of new mortgages last year.

And from something big to something more specific, because our second story is about how the u.s. government is suing bank of america for defrauding investors when it sold $850 million worth of mortgage-backed securities in the battle is of 2008. obviously this is the new challenge, the latest challenge for bank of america that is trying so hard to convince investors that all of the legal problems are over.

Brian moynihan circulating this e-mail.

Like a fat kid in dodge ball on the sidelines.

An american employee.

I really was good at dodge ball, surprisingly.

I was like 7. shoot the ball at ththe type gun -- tall guy with a bow tie on.

Our front page story, disney reported third quarter earnings.

Profit stalled and a lot of it due to cost to make "lone ranger." it was pretty much a dud.

It will lead to a charge of up to $190 million as a result.

Certainly -- you are not telling the truth.

For the movie review, the only person on the planet that paid full price -- i did not mind it.

I went into their with no expectations.

That is a really great point.

Maybe disney is focusing on overseas for the revenue, and that is a distinction.

It has not done as well overseas as they look like it too.

Having said that, we are not the goal, not the target.

Movie review with scarlet fu.

Now we bring in greg moffett.

For years at stanford bernstein.

Tearing it up this weekend.

Ken natori with us.

They make fancy sheets you cannot afford.

Very good on the department stores, among other things.

Very glad to have him here.

Why do bad movies get made?

How do these things get a green light did?

-- get green lighted/ ? i have to believe there are not that many people who even remember who the lone ranger is.

It was a show 20 years into reruns by the time i was growing up as a kid.

It is a franchise that if i ever said it to my kids, they would have no idea who i was talking about.

A seems like the lack of innovation -- that is where i want to go.

You need your original inspiration.

Pirates of the caribbean was the original.

Economics are the other way around.

The movie business is a funny business.

I covered the distribution side.

As an observer of the economics of the movie business, for 30 years the movies have been struggling with how to syndicate risk.

You have these risk pools that are essentially either hit or mrs.. there are two ways to syndicate risk.

We have -- 30 years ago we did the first.

Less risky translate to less interesting.

Talking about this later on in the hour.

-- abotut disney later on in the hour.

We talk about newspapers being dead.

Remember, for every buyer there is a seller.

There is not exactly a touchdown dance.

The boston globe was sold for $70 million.

But a billion $21 years ago.

We're thrilled to have this morning, ken natori.

I missed the sunday new york times because of what you do.

You look at the washington post and print.

They need your advertisements to create the romance of journalism.


We have seen us as an advertiser have moved a lot of hours on line.

Every year more of the money is moving on line.

We see a better return.

It is much easier to quantify.

You envision a world where you do not run them with bergdorf goodman and a print newspaper?

Where it is all digital?

To go we did not really run in newspapers.

Magazine, especially in fashion.

I cannot really envision us not running advertisements.

How much of businesses will move on line is the question?

We will always the partnerships with the fashion magazine.

Those partnerships, i cannot see them going away.

Take a much more in the next hour.

Company news.

-- much more in the next hour.

And jpmorgan and goldman sachs getting sued over aluminum prices.

A florida by year alleges they can -- they drove up the price.

More than 1 million tons are stored in warehouses, many of which are old guy -- owned by goldman sachs.

Morgan stanley rejoins the dollar bulls.

The bank is forecasting that currency will gain of 5%. the optimism tied to morgan stanley's believe the u.s. economy will bounce back faster than europe.

The bank had advised clients to sell it just before it sold -- tumbled to a four-month low back in june.

New details on the south was plain that slammed nose first.

The captain of the jets took controls from the first officer just before hit the runway.

No mechanical failure had occurred.

Regulators are trying to determine why the change of command occurred.

They're going as the devil land the plane now?

Something to that effect.

Here is our twitter question for the day, when will main street stop hating wall street?

A great question.

We will do that in the next hour.

When will main street stop hating wall street?

Great question by the team.

From new york city, this is bloomberg "surveillance." ? good morning, everyone.

Bloomberg "surveillance." this is an interesting guy.

Listen to this interview at 8:00 this morning.

Timothy armstrong.

The stock moves as he faces the immense challenge in america online.

Earnings out as well.

Tim armstrong this morning.

This is bloomberg "surveillance." i'm tom keene joined by scarlet fu.

Alix steele in for sara eisen.

When is she back?

Next monday.

She really is.


The history of the game of their loans.

-- thrones.

Aol report in this morning.

Disney reported yesterday.

Revenue did increase slightly.

The positive parts of the business, the tv business.

The cable division did fairly well.

All of that is in spite of the fact that the fund division struggled -- the movie division struggled.

Take of this highlights the tension between fox news starting its own network.

Take a seven people were worried about espn and tell primetime earnings were declining.

And the playoff season not lasting as long for the nba and losing momentum.

The revenue it creates -- and you are right, fox sports is launching in mid-august.

A lot of people looking to that to perhaps slowed down momentum.

Guest host of the hour, credit moffitt.

Parts of this is sanford bernstein.

Do you look at this as a moment to moment?

Because disney is a supplier to the industry as a cover, i tend to step back from the minutia and look at the bigger picture.

Disney has been about espn for a long time.

A move from the perspective of the ecosystem of paid tv in general, espn is a love/hate sort of thing.

One of the biggest reasons people have paid tv.

