Obamacare Under Fire: Surveillance (10/30)

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Oct. 30 (Bloomberg) -- Full episode of "Bloomberg Surveillance." Guests: Keith Sherin, Christine Poon, Kevin Plank, Mohamed Aly El-Erian, Jeffrey Immelt, and Fred Smith. (Source: Bloomberg)

This is bloomberg "surveillance." linkedin reports of slowdown but it's not as bright and shiny as some of the tech gadgets that access the network.

Ge says america's future is in the growing middle market.

Tom sits down with an exclusive interview with the ceo.

Good morning.

I have live from bloomberg world headquarters.

Halloween eads, wednesday, october 30. a special edition of bloomberg "bsurveillance." we are on the road today.

With me in new york, michael mckee.

How was your flight into columbus yesterday?

A great flight into columbus.

At the 7000 students here.

I will speak to the ceo of ge capital.

Then a conversation with the founder of under armour, really a success story.

I will speak with jeffrey and melt -- jeffrey immelt.

Now going to washington and sara eisen.

I am here at the museum at the national competitiveness forum.

Leaders gather to talk about our natures and -- nature and -- nation's competitiveness.

Heavyweight ceos are here.

I will speak fred -- to fred smith, chairman and ceo of fedex.

A lot of people looking at the fed to try to read what to make of the u.s. economy, forget it.

We will talk to the ceo of the world's largest airfreight carrier coming up in the 7:00 hour.

Looking forward to that.

Time now for the morning briefing.

We are excited.

They are missing this.

Two-year recession.

It is all exports, no domestic drivers of growth.

Stocks and bonds higher in spain.

A lot of economy data in the united states.

The adp employment numbers forecast to be disappointed.

We will see how that affects trading today.

The cpi, no inflation out there.

The fed rate decision at 2:00, nothing expected.

If you're going to trade today, you may want to look at these companies before the bell.

Gm will talk later in the day with the cfo.

After the bell, craft, visa, metlife, starbucks and facebook.

Then, the red sox tonight.

First time they have played a game six in boston in the world series since 1975. they have not won the world series and boston since 1918. i had not realized that.

You mentioned that no news expected out of the fomc.

Seems like no news is good news.

S&p futures are on the rise once again this morning.

Stocks have gained 13 times in the past 15 days.

Futures currently up at five points right now.

10-year yield really unchanged at this point.

Holding below 2.5%. euro slightly firmer against the dollar.

Oil prices down .6%. the fed is not going to do anything, but still a qe world.

The stock 600 cents -- the stoxx 600 at the highest since 2008. imagine if this goes below that.

In china, now talking about a stimulus program.

Look at the vix, the favorite indicator.

Not only is it really low, but only a quarter.

No one is trading it right now.

Volatility holding pretty tame right now.

Getting to the front page.

Scouring the papers in the -- on the web for the front page stories.

The agency says own records were supplied by european intelligence services and not collected by the nsa.

This is a new twist.

The funny that it is in the new york post today.

Letting them do the dirty work and then criticizing them for it.

I know onslow merkel is not a european citizen.

-- on july merkel.

This is an exclusive to the wall street journal.

S.e.c. will plead guilty -- sac will plead guilty.

Most of the firms have led no contest.

They just settle.

There is still going to be a criminal penalty, one point $2 billion, the largest ever for an insider trading case.

We will keep an eye on that.

Has not been finalized yet.

Final story, the multibillion- dollar settlement over mortgages at risk of collapsing.

Still cannot find that deal off.

That is not happening right now.

European banks come a ubs foreign exchange.

Order to pay capital reserves by 50%. the drumbeat of negative news.

All of these new capital standards and still cannot get out of trouble.

Rackspace still continue to rally.

The qe trade you talked about their.

Stories making the front page news this morning.

Getting back to sara eisen.

There has been a lot of developments rex -- with regard to surveillance in the nsa and debacle over health care as well . take center stage today.

There will be a hearing.

We will hear from kathleen sebelius.

Joining me for a special treat is peter cook.

Welcome to washington.

I picked a good day.

It is raining a little bit.

Kathleen civilian might need health care after she places -- faces republicans.

She will testify him of the first time since the rollout that she has been forced to answer questions from republican and democratic lawmakers not happy with the rollout.

Expected to have a rough time.

The good news is a lot of the issues have already been put out there.

Maryland calendar -- marian cavender had a pretty rough go.

She held her ground, explained what went wrong and apologize for what happened.

Not just computer glitches at this point.

Growing concern about people losing their insurance plans.

A new front in the republican party, -- president obama says we like the plan.

Now he is being challenged because there are americans who are being told you are losing your individual insurance right now because it does not meet the standards of the new affordable care act.

Here is eric cantor talking about this yesterday.

It the president knew these letters were coming and still indicated that you could keep your health care land if you liked it, that raises some serious questions about the sales job of obamacare.

This was a pledge the president made.

80% of the american people had health insurance already through their work and will not be affected by any of this.

What we're talking about they say is about five percent of the population.

Individual health care programs.

The plans did not meet the standards of the affordable care act.

I would think the administration can fight back.

The problem is a lot of the improved plans will cost more money than they were paying before.

That is the big discrepancy.

A lot of them will be available for tax subsidies.

They are not at this stage where they can see how much money that will cost.

Also, today is the first real meeting for the budget camp -- budget council.

That is right.

Paul ryan and patty murray getting together with 30 other the colleagues trying to sort out the intractable budget issues.

They will start meeting today.

Deadline is december 13. opening statements.

A lot of them will talk about the need to compromise.

Will they be able to compromise on entitlements, revenue?

Another political battle.

Peter cook, what a treat in person on this day when we are expected to get the health care hearing and the fed statement later on.

