Transcripts For BLOOMBERG The Pulse 20150424

Welcome to the pulse. We are here in london. It is a busy morning. Francine we are just getting some figures. Confidence at 108. 6. It is a good indication of what germans are thinking after we had some dire pmi figures yesterday. Guy this is a survey of business in germany. It is 108. 4. The median expectation was 108. 6. The Current Assessment, 113. 9. Francine when you look at the breakdown, expectations are lagging. The Current Assessment is a little bit high. Lets look at eurodollar. Guy lets look at what is going on. A little bit of a rally on our hands. That was generated a little bit earlier on. 1. 0892. Francine fitez, futeex where Authorities Say the man who caused the flash crash work. Guy ryan. Ryan we are on futexs Trading Floor, where Navinder Sarao worked. He spent the better part of his 20s here. This is where he learned the abcs of training and honed his skills. Important to note is the period after he worked here. Specifically 2010 and the flash crash. That has captured the attention of u. S. Prosecutors. Futex has not been accused of any wrongdoing. No one thinks that he did anything wrong while he was working here. I sat down with the chairman of futex, the cofounder of this firm. Even though it was seven years since no vendor worked here, it is pretty clear. Almost as if he was here just yesterday. In terms of his trading prowess still commands a lot of respect here at futex. Have a listen. It can go one of two ways. If hes found innocent of the allegations, then he will be the world superstar trader the most famous trader in the world. If hes found guilty he will become just another infamous traitor. Ryan he was telling me that if you want to be a trader at futex, you are tested on three trades. One is math, another is psychology, and the third is passion. He said that navinder had all three. Paolo doesnt think that he singlehandedly could have caused the flash crash in 2010. Could he have been a factor sure. But it is impossible, he says for one trader operating out of his home to cause an entire market to collapse like that. Theres been a lot in the press about the somewhat austere lifestyle that Navinder Sarao lived. I asked about that. He said, yes. What did distinguish him from other traders was, he seemed to be trading when he was here and making the huge profits that he was for the sake of trading, just making the money, not to spend it. That really distinguishes him from most of the people that get involved in proprietary trading. Francine you had amazing access. You are the only reporter thats been allowed on the Trading Floor. You spoke to the former boss of rav, as hes known to the press. Give us a sense what the Trading Floor is thinking. Ryan i think they are very clear that they dont want to pass judgment in terms of a criminal case. He was very clear. They didnt have any contact with him since he left the firm. Based on the years that he spent here, what he did say was that he came across as a very honest very bright, very passionate very brave trader that was a leader to the other traders that were working here at the time. To a certain extent, remains a leader for people that work at futex. He was so successful, so dedicated, so modest at the same time. They dont want to get involved in deciding whether hes innocent or guilty. But they clearly dont think that he could have caused the entire market crash. The prosecutors arent accusing him of that. They are saying he played a significant factor in the flash crash. The sense you get is, he was had the kinds of things that make for a legendary trader. Now Navinder Saraos legacy will be decided by the courts first the extradition courts in the u. K. , and eventually, in chicago. As far as when he left this firm, he was very much someone that everyone revered. Francine ryan, thank you so much. Ryan on the trading for, the first reporter allowed their since the story broke. We will have more of that exclusive interview with the chairman of futex throughout the day. Guy lets get the latest on Deutsche Bank. They were fined 2. 5 billion for libor manipulation. What stole the headlines was messages between traders. They called the system corrupt. Elisa martinuzzi has more on this story. What do we know about what the traders were highlighting, and in particular, what was being highlighted by trader three . Elisa the pattern was one throughout the financial crisis there appears to the evidence that traders colluded to benefit their own positions. As you point out, one particular trader stands out trader three. For his role in manipulating positions that would have benefited his proprietary trading account. He was a proprietary trader specializing in shortterm derivatives. One the regulators have said is that he worked in concert with colleagues at his own firm, and also with other firms, to rig rates in his own favor, to benefit the positions he was taking on the market. Francine what is next for Deutsche Bank . Elisa this was a considerable legal challenge that it faced. It was the biggest penalty the firm has ever paid. But theres not much time for them to rest. We expect a big decision as soon as today on the banks biggest overhaul in the current management. The bank is considering a radical shift to its model, which may see it exit Consumer Banking entirely. [indiscernible] francine thank you so much. Elisa martinuzzi from milan, the team leader for all coverage to do with European Finance. Guy what else is on our radar . Comcast is said to drop its proposed deal with time warner. The proposed merger which took over a year to get approval faces opposition from the u. S. Justice department. Comcast could announce the news as early as today. Francine not a grexit but a tapering is the greatest risk faced by the economy this year. That is according to martin, who spoke to me earlier. The thing that worries me most is what happens when tapering ends. I think growth is going to be lower. Guy hsbc shares jumping on the news that they could move headquarters. Europes largest lender could be considering a move away from the u. K. Francine coming up, we will hear from martin sarao. Todays twitter question, is the Nasdaq Record a single cell . Guy we are talking about what is happening with greece. All of that is coming up. Back to the twitter question of the day. Francine welcome back to the pulse. Euro area finance ministers are meeting in latvia today for the latest talks on a greek deal. As they head into the meetings, german finance minister Wolfgang Schaeuble and Jeroen Dijsselbloem expressed skepticism that a deal would be done today. Hans nichols it seems that the bar is set very low for this meeting. Hans the bar is just to get a status report at this point. You mentioned frustration. There are really two pockets of frustration. One is with mr. Tsipras. Mr. Tsipras may be trying to shortcircuit what happened here in riga and cut a deal on the sidelines with angela merkel. In that meeting yesterday, he asked for a shortterm deal. That is one bit of frustration. The other frustration is that greece simply hasnt shown enough details. They havent done enough technical work. As mr. Muscovy c said, time is wasting. The overall issue is about the regime the present program to deliver reforms we can change. We need jobs and growth in greece. On the other hand, we need to think about further arrangements which could come afterwards. This is why it must be a coherent and Strong Exchange of views leading to a maturation in the process. Hans mr. Dijsselbloem said that it was incumbent upon greece and that greece is going to be feeling the pressure to cut a deal faster than european