Transcripts For BLOOMBERG Countdown 20140904

I am mark barton. 6 00 a. M. Ingone london. Lets get the one of our top stories this morning. Mary draghis speech in jackson hole a few weeks ago shocked markets when he said we would use all the available instruments to ensure price ability in the nearterm. Central bankean take any action today . Manus cranny joins us now. Good morning. Why do the work yourself when our colleagues at Bloomberg News have done it coming out with all of these fabulous questions. Will they do anything . Will they take action . An analyst from bnp paribas and he said he would be foolish not to take some form of action. Not the solution, and to dont, qe, but aping demonstration that they do not want to lose control. Thats what today is about. It is about signaling and posturing. Lets have a little of the look. Best Case Scenario is no change in rates. That is what most would suggest. I put together a short its board of what could happen. Assety just get some backed securities but im doubtful. In aweek we saw that number people and they said assetbacked securities is barely 5 of the overall debt market in europe. Finetuning what is called the targeted landing, getting a bit more generous with the money. They are desperate. We know that the banks are not taking more money. Making that more incentivized. That is part of whats out there. Im trying to find the equivalent for europe. It is a church hell churchillian moment. Forrnment banks are calling another 5 percent lower. Weve had conversations with economists saying they need the around get down to 1. 25. That is where they are calling the euro dollar the next year and parity at about 1. 27. The bond markets are tumbling. But else could queue we actually do . Veryche bank said be careful what you presume. 70 of credit creation is happening by the banks. By simply lowering the cost of sovereign debt, mathematically you cannot get growth beyond this point. Lies the issue from mario draghi, the ecb, and the germans because theres the point you can do all you want with sovereign bond yields but you cannot move this mountain forward. You need to stimulate demand which even brings back in the french of of fiscal latitude. And the data is pointing to some sort of a move, isnt it . We have had data on inflation, pmi data, and gdp data as well. Pmi, purchasing managers december. Lowest since the company the country that implemented structural reform. It never feels that way. It doesnt seem like a recovery but youre not in the weres of despair where we a number of years ago. The data supports a very straightforward argument. Reform and you will move forward. That is factual. That is with the data is saying. Nothing can be argued with that. To that end, the germans will hold on. Aroundeverybody saying the possibility of the japanese loss. Priced its drop by 75 . No lending, property prices dumped him and never recovered. It took six years to get their act together. The fear is the ecb does not do enough. Not dobank of japan did enough. That is the risk from mario draghi. That is the challenge for his counterpoint around the European Central bank to agree, concur, and actually act. Otherwise, you run the risk of the 75 drop in tokyo property prices. We were talking to John Manchester later on today writing a new book on how to understand money, basically. One of the thing he talks about is abenomics. If you want Financial Professionals to turn up to an event that you are running, tell them it is about abenomics because everyone is obsessed with it because of this fear about europe turning into japan. Manus, thank you very much, full coverage of whats happening at the ecb and the bank of england noon london time. 45 minutes, the ecb. Then half past 1 00 p. M. , Mario Draghis press Conference Live and in full. Smartphones two new in a berlin yesterday including one with a wraparound screen. International correspondent hans nichols discovered smartphones are just the tip of the iceberg as far as the cuttingedge technology is. Good morning to you. Take us behind the scenes then. Think of this conference for all of the gadget you will take with you. Youll be doing all of the household chores that im sure you get out of doing. Heres what we had yesterday. 4 andg had the new note we are talking about connectivity in the home, watching ash washing machines, and increasingly interconnected world but as we talked to the managing partner about it, the challenge is getting everyone and all of these devices to speak a common language. A problem that we have as an industry is there is no common industry standard. The different appliances and different competitors cannot communicate with each other. Is the other aspect of that which is security. Security in your home. We have been talking about the iphone hacking. Does anyone really care about what you are doing with your roast . Listen to how the managing partner had to respond to that question. A topic. T is as you know, all of our telephones, ipads, computers, they are to be hacked. There is always somebody who wants to look into it. Always somebody whos trying to help you to prevent that. Can get at the crucial question, how quickly, how fully do you load your washing machine . Washinghave smart machines eventually adjust the water level. If that can be hacked, i will literally know your dirty laundry. Young ageed at a very not to overload the washing machine. From washing to geopolitics, hans, is the crisis affecting the conference at all . Absolutely. Look. We live in uncertain world. These are all Consumer Products and we need Consumer Confidence for that. We asked the panasonic ceo of europe just how ukraine is affecting overall sales and have a listen. In europe, we started to see some signs. Some Industries Like automotive or equipment start to show signs that it is starting to attack industries. These are not inexpensive items. You need Consumer Confidence for that. In some ways, everyone in berlin is looking at the nato summit in wales just like they are in kiev and moscow. Correspondental hans nichols there in berlin. Nine minutes past 6 00 a. M. Talking about action from the ecb. What kind of rhetoric we will get, details from mario draghi and hes team. Stay with us for that. Time for todays company news. Samson unveiled two new Samsung Notes are funds including one with the display extending. This comes as the topselling company tries to fend off apples push into large screen devices. There is inbuilt connectivity. Apple will unveil the new iphone a new wearablely device next week. Agreeing to sell the new yorkbased unit for 1. 