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Speaker 1: Broadcasting live to New York, Gloomberg to Washington, d C.

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Speaker 1: Bloomberg to Boston, Bloomberg twelve hunders to San Francisco, Bloomberg

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Speaker 1: nine to the country. See what he's exam General one

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Speaker 1: ninety and around the globe. The Bloomberg Radio Plus happened

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

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Speaker 1: thirty on Wall Street A Michael McKee along with Tom Keene.

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Speaker 1: It is a risk off day in the markets. That

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Speaker 1: doesn't mean that some companies aren't making news. You got

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Speaker 1: Blackstone out there. Um, they're expecting this month to finish

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Speaker 1: raising the biggest buyout pool. Yet they see some business ahead.

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Speaker 1: According to a person with knowledge of the matter, they're

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Speaker 1: looking for about five billion dollars for a core private

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Speaker 1: equity fund designed to mimic the long term buy and

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Speaker 1: hold strategy of Warren Buffett. Samantech, the computer security firm

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Speaker 1: go to buy Bluecoat Systems about four point seven billion

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Speaker 1: dollars in cash, add to their cyber defense technology area.

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Speaker 1: And here's an interesting one. Hunt Oil Company. Now, that's

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Speaker 1: the energy explorer owned by billionaire Ray Hunt, nearing a

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Speaker 1: deal to form a joint venture to drill for oil

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Speaker 1: in Texas with t s SP. They're a lending affiliate

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Speaker 1: of the buyout firm TPG. T s SP commit as

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Speaker 1: much as four d million to help hunt drill wells

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Speaker 1: on landed controls in the Permian Basin of West Texas,

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Speaker 1: according to people familiar with the matter. Interesting because, of course,

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Speaker 1: obviously not a lot of people drilling for oil these

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Speaker 1: days in the Permian Basin. All right, now we are

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Speaker 1: going to check in with Michael Barr and get the

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Speaker 1: latest world at National Headlines. Michael, Mike, thank you very much.

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Speaker 1: It's being described as the worst mass shooting in US history.

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Speaker 1: At least fifty people were killed and at least fifty

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Speaker 1: three were wounded after a gunman identified as Omar Matine

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Speaker 1: opened fire at the Paul's nightclub early Sunday in Orlando, Florida.

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Speaker 1: Mateen's ex wife, sit So Yusefi described him as an

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Speaker 1: abusive homophobe with mental old issues and those moments of

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Speaker 1: his emotional stability he would express, you know, his anger

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Speaker 1: towards a certain culture, homosexuality. We're learning from the victims

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Speaker 1: of the shooting. Attack. Patron John Alimo says the gunman

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Speaker 1: held his weapon like a marine, shooting from left to right.

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Speaker 1: Another patron ettie, Justice, texted his mother as he hit

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Speaker 1: in the bathroom, saying he's coming. I'm going to die.

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Speaker 1: Justice was Sean and kill. The American Academy of Sleep

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Speaker 1: MADISINE is releasing for the first time guidelines for how

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Speaker 1: much shut high kids should be getting. The Academy recommends

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Speaker 1: twelve the sixteen hours of sleep including naps were infants

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Speaker 1: four months to twelve months, and it says teens thirteen

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Speaker 1: to eighteen years old should be getting eight to ten

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Speaker 1: hours to improve attention and behavior. Global News twenty four

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Speaker 1: hours a day, powered by our journalists. I'm Michael Barr.

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Speaker 1: Thank you, Michael. Time now for the land Over Participani

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Speaker 1: Bloomberg NBC Sports Update. Here is Rob Bushka, rop Agobardy, Mike.