Thank you.

Any two company news in the meantime.

Boeing posing in on billions of dollars of deals for the redesign jet.

And talk with four airlines for as many of 250 five of the extras.

This is according to people familiar with the matter.

It is not expected to make its commercial debut until the end of the decade.

I keep it to staff -- ika batista oil company may be on the verge of filing for default.

It would be that america's biggest corporate debt debacle.

U.s. steel cutting costs.

Closing parts of two plants in an effort to save $74 million per year.

The ceo said the moves are just the beginning as they review all of the operations after four unprofitable quarters.

That is today's company news.

You are back in columbus, ohio.

Give us a sense of who you will be speaking to later this morning?

We will speak to the heisman trophy winner eddie george.

He will join us.

An important conversation with jeffrey immelt.

What is your question for ge ceo?

From washington, columbus, ohio, and new york, it is bloomberg "surveillance." ? coming up at bloomberg television -- coming up on bloomberg television at 1:00 eastern thomas penny pritzker, secretary of commerce.

We will speak with her in washington where she is attending the national competitiveness forum.

Not as live at 1:00 on bloomberg television.

This is a special edition.

Tom keene in columbus, ohio.

Sara eisen and washington.

Here with me is michael mckee.

They try to get people to invest in the united states.

They are trying to get us link and.

That was big earnings news last night.

Investors fairly disappointed with the numbers we did get.

The all-around theme is a slowdown.

What are your numbers like?

Revenue rose 76%. and has been sales estimates and every quarter since it was a publicly traded company.

Fourth quarter revenue said to ms.

Analyst estimates.

That is a weight over the stock, especially since it has risen more than fivefold since the ipo in may 2000 11. a lot of these companies we do not look at revenue numbers as much as membership numbers.

I get invitations all the time for people to join in.

Membership rose 38%. 38 million users.

A small, niche group.

A deceleration from the 43% increase the year before.

More than one billion members.

Membership is only 1/5 of facebook nation.

Still bigger than twitter.

Kids will not sign up for linkedin in the same way they do facebook.

We get facebook earnings at the end of the day.

This is a stock that has really delivered ever since the growth of mobile was visible to investors last quarter.

Today's earnings report will really be seen as can it justify the rise we see.

People will focus on revenue per he is -- per user in user numbers overseas.

The question is, what is the fourth quarter earnings season going to be like?

Most companies seem to be guiding down.


Cost cuts.

Cutting costs seems to be the same.

I got the first instagram advertisement yesterday.

It was from instagram.

It said this is what the advertisement will look like.

Upgrading shares of facebook last night, citing instagram and how important it is.

That story coming up later on today at.

Shares closing down in the after-hours trading.

We will see what happens in the premarket trade this morning.

A lot more coming up on the special edition of bloomberg surveillance.

Sitting down with the ceo of under armour.

It is not just sneakers and t- shirts anymore.

Speaking with the under armour see me -- under armour ceo coming up.

? this is a special edition of bloomberg "surveillance." i am scarlet fu in new york.

Michael mckee with me on set.

M has the top headlines.

U.s. intelligence officials testified on capitol hill.

James clapper said it is invaluable for us to know where countries are coming from.

He and other officials did not identify which world leaders are targeted by spy in.

The cia tc will vote on new rules to protect customer funds.

This is two years after it collapsed.

The proposed rules would give regulators electronic oversight of futures brokers thanks account.

If you are an nba fan, and miami heat opened the nba season with a win.

They top the chicago bulls 107- 95. lebron james leading the way.

Derrick rose is back.

His return after missing all last season following knee surgery.

Those are your top headlines.

A magical time of the year when all four sports are in session.

Time for the morning must reads.

Sarah and washington.

-- sara eisen in washington.

Comes on the day when budget negotiations kick off in full.

Democrats and republicans getting together toward the december guideline to come up with a budget.

If you think they're coming to the table weakened by the shutdown, think again.

What has changed now is john boehner beats this -- meets mr.

Obama again at the table.

He will know the only man in a worse political situation is across the table.

Splintering the democratic party and bringing them to the table perhaps with a more separate and more coherent position.

Here we go again.

I know you will speak with jeff immelt and other corporate leaders about the impact on business.

It certainly is just rolling crises.

It is really front and center here in columbus.

The ge capital summit.

Just never goes away.

You can talk about process, middle-market.

Every middle-market circles back to the cacophony of issues in washington.

What i think is interesting is the calendar.

Really starting to go into the holiday season.

You wonder how focused they will be and washington as we get to thanksgiving and december 1. lex michael mckee has the morning must reads.

We have all been watching the nsa hearings and the outrage coming from europe.

The former french were in minister in an interview with the associated press put it this way, let's be honest, everyone is listening to everyone else but we do not have the same means of the united states, which makes us jealous.

They would like to be doing as well as we are but said it is spying on each other.

You wonder how much of a big deal it really is.

My morning must read is on jokes, lies, and pollution in china.

This has been a big story in the past few days.

You cannot see anything.

The air is filled with smog.

This is a comment from an author in china.

Environmental regulations could beat detrimental to the economy.

They could enact changes to curb the environmental damage done by the big state-owned enterprises, but they are not because that might destabilize the rule.

Allusion was going to be a big issue.

It has to be.

The last time this happens, i saw quotes from people saying they were really upset up the rulers because this was not only unhealthy -- that looks pretty good where you could see the cars in front of you.

There are reports where it was daytime and look like it was nighttime.

I hope the air in cleveland -- in columbus is much better than this.

This really goes to what ge is trying to do.

They are looking at infrastructure buildout, but doing it in a way where you don't see what we just saw in china.

China is front and center.