One of the reasons why prices are escalating so much, along with regional sports and read transmission fees from broadcasters.

It is just making the entire paid tv ecosystem so expensive.

You have to wonder about sustainability.

When you have fox sports coming on line, it there will be content.

That is a great point.

When you introduce competition, it drives prices down.

You will at fox sports, and what will happen?

He will drive up the cost of sports input in the price of sports will go up, not down.

That means the consumer will pay more.

Then i will pay a higher bill.

This is the real challenge from a policy perspective.

The economic model is now under real stress.

Do you look at disney as going down with espn and fox on the way up?

I tend to think of the distribution side of the business.

I think the real challenge is how do you divide the pie between distributors, comcast of the world, directv of the world and the content suppliers like fox and disney?

The challenge is both sides are fighting for what is no longer a growing pie.

A number of subscribers have flat line.

Might i add if the pie is not growing, there does not appear to be a new pipe out there.

Here is decreasing.

The reason the pie is not growing is because prices are rising too fast.

You mention court cutting.

Our record cutting?

There is evidence we are now.

In the phrase has been around for a long time.

The real turning point was around 2010 when the talk was finally matched by the reality.

It is not a tsunami.

But at the margin, which is what they care about.

Take your starting to see people cut the cord.

Take a that was cut to less talk.

Significantly statistic shift.

About 900,000 households over the past 12 months.

Whether that is people -- households who said i do not want to start or households that already had it that stopped.

There is 900,000 fewer subscribers.

They are going back to revenue.

That is what i have at home.

We will talk about retail here in a bit.

The challenges of needless markup.

Take the next hour, we will talk about how the fed charges.

This is coming up in the second hour.

This is bloomberg television, streaming on your tablets, television, and

? good morning, everyone.

It is wednesday.

I'm tom keene joined by a scarlet fu and alix steele.

Looking at a large fire that shut down kenya's international airport.

It took five hours for fiat -- firefighters to contain it.


Look at that.

Courtney collins says it is a fully functional meeting -- major airport.

This comes at the peak tourism season for kenya.

A really big deal as well.

The justice department has filed criminal charges for the attack on the consulate in benghazi.

The september 11 attack killed four americans including christopher stephens.

The defense department reduces the number of furlough days.

It will now take six furlough days, down from 11 that were initially planned.

The defense secretary said the changes made this possible.

Not as bad as we thought.

Morning must read.

Arnold schwarzenegger.

Energy independence.

What do you have today?

I looked at the wall street journal.

Ted koppel talking about america's chronic over reaction to terrorism.

Saying that challenge is how we live with the threat.

We have created an economy of fear, an industry of fear, national psychology of fear.

Thing we have inflicted it on ourselves.

He would have said that at abc 20 years ago.

He said if you look back to world war i. coming up, we will talk about retail.

We will be right back.

? good morning, everyone.

Chief international correspondent.

This is at the bank of england.

And he is from portsmouth.

Mark carney the canadian speaking in his first as ability.

He moved sterling an hour ago with the comments, may be 45 minutes ago.

Mark carney, the governor of the aid -- bank of england.

Joining us as kit jukes.

Lau good morning.

-- good morning.

What is the significance in front of the british people?

Takeover he was appointed because of the success of the bank of canada with all guidance of monetary policy.

Canada avoided many of the worst ravages of the great recession aftermath.

As the top job in the uk.

It is about austerity.

Is it still austerity in the united kingdom and in europe?


No change to fiscal policy.

I think things get him easier from here on in.

He was called in to provide up set to allow the school responded -- fiscal policy to remain restricted by keeping fiscal rates as low as possible for as long as possible to get the recovery to escape.

That is what he is here to do.

Month -- one more question if i may.

What is moving is the dollar yen, yen stronger.

What does that signal?

This raise the forecast to 105 for the end of the year.

And the short positions are being squeezed out.

So the feedback loop is almost more important than the fact that people are giving up.

Think you so much from the shores of maine.

You see that with futures -yen, how the yen chat or sterling chat can fall back on the u.s. equity markets.

Take a one industry we're paying attention to its retail.

Neiman-marcus says the of hired bankers to go public.

This is after they got bought up by canadian realistic i. does the change of ownership matter when you are the consumer?

What about when you are the vendor?

Full disclosure, a bloomberg alumnus for having worked at bloomberg radio.

Welcome back.

Ppg -- tpg -- had been private and not thinking about going public once again.

Questions as to whether anyone wanted to buy it.

What is the buzz within the industry from what you see?

To come it sounds like their first choice was to find a middle eastern buyers appear yen . basically they filed for an ipo and will probably wait through the christmas season to see how that goes.

Early 2014. as a vendor and brand, what is the distinction between selling to an neiman-marcus, versus tax smith avenue?

It is all the same.

We sell products.

In terms of mergers and acquisitions in the industry, hudson bay buying saks fifth avenue.

The outcome of hudson bay winning that was a positive.

When it came out there were one to combine, there are only so many high-and apartments you consulted.

There is the potential.

There is possibility the stores would have looked the same.

Even more traffic moves away from moving on line.

And we're thrilled the one them and will keep them independence and keep the culture.

What are the best practices of the brand?

A sink of these names, luxury lifestyle brand where they are really not there for five or six, seven, and then they kick in with the psychology, particularly with women.

