Stocks Continue to Surge: Surveillance (04/02)

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April 2 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests: Kamran Ansari, Michael Purves, Fiona Murray, Will Dean, and Alexander Kliment. (Source: Bloomberg)

We begin three days of key economic data as the stock market surges.

The dow is 44 points from a record high.

The new microsoft, they greet developers today.

It is april.

I need to get cut and chiseled.

Call of the surveillance steeplechase.

Scarlett has to jump into a vat of mud.

This is "bloomberg surveillance." we are fat and live from our world headquarters in new york.

Joining me is scarlet fu and adam johnson.

Tough mudder.

The ceo will join us.

This is tough stuff.

Morning brief, here is what we have.

In the u.k., coal prices rose.

In japan, the inflation will rise to 1.7% in three years.

Tom keene, running in place as i speak.

The palestinian president seeks statehood for his country outside negotiations.

President obama meets his goal, announcing 7.1 million people signed up.

There was a victory for the president.

David plotz, one of the orchestrators -- saying we got the 7 million that they forecast.

We appreciate the right and the left.

There will be debate on the data coming out today.

The mba mortgage applications at 7:00. it is a weekly number.

Unemployment at 8:15. if they are cutting more paychecks, that is an indicator about jobs.

Monsanto will be before the bell.

Amazon may unveil a tv viewing device today.

Microsoft is kicking off its annual developers conference.

We will talk about that in this hour.

Let's do a new data check.

We advance -- 1881 on the s&p. the euro, 1.38. nymex crude, still at 100. the vix, stunning number.

13.10. to see it under 13 to a 12 signals bull market.

I have no idea why i put castor seed of future in there.

I did not know there were castor seed futures.

You are looking at the drop in commodities.

I am getting in shape for later, the tossugh mudder.

Gold futures , 1284. still underwater.

This is why you tune into "bloomberg surveillance." auto is good.

Auto is out of business, auto has come back.

Our second print -- about 60 million yesterday.

Michael mckee suggesting that is a big deal.

It is a big deal.

You wonder if we are going to start going back down again.

The replacement cycle has been completed.

These are different kind of markets.

Autos are trading cheap.

16.3 3 million vehicles sold.

That is the highest since february of 2007. get you back to the end of the crisis.

We did not know what to choose about the front page.

Here scarlet fu.

All you had to do is look at the print on u.s. stock markets.

The s&p 500 closing at the best level of the day, to set an all-time high of 1885 and change.


The second time they have set a record.

The dow was is about 44 points shy of its record.

All of this in the lead up to jobs on friday.

Would you say with your experience on wall street, a little bit of dressing the window?

March 31, i ought to look good, should i own ibm or whatever?

There have been 11 the kleins anywhere from two to seven percent.

-- have been 11 declines, anywhere from two to seven percent.

We will stay with markets.

Goldman sachs in talks to sell its stock exchange market unit.

Imc financial markets is in talk with goldman.

They wanted as much as $30 million for this unit.

I want to point out the way we phrase that.

Pay as much as $30 million.

After having paid $5.4 billion.

It drives me nuts where we say millions billions.

They paid 600-5000 million -- 650 million -- we're looking at a capital gain or loss side of it.

The backdrop here is that a sure the trading has dropped to about 12% from more than 70% over the past decade.

This is something we will take up later on.

The new york stock exchange trades 30% of the volume of its own listing.

Our final story, general motors ceo is back in d.c. for a second day of testimony.

Yesterday she told a house committee she was sorry.

She is the face of a new gm that puts customers first.

There were few detailed answers.

She said she has to wait for the results of an internal investigation.

She said that gm hired kenneth feinberg, who measured -- managed funds for 9/11. i cannot turn back the clock.

As soon as i learned about the problem, we acted without hesitation.

We said we had a problem many did -- that needed to be fixed.

We will not shirk from our responsibilities now or in the future.

We will do the right thing.

It was another report from reuters.

They did not change the ignition switch because it would add about a dollar to the cost of each car.

It was a part that cost a buck.

They had to cancel the dc-10 because an engine fell off the wing and they blamed a $1.10 bolt.

Less than a dollar to fix.

We talk about the new face of gm.

There is no new face.

She has been there for decades.

Jeff boyer, who came on last week, who will be in charge of making things right, he has been there 30 years.

There is nothing new at gm.

They're just shuffling people around.

I am upset.

People died in this whole thing.

An interesting morning as we begin the second quarter.

The vix is under 14. at&t buys back 120% of their stock -- april fools' day.

. michael purves is with us today.

Congratulations on your continued optimism on this market.

What do the bears have the most wrong?

This will be the most unloved equity rally.

At the end of the day, the valuation is not great on the s&p 500. the equity flows are coming in.

That is a tidal shift.

You have this unwind of quantitative easing, coupled with the three decade rally of treasuries.

The water has to go somewhere, it will go to the u.s. equities.

Why is this not about janet yellen?

What is the equity characteristics away from the fed distortion?

At the end of the day, you have earnings.

You're going into a healing of all of these things.

The snow cloud hanging over the data, a lot of people are glass half-empty.

With the snow cloud fading, people will come back to the fact that the economy is on the mend and that there are a lot of stocks that are cheaper than the s&p 500. there's talk about how there is complacency in the market as well.

The vix tends to spike up -- not spike up, but move up.

What is going to get us there this time when we have already shrugged off so many geopolitical concerns and other events?

What i am looking for is we are probing the new lifetime highs.

As we get clear of the next fomc and see how yellen comes out, there will be a lot of the smart money that will want to get ahead.

That may be a little bit of a had steak and we may not get that big -- it did not work.

No, it did not.

You took your vacation in the hamptons.

Just following your lead.

It is a bunch of bs.

