Anna is off today. Bloomberg reporters are standing by across the world, ready to deliver the stories that will drive your day. U. S. Prosecutors are seeking more than 13 billion from bank of america to resolve an investigation into the mortgagebacked loans. Jon ferro have the latest on that story. Zeb eckert will break down the inflation data. Caroline hyde will look at amazon. Can the worlds Biggest Online retailer keep growing . Now to our top story and a bloomberg exclusive for you. U. S. Prosecutors are said to be seeking more than 13 billion from bank of america to resolve investigations on the sale of mortgagebacked securities. Joining us now is Jonathan Ferro. This is all about the runup to the financial crisis. The bonds that were sold back to buy home loans. We know what happened to those mortgages and those bonds. It was not ready. Pretty. That is a lot of money. That would be on top of the 9. 4 billion the jpmorgan fines. These numbers just keep on getting bigger and bigger. That means the total amount that jpmorgan has set aside since the financial crisis is 50 billion they have paid in fines. Since the financial crisis. Let me put this number in some kind of perspective. Sales at cocacola about 50 billion. The market cap of socgen about 50 billion. It is a huge sum of money. Just working through the numbers, getting a bit of momentum. With the likes of credit suisse, when i think about it, what is the biggest risk to the Banking Industry the last couple of years . Is it geopolitics, financial markets, or just litigation . These guys have set aside huge amounts of money to deal with legacy issues that date back to the financial crisis. How deep is this whole . Is this hole . Does the likese of bank of america have to pay . If this gets settled, it could happen in the next two months. If you look at the banks in europe, the money they are setting aside is getting bigger and bigger. And if it is not settled, they will get sued. Thank you. We will see you later. On are watching countdown bloomberg television. Few countries measure the cost of living in more ways than japan. Today, we are focusing on the tokyo figure. The zeb eckert is in hong kong with the details. Talk us through this tokyo cpi data and why we care. Why do we care . We normally look at the national cpi number. The National Number is from the month of march. Why does that matter is to mark on april 1, the government of japan instituted a sales tax increase. The tokyo figure released today represents the month of april. It shows that the sales tax increase is filtering through. Core Consumer Prices for tokyo rose 2. 7 compared to 1 in m arch. Riseows the sales tax filtering through. It was not as strong as expected. Analysts saw and saw a 2. 8 gain in Consumer Prices. We are watching ahead because this is projected to tip the economy into a onequarter contraction in japan. Updatedk, we will get growth and Inflation Forecasts from bank of japan. This is important because we are watching the impact of a weaker yen and Higher Energy costs, how this ripples through the economy going forward. Of march, we saw core Consumer PricesHolding Steady at 1. 3 . This excludes fresh food. This is the same number that was reported in december, january, february, and march. It shows Consumer Prices on the National Level in japan stagnating. That is a concern as the bank of japan maintains its two Percent Inflation target. Could leadying it the boj, by the summer, to enact additional easing policies. No time to stand still. Ury powerhouse caring they beat estimates. Start with the numbers. It was a sales beat. That is good news for investors. You are coming off one of the worst quarters in four years. Overall, luxury just nipped in ahead. When you look at the numbers, it tells you a close story. Small is useful within the group. Brands, ysl, have gone through and delivered on the numbers. A sales list of 15 , mega expensive, heavyweight handbags. Gucci, which is the beast within the group, more than 55 of the lecture groups, sales rose by. 3 . That gives you the magnitude. This is one of the reasons why we are seeing this overhaul. Absolutely. And it gives you that clarity that one assumes in terms of what youre doing with marketing and positioning and pricing as you get ready for a recovery. That is the deal with in luxury. , he was the ceo of potato. Of botega. E is 51, italian of course, gucci, you are going marco looking after luxury couture leather. There is another division as well. And then you have watches and jewelry. Albert is french and his pedigree is about louis vuitton. He set up the luxury watches and jewelry at louis vuitton. He has 15 Years Experience. 16 Years Experience at the high end of watches and jewelry within lvmh. They are very clearly siloing the business in terms of what they are doing. A couple of other questions who is going to take over bottega and who is going to run china for the group . Investors are relieved and they are also focused. Your own brand, your own shops, youre all your own control. Back to you. Shares rising in afterhours trading after they beat expectations for sales. European is our business correspondent, caroline hyde. Sales are up, but costs are up as well. And in exactly the same proportion. It is quite amazing. Increase in expenses, spending. Nearly 20 billion is how much jeff bezos is plowing into this company. One investor we spoke to earlier this week was saying it is always jam tomorrow, never jam today when it comes to amazon. Investors like building the company up, because shares rose afterhours. And they are trying to increase profitability a little bit. They are charging more. If you want to be a prime subscriber, you are charged 25 more now. You are charged 99 per year. Overall, he is sacrificing profitability because operating margin fell. 7 . Million, this is a company that is getting 20 billion in terms of expenses. The profitability is not what you are looking at. You are looking at potential growth. And not just in the core business, it is venturing into other areas as well. Rex it is quite amazing. Jeff bezos does think outside the box when it comes to amazon. Yes, they are spending a lot on warehouses, shipments, but going into grocery delivery. This is something tesco is really worried about. If you start getting everything from amazon, not just your face paints i just bought some face paint. She did. Canut the vegetables, they put a lot of grocers out of hardware. Other fascinating areas, smartphones. They are likely to have a 3d display smartphone by christmas. To compete with the android. Exactly. Already, they have the kindle and tablets. There is an interesting hardware called the dash, where you can speak into a microphone and say, i want chocolate chip cookies. It will automatically put chocolate chip cookies into your online purchasing order. See