partners. Mr. Schaeuble seemed to express some confusion on why we are here. He said there wasnt going to be a deal and we should just enjoy the city behind me. Maybe i will do a little sightseeing. Guy that probably is justified. Talk me through whether these guys are talking. What communication is, how it is working, what efforts are in place to improve communication . Hans there is this back channel hotline between greece and its creditors. It includes jeanclaude junckers chief economist, mr. Paolo thompson from the imf, mr. Benoit coeure from the ecb. You have that on the creditor side. On the greek side, you have the state finance minister. You do not have Yanis Varoufakis. That is a question hanging over this meeting. Is the eurogroup relevant . Will the eurogroup stay relevant . And how much trust is there between Yanis Varoufakis and his 18 counterparts . They want specifics. They want details. They want progress. So far, they havent seen any of those three. Francine thank you so much, hans nichols from riga. We will have him throughout the day. We are not expecting much news but we will go back to him. Guy he wont be sightseeing. He will be reporting on what is happening. Francine the Martin Sorell story was interesting. He said hes been speaking to the officials and they are just getting used to the adf that a grexit the idea that a grexit is more likely than not. Obviously, emotionally, it might be quite damaging . I think weve come to terms. When i was in brussels, i got the impression that they are in the mind of, it is going to happen. Guy stay with bloomberg. Later on, we are talking to the mayor of athens. You can see that interview here on Bloomberg Television at noon london time. Francine the chances of greece missing its debt payment is as high as 40 . Only 30 of economists expect them to leave the euro. That will be an interesting conversation. Guy what are we doing now . Francine more from our interview with the employer of Navinder Singh sarao. Ryan chilcote has that interview. We have plenty more. Keep it right here. Guy welcome back. You are watching the pulse. Lets get more now from our exclusive interview with Ryan Chilcote. He just concluded that interview with the chairman of futex. Hes the former boss of the alleged flash crash trader Navinder Singh sarao. The man was always going to be the kind of person that i believed to be potentially legendary in some way in the future. The potential to be remembered he certainly has been one of the best, as an individual trader. Ryan now with what weve had, how do you reconcile that expectation . It can go one of two ways. If he is found innocent of the allegations, then he will be the world superstar trader. He will be the most famous trader in the world. If hes found guilty, he will become just another infamous traitor. Francine we will have plenty more from that exclusive interview with the founder of futex. That is what Ryan Chilcote was doing this morning. Guy in canary wharf, hsbc has started a review of where its headquarters should be. Lets get more with richard par thing can. The timing of this is interesting. What exactly are they saying . Richard they said that in the past few days, theyve had a Board Meeting to consider where they should be headquartered now. That is something the board has asked the chairman to do. There are many reasons for this. It is seen that the u. K. Has a levy on banking assets, and hsbc is europes largest bank. They have more than 2. 6 trillion of assets, mostly outside the u. K. If you have a levy on assets, that is what they are looking at, whether they should consider moving elsewhere to not have to pay that tax. Francine when are we going to find out . Are we talking a couple months, years . Richard it could take a while. They have said that there would be no time when they see a conclusion just yet. Theres a lot of considerations they have to take. A bank with 2. 6 trillion of assets is not going to be welcome everywhere in the world. There are only a few countries that would want to house such a sizable bank. Hong kong is seen as one potential area. What the Hong Kong Markets Authority want to take them . Guy can you give us a sense of why they might be wanting to consider that . We talked about the bank levy. Give us a sense of how onerous that is, how much money it costs hsbc to be based in london. Richard last year, they paid 750 Million Pounds toward the bank levy more than any bank headquartered in the u. K. If it were to move, it would obviously miss that levy but it would still pay a lot in terms of costs. If it keeps its u. K. Business, which i dont see why it would not want to, that would also perhaps still meet with u. K. Regulations. Francine this is a bank that has been grilled by a lot of nps over tax evasion from its private bank. We heard about the ceos own personal affairs in terms of where he has his bank account. Is this seen as a political move . Richard given that we have an election two weeks away, it would be read in that context. It is difficult to escape the politics of this. It is a coincidental thing as well. The fact that the election is two weeks away perhaps even strengthens their hands. The timing comes as we have their annual Shareholder Meeting today. This is something they would have announced on a day like today anyway. That timing is almost inevitable. Guy the sense is that this levy is only going up as well. Do you think that if one party were to win, it would change the thinking of the bank . Richard it doesnt seem as though any of the Political Parties have the stomach to reduce this tax. This is going up in either scenario. Just by how much is one consideration. The labour party have said they would hike it a little higher, as have the liberal democrats. I think it is a loselose situation given all the politics for hsbc. Francine richard, thank you so much. Coming up guy we are going to head to athens. Will greece be stuck in limbo for long . It seems to be the story at the moment. We are going to be in a situation where greece could end up the faulting within the eurozone. That seems to be a growing consensus. Does that lead to some sort of exit . What the Opposition Party be able to benefit from that . I dont know. Francine we also have a great survey on bloomberg today. We spoke to a number of economists. A greek default doesnt necessarily mean the greece has to leave the euro area. The chances of greece missing its debt payment is now at 40 . Take a look at the nasdaqs record close today. Does the record mean it is time to sell . Francine welcome back to the pulse live from bloombergs European Headquarters in london. Guy these are the Bloomberg Top headlines. Francine the nasdaq has hit a record closing high. Gains of ebay which Beat Estimates helped drive the benchmark higher. We can see gains extended today if microsoft and amazon beat earnings estimates after hours. Guy santander and unicredit have agreed to merge their Asset Management businesses. They will see the two lenders controlling one third each of the new business while the u. S. Buyout firms will own the other third. Francine profits at astrazeneca fell after currency fluctuations took a slice from revenue. Sales of two of astrazenecas bestselling products are also down as patents expire. Guy lets turn to one of our biggest stories of the morning greece. The country is seeing capital flow out of its banks at an alarming rate. 24 billion has been taken since november. One way to stop this would be separate got style capital controls. Will the greek people accept such bitter medicine . Greece is on life support. The greek people know it. They are pulling their cash out of banks in ever increasing amounts. 