Transcripts For BLOOMBERG Countdown 20150325

It paves the way to grade the uks biggest wireless provider. Mark welcome to countdown. Anna lets get to our top stories. The two food giants giant and craft meriging with heinz. 3g capital is a Brazilian Private Equity Firm and they looking to buy into kraft. It is a philadelphia cheese. But the next step would be to merge it with heinz. This would bring together these key players in the food sector. No price tag yet. 36 billion is how much kraft is overall worth but well the deal could be announced as soon as this week. It is interesting because we are getting 3g capital luring alltime favorite Berkshire Hathaway. They have worked together before. Two years ago, they came together when they bought heinz together. They combined to make this big billiondollar purchase the last year, they came together. Berkshire hathaway, Warren Buffett helping burger king by a Canadian Company of doughnuts and coffee tim hortons. That was in 2014. They were together now. Interesting they are longterm players. Clearly, they have been saying they want to Work Together in the future. Warren buffett wrote to his shareholders saying partnering with 3g is the way want to go. Berkshire hathaway has been again for a long time. A longterm shareholder of kraft. They had big stakes in 2010. It was back to win kraft bought cad very. He did cadburry. He said both the is our dumb bdeals are dumb. Going in potentially with 3g capital. The question is the price tag. What is kraft worth . Investors got excited that 3g capital will be looking at the stock. It was soaring 17 after hours. It makes the Company Worth in excess over 36 billion. This will be the question what is the price tag . The our reports the Financial Times is looking at 40 billion. That is 11 on yesterdays overall price on its market cap. It seems shareholders are little more excited with it think it could be 17 higher. Clearly, if you go further. Once again, we can we can see it carry it with Berkshire Hathaway and getting to juggernauts of the food industry. Kraft and heinz. We can see heinz kerry up with kraft over salad dressing. Back to you. Manus thanks for that. Investigators are preparing to examine the black box of the german plane. All 150 passengers are dead. The rugged terrain in the french alps, hoping to find an explanation of how it crashed. French german and spanish leaders have made public statements expressing their grief, expending their agendas and coordinating the crisis response. Angela merkel aris traveling to the site today. The company will visit as well. The lows costw cost carrier is exerting this offense that im. There is plans for strikes today. The airline is working on the assumption that the flight crashed was an accident. Lets go to the site of the Emergency Operations in the french alps. Hanz nichols is on the ground for us. Obviously, it is less than 24 hours after this tragedy game to our attention came to our attention. A great deal of condolences from leaders. What else do we know from this . The black box has been found . Hans that is one black box. The recorder has voice data. There will be searching for the other black box. About 10 kilometers from where they believe the plane crashed it is a pretty big area. Quite a big area spread out all over. That is where that will be focusing their search for the second black box. So many unanswered questions. Mainly, why was there no radio contact for that rapid descent . Cruising altitude about 30,000 feet down to die 5000 feet. Had there been something catastrophic that happened . You would have seen that this didnt happen in three to four minutes. It was rapid. It was not as rapid as it would have been its something catastrophic happened. The time difference, the other question is why was it the french radio, radio cap it Traffic Control was the one they contacted the cockpit . They noticed the deceleration. It was radio silence back from the cockpit. We know little about this plane, right . We know about the pilot. It was a 19 at one plane 1991 plane. A pilot was flying it who had over 6000 hours of experience. The plane itself had been recently checked up ful al and complete in 2013. It was routine maintenance. Border safety wise we will be learning more today. As condolences continue or what is a mass grave site of a few kilometers away from where i am standing now. Manus . Mark manus hans nichols reporting live. The operation, the rugby rescue operations are being from. Anna our top stories the ecb as band greek banks from doing debt. That is a concern by the government is funding itself by il l manners. It puts more pressure on greece. The billionaire bought it for 1 6. 2 billion. The biggest u. K. While his provider. 