Energy companies are preparing to pull back on Capital Expenditures, what you have is profits that beat the adjusted numbers and rhyme will take you through the nuances. Capital expenditure is down and it is dealing with a new reality of lower prices. What is next is profits dropping. Well, here, you have a dividend that missed and there was six or 7 billion in expenditure and they had it in the Fourth Quarter with a nearly 9 billion and you are seeing a Capital Expenditure number and it comes out with a fourthquarter profit rising and the net income up. They raised capital and it was up 43 in the Fourth Quarter. It would continue longer than anticipated. If you took protection and the banks stole it, you did not needed and 21 billion pounds was put back into the u. K. Now, he wanted a weaker currency and he got it a month late. Kit juckes says you can see the aussie dollar down with the excuse to sell the currency. A bit of a trajectory there. Thank you very much. Big moves in the market this morning. The equities are a little higher. Greece backed down and the tone seems to be changing. Lets discuss the debt proposals. That is berlin. We are joined by hans nichols. What exactly is the plan . A lot of reports. What we know is the presentation with 100 people and here is the proposal swapping existing debt owned by the ecb for the new securities and having that link to longer term growth inside of greece. It trickles out and it would avoid the haircut. Instead, you have them looking to restructure the ecb and leave the imf and private sector debt loan. There is a specific about how the restructuring will take place. The greek government will present the plan by the end of the month. They still want to defeat get to the surplus on the deficit after they pay their debt. Remember that the creditors want to see that. We do not know if there are plans to visit berlin and the Prime Minister enrollment today. They will be an brussels later. The Monetary Policy if they exit the Bailout Program has anything changed . What we got from the briefing is that they want to have a bridge financing and a fourmonth reprieve. In that time, they want 1. 9 billion and they calculate that is the amount of money the ecb has made from the 2010 bailout. It is still not clear if they would get access to the windows with the bailout at the end of the month. Osborne sounded a note of concern about what could be done with the broader you cherry economy with similar in berlin. It was a complex story to say the least. We are joined by edmund, the Global Equity fund manager. It is great to have you with us. Lets do this. Do it have to . Im going to pay you back interest and you say to me there is a problem. I am struggling. Two mailings the payments and the pay rise . Did you not just write down the value of the original agreement . Clearly. I make the contingent promise and it will only be when the conditions are satisfied. For you, it is when you get the money back. Lets cut through the noise. They agreed to this and the theoretical plan. If they agree to the debt swap did they just take a haircut . Of course. This is not the first time this has happened. Think about this. They have been Good Students and the efforts they made with restructuring the economy and wage cuts, raising taxes, unemployment, it is more than any country. Aside from the debt burden, they only spending what they receive in tax and that is a minor miracle. The greeks have been through pain, as have the portuguese and irish. Wouldnt you put your hand up and say, you know what, i want some of this. They are on the road to sustainability. The bond markets said, please buy the bonds. The answer is no. It is too early in my view. Has it changed the way you think about it . I am more bullish about the eurozone and i think the sharp collapse in the euro will continue. I think the trend is still down for the next year or so. It feeds into Economic Growth and we should see the benefits Going Forward. I would say it will have equities over the u. S. We will talk more after the break and speak more to a man who has a take on the Current Situation in 20 minutes. For now, i want to check in on profit the client. They are trading higher on profits and that was a big beat. We will talk the stock down and plenty to discuss. Welcome back. It was a little bit higher this morning. We are back to the highs not seen since 2014 and profits were down. The net profit was a big beat and Ryan Chilcote is at headquarters and will speak to bob dudley. What are the highlights here. Here . That is what the stock was up as much as by this morning and the most in more than a year. That is good news. The reason for it is worth highlighting. Some people thought bp would get no dividends and they got half a billion a lot better than the none that some were anticipating. There is a wildcard in the future. The picture Going Forward is not as right as the earnings. Bob dudley says that he expects the low oil prices to persist in the near and median term. So, they have reduced their spending. We have just lost the line. That is coming up in about an hour. It is very cold. The Global Equity fund asset management. Bp, they see the First Quarter production and it goes to show. Companies are managing declines and they are