Speaker 1: This is Bloomberg surveillance. Negative interest rates or a real problem.
Speaker 1: No one really knows how to deal with them. There
Speaker 1: are things as simple as accounting problems. I mean, the
Speaker 1: software doesn't allow you to deal with negative interest rates
Speaker 1: in a lot of places. I think the Feds actually
Speaker 1: increased the volatility in the market as everyone app becauses
Speaker 1: on the data to try to infer from every indicator
Speaker 1: whether rate increases our sooner or later, and how fast
Speaker 1: they'll raise rates. There is a weaker ruble, and I
Speaker 1: think one of the things that the Russian government wants
Speaker 1: to make sure is that the ruble in fact doesn't strengthen.
Speaker 1: The ability of the Russian stakes to get through this
Speaker 1: crisis depends on a weak ruble of Bloomberg surveillance. Your
Speaker 1: link to the world of economics, finance, and investment on
Speaker 1: Bloomberg Radio. Good Morning, I might come a key along
Speaker 1: with Tom Keen. It is seven am on Wall Street
Speaker 1: eight pm in Tokyo, where the yend never sleeps. A
Speaker 1: much stronger yen this morning, another seventeen month high investors
Speaker 1: concluding from the Fed minutes that the US central banks
Speaker 1: on hold stocks also mostly lower around the world, even
Speaker 1: though ECB officials were out in force, underlining their readiness
Speaker 1: to ease further right now. The end going for one
Speaker 1: oh eight thirty five been as low as one oh
Speaker 1: eight oh two. Tokyo did finish up to tenths, but
Speaker 1: in Europe stocks are lower. The foot see is UH
Speaker 1: down along with the decks of the CAC forty, the
Speaker 1: stock six hundred off a point three tenths of eight percent,
Speaker 1: The euro down from yesterday's close, a touch higher than
Speaker 1: at this time yesterday, though at right now one thirteen
Speaker 1: seventy five European bonds where you really see the reaction
Speaker 1: to ECB speak. The German two year note again Pierce's
Speaker 1: negative fifty basis points just above or below, depending on
Speaker 1: how you want to look at it. That level here
Speaker 1: in the US future is pointing to a lower open,
Speaker 1: with SMP futures down ten points half a percent down.
Speaker 1: Futures of seventy five four tenthss like one minis are
Speaker 1: down by twenty points, also four tenths. The dollar in
Speaker 1: next is down from this time yesterday. So it appears
Speaker 1: markets whipsode with all the central bank talk, but the
Speaker 1: yen has been moving for several days now. Tom has
Speaker 1: been all over this unaffected, it seems, by any of
Speaker 1: the news out of the central banks, contrary to what
Speaker 1: the Bank of Japan presumably had in mind when they
Speaker 1: adopted negative rates in folio is senior foreign exchange strategist
Speaker 1: at Rabble Bank in London, Jane. Why is the yend
Speaker 1: so strong and strengthening at a time when people are
Speaker 1: talking about the Bank of Japan easing further? I mean
Speaker 1: there hasn't been a flight to safety event this week.
Speaker 1: Well right now, that does seem to be this feeling
Speaker 1: in the market that's spectators are potentially testing the Bank
Speaker 1: of Japan. The Ministry of Finance resolved because of course,
Speaker 1: over the last couple of months, there's been a lot
Speaker 1: of talk about whether or not there would be intervention. Now,
Speaker 1: whilst they have been reports that the officials have been
Speaker 1: checking prices, and whilst there has been some hotline talk
Speaker 1: from some officials in Japan, well, it does seem that
Speaker 1: Prime Minister Arby's comments yesterday that banks should avoid arbitrary
Speaker 1: effects interventions taken as a signal that actually they're not
Speaker 1: going to intervene at all, and that really did provide
Speaker 1: a trigger to send Oliyan lower that today with the
Speaker 1: market doesn't believe they'll intervene, while in fact it could
Speaker 1: go lower and irrespective of of the easy that the
Speaker 1: Bank of Japan has been warning off, Well, if the
Speaker 1: Bank of Japan easies, do we catch a lot of
Speaker 1: people outside, well not necessarily. Again, you know that the
Speaker 1: end doesn't necessarily move around with Bank of Japan movements.
