Transcripts For BLOOMBERG Countdown 20140530

Standing by to deliver the stories that will drive your day. Could be weeks away from a deal with u. S. Authorities. Hans nichols is in berlin covering and is deflation a thing of the past for japan . And later on in the show, the worlds first smart racket. It is changing tennis for pros and amateurs alike. What it says about my swing. I tested out next hour. Is weeks awaynk from a deal with u. S. Authorities over lenders dealings with sanctioned countries. The u. S. May seek more than 10 billion from the bank. That would be the biggest ever sanctions violation penalty. Manus cranny is here with the story. 10 million . We were talking 5 billion a week ago. The mood is shifting. The mood is changing. Of the pond in terms of retribution. This would be the first french bank that the Obama Administration has gone after since he came to power. The severity of the penalty last week, i was saying 5 billion. It is almost like a ticker. Why . His conduct more egregious. The bank did not fully cooperate. This is what irks regulators. If you have done something wrong and you have been found out, admit and help and assist put the case together. It is what the american regulators want. This would be a significant departure. We are not just talking about a 10 billion fine. We are talking about a criminal commission. A guilty plea. That would be a huge departure. Other banks got away with a slap on the wrist, metaphorically speaking. Barkley, 290 million. Just when you thought, wow, 1. 9 billion. 10 billion dollars is in another category. It wasnt long ago that they put aside a 10th of that amount . 1. 1 billion. This is the biggest overriding concern. When you look at what it earns. It is a minnow compared to the fine. You you saw with what saw with Credit Suisse i think what you will see today is a stream of notes coming from the analysts. They will say, this is probably going to impact if it is 10 billion on their earnings and their ability to earn. If they are blocked from the payment system, that is something that has not been confirmed. It could have its own it is only a week pursue week or two cents credit swiss was given a fine and it did to a guilty plea. Uppingse that they are their game . A considered way too presented. I might have chosen different words. But youre holding me back like a racehorse on the bridle. I have one name for you. Fact anda mission with finds. The man, benjamin, who went flew the kite that they might ban the license for standard charge. This all pertains to breaches or sanctions for band countries and the u. S. Iran. I leave you with this thought. He is going after him. It reminds me of the movie jaws. Suddenly the regulator has got its teeth. By gosh, it is going to make the world realize, you break the laws and the u. S. You break the section loss the tax laws . , we will come after you ad find you to such an extent you wont want to do it again. They were not criticized for being too soft. Thanks a lot. They are streamlining. The biggest indie nearing company in europe is eliminating more than 11,000 jobs. Our International Correspondent hans nichols is in berlin with the details. 11,600 is the total number. This is on the highend. Had been hand of what speculated in the local press, 10,000 this is on top of the job cuts already announced back in september. 1 billion is a potential savings on this. Its quite remarkable. This company shrinks its global workforce. In september, it was around 370,000 workers. Trunk that by four percent. Theyre coming down a little more. They had to say. A certain number of people do things for coordinating and analyzing. About 20 of those, we believe, can be put to work elsewhere. They can be taken out of the system. The work was away. Jobs simply will not be coming back. It is remarkable the way he was so frank in saying that. There has been speculation about what they will do with the health care business. Willie selloff will they sell it off . He said they did not intend to, but they are flexible. It means, it is not for sale but if theres a good bid, it could be up for sale. All part of the Restructuring Plan they have gone from four sectors to nine units. It is supposed to be more streamlined. It means job cuts right now. And how does it tie into siemens bid . They are apparently still going after it. Here is what he said. Base in gassolid and steam turbines. They are looking for deals like this with alstom. They are still pretending or going through the motions of being interested. They have not submitted a formal bid. If and when that happens, it will be up to alstoms board. Think slot. Hans nichols, our International Correspondent in berlin. The japanese government is hoping deflation is a thing of the past. Prices rose at the fastest rate in two decades. David iglesias is in hong kong with more. You mentioned, that is the key thing here. Have numbers for april. That is when the sales tax was increased. The fastest pace of inflation since 1999 1991. It is important to strip out the effect of the sales tax. Everybody expected that to happen. What you got more or less was an inflationary move. Costs also exclude energy that is partially why prices are where they are. But you and to see whether there is a continued pickup because of demand. To some extent, we have seen inflation in japan. Japan imports fuel with a weaker currency. Back to the headline number, 3. 2 . One of the guests points out suggests data suggests companies passed on that sales tax to consumers and that is where the problem comes in. He yes, perhaps margins are protected. But margins volumes are questionable. Suggestsa survey which only plananese firms on raising wages by less than one percent. Wages, wage increases still sticky right now. Pursue mark critz good to talk to you. David and grace in hong kong. Ingles in hong kong. We will talk to someone with 30 years experience, next. Time for todays company news. Google is moving to comply with ruling which backs the rights of citizens to be forgotten online. They have created a committee of experts to advise it on the decision. Which said people may ask Search Engines to remove personal information. Microsoft and salesforce unveiled a Cloud Computing partnership. Salesforce programs will become available for Microsoft Windows and phone operating software. It signals a thought between the rivals. And Steve Ballmer won the bidding war for the Los Angeles Clippers basketball team. The people for money with the process says ballmer will pay 2 billion to buy the team. Owner Donald Sterling was banned for the nbi for life after making racist comments that were released to the public. Welcome back to countdown. Best six ndon is 614 14. Japanese inflation surged to a 23 year high. Our discussion. Slightly dis misleading. It includes the sales tax hike. We are roughly at 1. 