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Speaker 1: Broadcasting live to New York Groomberg eleventh Yo to Washington,

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Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundreds to San

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Speaker 1: Francisco Bluebird nine to the Country series Exam General one

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Speaker 1: nineteen and around the globe the Bloomberg Radio plus Aben

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Speaker 1: Bloomberg dot Com. This is Bloomberg Surveillance. Good morning, I

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Speaker 1: Michael McKee along with Tom Keane. The European Central Bank

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Speaker 1: set to report its latest monetary policy decision in about

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Speaker 1: fifteen minutes ahead of ad We're getting earnings by the

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Speaker 1: bucket full. General Motors just out earnings per share in

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Speaker 1: the first quarter. Adjusted earnings per share a dollar twenty six.

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Speaker 1: The consensus forecast was for ninety nine cents. Revenue of

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Speaker 1: thirty seven point three billion is higher than the estimate

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Speaker 1: for thirty five point six billion. If you look up

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Speaker 1: Verizon on Yahoo, you'll find that first quarter adjusted earnings

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Speaker 1: per share were a dollar six. That's in line with estimates.

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Speaker 1: Revenue of thirty two point two billion, a little light.

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Speaker 1: The forecast was for thirty two and a half. Blackstone

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Speaker 1: first quarter profit fell seventy seven percent. Asset sales slowed,

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Speaker 1: economic net income. That's a measure of earnings that reflects

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Speaker 1: realized and unrealized investment gains, dropping to three seventy point

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Speaker 1: seven million. That's thirty one cents to share. It was

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Speaker 1: a dollar thirty seven a year earlier. Time now to

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Speaker 1: check with Michael Barr get the latest world and national headlines. Mike, Mike,

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Speaker 1: thank you very much. President Obama is in Saudi Arabia

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Speaker 1: for a meeting with six Arab leaders. The meeting and

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Speaker 1: read involved issues such as regional security and the Persian

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Speaker 1: Gulf area, including the fight against the Islamic State Militant Group.

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Speaker 1: Deputy National Security Advisor Ben Rhodes, we need to develop

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Speaker 1: those areas that have been devastated by a presence, and

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Speaker 1: the countries here in the g c C can be

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Speaker 1: helpful in that process. Senate Republicans are set to relent

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Speaker 1: on an major portion of President Obama's request to respond

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Speaker 1: to the zeek of virus. Republicans are drafting more than

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Speaker 1: a billion dollar emergency plan. That is, according to a

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Speaker 1: senior Republican age familiar with the matter, that might now

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Speaker 1: as had requested one point nine billion dollars in additional spending.

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Speaker 1: The Olympic flame has been lit in Greece. The game's

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Speaker 1: organizers voice confidence today that Brazil would overcome its political

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Speaker 1: and economic problems to stage at the successful Games. The

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Speaker 1: opening ceremony is August fifth, and Rio de Janeiro Global

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Speaker 1: News twenty four hours a day, powered by our twenty

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Speaker 1: four hundred journalists and more than a hundred fifty news

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Speaker 1: bureaus from around the world. I'm Michael Barr. Thank you, Michael.

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Speaker 1: Time now for the Landrover Parcipiti Bloomberg NBC Sports Update

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Speaker 1: with John Stasha. All right. I expended tight series in

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Speaker 1: the Islanders and Panthers, three one goal games and other

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Speaker 1: There was a one goal difference util an empty netter

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Speaker 1: at the end Game four, and Brooklyn was tied midway

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Speaker 1: through the third period. Florida scored one, two to one.

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Speaker 1: John Tivera scored the Islander goal. Hunter is all we wanted,

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Speaker 1: and uh, it's not a good enough game from us.

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Speaker 1: We always had a great opportunity, just didn't take advantage

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Speaker 1: of it. So we gotta move forward and get ready

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Speaker 1: for Game five and you know, bounce back obviously, you uh,

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Speaker 1: we know with has been all over the ice in

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Speaker 1: this series. Three goals, four assists. They go back to

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Speaker 1: Miami Tomorrow's Game five series tied at two, and that's

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Speaker 1: the Ranger goal. Need to win at the Garden tonight

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Speaker 1: to tie Pittsburgh it too. The Yankees struggles continue. Solo

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Speaker 1: home runs by D. D. Gregorius and Carlos Beltrump, but

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Speaker 1: only four other hits over for four with runners and

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Speaker 1: scoring position. They lost to Oakland five to two and

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Speaker 1: now dropped six of seven and have all in all

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Speaker 1: six losses, Yanks have scored just one or two runs.

