Smartphone September: Surveillance (09/03)

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Sept. 03 (Bloomberg) -- On today's "Bloomberg Surveillance," Tom Keene, Alix Steel and Sara Eisen bring insight on the state of the market getting you ready for the day ahead. (Source: Bloomberg)

This bloomberg "surveillance." the president will meet with congressional leaders this morning.

Can he get congressional approval for a strike on syria?

Microsoft buys of nokia cellphone business.

Can microsoft finally compete with google and apple?

With six new smart phones rolling out this month, alix steele cannot decide which one to buy.

It is smart phone september.

Good morning, everyone.

This is bloomberg "surveillance." i am tom keene.

Tuesday, september 3. joining me as always, sara eisen.

Good morning.

How was new england?

It was lovely.

I had a fantastic time.

Ice cream and a fish.


The weather was great.

You will be able to watch nfl on sunday.

We have a deal with cbs.

I will kick off with a morning briefing.

10:00 construction and spending numbers on the economy.

Ism manufacturing out.

Set to soften a little bit.

H&r block is out of the bell.

A few key events to be watching.

8:00 a press conference -- news conference call from verizon on the vodafone acquisition.

8:45 eastern time microsoft will hold its conference call.

I would like to be a fly on the wall.

We know you just spoke to steve ballmer.

We look forward to see what he says.

Also watching syria.

President obama will meet with leaders of the national security committee.

John kerry and mr.

Hagel will appear at the classified morning briefing.

8:30 p.m president obama leaving for g-20 in russia.

The opinions on president obama.

I got more hate mail on twitter that i ever had on a weekend.

That amazing.

A data check.

Three-day weekend.

Futures up to 15 earlier in china.

Up 12 right now.

Higher yields.

The risk-on enthusiasm about recovery in europe.

A better china.

Eurodollar weekends.

Nymex crude really shows the difference.

Nymex crude down half a percentage point.

Look for the v.i.x. to go to 15. i am watching the two-year yield which continues to grind higher.

I think the bulls would say that is constructive with than the higher your to-year yield fear yen brent i think we got to 114.86. and a weaker yen over the past three days.

Tough to get through the weekend without thinking about indian rupi.


people are watching to see how extreme the flows out our.

You are in some clam shack.


September is traditionally a lousy month for stocks.

Except for when there is a 20% rise in august.

Time for front page.

We've scoured the papers for the most important stories.

There are a lot of good ones.

Microsoft top the list.

Aware for story, microsoft buying nokia appear yen -- our first story, microsoft buying nokia.

Companies trying to stay relevant against their tech rivals.

This changes the nature of both businesses.

Nokia leaving the mobile phone business focusing on hardware.

You spoke with steve ballmer this morning.

Listen to what he had to say.

To go the acquisition is about accelerating our share position by a excel rating and improving our ability and information.

Being able to put a clear, concise communication for one brand into the market brand.

Being able to be agile to go to market.

I am excited about what we accomplished in the 2.5 years we have built the partnership.

We are extremely glad to do that acquisition as a way to further accelerate our position with windows phones.

Steve ballmer from finland earlier this morning.

I thought he had all the right phrases.

Did not get off script.

Really pushes back against the sell side comments.

Not everyone was so negative.

Maybe the only path.

I am curious about stephen elop, ceo of nokia.

His name has been mentioned.

When you look at his credentials, he does not have the pedigree you look at normally with the ceo search.

But internal and an external relationship to microsoft.

A lot of deals as well.

Verizon, $130 billion make a deal.

To be a full control of the most profitable u.s. mobile phone carrier.

The third largest deal ever.

As big as this deal is, the company had considered an even bigger idea, which was an outright merger of the companies.

The big question, the going down in the u.s. market that is already richer.

To get that is the key distinction to me, the belief 10 mobile phones continue?

Some say no, and others say verizon is nic can continue.

This is coming on the brink of a slew of new smart phones.

Going to be an exciting month.

I am in the market, but i do not know which one.

Blackberry is coming out with one.

To go up for grabs.

Front-page story.

Cbs' one month blackout ended last night.

6:00 eastern time.

Time warner agreed to pay a significant increase for the right to transmit cbs signals according to a person familiar with the matter.

Looks to be below $2 per subscriber.

This is just before the start of the regular season.

An analyst saying it is hard to believe this is not as cbs victory.

Remember, time warner cable did not buy the home rights to cbs.

In theory they can sell those rights to an on-line player.

A lot more iteration of the deal to come.

It is finally here.

We can catch up on this 3 hour.

I can watch football.

The jets.

It is or is about how much it will cost and what that will mean for other networks.


i go with disruptive.


That is why they're still able to sell online content.

Continuing to highlight that point.

To get cbs, microsoft.

That is the front page.

Meantime, all eyes on syria.

Leader president obama will meet with congressional leaders.

Watching for any news out of the middle east.

He will try to sell members of congress on military action.

We want to check in with julianna goldman, our white house correspondent.

We have to ask you about reports overnight and early this morning about missiles being launched from syria.

What we know about this?

To go a lot of confusion about the missiles.

A lot of questions to u.s. officials.

They are citing a u.s. official that no u.s. planes or ships have fired missiles and the mediterranean.

Sky news reporting this could have been a test missile launch on the part of the u.s.. we will hear from the president this morning.

More briefing from the administration with lawmakers.

Other hearings on capitol hill.

Hopefully we will get this cleared out within a few hours.

To go we will continue to bring you all the latest details.