We are trying.

We're still fully independent, which we're very proud of.

That has been a goal, to build a life style brand.

That is what people most know us for.

We talked about betting, towels.

We really want that lifestyle.

Let me say it is a national scandal, the price of women's swimsuits.

I have to take my daughter's out.

I am like you are kidding.

How important is on line?


Do sales become worse than brick and mortar?

We do flash sales.

That is a very important part of the business for clearing out products and getting your name out there.

All of the brands are doing it.

Department stores are not growing as fast as the market.

Customers are going elsewhere.

Is that elsewhere online or different stores?

Take good definitely online.

Then people are moving to specialty stores more.

It is not a cent for someone who shops at neiman-marcus to also go to target.

It used to be people would only shop at tight end.

De you see amazon as a friend or enemy?

They are client and an enemy.

People shop there.

A lot of customers go to amazon to bride -- to buy them more cheaply than they can get elsewhere.

We sell to them but we make sure everything is at the same price.

Everyone shops there.

They are important.

Our guest this hour, correct moffett.

-- craig moffett.

The word i have is disruptive.

Is this business as usual or something new going on with this digital technology?

Actually the real story in media is how little it has been disrupted.

I remember back in 2003, everyone saying pay-tv system was about to fall apart.

It is actually the citadel of paid tv.

A fortress business that has been much more resilient and resistant to change than anyone would have expected 10 years ago.

In your world is it true that saks is fortress businesses?

They are.

There are so few high-and retailers we sell to, but they're all very important.

Some inebriates are trying to get in that department stores carry a lot of power.

My exclusive, the double exit in the seventh floor are to die for.

Thank you.

That was great.

We have lasted 38 minutes without talking about a-rod, so it is time to bring it into the community to talk about.

The new york yankees losing their third straight game against the chicago white sox last night.

I was definitely in bed.

He played a second game after being on the disabled list.

They suspended him without pay for 211 games.

He is appealing a suspension.

He was hit by a white sox pitcher.

He got cheers for the first time.

Use the night before and cheers.

-- boos the night before and cheers last night.

I am going to go.

I am going to go to the game where mariano announces his retirement.

Of he got hit.

If you get hit, you want to cheer.

They said it is unfortunate.

Yes, they did here because he got hit.

That is that appeared it to go all you more and getting hit by a pitch, let's talk about deals across the media sector.

Peso's buying the washington post.

We will look at the challenges across the media and the next couple of minutes.

? good morning, everyone.

Bloomberg "surveillance." i am talking.

With me is scarlet fu.

Euro and nicely set above 1.33. gold cross 77. not a critical point, but nonetheless, soft.

Top headlines for you this morning.

North korea is offering to negotiate with south korea about reopening the industrial park.

Talks to reopen the park collapsed when they fail to agree on a policy to prevent future closing.

Next wednesday will be a possible start date for new talks.

And japan's government steps in to help the operator of the critical nuclear plant.

The prime minister says his government can come up with their own plan to deal with a ton of radioactive water plant spilling into the ocean.

They have been overseeing the efforts to stop the water.

China has fined six dairy companies $109 million for price-fixing milk formula.

Chinese officials say the group tried to fix the minimum resale prices of the product.

Those are your top headlines.

Take up a few days since we have done single best part.

I miss it so much.

In we need it.

Finally back.

Hereby request.

With the stock market near record highs, we look at uncomfortable parallels with 2000 and 2007. this is from: roche.

The yellow line is the s&p 500 since 1990. the nyse margins that is the white wine.

As we know, it can exacerbate sell-off.

What happened in 2008? a lot of investors forced to sell holdings to raise cash to cover the declining value of collateral they had put up for the leverage.

Correlation pretty tight.

Craig moffett with us.

Your group is a moonshot group.

What does that signal?

It is funny looking at the margin charge because there is a fine line between animal spirits and speculate excess.

-- speculative excess.

These are utility businesses.

Comcast or verizon or att &t. these are utility-like businesses.

Of the large cap companies i cover, every one of them right now is a special situation.

Everyone expecting their to be merger and acquisitions.

All of them have the expectations built into what are pretty frothy prices for the whole sector.

What will be the trigger.

? you will have to see deals happen or it -- in order to support the prices.

If there are not have the stocks benefited from the search field environment?

Will that reverse a quick paper?

They certainly did of the past few years.

Think about the telecom sector over the past few years.

You can spin all of these stories about how everyone has wireless buff or house -- or how the next generation of smart phones and the market power between carriers purses apple and that sort of the -- sang, and the new plot the relative performance of stocks and find out they have basically treated as pure bond and derivatives.

I have to make some money.

What is the thing to you with a moonshot media stocks, which won most attractive?

Unfortunately the media stocks i cover have gone to be so frothy.

Comcast a little bit less because at least it is not affected to participate in the merger and acquisition story.

I think t-mobile has all the momentum in the world.

To go a little bit of an underdog play.

We will continue this conversation.

We are asking, can pay-tv keep making money as they fight with content providers and the shift to digital?

This is bloomberg "surveillance." ? this is bloomberg "surveillance." i am scarlet fu.

Company news from the piles of bloomberg west.

We start with washington turning out time warner cable.

They had asked the federal communications commission for help in the dispute.

Acting chairwoman says the regulators lack the authority to intervene.

