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tv   Bloomberg Surveillance  Bloomberg  August 4, 2015 6:00am-8:01am EDT

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only one donald trump. a bloomberg poll says jeb bush and scott walker are behind the candidate. not sure. and they can do no wrong? the money machine known as espn stumbles. the morning, everyone. this is "bloomberg surveillance ," live from our world headquarters in new york. it is tuesday, august 4. puerto rico is about those co-issues. one is about default fall, and the other is they cannot make a payment. brendan: also they are very similar to greece. they have made their own mistakes but they are caught in a currency union that they cannot control. people leave for the u.s. tom: headline item without question, default on an agency piece from puerto rico. top headlines with vonnie quinn. vonnie: good morning. a bloomberg news poll just
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released shows donald trump leading the republican presidential field by a wide margin. heading into the first party televised debate this week. jeb bush is second at 10%. scott walker is third with 8%. 500 voters who identify themselves as republicans were polled. even though we are a long way from election 2016, the 17 republican presidential candidates are watching the polls closely. the debate is thursday. only the top 10 will get into the event. that will push rick perry and bobby jindal into a less visible event. opponents of president obama's climate change plan -- regulated aims to reduce carbon dioxide
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levels in the air, opponents say it is overreaching by the government. and they say it would raise energy rates. mitch mcconnell: not only will these regulations failed to meaningfully affect the global climate, they could end up harming the appointment by outsourcing to countries with poor environmental records like india and china. they also may be illegal. vonnie: the trouble in greek stocks is deepening this morning, one day after the worst selloff in nearly 30 years. shares plunged nearly 5%, right after trading opened on the athens stock exchange. the benchmark fell 16% yesterday. that was the asp, and the first day of a five-week shutdown brought on by the debt crisis. stocks plummeted, nearly the
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maximum job of 30%. the british government raises $3.3 billion by selling rbs shares at a discount. monday's sale marks the first since the largest bank bailout. 5.5% were sold to money managers. taxpayers are still holding nearly 75% of the bank's shares. the government is trying to revive investor appetite in the stock. and this will be a busy day for president barack obama. it is also his 54th birthday. like most presidents, he has most that she has more right here than when he -- he has more gray-haired than when he first took office seven years ago. brendan: it always is amazing. i remember that was george w. bush as well.
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it is extraordinary. vonnie: does it have anything to do with the office, the gray hair? brendan: maybe it is just people getting older. i look so much older than i did eight years ago. tom: let's do a data check right now. equities, bonds, currencies commodities. oil gets a bit. print to print, it is fragile coming off the carnage of yesterday afternoon, 45.92 on nymex. on to the next screen. the vix -- 12.56. german government bonds -.25. the yields on german paper are really low and brent crude at $50 a share. let's go back to puerto rico. this will be a big topic with joe rhodes.
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in the 1980's, back to jfk and lbj, there are a lot of similarities in the action. boy, did that change. america with a pause, but we add up ever higher. brendan: the differential has always been a blessing and a curse to puerto rico. this has really started to divert. the problem in particular is the minimum wage in the u.s. is so much higher than it should be for the prevailing economic conditions in puerto rico. tom: a minimum wage in san juan is worth a lot of money. brendan: as our medicare and medicaid, which applied there as well. tom: but here we are back 40 years, and something new is causing this angst where they just cannot get their gdp going. in puerto rico, bill rhodes in our next hour. michael darda joins us for the
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next hour, she account -- chief economist at m km partners. in the midst of the commodity implosion, there is that lack of nominal gdp. this is at the heart of michael darda's research, looking at the animal spirit across economies and into the markets. why is this commodity implosion different than the previous ones? michael: what we are looking at here has really been led by china in the emerging markets. you mentioned nominal gdp, but in terms of the demand side for really all manner of industrial commodities, china is the 500 pound gorilla, if you will. china's business cycle is slowing. because i linked to the doctor is exacerbating -- because i linked to it -- the quasi-link to the dollar is exacerbating it. tom: when you worked with --
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part of the analysis was dollar dynamics. do you predict that we will see a rubin-like strong dollar? will we see a redux of the 1990's? michael: we are already seeing that underway. japan in the eurozone is continuing to ease monetary policy, and the fed talking about beginning a gradual course of tightening policy and lifting short-term interest rates. markets have already started to discount this. tom: brendan:brendan: we are going to play a little game and you push a button on tom's shoulder, and he says -- that was yesterday. you talked about demand in china. the extraction industries have a long lead time, so when does that begin to clear? is it two years? five years?
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michael: it is hard to say. if we are talking about the crude oil market we have several problems. one is there is a big positive supply-side shocks going on. it is mainly due to fracking and horizontal drilling in the u.s. as the production has come online, china, the most voracious consumer of commodities has been the celebrating -- has been decelerating. the crude oil market is caught in a vice. tom: this is the core of your expertise. you take commodities and the real economy analysis, and you have to bring it into a financial analysis. most microeconomics squeeze down, buttress in a low-rate low-gdp environment. what gives way back up michael: -- what gives way yeah go michael: we can look at the
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high-yield debt market, which is? tom: that is the only thing that gives way. michael: it is even different in the corporate bond market as well. we do see some disturbances in credit markets. inflation expectations have also rolled over. tom: enough to delay september into december? michael: it is hard to say. i would lean toward december rather than september, but i am more on the dovish side. tom: corn as well. this is not just about the metals. vonnie: is it anticipation of slowing demand, or is it a real-time effect of slowing demand pushing down prices now? michael: it is probably a commendation of both, plus the supply-side factors.
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supply-side factors will not slow growth. on the other side, china is slowing. the emerging markets tied to china, the commodity exporters in particular, are having a rough time of it. the dollar rally amplifies those dynamics, so you look around the globe and some of the developed market business cycles look like they are going to do better. in europe and japan. not so much when we are talking about china and the developing world. brendan: an important distinction is that you believe the fed is being led by conditions and not that the fed is driving conditions, so those conditions will force the fed to stay low. michael: thanks for clarifying that. dove in the sense they should delay. if they are serious about hitting their targets -- the fed has a 2% inflation target -- forward market indicators suggest that the said is not going to reach its inflation goal even with the super glacial
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past of expected rate hikes. tom: i just got an e-mail from nigeria. they want me to send $46,494.76 to an e-mail in nigeria. brendan, should i? brendan: yes. tom: we get these e-mails at bloomberg. unbelievable. brendan: i will sign the check for you. coming up, we discuss how disney's cable ratings problem may have an effect on their numbers. for our twitter question of the day, we ask the only thing that matters -- should sports moved to streaming? my answer is yes, but let us know you think @bsurveillance. good morning. ♪
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tom: good morning, everyone. "bloomberg surveillance." let's get to top headlines with vonnie quinn. vonnie: the fund set up to compensate victims after the ignition switch problems with gm has been set up. families are being compensated $1 million each. general motors recalled 2.5 million small cars. the luxury carmaker still expects china sales to contribute up to 10% of its earnings before interest and taxes. chinese buyers are discouraged by a cooling economy. united airlines is joining delta in banning big game trophies as freight. the carriers are responding to the global outrage after the killing of a protected lion in zimbabwe.