3 , which is where we have been for the year. The two going to hit Percent Inflation target at the end of the next fiscal year . I think it is still pretty tough. A lot depends on where the yen goes. Increasereally of the has been to sources. The weaker yen and effect that japan continues to import significant amounts of energy. As well Energy Prices and inflation has not moved up significantly higher. The key question from here you had a report that talks about this whether you can get some sort of genetically domestically generated inflation. That will be a trouble. Sales taxes come in. Rates were hit. We have seen in the inflation data that firms tend to, markets tend to pass taxes on 100 . It is not like in europe or other countries where some of that tax is absorbed. In japan, it goes straight through purity he massive hit to real wages as a consequence will get it will be tough to demand stronger. The bank will have to use policies. Ease policy again . Probably later this year. When you look at government politicians, what they are trying to do it is understandable to maintain confidence. A lot of this is a confidence game. Trying to convince the public nomics is ae revolution. The evidence is that is pretty hard. Real wage growth is going to be hit quite hard by this inflation increase. The third aero, as it were. Our we have seen politicians trying to be upbeat and suggest a sales tax will not derail the economy. And then the bank will not have to easy again. But as we get more data showing the impacts of that tax hike, the fact that inflation will not hit the target over the twoyear time frame, that will make the bank of japan ease policy. Perhaps in some senses, there is the issue that if they continue in this vein and suggest that they wont use policy, that does risk a decline in dollaryen. I can upset the whole process. Your forecast for the end . Just above 101 . We will see it here for a little while. 105. Longterm, we are going to 120. That is not just monetary easing but other factors that are going on. The fact that investors like the Government Pension Fund will shift assets oversized. I am nervous about the chinese economic situation. The slowdown there. Which could weigh on asia and japan and the yen. As longerterm. Longer term, staying in the region, the indian rupee the bestperforming asian currency in may. Up two percent versus the dollar. Well it last . Ask for the moment to dwell. The emerging market currencies in general are in a good situation. Soldhave been aggressively, like the rupee. Stock markets flying. Very low volatility across all assets. What is there not to like about any emerging market currency . The indian rupee do you have a preferred emerging market currency . Those that have sold off in the past and offer good yield, pick up, in an era of low volatility to rebury our of low volatility. Coming back. Even the rand. We had disappointing gdp data, but that currency is proving immune to the bad news we have seen there. That will continue to strengthen it a bit more. Head of big ten research. A big week for the ecb. Lots to discuss. Stay with us. Welcome back, this is countdown. Stephen is with us from standard bank. The ecb meeting, i just wanted to happen. What is priced in . Rate cuts. Clearly, i suspect at this stage, the market would like to see 15 basis points off. If the bank just stops at rate cuts, that would be taken as disappointing given some of the other aspects that have been talked up by the ecb. Beyond of rate cuts, what is most likely question like most likely and less likely . I would like them to have a funding for lending scheme, taking a leaf out of what the bank of england has done. Although a lot of people do write these keen, a lot of people deride the scheme, it has fostered confidence in the u. K. Of not lending growth. Dont be distracted no. A decline in lending. A lot of companies do not necessarily need to borrow but they need to know they can if they need to. That is the level of confidence the u. K. Economy has come bounding back significantly for different reasons. This is one of the reasons. Im not saying the eurozone economy will come bounding back if there is a funding for lending scheme, but its not enough to just throw money at banks. They have to throw money at banks and say, do something with it. Any period. Over 2012 inme started at the u. K. And then was extended. The ecb could have a short timescale but could extend it if it leaves the scheme is working. Towill nonsterilization that have an impact or not . I think maybe if the bank cannot get a funding for lending scheme together. This is more difficult for the ecb than the bank of england. They may look at other measures. Maybe sterilization of the Security Market purchases. That adds 20 billion euros plus two liquidity. At the end of the day, will that make a great deal difference . I dont think so. Today need to set the ground for outright qe do they need to set the ground for outright qe . We will go big . I think mario draghi has already done that. I think that is in the pricing. The ecb has seemingly promised quite a bit. When will it deliver . I think probably later on this your or into next year. I thought for a long time that was coming to read as with that was coming. As with negative deposit rates. I thought they would have to go the whole hog on this easing. It is plain out that way at the moment. What does it mean for the euro . Coming down from highs of 142 1. 36 . 1. 40 to not very much, is it. They are aiming for a lower euro, but they have their work cut out. The market has died. Volatility is scraping the floor. I think it will stay down. I think it will be difficult. More him what might happen next thursday, if they deliver something of significance, we might see the euro come down quickly. Then i see a stabilizing again. Seen with the ecb meeting, the euro came down very quickly and then it has petered out a bit and drifted lower. Lower out of its trading range what could break it towards 130 . If the ecb were to deliver qe2 straightaway . The key issue is the volatility which is low. It is likely to stay low. In some respects, that is good for a lot of currencies or markets. In emerging markets, and helps to carry trade. These currencies could strengthen. It does not help countries where they are looking for currency movement. In the case of the ecb, with the weaker euro. Good to chat with you. Have a good weekend. The head of research at standard bank. For payingeadline