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Speaker 1: This is Bloomberg surveillance. Negative interest rates or a real problem.

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Speaker 1: No one really knows how to deal with them. There

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Speaker 1: are things as simple as accounting problems. I mean, the

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Speaker 1: software doesn't allow you to deal with negative interest rates

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Speaker 1: in a lot of places. I think the Feds actually

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Speaker 1: increased the volatility in the market as everyone app becauses

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Speaker 1: on the data to try to infer from every indicator

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Speaker 1: whether rate increases our sooner or later, and how fast

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Speaker 1: they'll raise rates. There is a weaker ruble, and I

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Speaker 1: think one of the things that the Russian government wants

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Speaker 1: to make sure is that the ruble in fact doesn't strengthen.

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Speaker 1: The ability of the Russian stakes to get through this

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Speaker 1: crisis depends on a weak ruble of Bloomberg surveillance. Your

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Speaker 1: link to the world of economics, finance, and investment on

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Speaker 1: Bloomberg Radio. Good Morning, I might come a key along

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Speaker 1: with Tom Keen. It is seven am on Wall Street

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Speaker 1: eight pm in Tokyo, where the yend never sleeps. A

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Speaker 1: much stronger yen this morning, another seventeen month high investors

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Speaker 1: concluding from the Fed minutes that the US central banks

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Speaker 1: on hold stocks also mostly lower around the world, even

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Speaker 1: though ECB officials were out in force, underlining their readiness

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Speaker 1: to ease further right now. The end going for one

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Speaker 1: oh eight thirty five been as low as one oh

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Speaker 1: eight oh two. Tokyo did finish up to tenths, but

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Speaker 1: in Europe stocks are lower. The foot see is UH

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Speaker 1: down along with the decks of the CAC forty, the

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Speaker 1: stock six hundred off a point three tenths of eight percent,

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Speaker 1: The euro down from yesterday's close, a touch higher than

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Speaker 1: at this time yesterday, though at right now one thirteen

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Speaker 1: seventy five European bonds where you really see the reaction

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Speaker 1: to ECB speak. The German two year note again Pierce's

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Speaker 1: negative fifty basis points just above or below, depending on

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Speaker 1: how you want to look at it. That level here

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Speaker 1: in the US future is pointing to a lower open,

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Speaker 1: with SMP futures down ten points half a percent down.

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Speaker 1: Futures of seventy five four tenthss like one minis are

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Speaker 1: down by twenty points, also four tenths. The dollar in

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Speaker 1: next is down from this time yesterday. So it appears

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Speaker 1: markets whipsode with all the central bank talk, but the

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Speaker 1: yen has been moving for several days now. Tom has

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Speaker 1: been all over this unaffected, it seems, by any of

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Speaker 1: the news out of the central banks, contrary to what

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Speaker 1: the Bank of Japan presumably had in mind when they

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Speaker 1: adopted negative rates in folio is senior foreign exchange strategist

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Speaker 1: at Rabble Bank in London, Jane. Why is the yend

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Speaker 1: so strong and strengthening at a time when people are

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Speaker 1: talking about the Bank of Japan easing further? I mean

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Speaker 1: there hasn't been a flight to safety event this week.

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Speaker 1: Well right now, that does seem to be this feeling

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Speaker 1: in the market that's spectators are potentially testing the Bank

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Speaker 1: of Japan. The Ministry of Finance resolved because of course,

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Speaker 1: over the last couple of months, there's been a lot

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Speaker 1: of talk about whether or not there would be intervention. Now,

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Speaker 1: whilst they have been reports that the officials have been

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Speaker 1: checking prices, and whilst there has been some hotline talk

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Speaker 1: from some officials in Japan, well, it does seem that

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Speaker 1: Prime Minister Arby's comments yesterday that banks should avoid arbitrary

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Speaker 1: effects interventions taken as a signal that actually they're not

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Speaker 1: going to intervene at all, and that really did provide

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Speaker 1: a trigger to send Oliyan lower that today with the

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Speaker 1: market doesn't believe they'll intervene, while in fact it could

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Speaker 1: go lower and irrespective of of the easy that the

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Speaker 1: Bank of Japan has been warning off, Well, if the

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Speaker 1: Bank of Japan easies, do we catch a lot of

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Speaker 1: people outside, well not necessarily. Again, you know that the

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Speaker 1: end doesn't necessarily move around with Bank of Japan movements.