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delta is the first to announce the policy. tom: it is find that you go out there and shoot them but things have changed so much in the last five years. brendan: isn't it amazing how much moral certainty can change echo i do not think it is something -- can change? i do not think it is something anyone has thought about before. tom: to go out and shoot an elephant now -- they did that a million years ago, and fine. but it is not like then. brendan: there are not a lot of elephants left. my friends who hunt deer and geese -- i am not among them, but they draw a small -- they drew -- they draw a stronger tension between something that you can shoot and eat and something that you cannot. tom: the central bank is front and center with the september meeting. michael darda on what janet
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yellen may do, the reaction on the equity markets. we will attach ourselves to japan's very unique national labor problem. having of course to do with the ageless debate of immigration. well, it is simple. it is a very talked about book out of yell press. this -- out of yale press. brendan? brendan: a long time ago and the company far far away that is a reference to star wars pixar then "ironman," and now the only franchise that matters -- star wars. disney expects greater upside on "star wars." we did not see that. paul sweeney did, and he is here from bloomberg intelligence. i want to talk about espn. is it truly in trouble? paul: i do not think it is truly
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in trouble, but it will not be the consistent growth driver for disney that it has been over the past five to 10 years. disney is still obviously a huge cash generator for disney. it is the dominate -- dominant network by far, but consumers are cutting the cord on the margin. even on the margin, it is affecting even the espn's of the world. brendan: is this just a secular trend in the way people are looking at television, or is espn doing something wrong on its own? paul: we're starting to see a lot of the broadcast networks experiment bypassing the pay-tv package, getting hbo, going to consumers directly. all this is a response to netflix. there are 40 million people subscribing to netflix getting content directly over the internet. tom: you are good at full in the
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experience that we have. my tv sits like a monument in my house, dark and black. i look at fox sports, the outperformance at disney. how will disney, as the true leader, respond to "i do not want to watch advertisers"? paul: they are probably in the best position because they have live sports. people do not generally dvr live sports. tom: there are too many dam ned commercials. paul: you are seeing it in product placement all the time. at the end of the day, sports will still be a compelling program, and disney has to figure out how to get people to pay for it. tom: michael darda, do you watch tv at your house? michael: we do, but without commercials. vonnie: should tv stream itself?
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paul: that is interesting. they have built into the contracts, some of these skinny tv packages, if they get too successful, disney will pull espn off those things because they know it is a threat to their core tv distribution. but we will see some form of espn over the top to consumers. brendan: is it going to be paid for through the existing cables inscription, or will it be standalone service? paul: i think they will go standalone own service. they have to maintain their core distribution with their cable network because they make so much money off of that. they also have to think about how do i go to consumers who are not being -- who are not paying for tv? tom: the nominal revenue billed media is doing better than the nation. can they sustain that? keep the share price elevated
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and keep driving forward? paul: that is the big question. media stocks have done tremendously well coming out of the financial crisis. one of the concerns is that people are watching less tv within the cable tv package. that threatens advertising and affiliates. that is really an issue. they are walking a fine line. let's preserve the existing ecosystem, where everybody makes money. let's also figure out other distribution platforms because we know the younger demos in particular are not tuning into the secular tv, pay-tv package. they have to figure out where to get their content on the distribution platforms, but they have to get paid. brendan: i think we got through that with a minimum of "star wars" talk. for our twitter question of the day -- should sports moved to streaming? my answer is i just want to watch my teams. let us know @bsurveillance. good morning. ♪
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tom: good morning, everyone. "bloomberg surveillance," new york city. in the far distance is a gentleman in new jersey who opened an envelope and looked at his son's textbook bill. he let out a primal scream. i think it came out to $1042.12 for five textbooks. brendan: what are you talking about? tom: that time of year. textbook and fee bills. you get the textbook and the fee bill. a kit will need a printer in their dorm room. brendan: bloomberg business this morning -- a theory important
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macroeconomic issue. brendan: this was the worst part of the digital age, that if you wanted to print something, it was incredibly expensive. instead of making you replace the cartridges, buy a new one, for $70, which is what i spent yesterday for my brother printer, they will allow you to open up a little well, for some ink in and slip the cartridge back in. vonnie: isn't out -- isn't that how these companies have been holding on to profit? brendan: exactly right. kyle's point, printers are going to cost more up front. they will take the charges immediately rather than grabbing
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it off of you on the back end, like the razor companies. which is also a crime. tom: i strongly agree with what you said, that we stop using printers because it is such a pain. brendan: we got a quote from the ceo from epson, john lang. "the anxiety and fear of running out of ink it was prevalent." it was not anxiety, it was an annoyance. tom: bill rhodes back with us with an update on greece. ♪
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tom: good morning, everyone. "bloomberg surveillance." brendan greeley and vonnie quinn. we are here on a tuesday, and vonnie quinn has top headlines. vonnie: a bloomberg news poll
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shows donald trump with a double-digit lead over his republican presidential rivals. heading into the party's first televised debate this week, 21% of those surveys -- of those surveyed say trump would be their first choice. jeb bush is at 10%, scott walker is at 8%. trump's lead is well above the survey's margin of error. even though we are a long way from election 2016, the 17 republican candidates are watching the polls closely. their first nationally televised debate is thursday. only the top 10 in the recent survey -- in the most recent survey will be at the event. that will push others into a less visible event. some republican say president obama's move to slow global warming could be short-lived. party leaders say the new rules
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-- the regulations are aimed to reduce carbon dioxide levels in the a, but opponents say it is an overreach by the government. >> i want clean air and clean water. but i want an economy my children can grow into as well. the two have to go hand-in-hand. this is a buzz saw to the nation's economy. vonnie: as the stock plunge deep in seeing greece, investors say it could have been worse. shares plunged nearly 5% after trading opened today on the athens stock exchange. the benchmark index fell 16% yesterday. brokers say limits imposed on buying and selling limited the damage. one bright spot in the otherwise bleak financial greek picture is
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$1.3 billion have flowed back into the country pass banks after they closed three weeks ago. espn says the company is offering houston rockets guard james harden a 13 year deal worth $200 million. his latest deal with nike recently and expired, and now nike has to match the deal or walk away. a spokesman says the company likes james harden's game. tom: $200 million, i am growing that beard, starting tomorrow. the beard is it, i'm sure. let's look at the wheelhouse of michael darda. the fed tries to get to september 17 data. the jobs report may provide clarity. janet yellen and the fomc are working off a theory in action
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it is not in the textbooks that michael darda studied years ago. michael darda joins us on the fed and the markets. the markets -- do they come closer to where janet yellen would like them to be? michael: it is just the opposite. the infamous dot plot moves south, and the markets have been suggesting a much slower trajectory for short-term interest rates. there is more talk about a september move potentially. financial markets think it will be later than that, that the rate of ascent will be very -- tom: we need to look back and see what we have wrought. michael, you and i talked about this for years -- it is a liquidity trap. a liquidity trap is there. none of this has been seen before, has it? michael: it has been seen.