24 billion euros have been taken out of greek banks since november 2014. Deposits currently stand at 140 billion euros. 12 months ago, that was 160 billion. The European Central bank is maintaining liquidity with the emergency liquidity assistance program. So far, 75. 5 billion has been injected by the ecb. But greece cant agree with its creditors on the next course for its economy. Unless they do, the ecb triage could come to an end, leaving greece alone. That could require an emergency procedure, capital controls. Those controls could restrict the amount of money that can be withdrawn or transferred abroad as happened with cyprus in 2013. Banks stopped people from sending more than 20000 euros to foreign accounts and limited daily cash withdrawals to 300 euros. Without a deal, for the greek people, it could be bitter medicine. Francine lets head to athens and get the view from a member of greeces Opposition Party. Joining us now is a former minister of health. Thank you so much for joining us. Give us a sense of how worried you are that greece will have to default in the next couple months. Unfortunately, im very worried. Until now, mr. Tsipras doesnt seem to have the strength to do whatever it takes to keep us in the eurozone. Im very worried. Guy is more of the same Economic Policy being generated by the institutions and the prognosis that germany would like to see realistic . Can greece carry on with the same kind of austerity plan that has existed for the last few years . Mr. Georgiades our economy had started improving. The program made a mistake and we made many mistakes but our economy has started to rise up. Unfortunately, we had these elections, and syriza government came, and they tried to reverse the program. The program is a path, is a way to transform our economy, to modernize. You cannot go backtracking. What syriza is trying to do has brought recession again in the Greek Economy. Unemployment is rising again. The future is very has a mistake for everyone. Francine what is the solution . Mr. Georgiades the solution is mr. Tsipras to find the political strength to have a deal with the european union, with the imf, and the European Central bank as soon as possible. Even today. Francine will he stay in power if he finds a solution . Mr. Georgiades i have to be very honest. It seems to be a big problem internal to syriza party. It seems that approximately to 30 to 40 mps. If Something Like that would happen, the parliament can find many solutions. If mr. Tsipras decides to react as a responsible Prime Minister of greece, not just as a president of a new Congress Party of syriza, he will find a way. He is competent. He can do it. But i dont have the feeling if he has the political strength to do Something Like that. It is not an easy job. Guy if we have an election tomorrow, do you think new democracy would win . Mr. Georgiades that would be the question of the elections. The question would be, series a with drama, then democracy would win. Does greece really need elections again . From 2009, it would be the fifth or sixth election time we have. We cannot always go to election. Guy do you think we should have a referendum . Mr. Tsipras was elected on a mandate to end austerity. Hes tried to do that. Hes tried to get a deal that reduces the amount of austerity that greece suffers. Do you think he should have a referendum say, we havent been able to do that is this the right way to go . At some point, hes got to ask the people. Mr. Georgiades maybe he should try Something Like that. If we declare a referendum then almost in the next 24 hours, the markets in greece would be destroyed. Capital controls would be on the banks. Most people would not be paid. If there is a question if you will stay in the eurozone, until this is answered, the economy will be damaged in a very hard way. Either elections are referendum is not the solution. If you choose Something Like that you will just make the solution more difficult. He is the Prime Minister. He has a job in the parliament. We have a parliamentarian democracy. He has to come to parliament with a deal. Francine mr. Georgiades, do you regret not taxing shipbuilders more . It would be a very different plays for greece right now. Mr. Georgiades i dont regret it. I think the greek government if you try to put taxation with the big businessmen, in the next 24 seconds, they will have just changed their flags and the place they are. In britains government, when mr. Blair was in power, he tried to put that change on the ship owners in london. This is the main reason they came back to greece. If you try to do Something Like that, they would just leave. They can go wherever they want. Guy final question, have you personally taken any money out of your bank account and moved it either under the mattress or out of the country . Im curious to know. Im wondering if youve done that personally. Mr. Georgiades i will not answer this question. Whatever i would say, it would either say that i try to make things look better or i say that people take money from the banks. It is a private question. Guy ok. That kind of suggests all kinds of Different Things to people. Can you explain again why you wont answer the question . Mr. Georgiades i can understand all the people that took their money from the banks. We live in a free world. If you are afraid about your money, you have the right to take them from one bank to the other. This is how the free economy system works. On the other hand, we greeks have to keep count. We will still be living in this country whether it happens or not. We love our country and we want to make it rise again. Francine so you are intimating that you kept your money in greece. Mr. Georgiades i can say to you that i have my money in greece yes. Francine all right. Thank you so much. I dont mr. Jobless joining us live Adonis Georgiades joining us live. Guy stay with us. We are going to be joined by the mayor of athens. Francine still to come, is a monster deal dead . Sources tell bloomberg that comcast is going to walk away from their proposed takeover of time warner. Stay tuned. Francine welcome back to the pulse. Guy in the United States a 45 billion deal is on the cusp of falling to pieces. Sources have told us comcast has plans to drop their takeover bid for Time Warner Cable. We are joined now by matt campbell. Why is it falling apart . Matt this is comcast pulling the plug on this deal before it could be rejected by regulators. Word came down from washington according to people familiar with the matter that the federal Communications Commission was going to send this into endless hearings and punt the whole thing into the long grass, from which it would probably never emerge. Comcast are cutting their losses. This is a huge defeat and a sign that regulatory agencies in washington are very tough on these mergers. Everybody has an opinion about their cable or broadband service. Francine so the concern would be that we wouldnt see enough content or they would have stranglehold on what you would view on your cable channels. Matt there were a few concerns. One is a pure market concentration test. This would have been a very large company. It would have had 57 of the market for Cable Television in the u. S. The other one is the changing dynamics of the television landscape. We have all these emerging competitors. Netflix, amazon, hbo. One of the concerns was probably that this company could throw its weight around to heavily. Guy is this part of the Net Neutrality debate as well . Matt i think it comes into that. There is a very influential lobby in the u. S. That does advocate for things like Net Neutrality, that opposes