Hello. Welcome to countdown. I mark barton. It is 6 00 a. M. Thursday morning. On the pulse, check out our interview to talk about the swiss watch industry. The new York Attorney general has begun a lawsuit against barclays. Alleging the bank lied to customers masking the extent of highfrequency trading. Markets editor manus cranny is here to explain. Before we get into this. What are dark pools . Why do they use them . They have evolved. It is like a private trading venue. It is where institutions can go to execute highend sell orders without talking about which side they want to be on. Otc, referred to as overthecounter, hence less regulation. Is less transacted. What is at the heart of this lawsuit . Word, lies. Lies and fraud. This is under the martin act. Barclaysing that pursued the growth of the dark pool regards of Everything Else around it. They wanted to catch up with credit suisse. They lied about affecting them. Our complaint alleges that this marketing a protections was false. The grew the dark pool to largest of United States by telling investors they were diving into safe waters when, in fact, barclays dark pool was full of predators who was there at barclays invitation. And i willate protect you from what is known as highfrequency traders, apropos flash boys. And deceit. T fraud this is about marketing literature. This is a great deal of difference and thats not so. The high level corroborating a lot of this with the lawsuit barclays, for want of better words, marrying their trade and its about taking liberties. They are not part of this and they are not disclosing trade. What is the importance of trade bubble . Dominating the liquidity within the dark cool. They were defined as being toxic. Highfrequency trading company. Thosee going to take opportunities. They have not commented have they . Barclays has commented. They say they are examining the matter internally. The integrity of the market is a top priority of barclays. That is their response thus far. This is going to low up in the entire argument about where you do your business as a private individual. Where are you and i safe . The Pension Fund Safe . Much more importantly, institutions will now question the very validity of dark pools where they flew their flag for the past 10 years. Whats the Industry Impact . Dark tools, euro pools, this dark will push the argument back toward Exchange Traded products, exchange trading. People want more transparency. Transparency is available. It is in your car, your hand, google is on a mission to make its software ubiquitous. Version ofiled a new the Android Software. For more, lets bring in caroline hide. Good morning. Google wants to become an android addict. Beingant you to stop quick to give up your android powered smart phone and perhaps changed apple. They want to make it into your car and home. They have been buying companies such as nest and they want you to become an addict. They have various keynote addresses and its about making it easier. It is dubbed l, this new handset software. You can get access to new features from the app designs is to make animation all the more exciting. There was a focus for the app developer but also the hardware maker as well. They are saying to get your android into your television. Get it into your car. Android tv, android wear, android auto. The operating system is for free. Apple does not have socalled opensource and android does. They have sony on board, sharp, Lg Electronics pumping out new televisions that will already have the operating system within them. One. To play with a smart watch made by lg, you can speak to it. Text message he was doing extraordinary things. Show me pictures of pam does. Saying you it was could stream these to your android, tablet, smartphone. The courage toe sit on the tube and say send pictures of pandas with everyone staring at you . [laughter] why not . It will change the underground landscape. What about the cushion to emerging markets . This is where many felt apple should go. Moreive c is not that much expensive. When you look at and radian group goal, they are at every single price point. This is all about getting phones that cost less than 100. For ae been using this while and its really good. It cost less than 100. Leverage turnkey solution so that we can bring highquality affordable smartphones so we can get the next billion people access to these devices. Its really about pushing here. Theyre integrating better the various op rating systems. There is another operating system called chrome theyre integrating better the various operating systems. They want them to talk more seamlessly in this is about more seamless. They wanted to talk to your car, talk to the items in your home. Its about making the whole ecosystem easy to use. You do not want them to focus on competing. To an appgo and talk developer, they put apple first. Get the new product. That was the holy grail. Then you worry about android which is windows 8. You have android with 78 of the market. Are therefore thinking we should make android front and center. You offer free beers on all of the campuses and you get them to come around and network with each other. The keynotes and live streaming. You could watch it in uganda, london, all getting excited over a beer and how you would get it to write code about this new software. It tends to work, doesnt it . Hans nichols is here in berlin of theith a unique angle german game against the u. S. Are the germans quaking . I was going to use this opportunity to taunt you about the english departure but we have an interesting story coming up talking about what the breweries want from the german victory, how deep they go. Is there a correlation between beer sales, hosting the event, and how far your team goes . If you host the event, you see an average increase of 1. 7 on beer sales. Brazil is expecting to see a 3. 