Transcripts For BLOOMBERG The Pulse 20141223

Welcome back. You are watching the pulse live from bloombergs European Headquarters. Were near london. Im guy johnson. It is the second act in athens today. The Greek Parliament voted again on a president ial candidate put forward by the Prime Minister. Lets go to athens to get the latest. Marcus joins us now from there. Walk us through what the latest is in terms of expectations for this vote in an hours time . Can it get close to the 180 needs third round . Morning, guy. The challenge for him today is very big. 180 is the magic number, which is what he will need next week. Today people will be looking to see how close he can get to that. Around 170. If he can hit 170, he would be looking lot better than he was looking at the end of the first round when he got 160, which was on the low end of expectations. 170 is kind of the minimum people think with a big final push maybe he might get there in the third round. Overall, though, he needs to sway one of the smaller parties. He made an overture over the weekend on the prospect of elections over the next year. Have been rebuffed. Those parties are digging in. They dont look good for him, the prospects right now, guy . How big a part of this story is this bribery scandal that is also affecting this vote . Some suggestions that an m. P. Was a recipient of a redwoast change his votes and there are all kinds of things going on. That was rebuffed and reported. Is that going to make it harder for him to win the 180 do you think . Themselves ations are unsubstantiated. The background music is not great for him. Last friday, for example, we had seen where this m. P. Together with his party leader were holding a press conference talking about this. This is one of the parties that were considered one of the likeliest. If he was going to get to the 180 that they would be the ones hat he would sway. Well, when you that kind of backdrop that gives you a sense of how difficult it will be for one of those parties to do a u turn. The allegations themselves are not being taken that seriously, but they dont improve the overall prospects in terms of how it looks if all of a sudden one of the people from these parties change their minds and votes for minimum rrl you and i discussed yesterday the fact that maybe he pulled the trigger on making concessions a little earlier than anticipated and did so over the weekend. What else could he do if he were to fail today to get close to the 180 . I read all kinds of things from him resigning to putting up another candidate. Are there other options . Is there a plan c, d and e here . A week is a long time in politics. Who know what is might happen out of left field . It is a tough one for me to see happening. This was considered by some analysts, it got close to the 170 number that we were talking about earlier, was, you know, the cusp he could use the try and get that final push. Maybe something will come up in the next days and surprise us, but to be honest, i do not see what hea has it is tough to see. It is going to be an interesting week. Thank you very much indeed. Lets turn our attention to whats happening in moscow. The ruble is rebounding. It is up for a third day in a row. Rising close to 7 . What is going on . Let us find out. Here. Hilcote is the ruble, since tuesday last week high noon when it hit 80 rubles to the dollar has gained back 1 3 of its value. I cant think of any other currency that had that kind of swing. The volatile city extraordinary. The week leading up to that, the ruble lost half of its value. Were still 40 down year to date. The ruble has had a difficult term. Why is it strengthening . Exporters in on the game. The government has compelled the five biggest statebacked exporters to take dollars they and gas andling oil buying rubles with them. The government says you to have the same level of reserves you had on october 1. You have until march 1 to do that. They are spending about 1 ball day on the market buying up rubles. They will continue to do that until they spend 40 billion to 40 billion. About k of wasia spent 80 billion. Lets talk a little bit about the banking crisis that seems to be beginning to merge. We have seen one bank rescued. There is now maybe a more concerted effort. It would turn into a financial crisis. This is ghost of august 17, 1998 when that is exactly what you had in russia. We had one russian bank called trust bank yesterday that got a bailout from the government. 235 million. Not a massive bank. Most of the statebacked banks have most of the market share. Somewhere in the middle of the field, bruce willis on the billboards saying you can trust me and you can trust this bank. Last week was the week that russians lost confidence in bruce willis. They pulled their money out of the bank, their deposits out of the bank. The bank couldnt fill the hole quickly enough. They were running 8 on dollar deposits. The rates on International Markets are too high because russian banks have been largely locked out of that market because of sanctions. So what do you get . They are on the cusp of failure. Is that a one off . Yesterday we were talking about the former finance minister saying we are going to see a lot more of these. Clearly what were seeing the government trying to get ahead of a run on the banks on financial collapse. How close there are. What the government today is suggesting is to increase the amount of money that depositors would have insured and the allow the Insurance Scheme to take stakes in the bank which is a novel idea. Take equity stakes in the bank that the government has to prop them up. The other thing we have seen is all of these banks offering much better on the back of that rate hike we got from the stram bank. Much better ruble denses. Russians are going rush back to the banks, well have to see. Clearly this is the concern going into 2015. The a guarantee scheme designed to prop up the banks. They are shortcircuiting it a little bit. I guess there is some lodge nick that. It kind of smacks a little bit of of kind of panic is the wrong word but certainly there is a perception that there could be a problem. There is. You know, the problem was in 1998, the collapse of the banking system, and i guess it shouldnt be surprising, was very disorderly. Russians trying pull their money out. Unable to get their money out by and large. What obviously the russian government wants tock seen doing now and the bank of russia wants to be seen doing now is dont worry you dont need to go to the bank. Ryan