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Speaker 1: After that four game sweep of the Angels, the Yankees

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Speaker 1: were feeling good. They have plenty of momentum, So dropping

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Speaker 1: a series to the Tigers not really what Joe Girardi

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Speaker 1: had in mind. As Detroit Pete the Yankees four to one,

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Speaker 1: and their starter and former Mets draft pick Michael Former

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Speaker 1: extended his scoreless inning streak to twenty eight and the

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Speaker 1: third innings. Michael Paneda fell to three and seven with

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Speaker 1: the loss, as the Yankees are now below five hundred

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Speaker 1: and they'll travel to Colorado. Mets fell in Milwaukee five

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Speaker 1: to three. Baseball. Probably the furthest thing from their mind, though,

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Speaker 1: is their manager Terry Collins, was hospitalized overnight in Milwaukee

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Speaker 1: after requiring medical attention less than thirty minutes before first pitch.

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Speaker 1: According to Matt's upper management. Mets are also off today.

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Speaker 1: The host Pittsburgh on Tuesday. And speaking of Pittsburgh, the

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Speaker 1: Penguins losted their fourth Stanley Cup with a three one

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Speaker 1: win in San Jose and six games con Smythe winner

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Speaker 1: your playoff m v P is Sydney Crosby. It's his

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Speaker 1: second Cup in Golden State. Will try and win the

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Speaker 1: NBA Finals tonight when they host the Cavaliers in game

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Speaker 1: at number five, nine pm and tip off. And sad

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Speaker 1: news for Jazz fans. Former punter Currently Anderson, a member

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Speaker 1: of Super Bowl three's winning team, died Sunday at the

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Speaker 1: age of eighty. That's your NBC Bloomberg Sports update, Mike,

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Speaker 1: All right, thank you, Rob. This is Bloomberg Surveillance on

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Speaker 1: Bloomberg Radio. Might come a key along with Tom Keen.

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Speaker 1: Your surveillance data check is not a happy one. This morning,

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Speaker 1: SMP futures are down by six three tenths of eight

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Speaker 1: percent of fifty six point drop for DAL futures. That's

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Speaker 1: also a three tenths drop on the day. Right now,

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Speaker 1: we are going to continue looking at what's going on

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Speaker 1: with the Brexit debate. It is driving all of much

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Speaker 1: of the gloom that is in the markets. The foot

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Speaker 1: see down forty points seven tenths of a percent right

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Speaker 1: now and the pound is trading for one one eighty nine,

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Speaker 1: a half a percent drop on the day. Karthiks and

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Speaker 1: Karen It's director of Global Strategy at Erasia Group, and

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Speaker 1: he leads their analysis of global financial themes and the

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Speaker 1: global financial themes seems to be um Brexit, which seems

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Speaker 1: to be as themes go a little off key right now.

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Speaker 1: It is not going the way perhaps the Conservative government

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Speaker 1: thought when it first brought this referendum to the public. Absolutely,

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Speaker 1: I mean, our our base case remains that six chance

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Speaker 1: that Remain will win, that Britain will not leave the EU.

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Speaker 1: But it's a on the markets obviously word because the

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Speaker 1: polls are the polls are getting somewhat tighter and um,

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Speaker 1: you know this opens up a bunch of different questions.

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Speaker 1: One is related directly to UH financial instability within Britain itself.

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Speaker 1: A second as um the politics of the UK will

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Speaker 1: Scotland's to see what will happen in Northern Ireland? And

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Speaker 1: the third issue is what happens to the to the

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Speaker 1: broader EU in the event that Britain leaves for other countries? Um,

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Speaker 1: and do you be tempted to leave as well? Bloomberg

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Speaker 1: Simon Kennedy just finished an interview with George Osborne, the

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Speaker 1: Chancellor of the Exchequer, headlines crossing. Now we'll have that

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Speaker 1: interview for you here on Bloomberg Radio very shortly. But

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Speaker 1: the Chancellor says that he does see investor concerns if

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Speaker 1: the U gave votes for Brexit. That might be putting

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Speaker 1: it mildly. What do you see happening as a reaction,

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Speaker 1: uh to if the leave vote should win? Well, I

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Speaker 1: think I'm so far Sterling has been the primary shock absorber.

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Speaker 1: It's taken, it is taken all the pressure. What's interesting

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Speaker 1: is there has been very little pressure in guilt at all. Um.