not investing enough. They are cutting cap ask. It will not be sustainable and they will be running down the reserves will stop there is a vague factor and how much will they pay . It could become a take over target and that sounds ridiculous. There is a drop in the price. Could bp really be taking over . Why not. It is 30 lower and exxon mobil ended up being an obvious name. Maybe they feel the worst is behind it and they can get organizations and cut out some fat to make more profit. There are a lot of people who are not interested in the bp stock. Is that a benefit for them . It would be. In the longterm, the problem is that it gets taken over and the dividend sustainability comes into question. It will come into question with oil prices staying at 50. I do not think it will. Lets talk about what you have been doing. You look at the last months and you see some of the pieces. Have you . I have. I have been picking up certain areas. Not so much bp, shell, and exxon. It has been absolutely decimated. You look and see producers. And you are getting fantastic value. There is a lot of pain to come. How long are you going to hold it . We have seen sharp drop sharp drops and oil prices are way higher. Im thinking ok we are going to get a lot of supply destruction and Capital Exchange is getting Capital Expenditure is getting slashed and it comes into the hands of oil prices. It will be great news for the stocks when they do. Stay there and we will talk Monetary Policy. The plunge off of the rate cut with the record low. The aussie dollar is down. And there is so much to discuss. Welcome back to on the move. Monetary easing is on the move. They cut the key rate by 25 basis points. And, for more, were joined by the bigger picture. Simply put, australia has been the lucky country and they had no choice. You look at the australian economy and it has been the beneficiary and we saw the inflation rate with reasons for holding that were not compelling. The aussie dollar is down and would be a sign of relief for some exporters. You have a lack of explosive Growth Credit and the country has joined the mining boom. That has happened and quite frankly, the soft underbelly has been exposed. Lets talk about the impact and the end of the super commodity cycle. Iron ore and austria as gotten battered. It suggests the world cup chances are bleak. Im keen on rugby and it is leak in a sense. There has been a laziness at the policy level of the official government that should be operating fiscal levers. What you are doing is demand and you talk about iron ore and the volumes. Selling it is 75 a time. It is quite stagnant. The big release is coming off of the aussie dollar. Chinese steel mills are striking u. S. Dollars. It has dropped quite significantly. And it is dependent on iron ore and the likes of crude with gas. It is no different from any commoditybased currency. Great to have you. Always a pleasure. Great to see you. We talk more about Monetary Policy and easing policy. Australia is just the latest. Currency is overvalued and everybody feels that way. Look at that. That is a stronger dollar. And it was a big trade this year. Can that get can that continue . Yes and no. If you look at the dollar index it is not near the highs of several years ago. Momentum against momentum in the fx market. Everybody is bullish and with the position on one side of the trade it makes people worry and flip back. Gold is moving. People are trying to mount a contrary and rally. There was an early ugly japanese bond reduction and you are seeing the german 10 year. What is going on and how difficult is a make your life when you try to get returns . And make it difficult for me and for anyone who is a mortgage holder. This is a disaster. Where do you find income . People get more desperate and take more risks to get incomes. That is a wrap for fixed income. They give for joining us. Up next, we speak to the man who led greece negotiations. We are minutes away from the stock market open. All of that after the break. We have the markets and the dax is up 15 . So much more to discuss. We will talk about greece. Welcome back. I am jon ferro from the bloomberg headquarters and this is the equity trading session. We are seeing decent gains in europe and im looking at the ftse 100 this morning with the dax up and lets see if that has opened up . There we go. We are up at 4. 64 percent. They seemingly appeared to retreat and greece is the big subject. Joining us from the office is the man who led the negotiations on the greek debt restructuring deal in 2012. Lets welcome the former head of International Finance and the executive financier. Fantastic timing. You were around the table in 2012 and negotiating. Did you think we would be where we are now three years later . I saw a risk about where we are because it was rather clear the content of the adjustment was poorly designed and we wiped out over 100 billion euro and restructured another 100 billion. The restructuring will not solve the problem. They need investment and the problem is that the focus was never the intention of those designing the program. The question is what was on the table. It sounds like it was not any different from writing down the value. It is a bit early and i am not sure that they have details. We