There are a lot of those throwaway comments about wall street and old wives tales about what works.

Michael making the case for buying stocks in the public markets.

You're looking at companies and private markets.

Where do you see opportunity right now?

Valuation is up across the board.

Things are expensive, but things are getting it up.

-- bid up.

The exits on the other end are frothy.

Facebook bot oculus -- bought oc ulus.

Bill gross will join us on bloomberg radio on friday.

He is underperforming.

Do you see further ugliness in bonds as people rotate to equities?

When does that pain begin, when will others feel that?

You will start to see economic data trending better and some of the exciting -- the anxiety will start to resurface.

If you look at where a ten-year treasury should trade at, if you look at nominal gdp expectations, you can make a case for well over 4%. we are coming out of this pressure regime as well.

A lot more to talk about in the hour.

Our twitter question of the day -- do you believe in this bull market?

We love company news.

We talked about it at 4:00 a.m. scarlet fu has its.

A recall from chrysler, recalling some jeeps.

Almost 900,000 jeep grand cherokee's and dodge to rating goes -- dodge durangos due to break problems.

-- brake problems.

Volkswagen wants to open a plant.

They have applied to set up a plant in thailand.

Automakers accounted for almost 90% of sales in thailand last year.

Fallout from michael lewis' book.

Virtu will delay its ipo and will not have an offering until the end of april.

They had planned to start the process this week.

That was before michael lewis said the got market was rigged.

That is today's "company news." michael lewis will be joining us on "bloomberg surveillance." lots of talk about.

We will get to that in a little bit.

Coming up, a supreme court ruling would be life or death for aerio.

What barry diller has to say.

This is "bloomberg surveillance." ? only on bloomberg television for the next two days.

An intelligent conversation with michael lewis.

Everyone in global wall street is riveted by his book, the allegations he has made.

Look for this morning.

"market makers" at 10:00, erik schatzker and stephanie ruhle will speak with mr.


He will join us tomorrow morning.

We will beat him up like up in yada.

I am kidding.

Michael lewis, two interviews on bloomberg.

Starting this morning at 10:00 a.m. this is "bloomberg surveillance." i am tom keene.

With me, scarlet fu and adam johnson.

Barry diller sat down with erik schatzker.

It was to talk about aereo.

It has all broadcasters up in arms.

The supreme court is set to rule on whether aereo can resell broadcasters programming without their permission.

Erik asked whether it is game over for aereo if the company loses the suit.

I believe so.

If you lose -- we are finished.

There is nothing you can sell this?

-- you can salvage.

Aereo -- it would probably -- i cannot see a path for.

It would probably not be able to continue in business.

You have a platform.

You have a multi-programming distributor.

You would be like a cable company.

Could you not compete with content for -- for content with cable companies?

If we could make a deal with broadcasters, we probably could.

The value proposition would go out of the game.

Aereo is a low-cost method of receiving over the air broadcasting.

That is the platform.

Do you know anyone that uses aereo?

I do not.

It is relatively new.

Barry diller with erik schatzker.

We will have more on "surveillance" later on.

From where you sit in d.c., why is aereo important?

It is a new model on being able to obtain television over they are using internet protocol.

There are different models.

Aereo is basically free.

I think it is no cost for the most part.

Nimble tv is trying to pay content providers.

They are with an ip connection, wherever you might be.

People want to watch things on demand where they are.

Cbs, disney, they are very mad about it.

Coming up, you remember the website, hot or not?

You read people's attractiveness.

There's a connection between your looks and your ability to win funding from investors.

We will discuss on "surveillance." ? good morning.

I am tom keene with scarlet fu and adam johnson.

Mike lewis on at 10:00. this was all over twitter last evening.

Michael mendelson, the biggest concern we have with modern markets is their complexity and operational risks.

The market structure that enables the high-frequency traders and provides us with their benefits may be one that risks technological calamity.

It is a caution paragraph.

Here is another from "the wall street journal." prices responding quickly and traders not being able to buy or sell a ton without the market moving is what is supposed to happen.

An efficient market should not be mistaken for an unfair one.


I got a lot of heated debate.

It is bingo.

All of the great work , all of that distilled by a true hedge fund pro.

Michael lewis spoke with charlie rhodes about "flash boys." he talked about why he made the act -- accusation that the market is rigged.

I don't understand how you have a group of people operating by different rules than the rest of the economy.

People could think it was right to organize the stock market as a two-tiered thing.

Some people have special access and advanced word of prices and everybody else taking it.

It is shocking.

The other thing that goes unmentioned is how quickly things have shifted.

High-frequency trading has come on really quickly and has dissipated a little bit.

Wouldn't you say the prophets have evaporated, unlike mr.

Lewis' writings in the book?

These guys have -- the advantage.

Ok, there are some problems here, but be careful about the genuine efficiencies that have come in.

The big debate is the public stock exchanges.

They're publicly traded and that is a big difference from where we were pre-hft.

It is not actually there to facilitate in a goodwill kind of manner.

It is like -- how can we make money?

How do you do that -- hft.

Michael lewis, author of his new book on high-frequency trading, "flash boys." he will be on bloomberg surveillance at 7:00 a.m. tomorrow.

We are going to talk about microsoft and its annual billed conference.

? it is washington, d.c. as we begin the second quarter, arriving after a full state in washington.

Democrats having jokes on republicans, republicans having jokes on themselves.

It is this morning in washington dc and we welcome all of you to "bloomberg surveillance." this is the april 2 data check, up on the s&p 500, 1880. the euro is up, and quiet on the russian-ukrainian front as well.

Let's look at the gainers on those, scarlet fu.

Testifying before the house -- ford shares gained 4.2%. u.s. light vehicle sales were up 3.3% in march.