what is running out in your home and take a barcode of it and it will load into your Online Shopping list. Package delivery drones, this is a man expanding outside of retailing. Cloud, the internet, a big business for amazon as well. Rex why did you buy facepainting from amazon . A dressup a bit of coming up, but a neon face pain. Maybe we will have a trial on that coming up later. Escalating crisis in ukraine or gradual fed tapering . We will have more next. Time for todays company news. H into cloudpus computing is accelerating under new ceo satya nadella. They topped analyst estimates. Citigroups chief executive withdrew from an Economic Forum that russian president Vladimir Putin is hosting next month. The bank will send other executives in his place. Citigroup has more than 50 branches in russia. President as the u. S. Toughens sanctions on russia. Spendingtisers boosted to reach a growing number of people accessing chinas normal largest internet search engine. Rose 24 . Welcome back to countdown. Is six 15. London tokyo inflation data showed prices rising 2. 7 in april, the most since 1992 after trading near it strongest in a week. On that data. Aken for more, i am joined i Standard Bank head of g10 strategy. Thank you for joining us today. We are focusing on tokyo today, which rose 2. 7 . Nationwide inflation rose 1. 3 . How much of that increase was down to the sales tax increase . Pretty muchassume all of it. I would assume, in april, we are going to see a similar increase. The real key is not necessarily 2 rise in inflation or the target, but the hit to the economy and the damage that would do. Most of the market thinks it would do sufficient damage to make the bank of japan ease further. At the same time, the bank of japan itself seems to be more confident that the economy can ride through this. You do not think they can. Exley, the bank of japan holds its board meeting. They wait a month or two longer before implementing bond buying. We need to see the impact of the sales tax increase. Last time we had a sales tax increase, you would have to go back quite some years. There was a Significant Impact on the economy. It is not easy to look back at that experience. That was soon followed up by the asian crisis. The japanese economy was very weak. Corona kuroda and the other bank of japan members are more likely to build confidence that the bank of japan will continue to struggle. Rex at the meantime, we are at 102. 40. We have been in the 101105 range for quite a few months now. And i think we will stay there longer, to be honest. Once the bank of japan starts using, that will accelerate higher. Not just the bank of japan is doing more quantitative easing. I think the whole change in structural trade, large current account deficits that we see in extent,ffset, to some by the trading room and we are seeing in the u. S. Mario draghi has spoken once again. He spoke yesterday in amsterdam. He was more explicit in his language. He said that the ecb may start on buying if inflation, if the outlook worsens. How close are we to further measures from the ecb . Again, probably within a few months as far as quantitative easing is concerned. I think the bank can take steps before that, possibly just in terms of another cut in the refinancing rate. So i do think quantitative easing will come. The interesting thing, for me, will be, what happens with the april inflation data . A lot of the ecb members have been talking about that. They are banking on a sharp acceleration in inflation from. 5 to close to 1 . Temporarily will take the pressure off. I do still see quantitative easing ahead. Draghi with the strength of the euro. A board member said a strong euro is causing us problems right now. It is stubbornly high. It is not moving. The potential problem is that will not move it as well. This low volatility we have at the moment will persist for quite a while. There is a cloud hanging over currencies in general. It is not just the liquidity that the central bank is providing, but the whole issue of fixing allegations and potential pressure on interbank players as a result of that. I think that is holding back the market. If the ecb does quantitative easing, it does not make it explicit that that is designed to weaken the currency, then i think the currency probably will not weaken. In many respects, perhaps japan has found out, the only real way to get inflation up significantly and quickly is through depreciating the currency. We are going to talk more about the cloud that is hanging over the fx market. Will stay with us. Welcome back. This is countdown. I am mark barton. Stephen barrow is still with us. You spoke about this cloud hanging over the fx martin market related to regulatory and supervisory pressure in the wake of this alleged fx manipulation. How is that cloud expressing itself . You have already mentioned the volatility. What trades benefit in this period of low volatility and with this cloud in place . Really, carry trade. Current seas are not moving significantly. Ncies are not moving significantly. There is not a great deal to play for in those currencies. What it does do is increase the attraction of the carry trade. Particularly as a lot of emerging Market Countries have been forced to raise Interest Rates. Turkey, in particular, south africa to a lesser extent. Those countries look more attractive. As long as those currencies remain, to some extent, more ,table, and i think they will because as you see low volatility in the major currencies, it tends to drag on the volatility of the other currencies as well, that opens the room for the policy makers to start thinking about cutting Interest Rates the cousin the on they will not be downside. Or a lot of these countries raising rates. Turkey did not cut rates yesterday, but there is speculation, some political pressure from government and central banks. He might start to see some of those countries that have raised rates be in a better position. Ofwhat could another period emerging market instability within fx markets, what sort of period have we witnessed in january . The last few weeks has gone against emerging market currencies a little bit. What could set us off down the january road once again . Two main things. One is the situation in ukraine. Obviously, that could move in a direction that is that raises risk aversion. Possibly, a way that is going is a slow burning fuse towards some sort of military conflict in Eastern Ukraine. Maybe the way in which that has developed is not causing as much fear for the market as we might have expected. And then, of course, there is monetary policy. The ecb is likely to add liquidity. It is the fed that is the main concern for markets. Next week, the fed meets. I think they are on autopilot with respect to the 10 billion of tapering. I do not think there will be a significant change. They have been desperate to get fisher and Minard Fischer and maynard nominated. Then they can think about the communication issues that they want to put across as they moved to the next age, which will be higher rates. Speak, russia has gone to triple the minus at standard at standard poors. Ukraine situation has continued to weigh on the ruble. The outlook on the ruble from where you are sitting. Still negative. I think the key here is there will be a new level of sanctions , a new round of sanctions coming primarily from the u. S. What does that include . Is it like the first round of the merrily individuals, in which case it may not be that substantial, or do they target institutions . Thank you for joining us. Welcome back to countdown. Lets get straight to Jonathan Ferro for the asset check. I want to have a look at dollar10. We have inflation numbers, our first read from the month of april from the city of tokyo. What has the sales tax hike done for prices . 