Speaker 1: And part of this, and it's a little bit like
Speaker 1: this with Frankenness respect is it is because the the
Speaker 1: yen is the safe haven currency, so the yen is
Speaker 1: likely to see most weakness when risk appetite is fun,
Speaker 1: when people are using the yen as a funding currency
Speaker 1: to move into too higher risk assets. Now, we saw
Speaker 1: at the start of the year the end was very
Speaker 1: firm because stock markets were slowly in off, etcetera. But
Speaker 1: what was interesting is when stock markets started to recover
Speaker 1: and around about February and through March again remained relatively firm.
Speaker 1: It broke off its correlation with with the vix's index.
Speaker 1: Now that could be a suggestion that there are still
Speaker 1: lots of investors out there still worried about global growth,
Speaker 1: still worried that we could have perhaps disappointed earnings from
Speaker 1: the U s still worried about these risk factors holding
Speaker 1: onto to their young positions, perhaps as a hedge, and
Speaker 1: that then has fed this whole conversation about whether or
Speaker 1: not that would trigger intervention. But personally, the intervention from
Speaker 1: the G seven nation would be very, very difficult, and
Speaker 1: it would certainly raise some criticism or the risk of
Speaker 1: criticism from other major banks such as Jane Foley rather
Speaker 1: by good morning everyone, Bloomberg Surveillance, marger Bay, Investco and
Speaker 1: Vestco believes it's time to bench to benchmarks to consider
Speaker 1: active management and factor based strategies. Find out more and
Speaker 1: investco dot com slash high conviction. Jane Foley, who loses
Speaker 1: when the yen strengthens? Well, of course it is really
Speaker 1: those Japanese exporters and and once we can see the
Speaker 1: recovery most stock markets really since February, middle of February.
Speaker 1: Of course, the Nikki has been plagued from in the
Speaker 1: last few weeks really because of yen strength. But you know,
Speaker 1: we've spoken before about the broader value of of the en,
Speaker 1: and of course the en could suffer did see a
Speaker 1: huge amount of weakness in recent years, and on a
Speaker 1: relative basis at the yen on an effective exchange rate basis,
Speaker 1: the yen is still not an ember valued. In fact,
Speaker 1: it's still under valued on many measures. So those exporters
Speaker 1: year they might be struggling right now, but actually the
Speaker 1: yen is not overall a particularly strong currency. Well what's
Speaker 1: before we let you go? How long can it go?
Speaker 1: What are those speculative positions telling you at this point? Well,
Speaker 1: I think I think we saw a lot of these yesterday.
Speaker 1: A lot of people had to thought that one ten
Speaker 1: would really provide a line in the sand and it
Speaker 1: could hold it. The fact that it hasn't really opens
Speaker 1: up the prospects for perhaps at further further losses. Now, um,
Speaker 1: you know, if we look at the charts, so we
Speaker 1: could go a reasonably long way, but fancy one to
Speaker 1: five or say, but again, I think really in order
Speaker 1: to see that, we'd have to see some really big
Speaker 1: movements in the dollar as well. So I'm so skeptical
Speaker 1: as whether or not we fall that hard. But this
Speaker 1: break of one tent is any big level for a
Speaker 1: lot of people's psychological outlook. Jane, thank you so much.
Speaker 1: Jane Foley with Robbo Bank this morning. We have a
Speaker 1: lot of fun this morning with Steve Case Obayo well
Speaker 1: and giving us terrific tech perspective of Mr. Case's new book,
Speaker 1: The Third Wave as the author The Facebook Effect. David
Speaker 1: Kirkpatrick joins us. Now, David, we could go for hours
Speaker 1: with you right now, what is the single most I'm
Speaker 1: gonna give you an open question. I usually don't do this.