Lincoln was up as well.

Ford continues to roll on.

Total vehicle sales at the highest level since 2007. i was speaking with neil grossman, formerly with the norwegians central bank, he said to get to that kind of game you had to have a massive year-over-year gain.

He was absolutely shocked.

This was a guy who lives by numbers.

There are a lot of new, hot cars on the market.

It is hard to be attractive to investors when you are on a startup -- this is according to a new study from researchers at harvard and m.i.t.. attractive men fare the best in funding.

She is will the primary researchers in this study and she joins us from boston.

Siena, according to your research there is a bias towards men, and attractive men when it comes to getting funding.

What dynamic is this for women?

The dynamic for women is that if you show people an identical picture, you simply show them a video with a picture and then have a voiceover of a male or female voice, men are 33% more likely to have the person listening say that they would invest, that this is logical and then the pitch is convincing.

There seems to be a real gender affect here, and a bias towards taking it is more sensible to fund with men.

On have we learned, and doesn't confirm what a lot of people suspected, old prejudices?

It confirms some old prejudices, but the reason is because when we see women get about half of all venture capital deals, and only seven percent of capital funding, people argue that it is because women don't ask for funding or they come to investors with the wrong kind of ventures.

We say this is going on even if you hold constant the kind of business and you pitch the better business.

It is identical, whether there is really a bias.

That is not surprising and it is quite important to see so we can rebut the idea that women just are bad at getting money.

This is a time -- this is a week when boys and girls all over america look at that envelope to see if they are going to schools like m.i.t. you have a degree from oxford and a degree in engineering from harvard.

How do we get away from the stereotype that men take more rigorous courses and women don't? everyone watching this wants their daughter to be like fiona murphy.

How do we do that?

It is very important that we encourage girls to do science and technology and math when they are in school, and in high school.

I think we also have to celebrate positive role models of women and scientists and engineers who don't fit the traditional stereotype.

We may have to glamorize science and engineering as an activity in the economy and i think that we have to say, this is something that can be tremendously valuable from the economic point of view and fun and exciting.

From the colonies, does the british accent help you with raising money?

I want to know.

This is a big deal.

Does this help?

We have not done that experiment -- my coworkers are likely to do that experiment.

Anecdotal evidence, just listen to u.s. commercials where there are a lot of english actors.

Professors, this is going to be the research -- i have been told that this helps me in the classroom with my teaching.

And early in the morning, it is very soothing.

Professor, this comes from a report that only 11% of u.s. firms with venture capital backing have been founded or led by women, which begs the question, do we need to back up?

What do we need to do to empower women to get to that position in the first place?

We have to work on both sides of the equation and make sure that women are coming to the community with really good and effective pitches, and trusting and well thought out business ideas.

And we have to work on the other side.

Even if they did show up with the same pitch, that people would buy it.

We have to make sure that we get more women into venture capital on the investment side.

And we have to make sure that the investment community recognizes that they are biased, and in general, -- not every single one of them, and they have to take a hard look at the business that comes from women because if they don't, they are leaving good ideas on the table and they have -- they're leaving a real potential for economic prosperity on the table.

You are one of those investors who invests in pitches -- what do you say?

In certain sectors, with e-commerce, we take more, we have some great cofounders in those areas.

The -- with women involved in the top roles.

With game development we don't see that many female entrepreneurs come through.

We had a couple of investors on our team that help us with attracting people -- the owner, within your research, if you take the partial diff -- partial differential, how much do you use going by?

Five years out or 40 years that we won't be having this discussion?

I am hoping that if you or i take that partial differential, i am hoping it is you who does that, this is going to change.

I think if we look at the numbers we see more women going into the finances and engineering.

I certainly feel more women going into entrepreneurship and that is comforting to me.

As cameron says, it is important to get some of the great women here as investors on the outside of the table.

They become angel investors.

This will help fund this in a different way.

Fiona marie, thank you so much.

Professor at m.i.t., she focuses on business innovation.

Michael purvis, what are your thoughts on this conversation on women on wall street?

You could make the argument on a macro basis that these are the most important people in -- that women are the most important people in the global markets, with christine lagarde -- this is a sea change and how it goes to the cameras world, it does not happen overnight but i think that this is an important evolution.

We have seen big changes.

I work with scarlet fu on surveillance.

These are huge changes and i think this is just a matter of time, to be optimistic.

We will have a conversation with matalin here in a few minutes.

-- in a few months.

Coming up, not all social media is created equal.

How social media stocks have performed after not so great starts.

And our twitter question of the day, do you believe in this bull market?

Tweet us @surveillance.

Good morning, everyone.

"bloomberg surveillance," i am with scarlet fu and adam johnson.

What is our top headline?

We are going around the world, beginning in chile.

People have been evacuated after a 7 -- an 8.2 earthquake, which also caused a senomyx.

This caused landslides and at least five people have been reported killed.

In greece --the country will sell $2.5 billion worth of debt, the sale will happen sometime in the second quarter, following the second financial bailout and has kept the country afloat since 2010. and criminal charges stemming from this 2010 natural gas implosion in san francisco bay.

This killed 10 people.

They charge that pg&e broke federal safety rules and they may face age -- charges of $10 million or more.

Let's get started.

This is from our bloomberg economic reporter based in canada, of the major oil -- major media stocks after their ipo.

Linkedin is at the top, facebook is up after twittering -- after facebook is of after faltering in the first year or so, twitter could go the way of zynga and drop 50%. these are different platforms, different beasts.

They are all different platforms but they all have to adjust to global.

Can i point out the difference between lincoln, a way to conduct business, as opposed to zynga, which as very little -- you are using fake money -- real money to buy fake stuff.

I want to talk about my relationship with linkedin, i don't have one with zynga.