Back to the president, his mission today will speak to members of congress to spell the idea of military action.

Who does he need to talk to?

Essentially this strategy is " flooding the zone.

Premature to do anyone and everyone who you will need for this boat.

It yesterday was a really important day.

Senators john mccain and lindsey gramm at the white house.

They met for about an hour.

They have been critical of the white house policy for the past two years.

They held a lot of sway when it comes to national security issues.

If the president can get their vote, that will give coverage to a lot of other republicans who came out saying -- it basically least into the president's syria policy but saying they're more confident leaving than they were going in in terms of a strategy for the president to upgrade this syrian opposition.

Degummed very quickly, what is the likelihood that this passes in the president's favor of military action and syria?

To go that is an open-ended question right now, and that is what the president is letting its own with all of the briefings and hearings.

The good julianna goldman, white house correspondent, thank you for joining us from the white house today.

The president leaving for the meeting in st.

Petersburg, russia.

Ian bremer will join us in the next hour.

Guest host this hour is scott galloway.

Lumia, i have never seen one.

I thought it was by script.

What does he need to do to get off script?

They register pretty substantial market shot -- market share gain.

The bad news is no.

4. microsoft windows power phones.

They do have a foothold of the market.

The critical distinction is they need to improve.

The you assume they can only do that if the other players symbol, or can they gain market share, even if android and iphone and the rest of excellence?

There should be a marketplace for no.

3. it seems like there is now the big three and all the rest fighting over the scraps.

Microsoft does a tremendous culture of innovation.

They are a viable contender.

Optimism from scott galloway on microsoft and lumia.

Yes, and we will talk with the deal between vodafone and verizon.

Put a question of the day, what should microsoft by next?

Tweet us.

Coming up.

"in the loop." he is running for mayor.

He will join betty liu.

He has had interesting advertisements.

Very different from the others.

A conversation with the mayoral candidates.

We are getting floods -- flooded with political advertisements.

Have to talk about the make a deal after days of reports.

It is now official rise and will spend $137 billion to fully control wireless operations.

Are deals reporter, cristina alesci, joins us to tell it what reaching our deals reporter, cristina alesci joins us to tell us what this means.

All deals about financial engineering.

This one seems to be more about it and most others.

If you peel back what verizon is getting, it is booking all of the profits of the most probable -- profitable margin.

It is responsible for all of operating income.

They're looking out and seeing sprint has a huge investment from softbank.

The other competitor has just emerged.

They are very much out there saying they are calling to introduce a low-priced plans.

Verizon pretty expensive for a mobile consumer.

Probably more expensive than anywhere cell phone coverage is more expensive than anywhere else in the world.

They have to sell this to the board as a transaction.

Definitely a view on the growth.

You can argue vodafone is taking the opposite view, saying we will sellout of the high point.

Maybe there is not as much growth and bryson.

Did not forget, we had an all- out bidding war just a few months ago.

Not alone in the past -- in the potential for growth.

On the other hand, they would say what growth?

The question is, what does it mean for vodafone?

Bloomberg spoke to the ceo after the video -- a deal was announced yesterday.

Take a listen.

At some point i tried to materialize and resold both companies.

When the right value is there, you have this to go one question that remains, did they sell the u.s. investment at the top of the market?

What this means as a call of the market.

That is precisely what many people are saying.

It depends when you ask who the winner is.

Clearly vodafone is getting a ton of cash.

Returning 84 billion to investors.

This is something big european investors definitely wanted to see.

Then they are putting more to work to upgrade the network.

Something that the european competitors do not have the financial wherewithal to do right now.

To go hang on a second.

Scott galloway is here studying corporate management and boards.

When you look at the competitive landscape, at&t and horizon verizon, do you make of this deal?

I think it is a good move.

The terrible thing about recessions is there is happen and a wonderful thing is they always end.

Now, they get to go into europe armed with more fire prior predict firepower and will try to become the guerrilla and the room.

Rising gets cash flow.

Feel like it could be a win-win.

Are we becoming a utility or consolidating a monopoly and duopoly structure?

To them there is a global war of the world's taking place.

Who will control the consumer?

Will it be the cable guys?

Someone will on access to all things digital and will be very profitable relationship.

They are all figuring out how they can have the most capital.

It to go the ceo has said he wants the company to be more than just a pipe.

That is where the future really lies, whether or not they can go beyond to being a utility.

To go 130 billion.

-- 130 billion.

Big number.

The biggest deal in a decade.

One point on the microsoft /nokia deal that no one is talking about, the fact that they are using overseas cash.

You have to weigh any investment in the u.s. with the use of overseas cash.

They probably would have to take a big tax hit to repatriate that.

The next question becomes now that microsoft is in bed with nokia, what happens to blackberry?

As always we will continue to look to you for details.

Ian bremer height and geopolitical risk on syria.

That is coming up on bloomberg "surveillance." ? this is bloomberg "surveillance." i'm sara eisen.

Civil war in syria pushes the refugee ranks to a new high.

More than 2 million have fled the country.

Among half are children.

The u.n. said another 4 million syrians have been forced from their homes inside the country during the war.

Japan will spend $473 million to stop the leaks of the radioactive water at the nuclear plant.

Government is intervening to stop the ad hoc response.

In sports, roger fetterddere is r ierer is out.

The earliest exit from the tournament in 10 years for him.

A rainy u.s. open.

Very dry when it must read.

I actually went to find out about the microsoft deal.

She said in terms of the microsoft c.e.o., it is really stephen elop decides to move, this is his race to lose.