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Speaker 1: And part of this, and it's a little bit like

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Speaker 1: this with Frankenness respect is it is because the the

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Speaker 1: yen is the safe haven currency, so the yen is

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Speaker 1: likely to see most weakness when risk appetite is fun,

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Speaker 1: when people are using the yen as a funding currency

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Speaker 1: to move into too higher risk assets. Now, we saw

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Speaker 1: at the start of the year the end was very

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Speaker 1: firm because stock markets were slowly in off, etcetera. But

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Speaker 1: what was interesting is when stock markets started to recover

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Speaker 1: and around about February and through March again remained relatively firm.

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Speaker 1: It broke off its correlation with with the vix's index.

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Speaker 1: Now that could be a suggestion that there are still

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Speaker 1: lots of investors out there still worried about global growth,

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Speaker 1: still worried that we could have perhaps disappointed earnings from

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Speaker 1: the U s still worried about these risk factors holding

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Speaker 1: onto to their young positions, perhaps as a hedge, and

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Speaker 1: that then has fed this whole conversation about whether or

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Speaker 1: not that would trigger intervention. But personally, the intervention from

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Speaker 1: the G seven nation would be very, very difficult, and

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Speaker 1: it would certainly raise some criticism or the risk of

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Speaker 1: criticism from other major banks such as Jane Foley rather

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Speaker 1: by good morning everyone, Bloomberg Surveillance, marger Bay, Investco and

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Speaker 1: Vestco believes it's time to bench to benchmarks to consider

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Speaker 1: active management and factor based strategies. Find out more and

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Speaker 1: investco dot com slash high conviction. Jane Foley, who loses

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Speaker 1: when the yen strengthens? Well, of course it is really

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Speaker 1: those Japanese exporters and and once we can see the

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Speaker 1: recovery most stock markets really since February, middle of February.

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Speaker 1: Of course, the Nikki has been plagued from in the

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Speaker 1: last few weeks really because of yen strength. But you know,

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Speaker 1: we've spoken before about the broader value of of the en,

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Speaker 1: and of course the en could suffer did see a

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Speaker 1: huge amount of weakness in recent years, and on a

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Speaker 1: relative basis at the yen on an effective exchange rate basis,

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Speaker 1: the yen is still not an ember valued. In fact,

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Speaker 1: it's still under valued on many measures. So those exporters

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Speaker 1: year they might be struggling right now, but actually the

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Speaker 1: yen is not overall a particularly strong currency. Well what's

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Speaker 1: before we let you go? How long can it go?

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Speaker 1: What are those speculative positions telling you at this point? Well,

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Speaker 1: I think I think we saw a lot of these yesterday.

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Speaker 1: A lot of people had to thought that one ten

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Speaker 1: would really provide a line in the sand and it

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Speaker 1: could hold it. The fact that it hasn't really opens

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Speaker 1: up the prospects for perhaps at further further losses. Now, um,

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Speaker 1: you know, if we look at the charts, so we

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Speaker 1: could go a reasonably long way, but fancy one to

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Speaker 1: five or say, but again, I think really in order

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Speaker 1: to see that, we'd have to see some really big

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Speaker 1: movements in the dollar as well. So I'm so skeptical

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Speaker 1: as whether or not we fall that hard. But this

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Speaker 1: break of one tent is any big level for a

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Speaker 1: lot of people's psychological outlook. Jane, thank you so much.

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Speaker 1: Jane Foley with Robbo Bank this morning. We have a

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Speaker 1: lot of fun this morning with Steve Case Obayo well

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Speaker 1: and giving us terrific tech perspective of Mr. Case's new book,

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Speaker 1: The Third Wave as the author The Facebook Effect. David

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Speaker 1: Kirkpatrick joins us. Now, David, we could go for hours

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Speaker 1: with you right now, what is the single most I'm

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Speaker 1: gonna give you an open question. I usually don't do this.