asked debts to russia will expire on monday. Wealthy countries which are deal before russia turns off the gas . Welcome back, i am mark barton here in london. As is what is happening to the currency market. The one you want to watch today is dollar against the yen. Inflation surging to a 23 year high. That is on a tax rise that is pinching consumers who have seen limited wage gains. Does the increase in inflation mean we will get less holocene doj boj. Industrial production, Household Spending data out of japan today also falling more than forecast. The dollar is falling against the end today after that surprise inflation. For the three year high in consumer prices. These are the Bloomberg Top headlines as i just mentioned. Japans inflation accelerating to a two decade high. Industrial output, household after that sales tax increase. The chief executive of luna purchase most of the will be purchased bonds. I think rates may help on the euro dollar side. Not for us, i think, but for all economies in europe. They will lead to a slightly weaker euro. Capital and liquidity. Separatists are getting outside assistance in the form of advanced weapons. Prorussian rebels used shoulder launched missiles. Theres been a and upside an uptick in fighting along the russian border. The battle over gas. International correspondent hans nichols is in berlin with more. It is all happening in berlin today, isnt it hans . Where european officials are trying to mediate this dispute. It is pretty clear there is no deal. Energy minister of ukraine referred to russia as an enemy. Heres what we have going on here. 50 of the gas goes to the European Union from russia is piped through the ukraine. The supply of natural gas for europe at large. The deal that is on the table , thishe European Union hasnt been consummated. Heres what they say. Ukraine will pay 2 billion of its gas by may 30. That is today. By june500 million more 7. Om gets a first maintainthey will delivery. Yesterday,e was passed without an agreement. We will see what well go back to. Ukraine has refused to cover any russia raisedince its price is about 81 in april withdrawing two separate discounts. These are discounts from two separate years. Heres what the Prime Minister saying about it. We are ready to pay the market but never the. Itical one to i have no idea what that means in terms of how expensive it is for consumers, but there is a market price for gas, and they need to figure out what it is an come to an agreement. If not, once the winter comes, it could be more interesting. One interesting point, ukraine in april ase times they were preparing for this. Theyre bringing in a lot of gas right now and putting it underground and storing it. Me and isa man with exactly what 268 per thousand cubic meters means. He is trevor sikorsky. We will come to the question imminently. Trevor, thanks for joining us. The deal that is on the table at eu slapped on the the table. Is it feasibly palatable to both sides . They meet in berlin today. Are we possibly closing in on a deal are not . I think we should be. There are a number of reasons for why a deal would be good for both sides, particularly for gazprom. It looks bad in europe even if we dont need the gas at the moment. Think it would be interpreted in the west as an act of aggression on the new ukrainian government. Be seenhas to at least to be open to a settlement. The terms of the numbers, 2 billion is an agreed settlement. Everything above that is disputed. It is saying, we understand this level of payment, we will get out of the way. And we will talk about the rest afterwards. So if ukraine pays a 2 billion, the gas continues flowing. There is no disruption and they can talk about a price for the longerterm. That is the big thing. So essentially, russia has raised prices by 81 in april. They withdrew the two discounts to put in place in 2010 in 2013. Russiaf ukraine once 250300. What is achievable here do you think for both sides . The ukraine were paying around 268 and then it went up to 450. That is a big increase. That is way out of the market in some ways. Ukraine is looking at what they pay in western europe. That is downstream. After transport the gas there. The 268. Paying around theyre saying our gas prices should be around that. Theres no way we should be paying such a high premium for russian gas. That is what they really dislike. That is quite a punitive level of payment. To pay says you have this because you havent been paying your bills. You are a bad customer, and that customers pay a premium. This is going to be a very long dispute between the two. Gazprom is in arbitration often with its customers. Recently, the success has been that gazprom has to discount its gas. It has been in arbitration with rwe. Gas. Got discounted they havent had a good time in arbitration, and certainly, if you look at those gas prices you will say this is punitive, they would need to come down to be more in line with every with what everyone in europe is already paying. , if the taps were turned off they have been stockpiling, how bad would it be for the ukraine and for the rest of europe . It would be fairly bad for ukraine because you put gas in storage anyway in the summer. You have to do that because during the winter you have massive demands because everyone switches are heating on. They could then see a position where they would start the winter with not enough gas in storage and then it really becomes a difficult issue in how you meet your peak demands. For the rest of us downstream, we had such a mild winter that our gas in storage is incredibly high for the time of year. We would be ok, provided this didnt run all summer. , ait is a couple of weeks month, i think european gas markets will be pretty much unmoved. We just have so much gas in storage at the moment. Were looking at the lowest gas prices weve seen for a number of years just because we have so much gas in storage at the moment. Thanks very much for clearing sikorsky,p, trevor from energy aspects. Steve ballmer is said to have won the bidding war for the Los Angeles Clippers basketball team. Rob gloster joined us on the phone from san francisco. Ballmer is paying a record 2 billion to buy this team. This is a massive spread between the previous record, isnt it . Y z doing it . Yeah, it is always four times as much as a previous record. He is doing it because teams in a city like los angeles dont come on the market very often. It is the second biggest u. S. Market. The nbas grunge of new television contracts and a couple of years. Even though it is a lot of money, people are saying that it is not such a bad deal, because there will be a lot of money coming