Talking about how difficult the business actually was.

Take as scott galloway with us.

Bloomberg contributor.

Is he someone that struggles and the board can get behind?

He has the one key criteria and that he has mobile tattooed across his forehead.

Takeout at the end of the day, that is where the future is going.

Microsoft needs to focus on the future.

Scott galloway with us.

Much more to talk about.

Good morning.

? this is bloomberg "surveillance." i'm sara eisen.

It looks like september is starting on a high note.

If you were away monday, i worked yesterday.

Maybe you did not.

Dated check up 15. great numbers.

Great economics.

Maybe less of a worry.

Here we got it paid -- here we go up 15. i would say there is a calm on oil.

A bit.

A more of the divergence between u.s. oil and brent.

Still elevated to the political risk.

Brent crude 115.07. the white house is shoring up the pork for a strike on syria.

The defense secretary will appear before defense hearings today.

President obama heads to sweden tonight.

Sticking to the schedule.

What is the international reaction to a potential u.s. strike?

That is the question we will dive into now.

Take of the new diplomacy.

Covering foreign affairs for bloomberg news.

She joins us on the phone from washington.

Good morning to you.

How uncomfortable well the body language be at the meetings?

Hard to make words for that.

President obama is showing up with all the other big fish and the host has been the loudest in voicing his opposition to any kind of u.s. strike, or for that matter, any kind of strike against his long-time ally.

It is hard to a imagine how difficult the body language will be there.

When you look at this in the day-to-day struggle, i am surprised how little discussion there is of saudi arabia.

Are they part of the dialogue?


A lot of back kenneling going on.

Every day john kerry makes calls to his counterparts throughout the world.

An emphasis to the calls and the saudis, the turks, british, and the french.

They are ones that have been supporting the ouster verbally . they have also been giving weapons to the syrian opposition to oust them.

There was talk yesterday among some of the leading proponents of congressional authorization for the president to get powers for a military strike on syria.

There is talk about bolstering the syrian opposition.

As you know, perception is so key.

The idea that the president will hand office for congressional approval.

How will that play out in the international community?

It is not going to look good for anybody if he loses the vote.

What the president was doing here is drawing congress and to this.

He drew the red line.

He forced himself to take action.

In a way, making the decision to say you authorize it.

Means he is sharing responsibility with them for whatever happens.

In terms of how it makes us look overseas, no question if congress does not authorize action, you can say it is a democracy and the president will not do something without lawmakers.

On the other hand, it would certainly make the president lose credibility when he has said all right he believes there should be a strike.

To cut the president has put john kerry out there, making the case the syrian government did use a chemical weapons attack.

I can tell you today that we now have evidence from hair and blood samples from first responders in east damascus, the people who came to help, we have signatures of their hair and blood samples.

The case is growing stronger by the day.

I believe as we go forward in the next day's, congress will recognize we cannot allow him to be able to gas people with impunity.

Making a forceful case.

If this gets a no vote, does that set up the u.s. for a costlier intervention down the road?

That is certainly an arguments of taking up a larger military action.

At the same time, people on the other side saying, a very defiant tone, saying the u.s. has no proof he was the one who ordered the strike.

People on that side saying there is a possibility the middle east is a tinderbox and everything could spill over.

Just in the minutes we have been speaking come israeli radio has confirmed they launched a missile test.

The israelis guarding for any possible action in their region as well.

You have been doing this for years at the boston globe.

How are original is the method by the president?

I could not get a handle this weekend on how the international relations community is reacting to the process the president has gone under.

How original is the territory the president is on?

It is very unexpected.

Everyone thought the president was starting for a missile strike, a limited one he had spoken about and people have spoken about over the weekend.

It was taken as a really surprised development when he decided on what he announced, he decided to wait for congressional authorization.

This is the president who when he was campaigning, a former constitutional law lecturer himself said he did not agree with president's doing military action without authorization of congress.

In one way he is trying to live his own words.

As far as the reaction, there was one well-known commentator who referred to it for the waiting for good dose strategy.

This was a test a missile defense.

What is israel thinking right now?

I think they are concerned about any action that is taken in syria having spillover effects.

They are concerned about rockets coming over from his belote and hamas -- hezbollah and hamas.

They want to be ready for any bench quality.

Does it mean going it alone?

I do not think there has been discussion of that at this point.

There is so is a possibility, but that is not what i think people have in mind at this point.

I think people are talking about self-defense.

In washington on the diplomacy of the events in syria.

We will continue to keep you apprised.

Microsoft buys nokia's finance that business for more than $7 billion.

Coming up, we will speak to the c.f.o. nokia's financial handset business.

? this is bloomberg "surveillance." i'm sara eisen.

Mexico and brazil are demanding to know why the u.s. allegedly intercepted phone calls and e- mailed of their president.

Allegations were made by glenn greenwald who obtained secret documents from edward snowden.

Beijing will cut the number of cars registered in the city.

An effort to clean up the air and reduce congestion.

Officials want to cap the number of cars in the city of 6 million.

Presently 5.3 million cars.

"the butler" made it three weeks in a row.

Cook and $20 million, enough to beat a movie from one direction.

The best summer ever for hollywood based on ticket sales.

Revenue up 10% from last year.

It was so good.

The one direction movie.

I did not see it in 3d. you did not watch it.

Ok, moving on.

Moving -- buying nokia's hands of business.

The cheap financial officer for nokia joins us from finland.

Good morning.

-- chief financial officer.

You become a very different country.

How well nokia move forward in the next 12 months?