9 billion cash up front. Telephonic access the transaction to be completed by june 26. Brazil is trailing back the support of the program will not be enough to prevent currency swings and volatility. It is the end of this month. Real plunged 26 in the last month. Manus we are both on twitter. In terms of what i had been having a look at not looking at the board exchanged, Goldman Sachs says the u. S. Job growth has been running too hard. What does that mean for the dollar . Anna keep it with us on twitter. Coming up next, the u. K. Chancellor has some tough words for greece. Indeed, money. We will tell you what he said after the break. Greece should not have joined the euro. I think it would very difficult for them to leave without dramatic impacts on greece and the eurozone. Anna that was the u. K. Chancellor on look obligations on the complications. We are still the first month of the ecb program. Our next guest says qw is not going to work qw is not going to work qe is not going to work. Thank you for joining us. Lets look at what is happening with greece because we had a breaking news last night that they would not be able to load up on shortterm debt. Greece is worried their funding the state. Is this something you agree with or happening behind the scenes . It is happening behind the scenes. There is a country with enough debt and not enough income. It is not a good situation, but i think it typifies what the u. S. Has been dealing with with years which is you have too much debt overhanging these economies. You cannot grow into you deal with it. No Interest Rate is a backdoor way of taking value from savers investors they by dave without actually dealing with day by day without dealing with it had on. Headon. Generally speaking the politicians in the u. S. And europe do not want to deal with it. Everyone pays the u. S. Is so far ahead but we have millions of americans who live in homes were underwater and it cannot be sold because they are in debt. It is really an endemic problem for all the nations. Manus then the germans are tackling the greek problem presumably in a blind fashion because from what you just said there has to be some debt forgiveness. George sorsos says there is a 5050 problem of getting out of it. Are they handling the greek situation . I think they are. We can go back and talk about versailles. The germans seemed to have forgotten about it. You get more growth when you act in a benevolent way instead of tapping your foot and saying pay me back every penny because they cannot. It does not take a Rocket Scientist to look at greece and realize the countries that kurt is on the verge of default. Anna when you are looking at manageable property, you are saying quality of easing is not going to work. The flow of credit going to the corporate where it is needed . Quantitative easing is a next step. The whole point is a transfer value from savers, from those you did the right thing to debtors. Subsidizing getters. In the u. S. , it is over 1 trillion a year we taking out of the pockets of ground ball and pat grandma and grandpa. When they start to buy securities through quantitative easing, they are pushing of asset prices, hoping the change in investors. You dont see income and gdp grew up as well. You cannot validate those prices. What happens to the asset prices . They go back down. We have a situation in the u. S. Where as the fed tries to move toward some sort of normal Interest Rate policy, you can have bonds and stocks decline. It would not be like as it has been in the past. Many analysts have broken down because we have such a huge degree of government intervention. We also have a market. The u. S. Is fortunate because the market is working well but in europe, it is bank driven. The economies do not 67 of the credit europe comes from banks. Manus the banks are nomar near nowhere near cleaned up. To a certain extent, Balance Sheets, reorganization you have a fairly negative view on the u. S. Banking. That are have enough capital that is not profitable to generate capital. Dont forget, the u. S. , the u. K. We have this notion of offBalance Sheet finance. We have a lot of problems that went. Dothe wrestled the role does not do that. Lets be fair\ the crisis started because we were hiding liabilities. One morning, investors awoken they said all my, and they ran out that door. The u. S. Congratulated some thousands as there is on a capital but at the end of the day, both nations have a debt issued they cannot deal with yet and it is because of the politicians. The central bankers have done their part. You cannot fault the fed it is just goes they keep doing what they do. We have had low Interest Rates in the u. S. Since the beginning of the 2000 spared the goes back to thousand one. We had the same policy the whole time. Congress has been unable and unwilling to act on a number of things. You cannot restructure a mortgage. In 2005, the congress pervade tht. At. We had to take a hard look at all these countries. Do we want to start another were . I dont think so. We need to find ways that can grow our economy. Anna meanwhile, we have companies sitting on piles of cash. Investors with a resilient private Equity Companies merging with heinz and buying European Assets. How was that painting a picture for Corporate Credit . Is it working for good or for a negative sum . I think investors are doing what they can to build value, kraft has a lot of brands but still very steady cash flow. We see this all across the corporate sector. There is a lot of money getting to be put to work. If you dont get income from those assets, you dont validate the valuation. The fed has succeeded. Asset prices have come up. How do we generate income across the board to make those valley beaches valuations anna is half a percent not enough . You have to take those the sixers with a statistics with a grain of salt. The housing sector a quarter of the do mortgage lending we have done over the past decade. It is because firsttime homebuyers are not really participating. We had a balance and housing because of investors. The fed managed to have investors the run and singlefamily homes which makes sense. It is a singledigit visit. Capital is being forced to chased opportunities like this because it has you dont want to on treasury bonds. That is the the dilemma facing investors