And not before ge, china pollution.

You will be speaking with the ce -- ceo of ge capital.

What will be your first question?

Fax it will be interesting to see.

That is coming up.

We are in columbus, ohio.

Coming up, a conversation on the future of education and finance.

? this is bloombergh "surveillance." i am sara eisen in new york.

Michael mckee here with me.

We do have breaking news from earlier in our.

Teva pharmaceuticals says the ceo has quit.

He is stepping down after a reported feud with the board of directors.

Stock is down three percent right now.

Checking in with elliott lokken.

-- elliott lokkeglotkine.

Not in the job for very long.

Less than 18 months.

Given that two days ago he called the report about a feud between him and the chairman philip roth as being faceless makes it even more shocking.

We have not had a share price reaction because the shares have been suspended.

Lex i remember earlier this month, job cuts announced as well.

5000 jobs eliminated.

Yes, that seems to be the source of the feud.

The look roster wanted these cuts to be sure and sharp.

Jeremy levin seems to take a more consolatory approach.

The jobs would be lost through natural attrition by not filling new roles.

That's seems to have been one of the reasons why there was a disagreement between him and philip rost.

There may levin has stepped down.

Elliott lokkenglotkine joining us on the teva ceo stepping down after feud with the board of directors.

We want to check in with tom.

You have a special guest for us.

I am in trouble.

I am here at ohio state, red and white.

It is scarlet and white.

It is the colors of ohio state with 57,000 students.

The third year of the national middle-market summit.

Over 1000 executives creating investment and jobs to send on ohio date.

The special relationship with ge capital and the fisher school of business.

Keith sharon has been the chief financial officer who has taken on new duties helping new responsibilities, rather helping ge capital out of the financial crisis.

A biochemist, christine kuhn, dean of the business school of business -- dean of the school of business.

You said forget about game changing.

It is game defining.

I think game defining is our get the rules of the current game but the game we're all about that we can win.

What we love about working with ge is the dedication to innovation, and that is one of the things we share, a commitment to innovation, whether it is education or industrial manufacturing.

We will get to the summit in a minute.

The game defining thing for you is bringing ge capital out of the horrendous and this crisis we have seen.

Give us the optimistic message right now for ge capital.

Five years past the point of the financial crisis.

The great news is ge capital is safe and secure.

We never took a loss.

We never went negative on income.

Always positive on earnings.

If you look today, ge capital has been a remarkable transition.

He transformed the business model and are a lot smaller.

Short term funding from $90 billion down to around $30 billion.

It is a transformation of the balance sheet.

Today we're focused on the middle-market.

We are here growing and helping companies grow.

Not just about providing capital but growing the business.

You look at the new focus of gm.

I think i counted vocus 47 times in the new report.

What is your focus message away from the interest rate and finance to the executive here?

What we're trying to tell them is not only do we want to provide capital, we want to help you grow the business.

We can rely on the industrial heritage.

We have 1000 executives who have signed on to ge access.

For our customers who want help with finance, operations, leadership, we bring them expertise and ge to help grow the business is.

You have learned in crisis and failures as well.

You are front and center on what i love, which is getting more narrow away from the general business education.

Why are we having that conversation?

Here at ohio state we are one of the great public institutions of the nation.

I think our education is as good as the football, don't you think.

We believe what makes us different is our heritage as a land grant institution.

As a land grant institution we have always been linked to the economies of our day.

This kind of partnership is such an important part of the economy.

A third of the economy, a third of the jobs.

This year, for every 10 jobs that are created in the united states, the middle-market companies are generating this.

The far west is 10,000 new.

Over to the hudson river.

You are living this.

You are living in the american heartland that a lot of the made -- media do not see.

Describes the manufacturing renaissance of this middle- market america.

We see it here in ohio absolutely.

We see manufacturers or retailers ringing manufacturing back to ohio to be much closer to the innovation arm of their companies.

So what they are seeing is if you can shrink the supply chain, feed is a lot more valuable.

Lex within the process, i look out at my house in new york -- within that process, i look at my house in new york, and there is a new ge.

What is the ge we do not know right now?

We are building things.

We are selling oil and gas equipment.

How boring.

More than half of the business is outside the u.s.. the business is really doing great.

We are selling services.

Combining information technology.

Customers are loving it.

We can provide them help full information about running the business better.

What was the worst practice of the financial crisis that you observed.

What did you do most wrong?

It is how we got there really.

From the minute we got into the crisis the leadership team worked as well as anyone.

Ge is stronger than ever.

We feel great about the future.

How do you treat this today?

We love this combination when we teach to come -- to combine the academic faculty with practitioners like keith.

Do you ring in people that do things?

We've bring people it in the like keith to the classroom.

It is magical.

You will be interviewing business leaders and talk about the leadership practices.

The audience is soaking that in.

They are getting real life examples from people doing it today.

You see the folks out there.

I throw most of them away.

Microeconomics and the dependents, but what is the leadership best practice that you and ge hughes every day?

We have to be authentic leaders.

We have to let people know where they are going.

We have to let them know we will hold them accountable and will have their back.

We have to communicate a lot.

Our customers are global.

Our customers are outside of norwalk, connecticut, that is for sure.

We have kevin plank coming up from under armour, which is very cool.

Talk about entrepreneurial initiative.

Very cool.

That is what we will do.

Talking to a lot of smart people.

Jeffrey immelt will join us.

Kevin plank will join us from under armour.

On of the great successes.

Our entire team wears under armour surveillance) and cleats.

Here in ohio.

Good morning.

? a special edition of bloomberg "surveillance." tom keene in columbus, ohio.

Michael mckee here with me on set.

I know you have top headlines for us.


A big day in washington.