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Speaker 1: Guilt deals are actually very low and so are broader

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Speaker 1: Eurozone yields and the context of other deflationary environment. One

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Speaker 1: of the issues here is that actually makes it it

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Speaker 1: might make it somewhat harder UH to make the case

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Speaker 1: that catastrophe will ensue if UH if Britain word as

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Speaker 1: long as all the pressures on the pound and not

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Speaker 1: on and not on guilt um, which then translates into

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Speaker 1: higher mortgage mortgage rates for people, and that might actually

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Speaker 1: be something more emotive that gets them too to the polls. UM.

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Speaker 1: I think if Britain were to leave, we would see

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Speaker 1: significant spill over, and one of the big ones is

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Speaker 1: going to be the interfinancial sector because um, if Britain

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Speaker 1: were to leave, it would lose the protections that it

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Speaker 1: has as an EU member from seeing a significant portion

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Speaker 1: of your denominated business repatriated, which is something the ECB wants.

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Speaker 1: They launched a case they lost it with with Britain

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Speaker 1: claiming it was protected by its EU membership. They would

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Speaker 1: lose that. So I think that's kind of the the

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Speaker 1: in economic terms, that's that's that's a big place to look,

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Speaker 1: and that would be significant because finance is a large

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Speaker 1: sector of the UK economy, significant portion of of exports

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Speaker 1: accounts form London standing as a probably the perminent financial

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Speaker 1: center in the world. Well, that is something that Chancellor

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Speaker 1: Osborne mentioned in the interview with Simon. He says that

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Speaker 1: they don't want to risk the financial services single market

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Speaker 1: and he says a couple more headlines, Britain would be

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Speaker 1: permanently poorer after Brexit if indeed the UK were to

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Speaker 1: vote that way, and he calls on investors concerned about

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Speaker 1: Brexit to speak up. He says this is not the

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Speaker 1: moment for business to sit it out. He says he's

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Speaker 1: confident the UK will vote to stay in the EU.

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Speaker 1: You said, say, that's your base case, but when you

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Speaker 1: look at the polls that we have seen over the

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Speaker 1: last couple of days, what gives you that confidence. Well,

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Speaker 1: I mean we still think that ultimately, UM, the desire

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Speaker 1: to be safe and inertia UH and inertia will win. UM.

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Speaker 1: You know that. It's It's one of the reasons this

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Speaker 1: is tough is because there are two social science principles

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Speaker 1: at work. One is that people prefer safety, the others

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Speaker 1: that angry people show up to vote. And depending on

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Speaker 1: which one of those UH issues dominates on any you know,

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Speaker 1: on the on the actual voting day. UM. That's why

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Speaker 1: we are as close as we are, even though we

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Speaker 1: think the economic case is incredibly strong. It's just that

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Speaker 1: the other factors that are influencing people and that are

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Speaker 1: actually making them um more perhaps more likely to turn

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Speaker 1: out what happens on the continent if they vote to leave. UH.

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Speaker 1: There's a widespread fear that you will have other people

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Speaker 1: tempted to do the same UM, and that may actually

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Speaker 1: be reflected in markets. And one thing to keep in

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Speaker 1: mind is that UH for Britain to exit would actually

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Speaker 1: be somewhat easier. We think could be painful. There would

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Speaker 1: be consequences, but Britain is not in the euro, it's

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Speaker 1: not in shaw Angan, and it is a net contributor

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Speaker 1: to the EU budget. There really aren't that many other

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Speaker 1: countries that meet all of those criteria. UH, So an

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Speaker 1: unwind would be significantly more difficult for just about anybody else.

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Speaker 1: But that doesn't mean that some some populist parties might

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Speaker 1: not be tempted to ask for a referendum UM. And

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Speaker 1: one of the interesting things is that the actual I

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Speaker 1: mean obviously in financial market tells what people worry about.

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Speaker 1: Is the EU right well, we'll continue the discussion here.

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Speaker 1: We're speaking with the Razor Group analyst Karthik and sanark On.

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Speaker 1: Santa Karan, excuse me on Brexit in China. I'm stumbling

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Speaker 1: over my words as I as I look up what

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Speaker 1: to see where the pounding the pound nine is UH

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Speaker 1: off by about half a percent right now as uh.