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the early 1930's -- 1932 and the very early 1950's. short-term interest rates were at zero or very close to zero. this was not something that was short-lived. it was a two-decade situation and we did have several business cycles within that period, all of which were very low rate cycles. when the fed was starting to lift short-term interest rates or tighten policy by other means, we had recessions. tom: but they were in a closed economy. we are not. michael: sure, but if we are talking about a zero, lower bound liquidity trap there are some problems with that theory. that is the backdrop that we are discussing. the starting point is the 1930's and the 1940 plus, moving in -- and the 1940's, moving into the 1950's. brendan: there is a mood in
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"market analyst," and also i sent it at this desk as well. that we are getting bored of talking about it, so can we just raise rates and move on. then there is the thought, for god's sake, do not raise rates just because we are annoyed with it. michael: exactly. there is the thought that the fed can just operate in a vacuum, raise rates, get it out of the way, and we can forget about the fed. if they are going to raise rates once and never do it again, why do it in the first place? the key question is, are they going to hit their targets? if there is more uncertainty about potentially hitting the target -- if there is frustration with the performance of the economy, do you want the fed typing policy earlier rather than later? brendan: is there value that we have never been here before, we do not know what we are going to -- what is going to happen when
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we raise rates? michael: the problem with that is, the u.s. in the 1930's, other countries, japan in the 2000's, right up to resin day -- these periods in almost every case is that tightening came prematurely, and we fell back into a zero lower bound situation. waiting longer is not a popular view on wall street, but -- tom: what i love here is that i think michael darda is agreeing with paul krugman, which is very good. do we need to pay homage to hickson, 1939, to go back to old basic economic principles to a -- economic principles to extricate ourselves from this? michael: there is some value to that. look at the nominal gdp trend. nominal gdp and inflation tell you --
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tom: how do we boost inflation? this is important. bolivia blonde chart and scott sumner say boost inflation. michael: you do it through and expectations channel. you say this is the target and we are going to go for it. use the tools in monetary policy. tom: what tools does janet yellen have left? michael: they can do florida guidance on in monetary base from a monitor's perspective. you mentioned paul krugman. his insight in the 1990's was that if base injections on the zero lower bound or temporary they can be viewed as permanent. tom: i agree. she cannot do it. michael: there is no consensus on the fed either. and certainly congress. tom: this is great. we are doing some serious geometry here on what the choice
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is. michael, that was fabulous. there is the banner headline today -- "michael darda agrees with paul krugman." brendan: the imf and japan's labor shortage. the numbers are extraordinary. not enough construction workers in tokyo. that is coming up next. it is our single best chart. this is "bloomberg surveillance ." good morning. ♪
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tom: good morning everyone. let's go to the single best chart with brendan greeley. brendan: the imf released a look at japan's labor shortage. it has cost the country to percent of gdp per year. you have to see how bad it is to believe it, and it is the subject of today's "single best chart." a percentage of report -- a percentage of employers report difficulty filling jobs. japan -- 81% of companies are having trouble filling positions. in the u.s., the mismatch is in high skilled labor, a job that requires training or a college education. in japan, it is low-skilled labor.
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it is construction workers, security guards, services, nursing. it has been that way for years but it has gotten worse in the last decade. michael darda, we were talking about scott sumner earlier. he came up with the idea about focusing on nominal gdp because he happened to be an expert on japan. what we are looking at is not monetary, it is cultural. japan does not want to import labor. michael: it is not monetary, it is supply side. this is the structural backdrop of the liber force and -- of the labor force, activity. this is the supply side. nominal gdp is the demand side. japan has structural impediments, but if you are getting persistent inflation then whatever your production potential is, you have a demand-side problem, too. they are solving that problem with qe.
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nominal growth is around 2%, probably enough to hit the 2% inflation target, if your growth inflation potential is zero, which it looks like it is. they need a bigger effort on female neighbor force participation. immigration, a lot of cultural resistance to that. as you mentioned, taxation and regulation -- they can certainly chop there as well. brendan: and they could certainly change laws that make it easier for women to work, but they keep coming across this cultural barrier. they are still reluctant to put women in the labor force. tom: are we like them? are we like japan in america, with our lousy policies and some of our structural things? is their deflation or disinflation? michael: there is some similarity. we are in the weakest nominal growth recovery in postwar history. the second lowest average inflation rate in postwar history.
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the lowest interest rate nominal interest rate setting since the 1930 and the 1940's. japan had zero nominal growth for two decades. tom: michael darda on japan this morning. what are our photos? is he cute puppy stuff? vonnie: it is, tom. tom: cute monkeys. vonnie: a seven-day old baby at the prague zoo, in the czech republic. it is the second zoo to house the primate. silvery gibbons are only found on the indonesian island of java. brendan: look at that little guy. vonnie: the second one is all so -- the second one is also an animal, but not a real one.