24 billion acquired by the kate canadian company. It will be acquired by a canadian company. Company company told bloomberg in berlin that the of the jew political process has been limited. See a big slowdown in russia. Not even in ukraine. They were not really horrible and its still going ok. People whoalways be need to buy domestic appliances and there will always be a market for that. There will always be people who want to have different product, want to purchase the best available product, willing to spend the money on that. Will the ecb introduce further easing or will it wait to see if the stimulus package introduced in june works . For more head of todays Rate Decision, we are joined by jpmorgan head of Asset International rate strategy, john norman. Good morning. Youre being quite bold in your forecast today, boulder than the consensus. Tell our viewers what you are forecasting from the ecb today. I do not think our comments were being that bold. Only six out of the 50 are forecasting that. Thesem our standpoint, are pretty easy steps, conventional measures. They will probably also announced recasting of the program to make it cheaper. We think of these is Pretty Simple measures, things that have already been telegraphed or followed. Its in a different camp from qe which we think is off the table. Earth mess with Interest Rates that are so low anyway . Is it hard of trying to make this the targeted lending scheme in getting them to lend more . Is it hard trying to make that more attractive . The broader message is that the ecb is an and easing cycle. If they reinforce the measures they discussed with additional measures today, it just reiterates the point that we are not done yet with the easing and we will get people to focus on the qe possibility. Commitment to the abs program yet . Today the day that mario draghi will actually commit to the program . I think it is. Theyve been giving increasing amounts of information over the past couple meetings. Today is probably the day to put a fine point on it. I dont think this is a huge market mover. The size of this will be pretty small. Do a get rhetoric, commentary, anything around quantitative easing, what it might look like, and if it is coming . Do you think we will learn anything more on qe . We will probably learn something in the q and a. There will probably not be anything in the statement that they are willing to do something deeper than the mandate. He will be grilled on whether or not qe could run concurrent and i think there is quite a lot of stoke scope on the rhetorical side to advance this topic much more. What is the impact of all of this . What is the impact of all of this for Asset Classes today . If all we get is standard measures and some details on the program, this is a nonissue for the markets. They probably overshot a bit in terms of the yield in currency going down if thats all we will get on the measures. Where we could see it advance further, rally in bond, depreciation and the euro, is if draghi give signals about when qe could happen. If he says a could run in line then we will not have to see how they play out for the qe to be initiated, that is a market event. Some guests sitting in that chair have talked about how a weaker euro is the best gift mario draghi could receive right now away from Monetary Policy could enact. Playid the geopolitics into that at the moment . They were led on a merry dance by poroshenko, putin and it still remains a little unclear what exactly is happening on the ground in ukraine, just how closer to a ceasefire or not we are. If there is some sort of peace in ukraine, is that threatening to lift the euro a little bit . Maybe one cents but the reason i limit that is because i do not believe that is the crux of the growth or inflation issue in europe. If russia did not exist as a influence, it will not change it in a meaningful way. The russia issue is extremely important talking about Central European countries and currencies. Weak growth in europe is weak with or without russia. Bang theario draghi drum he kept on banging recently in jackson hole when he called on governments . He called on governments to take measures to restructure their economy, the fiscal, the monetary, and the structural. Hes becoming increasingly boko haram the issue of policy. Is becausenk it theyre running out of other peoples money to spend as we have heard before from other policymakers. Hes becoming increasingly different on the issue of policy. This is about opening the german purse. We know specifically from the germans they are not interested in doing that. More with john norman in just a moment joining us from jpmorgan. 6 19 a. M. Stay with us on countdown. Welcome back. This is countdown. Norman, with us, john head of fx strategy at jpmorgan. A Rate Decision is expected here. No change in Interest Rates seems to be the general consensus. What are you expecting . Changee looking for no as well. The bank of england has no pretext for changing rates are dialing up the rhetoric. The two members of the mpc her voted for a rate increase most recently, there will not be more joining the dissenting camp . Scotlandsue of stopping others or is it just a broader appreciation of the u. K. Economy . Its a broader appreciation whats been happening in the price front. Inflation is not moving up. Wages are definitely not moving up. They dont have the broader economic justification. Market participants, they are much more focused on scotland seeing the polls tightening and they realize this economically disruptive if the yes camp wins and its a game changer for the bank of england. Volatility for the sterling dollar. Is this the beginning of volatility around stirling ahead of the vote in a couple of weeks . Came intof investors september still long sterling believing the bank of england would be a first mover in terms of rate hikes and i also thought the referendum would be a bit of a nonissue. And they also thought the referendum would be a nonissue. The undecided camp is big enough to swing this. Sterling is being liquidated. How would you play it right now . Out right short sterling versus the dollar. We are basically in a bullish dollar environment because of whats happening on the u. S. Interest rate side. I think thats a lot cleaner than trying to do sterling versus the euro when its easing. Toyou think the threat disband the pound Monetary Union within the Monetary Union is credible . Are people trying to work out whether there is bluffing going on around us . Is that key for investors . Credible. 