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Speaker 1: Mets cooled off in Philadelphia, losing five, four and eleven

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Speaker 1: innings YO, Na, Sespitus, and Lucas due to homeward for

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Speaker 1: New York NFL Caroline I was sending the franchise tag

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Speaker 1: of All Pro quarterback Josh Norman. He becomes a free agent.

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Speaker 1: The Philadelphia Eagles acquired the second pick of next week's

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Speaker 1: draft from Cleveland, l A. Rams had already made a

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Speaker 1: trade with Tennessee to get the first pick. Both the

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Speaker 1: Rams and Eagles expected to draft quarterbacks Jared Goff and

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Speaker 1: Carson Wentz are the top two with the bloom Bird.

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Speaker 1: NBC Sports Update, I'm John Stapsha, Thank you, John Well,

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Speaker 1: General ootors beating earnings forecasts, and now the stock is

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Speaker 1: much higher, up three point six percent in the pre

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Speaker 1: market trade. This is Bloomberg Surveillance. You're listening to Bloomberg

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Speaker 1: Radio worldwide and welcome back to surveillance. I'm Michael McKee.

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Speaker 1: We are right now about eleven minutes or so away

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Speaker 1: from the ECB rate decision. No change expected. But ahead

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Speaker 1: of that decision, the stock six hundred is down two

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Speaker 1: point six tenths of a percent, the docks off twenty

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Speaker 1: five points. Also to tense US futures. Little change SNP

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Speaker 1: even he's a point about a tenth time now for

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Speaker 1: the Bloomberg n j I T STEM Report, brought to

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Speaker 1: you by New Jersey Institute of Technology, investing more than

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Speaker 1: a hundred and ten million dollars a year two applied

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Speaker 1: research to solve problems and improved life. Learn more at

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Speaker 1: Stories of Innovation dot n j I T dot. Here's

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Speaker 1: John Tucker. Yeah, let's see what's make news and science, technology, engineering,

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Speaker 1: and math. Taxis aren't the only ones that maybe stressing

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Speaker 1: he had about Uber Technologies. Transactions from the ride hailing

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Speaker 1: startup have surpassed rental cars among American professionals. This according

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Speaker 1: to Certify the second biggest provider of travel and expense

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Speaker 1: management software in North America, Uber accounting for fort of

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Speaker 1: ground transportation transactions expensed through Certified last quarter. While rental

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Speaker 1: Cars had right handling services with Uber at the forefront,

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Speaker 1: overtook rental Cars for the first time in the fourth

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Speaker 1: quarter off and have since widened their leave. This according

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Speaker 1: to a study by Certify that was published today. US

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Speaker 1: rocket manufacturers stand again if the draft five fifty six

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Speaker 1: billion dollar Commerce Justice Science Spending Bill for a fiscal

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Speaker 1: seventeen advancing through the Senate becomes law. The Senate c

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Speaker 1: JS Appropriation Subcuvity, by unanimous consent, sent the draft measure

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Speaker 1: to the Full Committee for a markup. Today. Bill, according

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Speaker 1: to the the summer is provided by the sender of Appropriations Committee,

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Speaker 1: contains nineteen point three billion dollars for NASA. That would

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Speaker 1: be an increase at That is this morning's Bloomberg m

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Speaker 1: G I. T. Snam Report. Michael, thank you very much. Well.