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a cecil the lion stuffed animal has been created by ty. 100% of the profit will go to the wildlife research unit of the university. brendan: i find this shameless. vonnie: there is some good feeling behind it. i do not know if i would buy one, though. number one top photo -- australian their double robbie madison served on a motorbike -- surfed on a motorbike in polynesia. his highly modified to bike with skis attached to the one -- to the tires. he worked for two years to make that happen. brendan: i feel like i definitely made some choices in my life that have led me to not
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being the guy on the motorbike surfing, and i regret them now. vonnie: i feel like we need an evil knievel to make a return. -- that we need evil knievel to make a return. tom: a sport! vonnie: is it dangerous? tom: it must be noisy. photos and videos. coming up, we will have an important conversation with the author of "humans need not apply." this is a really twisted book not about robots and digital but about your future non-jobs. stay with us, from new york city this point. futures negative four. it is "bloomberg surveillance." ♪
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tom: good morning, everyone. nasdaq picking up the pieces green on the screen after real damage in the commodities yesterday. let's get to top headlines. here is vonnie quinn. vonnie: firefighters in northern california are trying to stand
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their ground this morning against a massive wildfire. the blaze jumped containment line has -- and has grown to nearly 100 square miles. at least 13,000 people have been ordered or advised to evacuate. the fire destroyed two dozen homes 100 miles north of san francisco. the senate blocks a republican effort to end federal funding for planned parenthood, but orton opponents say the battle is not over. several republicans -- but abortion opponents say the battle is not over. the women's health realization gets $500 million a year in federal and state money. those are top headlines. tom: an important book getting real buzz right now -- "they are there and if you are not looking they will get you." technological progress is assuredly a good thing, except as most americans know, it is not. digital things like robots have
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crushed job formation and the traditional wage and benefit dynamics of the nation. jerry kaplan is receiving rave reviews for a thoughtful book "humans need not apply." it goes all the way to what we use each and every day, which is amazon. let me bring up the quote from amazon. this is a strange frontier without precedent in the history of humankind. the new regime will creep in silently and unnoticed, as if on cap pause, while you marvel at how the modern world grows ever more convenient, customized to you, and efficient." what is the backstory? jerry: another friend of mine, dave shaw, with de shaw and company, if you think of amazon not eisen the long line -- of amazon not as an online
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store, but as a trading company. jeff bezos understood that retail is king. that is what he did. tom: did he and his robots destroying american retail? jerry: no, that is not going to be the case. online retailing today is only at 7% of overall retailing and it is growing fairly rapidly. 15%. but if you look at how that is going to track out in the future, and if you have to pick an example that will not be that big an impact, it will stabilize at 29% online retailing versus storefront retailing. brendan: behind our rhythms, there is a tremendous human effort within amazon, picking stop from -- behind algorithms there is a tremendous human effort within stock -- within amazon, picking stock from the shelves. jerry: the truth is most people are not going to be able to afford it.
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we are seeing an acceleration to automation, driven primarily by artificial intelligence. in the next decade or two we will see lots of areas of employment be devastated. brendan: the argument has always been, since" "das capital" was written that -- jerry: eventually people out of work, they starve and die and maybe it is not such a good thing with our social policies. vonnie: so maybe in the future we will see other different kinds of jobs cropped up. jerry: the labor market is constantly changing. it is sort of like global warming. what matters is not that it is changing. that is a good thing because
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that generates additional wealth. what matters is that it happens so quickly. if it happens so quickly that people cannot adapt -- tom: this goes to a bipolar economy the two americas economy. is it one america, or is it jerry kaplan's two americas with people left behind? michael: in a trading environment on wall street, you can see rapid innovation displacing and disrupting a lot of the jobs or at least the way the traders would do their jobs so i see that firsthand. i would like to ask jerry, what would be your one or two best policy prescriptions for how to potentially bridge that gap if you have this period of disruptive innovation? jerry: that is a very good question. the problem with income equality is that we are looking at it statically, not dynamically. people think we have to take
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away from the rich and give to the poor and that is a nonstarter in this current political environment. but the u.s. economy doubles approximately every four years. this has happened reliably for over 200 years. think about what that means. four years from now, there will be twice as much wealth as there is today. vonnie: things are changing in technology. jerry: i think it is a reasonable assumption that the economy will continue to grow at the rates that it has in the past. how do we put the right policies in place? the answer is to set up an economic system that no longer favors the currently rich but that permits other people to join that. tom: how do we do that? jerry: i will give you an example. one is to take the corporate tax and make a progressive so that companies whose equity is much more widely distributed pay a lower tax rate.
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that will give them an advantage in the marketplace, and therefore companies who benefit, the largest group of people, will win. brendan: i hear that and i say that is a good idea, and i also hear a tax lawyer licking his chops. if you look at the invention of movable type -- we have the reformation, the 30 years war, and then the enlightenment. where are we on that scale with ai? jerry: this is a fun little change. it will sound extreme, but this is more like the invention of the wheel. we are talking about a fundamental -- or the steam engine, maybe is a little better. it is so broad across nominal and intellectual operations, it will transform labor. that is not to say that there will not be new jobs, but the skills are not the same. tom: jerry kaplan, thank you so much. "humans need not apply."