today find goods and opportunities that make sense. Anna we will look at the Housing Market more so in the u. S. Thank you for discussing that with us. The senior managing director. Thank you for making the trip. Manus we have been bringing you the latest. We asked questions whether traditional advertising is the relevant. Stay tuned. Anna welcome back. We will take you now to life pictures of the Recovery Efforts of the crash site of the german flight that went down yesterday and the french alps. The plane was carrying 150 passengers and crew. The french Authorities Say there is no hope for survivors. The airline has provided more details of the plane involved. The maintenance standard is very high. As long as you have your maintenance in place and all the procedures together with the manufacturer, there is no issue with the age of the airplane. Manus bloomberg has brought you covered all week of one of the biggest advertising events. It is Adweek Europe 2015. We asked people for their take on their take. We asked people for their take. Advertising is more driven by ever. We need to rethink how we buy advertising. It cannot be any more on a quarterly campaign basis. Need to be on plan with partners. I think advertising is more of a lead prevalent relevant. It is great to have a combination of traditional advertising you need to know what they are going to see them what they will act in order to drive them. You dont have a never ties the agency at the moment. It is more focused on how you do Search Engine optimized vision. I you get your brand recognized. Is not really about above the line marketing or being on a banner. I think we nailed the tone and it is about people being engaged. Traditional advertising is one of many tools we use. Advertising cinemas, radio tv. Stores. A story about music we want to tell everyone about. Secondly, we fund a lot of our programs. It is critical we talked to traditional advertising and explain to them and complement what they do today and region audience that are not the easiest people to talk to. The consumers and then the drivers. What we find is most effective is actually wordofmouth. We get a large portion of our customers signing up because they talk to a friend or the governments or as a first ride promotions or they get a first ride. Anna coming up, we go back to the tragic story of the german crash and we look at the model of the plane coming up after the break. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Manus manus 7 30 in europe. Lets see how the markets are looking at the dollar. He saw the count of living an inflation indicator the fed will be watching come up a little bit higher. Homestudy sevenyear high. The dollar is clearly unchanged. 97. 15. You saw that spike higher on the back of the u. S. Data. Today will get durable goods. That is expected to rise by. 2 . You will see Goldman Sachs view that we have run so far ahead of ourselves and the jobs data that it is going to have to soften. Mr. Bullard yesterday evening with saying the markets need to get their act together in understanding where the fed governors are on policy because the markets are behind the fed. The market says the rate will be about 5. 5 in december. The fed, according to their dots , will be at. 625 . There is a dislocation and it could be a violent end, according to mr. Bullard. Lets take a look at the euro. The euro is virtually flat on the day. Bumping along at 1. 09. It is trying to get through 1. 10. It is not going to today. Speaking at the central bank and no reaction so far from the European Central bank taking measures to ban greek banks from buying more greek government debt, squeezing the greeks into a position of where they may have to capitulate. When it comes to defending your currency, sometimes in life the best thing is to call it quits. This is the real. If finish yesterday at 313. 77. They have been defending and defending every friday. Every friday they have tried to defend the currency. Goldman sachs is support is a financial liability and the secondbiggest losing currency. Only the ruble lost more. Caroline thank you. Lets kick on breaking news. A little luxury for you this morning. Just missing analyst estimates. For the failure, 2014 for the full year, 2014 was just ever so slightly shy. Operating income came in at 1. 2 9 billion euros, slightly down from the estimate but they are proposing an exceptional dividend of five euros per share. They also have a regular dividend of 2. 95 euros per share. Shareholders probably going to be happy by that rather hefty special dividend. Across the board, you are looking at a regional breakdown across regions. U. S. Strong, japan strong europe up 7 . This is a company able to weather the storm better than its peers because of its exclusivity, its limited appeal, its limited supply. It has written out the storm of slowing growth better than expected. We are watching for dropping prices. China is a problem. Watch sales are down 11 . Textiles and silk are good but watches seem to be a problem. 