2. 7 inflation in tokyo from a year earlier. The biggest jump since 1992. Is it trying to celebrate . What does the sales tax hike due to the overall economy . The weakening of the yen has increased import prices, energy costs. At some point, that starts to drop out. I was just speaking with steven barrel. He says that is happening now. Aat happens to inflation in years time . Does the bank of japan have to do more . Those people say yes. Steven barrow thinks this one, over the long term, could head to 120. Bloomberg has learned that u. S. Prosecutors are seeking a record 13 billion fine against bank of america according to people familiar with the matter. Ofhas to do with the sale bonds backed by home loans in the lead up to the 2008 financial crisis. U. S. President barack obama is in south korea. The meeting comes as part of whichs 4nation tour began in japan. Todays meeting comes amid rising tension in the peninsula. North korea is ready to test a Nuclear Device at any time. U. S. Secretary of state john russia is warning russia that time is running out to comply with an accord about the ukraine. That is as russia begins new exercises near the ukrainian border. Will be anit expensive mistake if russia reverses course on an agreement reached last week in geneva. Ofi is a leading provider Payment Systems in russia. For more, we are joined for a bloomberg exclusive by kiwis chairman. Setourse, Ryan Chilcote this interview up so he better join us as well. For many viewers, they might not have heard of your company. If us an idea of what you do and how you operate. As you said, kiwi is a major alternative payment provider in russia. It is hard to say what alternative payment is in russia because more than 80 of payments are made with cash. We have two Major Products for our customer. The first one is the kiwi kiosk. You can use that to pay cash for different services. Track ity bills, traffic fines. There are 160,000 of these payment terminals. Kiosks. Ve more than 120 onwhy is this such an onus using cached in russia. I know there is a reluctance to use Online Banking and reveal credit card details on the web. Could that change . Some sort of change in the thinking, the National Psyche . There is a reason for such behavior. During the last 20 years, we through thevived bank crisis. 2008 and the crisis of 1998. There were major crises. Feel people still rely on cash and payments. And they need the shift to a cashless society. You have another product, the qiwi wallet, effectively like paypal in russia. This is a revenue sharing agreement you have with visa that allows people to use the pay fortem to basically their internet purchases, right . Yeah. You can useea is not only cash, but different types of funds, like your bank account, your bank cards, or even your prepaid account. Yesterday, we heard president visa, saying about that visa and mastercard are going to lose market share in russia. Demand aen able bogeyman ever since they declined credit cards after the fallout. How do you see that playing out in russia . Wallet, based on existing infrastructure. You can use not only visa cards, your mastercard, your union bank card, your ecb card, or you can use this russian nation payments system card to fund your transactions. The visa card is not the only way to pay for goods and services via qiwi. Do you think visa and mastercard will lose business in russia on the back of what is taking place . Just to be clear with our audience, Something Like 95 of transactions in russia, at some point, go through visa and mastercard, which is extraordinary. That is correct. At the moment, it is very hard to say what they mean by a National Payment system. I am sure that it is very difficult to build something similar to visa and mastercard fromp. O. S. Infrastructure, an issuance perspective and the number of customers. The existing sanctions, how are those affecting you now and how do you anticipate, as they get ratcheted up, it all feels a bit incomplete at this point. Not been, you have sanctioned, but some institutions have been sanctioned, some individuals have been sanctioned. How is that affecting your business in general . At the moment, we do not feel anything. Nothing. What happens if the level is ratcheted up . I think that people still use our kiosks will be in place. Visa is not the only way to use your wallet. When visa and mastercard declined to service some of these credit cards, you are talking about a small number of red card numbers, tens of thousands in a country of 40 million people. If we saw a larger application of that kind of denial of service as a weapon by the United States, that could be really bad, no . , if there is no substitution no National Payment system card instead of visa or mastercard, we will just switch to cash. Russia is just going to go all cash that is very obvious. They used to use cash. What about the economy itself western mark the economy itself . S p cutting russia to bbb. The outlook is negative. How much can the economy withstand if sanctions are escalated . Qiwis perspective, we do not feel any bit of sanctions because qiwi does not have any debts. Muche pretty muic independent from this point of view. For the economy as a whole, it is bad news. You do not get involved, but you must have an opinion on what is going on with Eastern Ukraine. Do you mind if he further moves into Eastern Ukraine . Are you mind if there is military intervention there . Kim,am here not as boris i am here as qiwi chairman. My personal view is peace is better than more. As a russian businessman, slightly reluctant to give a view about politics in russia. Presumably. Have beennks retreating from the russian market, particularly in the retail space, for a few years now. ,ow do you see this situation the ratcheting up of tensions between the west and russia, affecting Western Banks in russia . We have a story about how the citigroup ceo will not be going to st. Petersburg for the big Economic Forum. Is this a net positive for russian banks . The sense that Western Banks will be pulling out . Evel, we doiwi l not feel any tension. Our relationship with Western Banks is still at a very high level. Course, Western Banks are reluctant to come to russia. At a situational level, everything is good. We have got to wrap it up. Thank you very much, boris. At least come back and tell us how you are doing. Annaso come, entrepreneur series is back. It is all about cakes and the delicious business that is hummingbird bakery. Time for todays company news. Europes thirdbiggest carmaker reporting a. 1 decline in firstquarter revenue. We are talking about rental renault. Climbed 5. 