these cable and broadband mergers, all in the name of reducing the power of some of these very big corporations. Francine but we are expecting a lot of consolidation. Matt yes. While we have seen this deal fall apart, or about to fall apart, i think everyone expects that Time Warner Cable is going to get swallowed up, probably by charter communications, which is controlled by john malone. Clearly there is more m a to come in this space and more tests for the regulators. It looks like comcast and time warner was too much for them. Guy what does comcast do next . Are they done . Matt i dont think they are done. The have built it from a regional Cable Provider into this absolute colossus. There will be Financial Resources now. Guy what can he buy . The avenues for m a are being blocked off. Matt i think the avenues for m a in the traditional business are being blocked off. Content could still be possible. There was a big regulatory challenge to the purchase of nbc universal. Another one is wireless. We have one u. S. Wireless carrier, tmobile, whose owners would love to not own it anymore. Maybe we could see something there. Or international expansion. Guy he is a very domestically focused guy. Matt that is true. Francine thank you so much, matt campbell. Guy time for a bloomberg exclusive. Shes Facebooks Sheryl Sandberg and virgins Richard Branson sat down to talk about their companies and the worklife balance. They also spoke about diversity in the corporate world. Emily one of the reasons im honored to be here is richard will say, this is good for my company. We dont have enough diversity at facebook. We dont have enough adversity in any company. We think diversity will build a better product and a more successful company. I think what will really motivate businesses and organizations to take diversity seriously is when they realize that not taking diversity seriously is hurting their performance. Emily the perkins trial captured the fascination of the country highlighting this issue of gender discrimination in silicon valley. The jury found in favor of kleiner perkins. What did you see in that trial . Sheryl so many women across industries saw their own experiences. You saw women posting. I wrote a whole book about it. What is happening is, we have systematics are meager types of women. And systematic biases of women. For men likability and success is correlated. For women success and likability are negatively correlated. As a woman gets more powerful she is less liked. I asked men all over, have you been told you are too aggressive . It doesnt happen much. Women, i dont know a single woman in the workplace who hasnt been told she is too aggressive. We know that men are actually more aggressive. Our stereotypes of women and men are getting away. Emily Hillary Clinton is running for president. Carly thierry not just announced. How do you feel . Sheryl im thrilled every time a woman runs for Office Anywhere in the world. Whether it is local state, county, or all the way up to presidency. I believe this is the first time weve ever had two women running. Im thrilled. Richard im thrilled as well. We had a woman of a different political persuasion, but Margaret Thatcher transformed our country. I was going to compare it to [laughter] sheryl it has been a long time. Emily have either of them called you for advice . Sheryl i know them both and they are great women. What is exciting about having women on both sides of the aisle run, i want more women in office on both sides of the aisle. Whether they are conservative or liberal, having women makes a big difference. Francine for more of this exclusive interview with Sheryl Sandberg and Richard Branson tune in tonight for our special. It is called balancing act. That airs tonight on bloomberg tv. Can you have it all . You can try your hardest. Guy yeah. Frans got it all. Francine anyway, focusing on the other top stories. Guy u. S. President barack obama has announced that a january drone strike in pakistan accidentally killed two hostages. He said he took full responsibility for the deaths of the american, warren weinstein, and the italian, giovanni lo porto. As president and commander in chief i take full responsibility for all our counterterrorism operations, including the one that took the lives of warren and giovanni. I regret what happened. I ask the United States government for our deepest apologies to the families. Francine the former cia director David Petraeus, has been sentenced to two years of probation and a 100,000 fine for giving classified information to his biographer and mistress. The tragus agreed to plead guilty petraeus agreed to plead guilty. Guy samsung is responding to demand for its smartphone by moving up production. A third plan had originally been slated to start making screens in june. This will allow samsung to nearly double monthly output. Francine coming up more from our interview with Martin Sorell. We will get his view on the u. K. Election. We have this big story about hsbc reviewing its headquarter base. Guy we will talk about that when we come back. If we have a conservativeled coalition, the business in theory is friendlier but we have a referendum. The uncertainty with the referendum and what happens with the result. Francine dallas Martin Sorell talking about the u. K. Election. If the conservatives came into power. We also asked him about a labor government. If labor wins, controls the coalition good news is, no referendum. There will be some renegotiation. The germans want some of the same things. Basically, no referendum. Bad news is not so business friendly. Whether that is true or not, we will see. Guy Martin Sorell talking to 2 flacqua. What have we got coming up for you . Francine we will be all over the hsbc story. The bank is reviewing moving the headquarters. This turned into a political story. They are talking about tax levies and regulation. It will be interesting to see what David Camerons reaction to this is. One of our reporters is on the ground with him as hes campaigning. Guy we will get that reaction and bring it to you. Plus, more from our exclusive interview with futex chairman, paolo rossi. He is the boss of Navinder Singh sarao. We will have that coming up later on as well. Plus, we got a new high. Francine that is on the nasdaq. That sounds drugrelated. This is our twitter question. Is the Nasdaq Record a signal to sell . Martin sorell was saying that he thinks a lot of tech assets are in a bubble now. You can follow guy and i on twitter. We have plenty to talk about. Guy we certainly do. We will see you for the next hour. Take care. Francine hsbcs h. Q. Review. They are examining whether their headquarters should remain in the u. K. Well look at the political impact. Guy the alleged flash crash trader. He said he didnt cause the 2010 flash crash. Francine no accord on greece. We hear from mario draghi later in the show. Guy so good morning to our viewers in europe. Good evening to those in asia and a warm welcome to those just waking up in the United States. Im guy johnson. Francine and im francine lacqua. This is the pulse live from bloombergs European Headquarters in london. Guy lets get to our stop story. The british bank hsbc may longer be british. Hong kong or shanghai may be a more obvious destination. They are looking to possibly move to avoid a Big Government levy. What have they said . It is a constant subject of discussion for hsbc whether or not it should be headquartered here. They are now having a formal review. Yes. They have done this in the past. They have reviewed their Global Headquarters in the past. The last time was in 2010. This was something they had put to bed a few years