2014 sales will be up around 8 excluding foreign currency changes. That is short of their mediumterm outlook for 10 growth, but a company that is slightly better and able to give money back to shareholders. Manus thanks for that. Lets get to our top stories. Barack obama says he will not be behind the u. N. Led push for palestinian statehood. Such a move would be contrary to u. S. Policy historically. Singapore is inviting for people to view the coffin of a former leader until saturday. He is considered the founding father of the country and let the economy through a prosperous transition. The bank of chinas highestpaid executive left his job and there are pay cuts being imposed on Senior Executives at the chinese lender. Chinas government said last three would reduce salaries for executive at stateowned companies because of public opposition to what they call unreasonably high incomes. Manus lets return caroline lets return to france and that tragic accident in the french alps. Andrea, this is germany morning, this is spain mourning. This is france taking on its role in talking to the voters yesterday of tragedy on its soil. What do we know now . Andrea we dont have a lot more information that we had yesterday. We know we had a plane cruising at about 38,000 feet, which is standard cruising altitude, but it stated that level for one minute and began descending rapidly, that to about 5000 feet without any communication at all. It was impossible to get in touch with the plane. It was the air Traffic Controllers in france who had to call the emergency. We had many, many go ahead. Caroline sorry. You carry on. Andrea we had hundreds of military gendarmes trying to go to the mountains. It is not easy to access. They will go back again this morning. They stopped last night. Families of the victims will gather in the area. Both the french accident investigator and the german investigators are on the scene now with people from airbus trying to figure out what happened. I think we are going to get more news later. Caroline yes. Our hearts go out to the families. We keep urging to find out for those families related to the accident what happened. What is the latest in the investigation in terms of the black ox is black boxes . One has been found. Andrea is the cockpit voice recorder, we think. As soon as they can get that to paris, which will do today, you can start reading it. Once it works they can start reading the conversations between the two pilots in the plane. They can also hear any background noises. Even if there is not conversation between the pilots you can hear warnings if there is any kind of stall or anything. You would have had warning sounding out. Normally you have to marry the two, the voice recorder with the data recorder so you can follow second by second what is happening with the planes systems and to know how the plane was behaving while this was going on. We have the french accident investigator giving a press conference later today and they should be presenting whatever they have been able to get so far. Caroline Andrea Rothman in paris. Thank you so much for bringing us that update. Manus lets bring in thomas sachar. Thomas, thank you so much for joining us this morning. When we get to these tragic events for the families, for the people involved, there is a very human side to this tragedy, which caroline has just been talking to her colleague in paris about. Unfortunately, markets tend to look at risk as at well. We saw lufthansa and germanwings on their twitter post a symbol of black as a shine of respect. Where are we in terms of moments like this from the corporate in aviation and a number of these incidents . With your assessment so far . Thomas i think the what is the assessments of our . Thomas i think the a320 is a reliable airplane. It has been out since 1980. The aircraft is very reliable. Lufthansa has not had an accident recall as well. That is a very reliable airline. That is the first crash for a local airline in europe as well. In that context, i think it is an extraordinary evidence and it will be hard not to recall that. I think it will be a bit of a blow to germanwings. Lufthansas bread is so strong brand is so strong. Caroline this is all but hypothesis and speculation, but the fact that we saw this dissent over the course of eight minutes and that one made it not one connection one may day, that one connection on the ground with one of the pilots. You have a view what happened . Thomas it is hard to say. It is usually a combination of factors. It is a succession of Different Things happening. We knew that the weather conditions were good. It surely is not a collision. There are no other airplanes involved. We are thinking the conclusion will be a bit quick as for now. Manus obviously the a320 have a phenomenal security record, but it was involved in the air asia accident recently. This is a second incident using the workhorse of the sky. What does this mean . What happens in the airline landscape at moments like this air asia followed by this . Is there a protocol the airlines go through with the a320 or do they wait for instruction from airbus even though they do not know what happens happened so far . Thomas first it will be about finding out what happened during the investigation. When we know what happened, they can make modification on the technical issues, which we do not know yet. It is hard to say what the airlines can come up with. Caroline i suppose now the key is focusing on security and trying to rebuild trust and confidence for those who are about to step on a flight. It has been wonderful speaking to you. Thomas thank you. Manus joining caroline and i at twitter at any time on the mornings, your thoughts on the tragedy which has evolved over the last 24 hours, involving flight 9525. We have both tweeted out the latest updates. One black box has been recovered. We will keep you abreast of that with a reporter hans nichols on the ground. Caroline your thoughts will be most welcome. In an increasingly digital age how can you keep your personal data safe from cyber criminals . We will put that question to our advisor at interpol after the break. Caroline lets take a look at the top stories on bloomberg. The ecb has banned greek bands over increasing holdings of government debt. Blocking the path to bring funding puts more pressure on greece to present Economic Reforms acceptible to the countrys creditors. Punchs and rambo but telephone 02 43. 