Transcripts For BLOOMBERG The Pulse 20140627

I am guy johnson. And i am Olivia Sterns. Giants arete, how ad sinking their teeth into the suarez incident. And alibaba picks its new picks the New York Stock Exchange to host its ipo. The name, baba. The eu has signed a trade deal with the ukraine. That country is very much now at risk of seeing retaliation from russia. Hans nichols is at that you summit in brussels, where leaders are meeting this morning. First, the details of the deal. Well, this is an association agreement, which basically lois lowers tariffs between 300, angola, moldova, and ukraine. This is the approximate cause which irritated russia and started this entire crisis. Here is what happens next. One, we wait for a response from moscow. Poroshenko has that he plans to ratify this as soon as possible. Once it is ratified, you start harmonizing all of the different agreements and languages. What does this do to a potential . Xtension for a ceasefire the ceasefire expires later tonight. We must say it what it has not been much of a ceasefire. Angela merkel acknowledged that. About the divisions between the u. S. And the eu in terms of a third round of sanctions. But there is another wrinkle. Eu, the within the divisions seem to be that germany is pushing stronger for preparing additional sanctions. Italy is on the other side. They want to put the brakes on further sanctions. It looks less likely that we will have more sanctions coming out of this. We have to see what will happen from moscows response. Also, what is the response of the ground in ukraine . Will the ceasefire be extended for additional days . It also looks like it is shaping up to be something of a coronation. What is the latest you are hearing on juncker . Aght coronation coronation, but with plenty of intrigue and backstabbing. Prime minister rajoy has said that he is basically through. There is not much opposition. It looks like cameron will be increasingly alone. Losts lost holland, swedish support. The question is, at what damage . The british papers are full of some personal charges that juncker, and this was raised at the meeting, that he has problems perhaps with drinking. Perhaps he is not the right man for this. What is interesting about these allegations, and they are just allegations, is that they mark a shift in tone from the united kingdom. Before, it was always about the policy of having a federalist, a strong eu advocate in the job. Now it is getting a little personal. We will see if there is much space for David Cameron to climb down from this position. Angela merkel, of course, wants to offer policy concessions. That may be how the conversation will turn, away from personality. When you are talking about someones drinking, hard to make a pivot that quickly. It certainly is. It will be interesting to see if they Start Talking a little bit about the makeup of the theission and which job u. K. Gets. That will be fascinating to watch in the next few days. Thank you very much indeed. Top companyn to our story now. Barclays back in the spotlight today. The ceo is promising an urgent investigation after new York Attorney general alleged deceit in barclays dark cool trades. Manus cranny is here with more. Ceo Anthony Jenkins looks like he has to act quickly here. Some real delivery. Business is beginning to move away from barclays. Deutsche bank, a lot of the big names apparently draining liquidity from the old. To me, the interesting part of that story is they had not been doing business. Goldman sachs, j. P. Morgan, and Morgan Stanley were not doing business with lx. That tells me a great story. Did they know . Eric schneiderman, the attorney general, caught up with us. One of the things barclays was doing was changing the data and misleading clients about how many of the trades were actually filled in barclays own dark cool. They had all of this elaborate propaganda saying that they go with whatever market is best for the client. Fact, the data that this director was repairing for a big Institutional Investors showed that 75 of all trades were filled in barclays are cool. That thet on to say immediate aftermath is going to tie up with a potential fine. These allegations have been made. What Anthony Jenkins does from the top is going to directly impact in terms of how they are treated. What they do not want to see is a lack of cooperation. For me, you are breaking the trust. You break the trust once, it is hard to win that back in terms of other mandates of business. That is what jenkins is selling. Lets talk about culture, reputation, how you take the business forward from here. He is already in the process of significantly changing the investment bank. This is only going to make it harder. British politicians are going to be looking at this. Regulators are going to be looking at this. How hard it is to change a culture within an organization like barclays. Culture at barclays Anthony Sullivan did a review. Incapable of justification. That is what people within barclays, in terms of their view of what they should be renamed remunerated. Some seemed to lose humility. This is a whole culture of you that a culture of remuneration, particularly in the United States and with the emphasis of this dark cool. It takes years to build up these equity trading relationships, both on the underwriting side, the ipo side, and on the equity trading side. Your customers begin to understand that you have been tolicitous and they begin question the whole relationship. In that interview had with eric seidman, we had with eric schneiderman, he said it is the fact that they were selfdealing. Yes, and this is the point. In other words, barclays had business. They did it in their own dark pools. I understand somewhere in the neighborhood of 70 . ,hey were telling their clients come to our dark cool because we do a much smaller percentage. That was not the fact. The individual change that presentation, refused, and was fired. So many people in the office had to know what was going on. I do not know that one can i mean, you have got to say to yourself, if this was a great part of the business, why did jenkins not no more . Is this the hangover from bob diamond . This goes back to around 2010, 2011. It is not as it jenkins has not been in the seat since 2012. He has been in the business as ceo. He has a certain amount of responsibility to know what is going on. Business is equity what he wants to do. This is a real slap for Anthony Jenkins in terms of client relationships and trust. Alibaba lance to list shares on the New York Stock Exchange. Of course, a blow to the techheavy nasdaq. Alibabas ipo is expected to be the largest ever in the United States. The company will trade under the ticker baba, which is apparently good luck because ba sound like prosperity, which is fa. And it also is eight, which some people think is really lucky. This is the third Biggest Tech Company listed on the nyse, coming after nyse won the twitter ipo. Why are people leaving nasdaq . Look at what happened with the facebook ipo. They botched that, basically. In august, there was a threeour trading hold because of a Technical Glitch and it seems like nobody clearly understood. If you are alibaba, you are trying to figure out what exchange to list on. You want to guarantee that this will run smoothly. Down to an entertaining email earlier on saying what else a baba is. It is a cake with romeflavored syrup. He is lucky. One of our tops warning stories this morning. Nike reporting numbers last night. This comes as the world cup