ago. They are bringing it up again now because the u. K. Is considering hiking taxes. George osbourne said he will do so. The labor party would go over that. We have the election in two weeks. A deeply political timing for this discussion to start. It is an extremely complex one though and it will take some time to conclude. Francine complex, why . This bank is one of the largest financial organizations in the world. It is something that the bank is addressing, it must do so in order to be as profitable as it can be. Being based here if the u. K. Comes with Regulatory Oversight which is stringent compared to other parts of the world and it has a higher tax base because of it. Moving elsewhere would come with great costs in term of legal redomiciling and convincing a regulator to take it, it would be a difficult job too. Guy london is one of the financial hubs. Many come here because of that. What would hsbc lose by leaving . It is twofold really. In some ways it would lose a lot. It is headquartered here. It gives it a stamp of gold standard. The u. K. Regulations are the best in the world. That is something that gives investors confidence in a bank. Moving elsewhere, it may potentially lose that. However it is something that would be to investors as well because it would come with lower taxes and therefore takes out costs from the bottom line. Francine give us a sense of where they would likely be relocating . I suppose the consideration would be hong kong. It has deep roots there. The jurisdiction where they have their roots. The only question would be if hong kong would have them giveen hsbcs balance sheet. That is seen probably as the most likely location, that it would move to should it come to that conclusion. Guy people ask the question whether hsbc is too big. Do you think this is a way of sidestepping maybe a breakup conversation as well . It could be potentially. That is something that perhaps they will be looking at. They are going to announce a strategic update on the ninth of june. Some people have speculated that that may include withdrawing or cause in certain areas of the world, brazil, mexico the u. S. They are all areas which have been underperforming. It is something that the bank had been earlier in the past decade expanding globally but now in this new world of regulation it is less strategic sense to be in all parts of the world. It is extremely expensive to do. Francine yes, it is. Thank you so much. Lets go to caroline hyde. She is at westminster where the bank is holding its he said he would wait to have more clarity. In terms of timing the review starts today and can go on for how long . Caroline exactly just behind me we will see the general meeting starting here live in westminster. In a statement put out today, it was yesterday the board decided for the First Time Since 2010 to investigate whether they should be headquartered in the u. K. Or somewhere else. We have that statement earlier saying that the board has asked management to commence work looking at the best place for hsbc in this current environment. They said were not going to get an answer very quickly. They said the question is a complex one and it is too soon to say how long it will take and the work is underway. The it was one shareholderer in particular who said, who pushed him to move from the United Kingdom because they feel levies are too high, both the conservative party and the labour party. They have already done it eight times already, francine. Guy hsbc isnt the only bank this may make sense for. Standard chartered for instance is even less exposed to the u. K. Would it make more sense maybe tr it to leave or are other banks going to be looking at a similar move . Caroline youre exactly right. This could spark away potentially. Aberdeen Asset Management calling on it too to move its headquarters from the United Kingdom. Hsbc has to pay some 750 Million Pounds last year in terms of bank leveies because over the regulation because of the new environment. Prior to this, hsbc always said look it is too misty as yet to really decide where it is best to put ourselves because regulatory environments are changing around the world. It seems that that mist he talked about monday is easing. Is clearing and now that you can ask Asset Management to find a way where they should be placed. Already saying they have clear links with hong kong. With standard chartered, a key u. K. Player, most of its business in asia also under shareholder duress to look at whether it should be abroad as well. This really sparked something. It is really notable something that is starting to be analyzed by the bank itself. It is interesting to see how the politicians are digesting it. Labour and conservatives pushing these banks away by conning to up the levies on european banks. Guy let me take you to another financerelated story. Let me take you to the Trading Store where the the man u. S. Authorities said triggered the flash crash. Brian . Were on the Trading Floor just outside of london. You can see there are about two dozen traders here this morning. They carry on right until the market that they are trading in closes. A little bit of a lull right now. The way it works is the traders come here and pay a fee to avail themselveses to the resources. They also share some of their profits. This is where sarao worked. Spent the better part of his 20s here. It is really where he learned to trade. Despite the fact that it has been seven years since he left he is still very revered here. He had real trading prowess. I sat down with the chairman one of the cofounders and asked him what he thought about sarao today. Have a listen. He was always going to be kiverpb person i believed would be legendary, potentially legendary in some way in the future. The potential to be one of the worlds great traders he certainly has been of his generation, one of the best. Ryan to get a job at fuxex to have a partnership. The chairman was telling me that about one out of 100 applications, one out of two that put in applications get an interview. Out of the people they interview, they hire one out of 10. He had a scholarship. He wasnt actually paying for the training to improve his trading skills when he was here. You tested on three things. On your math. On your psychological traits and also on your passion. He came through with flying colors on all three of those fronts. One thing that the chairman remembers that distinguished him from those traders was in addition to being frugal, he seemed to be the kind of guy that was accumulating money in his trading accounts simply for the sake of accumulating the money. He didnt actually seem to want to spend it which is a big disfrinks a lot of the traders that get into this line of work and finally, you know, obviously the trading that took place after he left here in 2008, the 20092014 period, that u. S. Prosecutors are so interested in when we had the flash crash in 2010, he wasnt working here. Influence he doesnt think he could single handedly cause a market crash. Could he have been a factor . Sure. But the idea that someone is trading out of their home in a semidetached house, here at least, they think that is pretty laughable. Francine interesting. Great, great exclusive interview. Ryan chilcote there. Well have plenty more the that interview throughout the day. Guy coming up, well get the late from greece. Well join our colleague hans nichols after the break. Francine welcome to the pulse live from bloombergs European Headquarters in london. Guy the german finance minister and euro Group President expressed skepticism that a deal would be done today. Hans nichols is in reagor. In tsipras has urged Angela