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Speaker 1: What's the single most interesting thing that you're observing in

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Speaker 1: the Kirkpatrick world right now? Well, actually, I talked about

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Speaker 1: one of the breaks during TV. I think the Amazon

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Speaker 1: Echo is a really incredibly important new product that's really

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Speaker 1: pointing the direction at how computing is going ahead, and

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Speaker 1: people in the industry are amazingly excited about it. I

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Speaker 1: have been finding it kind of a catalytic device for

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Speaker 1: helping me rethink where what does The Amazon Echo is

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Speaker 1: a new technology product that it's a consumer product that

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Speaker 1: they have you put in your living room. It's basically

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Speaker 1: listening all the time and you just say, Alexa, you

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Speaker 1: know what's the weather, Alexa time might t Alexa, what's

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Speaker 1: the you know? Get bordered me a uber or Alexa play? Uh?

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Speaker 1: You know Merle Haggard on Spotify, uh. And it will

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Speaker 1: do all that stuff in plenty more. But the thing

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Speaker 1: that's amazing about it to me is that it's an

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Speaker 1: ambient intelligence that's just waiting for you to do things,

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Speaker 1: and you talk to it much like you talk to

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Speaker 1: a human being, and it does things you know at

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Speaker 1: the moment, still quite primitively, that are not that different

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Speaker 1: from what your wife would say if you asked her

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Speaker 1: a question. No, no, no, you're I have one, and

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Speaker 1: you're completely wrong. If I say to my wife Monique,

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Speaker 1: play this, She's gonna say no. But I Alex goes ahead,

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Speaker 1: what's the weather? Let's say. Well, but that's a good point.

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Speaker 1: I use it all the time and come home and

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Speaker 1: I say, Alexa play The Grateful Dead, or Alexa play

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Speaker 1: Beethoven or something like it. I love that, But I

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Speaker 1: don't ask it for the weather. I don't ask it

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Speaker 1: for the news because I'm connected on all these other

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Speaker 1: devices and I know what that stuff is. So I'm

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Speaker 1: wondering we are a more informed person? Yeah, but not

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Speaker 1: from what I read. Everybody's walking around running into people

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Speaker 1: on the street because they're staring at their Facebook screens

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Speaker 1: on the um. So do we really need it as

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Speaker 1: something that will control our lives? Given that there are

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Speaker 1: so many other things. I mean, we're we're not just

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Speaker 1: on many sites, were on many devices. I'm not saying

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Speaker 1: it will control our lives per se. What I'm saying

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Speaker 1: is that by just sitting there and waiting for you

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Speaker 1: to do something and not requiring you to like even

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Speaker 1: turn your wrist like you have to do on your

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Speaker 1: Apple Watch or you know, pick up your iPhone and

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Speaker 1: take a pick a button or say something. You just

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Speaker 1: do what you normally do as a human being, and

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Speaker 1: you get a response from computing. That is a new

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Speaker 1: phenomenon that I think points at the future of interfaces

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Speaker 1: and actually, when you really want to get into it,

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Speaker 1: combine that with with augmented reality and where that's going

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Speaker 1: in the kind of future of displays that are going

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Speaker 1: to be overlaid on the natural world that will probably

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Speaker 1: be controlled by voice, and you start to see where

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Speaker 1: everything's going. And that's the kind of thing I'm excited about.

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Speaker 1: It's still Tom has not learned how to open a beer. Um,

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Speaker 1: you say, Alexa, open a beer. You get I was

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Speaker 1: gonna say something prosaic, like Alexa, who's doing the dishes?

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Speaker 1: As as as as someone with children come you like this?

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Speaker 1: You say, Alexe stop and it stops. Okay, we're gonna

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Speaker 1: come back. David Kirkpatrick with us and UH, I do

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Speaker 1: want to focus on Facebook and the challenges of their

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Speaker 1: news feed much in the news now you know where

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Speaker 1: they go live, folks. Kirkpatrick at the bottom was screaming

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Speaker 1: time shut up, and by Facebook, I didn't you know.