battle in brazil continues. Nike will be hoping its sponsorship of some key teams and players will continue to drive its growth in its Football Unit, or soccer unit, as some call it. Football for the rest of the world. We are here with more with nikes ambitions and caroline hyde, who has been digging into this. How is nike doing . They are getting there. Their Football Unit is growing by 20 . They are only. 5 billion left. Nike just started to get serious about football back in 1994. Adidas has been sponsoring fifa since 1970. If we look at the numbers first, sales up 11 . Profit beating by 5 . Interestingly, women fueling demand. The females out there and the runners out there as well. It is about jogging. Huge in northis america. North america was the bright part of the sales. It has not really caught on in europe as much. Athletic gear in america all day long. Everybody is in leggings and running close regardless of whether or not they were exercising. It is fashionable to look fit. But you have got to be fit to look good in these voting cl tohing. Not really. All across america, women are wearing athletic loathing all day long. Look at the revolution back to nike air max as well. A massive fashion icon at the moment, to be back in the nike hightops. Women on the street have also got u. S. China where. They are seeing a resurgence. Problems with too much old year not selling gear not selling. We are looking at football and how they are doing versus adidas. They are pretty and neck now. If neck and neck now. Both have five teams. Spain was a bit of a disaster. Result, france, greece, netherlands, usa. Nike sponsored england as well, but nevermind. Adidas, you have five as well. Have 50 of the boots out there and social media is where nike is really dominant. They have double the amount of his book likes compared to a d this and four times the amount of twitter followers. Compared to adidas. Huge in social media and still big and Software Even though they are not making the fuel band anymore. There were talks that they hat, but they are keeping the software. Maybe they will team with other fit makers of the wearables. We now know what Olivia Sterns wears on a saturday to lunch, brunch, whatever it is. 100 and i am not alone. If you go to brunch in manhattan, every single woman has jogging pants. Lets just leave that one alone. Lets change gears completely. Coming up, is juncker the right man for the eu commissions top job . David cameron says absolutely not. More on this story when we come back. Welcome back to the pulse. David camerons eu isolation appears to be deepening. He is digging in his heels against Jeanclaude Juncker even though eu leaders are set to confirm him as the next president of the European Commission agreed we are joined seniorete generales economist. They are said to be discussing fiscal reforms over breakfast. What else would you discuss over breakfast . Is there anything that David Cameron could get that would more palatable . I think so. There is a general understanding in the eu that you need to reform and come up with reforms that create future growth. Tapeis a red liberalization, more free trade, etc. There is the potential the potential that cameron can come out with something out of the meeting. What is a win for cameron now . Is it the internal market commissioner . What kind of role does he need to see to bring back to london and say, we are making progress here . In thes difficult shortterm. The big win would be if you could steer the discussion towards more growth. And exactly how to do that. We are having, at the moment, a bit of discussion about whether fiscal rules should be loosened or not. That is relevant discussion, but it also risks to dilute from the real challenges. That is not the kind of structural reform that cameron is talking about. Of, lets blunt the pain for countries like italy. Exactly. That would be a bad thing if this is perceived as ane asing of the fiscal conflict. I think there is a push back on that as well. We will see how it is interpreted at the end of the day. I think the big topics for europe in the future is growth. How do you get growth . We are talking about the fiscal rules. There is also debt reduction. Public debt levels are just stabilizing at the moment. Italy is a country which will have a massive challenge over the coming 20 years. Is really where the question comes. How do you get growth to support that reduction . Be a problem today, but the next time we have a crisis, that is going to be a huge problem. Do you think the fear is juncker is not the right person to push through progrowth reforms . We do not know is the simple answer. The commission does not have a lot of executive powers apart from competition. Maybe we should not be so afraid of juncker. He might be a good deal breaker. He has that background, so he can perform that. The worry is that he is representing he has been around for a long time. He is representing the old eu and maybe that is why cameron has a problem with him. Personalities need to be put aside and we have to look at the challenges that the eu is facing in the coming years. From an economic point of unionwould political change the game for europe . Youextend the juncker put him in place and he had been in favor of a closer europe read if you were to extend that argument, is there an economic upside to him pursuing the agenda that he has pursued in the past . That is the longterm outstanding question. Do we need more fiscal union to make the Monetary Union more stable . There are a lot of reasons to look at it. We need a stronger banking union. These are the questions we have dealt with so far. Fiscal union becomes very closely entangled with the bureaucratic procedures, how you vote, etc. That is much more difficult. From an economic point of view, i think the Monetary Union would be stronger if we had the fiscal union, the eurobond, a single instrument in europe that would support , would be inroadly favor of that . He is a federalist, so he would like to see more and more integrated europe and integrated europe. Has asion has the limp limited role. Commission facilitates what the government want. Thank you. Still to come, israel does not have much water and it has even less snow. How does it manage to become an Industry Leader in making both . We are going to find out why and how when we come back. Good morning, everybody. Welcome back. You are watching the pulse. Lets find out how the markets are trading. We are actually paring losses on the equity markets. Volumes are about 30 of what they would normally be over the past early days. A couple of Different Things going on. House prices, according to a new survey, the slowest pace in five months in the u. K. That is good news for the bank of england. Here in the heart of europe, in rising tou are seeing a record. You are also seeing consumer missing estimates. Germany, we are waiting for a little more inflation data. The other areas have all beaten estimates. Consumer confidence , Michigan Consumer confidence, in the United States of america. That is going to be important because you have the yin and yang. Bullard saying rate hike in q1 of 2015. Consumerher side, spending this estimates and called a little bit of a disturbance in the market. We will keep an eye on those. That will be the driving force as we go to the close of the week. It will dictate how much of the losses we actually begin to pare on the european board. As far as europe is concerned, Business Confidence rising. A little bit better than the markets estimated. Bnp paribas have written a note this morning. Saying it will be a good deal and have raised the stock to neutral from sell. Getting together with al jazeera could perhaps fray some of that. As for the positive nike effect that we had in the first instance of trading this morning, it has dissipated a little bit. Puma brand. That adidas had a nice jump off the open, but overall, retail rising. 