U.s. health secretary kathleen sibelius answering questions about obamacare.

Surveillance will testify before -- the bilious will testify before the house committee.

-- she will testify before the house committee.

The u.s. moving closer to a landmark settlement with hedge firm sac capital.

The firm was founded by steve:. sac would also pay 1.2 billion dollars in criminal penalties.

The settlement could be announced late this week or next week.

Forget obamacare or spy inc., a really big problem out there, a local wine -- global wine shortage.

Not enough wine to go around.

Two families in australia say 2 million more cases per year are needed to meet demand.

This fell five percent last year with the lowest level since the 1960. part of the problem is lousy weather in france and argentina.

Wine production in the u.s. rose two percent last year.

Those are your top headlines.

Wine consumption in china must have risen 10%. we have done charts on that in the past, but single best chart this morning is on bifurcated america.

Confidence is just as divided.

The chart is from rbc capital markets.

We know confidence is down, no matter what income group you ask.

The yellow line, those making above $50,000 down 11% from the peak.

Down 24% from the recent highs.

If you look at the difference, the spread between the two, the cap all but disappeared in 2009. everyone was equally miserable.

The spread has widened at multi- decade highs.

Everyone really worried that if they would keep their job or not.

Nine percent lower around the country.

In new england, confidence was up 20%. why do you think that is?

New england, home of the red sox.

Lex i do not want to be there friday if they would lose both of them.

The crash of a pick or portions.

What about corporate confidence?

You are attending the national competitive forum.

This really rests on the idea of consumer confidence.

Look at fedex.

The founder founded it in 1971. shipped 3.9 packages per day.

Cannot get a better read on consumer confidence than that.

Look at the forecast for the holiday season.

The busiest shipping day will be cyber monday instead of late into december.

Everything getting moved up.

Did you get your new iphone?

I didn't get it through fedex yesterday.

I was not around.

I came to d.c. instead to interview the ceos.

We are here at the museum.

And the next hour we will speak to fred smith, ceo about consumer confidence around the world.

We will be back.

? coming up a little bit later on bloomberg television, in the 1:00 hour i will speak to penny pritzker.

President obama named her secretary of commerce in june.

We will talk about business issues from thenational competitiveness for him and washington, d.c. i am sara eisen in washington.

Later i will be joined by the ceo of fedex.

Scarlet fu and michael mckee are in new york.

Tom keene is in ohio with a few key interviews talking to corporate leaders.

Great ohio, the swing state.

So much going on.

It starts with an entrepreneurial spirit.

It can again anywhere.

Kevin plank football at the university of maryland.

Out and his grandmother's basement and georgetown, now the iconic under armour.

I particularly like they ohio state under armour alter ego compression shirt.

Chairman and chief executive officer of one of the nation's great success stories.

Joining jeffrey immelt here with ge.

The growth.

Of 20%. what is your biggest headache was 7000 employees?

We start reading our own headlines, believing.

Maintain the focus.

The most important element in any new business, know who you are and where you're going and do not get distracted i too many things.

I run my company much like a team.

I keep whiteboards.

They say everything from work charts to business philosophy.

Work -- walk with the purpose.

And the very middle it says do not forget to sell shirts and shoes.

Lex heard of it is protect this house.

That is an under armour phrase.

When we started in 2000 three our first television commercial, we needed to create something that would live longer than 30 seconds.

Took nine years to get to that point to put us in position for that to be effective.

We are in the 18th year of business.

If the were surprised by that.

It is a good message for anyone in the market.

Does not happen overnight.

You have to work at it every day.

Something jeffrey immelt talks about.

He says leadership has a short life.

How are you going to get growth 100%? how do you go from 7000 employees to 20000 and four years and keep the magic?

At the latest investor day in june, we promise to double the business from one failed -- $1 billion.

Took us 15 years to get to the first alien.

From 1996-2010. based on the latest outlook, well on her way to doubling again.

By 2016, we promised to go to the crossing $4 billion.

I know you as a teacher company.

-- t-shirt company.

Is it ripping pages from a competitor, nike?

Or a new way?

When you walk into our office, you will not see a list of competitor items on the wall.

We are still small.

As great as it is to cross the $2 million mile marker, we have a strong point of view for who we are.

We need to continue to deliver and execute on that.

When we start worrying about the joneses, that is when we are in trouble.

Do you meet -- need celebrities?

Not celebrities, but people believe in the company.

Tom brady is a shareholder and a spokesperson for the company.

Not until he believes in the product we are making for them.

Those are the kind of partners we want and athletes we have in the business.

Lwe have been involved with ripken baseball for a number of years.

We have never had the opportunity to outfit cal.

Sitting in my dorm room watching him saying being affiliated with ironman would be one of the greatest thrills.

Rex we go to maryland football.

-- we go to maryland football.

Look at how gorgeous they are.

They have this flag thing on the shoulder.

Nothing embarrassing about being from maryland.

I want people to look at under armour and say you mean this football player from maryland can start this multimillion dollar brand?

My reaction to that is absolutely.

I think that is hopefully parts of the inspiration that people see.

When you see parents and with kids today, the rap on america is it has become a sports world.

Have you combine the scholastics and kids that want to wear your products, the balance between sports and academics needed?

The words student athlete is not an oxymoron.

There are so many elements in the benefits that come from being heart of the team.

Cannot be underplayed.

We cannot walk away from sports and things like football.

My company is run because of my experience as a football player.

You could talk about the negatives and our partnership with ge and working with concussions.

They had a guy, tackle at dartmouth.

I think he runs a small shop called ge.

Jeff and milk in the sample of that.

What is an example you could take after what a went through with their stock deterioration in this financial crisis?