in. It is a huge market with a marquee team. I understand Oprah Winfrey was one of the bidders. Ofyeah, there were a lot bigname bidders that included Larry Ellison of oracle and david geffen who is a music executive. At one point there was discussion about Magic Johnson bidding. He was an nba star and hes start for the crosstown lakers redlos angeles and he start d for the crosstown lakers. Now it is three days later and the bidding seems to be over. Can you explain to me how Donald Sterling why donald . Terling is the current owner it all centers around these alleged racist comments he made. How is it that his wife signed off on the deal . They are coowners of the team. Apparently, there was some kind of language in a family trust that allowed her to sign off on this unilaterally and actually keep him out of the process of selling the team. It is unclear at this point whether he will try to block it. His lawyer has not said theyre going to file a suit, but they have said that Donald Sterling is against the sale, that he thinks he has been mistreated by the nba, by the National Basketball association. At this point, it is unclear whether he is going to try to do anything to block it. Will the nba approved the deal . I gather a board of governors meeting is due was due to take place. Will they rubberstamp the deal . Or could they say we want to sell it to someone else . Still have a board of governors meeting scheduled for june 3, that is why the sale came together very quickly, because the sterlings, or shelley sterling, was trying to get this completed before that happened and before the nba voted to take the team away from the family. Whether the nba will rubberstamp it and say it is ok, but it appears the nba, all it really cares about, all the other owners care about is getting rid of Donald Sterling and removing the stain he has brought to the leak with his racist comments. If you can bring in somebody with the credibility and money of steel of Steve Ballmer, im sure the other owners will be happy about it. It is likely that they would be very pleased with a sale. Owners, ther biggest price ever paid for 18 team so far was 550 million. If a team is going for 2 billion, all of a sudden these owners have a very valuable team that they own. Good to chat to you, rob. Hibbett Sports Editor rob gloster telling us about the latest news. Countdown. Ck to it is 6 46 a. M. Here in london. Onean Prime Minister modi the latest election with promises of real reforms. Ets get over to mumbai what can we expect today gekko . We are expecting a reading of 4. 7 . That is really bad news for the economy. The next the next government is inheriting. We was a sub five percent mark for what is really bleeding industry. India is completely at a standstill when it comes to capital investment. Everybody has been in wait and watch mode. Side as well. It is seen a bit of a hiccup. Play havoc with the crops. All in all, it is going to be bad news on the growth front. What is he going to do for the economy . We are waiting for his top 10 priorities, arent we . A lot of expectation, mark. As an uphillrnment battle. The economic reality is far from euphoric. Thes and india making newly appointed Prime Minister fix aked all ministers to hundred day agenda listing the top priorities. Reports are in the kidding that Prime Minister modi wants to ensure consistency in policy. That is a big one given the fact Global Entities have shied away from any Big Investments giving the flipflop in the tax regime. We understand there will be meeting next week at the finance ministry. Therell be a lot of expectation when it comes to the Prime Minister. Gdpking to a set of this numbers. Sub five percent growth expected for the eighth consecutive quarter. United spirits is expected to post numbers later, as well. Ore is are you International Business correspondent caroline hyde. This is all about the shakeup that is happening in United Spirits at the moment, because geo controls United Spirits, the biggest distiller in india. They dont have a majority shareholding, that is what they want. Theyre kind to buy out 55 and extend that holding from 29 to 55 . Because diageo is a huge u. K. Thougher, it looks as United Spirits will have to reorganize itself. It just agreed to sell off its spiritsin a key white business for 430 billion pounds. Scottish whiskey theyre making acid disposals. That is why we had to basically take they need to analyze its Balance Sheet and work out what is going on. Would confirm the growth story that diageo was hoping to uy into . Some of the statistics are phenomenal as to why they are quite so thirsty to get their hands on United Spirits. It is the biggest Whiskey Market in the entire world, india is. They consumed 1. 5 billion liters of whiskey last year overall. Dominatesited spirits 40 or set of all volume. They want to get into this company because this is an emerging market with a growing middle class that will eventually prove to be growing. Recently cut how may we leaders did you drink last year . Certainly not one and a half billion, but i will give it a shot. Carolinas here, i am here. Hans is in berlin. Take away sir. Bild. I had tohe make sure there were no naked girls on the front. One out of every two germans is overweight. Here, china, india russia, brazil, mexico, egypt and germany. Men are fatter than women here. 64 overweight in germany. Too much beer. Two things i know you would never do if you were here. Never, never. Girls were fatter. We have the fattest girls in europe. Eu is meddling in chanel number five. Apparently, the perfume has some tree extracts in particular. There are a few allergy sufferers. Certain ingredients therefore need to be labeled or he taken out of some fragrances to attack the small group of allergy sufferers. A bottle sold every 30 seconds. Apparently it includes tree moss. You might have to see that your chanel is going to be changed. I will notice that next time i scored myself. Counting down to its 100 players in the world cup. It is the final 25. Ele comes in number one. Number tuesday ago madonna, who of course to the world cup by storm in 1986. He played in four world cups. Number three is the kaiser, france beckenbauer who won the world cup as a player and a manager 16 years later. Lovely series. Bobby moore, number 22. Nextdown continues in the hour. Alexa siemens shrinks its workforce. Europes largest Engineering Company will cut nearly 12,000 jobs. Google gives in to the eu. The tech giant is creating a special committee to advise on europes privacy ruling. Welcome back to countdown. It is 7 00 here in london on this friday morning. Newberg report is standing by across the world ready to deliver the stories that will drive your day. Manus cranny has the details. Hans is in berlin. Covering siemens as it sheds jobs to cut costs. Complying with an eu ruling on privacy means setting up a task force. Caroline hyde has all the details on that. It is the worlds first smart racket. It is changing tennis for pros and amateurs alike. Will test it this our on u. S. Authorities are seeking 10 billion from bnp party about to settle an investigation. Our markets editor manus cranny is here with the details. How did we get to 10 billion . It just keeps going. I think it is a combination of things. Facts do not get in the way of the benchmark where you go with finds relevant to breaking sanctions. 