3 billion dollars. The deal comes bought telephone 02 for 3. 3 billion. They expect the transition to be done by 2016. Brazil is scaling back the support of the real as it sink to a 12year below. The Central Bank Program was not enough to prevent currency swings and villa to the. For Exchange Swaps will end after the end of this month and that is after the the rialto and 26 after the last year the real plunged 26 after last year. Manus with apple watch and google self driving cars on the horizon, it may feel like we are living on the future. Our next guest says we are only getting started. The more look it gets, the more opportunities there are for criminals to benefit. Mark goodman is the author of future crimes. Welcome to countdown. Mark good morning. Manus when i started to look at what people had written about your book omg is one of these things. A wakeup call. You are writing about baby monitors, social media posts, when people will break in, by gps. I am pooped at every corner, or type . Arent i . Mark Technology Brings benefits at every corner. There is a flip side. Most people do not understand how technology works. They know how to use their iphone. They can call and play angry birds. They do not know what goes behind the scenes and those who do do can take advantage of those who dont. Manus who want our data. Mark everyone. Data is the new oil. Just as oil has by you, so does data. Criminals are going after. Corporations are going after. Facebook google, the idea is to get data about you and sell it to their advertisers. Manus when you are writing this book, im fascinated to know, how much interaction did you have with the cyber criminals who bid for our data . How does the black market work . Is it suitcases of cash . Mark you can buy all of that online. Within this digital underground or the dark web, you can get anything from drugs to guns to trafficking human beings, child pornography, it is all available. It is exchange with standard currencies but also with crypto currencies, bitcoin, and there is a criminal version of pat paypal called liberty reserve. Mark our governments manus ar are governments inept . Mark technology follows moores law. Performance is doubling every 24 months and government institutions are linear. It is difficult for the police to keep up. Manus im curious because you look at the European Commission and they want to haul over google. They want to change the structure of how the internet works. They want to be invasive and have companies who is more. In their, mr. Or mrs. Google, or our government . Mark it depends on what country you live in, but Everyone Wants a piece of you. The corporations want free reign to your data without regulation or restriction in the government is looking for that same data. The thing that people do not realize is that there are criminals and terrorists going after the data as well. Everyone is going after your data for one reason or another. Manus if i get my new smart watch, have a heart attack, have a pacemaker fitted, and drive a fast electronic car, im outgunned according to. Someone will give me a heart attack by playing with my pacemaker. Someone will cause a necks them by jerking my brake. Or am i being too draconian . Mark im sure people like you so you have nothing to worry about. [laughter] computers are all around us. They run the electricity grid. They run the tube. The modern automobile as over 200 computer chips in it. A car today is really just a computer that we write in ridfde in. It can be hacked. Manus some of the stats when you go to look up the website on the book, facebook has 600,000 clients hacked last year. Mark daily. Manus even more outrageous. 2014, american Identity Theft happens every two seconds. Antivirus, there are two companies out there that are frightened when they read your stats. They are of no use. Mark antivirus programs wholly a have only a 5 detection rate. If your immune system work like that, you would begin in 24 hours. There are tremendous opportunities to create new tools. We will plug into hundred billion dollars we will plugin over 200 billion new device into the internet by 2020. Your fridge, your telephone, your waffle maker. It is all going to be online one way or another. We will need companies that can secure those devices and tremendous opportunities in the startup world. Mark was the most innovative . We were talking about simtech . Mark there are quite a few out there. I attended a conference in las vegas called money 2020 and it was 10,000 people focus solely on semtech. Apple pay us quite clever. Manus i want to get away from apple. Take me away. Mark use cash. You can use it still in a few places. Manus governments dont cash, do they . Mark no, and neither do criminals. It is hard to move her out. I dissect the criminal organization. What does the ceo do . The cfo in the organization is to do money laundering. They hate cash. It is hard to layer and they work for. Manus we wish you well. Apple ibooks says it is the most anticipated read of 2015. We wish you well with the book future crimes. Im going to lock myself away and never touch the internet of things again. Mark goodman, thank you. Mark cheers. Thank you. Caroline we will be looking at our favorite stories from bloomberg digital output, including to have not quite as much as you thought. Caroline we are just over an hour from the start of european trading. Quite amazing that this news comes out on the day after the tragedy involving airbus own model of plane. They are saying this morning that they plan to sell more shares of distal aviation. They are going to sell about 1. 