1 00:00:03,160 --> 00:00:07,440 Speaker 1: Broadcasting live to New York, Bloomberg eleventh Yo to Washington, 2 00:00:07,560 --> 00:00:12,560 Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve unders to San Francisco, 3 00:00:12,680 --> 00:00:17,119 Speaker 1: Bloomberg to the country, US Exam Channel one ninety and 4 00:00:17,239 --> 00:00:21,120 Speaker 1: around the globe the Bloomberg Radio plus Bloomberg dot Com. 5 00:00:21,320 --> 00:00:26,720 Speaker 1: This is Bloomberg Surveillance. Welcome back to Bloomberg Surveillance. I'm 6 00:00:26,720 --> 00:00:29,360 Speaker 1: Michael McKee along with Tom Keene in Washington, d C 7 00:00:29,640 --> 00:00:33,960 Speaker 1: for this Super Tuesday Bloomberg ninety point one in Washington. 8 00:00:34,880 --> 00:00:37,680 Speaker 1: Here's what we're watching. In terms of corporate news today, 9 00:00:37,720 --> 00:00:40,800 Speaker 1: Barkley shares plunging this morning. They are down nine percent. 10 00:00:40,920 --> 00:00:43,559 Speaker 1: New CEO J. Daley selling down at stake in its 11 00:00:43,600 --> 00:00:47,120 Speaker 1: Africa business, cutting the company's dividend, moving more assets into 12 00:00:47,120 --> 00:00:50,080 Speaker 1: its non core unit. On the other side, Intercontinental Exchange 13 00:00:50,120 --> 00:00:52,640 Speaker 1: says it's considering making an offer for the London Stock 14 00:00:52,720 --> 00:00:56,600 Speaker 1: Exchange week after Deutsche Bors did the announcement, propelling LS 15 00:00:56,840 --> 00:00:59,680 Speaker 1: shares to a record high. They're up eight percent this morning. 16 00:00:59,840 --> 00:01:03,040 Speaker 1: And Chevron considering a sale of its geothermal assets in Asia, 17 00:01:03,080 --> 00:01:05,800 Speaker 1: seeking to counter a slump and energy markets. One person 18 00:01:05,840 --> 00:01:08,920 Speaker 1: familiar with the talks says operations could fetch as much 19 00:01:08,920 --> 00:01:12,640 Speaker 1: as three billion dollars. Now, let's check it out with 20 00:01:12,680 --> 00:01:15,800 Speaker 1: Michael Barr and get the latest world in national headlines. Michael, Mike, 21 00:01:15,840 --> 00:01:17,840 Speaker 1: thank you very much. Voters were ahead to the polls 22 00:01:17,880 --> 00:01:21,640 Speaker 1: today for Super Tuesday primaries. Democrats will vote in eleven 23 00:01:21,720 --> 00:01:25,440 Speaker 1: states and American Samoa Republicans will vote in eleven states. 24 00:01:25,760 --> 00:01:29,120 Speaker 1: Mega Murphy, bureau chief for Bloomberg News in Washington, d C, 25 00:01:29,400 --> 00:01:32,760 Speaker 1: was asked about the impact of Republican front runner Donald 26 00:01:32,760 --> 00:01:35,520 Speaker 1: Trump that at the end of today we may see 27 00:01:35,560 --> 00:01:38,440 Speaker 1: Donald Trump, which is such a huge lead, not only 28 00:01:38,480 --> 00:01:41,520 Speaker 1: in terms of the vote and sort of popular momentum 29 00:01:41,560 --> 00:01:43,960 Speaker 1: behind them, but in terms of the delegate count. And 30 00:01:44,000 --> 00:01:46,840 Speaker 1: I think the Republican Party has only seen this the 31 00:01:46,920 --> 00:01:50,320 Speaker 1: establishment wing of that party quite late and has moved 32 00:01:50,320 --> 00:01:52,960 Speaker 1: to mobilize and sort of, you know, put their forces 33 00:01:53,000 --> 00:01:56,040 Speaker 1: behind who they would prefer um. This is going to 34 00:01:56,040 --> 00:01:58,280 Speaker 1: be too little, too late, I think many people think. 