1 . D the worlds biggest coffee shop chain raised its forecast. Held by a sales boost from new baked sweets, sandwiches, and a rewards program with about 8 billion members. Samestore sales rose about six percent in the u. S. For the quarter that ended march 30. International investors will be lining up to bid for londons iconic cucumbershaped skyscraper. Notice the gerkin. Lenders ended years of default yesterday. The building has become one of londons bestknown landmarks. It opened 10 years ago this month. Welcome back to countdown. Off today. Although she is away, we are taking a look at her entrepreneur series. This week, we are looking at the more delicious side of business. The hummingbird bakery, in particular. Anna met the founder of one of its stores in london and found out how he got started. From 1950s American Banking baking to modernday london, he set up hummingbird to revise his love of u. S. Baked goods, just like mommy used to make. Maybe not in this case. There was virtually no baking at all in my home. Growing up, it was not something that my mother did. We made brownies and cupcakes for some of her friends. He set up his first job on portobello road in 2004. 10 years later, he has six in london and two in dubai. Not the most rapid of expansions, but did he want to go faster . We could have expanded faster, but i feel like it would have affected the quality of our product. Freshlyon site, everyday. That does not take well to a very rapid expansion. One way that hummingbird has branched out has been with cook books. He has sold 800,000 copies worldwide. He is encouraging home baking is encouraging home baking good or bad for business . Some people who have never been to our shops may have met may have our books and made our stuff, might make a special trip when they come to london. Rex do you worry about anything to do with the business . Where do i begin . I have a whole litany of worries. Was employed before and in a completely different sector. I do not know what is normal for my sector. X tens of not taken thousands like we usually do, i will panic. And i will hear from someone else and they will be like, that famous restaurant that everyone goes to take this much per week and i am thinking, he take more than that and it is just cupcakes. Everyone worries about making sure the staff are happy, the customers are happy. Is that is what your own business is about, worrying about things . Yes. Well, for me. Peoplere there are some who never worry about things. I am glad i worry so that i can solve any issue that happens. I am now joined by tom mercer. Thank you for joining us today. Reason why it is moma and you did not put another m in. The god of harvest and fruits. Eight years ago, i was looking on google and i thought that fit. Tell us a little bit about the company and the products that you sell. Ofwe do two main sources products. We do a blend of oats, apple juice, lowfat fruit. It actually fills you up for breakfast with a lot of slowrelease carbs. The perfect thing first thing in the morning. Then we do a porridge. You have a great breakfast. At the end, i have got to try one of yours we will save that until the end. You came from bain and co. Management consultant. How does a Management Consultant decide, i am going to give this up to go into the world of serving people innovative breakfast . Son from farmers staffordshire. I have a bit of a food background on the farming side. A fantastic introduction to the working world. I always thought i would do my own thing. I wanted to do something practical and tangible and handson. The breakfast market was there. What were the challenges setting up question mark you first set up a store in waterloo station. What were the big challenges of setting this business up . We started with a stall made from a filing cabinet. We made everything by hand with rubber gloves up to my shoulders , mixing it together. It was a really basic, grassroots startup business. We started with that one store and went to nine stores. Then we started supplying other places. We do high street retail, airline, other markets. Who gave you the recipes and helped with the business design . Recipes washe myself in the kitchen, literally crossing different flavors of yogurt with different fruits, really basic stuff. A friends mom, also a shareholder, did help with the initial recipes as well. She is a chef. Rex imagined amazing that you managed to do this with your background. Did you fund it yourself, did you gain a system . Myselfial funding was through savings. It was a lowcapital set up business. Literally a van, a railway arch. We spent 2000 pounds on the initial branding. Since then, we have had a lot of investment and supportive shareholders. Oatley people working in london. We have about 20 different shareholders who have invested a little bit each year, which has been great. What is the plan with regards to expansion . Would you say you have attracted some unique deals with an airline and a number of Stores Across the country . How big can moma foods get . It is all about Healthy Breakfast and pushing that in our existing retailers. We are looking to grow with the airlines, the other supermarkets. We are pushing hard on that side of thingss. Recently, we have gone into wf smith. We are also adding other things into the range, expanding. Are you going to go into lunch and dinner or stick with breakfast . We have our feet firmly planted in terms of breakfast. We will be designing other products within the breakfast he if someone watching today thinks, i would like to set up my own business, what is the best bit of advice . , research, research. Do your homework about whether the product is a good product and good enough that a lot of people will buy it. Listen to advice from other people that are out there. Once you have listened to advice and you still really want to do it, then have the courage and the convictions and go ahead. Tell our viewers what sets you apart from your peers and then i will say, are you apart from your peers . Me personally or the company . The