did propose something very similar to what they are talking about and we had a gdp link that enabled the creditors to gain some potential upside if growth resumes. If my recollection is collect correct, it goes through the end of the decade and i think it makes sense to have. You have the chi issue of if there is much difference. I think what greece needs is a modest amount of easing of the pressure on debt service and some stretch out of the restructuring terms. They do not need to insist creditors undergo a major haircut. They need to focus on what will build confidence and revitalize some Structural Reforms that have been pursued and have lagged because of the lack of Political Support through the constant rounds of contraction. Something came up that greece is insolvent and it was treated as a the quiddity problem. The minister essentially admitted that the country was insulted. You know, i have been in sovereign debt for decades and have never found the distinction between insolvency and liquidity to be useful. What appears to be insolvent one day may not be liquid the next day and it depends on growth. We wiped out over 100 billion euros in debt and this did not solve the overhang because of the growth with the debt to gdp ratios that were higher than before we wiped out the debt. I think that, rather than focus on the distinction or debated it is better to focus on what should be the focus of the Economic Reform Program that allows space and gives confidence to the people of greece. In past decades, the inefficiency and the controlled sectors in the economy were going to be changed and altered. I would stress the importance of supporting the Banking Sector. There has been a lot said about this and this is a generally wellmanaged Banking Sector that was victimized by the management of the government and it deserves support from the central bank and the ecb. This will be a big theme as the end of the much the end of the month approaches. There is a threat to turn off liquidity they do not agree to a bailout package. If you look at the sector, can the ecb really do that . It is a good question and i do not focus on the legal dimensions of this. I leave this to the lawyers and i think the ecb is understandably concerned about collateral and cannot afford a new Courageous Program on quantitative easing to undermine the banks or facilitate a withdrawal of deposits that could undermine the Greek Economy and put the economy at risk. I think there will be a balanced approach that will enable it to support greece as the government seeks a for reform with creditors. You look at the greek Banking System in 2012. Are we underestimated underestimating the risk . Is it small that it is insignificant to europe . There is a potential risk that this could contaminate the great contagion and i am amused by the small size of the economy and suggest that this has very little Systemic Risk. We learned that none of us can anticipate where the risk comes from. It is clear that the greek Banking System is so vital to the economy and the economy is vital to the integrity of the eurozone. The greek Banking System is important and the quality of management in the Banking System before the crisis was high by european standards and they had been caught up in the maelstrom of the sovereign debt finding themselves in a weaker position. They have been recapitalized since 2012 and the Balance Sheet improved. If we can create conditions for the forecast in 2015, the Banking System can gradually work its way back. It is important to recognize this poses a Systemic Risk to the entire European Community and the economy. Beyond the Banking Sector, you look at the ireland portugal, spain, and italy. Why shouldnt everyone else get the same treatment . A good question. The questions are circulating these days and the reality is that none of the other economies have a problem that is the scale of greece. None of them have economies that are so inefficient and distorted by decades of clientele. I think that all of these have turned a corner in the programs and i look for a solution that undermines confidence and investment, rather than building investment. That is to risks that we have talked about. That holds 80 of the debt. People look at the bottom markets and greece appears to step back. They have pushed it a lot higher and 80 of greek debt in that Banking Sector. It also undermines the risk that greece could dominate. Greece affects the european bond markets and it is true that, as a result of the restructuring they restructured three quarters of private debt and two thirds of the total that. The bulk is held by the imf. This is why they have to take a balanced approach and reason with them to find a way forward with a growthoriented program. They should not discount or forget that the key to the Economic Future is restoring credibility and access. This has to do with european governments who are the creditors of greece. This is not what anyone wants. A real privilege and a pleasure to have you on this morning. Thank you very much. That is the greek situation. Lets get a check on the stock. There we are. Calling for a debt writedown. We dropped back below and coming up, we will talk european equities versus u. S. Stocks. We will do that after the