3 increase. If you just host the european cup, like england is doing, you see just a one point one percent increase. We will have all of those numbers and halftime flushes, what it tells you about beer sales. Cant wait. See you later, hans. But in brakes on the u. K. Housing market. What does mark carney have in his arsenal to tackle the surging house prices . We speak to the chief european economist to find out. Time for todays company news. Hischief executive says 46. 5 billion offer is compelling value for shareholders. 27 million ined its ipo. The cameras let everyone from surfers to skydivers record their exploits sold shares for 24 each and will start trading on the nasdaq later. Gm may need to fix the topselling chevrolet cruise for a new type of airbag problem. 33,000 vehicles may have received potentially faulty airbag modules supplied by jakarta. They have recalled a number of cars in the u. S. This year. Welcome back to countdown. I am mark barton. At 6 15 a. M. In london. Recommendations will be made public later when the central bank publishes twice yearly Financial Stability report. Joining us now is Jefferies International managing your chief european economist, david. Thank you for joining us today. What can we realistically expect from mark carney . . Ny measures to slow down alone to income ratio. There is also the possibility moving down the new zealand route restrictions on the very high value to loan ratios. Getting a loan more of the value of the house, it would the restricted. That affects the firsttime buyer. Loan to income ratio is simpler. What other measures . Banks are having to hold more. Is it workable . Mmr, the Mortgage Market review, is getting stricter anyways. At the moment, particularly here in london, they will basically have the loan to restricting it to less than 500,000 pounds. Obviously they are moving that direction anyway. Capital buffers and they could even do it by postcode. Moving across to Financial Stability he highlights the mps in the u. K. We can make takes hold more capital by where you live which would interesting. I think that all gets to very simple loan to income ratios. The Housing Market is slowing of its own accord now. Do we need tighter rules . The process by which it is in place actually fits in with the Mortgage Market review. The end of the day, the Housing Market is expensive. We know that they will be raising Interest Rates. What they are also trying to do is look cap a lot more detail. Bout debt levels by region they have much more understanding about david, how do you ensure that measures do not hit harder the market that does not necessarily mean slowing down . The other thing i would is that housing is actually expensive. It is not just the Housing Market is cheap elsewhere. Growing almost 20 yearoveryear. And it has some people saying is 150,000 to 200,000 area and collect there needs to be some rules of the can to ensure that they choose additional steps going forward. Be a next announcement 70 end of the day, the Housing Market appears to be taking off again than for the restrictive measures coming through. David, stay there. What he has to say about mark carneys recent testimony to the u. K. David allen, chief u. S european economist at jefferies. Welcome back. Im mark barton. This is countdown. David olan is here. The implications on Monetary Policy at todays recommendations, what are they . The more they do, the less they need to do on Interest Rates. In theory, this should push back the first rate rise which makes it more likely they will need to rates less than the cycle. Be 4. 5 or five percent. To extend out the duration of the cycle so we do not get a boombust. Look to a long time of sustainable growth. Do we need further clarity on u. K. Interest rates or is that it . I think we wait. The issue at the last mpc meeting, the data flow might suggest a rate rise this year. They will not raise rates in august. Does the referendum in scotland. Theres no way they would raise rates ahead of that. In a meeting earlier this month, they said the market was not pricing enough risk in for the november rise. In a sense, we have had weaker data flow than they perhaps were expecting. Inflation has only printed at undershooting the mpc forecast in just under a month. Can you raise rates with inflation around these levels . Lets say november, december it is still around 1. 5 . In the same way they did not respond to inflation when it was above target, he was doing more conservative easing. They could raise rates and they showed. It makes it more difficult so they have to do more were trying to investigate why inflation is undershooting target. We think this is more of a global issue. Inflation in germany is only 0. 6 and their Unemployment Rate is 5. 2 . Here in the u. K. , could inflation go lower . Yes, it could. The weather,ata, health care. It was more than that, wasnt it . Whats the take away . That janetnfirms yellens fed will not be raising Interest Rates until the middle of next year. Its interesting from the u. K. Perspective. Level u. S. Gdp is typically above where they were at the start of their downturn in u. K. The discomfort to where we were at 2008. From a behavioral point of view, the fed confirmed they would not raise rates until the middle or second half of next year. Bank of england tanks we should raise them may be late this year. From jefferies, chief european economist. We will bring you the Financial Policy Committee report live at half past 10 london time. Do not miss it. The potential fine for bnp. Is the u. S. Too tough on the Financial Services industry . Our next guest makes the case. Back. Come im mark barton. Lets get a check on the fx markets. Definitely worth looking at sterling today. The king at the sterlingdollar meeting beforee mark carney later this morning. Hes likely to unveil measures after last weeks financial to slowommittee meeting down the surging u. K. Housing market. Sterling, little changed today. Just a few days ago, on the 19th 1. 