company. We are really unique on the marketplace. We are setting something up that is becoming a subcategory of yogurts with regards to supermarkets and we offer something really unique and different. Really healthy, really fills people up. It is really, really good. I just had a spoonful. I saw the size and i thought actually, each spoonful is quite wholesome. Packed full of those slowrelease carbs. My taste buds are zinging. I am not going to say anything else. Cue adverts. Tom mercer, thank you for joining us. Welcome back. I am mark barton. The time in london is now 6 54. Take it away. I am starting with one in the wall street journal. Saudi arabia might start regulating content that is produced in saudi arabia and aired on youtube. Apparently, Saudi Arabians consume three times the amount of youtube than the United States, the u. K. Say,eason is because they in general, there is not enough fun, witty, satirebased comedy for the youth of saudi arabia. They started producing their own content to sase to satiate demand. Saudi arabia is now a little bit worried about it and could potentially start regulating it. Longevity. Udy out on you know i am a big fan of longevity. The thing to do with the story i am actually looking at, though he has been around for a while. Average,women live, on to be 86. 4 years old. Almost 4 years ahead of what is the secret . Raw fish, green tea. It is not just about the better food. Less calories, 25 less calories. I love the pros in this article. The author points out it is important, tiny amounts of food. They put a little on their plate. Tily asankfully dain opposed to the british style. Love, lust, and laughter on the dartboard. I am not talking about ryan on the dance floor. Ryan. Ot talking about i am talking about the 100 most downloaded songs in britain. Number one, any guesses . Happy . Number two . Number three . Lucky. D like get feelgoodis nonstop, dance party tunes. Where is the rock . Where is the rock . Stay with us. Russia cut to the lowest investment grade. That is john kerry warns president putin that time is running out to comply with the ukraine accord. 13 billion for bank of america to settle allegations into sales of Mortgage Backed securities. Willhe gucci owner increase their focus on the brand after the managing luxury brand owner sets down steps down. Welcome back to count down, i am mark barton. To the top story. To resolve Mortgage Backed securities. What has bloomberg learned . This. Have two picture this is one of the banks that have been resolved. It is all about the sale of bonds they have been desperately trying to clear up the mess. That is a massive amount of money. Cap the market matt cap is a terrific amount of money. Over the last couple of years, it has not been geopolitics. Costs piling up and banks. More provisions over the last couple of months. The momentum is there. Suisse. S of credit another probe going and gone. It took six years to build that momentum. Hopefully we have an and again. Theew countries measure cost of living in more ways than japan. Zeb eckert is in hong kong. This number is significant for japan and global investors. It gives us the latest indication of how the april 1 sales tax is impacting the economy. Typically we look at cpi, but the figures show cpi numbers for the month of march. They remain unchanged. Shows the fulle impact. They were up 2. 75 . 2. 8 number from bloomberg. The increase clearly having an effect. But what kind of effect will it be . They have been mired in inflation for the past two years. The intent for the government and bank of japan is to reach a two percent target. When the new number comes out, we will have a better sense of whether japans is for inflation continues on a National Level. So far, tokyo prices continue their rise. Set, thank you a lot. Home to iconic brand such as gucci. New structure in the group. Manus cranny is here. It was a narrow beat. That is important for investors. When you look at luxury as a whole, one of the toughest quarterly sales. The whole luxury business that is the critical thing. Niche brands. Rebranded. Up 15 . Up 27 . Ll it was ready to wear. Louisthe tone vitton had another good year. 27 in the first year. Gucci delivered better than the market expected. The marketess than expected. 0. 2 . They are getting more control. Where they have control in their own stores, angus it makes sense. The announcement focusing on the individual brands. Structuring the business. Giving cleared delineation and responsibility. When you of got within the group by the ceo. Run he ran it. He is the darling of the group. He is a 51yearold italian. You have gucci, Still Standing on their own. And then watches and jewelry. I spoke to them last week. He is 55 and a french man. His heritage is luigi tonn vitton. At on louis the question, who is going to run it . The a fell, but by houma fell, but not as much as doinged what they are is protecting these brands from the brand. Give them two or three years to get on their feet. Autumn is when you are going to turnaround, but the tricky brand is the group. Control is everything. Where they have control, they are delivering that is a critical message. Ryan is here covering the crisis. He is here to tell us everything we need to know. Broke andre when it have spoke to one russian executive. We have had one view on it it is nearing junk. It is nearing job. Russia watchers will have anticipated this. It is down to geopolitics. The Economic Situation was not going great going into the conflict. But if you look at the events in ukraine, things are getting more tense. Be better the rhetoric is getting more pointed than it was before. Just yesterday, the secretary of state said it has been seven days, making a point of that, since the russians agreed to the geneva accord. They have not done anything as far as hes concerned. Have a listen. The window to change course is closing. President putin and russia facing choice. If russia chooses the path of deescalation, the International Community and all of us will walk met. The costsdoes not, for russia will only grow. Reiterated, obama we are ready to act. Far from sounding more consolatory, the rhetoric from russia is definitely ratcheting up. We heard president putin reiterating the warning for the Foreign Ministry indicating that russia is ready to take military action. Said imea, russia never said that these progress in pro russian militias were troops. Looks like russia is prepared to send troops if they do not like what is going on. If they feel their interest are threatened in the east of the country. And not hide it. Where are we when it comes to sanctions . Of thethe lines one lines came from angela, the director of russian studies at georgetown university. She said this is not much of a response, talking about the fact that kerry did not denounce implementation