Will there be a lot of cost rationalizations for what remains of nokia?

Well, first of all, we feel this transaction is very satisfactory transaction for nokia shareholders, and we are really building a strong european company.

This transaction will continue to be a big company.

13-14 billion of your rope turnover.

An improved earnings profile and three businesses that are each a leader in their respective areas.

For the people of finland, what does this mean, and will the new nokia be as vibrant as we perceive it for finland?

There is clearly some emotion.

Inland will actually have two strong technology companies participating.

Microsoft will have more than 4700 employees in finland.

They're also investing 1/4 billion dollars.

When we look at nokia, nokia will continue to employ over 6000 people in finland.

It will be a strong technology company.

The shareholder -- shareholders of your firm of this transaction.

What is your order of business?

Your best practices in the next 12 months to continue the share advance?

Nokia will continue to have three businesses.

The mobile networks business, which is leading in the mobile brand band -- broadband.

Operating in 120 countries in the world.

We will have a leading location appear yen serving every four out of five cars rolling out in the world.

In and increased presence in mobility.

We're very happy we are a top three customer after this transaction.

We will further continue to expect -- invest in advanced technologies and continue to license those nokia technologies to other companies around the world.

We feel these three businesses have very good prospects going forward.

Specifically the handset and self and business have become very competitive.

How do you see nokia reinventing itself in being able to compete better?

Well, as part of this transaction, if it closes, the nokia prices and services business, the handsets business, will move to microsoft.

In that sense clearly nokia will not compete in not market anymore.

It is a very competitive market but we have been building up momentum with bill lumia handsets.

In that sense, it is our interest that microsoft continues to win in the market.

That will be good for the company and good for finland.

Thank you.

Chief financial officer of nokia.

Scott galloway here.

What stands out to me is the changing fortunes of nokia with competitors like apple and samsung.

The deal is a reminder of the price tag of the fact that they are taking over the hands of business.

It feels like some level of honor.

Remember how dominant nokia was?

It was the symbol of finished pride.

It was almost like a mercy killing.

This does not deal -- 10 years ago this would have been unimaginable.

I agreed with that.

What does this mean for android?

Barry recalleditzholz has agreed discussion on this.

-- has a great discussion on this.

-- steve ballmer is stepping down.

One reason he might be stepping down prematurely, five years ago you said it will be the dominant platform?

You probably would have said microsoft.

They are standing up for.

And greed is at 80. what are recalling this, smartphone september?

It is.

By the way, much more on microsoft being able to buy the business.

Also more from tom's conversation with steve ballmer.

We are all over it here.

It is marked on september.

No less than six new smart phone scheduled for release in this month alone.

We will talk about the companies behind the product launches.

Who has the most to lose?

That is coming up.

I? this is bloomberg "surveillance." alix steel with company news.

Cbs and time warner and the cable battle just a time for the nfl season.

They agreed to pay a significant increase for the right to broadcast cbs shows.

It is believed to be below $2 per subscriber per month according to people with familiar knowledge of the matter.

The c.f.o. of a micro blocker has been talking to banks about handling offering.

Twittered said to be waiting for the third quarter results before deciding to file the i.p.o. paperwork this year or next.

Andverizo vierzon issue 50 billion in bonds.

This could top the record -- record 17 billion offered by apple this past spring.

That is fascinating.

What would be the yield differential?

Very different companies.

What will this wind up being?

Less borrowing and less dividend and buybacks?

You wonder if it will get a lower deal because of the persistence of the cash flow.

What we have?

Single best chart?

The september single best chart.

Take a guess.

This comes to us courtesy of a client talking about penetration of the top devices of we know and love.

Smartphone reached 50% penetration in october of last year.

Less than 10 years.

Take a look at the vcr took over 10 years.

The dishwasher over 40 years.

The stocks to the rapid pace of adoption for the smartphone.

They basically said they expected to reach 80 percent saturation in august of next year.

That means by 2017 smart phones will be the only mobile phone at that americans will use.

At this pace, truly unprecedented.

That shows what the competition has been heating up.

Not over yet.

September marks 6 big cell phones launches.

Samsung starts tomorrow.

Sony premiers tomorrow.

The big apple announcement next tuesday.

Think and as we of scott galloway.

-- thank gooness we hvedness we have scott galloway.

A lot to be excited about.

Who are you interested in seeing most?

To go to the most interesting event is that apple launch of a discount phone.

-- the most interesting event is apple launch of a discount phone.

They became below-cost producer at the premium price.

The biggest market share, lowest price.

That would be like a ferrari had the market share of toyota.

They have been getting pushed up to the high end of the medium- priced guys have started to take share from them.

What is the right price point?

I am a big fan of role models.

I think mckee drexler launched old lady with a key action.

80 percent of the gap for 50% of the price.

I think that is the same algorithm here.

I think it is somewhere in the range.

You brought along a map of new york city.

Here is manhattan, new jersey, the island's. we're looking at iphone, and 3com and blackberry.

The summary is manhattan is very red.

Is that because of the applications?

What i hear from people switching to a hundred iphone, 99% because of apps.

I think iphone has become an accessory for wealthier people.

Some run of an express a benefit that says i have a wealthy income.

-- somewhat of an express a benefit.

It is striking when you look at the map of america, urban, ohio -- higher income ios.

Middle income, and dree.

A tiny blip in midtown with their blackberries.

Within that, who has to move?

The is the low end have to get more sophisticated or does apple have to get more basic?

Which is a marginal player of interest?