7039, thehit lowest since september 2008. These are the top headlines today. The new York Attorney general suing barclays. Accusing the british bank of misrepresenting the safety of anonymous Trading Program known as dark pool. They say they are cooperating with the investigation. The nations crude export will accelerate, another sign that violence in the countrys north is affect in the oilrich south. Next months oil exports from iran will be close to a record high. Mark kearney unveiling the stability report in just a few hours. Economists forecast he will unveil new measures to cool the Housing Market. He said earlier this month that rising mortgage debt could threaten britains recovery. Google already has its software on the majority of smartphones worldwide but in order to keep its top spot, it needs the best apps which means the best developers. To celebrate its new version of android, the company through it then surround the world for developers. Correspondentess Caroline Hyde saw with the u. K. One had to offer. Lured about 1000 developers to the google campus. Free beer and tshirts help to bet. They are trying to get them excited about the latest google creations. So far, so good. Or they could tune into the google announcement from home, many show up to socialize. Some are more serious than others. Its a bit more chilled up here, a bit of a sedate affair, the silent disco. To get App Developers excited across the entire business whether it is manipulating your mobile, connected cars, the latest smart watch, they want developers designing for the Google Android system. In we want to see what google is doing with android. Free foodusly, the and drink. I wanted to see google glass live. On. Ry it some are coming to play with the new hardware. Some come to talk software. Many just come for the free food. Exciting toy pretty get creative. That should be financially beneficial for both. It looks like Android Developers will be very rich. Caroline hyde, bloomberg. The wake of the 2008 crisis, the u. S. Was criticized for being too lenient on the Financial Services industry. Nymex guest now says the problem is the exact opposite. Morris reid from the public. Ffairs and Strategy Group thank you for joining us. Always good to see you. Youre now saying the u. S. Is too aggressive and its going to fire where the criticism before was that it was being too lenient. Aggressive inbe your own domestic market but when youre having these types of unintended consequences around the world where americans cannot even open bank accounts, you have banks in france where the president has to intervene with hours to fix the problem, perhaps this compliance notion may just be going a tad too far. All the conversation with obama did not yield much, did it . The significance of what is going on when heads of state have to intervene on their behalf. If you look at the situation here with barclays, frankly a Historic Bank in the u. K. Doing a lot of good things, this of the second time they have come under significant scrutiny from a u. S. Regulator. Im surprised that cameron has not stepped up to really weigh in. If you look at the Financial Services industry as it relates to this trade pact they want to do with the u. S. And eu, this is one of the problems. Theontinues to allow americans to be aggressive and sometimes overreaching. What can you do . It hits transactions amounting to 30 billion by leading sanctions against countries like iran and sudan. Shouldnt they be punished . Of course many do something as blatant and outrageous as that. That a lawt to think and has weighed in this way it is stark to think hollande has weighed in. The watern over in for alstom. It was a pound of flesh. Hollande did a great thing. He got something for france. Heads of state really have to find out and interact. This is not the domain of a head of state. Frankly, we would rather obama focused on other conversations with alon hollande. Astropfizer deal, do you think congress will act on these tax inversion deals . Probably not until after the election, but is that impending . Will we see more and more looking toike pfizer use overseas money in this matter . Are two editions. Americans are starting to worry about if other capital is welcome in europe. You had the situation with ge and great written with pfizer. Can we do business with europe . You have a lot of guys like me wondering about that. About know its not just business. Its also about taxes. The ge situation was not was about competition, keeping americans out. They may not be exactly like us. Is that the sense that american businesses have . Lets keep the americans out . Or lets protect our Key Industries . You want your companies to work in america and do business with america, dont keep them out when they want to acquire a fantastic business. To your point about the tax shelters, this is an ongoing problem that obama could have dealt with. If he would have come up with a gate system allowing companies to move capital back into america with a onetime tax, i dont think we would have this problem. He really missed this opportunity so you know when Congress Gets involved, they tend to overreach and it is because the president frankly did not show leadership on this issue. This leads me to the sanctions issue when it comes to russia. There is a concern that if the u. S. Goes ahead and imposes further sanctions on russia, u. S. Companies, oil companies, it might be to the detriment of their business whereas it might actually benefit european oil companies. Is there a worry within u. S. Business if the u. S. Goes it alone on imposing sanctions, which has tended to do so far . Led dont know if its a the way. Sometimes weve just been stupid. One thing i learned from my former mentor is a commercial diplomacy helps to bring down barriers. When you keep goods among pro