00 what is left of the United Kingdom will have the monopoly on the printing of sterling and provisioning sterling to the lender of last resort sort of facility. To keep be impossible another country, whether it is scotland or someone else, using. Terling it is extremely easy to prevent access to the bank of england as a lender of last resort. The rest of the u. K. Will not be tempted to call markets with something that might feel easier in the short term like preserving the union, the currency union. They will not be tempted to do that because they are too worried about what it might look like longer down the road . Will bember 19, there cooler heads prevailing laying out the timeline for negotiations and what issues will be dealt with and providing assurances to Financial Market participants, consumers and savers about this. If one part of the u. K. Voted to sever the union and the other part has said they are not providing the use of sterling as a currency or lender of last resort for the bank of england, then people need to factor in that we are going for a significant regime change. What you are seeing now involves nothing compared to what had happened on a yes vote. Geopolitical risks, the ruble the best performer yesterday on the shaky assumption we will get some sort of ceasefire. Would you buy the ruble now or not . I would not. Why not . Yesterdays action suggests we had a game change. I think this has many rounds to it potentially. Buyingetty chancy to be currencies related to the russian situation when it is still a very ok situation. Thank you for joining us. John norman, head of the u. S. Fx rate strategy at jpmorgan. Samsung makes a splash with the unveiling of two new galaxy note smartphones and a smart watch. Are these devices enough to scare rival apple . We take a look at whether the devices are industry Game Changers next. Welcome back. I am mark barton. Here is her fx check. Definitely worth looking towards the eurodollar again today inching toward the oneyear low. Has spoken to think mario draghi will get some sort of commitment to this abs program which would be a step up from last month when the ecb president said a final decision would depend on the action of many other actions. Jpmorgan said in their note yesterday the ecb could by as much as 40 million of a bs or varying risks of a note in return backed by limited to the newest to market over a threeyear time focusing on securities with the highest rating, so said the bank. Out of the 57 economists, 51 say the ecb will keep the key Interest Rate unchanged. Six say it will be cut right 10 in theoints to 0. 05 0. 2 . T rate lowered to the big decision 12 45 p. M. London time. As you can see, the euro just a tad lower against the dollar. Inching down towards the oneyear low. These other Bloomberg Top headlines this morning. Russian president Vladimir Putin will continue his shadow war until he has created quasistateless in ukraines easternmost region according to some of his current and former advisers. Potent and ukrainian president poroshenko have agreed to end more than five months of fighting. Limit thembling to potential losses from the cancellation of the contract to deliver warships to russia. This comes after the delivery of one was suspended. French president francois criticizing for going through when there are sanctions. She details her lines with president Francois Hollande and his alleged affair. Just one day after russian and ukrainian president s announced the out line of a peace plan. Lets go over to Ryan Chilcote at the resort. Its going to be a busy couple of days for the leaders. Theyre going to me meeting president poroshenko flying in today and there will be some discussion about how nato can help this nonnato country. Conversation on possible military assistance to ukraine, maybe a socalled coalition of the willing, if you remember that term, from the iraq war providing weapons maybe to iraq, something, definitely to watch. In addition to that, there will be a lot of decision about the Rapid Reaction force, the 4000 strong group of troops that nato intends to put together to deploy to Eastern Europe not on a constant basis but able to go there at the drop of a hat, a moments notice. That was ready will telegraph by the secretary general when he had his press conference on the eve of this summit. Finally, they will be talking about the Islamic State and what nato can do to counter it. Were thinking of reconnaissance and surveillance. Written is expected to float the idea of a training mission, nato to train theq Iraqi Military once again. Thats one of the ideas they will be discussing here. An awful lot on their plate. Us a sense with it will be discussing when it comes to ukraine. Its interesting. Obviously they will want to hear from president poroshenko what kind of peace plan is on the table. The russian president yesterday said he have one with seven points calling for the rebels to and for thefensive Ukrainian Military to pull out of the cities. It will be discussed on friday at a meeting of the socalled Contact Group between russia, ukraine, the rebels. Meanwhile, the European Union still has sanctions theyre looking to impose on russia on the table. The french president of course has put the sale of one warship to russia on hold. That is a sense of where that conversation is going to go today and tomorrow. Really looking to flesh out the situation on the ground and what nato can do to help the crane prevail in this conflict with those rebels and obviously as they see it, with russia. Its been quite an operation in there in south wales. Give us a sense of what has gone into this gathering. Its always extraordinary to watch the summit. Nato has 28 countries and it and you have all of the associated members, countries that want to be full members, they will all be here. You have six warships parked off the coast of south wales. 