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michael darda, thank you as well. forex -- what am i looking at? real simple, russian ruble 62.71. a week wrubel off oil. stay with us. ♪
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announcer: this is "bloomberg surveillance." tom: the rout takes an ever so
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slight breather as oil finds a bit. this morning markets adapt and adjust to the global slowdown. there are many republicans but only one donald trump. a bloomberg poll says jeb bush and scott walker are behind the candidate. puerto rico suspends general obligation payments. that is a taste of default in san juan. good morning, everyone. this is "bloomberg surveillance " live from our world headquarters in new york. it is tuesday, august 4. with me, brendan greeley and vonnie quinn. a default on an agency piece? brendan: we are always expecting an immediate cascade of events after a default, but with greece it is a long, slow, painful slide. we need to strap in and wait for the next six months worth of missed deadlines before anything moves on. tom: you wonder what the economy will do, with the challenges in
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greece. top headlines with funny when. vonnie: a bloomberg news poll shows donald trump leading republican presidential hopefuls by a wide margin. he leads by 21% in those surveyed. jeb bush is second at 10%. scott walker is third at 8%. the survey poll 500 voters to attend -- 500 voters who identify themselves as republicans. even though we are a long way from election 2016, the 17 republican presidential candidates are watching the polls closely. their first nationally televised debate is thursday. the top 10 in the recent surveys will get into the primetime event. that leaves rick perry and bobby jindal with a less visible event. opponents of president obama's climate change plan are promising legislation of lawsuits. the president announced he will
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limit power plant emissions, regulations aimed at reducing carbon dioxide in the air, but opponents say it amounts to overreaching by the government. they say the rules would raise energy rates. mitch mcconnell: not only will these massive regulations fail to meaningfully affect the global economy -- the global climate they may end up harming the environment by outsourcing to india and china. they may also be illegal. vonnie: the rules change would force cuts in emissions by 30% within 15 years. the trouble with greek stocks is deepening. shares plunged nearly 5% right after trading opens today on the athens stock exchange. the benchmark index fell 16% yesterday. that was the first day of trading after a five-week shutdown brought on by the
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nation past that crisis. bank stocks are being punished. the british government raises $3.3 billion by selling rbs shares at a discount. this sale march the government's first after the bank bailout. the government is trying to revive investor appetite in the stock. the royal bank of scotland is britain's biggest casualty in the financial crisis seven years ago. it will be a busy day for barack obama. it is also his 54th birthday. like most presidents, he has more gray hair than when he took office seven years ago. when he took the oath back in 2009, he became the fifth youngest president to enter the white house. he still looks pretty young. tom: he kills at basketball right now. brendan: and probably for
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another two decades to come. tom: he could have won or two careers after the white house. brendan: i have to put a dollar in the jar because one of my children yesterday said anybody can make mistakes, even presidents. did you know that barack obama can make mistakes? i said, "yes, sweetheart, i knew that." tom: let's do a data check right now. green on the screen, better than the carnage from yesterday. look at the chart -- it is shockingly elegant to the downside, going back three or four months, indicative of important greek data that we will see i believe thursday and friday this week. let's move on with bill rhodes. she is the adult in the room -- christine lagarde represents 188 nations at her imf. madame lagarde's prescription
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could be called the bill rhodes plan. get everyone in a room, locked the door, give the key to the lady from france. that is what bill rhodes would do senior vice-chairman at citigroup. someone really pounding the table for a gathering of the adults. is madame lagarde correct that a restructuring is mandatory? bill: absolutely correct, and i wish the imf had done their work on this earlier. there is no way that greece can have a successful plan for economic growth going forward without some sort of restructuring. we discussed this a number of times on the program. so i am glad they are finally holding the feet to the fire of the europeans, saying we will not participate unless? tom: you are acclaimed for knowing the machinery and mechanism of human behavior to make that happen. what is bill rhodes looking for
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from germany for that restructuring? bill: debt relief pushing out maturities and cutting interest rates are absolutely necessary because the greek debt cannot be repaid as -- tom: on a behavioral basis bill does lagarde provide cover? bill: only to a certain point. schauble thinks he is the only adult in the room. brendan: i think he is the only person who things he can even read in the room, and it goes beyond that. i want to talk about rules, the rules of the eurozone. you cannot default and remain in the eurozone, and the imf says wait a minute, we have rules too. whose rules win? bill: at the end of the day, the germans, particularly chancellor merkel, who brought the imf into it in the first place -- it was her idea. the previous head of the imf
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convinced her at the very beginning when greece had its problems in 2010, to bring the imf in. they will find a way to get the imf in, it means they will have to recognize at a minimum, debt relief. vonnie: who becomes the elephant in the room, then? christine lagarde only has so much power. if there is a federalist system put in or a federal union, who is the lead in that? who is the big thinker? bill: the senior finance minister of the eurozone will play a crucial part, and he is more flexible than schauble. he is a more flexible person and he will play a key role. tom: we saw the greece pmi yesterday. we have unemployment and cpi data. does real economy data move the suits and ties? bill: the only thing that will
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move them is when they see what is going on in greece is not going to be worked out based on the present plan. one of the things that bothers me a lot is they really have not done anything on the banking system. i have been saying on this show and others that the achilles heel -- you will not always have me on. i think the greek i can system is getting them back to growth. they have to recapitalize four major banks quickly, and they have major problems with their nonperforming. unless you get the greek banks up and lending, there is no way for this to succeed. brendan: let's address a real concern. you have done read -- you have done debt restructuring before. germany's concern is that greece will not fix itself given the break. is there any evidence that greece could fix itself, given this break? bill: there is an easy way to work this out.
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you say to the country, greece, you take next number of events upfront, and we guarantee the following debt relief. that way greeks have an incentive to get in there and do what they need to do with pension reform, labor reform privatizations, fixing the tax system all of that if they know that at x point they are going to get the debt relief rather than saying we will watch over number one and maybe we will give it to you and maybe we will not. brendan: is that a small hurdle for germany? they have said we will not think about it until the first imf review. bill: the final word will be merkel's, not schauble's. tom: bill rhodes is with us through the hour. we will speak of puerto rico and their restructuring as well. i want to make clear that after
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what we saw yesterday, the data is remarkably benign this morning, but fragile. there is green on the screen, but it is very, very fragile. off the bloomberg terminal, west texas, 45.81, and brent crude sent just above the $50 level. that is amazing. brendan: greece is stuck in a currency union and does not have complete freedom of movement. we are talking about puerto rico, of course. and bill rhodes has been there before. he will help us figure out what happens when we restructure and how we do it. this is "surveillance." good morning. ♪
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tom: good morning, everyone. let's digress on the morning must-read. we will get to puerto rico in a bit. this is fabulous from justin fox, who will join us on thursday at bloomberg surveillance. this is on the new world, which i do not understand. streaming. the streaming services already know exactly who is watching or listening to what and when. even at the greeley household. they start out with a huge informational advantage over everybody else -- advertisers, artists, music labels, movie and
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tv producers, and potential competitors. this is a revolution that is like my kids' revolution. i do not think i get it. brendan: it is something that the labels love. if you look at services like spotify, labels love the information dashboards that they get. they know if it is a friday night or saturday night party sought. -- party song three jay-z used to think he was big in the u.k., so he would go to london for concerts. he looked at the spotify data and found he was big in manchester so now he goes to manchester and makes more money. tom: the granularity is there, but the other thing about it is how to identify failure. one of the big problems with media and entertainment is that you let the dogs continue. now they surgically know what is successful sooner. vonnie: they know what will succeed. literally it is successful, when
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it attracts the audience segment it is built and designed for. brendan: they created house of cards because they knew two things -- they knew that people love kevin spacey movies and political thrillers. that is not an accident. tom: william rhodes with citigroup. remember queen for the day or "the red skelton show"? bill: the technical logic -- the technological revolution has been incredible. who imagined that we would be where we are today? when i was a kid, i was brought up on radio. tom: ms. quinn this was a little bit before the moon landing. remember when everyone would go down the street because somebody had a black and white tv?