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Speaker 1: Mr Sana Karan says, that is taking the brunt of

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Speaker 1: the concern right now people about the possibility of a Brexit.

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Speaker 1: Bloomberg Saveilance brought to you by your Try State BMW

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Speaker 1: center's visit of online and try State BMW dot Com.

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Speaker 1: At BMW they only make one thing, the ultimate driving machine,

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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the radio plus mobile app and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and is Bloomberg Business

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Speaker 1: Flash being brought to you by the accountants and advisors

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Speaker 1: at Eisener Amper. Cyber security is on the mind of

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Speaker 1: every business leader. Managing cyber risk should be too. Get

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Speaker 1: dot com slash cyber risk UH definite risk off feeling

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Speaker 1: to the market today of global stocks down for a

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Speaker 1: third day, British pound at an eight week low, while

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Speaker 1: boosting demand for havens such as a yen and gold,

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Speaker 1: all because of this growing anxiety with the prospect of

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Speaker 1: the UK exiting the European Union. And also we have

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Speaker 1: energy companies lower crew and retreating. Bank of American Maryland

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Speaker 1: saying there's still no reason to turn positive on oil

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Speaker 1: service providers. UH nine x crewed right now down forty

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Speaker 1: five cents a barrel. That's down about nine tenths of

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Speaker 1: forty eight sixty two SMP futures down five. DAL futures

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Speaker 1: right now fifty one points lower. That's down three tens.

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Speaker 1: The nazack futures down eighteen. That's down four tens. The

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Speaker 1: euro one twelve seventy three. The yen is up about

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Speaker 1: eight tens at one oh six oh nine. As drilling

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Speaker 1: one eight one, that's down about a half percent. Ten

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Speaker 1: year yield in the US one point six three percent. Well,

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Speaker 1: chuck the markets for you every fifteen minutes during the

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Speaker 1: trading day right here on Bloomberg Radio. And now back

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Speaker 1: to Michael and Tom and Jen Tucker. Thank you so

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Speaker 1: much with your raise your group. Karthik Shukan UH joins

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Speaker 1: US from Columbia University and working with Ian Bremer's team.

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Speaker 1: You know, Ian talks about a G zero world. You

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Speaker 1: wonder how Europe continues forward. I mean, the polarity is

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Speaker 1: the differences between Southern Europe, Greece, of peripherals, the pigs,

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Speaker 1: however you want to phrase it, within all of the

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Speaker 1: new tensions that we have. Is the European experiment going

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Speaker 1: to continue forward? Well, I mean that's that's something that

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Speaker 1: you know. Obviously, the market's asking and my my sense

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Speaker 1: is my sense is yes, but it's getting but it's

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Speaker 1: getting a bit more fraunt. And one of the one

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Speaker 1: of the interesting points is that the actual economic tensions

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Speaker 1: about the single currency I think have abated a little

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Speaker 1: bit because and real g d P is not all

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Speaker 1: that bad across much of this soap opera. Yeah, I mean,

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Speaker 1: a couple of things have happened. One I think, I

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Speaker 1: think shale is very important because and it's not it

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Speaker 1: doesn't affect It affects you up in a couple of ways.

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Speaker 1: One is that by reducing the US external financing requirement

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Speaker 1: kind of makes the dollar stronger, I would argue on

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Speaker 1: a permanent basis. Secondly, with Europe being the world's largest

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Speaker 1: the Euros are not being the world's largest oil importer.

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Speaker 1: You're actually giving a lot of support to kind of

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Speaker 1: peripheral current accounts by what's happened to oil. And what

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Speaker 1: that means is if you end up with a euro

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Speaker 1: that's one ten, let's say, it's actually much more comfortable

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Speaker 1: for everybody inside the Eurozone than where they were in

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Speaker 1: two thousand and eight. Um, the credit impulses recovering. I

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Speaker 1: mean you're seeing and then obviously after O m T,

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Speaker 1: you're seeing some very positive developments in terms of the

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Speaker 1: spread within multiple degrees from Columbia. Do you see and

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Speaker 1: you're reading evidence that governments could move currencies around. Um.