That is the correct question, who will increase the market cap the most?

To go to go the smartphone set to be released.

September 7. three iphones will break.

Dad, i'm sorry but i dropped it.

Maybe you will get him a smart watch instead.

I will end the hour as i do as always with the forex report.

The euros starting september on a weaker note.

Stronger dollar against the yen.

Watch that as it inches forward.

Coming up in the next hour, ian bremer on syria.

? this is bloomberg "surveillance." microsoft buys nokia's phone business.

Can microsoft competes with google and apple?

It is official, they control all of verizon.

We ask what is next after they get 130 large.

The president will meet with congressional leaders.

He seeks support for a strike on syria.

Ian bremer joins us.

Good morning.

This is bloomberg "surveillance." joining me is sara eisen, alix steele for scarlet fu.

Our guest this hour is even grimmer.

-- ian bremmer.

We have a lot to talk about with deal activity, microsoft and others.

Economic data to watch today.

10:00, construction spending and the big manufacturing report.

That will be out at 10:00. h&r block comes out after the bell.

The big deal that we will talk a lot about today, watch for conference calls.

Conference call on the vodafone acquisition.

At least a stake.

We're watching geopolitical events.

Jack hegel and martin dempsey will meet today.

-- chuck hagel.

All to sell the idea of u.s. military intervention.

A lot to keep an eye on in today's morning briefings.

A pat as $7.2 billion deal.

32,000 employees will transfer to microsoft.

The business accounted for half of the total revenue last year.

They will return to microsoft after three years at the helm of the top.

And this is according to a of a person familiar.

This could top the revenue of 13 billion.

Buying the stake for 130 billion.

Full control of the most profitable u.s. phone carrier.

Time warner cable just-in- time for the nfl season.

The feed bound to be below $2 per month per subscriber.

That is today's company news.

Taking it up with the big one you mentioned.

Microsoft buying nokia's hands of business.

$7.2 billion deal.

Companies trying to be relevant.

It changes the nation -- the nature of both businesses.

You spoke with steve ballmer.

Listen to what he had to say.

This acquisition is really about accelerating our position.

Accelerating and improving innovation.

Being able to put a clear, concise communication for one brand into the market and being able to be very agile in the business strategy and tactics to go to market.

I am excited about what we accomplished in the 2.5 years we built the partnership, and we are extremely glad to do this acquisition as a way to further accelerate our position with windows phones.

It is about microsoft position, but what is also interesting is the ceo will join microsoft again and is widely speculated to potentially take over.

Been there has been a lot of push back to the deal.

There is some serious push back.

Did to failing phone brands that have not been able to hold up?

They also had the surface tablet.

They had to have the $130 million writedown.

They have not had great success.

Microsoft will have to sell 20 million more units.

Value for shareholders of microsoft.

Splitting up the troubled consumer area with a cash prize enterprise -- the cash cow enterprise area.

How you do that?

It is the question of is it more valuable as a split off?

I got very little from mr.


I think it could have been an opportunity for him.

What you said on declining market share of the windows phone, it is outselling the blackberry.

That is in 34 markets according to microsoft.

Nokia and microsoft have already had been intertwined.

That is a big part of the story.

Takeover to go to me, try awfully.

Very difficult.

They may be able to make more money off the unit.

$40 per unit.

That is something.

One more number.

Nokia shares, 50% in 2007. -- . we will talk to corey johnson.

He has been following this for a long time.

It tuesday.

That should make you feel better.

Switching gears to something far more serious.

Ian bremer, author of every nation for itself, winners and losers.

Wonderful to have you here.

0 is barely a number.

Eastern mediterranean.

I was thunderstruck this weekend at the lack of analysis of what they will do, the adjacent successful arab states will do.

What will they do in response to the president's comment his decision?

You need to go to congress?

Not a very momentous decision.

The main point is president obama is own foreign policy team was surprised.

You basically had obama say go for it, a very strong and immediate response.

You then had cameron who told the president he was with him and was not with him after he went to parliament.

And a bunch of private reits with senate and house members were they all said we are going to make politics.

You were scathing about this.

How do the arab states view what we witnessed this weekend?

They see u.s. power and decision making in the region.

One thing very important is expectations management.

When you have the secretary of state say we're going to do something about this, you set expectations.

Yesterday i saw john kerry say congress will not let down the people of syria.

It is not clear to the congress is supposed to be letting down the people congress.

If you are israel, moscow hosting the g-20 summit, this is sending a message to you.

If you draw lines in the sand, we killed many more people within the syrian civil war, how do you framed the importance of going after them and punishing them for chemical weapons use?

For obama you frame it by the critical importance by the second red line, which is that of iran.

The iaea came out with the report that showed the iranians are moving full tilt on uranium enrichment.

That is what the new regime.

The credibility of the united states in responding to that red line is significantly eroded if mass use of chemical weapons is something we would like to do something about but congress is not going to vote for it.

Furthermore, i think congress will vote for it.

I think that is why they did not call it a snap vote.

Now they can make the case and show how important it is.

Even the resolution passes, the nature of the resolution, the precedents for the hoops you have to go for will also be a message taken very clearly our american allies and antagonism around the world.

I am abroad -- glad you brought up cost management into this.

Is there worry about the cost of the decision and what could come next?

The cost is international.

The political advisers do not care very much about that.

There is not a strong electorate in the united states that can articulate in syria.

I think obama is paying attention.

An important day for u.s. policy, u.s. foreign relations meeting later today.

Data check.

