Welcome to countdown. And Business Leaders gather for. E annual forum e will keep you up to speed. The professor joins us. International se chairman joins us later. Boost al bank will funding for the euro zone economy. The council decided to purchase assets. It will purchase a broad portfolio of simple assetbacked securities with underlying assets consistent of claims against the area in the Financial Sector under an a. B. C. Purchase program. It pushed the euro below 1. 30 for the First Time Since july, 2013. The decision was not unanimous but as the Bank President opposed the new stimulus while others pushed for me. It was discussed. There were some of our Council Members were in favor of doing more than than just presented and some were in favor of doing ess. It is the mid road. Three things interest me. One, how much are they going to spend. He is saying 700 billion. Back up to the 2. 7 trillion. That it was in 2012 versus 2 trillion. What are you going to do about yen . Seemingly according to officials within the e. C. B. And surprising we know germany has been against what they see as giving money. Financing governments. Purchases b. S. Problematic. Hat are you going to do yen. You didnt have him on your side and the market reaction. The euro, lowest since july, 2013. Clearly the market was really quite struck what he pulled out of the bag. Only so few expected it. Basis s face it, 10 points. He says we are done. Cant do anymore. Its a statement of intention and looks like he is going to try and pull germany along. What is interesting of how much will he spend, how will they buy these assetbacked securities. If you go into that market now, very hard to purchase at the moment. They said, takes about three months to get your hands on one billion euros of this sort of debt and you have to hold the more risky. They say they are not going to do that and going to the safest. How much that really takes risks off the Balance Sheets. And causing banks to put capital aside when you buy the less risky debt. They dont hold capital aside. Ron, give us a sense of what is happening on the ground this morning. The ukraine crisis dominated the summit yesterday and promises to dominate it today. The president of the ukraine was seemingly everywhere yesterday announcing he is prepared to introduce a ceasefire as of 2 00 p. M. Kiev time if the rebels do the same. There are peace talks this morning in minsk and the ukranian president says if those are successful, he will introduce a ceasefire. Dont get too excited. We have been here before and secretary general of nato said the last time the russians had a peace plan, it was simply a smoke screen so they could continue to advance their forces. It will dominate the conversation here in south wales. Careful optimism indeed. Ron, talk about sanctions as well because the e. U. Is said to be decided today on taking further sanctions against russian companies. The e. U. Announced last week they were imposing a deadline of today on themselves. We do expect a decision on sanctions and given what i have heard from the e. U. Leaders that re here and the results of the ranians president and the french president and italian prime minister, they believe sanctions should go forward simply because they feel what the russian president has already done, by their judgment, deserves more sanctions. Perhaps the more interesting question right now will be what will those sanctions be. Merkel said they are along the lines of wall they have faced. You have ukraine on one side and isis. Whats the situation like on the ground now just before dawn breaks . Well, you know, yesterday was a very late evening. The World Leaders went to a castle. They started the process of discussing what could be done with the Islamic State. Yesterday, it was ukraine. Last night they only began to discuss what they should do in the middle east, in syria and iraq. It would appear that britain is getting closer to agreeing to join the United States nrm air strikes should the United States choose to do that, maybe even inside of syria. There are a whole series of steps that can be done including a request from the Iraqi Government itself. In any case what we would likely see is a coalition of the willing. In other words, not something at would be natowide, not that the alliance would embark on but a narrower coalition that would involve striking from the air islamic forces. And talk about having a very, very modest nato force in iraq. Should the Iraqi Government request that to train their iraqi forces. But thats really a very model modest thing to kind of show presence on the ground. Even managing to squeeze in a visit to a primary school. First interview of the day i think its a good decision because we are experiencing low inflation and give all the stimulation to support the growth in europe. That was president of the european commission. Welcome back to countdown. The forum draws Business Leaders on the back of announcing a stimulus plan. E have an interview with chairman roubini. Good morning, thank you for joining us this morning. Good morning, great pleasure being with you. Can we start with the e. C. B. Measures announced yesterday, do you think those measures coupled with the ones announced in june will lift Inflation Expectations and remove fierce of inflationary spiral . I believe that the movement decided yesterday will go in the right direction and the most significant part of it is not even the conventional part of it e. C. B. Has ow the gone into conventional Monetary Policy. What they decided is quantitative easing and inclosing the Balance Sheet. It doesnt really matter whether you buy private assets of e. C. B. As decided or public assets. What they have decided to increase the Balance Sheets towards