I think we started the program with a focus.

You need to know who you are.

You can get distracted very easily.

All the sudden, the reason my whiteboard has the different slogans and beg -- says things like mike job description, at the center it comes back to the very simple model, do not forget to sell shirts and shoes.

It is more than just a compression shirt.

We are as much a foot or and as we are a peril.

Extra small women's under armour.

All over that.

You will just me.

Kevin plank.

Michael mckee.

That is it for now.

The dollar.

It is the day.

They may knock it down.

Dollar stronger going into the meeting.

Surveillance back in the next hour with jeffrey immelt.

? this is bloomberg surveillance.

Republicans cry fell -- foul.

Full faith and credit -- billions of dollars have different -- disappeared from the treasury market.

We will ask el-erian.

Ge is in overhaul mode.

Tom keene sits down for an exclusive interview with jeff him out -- immelt.

I am scarlet fu, live from our headquarters in new york.

We are on the road today.

Tom keene is in columbus, ohio.

Sara eisen is in washington dc at the museum for the national forum.

Michael mckee is with me.

Tom, i know you have big guests.

Most importantly, a conversation with jeff immelt.

He is focused on china, on emerging markets, on infrastructure.

He is focused on doing business with middle markets in america.

That is why he is in columbus, ohio.

Let's go to washington and sara eisen.

I am in washington at the museum for the national competitiveness forum.

They are here to talk about business and the government.

It is a government defined by confrontation instead of collaboration.

What can government do to better serve the business community?

I will put that to the ceo and chairman of fedex.

They shipped 3.9 million packages per day.

What better barometer to take that temperature of the global economy?

Let's get you the morning brief.

A lot going on.

Spain's two-year recession is over.

Depending on exports to boost the economy.

Austerity continues to hold back domestic demand.

Mortgage bankers reporting applications up 6.4%. we will be watching the adp employment numbers.

Cpi at 8:30. the fed rate decision at 2:00 this afternoon.

The earnings day louche continues.

Before the bell, comcast is just out.

Craft, visa, metlife, starbucks, and facebook as well.

And baseball in boston tonight.

I don't count that anymore.

The red sox could win the world series.

Do not ask tom keene about it.

He wants to be here for game 7. thanks michael mckee.

Let's get you some company news now.

The united states will be closer to a landmark settlement with sap capital.

They will plead guilty to a security fraud as part of an insider trading settlement.

It will pay $1.2 billion in criminal penalties.

The deal could be announced later today or next week.

The justice department pushes back against jpmorgan.

This according to people familiar with the negotiations.

One big point of difference, the government wants to bar jpmorgan from recovering the cost of washington mutual.

Boeing closes in on billions of dollars -- in on talks for the new planes.

It could be worth as much as $87 billion.

The 777x is not going to make its debut until the end of the decade.

On this fed day, we have mohammed el-erian, the ceo of pimco.

Perfect day to have you join us.

It seems very much that the markets have concluded that no news is good news.

That is right.

We are not expending any big news.

No change in big rates, no change in the asset program, no change and forward guidance.

We will be looking very carefully at the updated assessment of the fed by the economy -- of the economy by the fed.

We want to get a look at the impact of the congressional dysfunction.

Is no news good news?

In the short-term, the markets think that no news is good news.

The liquidity that the fed is putting into the system is pushing people to take more risk.

The fed is encouraging companies to change their capital structure and give back to the equity holders, to dividends, and to buybacks.

In the short term, no news is good news.

The longer term it is an open question.

In the next 24 months, that will be a very hotly debated issue.

Doesn't raise the pressure on janet yellen to get out of this?

The question will be had you tweak it?

How do you balance the benefits, costs, and risks?

At some point you have to strike this balance.

At some point you have to pivot, by tapering.

That is going to be a tough balance.

I feel sorry for janet yellen because she has a very difficult course at head of her.

No one has the playbook.

There is no model to explain how best to do it.

An unprecedented balancing act.

Last time, the market assumed that tapering meant tightening.

It made that leap.

It is not, of course.

The fed can hold steady before it begins to raise interest rates.

Will investors make the same leap?


If you were sitting in washington as a policy maker, you are obsessed with the journey.

What do i do now?

What would you tomorrow?

If you are in the marketplace, you care about the destination and not the journey.

You want to get to the value before others.

While the fed wanted to focus on the journey, the market will try to figure out what the value is.

What you get is preemptive tightening.

Even if it is a small step.

Buddy journey can be interminable -- like we have seen a japan.

It can be but the markets right to get there first.

That is what the makes -- what makes the next step very difficult.

The mention of the word tapering caused losses and undermined the functioning of the market.

Where is pimco on the fed's timetable?

We have no reason to think otherwise.

Where we are different from the market and where we think value is in the notion that the fed is not going to be hiking rates anytime soon.

We think it is too early.

We think the fed will stay much lower for much longer.

There will be a lot more value in the front-end than what most people anticipate.

Here at the museum, all the ceos are talking about the government's this function.

16 days of a shutdown.

How much better could our economy be doing?

How may more jobs could we be creating if we weren't getting all of these shenanigans and dysfunction in washington?

We could be getting many more jobs.

Ceo's have to make multiyear decisions.

When you make a multiyear decision you have to have some clarity on basic issues.

What is the tax regime going to look like?

What will government spending look like?

What will regulations look like?

As these things become less clear, we hold back.

We hold back because we are making multiyear commitments that are very difficult to change.

It does have an impact.

It is hard to quantify.

If you were there, the message should be that this is a time when the economic recovery and the job markets need tailwinds.

Instead, congress is creating headwinds.

That is really not a good idea.

All the talk eras of pro- growth agenda.