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bill: and then when you had color television. brendan: a lot of people bought a tv just for the moon landing. my grandfather did. tom: paul sweeney has been so great about this, with bloomberg intelligence, the idea of netflix in the embedded future. justin fox on streaming. how about our twitter question of the day? should sports moves to streaming? stay with us. ♪
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tom: good morning, everyone. i have been waiting for this. renminbi weekend -- 6.1, you want to u.s. dollar. that is modest to see per u.s. currency weakened this morning. that's get to top headlines with vonnie quinn. vonnie: at not is rising -- raising -- aetna is raising its full-year forecast after a second quarter profit that beat analyst expectations.
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last month, aetna agreed to by humana for $35 billion with plans to expand in medicare as shares have gained 28% this year. bmw says a steep slowdown in chinese demand might lead its profitability goals at its automaking division. the world's biggest maker of luxury cars is not in panic mode. it expects unit earnings to be between 8% and 10% of sales. a slowing economy has discouraged customers in china. meanwhile, the company's second quarter profit met estimates. united airlines is joining delta in banning big game trophies as freight. the carrier is responding to the global outrage after the killing of a protected lion in zimbabwe. united says it is limiting the transportation of trophies from elephants, rhinos leopards, and
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water buffaloes, in addition to lions. delta was the first to limit those trophies. brendan: we are learning again that as long as you are a charismatic mega fauna, you are protected. all sorts of other things are not. one agency has defaulted. we are allowed to use that word now. bill rhodes has seen this before. he is the author of "banker to the world." i am going to start with a tom keene trick. is puerto rico greece? bill: it is not greece, but it has similar problems. they cannot pay their debts. that is the similarity. brendan: it strikes me that they
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are stuck in a currency union. they have migration of free movement of people into the u.s. working -- into the u.s. where conditions are better. there are two things going on -- they have no power at the federal level, but they have laws at the federal level like the jones act, that really affect puerto rico itself. bill: but they do not get some of the benefits. there is a 1968 law that cap's their medicaid. 68% of the population is on medicaid and medicare. others are wealthier, and you look at what they are getting and what the states are getting, and it basically is not fair. that is why they should have another referendum to vote for statehood. brendan: would puerto rico be better off now if they were sovereign? bill: without a doubt. look at chapter nine. they cannot get what detroit got . at the same time, they do not have the benefits of being a state. they really are caught betwixt
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and between. congress is trying to push chapter nine, and they have a tremendous migration of professionals, and mainly what is killing them now is the medical side. 3000 doctors have moved out in the last five years. but you have professionals in architects lawyers -- all of these people are moving out of the country because they cannot earn a decent livelihood. brendan: richard blumenthal supported in the senate. it is all democrats, no republicans supporting chapter nine reform. bill: in the meantime, they will have to restructure their debt. there are between 12 and 17 entities they will have to probably restructure. tom: most of this is familiar. what i find fascinating is that this is like individual institutional investors on wall street.
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a real economy rolling over that is fine. but this is not about typical agency relationships. it is about mutual funds on wall street, and they have to decide what to do in litigation. how original is that, that it is about wall street institutions and investors? bill: there is one big difference. so many puerto ricans hold these bonds, even in cooperatives or directly. tom: this is critical. you are the first person to mention this. if order rico goes down, their people go down financial -- if puerto rico goes down, their people go down financially. brendan: so we actually have numbers here, a bloomberg brief put out numbers from barclays -- hedge funds hold $22 billion, mutual funds hold $10 billion. local investors hold -- tom: how will senator schumer of new york deal with the fact that these are evil wall street hedge
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funds and mutual funds? are they going to be the bad guys within this debate? bill: what you need is that they do something special on chapter 9. they have to give them a break. they have to give her to rico -- they have to give puerto rico a break. they have to give the commonwealth of puerto rico a break. then you have the fallout from that. the other thing is they have to put in a plan for investment. i was a young kid when the organized -- when the organ -- when the organization alliance for progress was organized under john kennedy. the last 20 years, there has been no investment and raising a lot of debt. brendan: bill rhodes is here. we will hit brazil, too.
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coming up on "market day," a request for easing by pedro pierluisi. ♪
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tom: good morning. green on the screen, a bid to all the markets. top headlines, here is vonnie quinn. vonnie: some republicans say president obama's move could slow global warming. party leaders say the new rules could be blocked if he is
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preceded in the white house by a republican. the regulations aimed to reduce carbon dioxide levels in the air but they will amount to overreaching by the government. they save the rules would raise energy rates. >> i want clean air clean water, clean land that i wanted in an economy where my children can grow as well. this proposal is a halt to the nation's economy. vonnie: it is proposed to cut emissions of 32% from 2005 levels and that is it within 15 years. while disney is among the bell and investors might want to know about the future online availability of espn and whether it will remain on services after losing 3.3 million customers over the past year. another big factor, disney's commune unit is expecting another blockbuster with the
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latest installment of the enduring series released december. the biggest basketball free agent, espn says the company is offering houston got -- houston rockets guard james harden a 13 year deal. his recent deal expired and nike has possessed the deal or let him walk away. a spokesperson says a person like james harden's look and style makes him a runner-up in most viable layer. brendan: i have my eye on how styles to say that adidas or adidas. tom: vonnie gets a pass being from europe. it sounds good when she says it. if i say it, you will punch me.
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let's get commodity currencies forget about oil. let's go to the bloomberg terminal and copper adjusted. this is inflation copper at 2008. we are not back there yet but we are getting a point of a low, 2008 china blowup angst. what i would focus on, this is what is normal -- the long-term structural price decline to the technological improvement of the commodity. and that we have one fiction, another fiction and you really wonder, do we get back down here? back to somewhere where we were long, long -- to use a star wars metaphor -- long long ago. brendan: far away. you know what i'm stuck right? you could apply this to so many different things. looking at this chart and if you put your hand over that label we have a trend. we have a spike. here is a new trend, we do not know what is going to happen.