Speaker 1: What's the single most interesting thing that you're observing in
Speaker 1: the Kirkpatrick world right now? Well, actually, I talked about
Speaker 1: one of the breaks during TV. I think the Amazon
Speaker 1: Echo is a really incredibly important new product that's really
Speaker 1: pointing the direction at how computing is going ahead, and
Speaker 1: people in the industry are amazingly excited about it. I
Speaker 1: have been finding it kind of a catalytic device for
Speaker 1: helping me rethink where what does The Amazon Echo is
Speaker 1: a new technology product that it's a consumer product that
Speaker 1: they have you put in your living room. It's basically
Speaker 1: listening all the time and you just say, Alexa, you
Speaker 1: know what's the weather, Alexa time might t Alexa, what's
Speaker 1: the you know? Get bordered me a uber or Alexa play? Uh?
Speaker 1: You know Merle Haggard on Spotify, uh. And it will
Speaker 1: do all that stuff in plenty more. But the thing
Speaker 1: that's amazing about it to me is that it's an
Speaker 1: ambient intelligence that's just waiting for you to do things,
Speaker 1: and you talk to it much like you talk to
Speaker 1: a human being, and it does things you know at
Speaker 1: the moment, still quite primitively, that are not that different
Speaker 1: from what your wife would say if you asked her
Speaker 1: a question. No, no, no, you're I have one, and
Speaker 1: you're completely wrong. If I say to my wife Monique,
Speaker 1: play this, She's gonna say no. But I Alex goes ahead,
Speaker 1: what's the weather? Let's say. Well, but that's a good point.
Speaker 1: I use it all the time and come home and
Speaker 1: I say, Alexa play The Grateful Dead, or Alexa play
Speaker 1: Beethoven or something like it. I love that, But I
Speaker 1: don't ask it for the weather. I don't ask it
Speaker 1: for the news because I'm connected on all these other
Speaker 1: devices and I know what that stuff is. So I'm
Speaker 1: wondering we are a more informed person? Yeah, but not
Speaker 1: from what I read. Everybody's walking around running into people
Speaker 1: on the street because they're staring at their Facebook screens
Speaker 1: on the um. So do we really need it as
Speaker 1: something that will control our lives? Given that there are
Speaker 1: so many other things. I mean, we're we're not just
Speaker 1: on many sites, were on many devices. I'm not saying
Speaker 1: it will control our lives per se. What I'm saying
Speaker 1: is that by just sitting there and waiting for you
Speaker 1: to do something and not requiring you to like even
Speaker 1: turn your wrist like you have to do on your
Speaker 1: Apple Watch or you know, pick up your iPhone and
Speaker 1: take a pick a button or say something. You just
Speaker 1: do what you normally do as a human being, and
Speaker 1: you get a response from computing. That is a new
Speaker 1: phenomenon that I think points at the future of interfaces
Speaker 1: and actually, when you really want to get into it,
Speaker 1: combine that with with augmented reality and where that's going
Speaker 1: in the kind of future of displays that are going
Speaker 1: to be overlaid on the natural world that will probably
Speaker 1: be controlled by voice, and you start to see where
Speaker 1: everything's going. And that's the kind of thing I'm excited about.
Speaker 1: It's still Tom has not learned how to open a beer. Um,
Speaker 1: you say, Alexa, open a beer. You get I was
Speaker 1: gonna say something prosaic, like Alexa, who's doing the dishes?
Speaker 1: As as as as someone with children come you like this?
Speaker 1: You say, Alexe stop and it stops. Okay, we're gonna
Speaker 1: come back. David Kirkpatrick with us and UH, I do
Speaker 1: want to focus on Facebook and the challenges of their
Speaker 1: news feed much in the news now you know where
Speaker 1: they go live, folks. Kirkpatrick at the bottom was screaming
Speaker 1: time shut up, and by Facebook, I didn't you know.
Speaker 1: I guess it's good to talk to David Kirkpatrick about
Speaker 1: this thing that's taken over so much of our lives. Alexa.