What is the most important policy that washington could put on the table right now and pass for the business community and hiring?

Sort out a better balance between monetary and fiscal policy, pro-growth structure reforms with the function of the labor market, residual bubbles that have to be dealt with, including fixing housing finance . these are the big three things.

These are not an engineering problem as much as they are a political issue.

The political will needs to address them.

When is the fed going to move then?

It is hard to tell exactly when.

I suspect it is probably in march.

I say probably and a lot will depend on the data.

I am still very surprised that they did not taper in september.

The door was wide open.

The market had priced it in.

Ceo of pimco.


I will be talking to a lot more ceos at the museum national competitiveness forum, including the ceo of fedex.

"bloomberg surveillance" i am scarlet fu in new york.

Tom keene is in columbus, ohio.

Sara eisen is in washington.

We have a great treat with us, the ceo of pimco.

They cling to the new normal to describe the slow growth and status profits expected as the economy recovers from the great recession.

You did not forecast it is a permanent condition.

As corporate psychology permanently shifted into the new normal?

Our forecast was a five-year forecast.

They go to 2014. we think it will continue to be sluggish growth, high unemployment -- unfortunately, that is our reality.

For the next five years, i believe you with the image of the t junction.

You either have to turn left or right.

We are on this road to a new intersection.

At some point, either we're going to make that transition to high growth and financial stability or we are going to go back to -- companies'performance and goals of changed.

Is the bottom line more important than the top line?

Don't worry as much about driving growth as you do about cutting costs?

We are definitely in self- insurance mode right now.

Companies want to protect.

They want to protect.

They what resilience.

The good news is that there is a ton of cash on the sidelines.

If that cash gets put back into the economy, through investment, through new positive investment, through hiring -- what this economy needs is some to blow the whistle and say, reengage.

If you can get that, you make that turn into higher growth and financial stability.

You also have a bifurcated america where high income earners are driving bending the low income earners are sitting back.

Cannot continue?

-- can that continue?


that is huge.

I look at employment data every few months.

I will give you two simple points.

If you have a college street, your unemployment rate is 3%. if you didn't finish, your unemployment rate is 11%. these issues are really important.

Ceo of pimco.

It is our twitter question of the day.

We are asking everyone when it comes to companies and what they can do to stimulate growth, what would you ask the ceo of ge?

We guess.

-- tweet us.

Good morning.

This is "bloomberg surveillance." i am scarlet fu in new york.

It tom keene is in columbus, ohio.

Sara eisen is in washington.

Michael mckee is here with me in new york.

This morning, u.s. intelligence officials defending the practice of spying on foreign leaders, testifying on capitol hill yesterday.

James clapper said that it is invaluable for us to know where countries are coming from.

Other officials did not identify which world leaders were targeted.

The cfdc set to vote on new rules to promote -- are checked customer funds.

The proposed rules would give regulators electronic oversight to monitor customer funds.

In sports, it is basketball.

Miami heat opening the new season winning.

Topping the chicago bulls one 07-95. lebron james leads the way.

Those are your top headlines.

That marks the beginning of winter for us.

I'm concerned.

Begin tonight in boston.

Not only that, the president is in boston.

Can you imagine traffic?

Let's head over to sarah, who is in downtown washington.

A big day of testimony from the health and human services secretary.


She is on the hill.

She will be facing the house energy and commerce committee.

President obama will be talking about the rollout as well.

Peter cook is with me.

So much else is also going on in washington today.

The fed, the budget negotiations get started.

Was front and center.

We have all been waiting for kathleen sibelius to testify.

So much pressure on her to deliver at this testimony.

There has been a little bit of the air let out of the bag in a ways and means committee -- were the same testimony was delivered.

What will be the key question that needs to be answered?

Where were these problems in the first place?

You will be listening to republicans that -- looking for evidence that the administration knew there were problems and did not delay the website and did not make adjustments.

If there is any indication that they still went ahead with it, that will be a big deal.

The argument is that we didn't see there will be this many people getting on the website at the same time, yet they have also it knowledge that some of the technology was not ready.

The white house was pushing back yesterday about the stories that the president did not tell the truth about, you can keep your health care plan.

Even if this was public before hand, most of the public does not seem to have absorbed that.

It is a situation where they may have to do something drastic like delay the program.

They're going to lose public support.

You are totally right.

This is a big defeat on the pr front.

This discussion about americans who are losing their health insurance and also can't sign up for new health insurance.

It is a bad moment.

It is one reason why the president is in boston talking up some of these issues.

Everything i am hearing is that they are holding off as long as they can from having to impose any sort of delay on the individual mandate because they know it is so important to the overall construct of the system to get people signed up to my particularly young people, as early as possible.

They have not been there yet.

There are a lot of democrats now who are pushing them to go in that direction.

It has not yet reached the tipping point.

The public support has not been there from the beginning.

About half of americans were in support.

I wonder what that looks like now.

They still remain firmly convinced that at the end of the day americans, once they go through this process, will be satisfied and will be pleased with the result.

They will be happier that they have the coverage, better coverage in some instances.

At the end of the day, they will feel this is a positive for them individually.

They are not there yet.

Tom keene in columbus.

I look at this and there is this assumption that it will get fixed by the end of the year.

Does washington have the belief that the problem will not go away january 1? i don't think anybody thinks it will go away january 1. there are somebody difficult steps going forward.

January 1 is one coverage kicks in for a lot of those people.

Then you have to go to the process of going to the doctor and getting her subsidy and getting repaid.

Lots of big question marks.

Then the system actually has to work after that.

This is compensated by the fact that it is an embarrassing time for the administration on the nsa revelations and the pushback.

It is getting more fiery as we speak.