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Speaker 1: I guess it's good to talk to David Kirkpatrick about

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Speaker 1: this thing that's taken over so much of our lives. Alexa.

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Speaker 1: Let's do a data check. We're gonna do that right

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Speaker 1: on negative eight down future negative sixty two. Gloomier earlier

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Speaker 1: is actually trying to be a bid right now out there,

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Speaker 1: oil churning rent and green thirty seven seventy three rent

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Speaker 1: crew near forty per barrel, gold up fifteen one five

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Speaker 1: fifteen dollars twelve thirty nine, the ounce and the action

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Speaker 1: again in foreign exchange, we had a one fourteen print

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Speaker 1: earlier in euro a more subdued foreign exchange market now

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Speaker 1: than the festivities of ninety minutes ago, but one oh

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Speaker 1: eight thirty three in one point four six points, that's

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Speaker 1: a huge, big figure move on the end stronger yen

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Speaker 1: one O eight thirty three UH now as well, and

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Speaker 1: again the futures Negative nine. Now let's check it with

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Speaker 1: Michael bar and get the latest world in national headlines. Michael, Mike,

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Speaker 1: thank you very much. The focus of most of the

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Speaker 1: presidential candidates is New York, which has its primary April nineteen.

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Speaker 1: Ted Cruz will meet today with former New York Mayor

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Speaker 1: Rudy Giuliani. Last night, Donald Trump spoke to a rally

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Speaker 1: of about ten thousand people on Long Island. For the Democrats,

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Speaker 1: Hillary Clinton and Bernie Sanders traded accusations yesterday about the

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Speaker 1: other's qualifications. President Obama will present his case why the

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Speaker 1: stalled nomination of Judge Merritt Garland to the Supreme Court

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Speaker 1: should go forward. President Obama will speak at the University

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Speaker 1: of Chicago Law School today. And Egyptian described as psychologically unstable,

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Speaker 1: will be returned to his home country from Cyprus to

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Speaker 1: face accusations of hijacking and egypt air flight with a

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Speaker 1: fake suicide belt. Global News twenty four hours a day,

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Speaker 1: powered by our journalists. I'm Michael Barr and Michael, thanks

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Speaker 1: so much again. Negative nine in the Futures Defies six

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Speaker 1: four coming up, we will speak with David Kirkpatrick about

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Speaker 1: what's forward for Facebook, so much of us A look

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Speaker 1: back for Facebook, A lot going on there. Michael mc

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Speaker 1: ke and Tom Keane. This is Bloomberg savannas Bloomberg Survantance,

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Speaker 1: on your radio. This is a Bloomberg Business Flash and

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Speaker 1: I'm Karen Moscow. This update is Rozzi Uvayne National Realty

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Speaker 1: Returns on cash and rented real estate. Find them at

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Speaker 1: n r I a dot net right eight reporting fourth

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Speaker 1: quarter profit that beat analysts estimates, revenue missed, and the

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Speaker 1: first of bullishness that lifted U s stocks yesterday is

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Speaker 1: fading with U stock index future signaling equities will fall

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Speaker 1: for a third time in four days. SNP eveny futures

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Speaker 1: down nine points, now eveny futures down sixty four and

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Speaker 1: nastac E many futures down seventeen and a half. In

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Speaker 1: Germany's down about two tens per set ten. Your treasury

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Speaker 1: up seven thirty seconds, the yield one point seven two. No,

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Speaker 1: I'm x screwed oil up to ten percent or eight

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Speaker 1: cents at thirty eighties three of arrol Co mix gold

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Speaker 1: up one per cent or fifteen dollars twenty cents at

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Speaker 1: twelve thirty nine announced and the euro a dollar thirty

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Speaker 1: nine three again one oh eight point three four. That's

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Speaker 1: a Bloomberg business flash, Tom and Mike Karen, thanks so much,

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Speaker 1: David Kirkpatrick with this, I might read this list the

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Speaker 1: Facebook Effect. It's still fresh, it was still exceptionally pointed book.