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Speaker 1: The it's really hard to observe, isn't it. Well, Well,

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Speaker 1: the New York Fed did a study on this, and

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Speaker 1: they found that you can have instances, particularly where you

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Speaker 1: have multilateral intervention that sends a very strong signal and

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Speaker 1: that I know you're talking about the Plaza accorded earlier today, um,

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Speaker 1: and you they've been pretty visible turning points um or

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Speaker 1: at least things that that signal a the signal change

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Speaker 1: in Plaza seven louver yen. So, but you need to

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Speaker 1: have everybody on board. Um, Single countries finding much harder

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Speaker 1: to do. And Mike, you wonder what dollar yen we

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Speaker 1: hadn't one to five handle earlier this morning? Where is

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Speaker 1: that mark you got? You gotta say at some point, Um,

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Speaker 1: the all of this risk aversion is very bad news

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Speaker 1: for some countries like Japan. Yeah, yeah, And I mean

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Speaker 1: I think you know the problem One of Japan's problems

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Speaker 1: here is that they were told by the G seven

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Speaker 1: and by Jacklue that what was happening was not disorderly,

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Speaker 1: which kind of potentially reduces the amount of support that

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Speaker 1: they may get from the United States where they choose

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Speaker 1: to do something and that. But that feeds back into

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Speaker 1: a larger political context of of trade, of of populism,

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Speaker 1: um going into an electioneer where trade is is a

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Speaker 1: hot button issue. So and it all kind of feeds

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Speaker 1: back on itself. Well, what's the the best case scenario.

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Speaker 1: We've talked a lot about the worst case scenario, But

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Speaker 1: what's the best case scenario coming out of the vote

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Speaker 1: next week that they um, you know, from the market's

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Speaker 1: point of view, that that the that Brimain, that that

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Speaker 1: the Brimain camp wins. Um. You know, the market will

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Speaker 1: breathe a sigh of the market breath a side of relief.

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Speaker 1: I still think that raises some longer term questions about

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Speaker 1: about about the EU. One of one of the points

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Speaker 1: we argued in the piece we wrote in the February March,

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Speaker 1: which I think still holds, is one question you have

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Speaker 1: is are the concessions made to Britain specifically acceptance of

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Speaker 1: the EU as a multi currency area and kind of

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Speaker 1: backtracking on this idea of ever closer union. Does it

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Speaker 1: become something a pull around People who are who are

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Speaker 1: opposed to sovereignty pooling can then gather because of the

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Speaker 1: Brits got this, Why do we have to sign up

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Speaker 1: to more? And that would be problematic because even with

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Speaker 1: the somewhat more favorable economic background, I think the consensus

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Speaker 1: is right that you do need more sovereignty pooling to

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Speaker 1: make the Eurozone actually a going concern. UM. You do

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Speaker 1: need something more, you know, whether it's UM moving towards

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Speaker 1: common deposit insurance, moving towards something more like common provisional

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Speaker 1: cyclical stabilizers. You need all that And does it get

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Speaker 1: harder to do once you've told Cameron you can have

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Speaker 1: all these things just stay. Does he get anymore out

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Speaker 1: of this if if they stay? Or is is the

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Speaker 1: negotiation done? Um? The EU maintains that the negotiation is uh,

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Speaker 1: that the negotiations done. The problem is um. In some

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Speaker 1: ways your skepticism is so strongly entrenched within the UK,

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Speaker 1: particularly within the Conservative Party. One of the questions that

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Speaker 1: we have is if you do require treaty change to

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Speaker 1: do some of these other things to stabilize um, the

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Speaker 1: Eurozone economy. Um. It has to happen through the treaty

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Speaker 1: apparatus and treaties have to be treaty change. It needs

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Speaker 1: to be unanimous. So what will the British ask for

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Speaker 1: next time? I'm Cameron got this much? Let's say you

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Speaker 1: have another uh Conservative prime minister who wants some what more? UM?