20022009, those other factual periods of time. The moods of regulators are changing. The severity is rising. Retribution is what is wanted. This will be the first French Institution under the Obama Administration which they go after. Lets take that down. That is for little bit later. That is a watch and see. The scale of the finest bigger than anything that has been handed out before. It is a lot more than they put aside. One point 1 billion set aside. This could be up to 10 times more the amount. I want to put this in context for you. The reason why the severity grew , misconduct was more egregious and the bank did not fully cooperate. That is what our sources are telling us. They didnt cooperate with regulators. Regulators are finding misdemeanors within your bank. If come to regulate you and investigate very cooperate. If you dont cooperate, the severity with which they will treat you is rising. Credit suissessuite fine look a slap on the wrist. Without hsbc could not get bigger at 2 billion. Barclays was 298 million. Mark, youre right. Fine for similar offenses. Thanotal amount was less half the 10 billion find. It is such a big difference. At think when it comes to talking regulators, i was reading through 80 New York Times article trying to get some sort of context on this negotiation. Prosecutors balked at the overtures. This is the language from the New York Times. Prosecutors balked. Ceos and the two lieutenants, too big to jail. They might be to be to fail, but nobody in this world is what these regulators are telling us now. Im emphasizing now. They were criticized number of other cases for essentially giving banks a fine and a slap on the wrist. This this is regulation in fifth gear and overdrive. This is the new cost of doing business. Theres is one man who keeps popping up. He flew the kite in terms of taking away Standard Chartered banking license when they were over sanctions. This is a prosecutor who is one to be reckoned with, i would say. People shake when benjamin laus ke comes into the room. Largest main Engineering Company is reducing up to 12,000 jobs. Is 11,600, mark. That is the total number. It would save about 1 billion. This is a this is in addition to the 15,000 job cuts that siemens announced in september. This is all part of their restructuring. Lets take a look at some of the jobs where they are going to be. 4600, 7600 of those will be in the companys streamlined. Superfluous positions for regional clusterings. Eres a quote from joe kaser a certain a certain amount of people do things for coordinating things, analyzing things. 20 of those we believe can be put to work elsewhere, but not there. They can be taken out of the system because the work goes away. 80 of those jobs will not be coming back or recycled back into the company. Theres been a lot of questioning about spinning off the health care sector, what theyre going to do there. Kaeser said. We will be prepared for anything that comes along. They have trimmed down about 26,000 at this point. Quite surprising as a trimmed down and try to take on ge. How does this tie into its aspirations to do some sort of link up with alstom . The a bit is imminent. How does this figure in with that plan . Make it more difficult. Eser insists they are still in play. If you think of the alstom bit as whether ge or siemens is going to guarantee more jobs in france, you have to assume that this news from siemens that theyre cutting all these jobs, we dont know quite there will be, but that will hurt their bid for alstom. Hans nichols, our International Correspondent in berlin. Search engine such as google could be flooded with requests to censor links to other websites. The tech giant is setting up a task force to help it response to the policy demands are here with more is our european Business Correspondent had caroline hyde. This is a tough balancing act for google, is net . Incredibly hard. On one side they have to balance the right of privacy of the individual versus the right of public information, the right of transparency. With humans based in google, they have to work out this judgment. Basically, it is the right to be forgotten. You can now, say theres a link on the internet. If youre based in europe, that goes to outdated damaging information that youd rather people didnt know him. You can, from today, go to an online document that google is put up on its website. You need to give the urls and the length. You need to give your home country and your reason as to why you think it should no longer be on the internet, on the google search. Google, with humans, with people in a room, will decide whether you are right or not heard of the cant decide, it will go on to Data Protection agencies. Germany is setting up a whole new realm of courts because they think they will be daily stress well by google passing on these sorts of concerns. It is a difficult weighing up. Countries thate are trying to suppress information . We need to know about these as information. The of creative effort the special advisory team. Pretty phenomenal. They have the wikipedia cofounder. He has thing or two about outlook information. We have members of the u. N. And law experts. There is one Oxford University academic who has said this is the analysis of ethical and legal challenges to the web. A is also going to be philosophical debate. Is a fascinating interview with the chief executive of the Financial Times this morning. Larry page is basically saying, growthhis could suppress in start ups. We are huge. We have the money and expertise to bring on bring them on web. And regulate this layer of the laxity is going to make it much harder for start ups. How do they navigate this new world in europe . , does thisworryingly fall into the hands of repressive governments . Can they repress their people even more . 