Speaker 1: Let's do a data check. We're gonna do that right
Speaker 1: on negative eight down future negative sixty two. Gloomier earlier
Speaker 1: is actually trying to be a bid right now out there,
Speaker 1: oil churning rent and green thirty seven seventy three rent
Speaker 1: crew near forty per barrel, gold up fifteen one five
Speaker 1: fifteen dollars twelve thirty nine, the ounce and the action
Speaker 1: again in foreign exchange, we had a one fourteen print
Speaker 1: earlier in euro a more subdued foreign exchange market now
Speaker 1: than the festivities of ninety minutes ago, but one oh
Speaker 1: eight thirty three in one point four six points, that's
Speaker 1: a huge, big figure move on the end stronger yen
Speaker 1: one O eight thirty three UH now as well, and
Speaker 1: again the futures Negative nine. Now let's check it with
Speaker 1: Michael bar and get the latest world in national headlines. Michael, Mike,
Speaker 1: thank you very much. The focus of most of the
Speaker 1: presidential candidates is New York, which has its primary April nineteen.
Speaker 1: Ted Cruz will meet today with former New York Mayor
Speaker 1: Rudy Giuliani. Last night, Donald Trump spoke to a rally
Speaker 1: of about ten thousand people on Long Island. For the Democrats,
Speaker 1: Hillary Clinton and Bernie Sanders traded accusations yesterday about the
Speaker 1: other's qualifications. President Obama will present his case why the
Speaker 1: stalled nomination of Judge Merritt Garland to the Supreme Court
Speaker 1: should go forward. President Obama will speak at the University
Speaker 1: of Chicago Law School today. And Egyptian described as psychologically unstable,
Speaker 1: will be returned to his home country from Cyprus to
Speaker 1: face accusations of hijacking and egypt air flight with a
Speaker 1: fake suicide belt. Global News twenty four hours a day,
Speaker 1: powered by our journalists. I'm Michael Barr and Michael, thanks
Speaker 1: so much again. Negative nine in the Futures Defies six
Speaker 1: four coming up, we will speak with David Kirkpatrick about
Speaker 1: what's forward for Facebook, so much of us A look
Speaker 1: back for Facebook, A lot going on there. Michael mc
Speaker 1: ke and Tom Keane. This is Bloomberg savannas Bloomberg Survantance,
Speaker 1: brought you by s c N d V Bank for
Speaker 1: businesses on the move. Are you looking for the right
Speaker 1: banking partner? Go to sc NV dot com to learn
Speaker 1: Now open a Long Island city, Get your business moving
Speaker 1: with SCNP Global Business News twenty four hours a day
Speaker 1: at Bloomberg dot com, the Radio plus Mobile Act and
Speaker 1: on your radio. This is a Bloomberg Business Flash and
Speaker 1: I'm Karen Moscow. This update is Rozzi Uvayne National Realty
Speaker 1: Returns on cash and rented real estate. Find them at
Speaker 1: n r I a dot net right eight reporting fourth
Speaker 1: quarter profit that beat analysts estimates, revenue missed, and the
Speaker 1: first of bullishness that lifted U s stocks yesterday is
Speaker 1: fading with U stock index future signaling equities will fall
Speaker 1: for a third time in four days. SNP eveny futures
Speaker 1: down nine points, now eveny futures down sixty four and
Speaker 1: nastac E many futures down seventeen and a half. In
Speaker 1: Germany's down about two tens per set ten. Your treasury
Speaker 1: up seven thirty seconds, the yield one point seven two. No,
Speaker 1: I'm x screwed oil up to ten percent or eight
Speaker 1: cents at thirty eighties three of arrol Co mix gold
Speaker 1: up one per cent or fifteen dollars twenty cents at
Speaker 1: twelve thirty nine announced and the euro a dollar thirty
Speaker 1: nine three again one oh eight point three four. That's
Speaker 1: a Bloomberg business flash, Tom and Mike Karen, thanks so much,
Speaker 1: David Kirkpatrick with this, I might read this list the
Speaker 1: Facebook Effect. It's still fresh, it was still exceptionally pointed book.