Let's talk with michael purvis.

Alibaba is the next big media company.

Will this be part of the bubble?

We have yet to see that, but i would make a couple of comments.

If you look -- if the survey valuation expectations for alibaba, everyone says this is a mixture of the four great u.s. tech companies in all of china.

It is like google all rolled into china.

But we don't know what the financials look like.

Certainly i don't know what they look like.

There has been a lot of hype about this.

This is deserved hype, what they are projecting for expectations two years ago, this is now up to 150. and in london -- coming at the $250 billion valuation.

We don't know a lot about this.

This is coming into a market that we talked about early in the show.

This is a rich market, some of the after market performers and some of these other ideas are less than stellar.

Facebook spent the first 12 months underwater.

I think it is going to be a high bar.

A lot of estimations -- but when you look at yahoo!, for example, this is like a tracking stock for the alibaba ipo and if this does not come, if this is delayed for some amount of time, you look at some selling pressure.

You are a vc guy who buys companies and take them public, what is your opinion on alibaba, the biggest ipo we have seen in years.

This could give us access to china, and these markets.

What people typically see.

There is a signal of confidence in this market?

I think that for us, what signals this is looking at this thing in valuations and what variables are trading at.

If the variables want this -- google is not trading at a high multiple, but this is a $400 billion company and the multiples are not -- this is what we have to look at.

Is all this money going to find a warm spot?

I just don't get it.

There is so much money chasing after these returns, better than anyone else could get, this has to fail at some point.

We think the ipo is the exit point, but we think mna is better -- you don't like the ipo?

We think they are unlikely.

We have a number of venture-funded companies.

You would like to sell your business privately to another entity.

That is typically the outcome.

In the history -- we have not had one ipo.

You want to do that but what about the entrepreneurs who funded the company?

The people who funded the company, these are very rare -- should he get stars in his eyes and spin off the consumer part of microsoft?

I think that he has been a great job so far.

Give them a little time, he needs to focus on this and the right thing to be focused on.

This is fascinating.

Coming up, we will be joined by the ceo and founder of tough mudder.

The strength, stamina and the grid.

There goes tom, over the wall.

And that is no bowtie today.

Making me take my bowtie off.

Are you kidding me?

We should do a "surveillance" outing.

There is too much -- tapping your phone at

Let's go get sweaty.

? good morning.

Although it is still my time, it is dark in honolulu.

This is a live shot of honolulu, hawaii.

They are preparing for a possible tsunami because of the 8.2 -- the actual wave in chile was seven feet.

And waves multiply as they go through.

The earthquake in chile bringing tsunami warnings in honolulu.

This is "bloomberg surveillance ," i am scarlet fu with adam johnson -- the company is -- amazon will do view a tv device.

This'll put them in competition with apple and google which offer their own devices to stream television.

Steve jobs announced his war on google a year before he died.

He promised a holy war on smart phones using google android software.

This was part of a legal battle between google.

Blackberry says they will not in their contract at the end of the month.

They had it criticized t-mobile for encouraging users to switch to smartphones.

Mold -- t-mobile has been doing better as a result.

Do you think that you are tough?

Think again.

Tough mudder, which takes you to an epic 10 mile obstacle course.

Millions worldwide have taken the challenge.

Stephanie ruhle?

I know that you are in there, somewhere.

Will joins us now.

It is great to have you here.

Admittedly, none of us have done this but maybe we should.

At what point did you realize this tough mudder idea could go from your dorm room to a $150 million business?

We had 500 people -- we were five weeks into the sales and 5000 people showed up.

And we had a lot of logistical problems the put on this event.

And then we realized we were onto something.

A -- we talked 800,000 people worldwide.

How did this happen?

This is two things, there is a boom in functional fitness, people look for new ways to challenge themselves.

This is not a race, this is a challenge.

The second part is this is is social, this is team-based.

Everyone is working together to get over that and this is very difficult from the average run.

And something else that is different, corporate sponsorships.

You have been way up on this and maybe this is from harvard business world -- how are you able to sell this to companies with the structures you put up?

We have a demographic of men in their 20's, who are very engaged.

Keep going.

We have 3000 on them -- talking about the fanatic -- fanatical engagement we have with the brand, people coming up for the whole weekend.

This is a tough graphic to reach.

They are not watching tv that much.

Companies wanted access to these overachievers.

This is not just overachievers, but people from every walk of life.

You do have a lot of competitors and this is an -- an industry with oh access.

There are companies targeting women and kids.

Are you adjusting your one-size-fits-all approach?

If you look at this in general, you find that one or two, over time -- if you look at this, iron man is the dominant player but we focus on having the best obstacles, we are the only business that has a dedicated innovation lab, this is very important for us.

Is their sustainability?

I look about this in terms of jim chenos --and the electroshock -- we do that before surveillance.

There is electricity going through those wires.

We do that here early in the morning.

But -- claimed investors -- the black swan, this is a paleo thing where they go and left one white.

-- one weight.

We are not a fitness business.

We won't say that this will get you in shape, you should do this if you are in shape.

We did this as a response to market demand.

This is the headband you get when you do your first.

Put that on.

He has not done this but i will let it go this time.

I have not earned this.

This is something to aspire to.

This is the two-time runner.

And then we have a three-time runner.

Shameless plug.

Get this on.

What else do you have?

And then we have the 10 times mode.

We found that we created this, to respond to market demand.

So many people were coming back time and time again.

And you have about one million people who will compete in 50 events.

There is the outside -- downside, there was actually a death when someone was trampled.

How do you do that?

Somebody was not trampled.

It is very important to look at the facts.

The fatality rate in a triathlon is one in 60,000, we have had almost 2 million people.

To be clear, one death is one death too many.