30 pages humble. He said we didnt engage enough. We are going to become more european. This is a big change of terms. Previously, google came in and said no, sorry, privacy is tantamount to everything. Now they will start the debate. Our european correspondent caroline hyde. Japans accelerating inflation. Biggest in two. All the details next. Biggest into decades. All the details next. Time for todays company news. Google is moving to comply with the recent European Union court ruling that protects the rights of citizens to the forgotten online. Wikipedia cofounder jimmy wales will help advise it on the decision. Unveils a Cloud Computing partnership. Available on Microsoft Windows and Windows Phone operating software. This signals a thaw between the two longtime rivals. Microsofts former chief executive won the bid for the los angeles basketball team. Owner Donald Sterling was banned from the nba for life after making racist comments that were released to the public. This isback, countdown. 7 15 in london. Steve ration is a thing of the past for japan. Rices rise by the fastest in more than two decades after last months sales tax hike. Good morning. This has been good for the boj. We have seen inflation start to take up. Fairly clear as to the jump from 1. 3 to 3. 2 rate if we strip out the effects coming from the sales tax, and brings us to what we have seen over the past few months in japan. What may help is if you try to yes, out energy costs, energy costs are part of the reason why prices are the way they are in japan. It is also what has driven up inflation. Japan has a weaker currency. They started to import most of not all of their energy needs because of all those nuclear shutdowns. It is pushed up inflation. If you take that out, that is whatwe start to see analysts are still worried about. We are not seeing a pickup in prices ideally, because of demand. Here in asiaest pointed out earlier that perhaps Japanese Corporation simply pass on the costs to consumers. Margins are protected, but it is the consumer that suffers the most. That is why Household Spending dropped over 4. 5 for the month. Willat note, perhaps, i leave it there. Thanks, david. Have a good weekend. David inglis speaking to us from hong kong. Correspondentnal hans nichols is in berlin. It is all happening today in berlin, isnt it tom hans . It may happen today if theres a deal. The eu is playing the broker role between the ukraine and russia. Things werent helped win the ukraines Energy Minister referred to russia as an enemy. That certainly escalate the rhetoric around this. You dont want to have escalated rhetoric. As could be an entirely different situation if were having this conversation in six leading into winter. One of the many reasons it is and is because we are heading into summer. Take a look at the deal that is on offer. This is what theyre trying to hash out. The ukraine were paid 2 billion of its cast by military. As they are i was yesterday. Another 500 million by june 7. Once gazprom gets the first chunk of money, they will continue to export gas without demanding payment. Then they can get into negotiation on what a fair market price is. You want to let off some of the tension city can have a negotiation about what theyre going to pay. The problem with all this is that ukraine has refused to cover any of its debt since russia raised the price of gas some 81 in april after they withdrew these two separate discounts, one from 2010 and one from 2013. Heres what the Prime Minister of ukraine had to say. We are ready to pay the market price for gas, but never the political ones. Mark, unite can pretend to be National Natural gas traders. Yet he gets an earlier in the show and he really kind of broke down. The question is, is mechanically surprised, what do they do . Ukraine gas, but flows to you. Hans nichols, our International Correspondent in berlin. The worlds first smart tennis racket is revolutionizing the sport for pros and others and avid and amateurs. Wait for it. In the know is next. This is countdown. Time in london is 7 21. Tennis pros are allowed to compete using smart racquets, from tracking your stats in realtime to competing with friends. Were joined now by sales and marketing director for the u. K. Debeauvais. This is the racket that rafael nadal uses. Brand. Re the tells about the smart racket, frank. How does it work . The first ever connected racket. Look second normal racket if you look at it. It will give you feedback on your game. Is a meaty to switch it on before you Start Playing . Does this mean you switch it on before you Start Playing . What does it measure . What sort of stats canada measure . Measure . Will give you the details of what kind of shots you have been doing. If it was a slice, spin, if it was more slack. One of the most amazing applications, it gives you the impact location on the string bed. To think it will improve players games . It will definitely help them. For the first time you will be able to know what is happening on your racket. Tennis players have always been blind. They couldnt see. You could feel it, but you couldnt see it. The player racket will help them understand better what is happening in the racket so that. Ey can improve the smarts o these are not allowed according to tennis regulations, yes . Ce the french open has anyone used it at the french open . Yes, a female german player. She is using the pure rive racket. Rafael nadal is one of your players. Lets listen to what he has to say about this new technology. Connected racqueted allows you to know much more about your tennis and where youre hitting the ball. You can have fun with that. Withan compare your shots. N old friend it is important for people who are learning how to play tennis. Mywould be great, in opinion. Is us just for the likes of rafael nadal or for me who just quet now and rac again. As a tennis lover, youre more than welcome to use it. It certainly feels good. You wouldnt know it has this technology inside. The pure drive is the most versatile racket. What about the purists who say theres too Much Technology in support . We need Less Technology more not more technology. What would you say to them . I would say it is the best tool to improve your game. If youre committed to the game and you want to play better, theres Nothing Better than knowing what is happening during your game. What about the competition . You have this prototype sensor to stick on the bottom of the racket. Will the competition thisbolar is leading natural trend. Use it in cycling and running. It is the first ever connected quet. It is available in europe and the u. S. The cost is about 350 pounds. I might just keep this racket. Dont tell frank. It is friday, lets check on the dollar yen today. The big story is japan inflation quickening at its fastest pace since 1991. Andstrial production Household Spending falling more than forecast. Where does it mean for the bank of japan . Does it mean we will have more stimulus later this year . Does it mean the likelihood is we wont have more stimulus . That is the question on everyones lips. The dollar is trading lower against the yen, down by about a fifth of one percent. 