A fascinating hearing up on the hill yesterday where we had james clapper and the head of the nsa, keith alexander, pushing back against the notion that washington did not know about spying on world leaders.

James clapper basically said that this is textbook intelligence.

Everybody does it.

Not just the united states.

People should've been made aware about it.

Keith alexander also saying that these reports in the foreign media did not happen.

Totally false reporting there.

There are real question marks.

It complicate matters here.

There is an opportunity cause here as well.

There are a lot of things being tabled as politicians scramble over this.

Peter, what is the single most unexamined issue because of the controversy?

Bucs there are some in -- there are so many issues going on.

Keith alexander is on the hot seat.

He will be with bloomberg' reagan today.

A lot of timely topics.

Tom keene in columbus.

? coming up, my conversation with jeff immelt.

Good morning, everyone.

From columbus ohio, we are live on bloomberg radio, and bloomberg television.

We are 102 miles from cincinnati.

He was a tackle for dartmouth football.

He joined a lightbulb company from new york.

Jeff immelt is the ceo of general electric.

Ge capital hosts a national middle-market summit, leading from the middle, here in columbus with ohio state's fisher school.

You and president bush talking to 1000 business leaders.

The math is stunning.

These guys are the ones everybody ought to be talking to about what is working, what is not working.

This is where the growth is.

These are where the jobs are.

It is a combination of family businesses, start up businesses, growth companies, divisions of companies.

This is who i talked to one i talked to -- when i want to figure out what is going on.

Bucs -- you need to deliver more to get their business.

We try to bring ge to our ge capital customers.

These are guys running factories, franchisees -- these are guys working on succession, leadership development.

They need the business context.

They are trying to grow in china and places like that.

We try to bring more than just the financing.

That is a commodity business.

We try to bring depth of understanding in the address real world.

Middle-market and america -- in america is a broad -- their businesses abroad.

They are dealing -- they are dealing in every industry.

We have the benefits of size and scale and having done it for 100 years.

These guys are on the cusp of everything that is going on in the economy today.

You have to go outside.

Where are you looking outside the company to grow the new skills?

Silicon valley, startups.

Do you get twitter shares?


[laughter] there is no case and life today for big and slow.

We try to be a big fast company.

We have to be very focused on markets.

Every process we have is focused on speed.

Let me ask you -- what was the worst practice you learned coming out of the financial crisis?

Never confuse tailwind with good management.

In other words, when things are going well, when the country is delivering, everybody look smart.

Ideas look smart.

The time when you should ask the most questions are when things are apparently going the best.

The ceo of pimco was just on.

He is committed to a new normal future.

You don't buy that.

You have a greater optimism.

I would say that you have to go out and capture growth.

We are in 160 countries around the world.

We have very intense localization plans in terms of where we are going.

Last week, i was in china, korea, japan.

We have growth opportunities in all of those countries.

Vietnam -- you have to have this global context if you want to be successful.

Everybody wants to know -- organic revenue growth numbers?

We would love to have a company that could grow 5% to 10% organically.

Two times gdp.

That is what we would like to be doing.

We are cautious about the developed world here it but we still see china and the resource rich countries, we still see benefits there.

Some ceos -- when you look at the future of this dominant part of your business, what is the best practice?

I think the ability to localize.

They are not doing that?

These businesses are about technology, globalization, services.

It is those three things.

It is high research and development.

It is sustained services and outcomes.

It is this ability to bring solutions across a broader way of different countries.

That takes big scale.

That is what we can bring.

I am on the airplane and you see a ge engine.

You need technical excellence.

It comes down to process technology.

A combination of two things.

Deep domain understanding and you try to match that with strong manufacturing.

The day, the product and the process are the same thing.

Without the supplying chain, you cannot deliver these new technologies.

In many ways, manufacturing is more important today than it has ever been.

Tim cook is the new pin yada -- pinata.

What would be your device to him?

-- advice to him?

I don't think i can give him any advice.

I think apple is doing just fine.

[laughter] i don't think tim needs my advice.

I think you should just keep going forward.

Is there an activist going after ge right now?

I think we always take our critics seriously.

I think you are crazy if you don't take your critics seriously.

At the end of the day, we are who we are.

We need to execute over the long term.

Every year during the financial crisis we doubled our research and development.

At the end of the day, i took a ton of heat for that.

Now investors come look at that and say, we see what it has delivered, we see the competitive position it has left you in.

As an industrial leader in global leader, the mantra is use of cash.

Is it overplayed?

I think the industrial leader has to have competitiveness first and foremost.

We have to be able to beat all comers in every corner of the world.

Without that, there will be no earnings, no cash.

The heart of what we all have to be is, you name the country, you name the market, we have to be able to win.

How you generate cash -- we generate cash flow -- how do you respond to the carl icahn's of the world?

Give us your dividend, deploy more to shareholders?

We take all these guys seriously.

We listen to what they say.

We have a good board.

We have investors that are very concerned about how we allocate our capital.

The people that own the stock, they want to see us winning.

They want to see that organic growth.

John rice is head of international for you.

It is easy to say china is everything.

Go beyond that.

Tell me about this growth economy.

The biggest theme that people miss is these resource-rich countries, the middle east, russia, africa, places like that.

They are trying to take their natural resource wealth and converted into an industrial base.

This is a massive trend.

It is going on across a huge amount of the economy.

Ge is positioning itself to be successful in latin america, africa, russia.

I will -- i want to ask you the twitter question of the day.

Armored is ripe for the taking.

-- harvard is ripe for the taking.

Which emerging market is going to do best against china?

I like the aisiasian countries.

There are countries in africa as well.

I am still bullish on some of the countries in the middle east, saudi arabia, algeria.

Is america energy independent?

It could be.