chilcote on the story coming out of russia. The pope has used an annual Christmas Speech to criticize the hypocrisy. He also urged them to use the christmas piston make a church a healthier place. North koreas limited access to the internet has reason restored after being cut off for more than 10 hours. Kim jong un touring a cat fish arm. U. S. Government accusations that north korea was responsible for the massive cyberattacks on sony. North korea denies the charge. Chinese billionaire has Broken Ground on a 15 billion canal project. He said the canal could be finished by 2019. It would rival the panama canal t is a link. Coming up, Stephanie Ruhle met up with the worlds fastest man. Well also have more on todays critical greek vote. Will Prime Ministers get the number needs and what happens if he doesnt . Well discuss that later in the program. Welcome back. Youre watching the pulse on bloomberg tv. In greece, a very high stakes game is being played. Another noon local time, in just under an hour, the Prime Minister gets a second attempt to get his president ial candidate through and in the process keep his government intact. It is going to be tough to do that on the third vote which is on the 29th. The implications of this, lets discuss it with our guest. Good morning. Good morning. The assumption at the moment is he is not going to get this to happen. He is not going to get to 180. What happens next . This automatically triggers National Elections by late january or early february. According to the latest polls, the main opposition, the party is ahead but the difference has been shrinking so it may actually be a close call. No matter who wins after the elections, they will need to form a Coalition Government. In the worst case scenario, they cannot form a Coalition Government and we have a second election, which is exactly what happened in 2012. How much does stability affect that from a market point of view . The greek recovery was supposed to finally start after six years of recession. It is negative news for markets. We have seen assets adjusting ownwards recently. Greek assets offer value at this level but it is likely to continue in the meantime. The extended program from the troika expires on march 1. Is it likely that we will have a solid government that is willing to negotiate and form some sort of solution with the authorities in washington, frankfurt, etc. , by then . Do you think were going to get to that date and have some sort of a program in place that allows a continuation of the scenario . A Coalition Government after the first election. Then we will not have time to agree by the end of february. We will expect that assuming the government is willing to negotiate with the troika. Until the end of march or even the end of f. B. I. February to provide time for negotiations. Even in this case, any new government will at most two months. How did the e. C. B. Play all of this . There is an expectation that the central bank will deliver q. E. In the First Quarter of next year. Could greece make it more difficult to achieve that or do you think e. C. B. Will take a view that actually they can play another card, which is q. E. And that will put further pressure on the greeks . We believe that they will take decision regardless of the developments about greece. If anything, you can argue that the negative Market Development in greece could be an additional argument for earlier in order to isolate the rest of the region. In any scenario, however, as long as the program is on hold in greece, they will not be buying any greek bonds. They should buy the bonds only if the program is in place. Is greece expendable now . Is the story unraveling again and yet very little connotation to other peripheral markets. The e. C. B. Must be watching thinking actually we can apply more pressure this time around and maybe greece is an exception . One of the best in the best line which we continue serving in the shortterm. The rest of the region is affected much more. It depends much more on Market Expectations about e. C. B. Policies. It will consider an extreme scenario in greece. In order to continue the scenario of the decoupling of greece, they have to that it will remain the lender. Still will do whatever it takes, but just not for greece. The troika has a lot of negotiating power with the greek government and any greek government will not be able to argue that greece will be safe for the benefit of greece will be safe for its own benefit. Do you think he will perform some sort of a u turn . To be able to say my party Still Believes this but were in a coalition now and as a result of which, i have to think about the entire coalition and my partners are saying that we need to do this. What is your understanding of the politics of this . Will that be possible . A lot of people are assuming that it is. It will be difficult. It is quite difficult to perpetuate the base. It is a number of parties together with many different views. At the same time negotiations the Coalition Government with the troika and also syria, to perpetuate their base noshed to in order to compromise. There is going to be a lot of uncertainty. Thank you. Were going to take a break, but coming up, north korea cease an internet blackout day a. F. C. The of accuses the country hacking sony. Thats what were talking about when we come back. Welcome back. Youre watching the pulse live on bloomberg tv. Days after the u. S. Government accused north korea of hacking into sonys files, the country has experienced an internet outage. Caroline hyde is here. Is an outage in north korea a regular event . Not this sort of event. It has been deemed by experts not normal. They say they havent seen anything like this before. It was close to 10 hours. The actual outage. This is according to research. However shaky at best is what north koreas Internet Connection can be. Surprising when you have four official networks in your country provide you go the internet. All of them through china. Four compared to 152,000 that run into the United States. Clearly we know that north korea is generally by and large not connected to the internet. When youre digging into this particular event, it is one of those points of course that we suddenly all eyes on north korea and learn the shine the spotlight on it. They have a bit of an internet problem. It seems like it could be linked to an attack. The jury is out on whether the United States has anything to do with it. One particular expert said it looks to be a relatively simple denial of