America toll generate a deal here certainly before the end of april. That is not actually that far away. At the same time they are saying there wont be a deal today. What are you getting from what youre hearing there . Hanz im picking up the frustration with your finance ministers. They dont like that tsipras is trying to cut a deal outside of here. There is a lot of progress that needs to be done on the technical and tactical side of things. How far is greece along in submitting that list or finding a list so they can give that to their creditors and start the process of unlocking some of that aid. You heard the finance minister the other day upset with tsipras going through the press and he is also trying to negotiate with merkel not through the your of group. In some ways greece needs this deal more than europe does. Listen to how he sflained dynamic. The dynamic is more important for greek side than the euro group. It is a matter of urgency for the greek side to get the deal, to get Financial Support to make sure there is enough money available to keep the government running. Hans we have not heard from him. He had no comment. We are expecting them to break up here in a little bit. If this meet goes on longer, sometimes that is a sign of progress. Well report back. Guy, francine snop francine what about the channel of communications . Hans well, there is this hot line that has been set up. A great story from our bloomberg colleagues have really broken this down. This is a lot line between the government in athens. The state minister meekos papas is on that. It is with e. C. B. Officials, e. U. Officials and crucially i. M. F. Officials. The idea is to avoid any sort of accidental default. That is really what that back Channel Communication is about. I hope i have a back channel to the wind. It is getting quite windy here. Ill throw it back to you guys. Francine well have more from hans. Guy the greek process. The end of april is not far away. Could we see deal be the end of month . Were indy by a european analyst. Joined by a european analyst. You seem to have reached a consensus that there is going to be a deal. There wont be a greek exit. There is some ambiguity surrounding who were the we get a default. What are the risks to that outcome . I think the risk is probably that the greeks run out of money before everybody else thought they would. Right now they seem to try and push it to the brink to try and negotiate as far out as think think they can. It is if something unexpected happens, if for example the municipalities dont transfer money, they will run into problems sooner than they thought. Francine a default to the i. M. F. It would take months for us to find out. Say they default on an i. M. F. Pame. What happens . Historically the i. M. F. Has shown reasonable flexible. Flexibility. There is always time a grease period in order to make up the shortfall. In this particular case, the problem, i think this advantage is to the greeks is that no Institution New York city one person wants tobs held responsible for pulling the trigger. Definitely not the e. C. B. They keep extending the liquidity by that little bit extra. Not the i. M. F. Not by the european entities. I think therein lies the hope that this will not end up with what we call an accident. This will not end up with an acrimonious spat. Somehow at the last minute just when the definition of where the brink lies has been pushed to the limit, there will be a deal. Guy is the amount that greece has to accept in terms of austerity going down they have got a hard line at the moment. You have to accept this to get a deal. Which of the variables can change here . Is the variable coming from the institution able to change do you think . I think it is the outcome is the hard line. Out in how they get there. What germany has been saying is that they need to do the reforms necessary to show that their debt can be sustainable in the longterm. So up to 2020. How they get there with what exact researches, i dont think they care that much. The problem is obviously they have suggested some reforms that they think the creditors think are the most appropriate to get greece to those levels. Greece comes up with other reforms that they think will yield the same results and it is verified by calculations of the institutions then i think the creditsors are very happy to have greece go that way. Francine the base scenario is if we get an agreement, we dont see a real default as it were and then we have restructuring. What happens after . At the end of june or july . No one talks about the next 18 months. The problem that i have noticed is there has been a significant move from the creditors to the institutions toward greece as a primary surplus target to reduce the primary surplus target. I think the agreement will be reached closer to where the greeks started on that in the near term. This freese up some money. On the flit side because the agreement has not been reached and because of the economic uncertainty, the Greek Economy is suffering much more than it was six months before. Some of that effect counterbalances in the near term. On the longterm issue of that sustainability, again, we can play with the assumption as the institution and make it look sustainable fwru a cash flow per spective, greece doesnt really have a serious problem of delivering cash flows as to whether it will eventually be able to pathe pay out i think that is highly unlikely and some form of future restructuring will be need. I think in the near term, the grem will be about reducing if greece does which will be difficult for greece to do and that will be the quid pro quo. Guy do you think the greek government will be stable in this scenario . I dont think so. I think when he has to pass these reforms, his coalition will likely stumble. He has almosts within his own party that will certainly defect at that point and he will eart have to reconstitute a coalition or resign and will get the testimony government or he will recall elections. Francine will it be worse than what we have at the moment, either a technical government or going to fresh elections . I guess it depends on the outcome of the elections. If we have a government that is much more coherent, maybe that is a better solution. That would definitely be his reasoning. Have a government that would alu him to pass these allow him to pass these reforms to stay in eurozone. Guy the greek people want to stay in the eurozone but they dont want the reforms. I cant put this equation doesnt have a solution in my mind in this its current form. It is political partly. A lot of what youre seeing is the greeks wanted their government to put up a good fight, which they have tried to at least from greek perspective. They tried to play hardball. If you see this sport for hardball tactics have gone on from 75 , more like that . The greeks are seeing the impact. I think they would still continue to support tsipras for having tried their level best and the government needed to even if its right from upfront that they would need to compromise, they needed to demonstrate that they really, really pushed everybody to the brink. Francine thank you so much. Were back in two. Guy welcome back. Let me tell you about bloombergs top headlines. Francine the nasdaq has hit a record high. Gains in ebay Beat Estimates for First Quarter results helped drive the benchmark higher. Guy have agreed to merge their Asset Management businesses. Well see the two lenders controlling 1 3 each of the new company while the u. S. Buyout firm and General Atlantic will control the rest. Francine profit at the u. K. s second biggest drug maker fell in the First Quarter