the targets. That 1 trillion increase will have a Significant Impact over time together with other policies over time and structural reforms. What do you think we can expect . How long will the program last for, will the e. C. B. Be tempted over time to buy risky aversions of assetbacked securities . I know well get the details next month, but what are you expecting . First of all, the most important part of the announcement they will buy existing assetbacked securities not only a. B. S. Of new loans but to get new loans is going to take long time. The regulations have not changed so you are doing Something Like what the fed did. And buying the assets, existing ones, new ones. Secondly, they pointed out that they dont want to take the credit risk and concentrate in the senior trenches of the a. B. S. Securities and question of whether they will buy at levels that are more risky without a guarantee of coming from e. U. Governments. They are not going to take that credit risk so they will concentrate in a arch a or slightly below that. Buying the statement by in large volumes if they decided to buy new securityized loans, it will be very slow in the first place. Do you think he is buying himself time and part of the eason could be this supposedly spat with the Bank President . Is he buying himself before the that m to launch outright this is light essentially. When do we get full blown . I mean, first of all, they are not easing directly because they depend on the demand for these new loans by the euro zone banks. While increasing the Balance Sheet is going to buy a. B. S. Is a form of easing if you believe easing is the central bank without purchases on the asset side increasing the liability side. Directly not quantitative easing of the banks but a form of credit easing the same way as they cover bonds. But at this point, quantitative easing gets started given the objections of the bank and others, not buying yet. But once you start to buy a. B. S. And start buying covered bonds, the next step might be buying a. A. A. Corporate bonds and whats the difference. Similar risk type. Therefore we are on the direction that eventually may lead to purchases of bonds. Why . The amount of existing a. B. S. And covered bonds that are senior is limited and if they want to increase the Balance Sheet by 1 trillion they will run out of bonds to buy and the next step will be Corporate Bonds. So effectively quantitative easing has already started. On the issue of the phrase you uzbekistanned, trying to compare used trying to compare. This is the monetary side and he is calling on governments to do more on the fiscal, structural side. Phrase ture using the can we see fiscal, monetary and structural fire at the same time within the euro zone, because thats the key, isnt it . Yeah. Thats the key they argued that in addition to working on the Monetary Policy side, the right fiscal policy that implies less in the short run and continuation over the medium term and you need structural policies that are going to increase on the supply side not just on the demand side. Now the good news that they dieded to go ahead even before there has been a credible commitment on the structural and the fiscal, they are doing their own share of this activity. On the fiscal side there is some room for flexibility even within the current e. U. Fiscal rules for giving more time for countries such as the 3 budget targets on the deficit or already achieved like italy to reduce gradly. The new head of new commission is going to provide that flexibility especially for greater structural reform. Yes, there has to be acceleration in france and other parts of the euro zone but the impact takes many years. You cannot wait until only the supply side kicks in. It takes years. Some of the weakness of the euro zone is cyclical. Policyts where monetary comes into play. We are seeing yields on government bonds lows. We saw yields on a number of twoyear notes across eight european countries. To put simply, would you buy european bonds at these levels in well, it depends. If this program of quasiquantitative easing is going to be effective, inflation going to go higher and signal that this program is credible will be a gradual rise in other yields in the euro zone because they will signal that inflation is higher and growth will be picking up. But in the short run, the the impact effect of the announcement and starting to buy securities might lead to further spread compression in credit spreads and can keep long bond elds in the euro zone like germany at current level. It would be a signal of the success when those yields are going to go higher rather than lower because that means its credible. Are are you worried about the performance of various Asset Classes because of the difficult verging policies of Central Banks . The e. C. B. Is heading in one direction in the same direction that the b. O. J. At the same time that the b. O. E. And the fed will tighten policy. What are the implications for volatility and performance of Asset Classes in the near to mediumterm from that difficult veeringens . Well, the difficult veeringens is justified by the economics. Inflation is getting higher. But in the euro zone you are almost back to recession and inflation is close to zero and growth has been faltering because of the consumption tax. The differential in growth rates and in the inflation rates explain the movement for the currencies. The euro has been following relative to the u. S. Dollar. Of course, there is expectation that the fed and the bank of england may start exiting near zero rates and the expectation that e. C. B. Is going to start quantitative easing and thats going to have an impact on both currency. I expect further weakness on the euro and yen. And