25 . Thank you. Coming up next, a bloomberg exclusive. We will be live with andrew sentance. We will round up what has been another big week from mark carney and why he thinks we will see a rate hike by the end of this year. We will also talk about clean energy. Good morning. You are watching the pulse. We are live from bloombergs european headquarters. I am guy johnson. I am Olivia Sterns. British Prime Minister David Cameron is in brussels today. Eu leaders are set to confirm juncker as the next president later on today. He is the wrong person. He will increase the power of brussels and reduce the power of nationstates. Meanwhile, eu leaders in brussels have signed a historic agreement with ukraine. The creation of a freetrade area. The pact strongly opposed by russia. Rebekah brooks meets the press. The former head of the u. K. Unit says she feels vindicated by a jurys decision to acquit her of all charges related to phone hacking. Assent of the crimes that i was charged with and i feel vindicated by the unanimous verdict. Staying in the u. K. , let me bring you the latest data in line with expectations. Gdp final read came out. 0. 8 as anticipated. No change. That makes britain still the fastestgrowing g7 economy. The recovery faces a number of risks including potential bubbles and productivity puzzles. On thursday, mark carney unveiled tools to tackle surging house prices. Has he done and off . Lets find out. Andrew joins us now, a former member of the boes Monetary Policy committee. Good morning. Macro prudential tools sound great, but carney made it for a clear that they are designed to prevent the housing bubble really spinning out. Not going to have much meaningful impact now. Would you agree that at the moment Monetary Policy and macro prudential policy is in the right face or do you think we should be further forward . Can object to what the Financial Policy Committee came up with yesterday. Mark carney announced precautionary measures. I do think what the economy is telling us, we just had the confirmation of that 0. 8 growth figure. Gdp is consistent with what is going on in the Housing Market. The level of Interest Rates seems to the too low. I think the mpc needs to start addressing that issue and start raising Interest Rates like they said they would like to do. Findey dont do that, they themselves behind the curve. When do you think we are going to see an Interest Rate hike . I think we will see the first rise later this year. If we continue to see good numbers, the labor market looks relative or strong, so i think that all points to the economy continuing to grow. When a 14 on average will be the strongest g7 economy in the calendar year. I think this we have come to the point where we need to stop talking about raising Interest Rates and do something. It seems to be a great vindication of George Osbornes austerity package. You say the labor market appears to be relatively strong. It sounded to me like carney didnt approve that much. He started talking about pockets of weakness because there is no wage growth. Wage growth has been worse but if you look at what surveys are saying, they are saying employers are finding it harder to get the skills they want. That is often a leading indicator that wage growth is about to grow. If they want to have this gradual rise in Interest Rates, they do need to make the first moves when wage growth is subdued. If they wait until inflation is a danger, they will have to move rates more sharply. When did you start calling for a rate hike . In 2010. Arguing for it when the euro crisis kicked in, it was clear that we needed to get through that. When we got towards 2013, i thought that was when the bank of england should have started debating a gradual rise in Interest Rates. Where his inflation 18 months out . I think inflation is going to stay around the target. The risks for inflation are twofold. One is that wage growth picks up with low productivity. Secondly, if the World Economy picks up we could well see another surge energy and, that he prices. The oil price has already been quite responsive to the situation in iraq. Interesting little bath, they once economic ropes Economic Growth tops 2 , which side will you be on . I dont think there is such a linear relationship tween growth and inflation. Even in a subdued growth environment. I do think there will be upward pressure in the mediumterm if Economic Growth continues at the current rate. The mpc should head off that. Not wait until it happens. It sounds like you disagree that macro prudential tools were the way to cool off the housing crisis. You think Interest Rates should be higher up in the toolbox. I think the tools you used it and on the whole picture. You shouldnt just look at the Housing Market in isolation. If the Housing Market was bubbling away and the economy was subdued, macro prudential tools might be the more appropriate thing to do. What we have got is a strong economy, falling unemployment, alongside an improving Housing Market. The economy and the Housing Market are both pointing in the same direction. This growth rate is clearly unsustainable . Where do you think potential growth in the u. K. Is . I think 2014 will turn out to be as good as it gets. An average rate of growth so far in the recovery including the recent orders, just over 1. 5 . I think we can do better than that. In the second half of this decade, we can grow it over 2 . ,omewhere between 2 and 2. 5 we should be looking for growth to settle down at. Carney has been getting a lot of flak for supposedly having a communication problem. People say the bank of england is acting as an unreliable boyfriend. What do you think of that . Do you think arnie is ms. Communicating . It is proof of the old adage when the facts change, i change my mind. The economy has changed over the last year. Guidance gotorward off on the wrong foot by suggesting that rates wouldnt rise until 2016. They should have made more of a conditional nature of the guidance. They should have reflected what they said then, once unemployment is down, there should be a debate about raising Interest Rates. So far, no Single Member of the interesto did for an rate rise has voted for an Interest Rate rise since 2011. Even david is beginning to sound like he is changing his course. Is do you think the debate pc the right path within the m at the moment. If people like david are beginning to change direction, clearly we are close to a rate hike. Beyond that, once they have got the first one in the place, how do you think the dovish people are going to think about where we go from there . Seekingnk we should be to achieve a gradual rise in Interest Rates. It doesnt give a big shock to me. All the staples of npc members have been consistent with that view. Members may of the be thinking that we should be having the first rise in the second half of this year, which would be my view. There might be others who want to wait until 2015. What is the gap between the first and second one . I dont think the mpc will have a definitive timing. They will see how the economy responds. I dont think they will see month on month a lag of what, 12, 18 months . You are not going to see the reaction you may see indications but you will not see a fullblown reaction to the first hike for an extremely long period of time. You have to get a judgment. The tradition has been to use the inflation forecast as an opportunity to reassess. I think at each Inflation Report forecast, we have the next one coming up. Do we need to start raising rates . I think that will be on the agenda in august. There might not be a Strong Enough opinion. Will probably be acting roughly in line with the Inflation Report. It has been a pleasure as always. Thank you very much indeed. Andrew joining us, former bank of england policymaker. Come, sinking their teeth into suarez. How at giants are cashing in on the biting incidents. Welcome back to the pulse. Israel does not have much water. It has even less snow. How come its world leader is making both of them . Elliott gotkine went to the biggest nonthermal desalinization plant to find out. It extracts enough Drinking Water from seawater to fill 172 olympic sized swimming pools. We get a huge amount of water to supply the needs of 2. 