She said rewrite the rules would take too long to help the cable company.

Samsung gearing up to take on apple and google in the smart watched market.

Designs were included in recent patent filings.

The device will have a bendable screen that wraps around the wrist.

The sec gets the go-ahead to sue a texas man accused of running a ponzi scheme using pickling.

The man challenged sank a virtual currency was not subject to u.s. regulations.

A texas judge ruled the investment met the definition of an investment contract and as such were considered securities.

That is today's company news.

Is this like the ghost of sara eisen descending on us?

She planted the story.

Tinto they are trying for it.

My only question, when does this go away?

It is not going away coming here to stay.

If it feels like we of been obsessed with the media industry for the past month or so, consider the headlines.

Mergers of publicists and hulu for sale and then time warner cable and cbs.

Then there is a earnings and well -- as well.

The value of content and the many ways we consume it, whether it's on the big screen from a living room screen or mobile devices.

I have to admit the cover story this week and following up on a. greg moffett authoritative.

His work as sanford bernstein.

Getting right to the cover.

You were in this story.

Netflix did not take of the media world or did, which is it?

The interesting thing is over the past four-five years is they have tried -- they have stopped trying to take over the media world.

They have slowly more for itself and you see it in the stock price.

From time to be the destructor but overturned the pay tv universe to becoming the next hbo.

As it has done that, first you saw investors get disappointed and the stock fell, and then investors say this is a better idea of the stock has risen.

You know longer receive them cast as the replacement for the current ecosystem here did you see it as another hbo, and pretty good one actually.

Everyone keeps talking the death of tv to the death of music.

It is a bet contrast for a lot of reasons.

When steve jobs and apple created the itunes price point for individual songs, it was partly because there was such rampant piracy going on at the time that the music industry probably rightly said we are better off to take 20 cents on the dollar than to take nothing at all.

They were giving up and capitulating, and them music business unbundled.

The content companies in the pay-tv ecosystem did not feel that time -- that same kind of pressure.

They are circling the wagons and say there is no legal basis, no economic model, and we're not going to unbundle.

The article was mostly about the revelation that after all of the years of people facing the industry was quick to fall apart like the music business did, people are suddenly starting to figure out there will not do it unless they want to come and they do not want to.

Talking about falling apart, this brings me to satellite tv.

I feel like what that represents is have dish does not have a lot of bets behind a satellite tv and try to move to a different business.

What is your take on that?

Charlie ardennes is not betting as the ceo of dish, not betting on a dish being the canary in the industry as much as he is saying it has a very clear advantage.

So compete against the player that will be harder and harder going forward and trying to figure out is the with the carry any to have my own a broadvision type.

That will probably be wireless.

So he is trying to get spectrum.

The problem he is trying to figure out now, i have to figure out who will do it with me, because it is too expensive to do on my own.

Greg moffett with moffett research.

Forex report.

The one thing moving.

96 handle when i walked in the door this morning.

The side of the stronger yen.

The stronger euro yen as well.

Even as the euro advances against the dollar.

Ozzie-dollar well under.

Looney gives up.

Commodity currencies in retreat.

That is the forex report.

Forex -- former senator judd gregg joins us in the next hour.

Keep your right here.

This is bloomberg "surveillance." the bank's lobby washington.

Former senator judd gregg of new hampshire.

How about planes?

Cutting aids -- cutting edge electronic automobiles.

Dreaming big.

Interstate 2 of the jeff bezos post.

Washington of just to the new washington normal.

This is blbloomberg "surveillance." i am talking live.

Joining me as always, scarlet fu.

Alix steele in for sara eisen.

Our guest host is judd gregg, chief executive officer of the securities industry and financial markets association.

They are a trade group.

You have are morning briefing for us.

Are relatively light economic data in the u.s. looking at mortgage applications out in a few moments.

At 3:00, consumer credit.

The bank of england linking the interest rate policy to unemployment and inflation.

Following with what the fed has been doing.

Busy earning state.

Time warner has just been out.

We're looking at ralph lauren and duke energy.

The green mountain coffee, tesla and group on pretty busy after the bell earnings stay.

-- groupon.

President obama continuing his trips.

We pay attention to what he says there.

Company news.

Scarlet fu is crumbling away.

Time warner increasing the full the share outlook for 2014, saying mid-teen that percentage growth of time warner.


Announcing profit and revenue misses.

Another deal in the media space.

It will buyback $150 million of its own equity.

Those are the latest earnings at of time warner and a well.

Bank of america cannot shake its past.

The justice department is suing the bank, alleging it defrauded investors when it held $850 million of mortgage-backed securities in 2008. bankamerica said it collapsed -- soured when the bank collapsed.

Another blockbuster loss for disney.

Could lose 160-$190 million on the "lone ranger." earnings were little changed to modestly higher.

New details on the assault was plain that slammed nose first.

The captain took control from the first officer just before it hit the runway.

Hall regulators still trying to determine why this occurred.

Does pose for the our chief executive officer.

The senator from new hampshire, well over 20 years of service, and judd gregg.

Good morning.

Once again in the headlines, some of the newspapers, front page.

Bank of america with another lawsuit.

This just seems to never end.

When does this go away?

It should have gone away and i do not think it is constructive to getting the economy going.

It is really history and i believe strongly if we're calling to get the economy going, we have to encourage the major centers of lending to wind.