after currency took a slice from revenue. Crestor is also down as patents expire. Guy in the u. S. A 45 billion deal is on the cusp of falling to pieces. Comcast is planning to drop a takeover bid of Time Warner Cable. For details now, were joined by matt campbell. Bloomberg reporter at large. What is going on . Matt well it looks like we will have an noum soon. That comcast are going to pull the plug on this takeover of time warn evener cable. Comcast are essentially hitting the stop button before the government could tell them that it wasnt going to happen. Francine this is why . Matt one is a market concentration argument. This was going to be an enormous company. Something like close to 60 of cable sup scriptions in sup scriptions in the u. S. Would have been in its hands. Competitors, netflix, amazon hulu, others trying to up end the Traditional Television model. There was concern that this enormous player would have too much power in determining how that industry takes shape over the next several years. Guy what can they buy . Matt that is a good question. Comcast is a very big company. They will seek to do more deals. Certainly wireless is a possibility. Tmp mobile own bid deutsche telekom, they would love to sell it should they be able to get a price and then can comcast go and buy more content . Francine the question we have been asking for a while. Thank you. Guy the markets paying attention to rage. What else are they paying attention to . Hans these equity markets handling greek assets at the moment are a different different. 1. 5 over spain and 11 over italy. German Business Confidence may be giving things a little bit of a lift. Here on the ftse 100 in london it is one story. Were up by. 6 . It is the biggest way to stock on the index. Hsbc, the plans to maybe, potentially look for a new home giving that stock a little bit of a lift and taking ftse 100 with it. I go back to greece. Equity markets run by over 4 . Greek yields come back. Apparently the deal wont be done today. If youre listening to the chief to have euro group but markets just shrugging that off. The it is still very, very high but the bond market has been interesting this week. German bond yields can go the other way apparently. German bonds headed for their worst week so far this year. Last week, five basis points. We dropped below that level. That is the bond market for you. Yields lower in greece. A touch higher in germany. We go to 10866. German Business Confidence is positive. Greek talks, im not sure how positive that is. They set the bar pretty low. Maybe they will beat. That is why it is there. Back to you. Francine thank you very much. Jonathan ferro. Guy we sat down the with the alleged boss offer the alleged flash crash trader. How did sarao come to you . He was i believe around the end of 2010. He went through. A stringent if you like procedures. We checked obviously his previous records and he was found to be honest person according to everything that he passed the knew mair cal numerical tests that we put people through and he passed the acuity test that pewut people through and he pass we put people through and he passed the passion test. Even if youre not currently involved in the markets do you have a passion for the markets and he passed that test. Did he stand out against the other applicants . We only take 1 of those that apply. Because of the innovation that we have had over application, we provide a nonsponsored system where people can pay to learn to trade. But in order for us to sponsor people we sponsor about four or five people every three months to go on our Training Course and we go in order to qualify for that, you have to meet all of our stringent criteria. So he was a special one. He was one of the many special ones if you like. 2025 people a year. What made him stand out from other traders . As a trader, or the interview possess . As a trader and in the interview process if you like. Nav was very bright. Very dedicate and he was willing to take on risk. And he did take on risk. What is most importantly he was able to do it in a probability fashion. Probability fashion means he can work out the probability very quickly of your trade being right or wrong. If youre able to do that, you can become a successful trader. Ryan as a person, what was he like . He was he is a fairly low key gentleman. There has been a lot written about nav. That alluded to that. I think nav, if he had one thing that was different from everyone else, he wasnt interested or hasnt been interested in the money. He has been interested in just purely focusing on growing his trading account. That is unusual. Ryan you know him. You spent years with him. How do you explain that . It is as usual and it is almost an that he seems to have to himself. A lot of traders are dedicated to growing their trading accounts. Ryan so they can spend the money. Eventually. What is the point of being a trader and making 10 million and not spending any of it . I think you have to give yourself a bit of a reward. Ryan what was the pointed for nav . I think it was to grow his trading account. Ryan other traders that work there or have worked here in the past described him as a very frugal guy. We know he lived with his parents. Some people say he arrived at 10 00 so he could have, you know a lower cost fare on the train to get here and waited until 4 00 p. M. To get a sandwich so he could get a discount on it. Was he really that frugal . I dont want to get into that. It is almost too personal. There were elements within his penalty. He didnt feel the need personality. He didnt feel the need to spend. Ryan in terms of his success, how much money did he make . Because what we runs from the press so far is he was making a pile of money when he was working here. He was i suspect still is a very good trader making very good money. There are two ways you can trade. You can trade as a follower or a leader. When people first come here we give it maybe five or 10 a million euros. What you can do is follow the market. As you become a bigger trader we have to teach people how to become a leader as a trader. It is a completely different start of trading. As a leader what you can start to do is you can actually influence the marks. Markets. You can i dont mean that you can cheat the markets but if youre putting in a large bid into a market that would put a brake on the market. Ok . So you can use actual if youre a big trader and big traders will do that. They will attack their positions and defend their positions. Guy fascinating interview. Francine well have plenty more on that throughout the day. Guy coming up, well talk the business of watch making and currency. How do those two go together . Well find without the c. E. O. Of a swiss company. Francine welcome back to the pulse live from london on bloomberg tv. Guy watches and currencies as the apple watch goes on sale today. The traditional swiss watch makers need to worry. How are they holding up with the strong swiss franc . Joining us is eduard meylan. The swiss franc is still at fairly aggressive levels from your point of view. How are you coping . Were now a couple of months into this new level. How is it affecting business . Eduard it was a big surprise. Sometimes reduce pricing. Sometimes increase it and look at costs. We had to review our Business Plan and see where we could cut what was unnecessary because we need that margin. Francine it had had an impact on sales as well . Eduard it had different impacts. If you look at europe, uncertainty puts us and other brands in a difficult situation. It was all about trying to stabilize the market and bring certainty back, confidence to our partners so