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tom: bill rhodes with us. how many times have you been to china? 47. hill: like about 80. tom: what is your insight on china when you look at one group not hard landing and another concerned about the future of the nation? bill: they will not be able to make 7% unless they fudge figures. they've got too many problems going there. they still have not solved the problem of the property bubble. they have got this mismanagement of the lease and stock bubble. it is interesting that they have made no pronouncements. he has left it to john. the reason why is that he does now at to make pronouncements until it is resolved and they mishandled it. when of the things that may happen is ahead of the security and exchange commission, it may not be around. tom: let's go to this equity
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implosion in china. we had a couple good days. brendan: we did. the one thing i would like to know, are the capable of learning a lesson, the chinese government? did they try to do something they cannot do? bill: they will learn and they have bright people pushing the liberalization area. i think ping is one and my good friend, the head of the people's bank of china. tom: would you suggest mr. diamond or mr. colbert that they ramp up investment in asia? bill: i think they have to understand what they are investing in, so it is not just ramping it up in asia, it is where you want to put your money and were to expand and not expand. brendan: there was a a great article about how asia could be having trouble because china is not as reliable as they assumed it would be. tom: report on bloomberg business this morning. i look at the futures right now and they deteriorated that i do
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not want to overplay that. they -- negative six, dow futures, -38 yields. oil getting a bit today gold 1091 downs on gold. brendan: i am brendan keeley with tom keene. tom: a number of times mentioned this morning, there are 4325 days until the election -- whatever. it is just out there somewhere. it is time for another poll and here is a smart pulled. bloomberg politics national poll of republicans. mr. trump does well and everybody else well, everyone is focused on mr. trump. someone like carson, carly fiorina, and carry, we need to get perspective on this in from des moines and and seltzer is with us. surely one of the nation's experts on polls. can i trust your work now versus
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the october? are these good polls and other beneficial to mr. trump and other candidates? ann: a were mostly created to help you out who is going to be on the stage for fox news. that is what they are deciding for for that short-term measurement. in terms of whether any poll taken in august is going to predict what will happen, you would hope not. the candidates are about to spend hundreds of millions of dollars to change poll numbers. of course we expect these to change. tom: my knowledge of your work is your incredible regularity. sue center, iowa, 7048 people and 8000 voters of the northwestern iowa. why do they like mr. trump so much? ann;: i don't know if they like mr. trump so much but would not be surprised if they did. he came out of a fairly common
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american story background and people have known him for a long time. he projects confidence he gives leadership, he has run the massively complex organization and lead it out of bankruptcy the couple of times. they see things they think would inspire the nation. brendan: i'm fascinated by two internals, we are talking about trump with evangelicals other options for evangelicals in the race and those with incomes over $100,000 a year. the rich do not like donald trump. ann: bloomberg politics of it a focus group in new hampshire last week and one of the study remarks was, he is one of us. and this is not a room of the $100,000 plus people. these are the normal people who see in him what they want to be. brendan: overvalue of name recognition fade? ann: he is going to have to build on where he got. two months ago, he was equally well-known but his poll numbers -- vonnie: it could be a sarah palin trajectory, couldn't it?
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she was externally popular to begin with as well. ann: because she was something else. when someone comes out and has a strikingly different voice america is searching for something else. tom: in your analysis, one number that stuck out was 71%. bring that up, if you would. we will give you this exactly -- 71 percentage of republicans approve of the double tier fox news debate. did that surprise a pro like you? ann: it did surprise a pro like me. there has been a lot of controversy but that has been in the inner sent -- circle. tom: mr. trump has high negatives and i believe secretary clinton does as well. how does a pro like you filter negative, like with ted kennedy, years ago? ann: there is a poll in new hampshire right side up on favorability. numbers can change and they have to change over time if he is going to be successful in
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winning the nomination or election. brendan: how important our second choices? it looks like jeb bush is the favorite by 1%, when does that begin to matter? ann: it matters when somebody else drops out. we look at who is donald trump's first number and who is the second choice. it is bush, walker, and chris christie. vonnie: how many of the polls will watch the debate? ann: we don't know. they go up and down. i will guess this will be record raking in terms of ratings because there was so much talk enthusiasm among people who are not normally inside. tom: i talked at length about this two or three days ago and he was adamant they were focused on every single question. will this be a new debate or a saint and boring debate? ann: i think they have to reengineer the debate. tom: congratulations. brendan: do not go anywhere. we will talk about this for a
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while. coming up, the city of rio on bloomberg's "surveillance." good morning. ♪
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tom: good morning, everyone.
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a "surveillance" correction, not only the president's birthday today but daniel thomas of bloomberg news that they as well. dan maas, sharing a birthday with our president. brendan: president obama unveiled a landmark climate change and has sparked a familiar red versus blue state. coal companies will be punished and clean energy companies rewarded. what will regulations before energy? luckily, we have erik schatzker with us. who wins and loses? erik: don't look to me to answer the question, but it does seem fairly clear, however that the renewables because the president is trying to double the share of u.s. energy producers were no book sources that renewable players will be the winners. then it is could the losers are obviously, coal. what about shale gas?
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initially, the president talked about shale gas being a bridge fuel and now it appears there is less focus on natural gas and the presidents climate plan than in the draft proposal. what does that ultimately mean for the producers where there is not a lot of oil but a great deal of shale trap natural gas? vonnie: one way of guessing is to follow the money and asking investors. erik: 10 that is what we will be doing. -- and that is what we will be doing on "market makers" at the 8:00 hour. energy and assets only, so he has got a point of view. one of the things that i know he likes and we will be talking about our yield close. these are the mlp -- well, they are specific structures established of assets of largely renewable resources i can investors the opportunity to invest in. play. if you like wind or solar, you
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can go to a yield color and not have to worry about dilution, if you will about fossil fuel sources like: gas. brendan: the president regulations go like utilities. -- go through utilities. every going to find out if they are opposed to do well? erik: it depends on state regulations and the kinds of producer. if you are independent like alpine or dynegy, you might have a natural cast fire plant that has spare capacity and you are likely to do well. if you own co producing plants that sell power into a deregulated market likeal new york and caliph and the coming could be in trouble. -- and california you could be in trouble. brendan: there is great frustration, especially arizona among people who want to put solar panels on the roofs and the local utility trying to
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prevent them from doing this. there is a ground swell. robert thummel will be speaking to erik schatzker today on "market makers." that is a lot going on there. our two at a question of the day, should sports move to streaming? let us know on "surveillance." i have my own opinion. good morning, it is "surveillance here come -- "surveillance." ♪
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tom: good morning, everyone. bloomberg's "surveillance." a bid to oil, not much but we will take it. let's get to our top headlines. vonnie: firefighters in northern caliph when you try to stand the ground against a massive wildfire. the containment has gone to nearly 100 square miles but crews are getting help from lower temperatures and higher humidity. at least 13,000 people have been ordered to advise. the fire destroyed 200 homes and 100 miles toward san francisco. the vigil in new hampshire trying to determine how a circus turned deadly. 22 were hurt and two killed yesterday when a tent collapsed
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in lancaster. a storm packing hail and 60 miles per hour wind hit when the show was starting. rescuers in the netherlands worked through the night searching for survivors after two huge construction cranes collapsed. two buildings were crushed in the accident. officials say they do not know how many people could be trapped but they estimate that at least 20 people were hurt. terrible tragedies around the world today. brendan: extraordinary and hard to look at. dancing in the devil with the city of god. this book is one of the best pictures we have not only of the city of rio but the country of brazil. giuliana, the author, is with us. we talked this morning about the various things we could use to paint this interview. there is so much going on in brazil, carwash, and you installed -- involvement and i was struck by the chapter you wrote about how hard it was to get an apartment in brazil.