15,000 meals expected to be served over the next two days. Even do have a weapons display right here on the golf course of the celtic manor resort. I met the 18th hole and that is enough 35 off to my left. Nato announcer, two days of nato fanfare. It is a nato bonanaza. Not every day you see enough 35 f35 on the 18th hole. It sounds like they have plenty of purpose to discuss. Central bank focusing this morning with the latest decision from the bank of japan. David inglis in hong kong on more and what the bank of japan has said this morning and how it is playing out in the currency. Good morning. Japanese yen has not been doing a lot all morning. Weve been at this level for the most part. The bank of japan also alluding to that. Its been the same tune theyve been singing all year. I could have taken last months script and reread it and it would have been accurate. Steady as she goes as far as the economy is concerned despite these recent concerns we have and concerning consumption the bank of japan has come out and diluted to data as well. I think the key thing here is inflation. A appears to be rising as whole. This record amount of monetary easing that has been in place has been exerting its intended course. Stablent to achieve 2 inflation. The boj forecast or inflation strips out the effect of the attack here which we saw back in april which essentially pushed inflation above 3 . Again, another more aggressive proposal by one board member that was voted on again been called for more intensive measures over the next two years. Steady as she goes, anna. David, theres been a lot of focus on whether or not they decide to change the assets they purchased. A big player in the japanese bond markets. Thats why there is such a focus on it. Japanesefrom a former adviser on this. Whats being said . The advisor speaking was head ofy the former this Advisory Council that took a look at the pension fund and what reforms needed to be done. Theres an ongoing review taking at how the funds are actually allocated. You mention the majority of which has always been low risk, japanese government bonds. The reason this is important is that it is a massive amount of money, 1. 2 trillion. Theres a push to get a bigger percentage of the fund into equities. Whether it is in japan or outside. What mr. Ito said, the name of the former head, as the fund moves in that direction, the yen yen will likely depreciate further. That jpmorganing stanly thinks will happen as they reallocate back into risk. You see a change of allocations may lead the yen sixfold again. David ingles from hong kong. Why Financial Literacy is not businessmen and economists. We have that story next. Welcome back. 642 a. M. In london. Our next guest argues there is a vast gap between those who understand the language of finance and those who do not. Why do you think its important to broaden on how to talk about money . Market, peoplee in the business do not appreciate just how colossal not to be rude about it the level of ignorance is in the general public. I have a firstclass class degree from oxford. I was an editor on a political and military magazine and i did not know the difference between until ind monetary was was 50. I mustve heard them thousands of times in the news. It was not obvious or i would go to find out. There is the sense that insiders do not want outsiders to understand the level of finance and how to speak money. I think the way i put it was it almost does not matter what the reason was. People feel bamboozled, flummoxed, whether it is deliberate or not. Listening to guys talking about would thinkpan, you they are talking about laxatives. I wonder if you have been listening for any dreadful financial jargon. Ask people what they think about quantitative easing and they would say the grandmother used to recommend a bowl of programs. Prunes. What are some of your favorites that you have managed to debunk . I like the dark ones like dead cat bound. Factoids that you absolutely love because it answers the question where in north america do they use the euro . Actually french territory in canada. It is something so odd in america you pay for your brewski with a five euro note. You think we are experiencing a dead cat bounce in the u. K. . We could be moving into the low skilled economy which has different implications, doesnt it . My buddy who first said that phrase was talking about the u. K. Economy and thats when he was using about 18 months ago. Now it does not look like that. We preserved jobs in it looks like we engineered a slightly different thing. Towards low skill, low productivity, low wage. All of these things we do not want to be taking. Pretty scathing about George Osborne and the Coalition Government and the way they were behaving in trying to engineer a recovery. Likeou see anything you about the structure of the economy now . Everyone was talking about rebalancing and being in favor, its like being in favor of voc again. Oxygen. Praise motherhood and condemn the man eating shark. Its necessary but we do not seem to have had much. Much based on consumption and feeling chipper about their crisis. When the currency was looking low. It was good for exports. To shrink themg in absolute terms. We just have to grow faster. Meets, whatthe ecb is your number one oriana top of the list, the term you used when it comes to the eurozone what is your number one worry on top of the list . An apocalyptic war zone, but we could be looking at decades of flat or no growth. That is one thing that people in the markets understand what that means, alarming as it is. People outside understand the fault, chaos, greek exit. Maybe they dont know what it would be like, but the idea of a couple of decades of flat is a real worry. I hope they worry draghi will be addressing later. Have you thought about scotland, the risk and benefits to the rest of u. K. And scotland depending on the way that the goes the way that vote goes . Theres a particular Energy Around this issue. It is all on the yes side. Everyone in the world of culture and arts is on the yes side and its easier to want to say yes. I must admit, i was very strapped by the sense that you cannot tell if it is actual momentum in peoples heads. A yeshing you see had plastid. Yes plastered. I wanted is he a big fat note about london. Dont tell me what happens in the end. There is an alien of the action. If you are interested in london today, you have to be interested in the city. It is just so central to it. The subject you should be writing about is the one right under your nose. Then there is the big