of the threat of sanctions. Everybody has been waiting and we have been talking about this. After the geneva accord was announced, i was there. He said if there was no russian action over the weekend, there would be sanctions. This week, all we have heard is sanctions could come in days, not weeks. Of course. You said they would come on monday. Now it is friday. In any case, it looks like they are aware it is seven days. We are serene from some treasury officials talking us off the record not up the record, but anonymously giving us a sense of who might be affected. One of the banks sanctioned might be one of russias thirdlargest lenders. The only bank affected so mark is the 17th biggest lender. Not the sake case for the Third Largest bank. A big corporate lender and big bang. Governments the development bank. It was used heavily preparing and funding the infrastructure for the winter olympics. During the crisis, it was the bailout bank bailing out the oligarchs when they got in trouble. None of these are really the kind of banks that the russian population interacts with a lot. Not big consumer lenders, places where russians have deposits. They are important to the kremlin. It would be the next place the United States would go. Up, amazon spends cash on expanding the business. Will be worth it for the august online retailer . Retailer . Online time for todays company news. Deutsche bank is considerings sharing selling shares to raise capital. They say the Largest Investment Bank may make the Capital Increase before the summer break or any for order or in the fourth quarter. Advertisers boosted spending to reach a glowing the growing number of people accessing chinas largest search engine. Microsoft hospira push into into cloud push computing paid off. Net income was 5. 66 billion, topping analyst estimates. Countdown, imi burton. Im mark barton. Good morning. Investing at the expense of profit. The right strategy . That has been the amazon strategy for almost 20 years. Ofrificing a little bit shortterm profitability for investing for the long term growth. Amazon has done the same thing they have always done. It invest in fulfillment centers. Platform improvements for the longerterm vision be required the customer and investor do not seem to mind because shares rose. It seems the customers are happy. They have a lot, dont they . Europe andseen in the u. K. And germany, they have netflix likere service and integrated that into amazon prime. They are always added Value Added Services on top of amazon prime rate prime. They raise the membership price by 25 . That offset some of the increasing cost. Absolutely. Theyprime first came out, have not increased the price at all. That is the first price increase we have seen. In the u. K. , germany, and the u. S. They are moving into all sorts of areas. What they are doing with the internet and downloading videos. What about the Grocery Service . Amazon prime pantry. As they move into consumables and catering to the grocery shirt trip. Fresh. Seen amazon it is very difficult to send through the mail. Difficult to send the post, being big bulky porches is purchases. I have tried to reinvent the economics behind that. They charge a little bit of money for that, six dollars on top of the prime membership. Are supermarkets clicking on their boots . I would say longerterm it is something you cannot ignore. This is not amazon testing something and it going away. It is a longterm dismantling to move into groceries. Consumable share is relatively small right now. But that is only going to increase. They are going to compete with the supermarkets, the likes of apple and googles android. We have heard they are developing a smartphone. It would not surprise me if amazon succeeds in that space. They have done a very good job, they have a good track record with the kindle fire. It seems like it is going very well. In the last quarter. They have been very quiet. Programs and movies. This is the it is similar to the apple tv and the rococo. Roku, contentthe tv into a portal for amazon. Watch her amazon video and see pictures and play games. They are going to be offering various old series on prime . Love film, when it was merged are they going to have to pay more on content . And what about content they generate themselves . Big play for a amazon continuing forward. Yesterday, they announced that hbo has been bringing a lot of their older content onto amazon. Which is a big historic moment. One of the big push backs for the fire tv when it was first announced, that it did not have hbo. We dont know how much they paid, but it is probably in the hundreds of millions of dollars. This is a very big play for them. They are lacking up locking up the content. They see them as the different ureter this differentiator between them and netflix. They have internal publishing and producing. A lot of that is focused on children. The Amazon Family is a very big driver of strategy. How can i comment as amazon, cater to the needs of the family . Do see them spending in the likes of 100 million like netflix on producing series because of cards. They wouldnt that same model where shoppers are what to have that same model where shoppers want to stay on prime. Locking in the prime loyalty. Part of that is through exclusive content. Is there a thing jeff bezos cannot do . Is there any way you think he should stop . I think it is important to keep in mind that amazon is a technology company. Company andovative they are willing to test the waters in different markets. They do a lot of different things. I wouldnt is paid anything is up for grabs. Whether it succeeds or not, we will see. He is willing to test the waters and lots of different industries. Thank you for joining us. Stay near senior analyst. Amazon shares. We will have more on that right after. Welcome back to read this is welcome back. I have mark barton. Amazon. H more on caroline hyde. Amazing. The expenses rising at the same pace as sales. 23 in sales, but spending more on warehouses. Delivers to us faster and quicker. They are expanding in china. They are investing in that respect to read expanding outside of web retailing. This is a longterm bet you read a company you have to believe is a longterm provider for growth. They have been doing it for 20 years. Investing for some years. So many years. 20 billion in sales in the first quarter. 20 billion in expenses. 