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it is what they call [indiscernible] what will it take to bring down the cost of doing business in brazil? juliana: i think that little anecdote about how difficult it is to do something as simple as renting an apartment tells you something about how difficult it is to start a business or pay taxes or do just about anything that involves a contract. this is one of the areas that brazil had an opportunity to improve and they have not done so. a, cutting down bureaucracy red tape, taxes, and feeding things out. brendan: this proves intractable for so long. bill rhodes has been looking at this for a long time as well. how long have they had to fix this business? bill: they actually had a minister to cut red tape and did not work very well. this is one of the real liabilities i think brazil has among many.
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in the sense of getting its house in order. brazil has so much going natural resources, the people the business clash brazil but they are entrenched with this bureaucracy and the inability to get infrastructure done. also, massive corruption, as you mentioned. but for real, the olympics coming up. a great moment for real. brendan: is it? i was doing research last night and i found this thick imf selling in the cap infrastructure investment in purcell. this is what the pan am games were supposed to do, the world cup and now the olympics. again, what will it take to take a megaproject and make it turn into useful intersection investment? juliana: the project -- it would take the project getting the city's needs versus the city trying to answer the project needs. we fell into this cycle of thinking that by breaking these big events into town and
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promoting the city's brand business were just low end money would come in, and it is not. the city's needs have been left behind in favor of the event's needs and it should be the other way around. brendan: what does that mean specifically? you are there for the world cup and the olympics what went missing that real could have used? juliana: for example, to clear areas for the population of rio de janeiro, clean water a big investigation that proved that everybody who lives there knows, that they and the water and the rivers are polluted. this would have been helpful for the olympics but most helpful for the population. the other area is housing for low income people. they are a symptom of this lack of housing.
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it is an interesting -- vonnie: in argentina, they are moving people out of these low income shanty type houses and people don't want to go because they are in the center of town, off freeways, so it is easy for them and they have their own sort of method of carrying on. sometimes they move far away from their families, so in that instance, is that the answer? juliana: something similar to thought is going on in rio de janeiro. when thesepavela communities -- when these pavela communities are removed, and 219 are supposed to be removed so on a large scale, but they are proposing this government housing many miles away, hours away in areas that have few jobs, few resources and little transportation. tom: so we see jim o'neill's bricks come down to a 3% gdp economy and hillsboro's question
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going back to ted truman, is this a g-20 country or a frontier economy? bill: i think it is both. also, i would mention additional points that you made here. i think rio has been saddled with a serious crime problem along with -- in line tom: will they fix that? bill: no they send the police to clean them out for the moment that they have to have a longer term plan. as you are saying on housing water. blocking lovey, the financial minister for four years under previous administration, you have had a lot of the people trying to clean it up and the olympics was the opportunity, so let's see what happens. brendan: you have great faith in levees -- in levy's capability going forward. one of the things were looking at is they could lock the world
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cup but not win the world cup. i have been working on that line for a while. what lessons did you take from the world cup? juliana: for one, the brazil that bit for the world cup and the olympics and that welcomed those offense was a brazil where it there were a lot of opportunism a sense of possibility in the people. as we saw in the years leading up to the world cup, the population has changed its tune. the sense you have is with the growing but the class, the demands are growing as well. what we saw in posters and chance in 2013 and up to 2014 is that people want more for the taxes they are paying and that might bode ill for the olympics. another project with huge infrastructure that does not have obvious use for the population and a population already questioning this use of their money when there is such obvious other needs. bill: you had a growth rate of 7.5% under lula when he went and
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got the olympics. this year it is going to be to 50.5 percent negative growth, so the attitude of the population has changed completely. -- two percent to 2.5% negative growth so the attitude of the population has changed completely. brendan: a beautiful book. tom: commodities with a technical construction and the technical chart of most of these commodities are horrendous. vonnie: i'm going to be looking at the factory -- the factory later on and that continued economic data. brendan: a slump in the spm and possibly better-than-expected performance on the star wars franchise. tom: that's the center, right? brendan: yes. vonnie: we asked exports should move to streaming and thank you
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for tweeting in. ird watched my nfl from the excellent streaming service. brendan: i love that. i think abroad they have different rules. vonnie: we don't know. they save streaming for younger viewers. otherwise, it will be the next newspaper. brendan: don't say that -- that hurts. vonnie: i can buy any 2000 computer every year with the dollars i do not spend on cable tv. brendan: i love that answer but cutting the cord is a terrible metaphor because you need record to watch internet. vonnie: you shave the court. i cannot cut the cord, what am i going to do? tom: build, thank you so much. -- bill, to buy so much.
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i get, -- again, crude back $50 a barrel. stay with us. "market makers" is next on bloomberg's television. ♪
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>> live from bloomberg headquarters in new york. this is "market makers," with erik schatzker and stephanie ruhle. stephanie: here we go. good tuesday morning.
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you are watching "market makers" at 8:00 a.m. i am stephanie ruhle. erik: i am erik schatzker. twitter down steadily since last week's our needs and jack dorsey's conference call. apple down for days in a row 10% since the very peak. investors are concerned the new product pipeline is empty. we have heard that one before. stephanie: also, chairman of will let advisors is speaking to us about the economy and challenges for the millenial declaration. he is not so rosy on the outlook. erik: let's talk about the morning top stories. we begin with the stock pledge deepening this morning to increase and investors say could have been worse. almost 5% after trading opened on the apple stock exchange. benchmark index fell 16%. restrictions imposed and buying limited to follow.

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