they continue to invest in the products and then customers, there was the first wave of people trying to maybe buy quickly as the price was still low. There was a wave of a lot of sellouts and then it stabilized. We see some markets more difficult than others. Guy has a thought ever gone through your head that this would be a good time to become part of payinger company . Eduard lon of course you need to think of those things. We invested into our independence. We put everything in our movement so that we stay independent. No. At this stage we dont want to go that way. There are tons of other things we can coto be innovative. Strategy partnerships. Being partor a big group is a different type of business. Francine you can muff production or headquarters anywhere. Could you . You based as a swiss watch maker. That would not enter your thinking . Eduard what protects our industry is the swiss made. We produce everything in switzerland and we need to continue this way. Guy have you talked about moving to germany . Eduard we live two kilometers away from germany. The swiss franc is very strong. Yes. I need to tell the people who make those decisions, thinking about speculators, for us as entrepreneurs, it will have an impact. We need to have a workshop across the border is a solution. Francine why is it just location. Why dont you actually consider moving those two or three kilometers . Eduard it is about passion, tradition. We have an amazing tradition in the village where our founder was born. 1805. I will stay there. We want to keep this brand where he was born. That is us. That is our life. Guy i can understand why. Apple have have designed in california written on the back of lots of their constructs. Why cant you move to germany and say made by swiss watch makers . Is there a branding exercise . These guys are swiss. They just happen to have migrated to germany. They are making watches. Francine but it is a german watch then. Guy no, it is not. It is made by swiss watch makers. Eduard for a small brand, we could take those kind of risks but moving i everything across the border would require a lot of explanations to our Consumer Base an fans of our brand who love the history and you dont want to break that. Francine when you look at the apple watch, is that a good thing or bad thing for you . Is it going to be a backlash of people saying i dont want anything like thele watch or does it actually make no difference . Eduard clonk thnk it is a good thing. Eduard you can panic. For me what is important i think it is going to help a new generation of to grow, to get used to wearing a watch. Just check the time on them. The mobile phone could have killed the watch industry. It didnt. The watch industry has grown further. I dont see it as a risk. It puts us in the situation where we need to be creative and innovative. I think the swiss watch industry has snoun the last 200 centuries we are good at that. Francine thank you so much for coming on today. The c. E. O. Of h. Mozer. Guy coming up, were going back to latvia. They are meeting at riga. They are eventing their frustration at the greek finance minister. Were watching the drama unfold. Well be back after this short break. Francine welcome back to the pulse live on bloomberg tv and streaming on the ipad and bloomberg. Com. Guy lets get you some of bloombergs top stories. A january strike that accidently killed two hostages, the u. S. Is responsible for that. Basically he came out and talked about the two guys that were killed in the hostage crisis. Lets listen to what he had to say. President obama as president and commander in chief i take full responsibly for all of our counterer terrorism operations including the one that took the lives of warren and giovanni. I profoundly regret what happened. On behalf to have United States government, i offer our deepest apologies to the families. Francine former c. I. A. Director David Petraeus has been sentenced to two years of probation and ordered to pay 100,000 in fines for giving classified information to his biographer and mistress. Guy samsung is responding to a surge in demand for its galaxy smart phone by moving up production at a third factory. It had been slated to start in june. Francine for a look at what were watching for the rest of the day, lets go back to the European Finance ministers meeting in rage. Were understanding that mr. Varoufakis is getting a little bit of a rough time from the other ministers . Hans yeah. A hammering is the term that bloomberg is using according to three people familiar with euro area talks. Yanis varoufakis may be going after the cameras in a little bit if and when this meeting breaks up. It is going to be hard to see how beaten up he looks. It looks like things got ugly. I dont mean physically. But the reports we are getting from this meeting is that Yanis Varoufakis, a lot of frustration that we heard by ministers going into it was evented. It was let out. The clock is ticking. There is frustration. It was expressed. Now well have to see how the eurozone is going to try to clean it up and more importantly, how markets react to this. The expectation was that this meeting wouldnt yield a lot. It would be a status update. It turns out what may have happened in there was quite a bit of acrimony and tension. Well see how the market recess act to that. It seems like like were further away from a deal than we were this morning when everyone walked in quite frustrated. Guy i guess were going to have to find out when this press conference is going to take place. You get a sense this is carrying on now. The press is going to be delayed . That were not done . Hans our understanding is the meeting is still going on. We saw one finance minister leave but our understanding is the meeting is still going on. That could have changed from the last five, 10 minutes from the time i walked out to come over here. It will be important to read everybodys body language and tone and were expecting mr. Varoufakis to how does he put his gloss on . At every meet swreg had, no matter how long, we have had some short ones that ended faster than expected. Varoufakis comes out and professes his commitment to the european project, to the common currency to greece being a good partner. Listen to see whether or not he preets that after in the bloomberg copy that is moving. He took that hammering. Guy, francine, you never give me a hammering. It is always a gentle never a hammering. Guy . Francine nothing physical. Anyway. Just verbal abuse. Thats what i get. Guy i get a quick on the shin turned desk. Francine hans will keep us up to date with any new developments in riga. Thats it for the pulse. For our u. S. Viewers surveillance is up next. For our u. K. Viewers i will be back with our politics show. She never kicks me under the desk. This is bloomberg surveillance. Tom the mystery is how much cash does greece have left . Not enough. Finance ministers gather in riga latvia as greek bonds find a bid. Janet yellen and monetary distortion. Ed of Evercore Partners site isi. Hong kong and the Shanghai Banking Corporation must choose between london and hong kong. This is bloomberg surveillance. Live from new york. Friday, april 24. I am tom keene. Joining me, Brendan Greeley and olivia sterns. Olivia this was supposed to be the crucial meeting for greece as European Countries who hold the Purse Strings finance ministers are meeting in riga latvia. Growing more frustrated with greek Prime Minister alexis tsipras. Tsipras was supposed to come up with economic reforms. If there is not an agreement soon greece might have to default on debts. Tother european Officials Say greece will not come up with a list