5 Million People in israel. Ide, is the ceo of which built the plant. Without this plant, you would not be able to finish summer with water in the tap. At the core are these massive membranes. Sea water is forced again them at High Pressure. That is not all. These are the pretreatment pools where the floating elements as they are politely known are separated from seawater which goes on to the desalination process. It is also a spot to give you a real sense of the scale of this enormous plant. First, theyrlds look to become more common. In 2013, the global desalination by 2015 a could rise to 18 billion. An israeli startup sees the best desalination opportunities in industry and says its technology is leagues ahead. We work at much higher efficiency. We waste a lot of less water. We greatly reduce the energy consumption. Its technology speaks for itself. Perhaps most surprisingly with an alpine snow maker. We originally desalinated water at freezing temperature. It wasnt economical but we were left with this facility to make snow. Ide has a number of projects in the pipeline. Decade spent in bureaucracy, it will start serving the first californians next year. I have been to some of these is really desalination plants. The scale of them is absolutely awesome. If you can figure out how to change the energy mix, this is the way forward. Excellent skiing as well. Now it is time for a bit of world cup news. I will talk about this one because you will be biased. Team usa to the last 16. That is after going down 10 to germany. 00 snap time halftime. It was a great goal. Only a few people have achieved that. Pele being one of the more obvious ones. President obama apparently congratulated his team for defying the odds. I have to begin by u. S. Soccerng our team, team usa, for advancing to the next round of the world cup. [applause] usa usa [chanting usa] we were in what is called the group of death. Even though we didnt win today, we were in the toughest grouping and we got through. We have still got a chance to win the world cup. It took a while to get that one going. Club not exactly football fans. We are new to soccer as we call it but we have made great leaps and strides. We lost to germany which is basically like tying. Anyway. England arent through. Sour grapes. Football fans in brazil are filling the time in between matches by collecting world cup stickers. Their goal, getting all 640. This town square has become a Trading Floor for these fans. The rare stickers of top players and shiny team and limbs are getting resold at double their 45 sent retail value. Guess the sticker most in demand. The brazilian guy. My son is doing this. 63 quaid. You hit the law of diminishing returns. The first pack you buy, you know you have all of them. There are also duplicates. I am going to go back and check. If that is what they are selling, that could cause a financial problem. One thing he is also aware of is the luis suarez biting incident. It has landed him with a fourmonth ban. 112,000 and is also banned from entering every single stadium. World cup sponsors are making the most of it. They have released these ads making fun of the bite. His selfierez has taken off as well. Olivia is keen to have one here. Fans posing in front of the poster in which the striker bares his teeth. Listerine had a good one. Said, wean ad that recommend having a nice swish of listerine after a nice bite of italian. There have been some really bad ones. What do you tell your son . Yesterday he came back from football practice talking about biting. Is that the biter . Who is the biter . He hasnt quite got his head around it. As we head to the break, it is time for todays post number. 180,000, that is how many atm can operate for after a power outage. We will speak to the head of the clean energy catch point. Welcome back to the pulse in todays new energy, atms are going green. The worlds greenest cash point can operate for 180,000 minutes after Power Outages, a common occurrence in many developing markets. Here with me now is the cio, frank. Welcome to the pulse. This seems like a great idea. Several years ago, the government of india wanted to bring Financial Inclusion to more people. There are 650,000 villages in india and only about 500 have bank branches. If you want to get people involved in the financial system, an atm is a natural tool to do that. Unfortunately, the buyer meant is inhouse the environment is inhospitable. Power goes out very frequently. There is an average of 100 Power Outages a week. Almost a third of the time, there is no electricity. What we did was come up with a power supply and architecture that allows the atm to run on battery power. It can run off the grid. These are standalone atms . This can be standalone in a remote village. The technology is designed to overcome the lack of infrastructure. How does it compare to s, how much do you sell them for . What are the margins like . It is a very competitive unit in terms of price. The indian market, cost is about everything. We would apply 55,000 to 75,000 a year. To do that over two or three years, that is a big bill. We are being very cautious about the price point. We looked at the power architecture specifically to reduce expense. There is a common voltage architecture. It simplifies the power supply, lowers the power load. It also allows us to build a unit without fans for cooling because we pay a lot of attention to heat management. Are there any new security concerns with a different power system . No, we still use the same encryption throughout the interior of the atm. It still has full ability for alarming and so forth. What are your expansion plans . Is it technology that you could apply to rural hospitals . Absolutely. Throughout southern asia, there is all sorts of problems with power. This can be deployed to bring Financial Inclusion so that all people can conduct the Financial Transactions they need to. Of course, power efficiency is a concern for all of us. Atms hade worlds the same power supply, we could save nearly a billion kilowatt hours of energy every year. You very muchk for joining us. Still to come, a second hour of the pulse. Lets get over to guy johnson twoyear what is coming up. For those on Bloomberg Radio, the first word is up. For our viewers, a second hour of the pulse. What are we talking about . The world cup, why not. Domination in advertising is a key battle. Nigel perry is joining