service attack. You flood the Network Traffic and it takes down infrastructure. Now it suddenly prevented people from being able to access certain websites. They feel this attack is unlikely to have been carried out by the United States as some sort of reprisal. Largely because it would only take about 200 for any hacker to do it. It could be they are upset about not being able to see the film. They use outposts when it comes to their own cyberattacks, it is thought. By attacking north korea itself youre not going to be protecting yourself from any future remember north korea still remains adamant that they had nothing to do with the sony attack stand the u. S. Should try and punish them in any way, they said they will retaliate 1,000 times great per. Im not sure a schoolboy way of doing it would be what what the u. S. Is thinking. It is interesting that it is up so we can see the sprem leader visiting a cat fish farm. The relationship between china in this story and the United States is quite fascinating. We could see the two global powers working together. The u. S. Returned to china and said you provide the networks and the equipment to north korea. Could you help us investigate if it really was north korea behind sony . China is stepping up to this and says they will be doing their own investigation. The u. S. Actually accused China Military of some cyberattacks back in may. Caroline, thank you very much indeed. Up next, s p cuts its forecast to big oil in europe as crude heads for its worst year since 2008. Well have more on that story when we come back. Follow me on 2013 at guy johnson tv. See you in a moment. Welcome back. Youre watching the pulse live from bloombergs European Headquarters here in london. Im guy johnson. We take you through the Bloomberg Top headlines. The hong kong billionaire had been sentenced to five years in jail and fined half a million hong kong dollars for conspiring the corrupt the chief secretary. He stepped down from his position last week. The chief secretary got 7 1 2 years for charges including accepting bribes from kwok. Two others received six and fiveyear sentences. Ukrainian president poroshenko said that peace talks aimed at resolving the crisis will resume. He held a conversation with vladimir putin, Angela Merkel and francois hollande. They will meet in minsk tomorrow nd again on december 26. The latest in protests taking lace in dresden. E group was called patriotic europeans. That is largest gathering since october. Some also nauched a counterprotest against group. Lets go to berlin. Hans nichols joins us from there. There does seem to be some momentum behind this story. Yes. There is momentum. It caused a great deal of hammering in the press here. Just two weeks ago, 10,000 protesters gathered and last week monday, it was 15,000 and last night it was 17,500. The group claims they are just by the islamicification u. S. That they are not nazi. Their critics question that. What they say they are doing is gathering there to sing christmas songs. They will admit to being concerned about the number of refugees coming into germany. This year they depopt have 200,000 refugees asylum see, up 60 from last year. Last year there was 127,000 and they overtook u. S. It is a most popular destination for asylum seekers. They only budgeted 40 million euros. They will spend 130 million. It is going to force all the major parties to react. Guy . Talking of reactions, how is merkel reacting to all of this . Well, she has been very clear that she doesnt support what they are doing. She also said that people have the right to gather and demonstrate but they dont have a right to incite the public. Clearly her government is in a bit of a bind by this. The support that could be drawn from there could erode her base. These are some conservatives in parts of the country where she needs their support. They could tweak the asylum laws a bit and make sure those from he balkans are not counted toward the total so you could accept more. Merkel said they think germans have a duty to accept refugees but an parent duty to try and integrate them into society. We have Regional Elections later next year where we expect the for deutchland to do well. It is mirroring whats happening in the u. K. With ukip. No one can pin down the number of support but they are clearly gaining at least in some polls. Guy . Well see how that affects Angela Merkels polling in 2015. G. D. P. Out. Seems to have a little bit of effect on the pound. Gilts also reacting to it as ell. Talking of things a have been revised a little lower, lets talk about the oil sector, total, b. P. , shell. They have been downgraded by s p on the declining price of crude. Lets get details now. Ryan chilcote is with us. Not just for europeans but certainly the europeans are feeling this one. Look. I dont think investors are particularly surprised by this. Not a huge change. Confirmation of what investors already are concerned about. Shale producers squeezing we have been their prauks of oil and going production of oil. If youre a Big Oil Company in europe, total, b. P. , sell shell, then youre going find your cash flow squeezed as a result of his. The exception being conocophillips. They had their outlook resized by s p. Cutting back expenses. There is not a whole lot they can do. B. P. , many of the analysts out there said has the most scope because they reduced their Production Profile by 1 3 but they have not done that with their head count. So there is room there to reduce costs. Over the next year or two, a lot of this is out of their hands. It depends on the oil price. Lets talk about the oil price. He is a boisterous guy. He has been saying for the last couple of weeks no matter how low price goes, they will not cut production. Even if oil fell to 20 a barrel, they are not going to cut production. He is pretty much controlling the costs and mentioned that saudi arabia could produce oil at 4 or 5 a barrel. Of course the issue the for all of these gulf countrys is they need a lot more to balance their budget but in some cases, not all the cases, they do have the reserves to wait it out. You and i have discussed this before. Were discovering those high cost shale producers in the United States able to produce oil at a lower cost than opec anticipated. What i have heard over the last couple of days is interesting. They believe that the saudis, in order if that is the objective, they dont need the oil price to go slowly down. They need it to go quickly down because that generates a lot of defaults in the