35 00:01:58,960 --> 00:02:02,720 Speaker 1: Bloomberg will have NonStop Super Tuesday coverage throughout the night, 36 00:02:03,000 --> 00:02:05,560 Speaker 1: starting with a special edition of With All Due Respects 37 00:02:05,560 --> 00:02:08,160 Speaker 1: starting at five pm Wall Street time. We will also 38 00:02:08,200 --> 00:02:10,920 Speaker 1: have analysis on how the results will impact the markets. 39 00:02:11,400 --> 00:02:14,880 Speaker 1: Later today, President Obama will sit down with Senate Republicans 40 00:02:15,040 --> 00:02:17,919 Speaker 1: who have vowed to block his nomination to the Supreme Court. 41 00:02:18,440 --> 00:02:21,200 Speaker 1: A Virginia police officer who was shot and killed on 42 00:02:21,200 --> 00:02:23,120 Speaker 1: her first day on the job. It's being laid to 43 00:02:23,160 --> 00:02:26,720 Speaker 1: rest today. Funeral services for Prince William County Officer Ashley 44 00:02:26,760 --> 00:02:29,840 Speaker 1: Gwindon will be held in Woodbridge. Global News twenty four 45 00:02:29,840 --> 00:02:32,960 Speaker 1: hours a day, powered by our journalists and more than 46 00:02:33,000 --> 00:02:35,280 Speaker 1: a hundred fifty news bureaus from around the world. I'm 47 00:02:35,320 --> 00:02:39,960 Speaker 1: Michael bar Thank you Mill Time. Now for the Boomberg 48 00:02:40,080 --> 00:02:43,600 Speaker 1: NBC Sports update. Here's John stash Our. John alright, Mike. 49 00:02:43,720 --> 00:02:46,400 Speaker 1: Rangers continue to play well, three straight wins. They finished 50 00:02:46,400 --> 00:02:48,920 Speaker 1: February ten three and one. They haven't had a two 51 00:02:49,000 --> 00:02:52,320 Speaker 1: game losing street in sixteen. At the Guarden, Rangers gave 52 00:02:52,360 --> 00:02:54,640 Speaker 1: Henry Lundquist the night off, still top Columbus two to 53 00:02:54,720 --> 00:02:57,640 Speaker 1: one and now the second most points in the Eastern Conference. 54 00:02:57,680 --> 00:03:00,480 Speaker 1: Matt Zucarello scored first period Derek step On the game 55 00:03:00,520 --> 00:03:04,000 Speaker 1: winner shorthanded with less than three minutes to go in 56 00:03:04,080 --> 00:03:06,280 Speaker 1: the third. The Nets with the first back to back 57 00:03:06,320 --> 00:03:09,120 Speaker 1: games at the Staples Center. They'll face the lowly Lakers tonight, 58 00:03:09,160 --> 00:03:12,119 Speaker 1: but against the Clippers they fell one oh five ninety five, 59 00:03:12,200 --> 00:03:14,359 Speaker 1: so unable to get a season high third trade win. 60 00:03:14,600 --> 00:03:17,000 Speaker 1: Jamal Crawford scored twenty six points for l A brook 61 00:03:17,040 --> 00:03:20,560 Speaker 1: Lopez that Brooklyn with twenty five is Kansas emerging as 62 00:03:20,600 --> 00:03:22,240 Speaker 1: the team to be in the upcoming n C Double 63 00:03:22,280 --> 00:03:25,880 Speaker 1: A tournament now ranked number one. That Jayhawks pounded Texas 64 00:03:25,880 --> 00:03:28,880 Speaker 1: on the road eighties six fifty six. North Carolina got 65 00:03:28,880 --> 00:03:32,200 Speaker 1: by Syracuse seventy five seventy as expected. Yet to use 66 00:03:32,200 --> 00:03:35,560 Speaker 1: the franchise tag on defensive lineman Moe Wilkerson, who hasn't 67 00:03:35,600 --> 00:03:38,240 Speaker 1: signed a long term deal'll make fifteen points seven million 68 00:03:38,280 --> 00:03:41,400 Speaker 1: next season. Asked for the team, the Jets are forever chasing. 69 00:03:42,080 --> 00:03:44,480 Speaker 1: New England signed Tom Brady to a two year extension 70 00:03:44,520 --> 00:03:48,160 Speaker 1: through twenty nineteen, when Brady will be forty two years old. 71 00:03:48,160 --> 00:03:53,720 Speaker 1: With Bloomberg NBC Sports Upton. I'm John Staph, Thank you John. 72 00:03:54,040 --> 00:03:57,640 Speaker 1: We are watching markets in generally a good mood this morning. 