Your ratios are better in america.

What is your advice to mr.

Dean, to monetize his genii see?

The corporate sponsors are right, there are many brands who want the social media audience that is not on tv -- and there are admission fees?

What does it cost to do this race?

This is wondered $50 and you can do the math on revenue.

-- this is $150 and you can do the math on revenue.

This is a successful business but what do they need to do to leverage to the next step?

We have seen the companies on the top levels, that ceos can delve into because they won't do anything on their own -- this creates the next succession plan.

The creator of tough mudder.

Thank you.

Look at tom, he is doing his calisthenics.

Michael, thank you so much, cameron, u2. let's get the forex report.

The ruble is doing a little bit weaker today.

We will have more, coming up.

? this is "bloomberg surveillance." we begin three days of economic data as the stock market surges.

And russia and the ukraine -- and dialing one 8001-800-jeff feinberg.

And larry miller talks about mainstream media.

-- barry diller talks about the mainstream media.

This is tuesday, april 2 -- and we are here to bring -- to get you up to date on the global crisis in europe.

Alex plemmet joins us.

But first here is adam johnson.

We go to the u.k., where home prices rose for the fifth month.

And in japan, inflation has risen to 1.7% in three years.

And finishing his trip after abbas but his country outside of initiations.

Obama met his goal, saying 7.1 million people signed up for the affordable care act.

If -- weekly mortgage applications were down, this is the fifth week of the past eight that this has been negative.

Adp employment will be out at 8:15, and earnings -- monsanto will report before the bell and amazon may unveil their new tv viewing today.

Microsoft -- this will be great.

What are they doing for microsoft?

Suddenly they have a new guy who finally bounced after 10 years.

As adam mentioned, this is day to on capitol hill, the ceo will talk more about the recall.

Barra offered a few detailed answers, she says she is waiting for the end of a report on why it took more than a decade on -- to report on these recalled vehicles.

Goldman is eyeing a new york stock exchange unit.

Goldman bought this operation back in 2000. they bought this as part of a $5.4 billion purchase of kellogg.

And fallout forom michael lewis will delay the ipo.

The company will delay this until the end of april.

They had planned to start the process this week but that was before michael lewis alleged that the stock market is rigged.

That is today's company news.

Hello, everyone.

"bloomberg surveillance." april fools was yesterday, and in april for the ukraine, russia has raised gas prices.

44%, on unpaid debt for gas.

Secretary john kerry canceled his trip to the eastern mediterranean as the palestinian authority's made moves toward a statement with the eurasia group.

Considering what is next for russia in this world.

Lifted off of the front pages, why should we still care about brussels, russia, and the ukraine?

In the immediate term, the gas prices in the ukraine, they could affect gas farming in the ukraine.

They said it have several billion dollars in unpaid gas bills, and russia can cut some of the gas to the ukraine and europe on the other end of the line will see their volumes go down.

And with the eurasian analysis that you do with others, is it enough to say higher prices could push europe back into recession?

This is certainly one of the concerns and one of the reasons that you have seen serious momentum behind sanctions in russia's energy sector so far.

Everyone knows that russia puts $7 million -- 7 million barrels every day on the market and nobody wants to see that go away.

When you say you, do you mean angela merkel?

Germany is certainly thriving , but there are different interests within the european union.

You have the nordic countries in poland that want to see a more hawkish approach to russia, and other european companies in a more fragile economic state are worried about what you mentioned, the prospect of harder sanctions on russia that may push europe back into recession.

He could not have done this when he first rose to power.

Thomas friedman writes, you want to follow the money.

If we are not for globalization and energy revenue that he produces for russia, putin and his oligarchs would be living off of exports of vodka and caviar.

He can't survive without the revenues to buy office people it in the former soviet republic.

For the first 10 years he was in power, he had economic growth and economic growth and people put up with the restrictions on political life in exchange for economic growth.

And politicians walked away with a very different idea of what they thought that he would be.

This is true, but this is also true that europe is very dependent on those ties with russia as well.

This is such an interesting biography, working with the "financial times." on the really sophisticated emerging markets, but in your world, what would you like to have everyone know, what is it that i get wrong the most about the alex clingman world?

This affects the markets more than people understand, we see that across the emerging markets.

This is defined by great political volatility.

The concern is how this moves markets.

A lot of times -- where is the greater political will?

You have merkel, who is reaching out, in effect, to rush or these other states that don't have the money?

Germany is certainly defining the agenda.

They are trying to find a chart under the road for demand in europe, but the germans themselves have huge investments in russia.

In the previous conversation we talked to equity people about stock markets higher -- and this helped to turn the tables.

In your world, how do you explain markets shrugging off all of this?

Sometimes they're not looking at the political fundamentals.

Recently you saw a surge in equity, that reset hospitals have gone down.

People thought that maybe he would lose the election in the fall.

And we would see much more market-friendly policies.

He is in a very strong position to win the election and as we go through the election cycle, we have opposition figures rising in the polls.

The underlying reality -- much like erdogan in turkey.

How much was the percent?

46%, which you described as a mandate.

Was this a mandate?

This sort of consolidates the polarization that we see in society.

With all of the corruption scandals and all of that, the adp did very well and they said the consolidated basis the behind them for the elections.

They are the ones saying the same message, that we can continue on course and this has been very polarizing.

We talk about elections in turkey and brazil, but as you said there are 24 emerging market countries with elections this year.

Is that why emerging markets have been lagging developed markets?

If you look at the growth, emerging markets are growing better than develop markets, but they are going slowly and you have a lot of issues in emerging markets -- people who will live well in emerging markets during the fat years and when growth is slow, -- bremmer writes a seven-page note every morning, he dips this in ink and writes this with a quilt.