break. Stay with us. Welcome back. Lets talk equities. Not a pretty january. Please stoxx 600 had their best january since 1989. Lets welcome the portfolio manager. Great having you this morning. The u. S. Economy is strong. Europe, not so. You look at the reverse and we are looking at the shortterm. We tend to look at the longer term and we think the u. S. Economy is in good shape. There are lots of factors driving the economy and it is very dynamic with stable economic and monetary systems with populations growing. Immigrants come all over the world and lots of the night states of america will be Energy Independent in the next two years. It will drive u. S. Stock markets. We like the markets as an asset class. The drop will not put a roadblock in efforts to go there . There is a bit of a pothole and some of the companies are coming in below expectations with the drop in energy prices. We see the United States of america the coming Energy Independent and we think it will be positive with a bit of a price. We like to focus in on companies that have a catalyst and we focus in on an investment philosophy with a catalyst. We look for companies that trade at a nice discount and what the informed industrials pay. We want to have a catalyst and something that will drive shareholder value. Companies tend to be in the small and mid space and we like to focus in on those opportunities. Ahead of the curve here and there is a lot of talk about movement in the United States. Is this something you are taking a look at . We see consolidation happening and the consolidation is a trend we are going to see more of. We like to get in front of those and we see that as a driver Going Forward in the stock market. You call this the fifth wave. You look at the deal activity and we think we have gone through four waves of meaningful deal activity and we are in the beginning stages of the fifth wave of deal activity. There are a number of reasons why the deal activity will pick up. Corporate america has a strong Balance Sheet and the cash has earned almost nothing. It needs to be put to work and the u. S. Economy has done well with confidence rising. Ceos are ready to do deals. An awful lot of money has been raised by private equity funds and by activists. They like to go and do deals and things. We see a lot of catalysts that will put cash to work with confidence management teams and funds. A lot of people look at the consolidation and it has not been a vote for growth. That does not point to confidence about growth or the u. S. Economy. There has been tax inversions in the United States of america and you are starting to see a pickup with energy and we think we are in the early stages of this. With think we will see more that is positive for industry and shareholder value. How much of it is dependent on low rates . The rates are low right now and will stay low for the near term. We think the management teams will want to capitalize on that and there is deal activity Going Forward. Not just deal activity. You see buybacks and dividends a lot and yesterday, as well as up how much of that has been a big theme . You see the Dividend Increase and the payout ratio is still low by the historical standards. It is in the 34 30 5 rate. 35 rate. There is a low payout ratio and you see the increase. It has been a little factor and not a big factor. We think more of the cash flow goes to activity. Before we go to the break, with the yield is that another reason to buy stocks . The rates below and you can buy many stocks and assets with a dividend yield that should grow over time and the earnings should grow over time. We think the stock market is attractive and it is good. Bullish on equities. We had to the break and check in on how oil is trading a little higher today. Brent is up 56 dollars a barrel. Keep a close eye on the bob dudley interview in a few minutes. On the move is back. Welcome back to on the move. The equity market trading day. That is almost it for on the move. We are joined by guy johnson. That is a way of looking at it. It depends on what you thought the plan was. We are getting multiple moves and this is one of the bigger moves they are making this morning. The equities are of pretty sharply and i agree if you look at the longer term. It is up again this morning and the markets have come down a little bit. Where are we at with 30 nations doing Monetary Policy . The rates are down under. We have the cfo out of denmark and a real interesting conversation to see how his view of the world changes with the negative rate story evolving in that country in a world where the 10 years are going negative. We are getting to a place where they could be paying mortgage holders. I did not know. Whether the issue debt or other negative rates other banks are saying no. We are up now. Look at the chances and it is stunning. What is bob dudley going to make of that . I do not know. We will speak to Ryan Chilcote. Before ago, we had to check in at the equity market. The dax is up. Call it a greeceinduced rally. The bps cash crunch. They enjoy exxon. We will speak to bps ceo. Greeces debt plan. They played to exchange a debt in their latest bid to seal a deal. Rates down under. Australia cuts is benchmark to 2. 25 . Quickly good morning. You are watching the pulse.