Do they want creative financing and greater products or get back to block and tackle, boring new hampshire banking?

I thought there would like to get back to boring new hampshire banking, but the problem is excess.

This is very disorderly.

It is not consistent.

A lot overlap in contradiction.

This entire banking sector is tied up and worrying about regulations and how they will deal with regulations.

Takeover you and elizabeth warren.

Where is the common ground?

-- you and elizabeth warren?

To go there is an populism that has always been in our system.

It is not constructive if the pendulum swings too far.

It does point to a new normal.

Thinking about when this will end does not seem to be constructive either.

I think the bends -- banks are dealing with it.

Spending a huge amount of time dealing with this.

The models are changing.

The business models of banks from middle size too large banks are changing fundamentally.

They are all trying to adjust to the very new environment.

The problem is the environment is not predictable because to have these dreams of regulation coming, which some of them are just plain contradictory.

You have to go search for the regulators to begin with.

They have a lock not well written.

We started it 2:00 in the afternoon and ended at 5:00 in the morning.

They have been handed a pretty difficult task.

I want to get your thoughts on the president making comments about how private capital has to take a bigger role in funding mortgages.

Very explosive there.

Calling the president a socialist.

To go he said he wasn't. -- he said he wasn't. he said i am for capital taking a better position.

I have never called him one, do not think he is.

I think he believes in his philosophy of government.

I think he is absolutely right on the issue of giving private capital between the taxpayer in the streets on the issue of how you absorber mortgages.

How do we wind down the may and freddie mac?

-- fannie mae and freddie mac?

The idea that you transition it at of having it as the first order of business and have the private sector state in between the majority of the obligation and the taxpayer.

Ticket judd gregg with us for the hour.

We fold it the twitter question into the perspective of the senator.

When will mean street stop hating wall street?

That is the twitter question of the day.

You can tweet us.

I would suggest when the washington nationals finally get a team.

Take of that could be awhile.

We also want to bring in edmond lee who covers the media companies.

We of the talking about how the media sector is so hot with the deals coming in.

Have you seen this before?

To go it is unprecedented.

They are renouncing all these deals.

I think with all of these deals, it is a huge surprise.

It is like you to pieces of the puzzle that came into place.

No one expected either one.

There seem to be to conversations going on.

There is corporate america, and there is washington completely destructive by things that have nothing to do with creating jobs.

Absolutely right.

I have never seen washington so disconnected about growth and prosperity in the country.

There is a massive and ability to address fundamental concern that we have as a culture.

Until washington put in place a responsible plan for getting -- term debt under control, it will not contribute to economic growth and a significant way.

The davis strait now long-term entitlement issues and make it clear where no war on the path of accumulating debt we cannot afford, this economy will have one of the most of the cat retardants withdrawn.

I think the economy will explode.

I think the economy will do great anyway because i think we loved a shift.

If washington would get its house in order, it would do even better.

To go a lot to talk about this hour.

I would say almost a paradigm shift in media as well.

To go having a major conversation and washington.

Looking at it dated check.

The yen is front and center.

Here is the general and a wood dated check.

10-year yield goes nowhere.

Stronger your rope confounding germany.

Oil a little bit south.

Commodities soggy.

West texas intermediate, 105.18. that makes me feel like it is august here yet to go . we have a number for you, 474,767. the weekday circulation of the washington post.

Will a new owner change the trajectory?

That is what we will discuss coming up on bloomberg "surveillance." ? good morning, everyone.

Bloomberg "surveillance." i'm tom keene.

Time for this matter is now.

The former senator from new hampshire, and judd gregg is with us.

The parlor game of august.

There has to be one even with air-conditioning and washington.

Janet yellen, larry summers and a cast of five others.

It comes down to the very qualified economists, who should be the next fed chairman?

Whoever the president wants to choose.

I think either one would be as strong candidates.

I suspect it will be janet yellen, simply because she is extremely talented and has the credentials.

The good as the fed have too much responsibility now?

I have never seen such an early unseemly debate.

Is that because the fed is washington's institution?

To go i think it is because everything has become -- the way the media works with the different social media sites and commentary occurring, anything that is significant becomes a very public event and very much a public discussion.

Does the fed have to much responsibility?

The fed is a key organization in our system.

It is a force for stability.

Whether or not it has taken on too much responsibility is a legitimate question.

Can we do all of this they have been asked to do under the regulatory regime of thought frank install function as the force for stability?

It is a good question.

Ticker you were in the house, governor of new hampshire and 18 years as senator . what is different this time with the gridlock in washington?

I think the difference is the stakes are so much higher.

People say the deficit does not matter.

This matters hugely as a nation.

It will be the opportunity to do something substantive on the debt.

There has been a considerable down payment, 2.7 trillion dollars taken out of the debt of the past two years.

You need to do another 2.5 trillion.

You have to replace the sequestered with entitlement reform, and this is the chance to do it.

There is some light in the tunnel.

The light is the president is meeting with a group of bipartisan group of senators and tried to work out an understanding.

Can they?

I do not know.

Take a judge break with us.

How about this?

It is a bird, a plane, it is jet man.

This was pilot is the first person to fly 5,000 feet.

What is that about?

This is bloomberg "surveillance." good morning, everyone.

Tom keene joined by scarlet fu.