73 00:03:57,840 --> 00:04:00,360 Speaker 1: S and P futures have seventeen points nine tense of 74 00:04:00,360 --> 00:04:03,800 Speaker 1: a percent stock six hundred by four points in Europe 75 00:04:03,800 --> 00:04:06,360 Speaker 1: one point one percent. So there's concerned about what might 76 00:04:06,400 --> 00:04:09,800 Speaker 1: happen on Super Tuesday. It's not being reflected in equity 77 00:04:09,840 --> 00:04:13,560 Speaker 1: markets at the moment. This is Bloomberg Surveillance on Bloomberg 78 00:04:13,640 --> 00:04:20,039 Speaker 1: Radio Worldwide. Welcome back to Surveillance. I'm Michael McKee along 79 00:04:20,040 --> 00:04:22,200 Speaker 1: with Tom Keene. We are in Washington, d C. For 80 00:04:22,640 --> 00:04:28,800 Speaker 1: coverage of Super Tuesday. Bloomberg in Washington our host this morning. 81 00:04:29,480 --> 00:04:32,279 Speaker 1: We are fortunate this morning to be able to speak 82 00:04:32,320 --> 00:04:36,600 Speaker 1: with the former Chairman of the Federal Reserve, Alan Greenspan. 83 00:04:36,880 --> 00:04:39,200 Speaker 1: I've been covering him for twenty years and I've never 84 00:04:39,200 --> 00:04:42,359 Speaker 1: seen him quite this pessimistic about the economy. We began 85 00:04:42,480 --> 00:04:46,880 Speaker 1: by asking him what he sees in the realm of 86 00:04:46,960 --> 00:04:52,840 Speaker 1: monetary policy. What are the ramifications to the overall financial 87 00:04:52,880 --> 00:04:57,520 Speaker 1: system from negative rights up to a point, negative interest 88 00:04:57,560 --> 00:05:01,719 Speaker 1: rates have no effect? Why before people are willing to 89 00:05:01,760 --> 00:05:06,720 Speaker 1: accept essentially a negative interest rate to hold the claims 90 00:05:06,800 --> 00:05:12,039 Speaker 1: of these particularly countries. That's going to change if this 91 00:05:12,120 --> 00:05:14,640 Speaker 1: goes on indefinitely, because somebody's going to start to move. 92 00:05:15,440 --> 00:05:19,520 Speaker 1: We don't know what happens when that happens. Is it dangerous? 93 00:05:19,800 --> 00:05:23,240 Speaker 1: Do you think a dangerous experiment? For so many central 94 00:05:23,279 --> 00:05:25,440 Speaker 1: banks to be doing this, does it call to mind 95 00:05:25,440 --> 00:05:29,000 Speaker 1: the beggar that neighbor currency policies of the nineteen thirties. Yeah, 96 00:05:29,080 --> 00:05:33,719 Speaker 1: I wouldn't. I don't know the word dangerous, but it 97 00:05:33,880 --> 00:05:38,479 Speaker 1: is clearly nonproductive. That is, to have this type of 98 00:05:38,560 --> 00:05:42,440 Speaker 1: situation is a distortion. And remember the big, big argument 99 00:05:42,480 --> 00:05:45,479 Speaker 1: about excessive low interest rates for very long period of 100 00:05:45,520 --> 00:05:50,560 Speaker 1: time is it warps the investment pattern on real investment. 101 00:05:51,400 --> 00:05:54,920 Speaker 1: And clearly, if you have negative interest rates, that is 102 00:05:54,960 --> 00:05:58,320 Speaker 1: going people who can raise funds with negative interest rates, 103 00:05:59,080 --> 00:06:03,400 Speaker 1: their capital investment projects are going to be warped. The 104 00:06:03,480 --> 00:06:06,800 Speaker 1: corporations that you've followed for your with your data analysis, 105 00:06:07,320 --> 00:06:12,040 Speaker 1: are they acting in an unhealthy or improper manner because 106 00:06:12,040 --> 00:06:15,080 Speaker 1: they have a free lunch from low