will lead to difficult veeringens in bond yields. T why they have been falling despite of strong Economic Growth in the United States, oon yields 1 , International Portfolio investors are switching away from japanese bonds to u. S. Bonds. What they do is also impact on longterm Interest Rates in the United States. That difficult veeringens on the ond side will be less. Japan is faltering and emerging market in china are mixed. Some of them are doing better, some are doing worse. And i would expect that the chinese are going to slow down towards 6 or below that. We are in a Global Economic recovery, but there are meaningful starts over the Global Economic outlooks. The bank of japan that the isis in ukraine was his best concern. Where does russia and ukraine on your worry table right now . Certainly there are many geo political spots from russia, ukraine, to what is happening in syria and iraq. Financial market these years have not strongly reacted, take iraq, 90 of the Oil Production is in basra under the control of the shiites and there has not been a shot to the supply of oil or in the situation in ukraine and russia, there has been a cutoff of supply of gas to ukraine and not to europe. Therefore while the factors are a matter of potential risk both for Economic Activity and full financial markets, as long as they are caped and dont have an impact on the direct supply of gas and oil, their impact will be limited. We dont know yet how many of. Hese thats the risk of maybe a terrorist attack. Thanks for joining us today. Welcome back. Euro against the dollar, dipping below 130 for the first time in ver a year, lowest since july, 2013. All sorts of measures announced yesterday, such as an ssetbacked security and billion euros. Bonus Bank President. Markets dont care the euro fell. Bond yields in eight european nations on the twoyear front selling in negative tower tower and european money markets fell o record lowest. These are the Bloomberg Top headlines. Called for almost 1 trillion in stimulus to significantly steer the Balance Sheet back to the higher levels seen in 2012. The council decided to start private g nonFinancial Sector assets. They will have simple interestbearing, assetbacked securities. 13 of the worlds biggest banks have been accused of banking u. S. Antitrust laws. Arclays, bank of america and stigroup. And comedian joan rivers has died at the age of 81. Rivers was admitted to mount sinai hospital on august 28 after going into cardiac arrest for a routine throat surgery. U. S. Department of health is looking into her death. Apple and samsung, chinas Biggest Network of phone. The number of phone makers will shrink to four. We played with their newest and joins us now. Talk to us about market share. They sound like Ambitious Goals. Their plan is to take over apple, but to do so they need to t into samsungs 25 apple share. In an interview, the head of their consumer unit, he acknowledged these are Ambitious Goals but said the race is a long one. Im not humble. Can see that in the future. That means the lgs and sonies of the world may not survive. About their phone, sixinch screen and takes it directly to samsung and released their 5. 6. Its exciting phone and by sharp, i just dont mean the images but the actual size. You could cut some cookie dough, its a heavy phone. Another aspect of this, they are focusing on europe and asia. They say it will go to the states but eventually they will have to play. Have a listen. It will start at 500 euro. Most exciting feature, battery life, two full days. Not just phones here at this conference in berlin but your connect at home. I took a look earlier at a refrigerator that can take a picture of itself. A camera inside your fridge if you leave for the store without checking what you need. Text your fridge and sends you back a picture of whats inside. All part of your smart home, a mix of products for sail and future concepts. This bathroom mirror from toshiba syncs. You can see that information as well as the schedule on the weather. You can have a little lean lunch today. If my bathroom mirror told me i needed to have a leaner meal, this will show me how to cook it and if im struggling with my meal, i can come down here, call my mom, and shes going to walk me through it. There are two reasons why a fully connected home may stay in showrooms like this. One, a common language for all these machines to talk to each other. And two, security. How do you ensure that the home stays private. On the other hand, who really ares about my dirty laundry . Who should be interested in hacking in your domestic appliance . Who should be interested in what you have in your washing machine . I doubt someone is ined in that. May not be that interesting but first thing in the morning i dont want people to know how little i exercised and how much i ate. I mix my whites with my colors and have yet to see any tangible detrimental effects. I think you can mix whites and colors. Was that your moms hands or was that a pretend Television Mom . It was a pretend. No disrespect to my lovely mother but she is not that sophisticated. He loves videos of children. Thanks very much. Ming up, the latest from the forum, jpmorganchase joins us after the break. Bp charged with gross negligence with setting off the Biggest Offshore Oil spill. The decision may be forced to pay billions more for the 2010 gulf of mexico disaster. The judge rejected bps argument saying that its employees took risks that led to the ladgest environmental disaster. Trying to win sales dominated by apple and samsung. The smartphone is waterproof and comes charged for two days. And apple is planning to unveil new iphones and they are being nvestigated for unsafe labor practices. A report by two n. G. O. s documented f