u. S. Shale sector. It allows you to tweak your Business Plan and change the story. They need to do it quickly. It is a capital intensive business. Shale production. You basically have to put in a huge amount of money quickly. It has a short life span. You need money a lot faster than you did if you were dealing with conventional drilling. Not that many shale producers being shaken out of the market yet. Scaling back their forecast for production in the United States. This is something we have to watch for over the next couple of years. No one really knows how this works. No one really understood shale production just a few years ago. No one thought it was going to be a big deal. No one expected them to be able to produce at the levels they are producing now. The one thing we need to mention is this guy genuinely believes that sfleast we take him on his word, that the price of normally the second half of year is going to rise in any case because demand is going to come back he maybe knows more than we do. Im sure he knows plenty of things you and dont. Thank you very much, Ryan Chilcote joining us on the oil story. The slowdown on the european economy hasnt affected demand in parts to have touring industry. 42 minutes after the hour. Welcome back. You are watching the pulse live from london. Now one of the brightest spots on the eurozones struggling economy is the tourism sector. Despite the slowdown on significant part turnovers travel sector, some continue to conform. There are two people you want to talk to when you talk about the hotels. The founders over the Hotel Booking service mr. And mrs. Smith. Good morning. Good morning. Everybody thinks the european economy is a horrible place to be now. Seven feeling bad about themselves and nobody wants to spend any money. That is not the case is it . Not in travel at the moment. Were working as hard as we ever were and we need our holidays still and were being choosy. Which is why the sector is doing so well. So how good is it right . Were up the last quarter of the 60 yearonyear, which is incredible and well probably end up around 40 . That is a bit more than you would normally see. You are seeing fairly decent growth rates consistently across the quarters . Absolutely. Into next year as well. The booking for next year, 100 . People going europe is up 30 yearonyear. This is mainly brits, right . Mainly brits. We are a Global Company with offices in london, melbourne and new york. We have 1,000 hotels around the world. Were servicing people from around the world but it is mainly a british business. How that is context of the boutique changed . They just bought a u. S. Boutique hotel chain. Does boutique, hotel and chain go together . As far as chains go, there is no question, but we tend to we call them collections. The biggest chain we would have is Something Like the Ferndale Group which has seven hotel or vilas. Collection of hotels rather than change chains. It would not be right for smith because it is a bigger chain. I think they have 100 hotels. It is a small chains that we are interested in. How big can those groups get . I dont think they are trying to be too big. If they go too big, they will lose their magic. Such a nicer detail. To do that across so many hotels is impossible. They are not floling the brand the same way. They are rolling out in the boutique way. Providing they can keep that magic and personal feel and keep that uniqueness through design, people continue to support it. The chains are degrading the concept of the boutique hotel. Do with need to come one a new way of describing these hotels . I dont think so. The Boutique Independent Hotel will be unique in itself because an ownerrun property can innovate much quicker than a very large chain and it is never quite the same. Even if it is a small chain, it is never quite the same as staying in some little hidden gem that no one else has found that is ownerrun and not marketed across the world and gives you that experience that no other hotel does. This is the this is the next thing. There is a wonderful place in stockholm where you feel like youre in someones private home. You have a chef there. There is a private house hotel which will be launching in february called fox hill manor. I think if anything boutique will become even more so. We have to use boutique as google recognizes it. [laughter] what about private equity interest in the sector as well . Is that zsh the expression that maybe the sector is going to change . We hear rumors that it is going to be taken out by private equity. There are plenty of other stories surrounding other businesses as well in the niche high end sector travel sector. Does that spotlight change the nature of the business, do you think . What do you think . I think it definitely shines a light on it and also the very big players like priceline are investing in systems and technology that service the biotechnique hotels and recently amazon said they were going into booking small independent hotels as well. I think the big boys realized that boutique markets can go away. Can they be stream lined . They are going to say we need to improve your return on investment and your technology base. Im just wondering whether that kind of changes im sure that will happen as well. I think the reason why the private equity in some of the Bigger Companies are interested in these smaller companies, they cant talk to their audience like we can. If they scale it too far they will break it and that is going to be a balancing act that they all have to are you going to stay independent . For now. Never say never. Never say never. Ok. Where in 2015 would you recommend what is going to be hot and what is not going to be hot and what was hot and what is not and what is going to be hot . It depends on what kind of holiday you want of course. Sri lankalooking long a very hot. The biotechnique hotels, were seeing them opening. It is just a great place. Well continue to grow. We have more hotels. Zpwreast hot. Greece is hot. Is it top tal from a hotel point of view . Yes. British air ways announced they will put a couple of new direct flights into greece and crete. Hat is exciting. We have seen hoteliers who have other industries as part of their family portfolio that have invested in hotels because the Tourism Industry to the economy. Still hotter than ever doing brilliant business for us. Nice, thank you very much indeed. Thanks for having us. The cofounders of mr. And mrs. Smith. Now coming up on bloomberg, we have been catching up with the worlds fastest man. We have been speaking to u sane olt about his claim usain bolt about his claim of being the worlds number one athlete. 