thing in london. Closingwhen i started between the insiders and outsiders trying to understand the language. We look back on the financial language of your book, you pose the question about bank of understanding, the nature of risk. You asked the question back then five or six years ago, do you get that it is better understood the nature of risk or not . There is the perennial risk of bank and uncertainty things that you can assign mathematical uncertainty to. Always the danger that you think you can model together. Model these huge Tectonic Forces at world that are very difficult to fit in then mathematicallybased paradigms. Im afraid it is built into the system, a gap with you can make mathematical patterns of and the stuff that just happens. John, thank you for joining us. John lanchester the author of how to speak money. Should england pack it in . If you watched the match against norway last night to me you know what were talking about. Its such a depressing subject. Newspapers are next. Welcome back. I mark barton. Stay young. I like that concept. It has a study and you love studies. Apparently what we all need to be doing is standing up more. It does something to the protective layer of your chromosomes one u. S. And then. It has all when you are sitting and it has to do with aging. Could sit down a lot you have premature aging. Generally, we should be getting up. Theou want to stay young, telegraph says to stand. David cameron and barack obama writing an opinion piece in the times today as nato gathers in south wales to talk about many items on the agenda. We will not be cowed by barbaric killers, is the headline, as they commit despicable murder. For must strengthen calling more financial contributions. In message we have heard from them of late. The cartoon is up there. I will annoy the cameraman by holding it up again. The cartoon is quite amusing, a bill arriving at the nato table and everyone is reaching for their wallet. Obama has his wallet open and they are scratching around for a few coins to throw in. Building societies and government to avoid the political instability in which threats to security flourish. On a lighter note, wayne rooney playing to the sky praying to the sky. Whenever he going to get an exciting english performance . Goal ofcored the only the game, the penalty. His 41st goal for england, fourth on the alltime list. Captain for the first time . Captain for the first time. Next week we have a massive game against switzerland. Apparently it was dire and only 50,000 fans turned up. It was the smallest ever attendance for an england game. When are you going to Start Playing football, england . Againstwe will draw switzerland. I think we will progress because the group is quite a good group. Theiry are known from hundred punditry. Just an hour away from the start of trading. We will take a break. World leaders arrive at a nato summit. Deflation dilemma. Taking center stage as investors wait to see if Central Banks will take more measures to boost economic growth. Samsung gets smarter. They launched the newest devices in berlin. Hello and welcome to countdown. It is almost 7 00. Lets get to the top stories. World leaders are gathered for a summit after russian and ukrainian president s announced the outline for a peace plan. Lets go to Ryan Chilcote. He is at the resort. It is going to be a busy couple of days for the leaders in newport. Certainly. They will meet poroshenko today and they will discuss how to help a nonnato country. Look for a coalition of the willing to provide military assistance. That is not something the alliance would do. Agreeing toountries send weapons to the ukraine. There is one thing where there inms to be more unanimity assisting countries in Eastern Europe and the baltics. They were telegraphed by the secretarygeneral going into this and they want to have a force of troops to be deployed. They would not be based in Eastern Europe. Deal struck a deal in 97. They. Short of that. They talked about the Islamic State and what can be done to counter the Islamic State. A very busy schedule. That is a busy schedule that will be talking about. Give us a sense of what will be discussed. We heard from them yesterday and it does not seem clear. Surprising if they did ask for clarification of what the peace plan Vladimir Putin says he has. He talked about it on a trip to mongolia and stole the headlines. Says heian president has agreed with the ukrainian president and they will discuss it in belarus. They want to hear more about it. You can expect Union Leaders here to be discussing sanctions that are on the table to be imposed against russia as early as this week. Im sure it is a conversation that will take place and the president is likely to get path on the back for the decision to hold off on a sale of warships to russia. France was under pressure to not go ahead with the sale of the helicopter carriers. They are for helicopters. The foreign minister thanked the french are making the decision. And it is athrough fastmoving situation. In souththe operation wales. Military equipment on a golf course. Day that you see a fighter jet on the golf course. This is a bonanza. The meetings only happen once every two years and the last one was in chicago. About 60 World Leaders. Has 28 Member States and have lots of associated members and countries that would like to be part. They were invited. Craftsng like six war are parked off the coast. In on ad obama fly funkylooking helicopter. 15,000 meals will be served between the various retinal use of the World Leaders. Vague and fit is always a big operation. I think of the british have been careful to get it together because it is an honor to host this. At the end of the day, were talking about is the United States and turkey. Maybethe u. K. France and germany. This is the british Prime Minister flying out the red carpet for obama. Thank you. David cameron and obama started by talking about the cold war ending. Margaret thatcher and bush were in power. About the talk figures in the bloomberg terminal. We had the biggest increase in more than a year. It contributed to a contraction of the economy. The orders rose and they ghted they slighted they slid the previous month. I was seeing a pickup in the Third Quarter . Something to think about today. Talking about the ecb and the speech in jackson hole jewel did the market when they said they would use all available instruments needed to ensure price stability. First forced to take measures . What the introduction quite the introduction. What is realistic . Seizing a moment of expectation. Bought yields are declining and do not lose the momentum that you have instilled in the markets. Was withsation lookgan and lets have a at the range of options out there for action. The mark where they cut the refinancing rate. The lower bound of the lower bound. 