If you look at canada, mexico, u.s. very, lament to refuel types.

Gas in the u.s. if you build a pipeline structure, you will have unbelievably energy strength.

We will come back and talk about the cacophony in washington.

1000 executives come to columbus, ohio and the fisher school of business at ohio state.

We will talk about the follies in washington.

It is "bloomberg surveillance." good morning.

"bloomberg surveillance." we are in columbus ohio here at the ge capital fisher school summit.

I am here with the ceo and chairman of ge.

The best quote in your annual report is from your presiding director.

He says, preform -- perform amid ambiguity.

That is the challenge you had moving forward.

How did you move from ambiguity to a clear path?

We had in our mind that ultimately what ge needed to do is an industrial company with a financial service position.

We had that before the financial crisis, but we could not get there fast enough.

We always had a vision for where we wanted the company to go.

When you are going through this kind of volatility, you keep swinging.

You have to keep clawing away to get to where you want to get to.

I'm sure it is fractious.

Then you see washington.

We are drowning in ambiguity.

Your thoughts on the leadership that the president needs to display to get capitol hill more functional.

It begins with talking to each other.

I have done 1000 complex transactions in my life.

None of them ever get done unless you actually meet.

Unless you actually argue.

Unless you talk about things.

Not with the tv cameras going, no offense.

The one-on-one.

-- but one-on-one.

I think that guys don't talk.

Until they start having dialogue, none of these things will get solved.

I think all of the business world has orchestrated their business to be able to operate assuming nothing happens in washington.

We could sit and hope for immigration reform or tax reform or things like that, but none of them -- us are counting on that anymore.

For all of the lipservice, if we just had a progress agenda -- pro-growth agenda, it would help all of us.

None of us are counting on it.

We are all orchestrating our companies around us.

That -- around it.

How would you bring the tea party and the president together?

What i would say to the tea party is that the country would never be great unless it has fantastic infrastructure.

The extent to which you think anything the government does is wrong, we will never be able to compete with china and places like that.

To the president, i would say that we have regulation -- there is no country in the world that follows this anymore from a regulatory standpoint.

We need to simplify this place.

Sara eisen is in washington.

I am here with someone who also says we have regulatory headaches.

That is fred smith, the chairman and ceo of fred smith -- fedex.

That is coming up.

Coming up, general keith alexander joins trish regan on "street smart." it is an exclusive conversation with the general.

He testified yesterday on capitol hill.

He will be speaking with trish regan later on today.

This is "bloomberg surveillance." i am scarlet fu in new york.

Thomas and columbus, ohio.

Sara eisen is in washington.

Let's get straight to sara.

I am at the national competitiveness forum talking to top ceos about some of the issues facing this nation's economy, a pro-growth agenda.

Chief among them is the chairman and ceo of fedex.

Some are pointing to the fed statement out for a read on the economy.

I am looking to you.

The largest airfreight company by volume.

You have to remember that fedex has four operating divisions.

Our global air express company, which you just mentioned, the biggest in the world.

Then we have a large ground parcel company, a freight company, and a retail company.

We touch a lot of different industries through those segments.

We are pretty optimistic about the season and the u.s. economy.

We announced that the day should be december the second.

Cyber monday.

It is a big change because of the short season.

There are only 21 days after thanksgiving, which happens very late.

About 85 million shipments that week.

That will be up strongly, year- over-year, primarily because of e-commerce.

The global trading system is under pressure to some degree.

We have adjusted our strategies and we think that we have a very good one in a low growth environment.

It is definitely lower growth than it was several years ago.

What about europe?

There are maybe not robbins on the ground, but you can see them in the air.

A lot of people are saying that europe is getting a little better, but there are still a lot of fundamental problems.

Too much automotive production capacity.

Not enough progress on the d leveraging of the banks and so forth.

It is better than it was.

It has not grown like the united states after 2008. we are the bright spot.

We are the best horse in the glue factory, as somebody said.

The nafta economies, canada, mexico, and the united states -- it is quite encouraging.

We have these government problems coming off the government shutdown.

How much is government working against you right now?

The government shutdown was a tactical issue.

We had lots and lots of shipments we could not deliver.

We had lots of shipments that we did not get.

The structural issue is much greater.

Why can't we run the government?

I am pretty encouraged about the progress being made.


I think this budget committee they have put together with senator patty murray and congressman paul ryan, both of whom i know, they are exceptionally able people.

People will be surprised, i think.

There is a bit more agreement, maybe not for a megadeal, but to make some progress on these issues.

I am a bit optimistic.

When you talk about the relative competitiveness of the united states -- that is a different matter.

Our competitiveness is not where it should be for three reasons.

First, we don't have the level of investment that we need.

If you track job creation, it looks like a railroad track.

Our tax code and investment incentives do not match up well with other parts of the world.

Second, as jeff immelt was just saying, the regulatory situation is quite oppressive to business and job creation.

That is true by any measure.

You meet with the president.

Have you told them?

I wouldn't say i meet with him regularly.

I had the pleasure of meeting him.

I think the business community, including the business roundtable, the chamber of commerce -- has been crystal on this issue.

It is an enormous problem.

It is impeding job creation and business growth.

It needs to be toned back.

What about entrepreneurs?

Your story is incredible.

A vietnam veteran with $4,000,000 in inheritance.

Can you do that in this type of environment?

I think you can do that today.

I think in set -- to some degree it is easier.

The venture capital business is more legitimate and has had such great success with fedex and google and all kinds of things.


Certainly, if you have a good idea -- i think, going back to the regulatory issue, it would be harder from that respect.

It is harder to employ people.

It is harder to comply with this regulation or that.

It certainly can be done, no question about it.

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


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