52 minutes past the hour. Welcome back. Were on television, the radio, streaming on your tablets, fiend bloomberg. Com. Bloomberg has been speaking to he worlds fastest man as he launched a d a new watch. Stephanie talked to him about the fact that he is the greatest living athlete. I wouldnt say im greater than those guys. They have done so much for their sport around the me to do the same for my sport and when i retire, i want to be in the class with these guys. Why not go out on top and say you have done it. As you said, you are legend. Why duoing go back and run the risk that you may lose your autograph . I think i have one more in me. Rio is the one. Ecause of lose your groove. Set the bar higher. Need to do three. Not four . Just three. I wanted three. How much do you run . I dont know the distance i run a day. But i train like six hours a day. If you were working out six hours a day. What do you think of these athletes and the performanceenhancing drugs . It is bad. I think over the years it was Getting Better but every now and then there is a setback. Over the years, that is me trying promote and explain to people. You can do it if you work really hard and push yourself. Many people have done it before. Michael johnson has done it before and showed that he is one of the greatest without a doubt and he has done it without drugs. Are you concerned at all about the i. O. C. . Are you concerned about the way the International Olympic Committee Works . I try not to get myself involved in politics and not worry about things. I let my agent and people worry about that side of things. All i do is train and run. You knew you were always fast. You knew you were a good athlete. When did you know i have got Something Special . I was always fast. The moment that changed my life was 2009 actually. It was 2009 after a car crash and i came out unscathed, no problems. I sat down and said i was put on earth to do Something Special and to compete and to run. Said i want, i have to inspire people. From then on, i have just always tried tony speier. Thats why i feel so good when i see people texting me all the time saying youre an inspiration. Usain bolt talking to Stephanie Ruhle. Talking of new energy, lets talk about new energy and m. H. I. Investors plans to expand in the United Kingdom as the market for offshore Wind Turbines grows according to the companys c. E. O. Who said the joint nture will have full Manufacturing Capabilities in the u. K. If the market develops. Critical mass they may expand manufacturing as it gains more orders from u. K. Projects. Staying in wind and Mainstream Renewable Power has obtained a cility to build two offshore wind farms. The debt was raised. Were going to take a break. When we come back, it is the second hour of the pulse. You want to follow me on twitter at guy johnson takeover is where you can join the conversation. High noon in greece. The president ial vote starting soon. In the balance, a general election. Oil spill over. Downgrade. Fits over the crashing crude price. The russian ruble rebound. Tell you what is going on later in the program. Good morning to our viewers in europe. Good evening to those in asia. A warm welcome to those waking up in the United States. I am guy johnson. Francine lacqua is not here today. We are live from the European Headquarters in london. Our stop our top story, voting about to get underway in the Greek Parliament. Unlikely the Prime Minister will be able to get his candidate confirmed or in the third round of voting on the 29th. Elliott gotkine is standing by. He is monitoring the situation. What is the lie of the land . They will either shout out i , or they will shout out is they want to support the governments choice for president. Highly unlikely the government gets its manning gets the vote stavros into the government. All focus will be on the third round on december 29th. Stavros has been doing his best to get people to vote with him. He went on television a couple of days ago. Would be happy to broaden his coalition. If lawmakers vote for stavros a generaloffered election moved forward from mid 2016. Ands saying we must political uncertainty. Thinks greece needs to negotiations when the current bailout dale the bailout deal ands on negotiations when the current bailout deal ends. This has sent shockwaves through the eurozone. Talk to us about the link that exists now and the impact that this scenario could have on the ecb. There are a lot of balls up in the air. In terms of greece, we saw the president ial elections would be brought forward. We saw greek stock tumble. The stock market having a good year until then. It is now the worst performer in the world after portugal and russia. It may wantculation to get into some sort of quantitative easing. They cannot leave greece out of because they fear what might come next. If you leave greece out, it will be punished by Financial Markets. What is going on in greece is not going to result in contagion with the likes of portugal or ireland or any other country forced to have bailouts. Happenot know what will in terms of the vote. If they fail to get Stavros Dimas into the president ial palace, the opinion polls have gap has been narrowing. We do not know if would make good on its valves to renegotiate the amount of debt it owes to the European Central bank. Those uncertainties factor in. Election, they are probably not going to make any to crazy decisions now. We saw the initial reaction when brought samaras forward these elections. Thank you. Beentt gotkine has covering the story for us. Maybe he will be back there soon. You never know. We will have more on this shortly. I want to talk to you about what is happening in russia. Ruble has been rebounding. A strong day yesterday. To theus is shifting banking sector. Lets walk us through the action. Ryan chilcote joins us now. Lets talk about what has been happening with the banks and the deposit guarantee scheme. The concern has been a arrency crisis could become financial crisis. Parliament rushed through laws, passing bills into law before they break for the holiday. They do not want a one on the banks while they are on holiday. A doubling of amount of deposits insured. 