us. We will talk about what is happening with the big adidas versus nike battle and suarez as well. We are back in brussels. We are going to be talking about what juncker means to the eu, what he means for britain. Andrew e is going to be joining us to talk about that. We are going to be talking about exactly what is happening in brussels. You can follow us on twitter. We will take our break. We will see you in a moment. A collision course for the kremlin. Ukraine provokes russia by signing a trade deal with that. Ou the eu,. We will be live at the summit showdown in brussels. Draining the dark pool. The ceo promises an urgent investigation. Good morning to our viewers in europe, good evening to those in asia, a warm welcome to those waking up in the United States. Im guy johnson. Im Olivia Sterns. This is the pulse. Taking a bite out of branding. Ad giantsnts are are sinking their teeth into the suarez incident. We will talk about the alibaba ipo. The eu has signed a historic trade deal with the ukraine. The country is very much at risk from retaliation by russia. Eus nichols is that the summit where leaders are meeting this morning. What are the details of the deal . Will be a lot easier formal though buck, georgia, and ukraine to trade goods and services if they meet standards with the European Union. The ink is dry, the Ukrainian Parliament now needs to sign it. Leaders in brussels are talking about what a historic commitment it is. For the European Union, it is a solemn commitment to support moldova, and ukraine along the road of transforming their countries into stable, prosperous democracies. There are two bank things to watch for today. What happens with the ceasefire in ukraine that is set to expire later tonight . What will the reaction from moscow be now that this agreement is formally signed . Entire what caused the crisis. How will moscow react . What is the threat of additional sanctions coming out of this morning meeting in brussels . The rough day for David Cameron. What is the latest on carl junker . It looks like David Cameron will be the odd man out. There were comments from the spanish Prime Minister that 26 of the European Union leaders will be voting for junker. Aude how does David Cameron pivot from the personnel opposition to policy points . It may be difficult to do. Thereve been somewhat personal junker,on mr. Uecker strong allegations. Towill be a difficult scene mend. Hans nichols, thank you very much indeed. Lets turn back to the top company story, barclays back in the spotlight today. This ceo is promising an urgent investigation after the new York Attorney general alleged the seat in dark pool trades to rid manus cranny is here with more. This is looking pretty grim. The stock sold off yesterday. The allegations of selfdealing. How bad is this getting . It is beginning to cost them dollars. Liquidity has begun to pull away. It undermines the whole purpose of why you would go to the number two dark the United States of america. Credit suisse is number one. The heart of the lawsuit. One of the things barclays was doing was changing the data, misleading clients about how many of the traits were actually filled in barclays own dark old pool. They said, we go for whatever market is best for the client. In fact, the data that this director was preparing for big Institutional Investors show that 75 of all the traits were filled in barclays dark will pool. That is the rub of the issue, potentially having lied to clients. And the man who wouldnt change the presentation was fired. Did Anthony Jenkins know . Anded if he did doubledamned if he didnt. Huge business. Im not here to defend jenkins. Im here to put a quantum around it. The exchange is worth 50 million in revenue. There are much bigger revenue lines. That is the only point i will make with regard to jenkins. You break the trust, you show i amest, you know what, scoring with you. What does that mean i am possibly doing with you and you and you . It makes you wonder what everybody else is up to. This goes back to culture. Whether hes been effective in changing it or not is another question. Incapable of justification was one of the lines used in the review of the culture. Some bankers seem to lose all sense of proportion and humility. One year later on the remuneration really out of sync. This is last year. Jenkins has been in the seat since august 2012. It takes time to change culture and an institution. But this is the last thing he needs. He wanted to build the equity business. They got rid of bob diamond. That was supposed to help with the scandal. The pressure is growing. Manus cranny, thank you so much. Lets take a look at what may be the largest ever u. S. Public listing. The chinese internet giant alibaba has picked the New York Stock Exchange to host its ipo. , which a blow to nasdaq likes to see itself as the home of Technology Inside the United States. The Ticker Symbol will be baba. It sounds sweet, doesnt it . It can also mean father in certain languages or apparently it is a very nice rum soaked cake. It is a nice win for the nyse. Theseave been swooping up tech ipos. The nasdaq botched the facebook ipo. With a Technical Glitch there was a Technical Glitch. If you are the head of ali baba, you want to do your tech ipo the nyse has been able to smooth concerns that the takeover of the International Continental exchange has been completed. Can to get it done by the eighth . August 8 . That would be extremely lucky or we will see a push in the september. We will find out. Baba will be the ticker. Turning to sports. Nike reported numbers overnight as the world cup battle in brazil is continuing. The company will be hoping its sponsorship of key teams, including brazil and players, will continue to drive growth in its mobile unit. Here is caroline hyde. Brecht on the nike results for us. Looking pretty good. Pretty good. 17 market share and keeps on winning. 11 . Profit up 5 . Will be soothed about china in particular. China picked up. For the future warders, china is growing some 6 . , china is growing some 6 . Women are growing. It is true. The trend has not caught on in europe. Im glad about that. [laughter] everyone is wearing nike trainers. Im yet to go out in sweatpants. Tracksuit bottoms. Im going to go with the traditional view of these things. Half of our female colleagues in the new york office turn up in tracksuit bottoms come a lululemon leggings, and this is fueling growth of america sales. Im definitely showing up at my lululemons. Ok. [laughter] area has really grown for nike. 21 increase in revenue. 2. 3 billion. That is one half billion off adidas. Nike only got in on the act 20 years ago. They are managing to grab market share by sponsoring some of the best teams out there. Neck,ave gotten neck and both have five qualifying teams in the next round of the world cup. Nike had more to begin with. Brazil, like nike has france, greece, netherlands, usa. Adidas has argentina, germany. Of an own goalt with luis suarez. For Nine International matches. This is not great for adidas. Look at this. I think he hurt his own mouth. About ofe a little bit a worry about bringing into your portfolio individual players. Nike has not done all that well in terms of the world cup. You no longer have the likes who else does nike have . Renaldo is out after portugal came out. Theyll have big winners. Adidas has been a bit of an own goal with the details. Individuals. Nike has 37 million facebook likes. That is about double what adidas have. They have four times the amount of twitter followers. Theyre pretty much winning there. Caroline hyde, thank you so much. Ok. Got to win the social media battle. We will look at sports, how branding giants basically are winning or losing on the suarez bite. Look at some of these ads that have been quick to come out. We will talk about political ambition. What is happening with jeanclaude junker, the next head of the European Commission. David cameron is not happy. We will talk about that when we come back. Welcome back. You are watching the pulse. I want to take you through the currency markets. Eurodollar not budging a great deal today. Aredata out of germany broadly to the upside when it comes to inflation. We prelude the national data. We have just had numbers come through from the largest region. The cpi number coming through 0. 