100 million in profit. This is a company that the market believes in because it at 548 times the earnings. They are pushing it to all sorts of areas. We have seen them expanding regionally. Way are expanding into the into which they deliver. Drones they are buying, so they can deliver packages to our windows. Grocery. Going into pa just clothing and face ints, which i bought. But groceries. The buddies looking how to they are spending big on content. Also, they have tablets. Smartphones. It will apparently have 3d scenes screens. A new article called the which is a way you can say your soap was running out. Automatically added to the shopping list. Ship not much profit. Caroline, thanks a lot. We will take you behind the scenes at the tate. It has been touted as a once in a lifetime show of the 130 artworks. Stay with us for review. Lets get straight to jonathan for the check. Will a pound. We will look at the pound. The yen. Excluding food, inflation comes in at 2. 7 . The biggest jump since 1992. Is it time to pop the champagne . We have a sales tax hike that is feeding into a higher number. In 12 months time, that will drop out of the number. What happens to the rest of the economy . Is why many think the bank of japan needs to do more. Stephen biro says it could go to 120. These are the Bloomberg Top headlines. In an exclusive report, the merck has learned bloomberg has learned that prosecutors are seeking a 13 billion fine against the bank of america. Korea obama is in south for talks aimed at containing north korea. The scans as part of the north four nation tour that began in japan. This comes amid increased tension in the peninsula. South korea warned the north is ready to test a Nuclear Device at any time. It and john kerry is warning russia that time is running out to comply with an court to ease tensions with ukraine. They are beginning exercises near the ukrainian border. Kerry says it will be an expensive mistake of russia reverses horse on an agreement reached last week in geneva. Here in london, the Henri Matisse exhibition as being hailed by critics as a onceinalifetime event. Join us is alastair cook. Thank you for joining us. Critics seem united in their praise of this exhibition. Is it justified . Is it a onceinalifetime event . It isould love to say, terrible. That would provide drama. The truth is, this is sensational. It is really rare. The last time there was a big cut out show was in the late 70s. There was a catalog that accompanied it, and most of the images were blackandwhite. What the tease, that is ridiculous. He is all about color. They have brought new cutouts. Is a bigm that, this and on behalf of the tate his curating team. A gorgeous exhibition. Talk us through the cutout phase that came at the end of his life. A second life. This is how he referred to his final decade. He was a painter and a scope door. Sculptor. He was known primarily for his oils. He became very ill treat he had a life very ill. He found it difficult to stand and paint. Devised, in his own studio, even sometimes in his bedroom, a system where he could continue to make art. He started cutting out pieces of paper which had been colored. He penned at them to a board. To begin with, it was experimental. Over the course of the next decade, up to his death in 1954, he left painting behind. He loved this do experimental medium. Medium. Xperimental the cutouts look as if i could do them. We could have a go with your script. A lot of people say that. Interviewed, as part of my research, the curator. He said, a lot of people say masterpiece,ous big blocks of color. It looks incredibly simple. People say, mike could do this. If a child of six had created it, i would show it at the tate. Lifetime of understanding how to marshall color has gone into that image. It looks effortless. Was it received initially in the 1940s and 1950s . I gather was not received well by critics. On. Ou are bang matisse said any artist worth his salt is making art which will not be appreciated for half a century. 50 years ahead of his time. When he first showed the cutouts in the 1940s, people wrote them off. They relished dismissing them. They thought these were quite senile works of art in which the sky was not having a second lap as a second childhood. It was a bit embarrassing see go downhill so quickly. But what a creek snow . Eventually, people came around. I went to the show a couple times last week. It was so full. People of all ages there. The mood seems to be extremely lebratory. Or he ce sensual andare very exuberant. Affirmative. I must read you this review. He is a famous art critic. He writes for the evening standard. This is what he said. Enjoy these seductive trivialities for what they are. Insubstantial, deceitful, fraudulent. And we must hope transient rather than some spiritual and mystical essence of art. Im so delighted he is part of our Cultural Landscape in the u. K. I have a huge amount of respect for him. He is a brilliant provocateur. It doesnt surprise me in the least when everyone is saying one thing, he wants to Say Something else. I wonder whether he retains the residue of that early critical reaction to matisse when these were dismissed by some people. I only hope that unlike the early critics, people will cling to reason. Some people might go in there and feel they could do these themselves. Personally, im not sure. Brian is certainly taking online. It was a standup. In his life . Following a lifethreatening operation . Where does it fit into his entire sixyear career . People, they are the culmination of what he was doing. Not paintings. Re the work she was famous for in the early 20th century. He was the ringleader of the avantgarde. Ivee seems to spend and ata lifetime as an artist distilling form. Creating a language of personal and universal unit visual signs of things. Toward the end of his life come he created in the studio and imaginative space where he made a peace which is the swimming pool. It feels like you are wandering through a garden. Simple pleasures which he had enjoyed previously, but which he could no longer experience. He found tremendous freedom in these works of art. That for me is what i take away most of all. What is so poignant about them. The context of how they are made. It makes you appreciate them more. The greatest art of the 20th century . There are other contenders. That was such a rivalry. Picasso was a friend. But they also were very competitive. You can see examples in their career where they are responding to each others work. Even though they are so different, they had a huge amount of respect but possibly and before the other. There are wonderful antidotes of pentecostal picasso going to visit matisse. He took his partner who later wrote in an sender a book. In incendiary book. They supposedly brought a reallife magician to matisses bedside. Magician crewke a to inform out of nothing but a simple piece of paper. Good to talk to you. This book is accompanying the exhibition. You can pick that up. Henri matisse, the cutouts at the tate modern. Thank you. Who let the dogs out . Although skimpy for the most beautiful title. It is time for hotshots, a look at some of the most compelling images of the day. Human robots started showing off. President obama was greeted by a robot and told it could