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Speaker 1: We're joined now by Admiral James Stavridis. He is the

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Speaker 1: dean of the Fletcher School of Law and Diplomacy at

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Speaker 1: Toughs University. Formerly the highest ranking admiral you can get

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Speaker 1: in the U. S Navy, served as the Commander of

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Speaker 1: the US European Command in NATO's UH Supreme Command in Europe,

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Speaker 1: Commander of the US Southern Command UM. Very long Navy

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Speaker 1: business card. Jim, I want to ask you about the

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Speaker 1: President's trip to the Middle East, the stop in Saudi Arabia,

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Speaker 1: because we have been up and down in our political

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Speaker 1: relationship with the Saudiast, but the military relationship has remained

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Speaker 1: fairly stable despite our differences. They have always allowed the

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Speaker 1: US to basically operate in their theater, and they are

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Speaker 1: big customers for our weapons systems. So, UM, is the

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Speaker 1: spat between US and the Saudias over UH nine eleven,

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Speaker 1: over what's going on with oil and that sort of thing? UH?

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Speaker 1: Is that just temporary? UH is a relationship more fundamental

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Speaker 1: and deeper From the point of view of somebody who

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Speaker 1: looks at the strategic picture, My good morning. I think

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Speaker 1: you've categorized it correctly, which is that the long term

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Speaker 1: strategic interest of the United States and the Kingdom of

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Speaker 1: Saudi Arabia aligned very well. They are and have been

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Speaker 1: very close allies. They continue to do an extraordinarily good

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Speaker 1: job of working with US. On a military to military basis,

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Speaker 1: But we have some significant tactical disagreements, if you will.

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Speaker 1: The first one you already mentioned is the contention that

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Speaker 1: some level of the Saudi government was involved in the

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Speaker 1: nine eleven attacks. There's still some classified material that hopefully

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Speaker 1: will be released soon that I hope will pretty much

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Speaker 1: lay that to rest, but we don't know until we

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Speaker 1: see that. Secondly, and perhaps more importantly, is the contratone

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Speaker 1: between Iran and Saudi Arabia, which is quite significant. It's

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Speaker 1: not only a Sunni Shia divide, but it's a direct

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Speaker 1: disagreement in Yemen, where effectively their troops are opposing each

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Speaker 1: other in the Persian Gulf itself, at sea in Syria,

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Speaker 1: where Iran supports Assad and the Saudis do not. So

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Speaker 1: there's this overlay of disagreement between Iran and Saudi Arabia

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Speaker 1: and UH. To the point of this meeting by the

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Speaker 1: President arriving in Saudi Arabia, UM, he's there to try

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Speaker 1: and assuage the concerns of the Saudias about the Iran

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Speaker 1: nuclear deal and whether we continue to truly value them

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Speaker 1: as allies. So it's a tricky time and it will

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Speaker 1: be a I think a contentious set of meetings for

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Speaker 1: the president. How did the Iranians and saudiast stack up militarily?

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Speaker 1: Is it basically a standoff here as they're a sort

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Speaker 1: of a mutual ability to hurt the other that keeps

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Speaker 1: them from direct conflict. In terms of how they stack up,

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Speaker 1: it's an interesting pair of military relationships as follows. The

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Speaker 1: Saudis are much more technically capable because they had had

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Speaker 1: an enormous amount of oil wealth as well as access

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Speaker 1: to Western military markets, so their jets are better, their

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Speaker 1: tanks are better, that all of their hardware is two

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Speaker 1: or three generations better than anything the Iranians are fielding.

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Speaker 1: On the other hand, Iran has invested quite a bit

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Speaker 1: in ballistic missile technology. This is why the Saudis want

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Speaker 1: ballistic missile defenses more from us. And secondly, the Iranians

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Speaker 1: have a comparatively massive ground force be because of the

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Speaker 1: population differences between the two countries. So I would give

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Speaker 1: the Saudiast the technological edge, I'd give the Iranians the

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Speaker 1: combat experience and pure size of the ground force edge,

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Speaker 1: And I don't think we're going to see them go

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Speaker 1: to direct conflict with each other. We'll see more surrogate

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Speaker 1: type activity like we do today. Mike, let's come back

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Speaker 1: with Admiral James S. Taffrit di Seas. Now that you

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Speaker 1: know the Fletcher School of Law and diplomacy, a lot

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Speaker 1: going out in US politics, the touch on foreign affairs,

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Speaker 1: and we'll get his thoughts on that. Coming up. We

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Speaker 1: will also have the ECB decision for you in about

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Speaker 1: five minutes. They put out the numbers on interest rates

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Speaker 1: at seven forty five Wall Street time. Then at eight

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Speaker 1: thirty Mario Drag will explain anything else we need to

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Speaker 1: know about their policy, and we'll have that news conference

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Speaker 1: for you here live on Bloomberg. Surveillance futures are mixed.