interest rates. Well, 107 00:06:15,120 --> 00:06:17,720 Speaker 1: the problem basically is, and I'm sure they are doing 108 00:06:17,800 --> 00:06:21,159 Speaker 1: it because you can tell what happened as the queas 109 00:06:21,400 --> 00:06:25,720 Speaker 1: opened up with the price earnings race shares rose. We're 110 00:06:25,760 --> 00:06:31,480 Speaker 1: getting signals which are distorted because interest rates are too low, 111 00:06:32,160 --> 00:06:35,359 Speaker 1: people are investing in long term assets. When they do 112 00:06:35,440 --> 00:06:40,000 Speaker 1: invest in long term assets, uh, under the mistaken views 113 00:06:40,040 --> 00:06:42,760 Speaker 1: to what the rates of return have to be. And 114 00:06:42,839 --> 00:06:47,240 Speaker 1: that means you're going to get misuse of capital the 115 00:06:47,320 --> 00:06:50,719 Speaker 1: markets these days seem to be telling us that we 116 00:06:50,760 --> 00:06:56,840 Speaker 1: are in trouble? Are we We're in trouble basically because 117 00:06:56,880 --> 00:06:59,800 Speaker 1: productivity is done in the order? Do you agree with 118 00:07:00,120 --> 00:07:04,679 Speaker 1: Robert Gordon of Northwestern University that our productivity is low 119 00:07:05,360 --> 00:07:09,279 Speaker 1: because we don't have the technological progress in the moment 120 00:07:09,360 --> 00:07:11,840 Speaker 1: that we had in the middle of the last century. 121 00:07:12,000 --> 00:07:15,680 Speaker 1: Bob runs about book is excellent time. But he has 122 00:07:15,720 --> 00:07:20,880 Speaker 1: a position which I don't think holds very far into 123 00:07:20,880 --> 00:07:23,120 Speaker 1: the future for one important reason, but he agrees with 124 00:07:23,200 --> 00:07:29,560 Speaker 1: it actually, namely that innovation is something which by its 125 00:07:29,640 --> 00:07:33,880 Speaker 1: nature cannot be forecast. If you could forecast it, it 126 00:07:33,920 --> 00:07:40,000 Speaker 1: wouldn't be innovation, So that saying what the technological capability 127 00:07:40,080 --> 00:07:45,560 Speaker 1: is going to be out in the future is questionable. 128 00:07:46,480 --> 00:07:49,160 Speaker 1: He doesn't say that we will have no productivity. He 129 00:07:49,240 --> 00:07:51,320 Speaker 1: just feels it will be lower than it was when 130 00:07:51,400 --> 00:07:55,000 Speaker 1: you were having these major leaps forward. But we're not 131 00:07:55,040 --> 00:07:58,720 Speaker 1: even getting low productivity right now. Why is that? Where 132 00:07:58,760 --> 00:08:03,080 Speaker 1: has it gone well? That you look productivity? Almos put 133 00:08:03,120 --> 00:08:08,200 Speaker 1: it this way, upput per hour is driven essentially by 134 00:08:08,400 --> 00:08:14,480 Speaker 1: real capital investment. The data clear on that real capital 135 00:08:14,560 --> 00:08:23,440 Speaker 1: investment is h way below average. Why because businesspeople are 136 00:08:23,720 --> 00:08:27,960 Speaker 1: very uncertain about the future. Are you optimistic going forward here? 137 00:08:29,560 --> 00:08:32,000 Speaker 1: I haven't been for quite a one now, and I 138 00:08:32,040 --> 00:08:37,319 Speaker 1: won't be until we can resolve the entitlement programs. Nobody 139 00:08:37,360 --> 00:08:43,280 Speaker 1: wants to touch it. But it's gradually crowding out capital investment, 140 00:08:44,240 --> 00:08:48,160 Speaker 1: and that's crowding out productivity, and that's crowding out the 141 00:08:48,200 --> 00:08:50,360 Speaker 1: standards of living. Where do you want me to go 142 00:08:50,440 --> 00:08:54,559 Speaker 1: from