But what is the dodging shot around vladimir putin on this issue, is it taking the baltic states, or with the whiny or something?

What is the outside shot?

I think the problem for putin is internal, it is keeping the coherence of the elites that are around him.

Keeping popular support.

He has this new narrative of imperial resurgence to make up for the fact that growth is not looking so great these days.

The actual room for russian expansion is quite limited.

He will not going to the baltic, this would be a war with nato.

This would deny him the only dependable ally that he has, and an economic issue -- as collates things and -- what should the u.s. do next?

Of the u.s. has to be careful about how they respond.

My understanding is that if russia starts to make other moves to destabilize the ukraine, other moves to destabilize ukraine by cutting off trade flows and reducing gas flows, we will see the existing u.s. sanctions continue and against companies, it will expand.

But we will not see the kind of sanctions from iran, really big stuff.

This is a subtle game, going forward.

You want big headlines.

Big headlines.

This is two thirds, roughly of the russian economy that is related to the commodity materials.

Out as vladimir putin diversify that?

I think that the issue for russia is not so much trying to do the top-down diversification.

I think this is more an issue of creating a business climate in which independent businesses can flourish on their own.

That is the opposite of what he is doing.

That is absolutely true.

Alex klimmet with us.

You can listen to the entire interview, on bloomberg tv plus and bloomberg radio plus.

Mocon volatility -- how many companies -- countries did you say?

44. but u.s. markets continue to rise with the s&p 500. this is our twitter question of the day.

Do you believe in this bull market?

Tweet us.

? good morning, everyone.

"bloomberg surveillance," i am tom keene.

At 10 a.m., michael lewis will appear on market makers.

Tomorrow on "bloomberg surveillance," and his conversation with charlie rose about the controversy over flashpoint, and wall street -- "flash boys" and wall street's ruvell eared you look at the financial crisis and you see a pattern.

There is a kind of systematic meddling in the markets.

There is the acclaimed quote, rigging the markets.

Alex cklimmet is -- the upper trading and maybe this is not your area, the system.

They are really against the "flash boys." how interconnected are the systems now?

The question of interconnectivity is a discussion we had earlier about russia possibly with europe.

-- pressure' -- russia's relation with europe.

Europe is very vulnerable to being cut off from russia.

With trading and the global financial system and the massive divide between the united kingdom, there is a huge focus on continuity with europe.

How linked is united kingdom to europe?

There has always been a fiscal relationship with europe in relation to the eurozone.

We have seen that with a statement i mr.


With the approach to russia, there is also a difference of opinion between the u.k. and the continental europeans.

The u.k. has to mend this vulnerability to russia, not to energy but the financial center.

The property market and the education market and the luxury gift market is all-pro -- all affected by russian capital.

The geopolitics i think about, with the four reads a car he -- fareed zakari and others, you see michael come in with a story that is esoteric.

Is there a political process?

We see this -- this dispersal of leadership at the moment which, in some respects, mayors the democratization of technology, for people.

At the time that the world becomes more atomized, we can see this politically as well.

Alex klimet with us.

We will continue the discussion as virtu delays their ipo.

? good morning, everyone.

"bloomberg surveillance," i am tom keene.

Let's get to our top headlines this morning, adam?

House prices continue rising in the u.k., there is 4/10 of one percent in the month of march.

The national average for houses is now at $300,000. just three percent below the peak in 2007. and the prices have doubled the national average -- and there is tom keene, snapping up that london real estate.

Palestine makes a move at the united nations.

The palestinian president, abbas promised to work outside of the peace process.

They have canceled a meeting -- john kerry has canceled a meeting with abbas and return to the u.s.. in chile, soldiers were evacuated after an 8.2 earthquake.

There were also tsunami warnings, these evacuation orders have been lifted and people are now returning to their homes.

Five people have been killed by the earthquake.

Those are the headlines.

The words of michael bloomberg have led to -- michael lewis -- the words of michael lewis have led to issues.

He said this in his novel "flashboys," and virtu, a trading firm has delayed its ipo until the storm clears.

You broke this story last night.

Do you believe that virtu financial was caught by surprise?

They had planned for this week, for their ipo, and they set terms and a price and evaluations.

But with all of these -- these issues around the book by michael lewis, this is not a great environment to go public.

What really changed things is the fbi probe.

They are under investigation by the commodities.

So there are already -- this industry-wide probe is not a good thing.

It is not like it came out after michael lewis made the publicity blitz for his book.

They were only doing this for about one year.

Investors are now focused on that, and this is a reminder to them that this is very risky.

And subject to regulation.

I know that you and sam were working on this, and virtu fin ancial, --he is out of west point and he is a legitimate guy.

What is the distinction between all of the smallest firms?

I grew up with the new york stock exchange and those crazy guys out in chicago, i cannot keep up with them.

What is virtu?

I do not even know this.

Who are they?

They are a very strong business and have lost money one day in five years.

The financial measures that they have used with the investors -- what they do, obviously, they are market makers.

When securities are bought and sold -- they were founded on stocks only and went to other kinds of markets.

By all measures they are a very well run company.

In the last five years -- someone like michael lewis says that this is proof they are rigging the market.

Those financial measures, as an investor, that you will look at.

Last night, investors hoping to profit off of high frequency trading may not get their chance.

It is going to be the opposite.

In the reporting i talk about otis and the entire team at bloomberg news.

Do you see any distinction about what they are doing -- as we go to 10 a.m. this morning, help me and erik schatzker ruled this out.

What is the new word -- in my conversations with bankers, they say this is not a level playing field or fair for every investor.

Certain parties are having an advantage.

And that advantage, by definition, is speed.

Think of this, tom.

You are a pro athlete and you train harder so you move faster.

Look at this conversation.