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Speaker 1: We're counting down to the opening ball. Brought to you

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Speaker 1: by the new Jeep Grand Cherokee, the most awarded suv ever.

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Speaker 1: at your local Jeep dealer Today, Global business news twenty

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Speaker 1: four hours a day at Bloomberg dot com, the Radio

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Speaker 1: plus Mobile lact and on your radio. This is a

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Speaker 1: Bloomberg Business Flash and I'm Karen Moscow. This updates brought

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Speaker 1: to you by marks Panet Llp, ranked among the top

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Speaker 1: three forensic accounting firms in New York by the New

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Speaker 1: York Law Journal for the sixth year in a row.

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Speaker 1: Visit marks paneth dot com. And we do have some

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Speaker 1: breaking news crossing the bloomberg as the European Central Bank

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Speaker 1: leaves all three of its rates on change, the main

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Speaker 1: financing rate remaining unchanged at zero per cent. U S

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Speaker 1: Stock Index futures. Meanwhile, on this busy morning for earnings

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Speaker 1: are little change to hire s and p E Many

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Speaker 1: futures up about two points and now e many futures

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Speaker 1: up ten nas DOCU many futures one the knacks in

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Speaker 1: Germany's down a quarter percent ten Your treasury down eight

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Speaker 1: thirty seconds, the yield one seven percent yield on the

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Speaker 1: two year point eight zero percent. Nim X screwed oil

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Speaker 1: down a tenth of upper cent or six cents to

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Speaker 1: forty four twelve of arrol Comex gold is up half

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Speaker 1: percent or five dollars eighty cents to twelve sixty twenty.

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Speaker 1: Announced the euro at all our thirteen twenty one. The

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Speaker 1: yen one oh nine point seven nine General motors posting

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Speaker 1: first quarter profit of two billion dollars, meeting analysts estimates,

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Speaker 1: as every region around the globe showed solid results, led

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Speaker 1: by a record results in North America and Verising Communications

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Speaker 1: adding six d forty thousand new subscribers and meeting analyst

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Speaker 1: profit estimates. That's a Bloomberg business flash. Tom and Mike,

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Speaker 1: thanks so much. Karen greatly appreciate it. We're gonna rip

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Speaker 1: up the script here in honor of the Queen's birthday

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Speaker 1: ninety years old. James Travitas was there with Nelson at

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Speaker 1: the Falgar. He joins now Admiral Stevinus. I know, Jim,

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Speaker 1: it's nice. Nice to have you with us. Of course

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Speaker 1: with the Fletcher School as well. There's a modest debate

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Speaker 1: in the United Kingdom that is deadly serious, which is submarines.

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Speaker 1: Would you brief us on the global submarine defense and offense.

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Speaker 1: We have pictures of Russian submarines deployed. I was looking

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Speaker 1: for Harrison Ford. I couldn't spot them. And in the

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Speaker 1: England this is a serious issue about replacing the Trident

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Speaker 1: sub isn't it It is? And actually the guy you

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Speaker 1: should have been looking for was Sean o'connory, who played

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Speaker 1: the Captain of the Red October. So when you when

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Speaker 1: you watch that, are you like throwing popcorn at the

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Speaker 1: screen or it's a total popcorn um. But I'll tell

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Speaker 1: you what is very serious. You're absolutely correct is the

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Speaker 1: debate over Trident because it is hugely expensive for the

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Speaker 1: Breads and they feel relatively comfortable that they live under

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Speaker 1: our nuclear umbrella. So frankly, as a military, US military,

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Speaker 1: I'd rather see them spending that money on a carrier

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Speaker 1: or better jets to go on the carrier, or even

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Speaker 1: enhancing their special forces or their cyber capability. I think

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Speaker 1: it's a national pride point to have the nuclear force,

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Speaker 1: and I'm not sure that's the best use of their funding. Mike,

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Speaker 1: the Vanguard's uh I guess proposed is twice as long