3. Above expectations at economists were respecting thats expecting a 0. 2. Maybe a slight bit of relief for the ecb boss, mario draghi. Lets get back to the showdown summit. European Union Leaders are meeting in brussels today. Theyre expected to confirm Jeanclaude Juncker as European Commission president. David cameron continues to dig in his heels against Jeanclaude Juncker. The morning, andrew. Thank you for coming. David cameron says Jeanclaude Juncker is the wrong man for the job. Do you agree . I dont think it makes a whole of difference. I think the direction of the European Union is quite clear. It is leaning toward much deeper political integration. The direction for the clear one eu is also it does not have a future. If you want to make the eurozone work, you have got to have a deeper Political Union. You have to have the fiscal to balance the monetary. The idea of having a much deeper Political Union is not ambition orical flighty goal. It is regarded as a nexus dental necessity, one of the key lessons from the eurozone crisis is that more of the political architecture should have been placed at an earlier stage. They are reacting to the crisis by establishing banking unions, fiscal unions, eurobonds come all of these things will come with deeper political integration. United states of europe. The italian Prime Minister said it was the ambition of the italian presidency to establish United States of europe. Hollande wants to establish integration,cal 2015. The idea of the European Union without this is without football without the ball. Are we setting each other up which incredible tension britain has not fully understood and been able to take advantage of . If you take a look at the recent voting patterns, it is clear that there are huge portions of the population that are not onboard with the idea of deeper integration. Hashistory of the union been the we dont ask the people. There is going to come a point, at some point, when we do need to ask the people. Are we going to create a situation that the u. K. Could take advantage of when the tension arises . Citizens areozone in favor of a euro federation, that is what they say. In the elections, although there eurosceptics, 70 of those elected were four pro integration candidates. A situationill in with the numbers are broadly in favor of it. All im saying is that the numbers are changing. There is a minority. The attitudes of the European Union leaders is that that is a reflection of economic anxiety and the way to address that is to address the economic anxiety by increased political integration to secure the basis for growth over the medium term and that will make the euro skepticism grow away. Voteshave to remember who in european parliamentary election. People on the french. Fringe. The throw valid points. The train is on the rails. Britain is not on the train. The only way this could change is if there were a much larger group of countries that could be in the noneuro eu. Instead of just having by 2020, there are scheduled to be four or five countries that are no longer members of the euro, who are still in that you. The eu. This double majority concept you have to have most of the eurozone and the noneurozone countries voting in favor. That will fade away automatically and are the rules as they are established once the noneurozone members follow it. We are not talking about something off in the nether nether. The noneuro eu does not have a future. David cameron can renegotiate or britain leaves the eu . David cameron can renegotiate all he likes, but it will not make a difference unless it will secure an increased number of countries in the European Union. Thanks to the managing editor of european economics. Back in a couple of minutes. Welcome back. Withtt gotkine caught up the ceo. We have built a village sized solar generator. Itn the sun is inadequate, can burn biogas and continue to produce electricity. Pretty, withery the metal to look in the middle. Do they work . To bethe honest honest, they did not work at the beginning. For the last 18 months, they have been working very well and very consistently. The key in any solar installation compared to traditional Power Sources is cost. Does the cost of your installation is it cheaper or as Cost Effective as batteries . Photovoltaic is cheap, won two of the cost of batteries and you get into megawatt sized batteries, it becomes significantly more expensive. We are very competitive with photovoltaic Battery Storage and we are competitive with photovoltaic tied to a diesel generator for providing power. Uring nonsolar times i have spoken to one of my colleagues and they were talking about a lot of startups in this field and some say they have Game Changing technologies, but 99. 9 of them are going to fail. Why will you be in the 0. 1 . Were the only one who has working prototypes. They have been working for a number of years. At the beginning, we experienced , we haveproblems overcome them, we have a configuration that has been operating consistently well. Gethen do you expect to tenders to have Solo Technology actually deployed in a commercial installation . We have sold their first two units to a country in africa. They are still sold as prototypes to be monitored, but the commitment is that if they meet the expectations, that we would then rollout and implementation of many tens of units. You have mage to about raised about 15 million. How much more do you need . We need a minimum of 25 million. We have opportunities in the 100 million plus category in italy, as well as to opportunities in mexico. We need to begin these, a few Million Dollars to do the engineering and permitting and then we will need the order of 20 million for each, in order to provide the equity that will allow us to finance the balance. You need more than we will get one program underway, it will be easier to raise money for the second one. That was her middle east editor, elliott gotkine. The battle for alibaba. They picked the New York Stock Exchange to host their ipo. A major blow to the nasdaq. You can follow us on twitter. You can see us doing the suarez by. Welcome back. Im Olivia Sterns. Im guy johnson. These are the Bloomberg Top headlines. Cameron is in brussels and he is reiterated his belief that Jeanclaude Juncker is the wrong person to head the European Commission. Eu leaders are set to confirm Jeanclaude Juncker as the president later today. He is the wrong person. Theas been at the center of group to increase the power of brussels and reduce the power of individual nations. He is the wrong person. Thehe treaty foresees creation of a free trade area. This is strongly opposed by russia. Rebekah brooks has faced the press. She feels vindicated by the jurys decision to acquit her on all charges relating to phone hacking, bribery, and perverting justice. I am innocent of the crimes i was charged with. I feel vindicated by the unanimous verdict. A look at how european markets are trading this morning. Manus cranny has more. Everyone is trained to pair their losses for the week. Confidence in the eurozone has dipped ever so slightly. Volumes are about 30 below. And france, you have record unemployment and Consumer Spending dropping. In germany, you have inflation rising ever so slightly. That may change some of the arguments within the overall complexion of the ecb. Here in the united kingdom, we have had ratification and confirmation as well. No shock. 