Michael lewis is saying that this is not about high-frequency traders, getting away with an e trade account.

But the idea here, is that indirectly, my pension fund is being taken to the cleaners by the virtue of others.

And get to the back of the line.

We will talk to michael.

Opelousas lewis makes the point that a lot of russians ended up as high-frequency traders because the old soviet culture may the motley prepared for wall street.

You have a consultative market where there are some loopholes, and some of these russian concert -- computer programmers were able to affect the system because they grew up in a soviet economy where they had to work for ways around the system.

Alex, what do you think about that?

This system is something that russians have been very good at over the last 20 years, certainly.

And as you said, you have a very strong community of computer programmers left and right coming together.

I saw a speech with robert burton at nyu.

He did a survey, asking where everyone was from.

Two thirds of the room was from bulgaria or russia, in general.

Russia has tremendous capital in this area.

Immense capital.

Mass capital.

Thanks to tom keene.

So where do we stand at this point?

Yes, where do we stand?

It will be at least april 20 before virtu sets terms for their valuation.

Will this be enough time for this to blow over?

I don't know how he sent a long number is, but three weeks, i don't know.

Congratulations and thank you for being with us today as well.

Next, the general motors ceo is back on the hill today.

We will go to washington and check with matt miller, who will give us the latest.

"surveillance" on television and radio.

? this is "bloomberg surveillance." i am scarlet fu with tom keene and adam johnson.

House prices in the u.k. -- we are starting with chrysler.

They are recalling jeeps.

They are recalling almost 900,000 jeep grand cherokee's and dodge durangos because of a break defect -- brake defect.

They are aware of one accident, but no injuries due to this.

They come -- volkswagen has a plan to set up a plant in thailand.

Japan's carmakers account from us 90% of sales in thailand.

Pg&e corp.

Hit with charges.

Prosecutors charge that the company knowingly broke safety rules.

It is charged with 12 felony violations of pipeline safety laws.

That is today's "company news." with the explosion that happened in harlem, it is difficult.

You know all of the ads that we see for oil, it is just that her.

-- it is just better.

It is all volatile stuff.

There is some volatility going on in the media industry as well.

Airey deller sat down with erik schatzker last night in an exclusive interview to discuss his online television venture called aereo.

Whether it is game over for aereo, if the supreme court rules that cannot sell broadcast programming online.

I believe so.

There's nothing you can salvage?

It is possible.

Aereo would probably -- i say probably because i cannot see any path for it -- it would probably not be able to continue in business.

Why is that?

You have a platform.

You would be ruled a multi-video programming distributor.

You would be like a cable company.

Could you not compete for content with cable companies?

We could probably do retransmission consent dollars if we could make a deal with broadcasters.

The value proposition would go out of the game.

Aereo is a low-cost method of receiving over the air broadcasting.

That is the platform.

There are other players keeping a close eye on this.

Notably, amazon, which is trying to come up with its own streaming device.

What a conversation yesterday with rich greenfield and scott galloway.

They totally disagree.

Very different sides on this.

Here is what is curious about broadcasters.

Only 15% of the u.s. population gets its tv from the rabbit ears.

Is that ariel's market?

They are taking that broadcasted signal, bringing it down onto the internet and sending it out to you.

If the broadcasters stop broadcasting and go only on cable or satellite, done.

They threaten to do that.

It is a question on whether they will do it or a tarot -- aereo will call its bluff.

The obama administration has weighed in and they weigh in on the side of the broadcasters.

Correct me if i am wrong, the distinction here is aereo won in the new york city federal court and now they have to go to other courts that are not as aereo-friendly.

In california, ariel lost.

-- aereo lost.

Isn't that interesting, the difference between california -- am my right -- galloway says aereo will lose.

He stands on the side of you need to pay for content.

Greenfield says it is out there.

This is just redistributing it.

He goes back to sony and betamax.

They almost made it illegal to record.

This is a huge deal.

We will continue to follow this on bloomberg surveillance.

Did you ever think we would say aereo would be the new betamax?

A couple of years ago, twittered in excess.

Ahead of some data this morning, we have employment changes.

Futures are slightly higher.

Good morning.

"bloomberg surveillance." all of our interviews at bloomberg tv plus, bloomberg radio plus.

Look for them at

I am tom keene.

We're getting perspective on europe and russia this morning.

Let's talk about general motors ceo, mary barra.

She told the house she does not have all of the answers to explain why it took 12 years to fix the flaws.

More than a decade ago, gm embarked on a program and i cannot tell you why it took so long for a safety defect to be announced for this program.

We will find out.

This is an extraordinary situation.

It involves vehicles we no longer make create a came to light on my watch and i am responsible for.

We will be transparent with you and our regulators and our customers.

Matt miller has been following the testimony closely.

Our lawmakers buying hermia kohl's? -- her media kohl's -- mia culpa?

I don't think they are buying that she had no idea how this happened.

She just continued to express a total lack of knowledge as to have -- as to anything having to do with this or the investigation.

She is trying to not make herself liable, or gm at least, legally liable for this.

Everywhere mr.

Feinberg goes, checks are issued.

Our checks going to be issued here?

That seems to be the case.

There are a few issues for mary, figuring out why this happen.

She's not telling anybody how far she has gotten on that.

Apologizing for it, which he has done.

Making up for it.

This is the greatest sign that gm is going to pay, regardless of whether or not it is legally liable.

Bankruptcy legally wipes out these kind of claims.

It seems like gm is going to pay up big time.

There is talk of a $3 billion fund, but we will see if she says more about that today.

They will be focused, as was margaret carlson.

She drew a parallel between gm and christie, paid exonerated can do more harm than good.

Christie did not get what he had taxpayers pay for.

No report can save gm from what it did.