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Speaker 1: as a Boeing seven. These are These are huge machines

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Speaker 1: of war, eighteen thousand tons. They can toss ballistic trajectory

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Speaker 1: missile for thousands and thousands of miles. These are very capable,

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Speaker 1: very complex, and very expensive. The cost you're suggesting then

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Speaker 1: is not worth the what you get out of basically

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Speaker 1: having it that you know, the idea that you're a

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Speaker 1: part of the nuclear club, and that you can project

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Speaker 1: force correct, and I think i'd make the same argument

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Speaker 1: about the French nuclear force. These are just huge investments

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Speaker 1: that are not necessary. What I want to make clear, though,

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Speaker 1: is I'm not advocating not building those submarines and then

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Speaker 1: simply taking that defense, spending it, turning it into domestic constituencies.

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Speaker 1: I'm simply saying you've got to spend two of your

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Speaker 1: g DP on defense, which is the NATO goal. The

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Speaker 1: Brits meet it, the French do not. But they should

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Speaker 1: be using that money, not on a nuclear force, my opinion,

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Speaker 1: but on better conventional capability that would match up with

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Speaker 1: US and with NATO. Interesting um news from the campaign front, Uh,

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Speaker 1: Donald Trump back out suggesting we should be waterboarding a

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Speaker 1: lot of people criticizing him for the interviews he gave

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Speaker 1: to The New York Times at Washington Post where he

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Speaker 1: betrayed zero knowledge of foreign policy. I'm wondering, Uh, can

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Speaker 1: you learn that if you if you want to, in

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Speaker 1: the heat of a campaign like this. In other words,

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Speaker 1: could the person that people are voting for in November

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Speaker 1: be significantly different from the person we're seeing now. I

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Speaker 1: think it's unlikely a candidate has to devote such an

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Speaker 1: enormous amount of time to the simple mechanics of showing up,

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Speaker 1: given the stump speech, doing the interviews, there's very little

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Speaker 1: time for, if you will, personal development and growth. But

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Speaker 1: we've seen this movie before. Right eight years ago we

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Speaker 1: elected a first term senator named Barack Obama who had

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Speaker 1: essentially zero foreign policy experience. Uh. I think that it

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Speaker 1: is far better to have a candidate who has a

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Speaker 1: sense of the world and a real level of foreign

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Speaker 1: policy experience. The question is, Mike and Tom, who would

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Speaker 1: he bring in as advisors? And I think, um, that's

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Speaker 1: what we ought to be focusing on as voters, because

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Speaker 1: he's not going to learn this between now and November,

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Speaker 1: but he could be telling us more about who's on

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Speaker 1: the team, who's given him advice, Who's he going to

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Speaker 1: bring in. How distant is Mr Trump's views on your world,

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Speaker 1: admiral from the Republican establishment? Is he close? Is he adjacent?

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Speaker 1: Are you teaching a tough thingies on Mars or Venus? Well,

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Speaker 1: first of all, I'm not part of the Republican establishment,

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Speaker 1: and I know you know that. I'm I'm a centrist,

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Speaker 1: I'm a registered independence. But how far he is at

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Speaker 1: great distance? From centrist I would argue sensible views on

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Speaker 1: foreign policy, and I'll give you two obvious examples. One

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Speaker 1: is the idea of building a wall with Mexico. Listen,

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Speaker 1: we don't need to build walls between US and Latin

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Speaker 1: American the Caribbean. We need to be in the business

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Speaker 1: of building bridges. There's enormous potential down there, and the

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Speaker 1: signal that would send would be disastrous for US in

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Speaker 1: that entire world, not in Mexico. The second example, you're

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Speaker 1: you know, I'm going to say this is his view

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Speaker 1: that we ought to either get out of or diminish

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Speaker 1: our leadership role in NATO. That would be a huge mistake.