10 consecutive quarters. Mpc runs the risk of being behind the curve. Get on with it. U. S. Equity futures indicate lower. University of Michigan Consumer sentiment will be the driving force of markets as we close business for the week. As we look backward to ,esterday, to Consumer Spending today it is about confidence. Will the consumer belie a different story for the fed . Thank you. In 25 minutes, it is surveillance. Tom keene joins us with a preview. A lot going on here. Iraq is still front and center for everyone in the United States. A bit of a change today. Much more of a focus on syria. We will talk about that in our first hour of bloomberg surveillance. Conversation with ellen zener on what has occurred in the last 48 hours. It is simple. There has been a very real change in how economists look at the american economy. All bringing down their calls. Gdp estimates lowered. Barclays coming in as well. We will size it up with alan Ellen Zentner of Morgan Stanley. In thes a team moving on world cup. A select of a group of nations are not. It is true. I watched the match. Did you watch the match . It was fantastic. I did. We were on Bloomberg Radio with it. We have a lot of fun with it. Michael mckee all set up with the match. We look forward to tuesday where the u. S. Plays belgium. What do you make of this suarez bite . I have watched it a little bit. What i would say is immediately following the event, i was really taken aback by the experts at espn from europe and south america and they were visibly distraught over the event. This goes way beyond punishment or that. These people who are real pros within the culture of soccer were very, very upset by it. Way beyond anything i have seen in america. Apparently, it does not, such a huge surprise because so many that hehat that bet would take a bite. Yes, scarlet fu once the money on that bet. Looking forward to surveillance coming up in 25 minutes. I dont want to talk about football, so i will talk about tech. Pickeds picked up the New York Stock Exchange for its ipo. It may be the largest ever an initial public listing in u. S. History. Lets go to hong kong for more. This is a key victory for the New York Stock Exchange, the 222yearold board. It is a key below for rival nasdaq. Hastech heavy index that seen challenges as of late, particularly with its face was facebook listing in recent years. The New York Stock Exchange and power ahead despite its age and woo Top Technology listings. Jack ma gets a prime position. It is the third biggest tech stock on the nyse. It may be an historic ipo. It may raise as much as 20 billion. The company is valued at 160 billion dollars, according to some estimates. People familiar with the matter tell us it is likely to be an auspicious date in the calendar, august 8. Eight is a lucky number in china. Baba. Ba in mandarin is the number eight. , double happiness, if it does happen on the states. If there is any kind of market disruption that would slow the deal, it may be pushed back to september. A key move for ali baba as it continues its push to go global and go public on the u. S. Market. Bloomberg, hong kong. We will leave the ali baba story there. Massive listing, huge story. Vladimir putin is talking about the ukrainian situation at the moment. He is talking at the meeting with a group of ambassadors. He is saying that russia is particularly concerned about ukraine. Anyway, lets move on. Lets move on over to israel. The nation does not have much water and even less snow. How in a world as it possibly a leader in making both of them . Are middle east editor, elliott gotkine, went to the went to find out. It is the size of 14 football pitches. Drinkingts enough water from seawater to fill 172 olympic sized swimming pools. A huge amount of water that can supply the needs of 2. 5 Million People in israel or cities the size of chicago. Ide which built the plant. Without this plant, we would not have been able to finish this summer with water in the tap. Are thesecore, massive membranes. Seawater is forced against them at a super High Pressure filtering out the salt. That is not all. These are the pretreatment pools where the floating elements as they are politely known are separated from seawater, which then goes on to the process. This is also an excellent spot to give you a real sense of the scale of this enormous plant. First water shortage grows, the Global Market was worth 6 billion. By 2018, it could rise to 15 billion. An israeli startup based in boston sees the best desalination technology. We work at much higher efficiency. , weenerate a lot less reduce energy consumption. Ide says its technology speaks for itself. Perhaps most surprisingly within alpine snow maker. We wanted to desalinate water. So we were left with his ability to create large quantities of water and makes no out of them. Ide has a number of projects in the pipeline, including the western hemispheres largest desalination plant. It will finally start slaking the first of drought stricken californians next year. Elliott gotkine, israel. Interesting stuff. Coming up, taking a bite out of branding. The suarez incident. Tech out check out our very own suarez selfie. I took a bite of the guy johnson shoulder. Welcome back. You are watching the pulse. Sinking its teeth into advertising following luis suarezs biting incident. We are joined by brandrapport director nigel currie. Will talk about nike and adidas in a moment. That is not what is gripping everybody right now. I have been pleasantly surprised at how quickly Advertising Companies have gripped to this suarez incident as a positive story. How does it work . How to add themes work around incidents like this . This has become a bigger and bigger part of what they do. All of the companies and all of the brands involved and all of those not involved are seeing that when these opportunities come along, they are a fantastic chance to score some extra points and get extra branding. They have to be very creative. They have little teams that work on these things and come up with fantastically Creative Things to get the headlines. Who are some of the brands who have been capitalizing . It is only social media that has enabled them. Normally official sponsors would steer clear. Only those who would not officially be involved would be capitalizing. Budweiser is involved. Mcdonalds got involved. You need to have a war room. They are having a lot of fun with it. It brightens the whole thing up. They are making some hay out of it. Does this change are you see being an official sponsor . Does it degrade the value of being an official sponsor or does it kind of upgraded . How does it work in terms of the relative value of paying the money upfront . They get unbelievable amounts of exposure and branding from all of the matches. If youre officially involved, you do get a brilliant exposure to a mammoth, global