Risk-on over the three-day weekend.

Terrific move in foreign pmi's. higher yield.

Crude slightly weaker.

Nokia shares are up big as well on word microsoft will spend more than 7 billion on the hands of business.

That is coming up.

? good morning, everyone.

Bloomberg "surveillance." ian bremer with us.

You know him from his wonderful concept, a g-0 nation.

This is after the wonderful success of pittsburgh.

The president leaves for meetings in st.


Historically fractious moment.

The g-20 meeting being hosted.

U.s.-russia relations could not be worse right now.

All of the revelations continue to come out on the nsa surveillance internationally.

The brazilians think they may cancel the summit because they were engaging in surveillance of the president.

This serious situation with the americans trying very hard to push a coalition together.

What is the best practices of the president?

He does not want the g-zero world.

What does he have to do?

What is the to do list?

He would have to show more interest and willingness to take leadership.

John kerry tried to do that.

You saw it this weekend.

You were vicious on twitter.

He absolutely got hurt by obama's decision to go to congress.

He said this cannot stand, we're going to take action, we're going to respond.

In the arab league we said we would like it to go through the u.n.. once the u.s. is already out there, why should they say anything or be supportive?

British, same situation.

Germans, same situation.

Canadians have told us they're not part of this.

Americans affectively are going with the french.

What should we look for out of the meetings?

This is not a photo op.

This is worse.

It is worse than that, although your bow tie helps.

What we have to look for is where are the russians and all of this?

How willing are they?

. while that is going on, russians will try to get congress every reason to vote this down.

Might they pull a rabbit out of that in terms of negotiations?

Where are the american allies?

To go that is what it to look for.

-- that is what we have to look for.

Ian primer with us.

Good morning.

Bloomberg "surveillance." ? this is bloomberg "surveillance." i'm srasara eisen.

Guest host for the hour is even grimmeian bremmer.

Microsoft by nokia for $7.2 billion.

Corey johnson joins us to talk more about that.

Plus, verizon pays 130 billion for the wireless business from vodafone.

Cristina alesci has been covering about one.

Your impression of microsoft scooping up the cell phones business to try to get in the game.

Struggling businesses when it comes to the market.

The handset business for nokia has been a mass of cash- burning problem for them that was a great strength for some time and became the focus of the big company.

They are pretty excited to get rid of the problem.

What can microsoft make of that?

It is an open question.

Microsoft has not been a total failure.

The ex boss has been an enormous -- xbox has been an enormous success.

They have made a decision that the old way of doing things, the high-margin software , that was the old model.

Really high-margin.

Very successful for them.

I just interviewed steve ballmer.

If you would have done a better job to be honest.

Levy asked you a direct question, it does he ever get out of talking points?

He is the worst interview an all time.

I was glad you had to do it instead of me.

It is like playing football against the colts.

You cannot talk to him.

When you look at the memos coming out of the company, they are penetrable.

Impossible to understand.

No declarative sentences.

That is a problem for the company.

When you see jamie dimon on t become he is a lot like that in meetings and conference call.

Steve ballmer is leaving for the next guy to run the shop.

Some form of agglomeration.

Where does the phone actually fit in?

I cannot figure that out.

I think they look at it as a series of capabilities, not a particular phone right now.

I think it is fair to recognize what we see in the smart phone business, the ipad itself or tablet business did not exist three years ago.

It was ereaders.

What we're looking at is very much early days.

The knee -- the nokia phone, they are really well-liked.

They are really cool phones that work well and have tremendous functionality.

They have not have the take up on the lam -- claim that there are not as many apps.

I do not think the game is over in terms of winning customers and the business.

This is a dramatic departure from the thing microsoft has done well, which is a high- margin operating systems business.

While everyone wants to compete in the smartphone wars, cristina alesci, the wireless carriers are sitting pretty.

Here comes verizon doubling down.

A lot of this has to do with the fact that the u.s. market has been booming.


We talked about this last time around.

We had a bidding war for sprint a couple of months ago.

The fact that they're cutting down on the most profitable business.

This has 50% profit margins.

That is an amazing business.

What they could see ahead is potential margin compression.

You have competitors like sprint that have a big money baker -- maker.

They are out there think they're looking to do more competitive business.

Owning and paying for a cell phone in the u.s. is a lot more expensive than paying for services and other parts of the world.

That is what they may be seeing coming down the pike.

The reason why it may think strategically owning the assets of 100 percent, it is better able to fend off some of the competition down the line.

It raises the question, what does this do for the merger and acquisition market in general?

That is a very good question.

What a lot of bankers would say because they're more motivated to prop up deals, this deal gives a lot more confidence in ceo's. the fact that they can execute the deal supposedly what the bankers are seeing.

They are motivated by self- interest.

The fact that the banks are really running out.

U.b.s. alone, this takes them from #11 to no.

6 in terms of the ranking and a merger and acquisition advisory business, which everyone was laughing at a couple of years ago.

Where will the deal come from?

-- yield come from?

We do not know yet.

A great question.

Apple is a fantastic credit.

They have all lot less on the market.

That was a big consideration in the deal, making sure of the credit rating did not fall.

Cristina alesci, thank you.

Bluebir oomberg "west." what should microsoft buy next?

This is bloomberg "surveillance." ? this is bloomberg "surveillance." you are looking at the newly built east and span of the san francisco oakland bay bridge.

Reopening to the public doesn't time for tuesday's commute.

Vehicles started crossing.

This has been a decade and construction delays.

And i am assuming that is our office at the end of california st.