Judd gregg is the guest host this hour, senator from new hampshire.

We were just talking about my book of the summer.

On john hay.

A terrific book.

Someone very much associated with new hampshire.

A large fire shutting down the main international airport.

It took five hours for firefighters to contain the enormous buyer.

The airport is a creek -- keep trading have for the region.

The justice department has filed criminal charges against suspects and the attack.

One of the suspect is the founder of an islamic militia who was seen at the compound the night of the attack.

The defense department reducing the number of furlough days for civilian workers.

There will take six furlough days, down from the 11 that were initially planned.

Check hegel said congressional funding and budget management efforts made the change possible.

Those are your top headlines.

To go the gramm family.

They have sold the post.

-- the gramm of familyham family.

We will watch day-by-day for the shift in the front page in the off-ed section.

Judd gregg very angry at the left liberal rag.

Let me start with you edmund leach.

They too, everyone was stunned by this.

What does this bring?

What is the analysis being done?

The analysis is what will he do?

Will he invest more, put more money into the post?

It has been bleeding money, need more investment.

The shift to digital, how much?

Bundles are dropped on case street.

There is something valuable for the nation.

Explain worldwide why we should care about this?

Take of this is a huge event in my opinion.

We seen a massive contraction in the area of news and coverage, especially with what is happening with politics.

There are not really significant contributors.

Television stations and cable news, but they feed off the core content produced by the basic group.

So the post is at the center of that really.

They are probably the most prominent of the content producers.

What i find interesting is that the family, part of a culture of washington, like a shortstop who knows where to play, jeff bezos one of the most extraordinary business people in the country.

He is from the west coast.

How does he get into the culture and realize this is an incredibly significant entity that i now possess in how america is the finance itself.

That is question where ed at some point.

Did he buy it as a technological experiment?

Does he have hidden technology somewhere that he wants to explore with the newspaper and move it online?

I think that is exactly the right question.

He has created a lot of technology.

These are areas that any kind of newspaper, constant initiative would benefit.

When i go back to content, there is a landmark.

He brings a catholic feel to the city.

There is character.

Look at each of the individuals.

There is a fabric to it as well.

That is what we're losing.

I did not know we were losing it.

My question, because of his west-coast basically persona, understands the real cultural significance of the post to produce in the content that drives american politics.

He may well.

Are you afraid of the technology billionaires'? i think they're the future.

As someone who has been in the beltway, the post verses a lot of other upstarts, what do you read?

The gum you write -- read as much as you can.

I mentioned bloomberg.

The core content producers are the bloomberg, the time, and opposed.

-- and the post.

You have a lot of people on the hill covering basically the idiosyncrasies.

The core, big news policy that comes out of this huge capacity of those entities to produce news, and then it is repeated across various other news cycles.

"the post" is at the center of this.

A huge part of the american political culture.

It is not west coast.

We cannot leave jeff bezos out of this.

He is described as keeping politics to himself coming get amazon has been very active in washington.

How do you reconcile that?

To go he is obviously a brilliant guy.

He fully understands what he has stepped in to hear.

Not only a major effort to resuscitate a newspaper that is basically struck with competition and technology for which he is part of the industry for, but the need to protect that core content that is really being used across the country to explain what politics are.

Em he is a businessman and know how this works.

It is curious he would want to buy this because it is losing money.

We will come back.

? . . good morning, everyone.

I'm tom keene with scarlet so, alix steel.

Judd gregg with sifma speaking with us on many things on banking and regulation.

The same this morning as morning will there's -- morning movers.

Bank of america shares falling in the premarket trades.

The department of justice stewing be of a about misleading investors when it sold during the financial crisis.

At issue is the quality of the loan.

Just another example of how these legacy issues can continue to hog -- to haunt bank of america.

These are in bs's that the bank itself packaged.

The debris of another era.

Glenn corps, they're being sued on claims they restrain supplies and drove up prices of aluminum.

We have been hearing about is over the last few weeks.

The lawsuit was filed.

Judd gregg with us.

As is a distraction for your customers at sifma?

Commodities are like, we did that.

I think it is unfortunate if they did get out of it because that would push it into a nonregulated, nontransparent market.

Commodities and margin banking has always been a big part of our -- it is been at the core of a lot of things.

Major investment houses do.

Historically, it has been extremely good to an efficient economy.

This is a 2010 thing.

They had been in it for a really long time.

What was the regulation landscape like before?

As tom said -- i mean specifically for the warehouse is based on this case.

I don't know much about this case.

I think we need to let things play out.

I would rather have a transparent manager then have a nontransparent dark pool regulating this area.

I mean, you're going to push into some area, some ownership structure which we are never going to see, you are not going to know who is behind it, how it works.

This way at least that there is a problem, you can take a look at it.

It is truckloads of aluminum going around.

Trying to go around.

They can't get out.

It is a summer distraction here.

We want to get back to our summer theme, which is deals in the media space.

A well is moving this morning because it announced it is buying a adapt tv, $405 million.


It is used by the biggest brands and agencies.

A while also reporting earnings.

It beat analysts' estimates.

It will start at 150 million- dollar stock bar back, that a story appeared the stock is up 257% since the world is coming to an end.

We never seem to talk about here and we always thought what the other big guys, but this one has been moving.

Plenty of people still use a well.