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Speaker 1: I think you know that's not what people are gonna

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Speaker 1: be thinking about on June, if you know, if if

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Speaker 1: Remain wins. But it's a question for us going forward.

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Speaker 1: I just got a brilliant treet and I'm the gentleman

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Speaker 1: I believe is in the United Kingdom. He said, please

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Speaker 1: stop calling it helicopter money, which is maybe the most

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Speaker 1: sensible thing I've heard today. It's not helicopter money. It's

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Speaker 1: a desperate fiscal policy, and I mean desperate editorially. But

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Speaker 1: we haven't seen this before ever, have we, and you're

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Speaker 1: reading of history, have we seen an alternative fiscal policy before? Well,

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Speaker 1: I mean we have seen we have seen monetized fiscal expansion,

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Speaker 1: you know, on a number of occasions, and we used

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Speaker 1: to think that it always ended up with hyperinflation. Um.

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Speaker 1: What's interesting this time around is that it is not happening,

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Speaker 1: notwithstanding all the fears that that that people had. If anything,

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Speaker 1: I mean, I have a joke that a developed market

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Speaker 1: is one where the market goes. Um, I can't believe

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Speaker 1: you didn't do monetized fiscal expansion. And Mike is one

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Speaker 1: way they say, I can't believe you did do my

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Speaker 1: physical expansion. That's clearly what they want more of them,

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Speaker 1: you know, from Japan and from the Thank you so much,

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Speaker 1: greatly appreciate your attendis to the cath chucking I with okay,

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Speaker 1: two of us, excuse me, the two of us. We're

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Speaker 1: all talking like Tom keen this one. Thank you so much.

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Speaker 1: Dreggy and bremer in with you. Sometimes the two of

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Speaker 1: you together would be lights out. That would be we'll

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Speaker 1: do breakfast here on UH Savannas, Mike, we've got to

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Speaker 1: do a data to check and the reason we do

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Speaker 1: it's actually of a modestly better tone than the last

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Speaker 1: three hours. Boy, you're looking for roses. I'm trying negative

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Speaker 1: nine to negative six on SMP and that's all. Cross

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Speaker 1: Asset is well, fractually better Swiss twenty year, fractually better Swiss,

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Speaker 1: a German tenure uh in the Yen, which was a

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Speaker 1: one oh five handle now is a lofty and Yen

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Speaker 1: week er one oh six ten. I'm trying to be optimistic, Mike,

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Speaker 1: I'm trying to be constructive. Yes, well, we appreciate that

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Speaker 1: gold is up thirteen dollars. It's up only eleven dollars.

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Speaker 1: Now we know that you're you're in a better mood

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Speaker 1: than a lot of people because your team won the

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Speaker 1: Stanley Cup last night. They did. They woke me up

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Speaker 1: to see it. I'll be honest that I was trying

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Speaker 1: to get my surveillance beauty rest. There's a tap on

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Speaker 1: my shoulder, wake up, watch this And it was a

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Speaker 1: joy to see. It was. It was truly a joy

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Speaker 1: to see. And what is remarkable for all of your

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Speaker 1: globally who don't follow the National Hockey League. Is they

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Speaker 1: were dead when Mike New Year's Eve January? They totally

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Speaker 1: Pittsburgh Penguins totally came back. Something went right for them. Yes,

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Speaker 1: unfortunately for the other thirty one teams. It's a hockey

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Speaker 1: free world right now. But we could look at basketball

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Speaker 1: could end tonight. I did not know that our our

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Speaker 1: Golden State Warriors need just a victory to living and

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Speaker 1: then then it's just baseball. They've been they've been to

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Speaker 1: Wait a minute, isn't Wimbledon coming up? We're going over

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Speaker 1: to We could stay Strawberries and creamy Michael that I

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Speaker 1: could do that, Tom Keane with Francie mcquaire in London.

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Speaker 1: We will do that all next week with a Steam

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Speaker 1: guest on Remaine and on Brexit from New York. Bloomberg

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Speaker 1: Surveillance