10 business points off of Interest Rates. That would be a bit of a shock. There was nothing at all. That might happen. The smallscale. Entree to say that you have blackrock on board and here is what we are going to do with the assetbacked securities market. They finetuned the lending. It is free, more or less. It is not free enough and they. Re taking another. 1 off free takes on a whole new meaning for the Banking System and the point is that there is a great deal of expectation from the euro moving lower and the market is utterly short. They are a bellwether. Theyre one of the few who are the most accurate this year. To. Bring it down thank goodness for a quote from somebody else. It means im not making it up. The market does not like it when i make it up or come up with my own interpretation. A much greater mind than mind mine. The credit creation is happening by bank loans. You cannot get much growth out of that. Basically, Structural Reforms are the message. You can only do so much with Monetary Policy. There is still a bit of time to go and why are you laughing . More than a couple. You are referring to that. We can all learn something from that. Is on the move and the body yields are on the move. Seize the moment. Shakespearean. Noon. Uned today at we get the rates. 45 minutes later, it is the return of the ecb and we will bring you the news Conference Live and in full. On samsung stole the show with the wraparound screen. Hans nichols discovered that smartphones are the tip of the iceberg. A good morning to you. Take us behind the scenes. Behind the scenes, there are devices that you may not even know that you need, like a vacuum cleaner. Samsung steal the show with the phones and with watches. Emailsmake calls and from. Here is the challenge for the industry. You talk about a common language and the industry has not settled on a common language for all of these devices to interact with each other. Problem is that there is no common standard and the different appliances of different competitors cannot communicate with each other. Partnerwas a managing for the Home Appliance company. There is a question with security and there is the hacking scandal. To question is what they do get the devices. It is a topic. , all of our and there are hacked is always somebody who wants to and is trying to prevent that. From thesed hear companies that it should be the engineers to come up with defenses. Before you get your home connected, you want to have some outside. They need engineers. And events a cloud in ukraine. Absolutely. You will see these televisions themou can put off buying and sometimes you cannot. Confidence consumer and it is weighing on people here. It is what is going to happen and hee european economy was not all that optimistic. Signs inope, we see some industries. Signs that start to affect industries. We will be looking at trying to test some of these objects and appliances. They have machines and the water adjusts to how much you put in. Clearly, it is a problem in this household. Welittle to you know that have been discussing the chore of choice. Is the domestic chore of choice . It is easy. Loading the dishwasher and unloading the dishwasher. You do not have to deal with the kids. That is the easy one. The dishwasher is a clinical operation. It is easy. Mine is taking it out. I do not mind the washing. As fascinating as the conversation is how long should a grown man take watch mark as illuminating as this is, lets take a break. Coming up, not more about this conversation. Something worthy. This after the break. Worldly theres World Leaders gather and mario draghi prepares for a central bank meeting. We take a look at Investment Strategy and we are joined by the investment director. Good morning. You use the term of russians facing investment. What are they and have they been affected by the ukraine . One that owns warehouses outside of moscow and it is doing fantastically well until Vladimir Putin scrapped my policy. Always look for is investment and you have something where demand its supply in the moscow warehousing markets. The values of yields are 11. 5 . Every year, the company buys back shares and yields. It is a seethrough basis. The other one is an exhibition space. Are you rethinking . There is always something, isnt there . There is a book called 100 years of solitude and it is all about the meaning of life. Guyget to the end and the is turning the pages because he thinks he has the answer and it has disappeared. Analyze, yound say, you have a Business Model you believe in and i am going to vacuum. People are dying, etc. We have been near before and with a look at the dynamics. If you have characteristics where demand its and suppliers are. R, you hope that things are going to be all right. Hope is not a basis for investment strategies. Things,from russian what are you thinking about buying more of . Because interesting people often stop by my desk and say, what kind of share are you looking for . Looking for a share where there is pentup demand and the cost is relatively low because theres is not a lot of people involved in the market. I want a rising stream of dividends from earnings and a pe of lessee than 10. Sentiment dominates stocks at times and we have seen that in the Interest Rates. And youot related cannot get a better sector. It is not going to be attacked by the internet. Live in a virtual home. No. There used to be people competing and a pentup demand. Will take a break and have more thoughts when you get back. Stay with us. Welcome back. Am mark barton the ecb. What should they do . Want to bed not against mario on the world poker tour. The skype has no cards to play with. He has germans holding onto aces. And hek at his hands comes out and says that he will do whatever it takes and he has in thehalf of the bonds bloomberg terminals. He has not had to buy one. The brits have ponied up billions. God knows what the americans have invested. They will do whatever it