Pierre yen there it is.

It is the bay bridge.


Bloomberg "surveillance." sara eisen.

Citigroup has been selling off hedge fund and private equity assets.

The banks of more than $6 billion worth of investment in the past month.

The move comes as they work to meet new regulations restricting the size of so-called are tentative -- alternative investments that banks can hold.

New capital rules trying to set of eyes bank of america to sell its stake in china think.

The sale triggered by new regulations making it more expensive for financial institutions to hold minority stakes in banks.

Strong summer sales of clothes.

A boost.

It was the strongest monthly sales growth since october 2009 when the chain saw a 35% jump in sales.

A missile launched detection by russia's tracking system in the mediterranean turns out was an israeli test launch.

Ian bremmer is with us this morning.

Also with us this morning is in julianna goldman.

Any response from this missile launch?

We are still waiting for a response from the administration.

I just as officials who i had been the mailing with earlier, they said no response.

I will be getting something soon.

In a new twist, is really media is reporting that this was a joint missile launch with the u.s., so lots of questions on this day.

Really speaks to their fragility of the region.

I think the u.s. want to remind everyone they are strategic allies of israel, not just on intelligence and defense.

What will this mean for iran in the region?

The u.s. wants to make it clear, that military relationship is not going anywhere.

The geometry of the maps, the fiction of syria 80 years ago, is focused on of the golan heights.

How have that changed -- how has that changed for syria and lebanon and israel?

First of all, one-third of the country has been displaced.

Lebanon is still a country, but they have the potential not to be a country.

Hezbollah, which has been a political party in lebanon, has thrown its entire weight behind assad.

We have the fracturing of this region into sectarian conflicts.

Israel is a word about that level of instability.

What about the israeli cohesiveness about a unilateral approach?

The israelis do not need to know to the -- go to the knesset for this.

There is plenty of coherence the.

With an essay, congress -- nsa may not even be nsa, congress may not even be aware.

The main take away from the u.s. is the u.s. does not want to be the world's policemen any more.

That is not just planning obama, that is blaming american allies who have shown very little support.

It is hard to glean from behind if your allies are further behind.

American antagonists have been able to double down on a pretty bad dictator.

There is plenty of blame to spread around.

What is the role for congress in 2014 right now?

If you look at the republican calculations, the big elephant in the room is iran.

It is about a signal that inaction would send to countries like iran.

Futures are up 12 today.

This is bloomberg "surveillance." you can also watch us streaming on your tablet, phone, and on

Our guest host for the hour is ian bremmer, from the eurasia group.

Tom, hermes, then make your bags.

Just the first and a number of retailers showing positive earnings.

They have been a winner.

Mixed signals out of the likes of wal-mart and target, and also macy's. let's be clear, and they are your backs, not mine.

-- bags, not mine.

Teachers are of a big this morning.

Jim taylor is vice chairman of the harrison group.

He has some interesting data on what we do with our money, those of the high income in america.

What is the new new in september?

What is the distinction of the fall of 2013? we have had a division in the economy between the middle and upper-middle, and affluent class, which for the four years, people had been saving money at an astonishing rate at the top.

We have a dollars trillion in savings accounts and $1 trillion in in checking accounts.

People have a lot more money to spend.

Within your work at harrison, what is the distinction between aspiration at hermes, compared with louis vuitton.

? i think they are both doing it right.

The question is not how to cheat something is, but what is it worth?

As people came out of the recession, and learn the lessons of financial responsibility, self reliance, and now they are asking themselves, but is it in the economy that collects material value?

Both have set a benchmark for something worthy of being owned.

I just traveled to italy where i saw two brands in motion, ferragamo and ferrari, in part because they have stayed true to their roots.

For some, innovation is so tempting, but both of these brands have rarely stayed true to their roots.

Ferrari, at one point, most of the couture shops were looking for this none customer who would put their higher stuff at risk.

Fendi is in, according to madison avenue.

How important is location?


That goes not just to the fifth avenue's or the shopping areas in l.a., it even goes to the allied stores you are involved with . ian bremmer wants to step in.

I am wondering how much is coming up of this extraordinary for emerging-market boom.

As we see the emerging market sell-off, are a lot of these high and brands running that bubble hard?

They have been writing a bubble where people are searching for extraordinary quality without increasing the number of objects they are buying.

They are buying better object without searching for discounts.

At one point, 95% of the economy were looking for discounts.

Who is the brand you are watching most closely?

On the retail side -- neiman marcus.

On the brand side, ferragamo.

We will be back.

? good morning, everyone.

It is a big deal in new york, in the mayoral race.

He is actively running for mayor.

He will be with betty liu in 8:00 hour.

We are talking about a number of corporate partnerships.

The other corporate duo you're watching a cbs and time warner.

There was a blackout for many customers in the new york area.

Yesterday, time warner agreed to pay to transmit cbs programming, right in time for football season.

Alex sherman of bloomberg news, euro weaken was ruined by this story.

Who caved?

No one gets everything they want in a negotiation, but i would have to say time warner caved, if you have to pick one or the other.

It seems they did not get everything they wanted in the deal.

One of the big features was not just the money.

Cbs wanted to dollars per has scriber per month.

-- subscriber per month.

Time warner wanted closer to $1. they ended of closer to $2, but the big thing is mobile rights.

Time warner wanted access to the out of home cbs mobile writes.

-- rights.

Cbs did not want to do that because they want to sell that to a particular new entrant who would be coming down the road.