101. 62. Inflation is accelerating to a 23 year high. Read. 2 was the figure from a year earlier. Industrial out put and Household Spending also fell. This was all after the sales tax increase. The chief executive of luna credit says he expects the ecb to begin and assets pursued Purchase Program soon. He says most of the purchases would be corporate bonds. He he spoke with bloomberg about the benefits of an expected rate cut next week. Help on theates may eurodollar side. All theus, but for economies in europe, to have a slightly weaker euro. Especially for medium sizes. The United States says ukrainian separatists are getting outside assistance in the form of advanced weapons. Theres been an upsurge in on hundred 60 kilometers from the russian border. Well get the latest trend in the economy in india. Groups capital asokh shah joins us. Has the economy bottomed . I think we are in the process of bottoming out. The consensus expectations are about 4. 6 on an annual basis. We are waiting for the Reform Programs. In terms of the Reform Program, the priority is to unblock all in her structure projects that have been put on hold. That is the way you improve the productivity game. We know there is an acute shortage of electricity, but there is there are infrastructure programs across could allvery how that potential spending the block . Due to landen stuck acquisition issues or environmental issues. I read this morning that these are things that are under the control of the state and that the central government. Is it out of the new Prime Ministers reach . Some of it is out there that think the momentum is there to get things going. I think a large number of the states are going to want to help modi get the Reform Program underway. Going to be a contentious issue. When asked to make sure you dont have a black list later. It is more important that the issues are set out so there is no red true suspect if taxation. Level thatsuch a encourages new investment rather than discourages it. Return must be adequate. More importantly, there is a shortage of capital in internally, but also fdi coming in. He can restore Investor Confidence . I am sure. He is a very good majority to work with. It will reduce bickering and accelerate approval of projects. The most important reform that he can bring is to try and do a onestop shop for the large investment programs. Instead of having 50 or so applications for particular project, if he did it in one window, which is what he did, that is going to accelerate the way that the f dei comes in and also the way that a domestic projects get ignited. At the same time he has to work in an environment where inflation is above the Central Banks limit or does come down from 11 in 2013 to around eight are sent. He has a man at the helm of the r. B. I that many have faced. Is going to give a lot of credibility is a banks are concerned. Importantly, the wholesale prices are already indicating that the pressure has been easing. You have five and a half percent on the whole. A lot of the regional and wholesale prices are different due to the food prices. It can be cyclical, but we need to make sure we have good investment going into the farming sector in order to make sure the forwardlooking numbers come down. It really the central bank. If you look at the money supply in a way, it is a fairly restrictive situation. I think the longerterm benefits of getting inflation under control are going to be tremendous because it rings it reduces the credit risk in terms of the credit cycle and so on. That really means ultimately the to restoreegins confidence. Projects get ignited. It is not a short journey, is a 23 year journey to get there. The first year will be quite difficult because you dont see the benefits of the project starting until two or three years down the line. Yes, the market is going to be optimistic. It is already ran away. Lets have investors take part . Up 40 from its august lows. The yield has come down from 92 to eightpoint 9. 2 point six percent. I think shortterm games of course, what has been accessible to the large investor has been the headline companies. Dispersion inof the medium cap stocks. I think the real thing starts because their earnings have been on a good trajectory. In a few months, as expectations begin to improve, the market will then begin to look fairly good value. It needs to go through stabilization phase after such a big move. In terms of the currency, we had a huge change. Now, the surpluses on a shortterm basis because of all things that have been done. Telling you that fundamentally things are already on a good and improving track. Of consolidation for a few months, let the earnings come through, let the new projects get started and then it is going to look like a very good value indeed. Do all thetime to Due Diligence one would normally want to do. Short list where you want to put your money to work. In the meantime, the credit markets looked fantastic value because inflation is going to keep coming down. Is y, in a way, there we need to unblock the amount. That is the first big change it can bring in terms of Financial Market liberalization is to that Foreign Investors want. The real rates are very attractive. Normal rates are very good. Amongst the highest in the world. In terms of global fund managers, they will be a very attractive place to put some serious money to work. It is been great talking to ashok. Irish rental homes, details next. Time for todays company news. Siemens will cut at least 11,600 jobs as it reduces costs. The cuts in europes biggest Engineering Firm tom among streamlines. Some employees will be reassigned to other roles. The ecb should not rule out buying corporate bonds. He spoke exclusively to Bloomberg Television on possible ecb measures next week. Ecb isink that the already doing something important. Now it is time to put all the effort together to combine the control of the cost. On the other hand, as in every company, we cannot survive on cutting costs, but also to andst and look at growth remember there are key goals for europe. The approval signals rep sols desire to explore for more drilling. Deutsche bank likes irish rental homes. International correspondent hans nichols is here with the details. Mark, this is a fantastic scoop out of our dublin bureau. Familiar