Let's look at some photos making news today.

We will start in kenya.

A massive fire we have been talking about.

Just staggering.

It looks like some sort of an attack, it is so huge.

It is a major hub, not as a major -- not just a little thing.

Terrorism, no, that is not right, forests, there we go.

The brain does not click in until 9:00 a.m. and now.


We also have heroine -- highlights for you of president obama.

He took time off his busy schedule to visit the "tonight show." six appearance on nbc's had talk show and the third as president.

This is a different kind of campaign.

Should a president be campaigning, or should he be in the white house?

I'm a little concerned that his language has been so strident, that he is making it difficult for him to do the work in the white house, which is to get people to gather on an agreement on the debt.

He has been trying that.

I give him credit.

He is actually put on the table a couple of really good ideas like changing the way we calculate, and the medicare proposals.

But when you go on the road in use are using very strident language, then you basically undermine some of the work you have been doing back in washington to try to pull people together.

Campaigner in chief.

One bit of criticism.

But it is in company news as well.

We want to talk about -- and considering bidding or weighing a bid for a $14 billion line in canada.

A move into the pot ash industry would come after last week of the collapse of a cartel that supported for the bidder.

It is alongside coal, iron ore, oil and gas.

Morgan stanley rejoins its dollar call.

The currency will gain 5% against the euro and 9% against the yen by the end of 2013. good morning, everyone.

Bloomberg "surveillance," @bsurveillance -- on bloomberg television, streaming on your tablet, your phone, and

All of our interviews on media.

Bloomberg radio plus one wide- out on itunes and android.

I'm tom keene, alix steel, scarlet fluid figured their eyes and is on a 14-week vacation of some type.

Think like an african safari or something.

"game of thrones." she did not go through kenya.

She is at camp.

What we have today?

We have the former senator, judd gregg, speaking to us.

We want to talk about finance and the regulatory environment because first exit goldman sachs for restore -- fabrice tourre.

It is the latest legal headache for the number two u.s. bank.

At the sec continues addressing alleged wrongdoing on wall street, we asked how far will the regulatory environment change.

This is an ongoing question, and one that is weighing on the country.

It is the weight of seven years.

In august we began the seventh year of this financial crisis.

Judd gregg has lived it, senator of new hampshire, now chief executive officer of the securities industry and financial markets association.

Senator, you look at this, and i bring in michael moore as well from bloomberg news covering morgan stanley and goldman sachs.

Senator, when does the end, when do we get the trust back?

I think when folks understand how important markets, capitalism, profit, and entrepreneurism is to our country.

What we have to do is reconnect with the american people the fact that when they go to their job, when they buy a car, when they send their kids to college, when they go to a hospital that is a good hospital or get their water, that all of that is built on a capital market system, which supplies the people who created the job, give the opportunity to go to school.

I think we have to reconnect with folks on main street that the role of the capital markets and their life is immediate and it adds to their prosperity and ability to transfer prosperity.

Michael moore with us, lloyd blankfein has been more visible.

He has a beard like bernanke to be sensitive.

But michael, it is a new sensitive goldman sachs trying to get their message to main street.

Is it working?

I think it is working -- i think it is starting to.

The fab trial is not something they wanted to be brought back up, a black mark from the past.

I think they are trying to work more toward that vision of them being it -- being advisers to the global economy.

Lloyd blankfein has been speaking publicly a lot more, and speaking ron goldman but on ud u.s. economy, europe, and being more ambassador-like.

He is in a great space for the industry because first he is a low-key and he has a great sense of humor.

He have a nice way over on him.

And he understands that if he does not succeed, and the industry does not succeed, unless he explained to people have reported the industry is in their everyday life.

He is very good at that.

What everyone sees from the banks is the massive amounts of money that they make every earnings season.

Are the current profits were getting into these big banks proved that the regulatory roles that they're fighting against so often are manageable?

I think profit is part of the american culture.

I think entrepreneurship creates prosperity.

If you don't have profits, or you turn these industries into public u-turn -- public utilities, you will undermine the engine which gives american at the advantage.

The great american advantages if you have a good idea and you put sweat equity into it, you can probably get i credit that will support you.

That is an event as our country has over others.

To another point, you have got to get skinny point in the old partnership structure.

We don't have that.

How do we incentivize these managements to be responsible if they don't have major ownership in the game?

I think they are responsible.

I think if you watch with ayers saying, what goldman is saying and the other banks are saying, but more important what the medium-sized and smaller banks are saying, it is that they are there to help clients be successful.

Mib a large client like a major -- it might be a large client or it might be an individual trying to invest in a 401(k) and making sure they make the right decision.

We await main street getting back on board with wall street.

It has been a long seven years third michael moore, have you asian the last seven years?


Michael moore with bloomberg news and judd gregg with us this morning.

Coming up on "surveillance," elon musk is trying to change the traffic.

A former transportation secretary joins us to talk about presentation problems.

? -- about transportation problems.

Good morning, everyone.

Bloomberg "surveillance." 8:00 a.m. this morning, "in the loop" with betty lou, tim armstrong, "in the loop" with betty lou.

As my automobile goes 49 miles an hour up central park west, then there is jetma,n, 12,000 feet and 5000 feet as he goes 190 miles an hour.

We are thrilled to bring you with experience with the swiss air force and flying planes for swissair after many years of technology, this is not hollywood, this is for real.