there? Put China in the context of where we 143 00:08:54,640 --> 00:09:01,080 Speaker 1: need to be with China in five and in ten years. Well, 144 00:09:01,240 --> 00:09:04,920 Speaker 1: the big problem is basically China itself. That is, it 145 00:09:05,080 --> 00:09:08,959 Speaker 1: is slowing down its rate of growth quite dramatically, and 146 00:09:09,040 --> 00:09:11,200 Speaker 1: as everyone who looks at the data will tell you, 147 00:09:11,200 --> 00:09:13,480 Speaker 1: we're not quite sure which data are real and which 148 00:09:13,520 --> 00:09:18,520 Speaker 1: are not. I do think that the seventh seven and 149 00:09:18,520 --> 00:09:24,760 Speaker 1: a half percent annirator growth is unachievable. I think that 150 00:09:24,840 --> 00:09:29,240 Speaker 1: what is happening is as as China's productivity edges ever 151 00:09:29,400 --> 00:09:32,440 Speaker 1: closer to the level that exists in the United States, 152 00:09:33,360 --> 00:09:39,439 Speaker 1: the gap closes, and the ability to to close the 153 00:09:39,520 --> 00:09:43,439 Speaker 1: gap is more and more difficult, which means that you're 154 00:09:43,480 --> 00:09:47,920 Speaker 1: going to get a convergence between productivity and the United 155 00:09:47,960 --> 00:09:52,760 Speaker 1: States and productivity in China much more closely, and that 156 00:09:52,800 --> 00:09:56,640 Speaker 1: means it's going to be a big slowdown of China. 157 00:09:57,840 --> 00:10:00,680 Speaker 1: The former chairman of the Fellers Are System, Alan Greenspan, 158 00:10:00,760 --> 00:10:02,959 Speaker 1: Mike I thought a spirited conversation. He had a real 159 00:10:03,000 --> 00:10:06,880 Speaker 1: sense of humor within his very dour outlook. Yeah, he 160 00:10:07,040 --> 00:10:11,160 Speaker 1: is unfortunately more gloomy about the prospects for the economy 161 00:10:11,160 --> 00:10:12,680 Speaker 1: that I have seen him in a very long time. 162 00:10:12,720 --> 00:10:15,600 Speaker 1: And he says it's because of uncertainty so much. He's 163 00:10:15,640 --> 00:10:19,800 Speaker 1: never seen as many as much uncertainty given what's going 164 00:10:19,840 --> 00:10:22,560 Speaker 1: on in the world today. Well, more of this, Alan Greenspan, 165 00:10:22,679 --> 00:10:24,559 Speaker 1: look for that of course on digital media. We hope 166 00:10:24,600 --> 00:10:27,040 Speaker 1: to get it out to you on podcast is Well, 167 00:10:27,160 --> 00:10:29,600 Speaker 1: that's a nice announcement. We're really making an effort to 168 00:10:30,400 --> 00:10:32,719 Speaker 1: get out all of our interviews at Michael McKee and 169 00:10:32,800 --> 00:10:35,400 Speaker 1: I do. You'll see those two iTunes, not only the 170 00:10:35,440 --> 00:10:40,640 Speaker 1: complete Bloomberg surveillance files, but also the individual interviews as well. 171 00:10:40,679 --> 00:10:44,840 Speaker 1: We'll have much more on that, uh coming up. It 172 00:10:45,000 --> 00:10:48,480 Speaker 1: is super Tuesday. We are in Washington for two days 173 00:10:49,040 --> 00:10:52,040 Speaker 1: looking for coverage and reaction tomorrow to what appears to 174 00:10:52,080 --> 00:10:56,400 Speaker 1: be good days for Secretary Clinton. And for Mr Trump 175 00:10:56,679 --> 00:11:03,240 Speaker 1: stay with us from Washington. Bloomberg Surveillance. Coming up, we 176 00:11:03,400 --> 00:11:06,920 Speaker 1: will talk with Senator Angus King. He is an independent 177 00:11:07,280 --> 00:11:10,360 Speaker 1: from Maine. What does he look for in the economy, 178 00:11:10,480 --> 00:11:13,240 Speaker 1: in the political world in the campaign this year