25,000 in the bank and the government will guarantee it is there when you go to get it. Theirment has given deposit Insurance Scheme the right to take equity stakes in the banks that they deem necessary. The is on the heels of recapitalization program. The government committing 16 billion to recapitalize russias banks. We had a bailout of trust bank. Face ofllis is the advertising for trust bank. Russia started pulling their money out. They wanted to buy cars. Ruble was in freefall. The bank could not cover it. Million dollar bailout. The concern that is just the first. The 32nd biggest in terms of reserves, but it reminds people the ghost of august 17, 1998 and the significant financial crisis we had then. This is parliament trying to get ahead of things. Russians on holiday effectively now until january 12. That is a decent holiday. Orthodox christmas is on the seventh of january. They are off that whole first week. We are looking, not at pictures of the russian all are meant, but pictures of the greek they have, where started voting for the second round of the president ial vote. Calculators at the ready. We will make sure they mathis right. , maybe fromt you go a currency story into a financial story, but the currency volatile. Popping higher. The ruble has strengthened up 33 this morning from high noon tuesday last week. It hit 80 rubles to the dollar. A record low. A painful moment for all russians. No one was sure what was going to happen. 50 inle fell by almost the week leading up to this. We are where we were almost two weeks ago. The ad has been taken off of this, but the ruble is down. Russians have to deal with the reality that that ruble reading weakness willuble we were talking about the price of bread, which has doubled. These are the big concerns going into 2015. Ryan chilcote covering all things out of russia. These vote starting in athens, we will keep you abreast of the situation. A critical vote not passed today, but will there be enough samaras to maker that happen . We will discuss that shortly. The pope has used his christmas address to criticize the bureaucracy. Them fromused suffering from spiritual alzheimers. He urged the season to make the church a healthier place. Koreas access to the internet has been restored after being cut off for about 10 hours. Were able to see their leader, kim jongun, touring a catfish farm. North korea denies an attack on sony pictures. En haveua and wang j canal. A deal on the panama plans to complete a 5. 2 5 billion expansion of its waterway next year. Ahead, we will carry on the conversation about what is happening in russia. We have seen the currency rebounding for a third day and we will carry on discussing what is happening in greece. We have seen voting start in the parliament. This is the second vote on parliamentary candidate. Happens here, everything gets up, they either say the president s name or they abstain. We will watch the process carefully. They need to get to 200 today. The third round is for 180. If they get close to 180 today, then maybe we get through to the third round. Underway in athens. We will discuss what happens next when we come back. Welcome back. We are in london. Live pictures coming from athens and the great parliament. Here is the getting names of parliamentarians being called out and if they stand up name,y the president s they are voting for him. If they abstain, that is effectively a no vote. If you listen, you can hear what is being said. Language]foreign that means they are essentially abstaining. , theyy say Stavros Dimas are essentially voting for the president. They need to get to 200 today for dimas to be voted through. Very complicated. It looks like the Prime Ministers going to fail in his bid today to be able to get this through. We speak inrway as athens. What are the implications . Lets find out what happens next. It is not expected we will get through. A week is a long time in politics. How concerned are you about the possibility of early general elections. Having early elections has one initial drawback. It means a period of instability, which is bad for the greek economy. We had reports over the last 10 days that tourist booking for the summer are less than they should be because now, with christmas holidays, a lot of people have time to book the Summer Holiday and they are booking less in greece. About dealsrts about mergers and injecting money into the economy is on hold because of this. Five weeks extra uncertainty until the election day. Setback be a temporary to the economy. A few key dates. March 1 is when the extension to the program ends in greece. How big a focus will that be for the mind if we get into a general election . How big of an impact you think it will have . During the election campaign, i think this will help to focus the mind of voters. Know that if they do not stay in a program, or if kets believe they believe or if markets believe they will not stay in the program, they may be right back into crisis. The end it to the support program may help. After the election, we probably do not have to wait until the first of march. If we had a new government in greece, if we have that, this will have to make up its mind within days under the pressure of markets, wish or with or without. How expendable is greece from a eurozone point of view . What we have not seen this time around is contagion. We have not seen portugal and spain being affected. There are political issues in those countries as well. To change the mindset of authorities, where they look at whether or not greece is worth helping. The systemic euro crisis has been fixed they while ago. Theas been over since summer of 2012. Contagion control his work. Greece is a big risk. It has modest impact on the rest of europe and the rest of the eurozone. Programs, such as easing, we can contain the contagion from greece. It would be sad for the eurozone, if, after so much pain in recent gain in the greek greece or toulouse. Greece is expendable . The wrong word. Ultimately, it is for greece to choose. It is not for europe to make the choice for the greeks. Have a great christmas. Next, bad advice from tripadvisor. An italian regulator seems to think so. We will have the details when we come back. 23 minutes past the hour. You are watching the pulse. On your tv, streaming on your ipads, and live on bloomberg. Com. Shares up sharply in the United Kingdom. There are facing a reduction in orders. In terms of other news, we need to watch out for, all stem alstom needs to pay. It is the biggest criminal penalty paid to the u. S. Justice department. Wong jai lin is asias third richest person. Lets talk about another company we are watching. Tripadvisor being fined by italy over accusations of improper business