takes. He has a situation where deflation is on the table and deflation, when you are playing poker, is hard. Inflation calls his bluff. What he does is that the germans have two choices. Relaxing. France and more spending. Do we believe that everyone should have sensible fiscal policies and regimes . What you think . Again, the deflation is out of there. Perhaps ther table, various parties in westminster. What about scotland . I was at a dinner and we talked about it. This guy has played. You look at this in the first debate. Someone said to act like a complete idiot at the first debate and someone asked him about what would happen if aliens landed. Then, he came out guns a blazing to the second. That is what he is done. You think . What implications will let have for economics in both countries . Well, it will lead to uncertainty and you think . Perhaps. A four scale currency crisis . Fullscale currency crisis . Companies will have to sit down and rational thinking will have to happen. When you are investing, when something has momentum and it pounds, it is hard to stop on the tail end of that. You look at the way he has played the campaign and the votes. You think about this and you have a chance of winning. Thank you very much. Reat to hear coming up, more on the ceasefire confusion as the ukraine and russia struggled to find a middle ground. That is next on countdown. Welcome back. I am mark barton. Lower against the dollar. We had the decision a little later. The policymakers. They say that the ecb will therk on bonds under strategy this year or next. The Technical Analyst out there has a relative strength index versus the dollar. It is holding for a 10th day below the level and signals to traders to reverse course. We got the report today on employment. It added to the economy for the second straight month. That, the euro is lower. These of the Bloomberg Top headlines this hour. Will in thein eastern most regions. This is according to foreign advisers. Vladimir putin and the president have agreed to end more than five months of fighting. Scrambling to limit the losses of a contract to deliver warships to russia. The front president has been criticized the french president has been criticized in the past. A new book by the former first lady is scheduled for release today and it details her life Francois Hollande and his affair. Ukraine and russia peace offer announcement. Talksll the rocky peace we are joined by charles. Good morning. Make some amends of the ceasefire announcement. What was it all about . It was a tricky process. Announced that there was an unconditional peace offer on the said and Vladimir Putin that we are not waging war on you. Hours, they got the offer of a sevenpoint plan from russia for a complete ceasefire between the countries. A little bit of mayhem in the beginning and a concrete proposal. What chance does it have a being adopted . We think they are going to say no to the offer for three reasons. The offer seeks an unconditional arrender from the ukraine and withdrawal from the eastern provinces. Just revert back . Agenda is that Vladimir Putin is asking for the ukraine to throw open the borders to aid offers. Is biggest Sticking Point tightening down the borders. We think it is unacceptable. It may be valid for poroshenko to turn down the proposal. Surely, Vladimir Putin gained the upper hand. Is this an opportunity for peace . Can you reject it . No, he gives Vladimir Putin the opportunity to say that he has offered peace and the ukrainians have said no. This is a clever piece of manipulation from Vladimir Putin and you notice that he has done it on the eve of the summit. The diplomats and the leaders gather in newport today to think about sanctions and retaliation. Plan thathave a peace they need to discuss. Should the ukrainian Response Plan . Senting a peace here is our offering. There is the possibility of a counteroffer and there has been an important change in the past days. There is a large presence of russian fighters and material in the ukraine and the tide begins to return away from the ukrainians. The positionning considerably and is only a matter of time it is only a matter of time before they have to consider the offer more seriously. You have a matter in south wells. Do they need to beef up the military profile in these nations . It will be interesting to see if they can agree on that. There is not harmony among should or where they should not be putting troops. We will see if they come out with a unified statement and they interpret the crisis in a severe and closer to home fashion. Those leaders are further west. Will we see more money as a result of calls from obama and cameron . They say they are putting in a lot of money and that the rest of europe needs to pay up. The crisis has given nato a fresh reason for being and there will be more activity and money. You see the creation of Reaction Forces of troops and it is part of a buildup and bolstering of nato in response. Vladimir putin gained the upper hand and the separatist forces. Where are we heading . It seems as if we are heading towards a resolution of some sort. Mi jumping the gun . Way of beinga undone if they are made to early. Now, youve a piece of paper on the table and there is something to talk about. A dialogue towards peace has been done. It is a little bit different over the next few days and weeks. It looks like the ukraine has little choice but to head towards a negotiation. How do they play into here . Start up again next week in a couple of days and russia has extended a 100 discount to the ukraine that brings the price closer to what other countries who by ukrainian gas pay. At least a gap of 100 between what the ukraine wants to pay. Debt that the a ukraine owes to russia for gas that it has used. Tense negotiations are coming up. Thank you for joining us today. Charles pack. The samsung fly in the battle for electronics. Flag in the battle for electronics. They have a Virtual Reality headset. The south korean firm attacks on all fronts. Are any new products likely to make an impact . We spoke to an analyst at the trade show in berlin. I think this is nice and interesting. It is not something that people need. That six not forget inches has not been successful in the market. That is the mainstream, really. I did nothing the product we have today is going to be a game changer i do not think the product that we have