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Speaker 1: But what's changed, David Kirkpatrick. I mean, I look at

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Speaker 1: Facebook now, the news feed. They're manipulating me. I hear

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Speaker 1: it all the time for people. What's their strategy strategy

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Speaker 1: to engage me more on Facebook? Well, certainly the most

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Speaker 1: recent thing we've heard about is their focus on video

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Speaker 1: in the in the United States and developed world. Um,

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Speaker 1: their strategy is still very growth oriented. I mean one

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Speaker 1: of the biggest things that's changed. You know, my book

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Speaker 1: came out in when they had three fifty million users,

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Speaker 1: and now they have one point five billion. Probably in

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Speaker 1: a year they'll have closer to two billion, and their

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Speaker 1: goal is everyone and and that's a very daunting goal

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Speaker 1: which I think is not going to get there. One

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Speaker 1: of their biggest problems in a way is that they

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Speaker 1: want to basically have everybody on a service that's controlled

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Speaker 1: by a company. And that's a kind of complex social

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Speaker 1: challenge in itself. And I think what we're seeing in

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Speaker 1: terms of the response to them and other American Internet

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Speaker 1: companies in Europe is an early indicator of the big

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Speaker 1: pushback they're going to get as their power just simply grows.

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Speaker 1: I think that's a big, big challenge for them. Well, Uh,

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Speaker 1: the curious thing is is what kind of credibility do

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Speaker 1: people And I guess this is gonna be primarily the

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Speaker 1: younger generation. Do people give to video that's going to

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Speaker 1: come over Facebook? Are they gonna look at it the same?

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Speaker 1: You know, if you have uh the example they showed

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Speaker 1: was to have Zuckerberg, you know, he's he's on the

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Speaker 1: video on Facebook saying watch this on TV. Um people

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Speaker 1: are gonna do that? Is it going to work? Uh? Well,

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Speaker 1: I think people are young people are getting increasingly used

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Speaker 1: to the idea of video coming at them from their

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Speaker 1: friends and you know, Snapchat is video mostly you know

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Speaker 1: it's so I don't think that's a problem for these kids.

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Speaker 1: I think that it's is it interesting, is it engaging?

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Speaker 1: Is it diverting? Um? And uh and and it probably

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Speaker 1: in many of their minds, Tom Keene and you know,

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Speaker 1: is just another image like you know, their kid brother

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Speaker 1: uh coming from the other room. And I'm I think

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Speaker 1: that's an odd new reality of media that we're in. UM.

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Speaker 1: I don't think that their their interest level is diminished

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Speaker 1: because it's on Facebook in any fundamental way, not not

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Speaker 1: not diminished. But I'm just wondering how much credibility it has. Well,

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Speaker 1: I mean, I don't think you're gonna is it gonna

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Speaker 1: drive business? I think the question for me is more

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Speaker 1: how much credibility does Tom Keane have as a news

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Speaker 1: you know, deliverer compared to your brother in the other

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Speaker 1: room telling you of that you know the goldfish has done.

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Speaker 1: But that comes back to the individual product. My question

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Speaker 1: is I understand the international reach of Facebook and all

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Speaker 1: that full disclosure pokes. We do ads and we build

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Speaker 1: the audience like everybody else on Facebook. Does anybody look

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Speaker 1: at the ads? I mean, it's a revenue model, and

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Speaker 1: I get I get the idea of all the marginal

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Speaker 1: money's going to Facebook, Google, But in three years are

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Speaker 1: they're all gonna wake up and go wait, nobody's looking

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Speaker 1: at the ads. The ads are working. They're not the

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Speaker 1: an storical banners. No. The reason the reason they're working

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Speaker 1: is because they're on mobile and they're extremely intrusive and

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Speaker 1: they're quite minimal. Uh. If they weren't working, you wouldn't

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Speaker 1: see the money. The big sucking sound of ad money

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Speaker 1: going into Facebook, which continues. And I think it's really

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Speaker 1: effective on video where it is intrusive, but they can

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Speaker 1: really put it in your face. And as long as

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Speaker 1: they don't make it too annoying, you're gonna be willing

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Speaker 1: to tolerant things like you are on YouTube. Do they

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Speaker 1: buy Vivo? Do they you know, the music like the

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Speaker 1: new MTV? I mean, I I can't get a handle

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Speaker 1: on what the strategy is other than more whisbangs that

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Speaker 1: make me want to look at Facebook. Last, let's legitiate question.