practices. Quite a hefty fine. This is all to do with what they see as misleading information about the sources of the reviews. It has been criticized across the board that people will be able to go on and put fictitious reviews against competitors. The complaint stems from the National Hotel association and the Consumer Protection agency. Been a sevenmonth review by the italian regulators. Tripadvisor has 90 days to respond. They put out a statement yesterday. They are just trying to bring transparency. When i goll the time traveling. I put my latest review on a couple of days ago. It will be an issue it in personality and how much they can do to stop people from putting on these fictitious reviews. That. K. Regulator also had it was not clear enough that it is all not always independent travelers put on reviews. These are pictures from the Greek Parliament. Lawmakers voting. This is the second act out of potentially three. It is interesting. You can listen in. President ialt that s candidate name, which means they are voting for him. We will keep tally of it. Welcome back. Live pictures coming from athens. The Greek Parliament. Voting is underway in the second of three rounds of voting to elect a new president. Out of the 300, we have had more than 100 abstentions. It is mathematically impossible ,or the Prime Minister, samaras to get his candidate, Stavros Dimas through. We will go to a third round where the bar is lowered to 180. The voting is significant because we need to know whether or not he is close to the 180 or whether or not mr. Samaras is significantly short of it. If he cannot get the 180 on the 29th, we may have a situation where mr. Samaras have to call a snap general election. At least 100 members of parliament have not approved the candidate of the Prime Minister has put in front of parliament. What they do is they say the guys name or they say , which means they are abstaining. [speaking foreign language] right. Elliott gotkine been tracking the story for us. We knew he was not going to win. It is official. Get is official is how you how close you get to the 180 mark. Five law mongers five lawmakers did not bother to show up. If there is some kind of momentum towards the 180. He has turned a few cards onto the table. He has offered lawmakers to the possibility of entering his coalition if they vote for Stavros Dimas. Many of these politicians may find themselves out of a job if there is an early election. , a lot ofossibilities equations and things will be going inside politicians. He said we must end the political uncertainty. What we have seen, i Financial Market reaction that is perplexing. The yield on the greek 10 year up a little bit. We have seen prices on the Greek Stock Exchange rise. Maybe there is a more sophisticated story, suggesting they are getting closer to the 180. We will wait and see. At the moment, we are seeing the athens composite begin to rise. It is down 2. 5 on the day. Watching to see how close we get to the 180. If we were to see the third vote fail there are still many unknowns out there. Is thenown number one winninge Stavros Dimas in round three. If there is a general election, who is going to win . If there is a win, who will be the coalition. If it forms a coalition, while policies are it is it going to have. There are a lot of permutations that can happen along the way. There was never any doubt there was going to be a round three. Lets wait and see. That is probably what they are telling themselves. For now, liquidity is not going to be great. Thank you. Allie a got can joining us. He has been covering the story. What i think is a brief hiatus is underway in the Greek Parliament. We may have come to the end of the vote count. , trying toentlemen work out exactly how many votes have been cast for and against. We will get an announcement shortly on that. The critical number to think about is 180. We have failed today. We will go to a third round on the 29th. The bar isered lowered to get Stavros Dimas through. We will see if we have gotten close to that. Lets get status. Good morning. We are waiting for the final vote to come through in terms of the nose count out of parliament s count out of parliament. What is your sense of what is happening here . We still have a few days to go until the last round. Observerse and expectation is that it is probably unlikely that the candidate will make it through. It means greece will go through another round of parliamentarian elections. Is there anything left that mr. Samaras can do to persuade them to vote for Stavros Dimas . We saw the possibility of early elections at the back end of 2015. Are there anymore rabbits that can be pulled out of hats . There may be a possibility for him to announce and alternative candidate. Even that would make it difficult for a majority to manifest itself. Is there a possibility that mr. Samaras would step down . In order to preserve some sort of continuity as we go into this period when we are going to have to talk again about the extension of the current program, it would be better if we saw some kind of government in place . It is highly unlikely. That would require a level of consensus between the two major parties. Probably a priority in greece. Do you thing the current polling data is going to change . The leadment, it seems is beginning to narrow. Do you think that narrowing of the gap continues or do you think we are getting to an understanding of what the is going to be . Whatey will be affected by happens in the economy. The economy will be greatly affected by the uncertainty that will accompany this new election. However, it is difficult to expect the difference between the two parties being reversed. Next more likely that the general elections will produce a result that will not make the formation of the government very certain, which will take us back to the situation we saw in 2012, when we needed two general elections to produce an actual government. There seems to be this belief that he will perform a uturn and he will change his view and changes significantly. Is that the correct interpretation . Stayeds to me as if he fairly static. In that scenario, i found it hard to believe he would bend. Isit is hard to see what going to happen. He speaks with many voices and has changed his positions a number of times. He is not clear in what he is going to do. His voters expect him to not do that. If he ends up doing that, it will be a difficult political closeon for him, coming to political suicide. The third thing, his party is not