Speaker 1: But what's changed, David Kirkpatrick. I mean, I look at
Speaker 1: Facebook now, the news feed. They're manipulating me. I hear
Speaker 1: it all the time for people. What's their strategy strategy
Speaker 1: to engage me more on Facebook? Well, certainly the most
Speaker 1: recent thing we've heard about is their focus on video
Speaker 1: in the in the United States and developed world. Um,
Speaker 1: their strategy is still very growth oriented. I mean one
Speaker 1: of the biggest things that's changed. You know, my book
Speaker 1: came out in when they had three fifty million users,
Speaker 1: and now they have one point five billion. Probably in
Speaker 1: a year they'll have closer to two billion, and their
Speaker 1: goal is everyone and and that's a very daunting goal
Speaker 1: which I think is not going to get there. One
Speaker 1: of their biggest problems in a way is that they
Speaker 1: want to basically have everybody on a service that's controlled
Speaker 1: by a company. And that's a kind of complex social
Speaker 1: challenge in itself. And I think what we're seeing in
Speaker 1: terms of the response to them and other American Internet
Speaker 1: companies in Europe is an early indicator of the big
Speaker 1: pushback they're going to get as their power just simply grows.
Speaker 1: I think that's a big, big challenge for them. Well, Uh,
Speaker 1: the curious thing is is what kind of credibility do
Speaker 1: people And I guess this is gonna be primarily the
Speaker 1: younger generation. Do people give to video that's going to
Speaker 1: come over Facebook? Are they gonna look at it the same?
Speaker 1: You know, if you have uh the example they showed
Speaker 1: was to have Zuckerberg, you know, he's he's on the
Speaker 1: video on Facebook saying watch this on TV. Um people
Speaker 1: are gonna do that? Is it going to work? Uh? Well,
Speaker 1: I think people are young people are getting increasingly used
Speaker 1: to the idea of video coming at them from their
Speaker 1: friends and you know, Snapchat is video mostly you know
Speaker 1: it's so I don't think that's a problem for these kids.
Speaker 1: I think that it's is it interesting, is it engaging?
Speaker 1: Is it diverting? Um? And uh and and it probably
Speaker 1: in many of their minds, Tom Keene and you know,
Speaker 1: is just another image like you know, their kid brother
Speaker 1: uh coming from the other room. And I'm I think
Speaker 1: that's an odd new reality of media that we're in. UM.
Speaker 1: I don't think that their their interest level is diminished
Speaker 1: because it's on Facebook in any fundamental way, not not
Speaker 1: not diminished. But I'm just wondering how much credibility it has. Well,
Speaker 1: I mean, I don't think you're gonna is it gonna
Speaker 1: drive business? I think the question for me is more
Speaker 1: how much credibility does Tom Keane have as a news
Speaker 1: you know, deliverer compared to your brother in the other
Speaker 1: room telling you of that you know the goldfish has done.
Speaker 1: But that comes back to the individual product. My question
Speaker 1: is I understand the international reach of Facebook and all
Speaker 1: that full disclosure pokes. We do ads and we build
Speaker 1: the audience like everybody else on Facebook. Does anybody look
Speaker 1: at the ads? I mean, it's a revenue model, and
Speaker 1: I get I get the idea of all the marginal
Speaker 1: money's going to Facebook, Google, But in three years are
Speaker 1: they're all gonna wake up and go wait, nobody's looking
Speaker 1: at the ads. The ads are working. They're not the
Speaker 1: an storical banners. No. The reason the reason they're working
Speaker 1: is because they're on mobile and they're extremely intrusive and
Speaker 1: they're quite minimal. Uh. If they weren't working, you wouldn't
Speaker 1: see the money. The big sucking sound of ad money
Speaker 1: going into Facebook, which continues. And I think it's really
Speaker 1: effective on video where it is intrusive, but they can
Speaker 1: really put it in your face. And as long as
Speaker 1: they don't make it too annoying, you're gonna be willing
Speaker 1: to tolerant things like you are on YouTube. Do they
Speaker 1: buy Vivo? Do they you know, the music like the
Speaker 1: new MTV? I mean, I I can't get a handle
Speaker 1: on what the strategy is other than more whisbangs that
Speaker 1: make me want to look at Facebook. Last, let's legitiate question.