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Speaker 1: I think about what is the strategy. You could argue,

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Speaker 1: you know, look at their infesting obsession with the virtual

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Speaker 1: reality and exactly it's it's a little bit of a

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Speaker 1: distraction if you really think in the short term. Zuckerberg

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Speaker 1: does not think in the short term, and that may

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Speaker 1: be confusing to people like you, who really say, wait

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Speaker 1: a minute, what are they doing right now? He's like

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Speaker 1: got a He's like Jack Mak kind of you know,

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Speaker 1: hundred year Masayoshi song thinker and and and sometimes it's

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Speaker 1: goes overboard. And I think some of the verbiage about

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Speaker 1: augmented in virtual reality that they have is distracted. What's

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Speaker 1: the best practice from Jeff Bezos for Mark Zuckerberg right now?

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Speaker 1: What's Bezos doing? In Bezos hardly ever talks about what

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Speaker 1: he's actually doing. Does it? He just doesn't. He does

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Speaker 1: it extraordinarily effectively. And you know, the press is like

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Speaker 1: blocked out entirely from Amazon, but in Facebook is something

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Speaker 1: more of a of a you know, public company in

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Speaker 1: every respect, not just in the markets. But because they're

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Speaker 1: constantly under scrutiny, they've gotten used to talking about what

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Speaker 1: they do rather incessantly. And I think sometimes they one

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Speaker 1: good thing is they make a mistake and they pull

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Speaker 1: back from it really fast. They do a lot of

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Speaker 1: stuff and if it doesn't work, they drop it and

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Speaker 1: they go on. They've seen that from them time and

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Speaker 1: time again. Um, But but I think that, you know,

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Speaker 1: it's also confusing. I do think that on the issue

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Speaker 1: of privacy, which is increasingly one of their sin you know,

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Speaker 1: gigantic challenges, uh as they become such a dominant force

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Speaker 1: in society, and not so much among kids, but among

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Speaker 1: older people that they have all of our information, they

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Speaker 1: don't really tell us how they use it, even though

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Speaker 1: they say they don't sell it to an advertiser with

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Speaker 1: their name on it. But in Europe right now it

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Speaker 1: is a big problem. Are you using Facebook less? All?

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Speaker 1: In at the McKee house, I can't use it less.

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Speaker 1: None of us subscribe because you're David. Effect is I'm

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Speaker 1: seeing less usage Facebook is they try to manipulate my

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Speaker 1: income and I I don't sign up because of what

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Speaker 1: you were just talking about. I mean, basically, this is

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Speaker 1: an opportunity for Zuckerberg and Sendberg to sell me my

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Speaker 1: data to other people. But I mean what's interesting is

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Speaker 1: how little daverage person seems to care. They don't care.

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Speaker 1: And I think you're extremely and so why did you

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Speaker 1: worry about it? Why why did Tim Cook worries so much?

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Speaker 1: Because that struck me the whole debate. But I mean,

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Speaker 1: if you if if I'm little, if people are willing

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Speaker 1: to give all their information out, well, you know Facebook

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Speaker 1: just turned on encryption in in WhatsApp, you know, for

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Speaker 1: a billion people to go in the same direction Tim

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Speaker 1: Cook is going. You know, at Facebook, they also agree

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Speaker 1: that the government should not have the right to get

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Speaker 1: a peek. We're running out of time. David Kirkpatrick will

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Speaker 1: get you back for a full hour here, like David Patrick,

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Speaker 1: Facebook at the bottom. Unfortunately what Time Warner at the top.

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