unified. Wing that leftist will follow him. We can perhaps anticipate a sort of grand coalition emerging at some point. Politics are going to be fluid and it is difficult to predict how things will turn out. Finally, we should not lose the fact that economic developments will be crucial in determining how voters and parties come to a decision on what kind of policy to follow. Us your expectations. What happens next . You talk to the people involved in the political process. What does 2015 bring for greece . Uncertainty. A lot depends on two variables. One is the outcome of elections. Whether a party is going to have a majority in the parliament, whether there will be possibilities for a one Party Government or need for a Coalition Government. That is a big uncertainty. The second is the economy. His there going to be a reaction , will people be worried about banks. I am seeing a flash coming through saying that stavros got 168 votes. That is 12 short of the 180 required. Do you think the Prime Minister will be able to close the gap in the space of a week . He will have to take initiative to close the gap. Not enough to get the majority of independents. Of have to take the votes members of two small parties. It is going to require a at to achieve that result. Thank you. As you look at pictures coming to you from the Greek Parliament, we wrapped up voting. Forsecond round of voting to becomemas president. He got 168 votes. That leaves him 12 short of the 180 that will be required in the third round on the 29th. That is what we are looking at in terms of the electoral mass. The final votes will take place on december 29. Is 10 00 p. M. , london time. In that me take a quicklook at the markets. We can see how the markets have been reacting to all of this. As we saw the failure of this round to go through, we saw a spike in the market since then. It has begun to sell off. We will take a break and be back in a couple of minutes. Good morning, everybody. We are live from london. Talking about greece. Lets talk about germany now. Antiislam protests taking place in the city of dresden. 70,500 peoplend attended. For more now, we are joined by hans nichols. This is the biggest rally yet. It was. When you look at where they were two weeks ago, they were at 10,002 weeks ago. They had 17,500 protesters. The group says they are not necessarily antiislam. Some of the critics are concerned that there may be some neonazi elements inside this group. There was a counter demonstration around 4500 injuries. Throughout germany, some of the climbeddemonstrations to 20,000 in aggregate. Here is one thing we know. Refugees are increasing in germany. They are up 60 this year. They expect to have some 200,000 refugees. Country thate the overtook the u. S. In terms of the number of asylum seekers. That has had an economic cost. When you look at some of the numbers out there, the city of berlin has had to pay 130 million euros. They only budgeted 40 million. That hasot of been covered closely. How much more will it grow and what will it do to Angela Merkel s support . Is merkel going to respond to this. This is in the east of the country. How is that being viewed from the west of the country . Maybe a lot more about something other than islam a fixation. It is about jobs and not having access to that much money in their retirement. They say it is a confluence of factors behind this. In some ways, the stories are not as economically depressed as they were 10 years ago. Countrywide, it is 6 in germany. They have Big Companies that work there. It is a city that is very functional. What marvel is trying to do, she is trying to say i understand the concerns, but she is very clear the public needs to be warned that you cannot incite violence at these demonstrations. Interesting stuff. One story to watch. Hans nichols, great reporting from berlin. Stay with us. We will bring you the breakdown of votes in athens. Failingnister samaras to find himself with a new president. We have another round to go. He is sure 12 votes. It could have been worse. That is the sense that seems to be coming out. We will break it down for you when we come back. Welcome back. You are watching the pulse. Or ipadour ipod and bloomberg. Com. Not a great deal of reaction to the vote in athens. Did not get his president ial candidate, Stavros Dimas, through. He needs to get 180 in the third round. He is 12 short. It could have been worse. We are here now. It could have been worse. 12 is still a big hill to climb. Not a disaster, but not a victory. What get some analysis of has been happening with the greek stock market. We saw a little bit of a rally in the conclusion of the vote. That has completely faded. Lets go to our guy, who we have had following the story, that is elliott got can. 12 short. Quite a hill to climb. It is. I spoke with it is a case of close, but no cigar. He did abysmally in the first round. 168, youre right, 12 is a big gulf to bridge. Politicians may say ok, more people support him, i will throw my hat onto his side of the ring. Ultimately, the politicians will factory and a number of things. They may be seduced by the joining the coalition and earlier elections. They may be taken in by the course of the conscious. I would not like to suggest that they are a cynical bunch. For him asnot vote president in round three, they could find themselves out of a job. Factoredthings will be into the mind of the lawmakers. Great stuff. Thank you. We have hadn covering the story as we head towards the 28th towards the 29th. The bar is lowered to 180, but we are 12 short of that. We will be watching this story over the next few days to see if mr. Samaras delivers any more rabbits from hats to persuade them to vote for his candidate. That is it for bloomberg surveillance. That is it for the pulse. Have a great rest of the day. The bank of russia bails out russia bank as putins faces a financial crisis. Searchesoyear yield searches, we consider Janet Yellens options in the confidence well, the confident ceos will commit m a in 2015. Good morning, this is bloomberg surveillance. Live from our World Headquarters in new york. It is tuesday, december 23. I am tom keene with brendan. Reeley leslie picker is with us as well. Top headlines to get us started. It is called the center really for reason. Rally for reason. S p 500 clothesling less than one point under its alltime high on monday. Yes the ruble strengthened as oil prices go up as well. North korea has internet again. It was cut off for nearly 10 hours. Interruption comes just days