He is jetman.

You have throw -- flown across the english channel, what is next for you?

Do you go to the moon with the jetman?

That would be nice.

On my next thing, it will be a demonstration in reno and one month.

From the ninth to the 15th of september.

Also a second jetman, younger, so we will soon be able to fly in formation.

By information shared within the aerodynamics, tell us about the geforce.

All of us have had the experience of a fast car.

This is not a fast car.

You have got all the other stuff going on.

The max g-force is the beginning of a loop.

And i pool, -- pull, doing like that, almost 3-g's. the air is pulling me.

It is like the handout of the window of your car.

I know you do that.

It is not really physical.

It is just i am loose, relaxed under the wind.

It is not like landing a large air plants, the airbus and boeing plans you have landed for swissair.

What have you learned doing this given all of your aeros place -- aerospace experience?

It is a lot different.

I am completely in the element of air.

So -- what i could use is my experience as a professional aviator.

Have always a plan b. if you have that situation, you can come out of that that situation -- can you go into a right -- a glide, a soaring glide if things go wrong, you glide and then you go to parachute, is that the game plan?


I always land with a parachute.

But if something is really wrong at the time, i can relieve the wing.

I found as i've gotten older, i am afraid of heights more.

Are you afraid of heights?


like, if you are on the 30th floor of a building -- of course not, tom.

No, i have got a plan b. i love to be on top of a skyscraper.

Yves rossy, thank you so much.

Speaking of technology, elon musk next.

This is bloomberg "surveillance." i'm scarlet flu.

Alix steel is an first arise in this week.

We have got some company news from the files of "bloomberg west." a well expanding into news production.

The company is buying for about $405 million.

He gives able access to 's technology, used by ad agencies and consumer goods companies.

A will can now offer a wider range of services to advertisers and publishers.

Time warner cable had asked the federal medications creation -- communications commission feared they save their authority lacks to intervene.

She also ruled that the dispute would take too long to help the cable company.

Samsung is gearing up to take on apple and google and the smart watch market.

Designed for a watch from samsung will include -- were included in recent patent filing spirit it will have a bendable thing that will wrapper on the wrist.

The samsung galaxy gear for the watch in the u.s. do i need a watch?

It appears so.

I don't know, but i just wonder how much of the public really needs their laptop on their wrist.

I wonder.

Mostly will just use their phone.

I think it would just be too -- i am just not there yet.

The question expands to all kinds of technology.

We need a sewer powell -- solar powered electric car, a rocket ship -- a hyper local.

All those things have one manning,, entrepreneur elon musk.

His company's tesla and a city, which by the way report earnings today.

Bridges are tumbling and roads are collapsing.

We hear about it all the time.

The honorable james burning -- senator bob dole of kansas, a long career with legal transportation issues, he represents american airlines among others.

Another with us from bloomberg television who has look that's tesla.

Let me start with you.

This is a sci-fi that we are talking about with a hyper loop.

What is tangible about this project?

Not a great deal.

He is announcing details next week.

The best he guessed that someone has put forward according to musk and pneumatic tonal -- tunnel.

That is about all we know at the moment.

There is a primal scream in washington over fixing our bridges, airports, the infrastructure effort.

We are talking sci-fi here about mr.


At the same time, we cannot get our infrastructure started.

I guess we have got to do both, right?

I hope we can do both.

It would be a sick shame if we discourage people like mr.

Lu from risking their own capital -- like mr.

Musk from risking their own capital.

That is that we have seen the money of the most important innovations and transportation in world history.

If you think about the steamboat, for example.

We need a mix of public commitment, particularly to maintain our existing infrastructure.

We need an first -- we need entrepreneurs or cutting edge.

Is innovation or repair?

Where should a public-private partnership be trying to focus their efforts right now?

I think the public investment into focus on maintaining the existing system, whether it be in the air or on highways, bridges, inland waterways.

But i do think that we have got to be sure that our policy, our tax policies and others encourage rather than discourage entrepreneurs and those who have got new ideas.

We don't want a stagnant transportation sector.

That would damage the overall economy over time.

In a recent article, judd gregg is with us, our guest toes, former senator from new hampshire.

New hampshire was ranked 11th worst bridge place in america.

A state that has follow the parts, a lot of tough weather up there.

Where is the infrastructure right now?

Why can't this get done?

Because people are not willing to pay for it.

Historically, the transportation trust fund to pay for infrastructure repair.

It has been running a deficit and going into the general fund.

As cars have become more gas efficient and people have traveled less -- less gas tax.

Less gas tax.

If we are going to do this appropriately, you have to get more revenue from the transportation community by probably raising taxes on gas.

Willem, there is a view that we have got to get our bridge fixes.

Hyperlink from san francisco to l.a. is vacuum.

I think i get the thermal dynamic, but it does sound like sci-fi.

Anyone other than musk -- would we think they were crazy?

That is the thing, you look at space x, and here is a man who spent a third of his fortune developing rockets in the space mission.

He has since then, in 2006, i believe he had a contract for $270 million, he at 440 -- $440 million from nasa, this is a private partnership to work with the government successfully.

Therefore he is the kind of guy that maybe can deliver.

Private, public, secretary burnley, when you look at the negotiation business of putting public money into place, is there any optimism

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


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