audience. It is all of these Little Things you can do on the side of it, which probably are things the doicial sponsors could not in the past. It allows them to get an extra edge and get some more attention out of it. Another big headline besides the bite, the fines facing name ar. When he took off his shirt following brazil eating cameroon, he was fined because you could see the top of his 80,000 pounds. Because it competes with nike who is sponsoring. Does that make sense . Yes. They all mobile rules. The governing bodies have to protect their sponsors. The sponsors are paying upwards of 100 Million Pounds over a fouryear period. It was a deliberate. Possibly not. There have been deliberately things done. It was clearly planned. People have been heavily fined. The sorts of things happen. The governing body has to try to cut them out because the sponsors are paying so much money, they need protection. How is it going for nike and adidas in your judgment . I think adidas as an official partner are benefiting a lot. They are able on the social media site to cash in on a lot options hashtag options. Nike has a more peripheral role. If nikes team wins. That is what they are praying for. Theyre looking for brazil, the captain of brazil, with his swoosh, holding up the trophy, that is the money shot. That will spoil adidas party. Doing think adidas is better . Nike is much more tech savvy. Thehey use much more players and their ambassadors and all of their players are very high profile. Nike does. They have more of the trophy players. Adidas goes more the team. You think that is the smarter strategy . As well. Has players nike focuses more on the players because adidas has an official role and relies an awful lot on the natural exposure. Which is more effective. Adidas role is more effective. Nike will be waiting to see which teams go the furthest in the competition. Opal it will be there is. How does branding, advertising, and everything that goes with the devolved from here on in . Evolve you ball from here on in . It has been a very big part of the tournament in a way that it never has been before. If we step forward four years, what is it going to look like . It takes time for people to work out actually how to use it and get the best value. It is the same as social media. They are just starting to get to grips with it now. Those were finding out how to monetize it and to use the players. Rinaldo has 28 million followers. There are restrictions on what you can say. As soon as you can get more brand mentions intuit, it will become into it, it will become incredibly effective. Players become more of the focus. Exactly. You see with suarez, how much of a focus they are at the moment. Do you think fifa will be comfortable with that as this is about to be about teams and nations . Fifa loses some clout. That is a good point and i think they will be very wary of it. At the end of the day, the players and the individuals are very powerful. They will be looking to get a balance between that. They will place as many restrictions as possible. Dont you think that some of the fines are a little bit disproportionate when you think about the fines that fifa hands up for things like racism compared to what namar is getting for showing the top of his underwear . I dont. You will be waiting for that call from nike or adidas saying, what is going on here . They will be under huge pressure from the sponsors to get it right and make sure it is as clean as possible. What about the puma strategy . How effective is that . Two different colors of boots . Yes, there are all sorts of new things coming along. Someone will come up with something even better in the coming matches. No doubt about that. Do you think the big brands are looking at their ad agencies and saying, you guys are not up to speed yet . Welluys are not doing this enough in terms of the social media site, in terms of what is happening here. One of the things that came out was thatnnes meeting there seems to be this understanding that in the advertising agencies, that we still dont have the secret source. That we still have not figured out how to use this stuff and translate traditional media into social media. Do you think the brands will be looking at this world cup and saying, how do we do this better than the other guys are the right as to be working with . That is why new specialist agencies are developing all the time to realize the power of the new social media and how to monetize it and how to really turn it into a proper return. That is where all of the emphasis will go. Certain other avenues are sorted. They know how they work. They work very well. Social media will turn a lot of the existing activity. England is out. Who do you think will win the cup . I will go for belgium. Who are you guys playing next week . [laughter] isnt that terrible. I dont actually know. Belgium. I knew that. Belgium. We are playing belgium. Nice to see you. Nigel currie, the manager of brandrapport. Jeanclaude juncker, the right man for the job . David cameron says absolutely not. Absolutelyighting an losing battle. We will be live in brussels. Good morning. Welcome back. We are live on bloomberg television. We are streaming on your tablet on bloomberg. Com. Lets talk about the currency markets. Not a great deal of movement in eurodollar. A bit more movement in the pound euro. Would you have seen today is inflation data coming out of germany. Broadly, the data has been a little stronger than anticipated. In some ways, the euro has come down a little bit. That is having translation effects. You will see an impact creeping through. It is not a big enough pick up. Now for a look at what were watching for the rest of the day, we are joined by hans nichols for us today in brussels. What is shaping up to be the coronation for Jeanclaude Juncker. What are you watching . It is going to be a coronation with a oneman dissent, that one man being David Cameron. Does it poison relations between the European Union, the new government here, the new Commission President , and the u. K. . Are there additional sanctions . It does not look like it. It does not seem like we are headed in that direction. Ago, president Vladimir Putin speaking in moscow talked about the need for a longterm ceasefire in ukraine. A longterm ceasefire could give you breathing room to deescalate the situation. Hans, what is the vibe like in the room behind you . Are the journalists moving on from the Jeanclaude Juncker thing . Or do they think there is still a battle to be fought . Everyone is snickering about the British Press stories that came out overnight the question or ask the question, does Jeanclaude Juncker have a jerking problem . Was that the right move for David Cameron . If he was behind it. Have a drinking problem . Was that the right move for David Cameron . If he was behind it. That is it for the pulse. Surveillance is up next. Expect the unexpected america should finance moderate revels in syria. The spreading crisis in iraq. Yields drive lower and we just got years of financial repression ahead. If its tuesday, it must be belgium the usa takes on antwerp. Good morning, this is bloomberg surveillance. It is friday, june 27. I am tom keene and joining me is scarlet fu and adam johnson. Gent . You just say not jent. I havent heard anybody mention that since social studies. We are playing belgium on tuesday. We will all know about it by them. Nothing got done between for0 and 2 00 yesterday the u. S. To come in 10 is pretty good. Thats like mexico and brazil 00