to two people with the matter, 680 rental properties lent to own or to be bought by deutsche bank. The germans are moving in. The danes are moving out. Here is what we know about these let properties. These were properties bought as investments during the boom years. In the financial crisis happened and then a danish bank came in and bought them off. Now they want to sell into deutsche bank. 60 of his portfolio is in dublin, the rest is in the outside of ireland. Vacatione got a new home for you. Youre just going to have to talk to a banker in frankfurt about getting it. Is looking for one himself. Hans nichols, our International Correspondent. He is a man and knows all about property in ireland, especially the northern part. If you just go over the border, it is phenomenal. Homes have two or three if you didnt have two or three homes and property, you are nothing and nobody. Are they investing in the Property Market . What are the single biggest moves that ive seen from a group of people is in commercial real estate. Putting together funds that were bad to stressed assets. Lot of my friends that run businesses there have reorganize themselves with the banks and renegotiated the value of the gazillion dollar warehouse is that they had. There are many property bubbles around dublin, even the area where i come from, theres a little stretch, an area where prices are on the upswing. In the end, it comes down to location. Based outt is already and is gone. For a holidayrket home, myself. Equity markets in europe have been rising for seven straight weeks. In august 2012 they rose for 11 or 12 straight weeks. Paris is just a shade lower. The dax is flat. On, 10,000 pairs that is what the market is looking at psychologically. Robbery prices in the United Kingdom up for the 15th straight week. K confidencehe of poll, the first time weve seen a positive number. Will he get more stimulus or not . Youll find that most people running foreignexchange have got a call unless there contrary in. Paribas calls back to four percent on the possibility of a 10 billion fine. Of course, the siemens news, the human side of the story, is a number of job losses. Teams for the day, inflation data from spain and italy , chicago,y u. S. Midwest confidence indicators and the university of michigan. Are you impressed . Subjects thatmany i cant talk about. I am qualified on them, but there are not many subjects in which i cannot talk. I will back that up. By the supermarket you shopping. Shop in. Time in london is 7 51. Very good to see you again. At the beginning of the year your project and sub 10 returns for the s p 500. That call is looking pretty good. The big question is, will we see a Market Correction . Is been a while since we saw one. Yeah, ukraine and russia, you mightve seen a kneejerk reaction. Correction seen that. The markets brushed it aside again. Macro data looks good. The ecb look ready to act and support the eurozone. I think there is still a wave of passion on the sideline that has to participate. You are still saying hold onto that cash. It just takes one little event and all of a sudden before you know it the market turns negative. 510 correction that everyone is talking about is warranted heard when it does come it will happen quick. It wont take months for that correction to happen. What it is smart to be a little more cautious in terms of positioning. , they havent done so well on a stock prices. Theyre down seven percent. Thereve outperformed tesco and william morrison. Is it the best place out of those . I think if you look at what is happened with the sector, tesco has been getting in a pricing war with leto and all aldi. The likes of tesco are cutting theres down to try to compete with price. Furthermore, i think theyre focusing on a better quality brand, which means the kinds of customers that they will be getting in the doors are more loyal. To brand, youd rather pay for quality and premium. Others allow them to maintain market share. They have a healthy market share. It is a bit of a recovery play. It is a defensive lay if the risk the retailers and builders. You have to have aced strategy on europe. This is all about europe bouncing back from the doldrums. Thinkd are easing, sigh growth in the u. S. Is about three percent, which is what the economists are projecting. That is all priced into the market. If the ecb, next week with some qem of signal, whether it is , the fact is they are now going to start targeting the underlying economies. That will get growth within the eurozone to accelerate. Investors will want to participate where the money is at. Ftse 250 company, why do we the markettock . Cap are just over one billion. They just offer packaged product to u. K. Consumers through the likes the big one is energy. A packaged offer deal but they offer through a distribution chain which is similar to herbalife. Of the likes of a conservative labor targeting the Energy Companies saying they need to cut their prices. They have a very small market share at the moment of around two percent. Room to grow. The distribution chain has just increased by over 5000 members who are out there knocking on doors and selling the product on their path. If you look at the momentum that the stock casino the past 34 years, progressive dividend i like it. How excited are you about the world cup, michael . Of course, i am a football man. R england going to get to the group . They have a very good chance of winning. Really, england to win the world cup. We will have to back in the summer. We will have you back in the summer. I am guy johnson that bloombergs european headquarters. We are Just Moments Away from the start of the european trading session. Investors are focused on the eye watering 10 billion settlement that could be awaiting bnp paribas. Team, manus, lets start off with you. 10 billion fine could be extracted from them. We will see if that is a matter of weeks away. Lets go over to hans nichols. 11 thousand 600 positions, that is what siemens plans to cut. It is all part of the restructuring and costcutting ser. Joe kae the right to be forgotten is all about allowing europeans to disappear from the internet. More on that later. Guy coming back to you. Were forgetting anything here today, caroline. The european markets are about to open. It will be interesting to see how bnp paribas deals with that news this morning. Lets find out what is going on. Manus cranny standing by at the touch. We have seven straight weeks of gains in the European Equity market. The question is how will we close out the week. This is the longest judge in european since 2012. Is making record highs. The yen is rising. The qst what the