Speaker 1: I think about what is the strategy. You could argue,
Speaker 1: you know, look at their infesting obsession with the virtual
Speaker 1: reality and exactly it's it's a little bit of a
Speaker 1: distraction if you really think in the short term. Zuckerberg
Speaker 1: does not think in the short term, and that may
Speaker 1: be confusing to people like you, who really say, wait
Speaker 1: a minute, what are they doing right now? He's like
Speaker 1: got a He's like Jack Mak kind of you know,
Speaker 1: hundred year Masayoshi song thinker and and and sometimes it's
Speaker 1: goes overboard. And I think some of the verbiage about
Speaker 1: augmented in virtual reality that they have is distracted. What's
Speaker 1: the best practice from Jeff Bezos for Mark Zuckerberg right now?
Speaker 1: What's Bezos doing? In Bezos hardly ever talks about what
Speaker 1: he's actually doing. Does it? He just doesn't. He does
Speaker 1: it extraordinarily effectively. And you know, the press is like
Speaker 1: blocked out entirely from Amazon, but in Facebook is something
Speaker 1: more of a of a you know, public company in
Speaker 1: every respect, not just in the markets. But because they're
Speaker 1: constantly under scrutiny, they've gotten used to talking about what
Speaker 1: they do rather incessantly. And I think sometimes they one
Speaker 1: good thing is they make a mistake and they pull
Speaker 1: back from it really fast. They do a lot of
Speaker 1: stuff and if it doesn't work, they drop it and
Speaker 1: they go on. They've seen that from them time and
Speaker 1: time again. Um, But but I think that, you know,
Speaker 1: it's also confusing. I do think that on the issue
Speaker 1: of privacy, which is increasingly one of their sin you know,
Speaker 1: gigantic challenges, uh as they become such a dominant force
Speaker 1: in society, and not so much among kids, but among
Speaker 1: older people that they have all of our information, they
Speaker 1: don't really tell us how they use it, even though
Speaker 1: they say they don't sell it to an advertiser with
Speaker 1: their name on it. But in Europe right now it
Speaker 1: is a big problem. Are you using Facebook less? All?
Speaker 1: In at the McKee house, I can't use it less.
Speaker 1: None of us subscribe because you're David. Effect is I'm
Speaker 1: seeing less usage Facebook is they try to manipulate my
Speaker 1: income and I I don't sign up because of what
Speaker 1: you were just talking about. I mean, basically, this is
Speaker 1: an opportunity for Zuckerberg and Sendberg to sell me my
Speaker 1: data to other people. But I mean what's interesting is
Speaker 1: how little daverage person seems to care. They don't care.
Speaker 1: And I think you're extremely and so why did you
Speaker 1: worry about it? Why why did Tim Cook worries so much?
Speaker 1: Because that struck me the whole debate. But I mean,
Speaker 1: if you if if I'm little, if people are willing
Speaker 1: to give all their information out, well, you know Facebook
Speaker 1: just turned on encryption in in WhatsApp, you know, for
Speaker 1: a billion people to go in the same direction Tim
Speaker 1: Cook is going. You know, at Facebook, they also agree
Speaker 1: that the government should not have the right to get
Speaker 1: a peek. We're running out of time. David Kirkpatrick will
Speaker 1: get you back for a full hour here, like David Patrick,
Speaker 1: Facebook at the bottom. Unfortunately what Time Warner at the top.
Speaker 1: It's Bloomberg surveillance. Bloomberg Surveillance is brought to you by
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