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Speaker 1: That's our strongest pool of allies in the world. They've

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Speaker 1: stood with us over and over again in a wide

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Speaker 1: variety of campaigns. They don't meet the two percent spending goal,

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Speaker 1: but they do spend three billion dollars a year on defense,

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Speaker 1: more than more than Russia and China combined. So there's

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Speaker 1: two examples of being really out of step with where

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Speaker 1: I think sensible centrist foreign policy lies. Um, is there

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Speaker 1: a case to be made that though that NATO needs

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Speaker 1: to be changed. I think there's always a case for

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Speaker 1: any organization, particularly one that's been around for seven years

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Speaker 1: and has seen its mission set evolves. UH, to continue

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Speaker 1: to improve itself. And I yield to no man in

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Speaker 1: my frustration at times with NAT. But you know, so

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Speaker 1: much a life is compared to what and if we

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Speaker 1: were to simply drop out of NATO and not be

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Speaker 1: a leader and not try and change it, make the

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Speaker 1: spending on the European side come up a bit, UH,

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Speaker 1: do more efficient work in and around the command structure

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Speaker 1: in Europe. UH, take a more direct approach to NATO's

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Speaker 1: role in Syria. Those are all things I would do. Uh.

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Speaker 1: But we're not going to accomplish that by getting out

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Speaker 1: of NATO or diminishing our leadership. I have to ask

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Speaker 1: you this, Uh. The Russians have been all of a

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Speaker 1: sudden buzzing US worships to Russian fighter jets flew within

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Speaker 1: thirty ft of the U s s. Donald Cook correct

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Speaker 1: this week. Russia's NATO envoy is just on the wires

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Speaker 1: now saying that it's our fault. The Russia can't ignore

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Speaker 1: a US worship in the Baltic What what would you do?

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Speaker 1: I would continue to do exactly what we're doing, which

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Speaker 1: is uh, drive ours ships on the high seas. Those

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Speaker 1: ships were in international waters. They have every right in

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Speaker 1: the world to be there. The idea that we're somehow

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Speaker 1: going to feed to the Russians the Baltic as a

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Speaker 1: uh and I use this term deliberately, a Soviet lake,

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Speaker 1: is absurd. It makes no more sense than seeding the

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Speaker 1: entire South China Sea to China. We have got to

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Speaker 1: continue to operate our aircraft in our ships on the

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Speaker 1: high seas, in international waters, in international airspace. There's no

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Speaker 1: question that what the Russians are doing is deeply provocative,

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Speaker 1: highly dangerous from a military perspective, and I would guess

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Speaker 1: is not coming from Alexander Grushkov, the NATO rep It's

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Speaker 1: coming from Vladimir Putin. Did you read Patrick O'Brien the

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Speaker 1: seventh novel, The Surgeon's Mate, The War in the Baltic.

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Speaker 1: Of course I've read all twenty of those. They are

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Speaker 1: the greatest books on leadership ever written. But yes, it is.

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Speaker 1: The Baltic is the strategic see of Europe. It's not

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Speaker 1: the Mediterranean, it's the Baltic. Why is that? We? I mean,

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Speaker 1: in the time we've got left one minute, explain why

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Speaker 1: the Baltic is so important to our global audience several.

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Speaker 1: It's because it is the crossroads of great powers in Europe.

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Speaker 1: This is where the United Kingdom, the Russians UH, and

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Speaker 1: the Low Countries France UH and Belgium all together. It's Mike,

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Speaker 1: this is so good. Russell Kroll is going to speak

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Speaker 1: at the Fletcher School. I can see it now. Yeah, please,

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Speaker 1: the Sainted One will show up to It will be

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Speaker 1: the one panel the Sainted One will listen to. Jeems

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Speaker 1: to be sank you so much with a Fledger School, folks.

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Speaker 1: I'll put out on social Uh. The wonderful Wikipedia page

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Speaker 1: for the surgeons may and is the Animal States. I

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Speaker 1: can't say enough about the life where Patrick O'Brien all

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Speaker 1: we wanted books. All right, let's uh once again. Note

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Speaker 1: that the ECB has announced it has not done anything.

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Speaker 1: Did not change the refinancing rate of zero or the

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Speaker 1: deposit rate of negative for the forty basis points. So

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Speaker 1: now it is up to Mario Draggy in about half

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Speaker 1: hour from now to tell us if there's anything else

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Speaker 1: we need to know. Ahead of that, we're watching European

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Speaker 1: stocks lower. The stock six hundred down by three points