Perhaps if mr.

Feinberg comes in and doles out money.

What is mary barra think she is doing to change it?

I think she still has the possibility of a really bright future.

She came on as ceo in the middle of january.

It seems that as soon as she took the reins of this company, she started to act on this important issue.

There are a lot of interesting coincidences.

This did not come until the government had exited its stake in the company.

This seems to be her first order of business.

She wants to get this behind her.

You cannot make up for an error that caused the loss of human life.

She wants to get it behind her the best she can.

She wants to spin it forward.

She said this is the older gm that made these errors.

The new gm is customer oriented.

We are not cost oriented and quality and safety are our focus is.

Thank you, matt miller.

He will do anything to get into a baseball game.

He is going to go see the orioles and the red sox today.

Something like that.

Matt miller in washington.

Important testimony by mary barra.

Date to.

We want to bring the twitter question of the day to you.

Do you believe in this billull market?

? good morning "bloomberg surveillance." i am tom keene.

Futures fade a little bit.

A quiet day.

Three big days of economic data.

Crescendo leading the jobs report on friday.

Friday in the 8:00 abovenet -- our.

-- hour.

You could not sleep, worried about the jobs report.

I am excited.

We love this sort of stuff.

Speaking about jobs, what has been a big job creator from a place that i just went to visit.

The gaming industry.

We had to go across the park.

A hong kong based casino company has been a tycoon in -- and has created a gaming industry.

Stanley has 17 children.

Many of them are from different lives.

A cheap shot on surveillance.

He is building this third resort, hiring 8000 people.

The gaming revenue is -- why is it different from?

You have a great take on the culture.

Why is it different?

All of the chinese visitors.

That is a huge money stream.

They are serious about gambling.

Does celine dion later?

No one is interested in her.

Does she play there?

I do not think entertainment is that big there.

It is about getting there and making money at the tables.

When you walk and i walk through the city of dreams, when you walk through the floor, people are not drinking alcohol.

They are not really eating.

They're drinking tea and coffee and they are focused on trying to win.

It is a totally different culture.

You were standing next to the president of the united states, you would be dying to take a selfie, right?

Which is exactly what david ortiz did.

They were at the white house being honored for winning the world series last fall.

He stood next to president obama and could not resist pulling out his phone.

There is the selfie.

With john henry in the background.

I am jealous.

The yankees are right where the red sox were 12 months ago.

We will be back with more.

? good morning.

Overnight, michael lewis is torn to shreds in an op-ed.


lewis will join us at 10:00 this morning.

Michael lewis will join "bloomberg surveillance tomorrow morning at 7:00 a.m.. we will talk about a set of distinctions about his idea that the market is rigged.

Michael lewis, not one, twice on bloomberg television.

This is "bloomberg surveillance." i am scarlet fu here with tom keene and adam johnson.

Let's get you some "company news." amazon taking a step to reach customers in their living room.

They will introduce a device to stream movies and tv shows at an event in new york city today.

The gadget will put amazon and closer competition with apple and google.

Blackberry ends sales with t-mobile.

It will not renew its contract with the carrier when it expires at the end of this month.

John chen has criticized t-mobile for encouraging smartphone users to switch to iphones.

Barry diller will expand to every major u.s. city as its core battle is successful.

In an interview, he offered a bleak forecast for the service if the supreme court rules against it.

If you lose, we are finished.

There's nothing you can salvage?

You never used it?

No, but it is a huge deal.

Rupert murdoch was the first one to make this clear.

Listen on bloomberg media to richard greenfield and scott galloway.

Their heated constructive argument on aereo.

In russia, the oligarchs take their money, they dressed, they flee, this is sanctions ramp up.

It is a changed game.

Alex clement is going to make me and you smarter on the oligarchs with eurasia.

What is the number one thing i get wrong?

They are more dependent on putin then he is on them.

In the 1990's, the government was broke, it depended on oligarchs for tv time, money, what have you.

The oligarchs depend on putin.

You continue to make money as long as you stay out of politics.

The sanctions targeted some oligarchs close to putin.

If you can weaken the people around him, you can affect his decision-making.

So far, that is not working.

As sanctions ramp up and the ability of russia's wealthiest people to park their assets abroad, as it gets more constrained, their calculations will change.

It could change the cohesion.

Do they make their money legitimately within the rule of law.

Is a good revenues and good profits or is it a fraud?

The question is, how did they come into control of some of those businesses?

That tends to be where the focus is.

A lot of these guys have legitimate companies.

There is some murky things that can be found.

At the top level, they are publicly traded companies.

That is what it is.

How easy is it to become an oligarch today?

There are several wealthy people in russia.

In the 1990's, the conditions were you could get companies dirt cheap from a state that was broke.

In the 2000, you could get money from resources on the mahdi's bone -- the commodities boom.

Part of the narrative for putin's power is the economic growth.

The disposable income is growing for most of the 2000 and now they're growing about one percent or two percent.

How long does the russian population put up with this inequality and the corruption and bureaucracy?

15 people own russia.

Is that an outlandish statement?

15 people control of.

Is there a parallel in american history?

Sometimes they are compared to barrens.

You see that comparison a lot.

The associated ideas that at some point -- the railroads and all that.

How many people own ukraine?

One and he is out.

The yanukovych regime was corrupt.

There has been some reporting on his lavish home, it is amazing.

Handwritten receipts for bribes and things like that.

How do we protect -- project a foreign policy?

Is russia less corrupt than ukraine?

That is an interesting distinction.

Ukraine is on a path to creating a political culture that will be less corrupted.

That is the idea kind bringing ukraine into more european structures.

Were they supposed to do?

Not to apologize, but alex, wayne year.

It was only in 1980's when they tore down this wall.

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


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