seen today is going to be a game changer. There isk that definitely an opportunity for wearables that is going to grow. We have seen the numbers growing. Key and wet is the have not seen it yet. It is a different product than google glass. It is not competition to that. It is different. It is something that is a little more towards the gaming and entertainment consumer. This is a consumer product. Google glass is a development product. In this sense, it has markets already there and limited. The overall strategy shows what samsung is after. Wearablesatform with to be built out and they continue to build on that. The samsung shares are higher and apple shares have declined. The next relevant to conversation when we talk about technology stocks. After the break. We will talk about technology and what is driving the trading day ahead, as well. Welcome back. It is 7 43 in london. There is confusion over the ceasefire and the ukraine. We are here to make some sense of it. Here is what happen with technology. It has been interesting. The ceasefire. What ceasefire . We cannot weigh in. We have an idea for a seven step half. We have to put this in perspective. Valuesves us equity around the world. It is near a record high. We are still very close to the high on the s p 500. Interesting things happen in the United States because of apple and the shows you the power of the most Viable Company in the world. The biggest decline in apple stocks since january. As their profit ahead . They had the calls and we expect and mobileble device payment systems. It will be interesting to see how that shapes the landscape. A new unit. Nveiled the samsung galaxy. The screen beds around bends around. We can take a group selfie. Our lives are complete. Holder toeone with a take Group Selfies at a distance. Ive seen that. Yeah. It is about picking your best angle. Offre seeing apple fall because the samsung competition and the smartphones. Even the Virtual Reality headset. They profited a bit from that. It still continues. We know that individual accounts of celebrities were hacked and there is concerns about the data and security. That managed to drag down the nasdaq the most in a month. That is how valuable as bowl apple is. That tech isting the worst performer. At a 500 stocks, apple was the second worst and it was a bad day. The european markets closed higher yesterday and the u. S. Did not have a good day. In the end, it was negative. This is a stock and focus this morning. It is creeping in to the green. The bank of england, of course. We have Central Banks all over the place. That is a stock to keep the ion. Willing. A wooing. Point 3re gaining one billion in cash and it will go to the shareholders. The german builder. Thank you. Those expecting actions from the ecb are likely to be disappointed, according to our next guest. Welcome back. It is 7 50. Noises from michael. He joins us to have a look at the day ahead from the themes in the last year. We have geopolitics in south wales and we have Central Banks. Where is your focus for the day . Verym not expecting it much and there are expectations that we will see further in policy measures put in place. There is another 10 basis points or an acidbacked security program. Do you think it will ever be implemented . I think it is a massive bluff. Dividendss extracted from the markets by talking talk without walking walk. There is a question of legality and we have a countries. Hback from germany is at the top of the list. And radical policy measures im not sure that we will ever get that. Michael. Im going crazy. The greatest poker player in the world. Played. That is right. He stabilized the bond markets and we are rough game up lets talk about the bank of england meeting today to decide Interest Rate. You do not expect any change their. There. And maybe earlier. You have turnover over the last few months and the new members coming in are going to take a while to settle in. Desk may not gain more than the dissenters i think that we may not gain more than the dissenters we saw last time around. I think the wild card in all of this is scottish independence. Yes. It was talked about on the set more than any other. The it haso moved to the front of peoples minds. It would not surprise me. It really would not. I was on the set two months ago and i spent some time in scotland. That there feeling is so much pressure on scottish voters. It almost feels like bullying for england. Stuff the lot of you and i am going to vote for independence. It is a thing. Nothing changes on the day of the vote, is what we have been told by several. Independence would kick in, if voted for. Intervening time question mark the markets dont like uncertainty and i guess we will see weakness in the sterling continued. The uncertainty has been shrugged off in all regards, hasnt it question mark it has. Yeah. We talk about risk. Equities retraced. Markets are connected to rusher. Market snap back and we still have this. But along with that continue for . How long will that continue for . I wrote a piece. How to speak money. A phrase. What send it to him to include in the next edition. A time for declines. September is more problematic for equities. You have october crashes and headlines. September is a week or month on average for equities. Thank you for joining us. It is good to get your thoughts. The bank of england is on the agenda. Thank you very much. Person presents on the move. It is not me. It is not that special. You are making me blush the same color of my dress. Serious topics front and center during on the move. I ame to on the move anna edwards. And climb to the highest in nearly two months yesterday. Investors wait mary o draghis Mario Draghis next move. Mario has promised many things, saving the euro was one of them, now it could be that the European Central bank has to put its hand quite literally in its pocket. A first. Be we wait for the press conference later today. Lets go to hans. Manus, i have gone technical. I will be talking about all the gears and god gets gadgets here in berlin. Changes. Rgy how efficient will products be in your home, will they communicate and how expensive will that bill ultimately be . Auntie to focus in on this morning. Plenty to focus in on this morning. Lets check in with caroline. Caution ahead of a central bank fury. Really kicking things off at halftime. Later today we have the bank of england and