kick a football. It proceeded to do a little dance. A perfect bowling game is no easy feat, especially when playing backwards. A man from illinois has been trying to perfect his game of outward backwards bowling. He says it does not cause him much pain because he does not have to bend his knees. Do mornings, to iowa for the beautiful bulldog competition. It has been going on for years. This is a case where beauty really is in the eye of the beholder. Welcome back, i am mark barton. Time in london, 7 43. Lets look at the tour up top corporate stories. Net neutrality. Quite a jump, bulldogs to net neutrality. Tech investors will be keeping an eye on this. Appeals urt of open internet rules were not strong enough. Service providers, companies couldt t and comcast, slow or block websites. Say they felt they were competition. They were able to. Also, time warner being stopped by comcast. D up concerns going on at the moment. Sent out some draft rules. The end is a good one. Keep it safe. Keep it from blocking certain websites. It doesnt go far enough, according to many, especially netflix. That shouldnt come as a surprise. What they have not tackled the is currently the internet providers. Content providers. Netflix, amazon. They can strike agreements. Hundreds of millions of dollars. To the internet. When you are watching your videos, netflix does not become jerky or fuzzed. Has spent this money to comcast, but his vocal about it. We should not have to pay this extra. We are being held to account too much. Already consumers are paying a lot of money to get good fast why should we have to pay extra . What is also of concern is what if you dont have the money that netflix does . What if you are a poor start off . Start up . You cant afford to strike these deals. Will they be watered down . The fcc chairman, the he is saying, this should not be a surprise for the he calls it. Pering. Generally this is a concern. You have consumers and companies worried about this. It will be changed a lot going forward. I think it will have to be renegotiated. We will have more on that story on noon and neutrality. Manus cranny is here with a preview of what to watch. Politics is going to trump the markets. Big m and a week. Fromnk there is a warning john kerry, russia is running out of time. I was tried to look at it from the perspective of where do i want to take risk. Im not saying every hedge fund or asset manager will take risks. Not at all. Trading and looking to take risk away, why would you run the risk and taking major risk over the weekend . The market is going to focus squarely on anything that comes out from angela merkel. Then we get back to basics and talk about the u. S. And what is going on there. Pmi services due out. Sorry, michigan. Stocks to watch . Deutsche bank. This is an ongoing thing. Have they got enough capital and do they need more . How much more do they need to raise . I spoke with some of the key investors, and there was a bit of a concern. His stop fairly . Doing quite well. Firstquarter revenue. And then home appliances. Electrolux. Looks nothing for the but the best for the boss. Are you electrolux . I am for eeg. Pulling myself back. Bulldogs, backwards bowling. I dont pick ever seen hotshots quite like that. What was the underlying message . Recovery is coming in europe. Sound the alarm bell. They said there would be a slight positive demand increase in europe. I counted up three percent. Lost you somewhere be bulldogs. Thanks, manus. Is optimistic on europe. Increasing the forecast for european demand. We will have more on that. Stay with us. Welcome back, this is countdown. We are seven minutes away from the opening. Lets have a chat. Michael, good to see you. Good morning, mark. Saless start with the narrowly beat estimates. This is good news for the company, this reorganization. Their earnings estimates have come down a long way. Pretty much have that over the last six years. It is nice to get a beat. Listening into the analysts call, they feel the Management Changes that have been announced and the strategy they laid out, particularly in terms of raising pivoting brand and puma towards the sports section, well drive earnings going forward. But it will take some time. Driving,ng about europe is picking up for electro rocks electrolux. Pleasant surprise that demonstrates the power of operational gearing. Analysts had penciled in Something Like a 300 million loss. They turned a 1. 1 billion profit. A genuine upward surprise in a highly competitive industry. Michael, on the macroeconomic what is happening in japan is the big story. Consumer prices in tokyo rising at their fastest pace since 1992. A lot of that is down to the sales tax. Yes it is. We have the impact of the d valued yen. If you look at the broader picture, and you pan has except essentially exported deflation to the rest of asia. That is causing problems in number of countries such as china. Im not saying it is completely a zero sum, but there are those that are paying the price for japanese reflation. What is your feeling about equities, michael . They are going to find it these have had have hey the weather. If you look at the rotter picture, a third of the Earnings Growth that was programmed in for this year already a lot of that is down to the euro. Stage where we were ready to see earnings get going. Over is a big question that right now. Mario draghi spoken in amsterdam. He mentioned the euro and the qe, bond buying. How soon before he actually pulled the trigger . Ifs, ands or buts. Certainly, the recent pmi data. Adds fuel to the argument they need to do something soon. There is a real possibility they might wait until june for a renewed set of forecasts. They might be behind the curve by that time. They seem desperate to try to talk the euro down in lieu of actually doing something more active at the banks. But it has not worked. Thanks michael. Market strategist. 7 55. Stay with us for the news you need to know. I will see you monday, nice and early. Have a good weekend. Welcome to on the move. We are Just Moments Away from the start of the European Market open, and we have all angles covered. We have ryan standing by in the newsroom. What are the futures indicating . What they are indicating a lower start. They are indicating a lower start. It all has to do with ukraine. John kerry warning that time is running out. Were going to look towards Consumer Confidence numbers. Donald oscar meeting a little bit earlier today. This is going to be the one thing we will watch today over the weekend. Investors appeared to be weighing escalating tensions in ukraine. What is the latest . President obama will hold a Conference Call with european leaders according to a senior obama official who says the United States is particularly frustrated with germany and , which official says they are reluctant to