That could be apple, google, intel, some of the already in the video distribution game but is not a live player like amazon or netflix.

Whoever it is, cbs knows that they hold a pretty big chip there.

What is the precedent in terms of network providers?

Cbs just struck a deal with verizon fios.

This was a longer black and unexpected, but i would expect to see more in the future.

In honor of ian bremmer being here, we have some positive news.

35 years after her first attempt, diana nyad completed the swim from too much to florida without a shark cage.

64 years old.

It took her 53 hours.

That is incredible.

It is her fifth attempt and she says it is our last one.

We have to tell snowden there is another way to get to cuba.

We will be right back.

Good morning, everyone.

To get the season back in order, robert nardelli is with us, former chief officer of general electric.

His thoughts on horizon, vodafone, microsoft, nokia, and the and in a season.

Our ghettos for the hour is ian bremmer, president of the region group.

Verizon may issue as may as -- as much as $50 billion in stock.

Verizon is buying a stake for $130 billion.

The deal gives it control of the most profitable u.s. mobile phone carrier.

The twitter ipo is in the works.

The cfo has been talking about handling the offering.

Twitter is said to be waiting for its third quarter results before quitting to file its paperwork this year or next.

Microsoft is by nokia's and said business.

The devices and services unit and employees will transfer to microsoft.

The business had accounted for half of their revenue last year.

That is today's company news.

Me know the president has called for a vote of congress on whether to intervene in syria, and that makes it a crowded day for -- agenda for congress.

The budget deadline is looming.

If there is no resolution, there is the threat of a government shutdown.

Not to mention, the president still needs to make a decision on the fed chairman.

The debate really gets started.

We begin with the deficit is improving.

Alice rivlin has seen this before, the initial director of the congressional budget office.

She knows the debt ceiling debate is a perennial washington distraction.


rivlin, good morning.

So many times we have talked about the debt ceiling.

What is different this time?

I hope what is different is syria, that it reminds people in congress that they are at the helm of a great nation that the world is looking to for leadership, whenever you ought to think we do in syria, the u.s. is the leader and everyone looks to us.

That means we ought to also have our ordinary business and government in the hand.

The debt ceiling is a silly distraction.

That is all it is, a distraction.

Congress ought to make a budget for the next fiscal year.

Most countries have that.

We are hung up on partisan bickering.

At the same time, they need to raise the debt ceiling so we do not have this counterproductive argument against.

We have an improved budget deficit, the vectors are moving in the right direction.

Should congress take a victory lap over the improved fiscal situation?

I do not think so.

The actors are moving in the right direction, meaning the deficit has come down, and that will continue to come down over the next couple of years as the economy improves, but it will go up again as the boomers retire.

They need to take a longer look at the run.

They have also brought the budget deficit down in absolutely the wrong way.

The reason is going down is hardly accidental increases in tax revenues, and partly that they cut spending, but for discretionary spending, for the things that we really need to run the government and grow the economy.

They are doing the wrong kind of deficit reduction.

They need to get back to a bargain in which they can say let's get rid of this ridiculous sequestered and, in return, make some adjustments in the long run that will bring the deficit down over the next 10 years or more.

A good point on the quality of the budget cuts.

Ian bremmer has a question.

Obama will have to spend a lot of time and political capital on syria to get something done.

Are you worried, that if the vote goes down, that this will have a significant negative impact on the ability of congress to get something done on the debt issue, as well as on the fed chair?

I hope not.

It is important that we show we are a great nation and can get something done.

The fed chair argument seems to me, quite irrelevant.

We have several good candidates.

I think janet yellen would be excellent.

She is not the only one who can run the fed.

That is only a symbol of the silliness of the financial press, if you will forgive me, fanning this into a big fight.

Who will be the big players this time around in the budget debate?

The budget director.

The treasury secretary will certainly play a role.

On the congressional side, you have the leadership in both houses who will try to cut a deal with the president that will move us on from this brinksmanship about the budget and let us talk about more serious things.

Should the american public be concerned about a ratings downgrade again?

A ratings downgrade, again, it is important to think about the financial press.

The rating agencies do not know more any more about this fiscal situation than you and i do.

They have expertise in a lot of things, but not in that.

These numbers are all out in the open.

If the u.s. does not get its act together, it is in long one fiscal trouble, and that is a surprise to nobody.

Thank you.

It is time to shift the agenda.

I know that you were having a conversation with steven ballmer.

Microsoft has to get off of talking points.

That is their first order of business.

They have to level with their shareholders and border directors.

I know this is out of your area, but it is about common sense of talking to their constituencies.

I think the top level is good at microsoft talking to their corporate clients.

I think they have the ceo relationships, they respond immediately, but when they are talking to the public, it does not work.

Is that a ballmer issue or microsoft issue?

If you are the ceo, if it is not your issue, it becomes your issue.

We have some interesting answers about what they could be buying next.

One could be a decent app store.

Also, if they are bolstering their games, maybe they should look at acquiring foxconn.

I can't wait to see what will happen with all those iphones that foxconn is making.

International growth is something that these phone makers need to ramp up.

Everyone expecting to seek a newer iphone to get into the emerging markets.

Microsoft's engagement with the heads of top companies around the world is almost unrivaled.

You do not see it publicly, but you look at their relationships with companies, they spend time with these people.

Thank you for coming today.

You were vicious on twitter this week.

It was a surprising decision that the president made, and you were not the only one.

As president obama speaks to the lawmakers, he is getting on an airplane to sweden, and then to russia for g20. "in the loop" is next.

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


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