3 million shares. They will hold about 27 wholesale. Putting up that statement a day after 27 postsale. Putting that statement out a day after the crash and the french alps. Lets look at our top picks from the digital output. Manus i have gone for the g. Gs. I access thoroughbred race horses for 10,000. Harry herbert. I love what he says. You dont do it for profit, quite the contrary. It is about having fun. Caroline for 10,000, it is not exactly free. You dont have to be superrich. Manus it takes it from being superrich to just being pretty darn wealthy. Caroline googles new ceo coming from wall street and the amount of links we see between banking and silicon valley. We will be talking much more involving the tragedy after the break. Beck said to be in talks about kraft foods. We bring you the Details Behind the potential deals. Effects crews have crews have hoped that the black box will give clues to the cause of the crash. Authorities say there are no survivors. The ecb Bancorp Banks from buying more shortterm government debt, limiting the government sources of funding as the country runs out of time and money. The billionaire hutchinson snaps up 02 for a 15 point 3 billion price tag. The deal paves the way to create the uks biggest wireless provider. U. K. House builders report earnings. We bring you the numbers ahead of the general election. Welcome. Im caroline hyde. Lets bring you some of those numbers. Pretax profit is 158. 9 Million Pounds. Thats for the first half. The gross margin is when 3. 5 . Operating margin of 23. 5 . Challenges for the Housing Market are very obvious. We are going to get mortgage lending a little later. Over one point one billion pounds. Operating margins cracking along in the first half. A dividend of 25 pence. What have you got . Caroline this is the infrastructure player. Its about power. This is a company that had a torrid time of it. They have lost the chief executive, both stepping down last year. They struggled with mismanaged projects, lack of demand, and rejected takeover targets. We are looking to see what the overall numbers are. Revenue underlying it hundred 44 Million Pounds overall. They say pretax loss was 80 Million Pounds. That is more than had been expected. This is because of provisions. Many had been expecting we would see an increase in provisions relating to construction. They brought in analysis, trying to bring to dig into what has been going wrong in the construction unit. They have been conducting an external review where they have been underestimating contract expenses. Week administration has been the problem. Many want to see what is the outlook for 2015, and we can see revenue is 8. 7 9 billion pounds overall. It has flattened to slightly less. As i say, the operating losses 280 one Million Pounds. A pretax loss bigger than had been expected. As we head towards the general election, there is a great debate about whether George Osbornes initiative is going to support the Housing Market. They made a statement the london market remains resilient with revenue up 16 . They also spent about 365 Million Pounds on land opportunities and they say the order book is cranking along. Demand for new Homes Remains robust across the country, and they see an increase in the final dividend. Lets see how the stocks get moving at the open. Residential coming in and saying how the election will put the markets on ice, but it wont put prices on ice. Meanwhile, lets turn our attention to the key story after that terrible tragedy yesterday because investigators are preparing to investigate the black box found on the site of the crash that left all 150 passengers dead. Rescue crews continue to search the rugged terrain in the french alps hoping to find an explanation as to how the crash happened. Manus leaders have made public statements expressing grief. German chancellor Angela Merkel spains Prime Minister rajoy are traveling to the site. The ceo of live times a lufthansa will also visit the site. Passengers can expect flight disruption across the neighborhood across the region. They have canceled plans for a strike. The airline is working on the assumption that flight 9525 crashed was an accident. Lets go to the Emergency Operation in the french alps. Hans nichols, give us an update. We understand one black box has been found. What sort of light can this shed on the family rocked by the tragedy . Families are ruptured by the tragedy. There is a deep amount of grieving. You see the mountain is on the other side, where they lost contact with the plane they believe at 5000 feet. The latest is we have seen three helicopters take off. Officials are saying the recovery search is looking for information. The second black box could have some sort of clues as to why you have this rapid descent. Just to give you a little bit about the surrounding area i am at 1200 meters. We think the crash happened around 5000 feet. It was cruising at 38,000 feet, and it made this to send in about eight minutes. The first seven minutes down to 11,000 feet. They have lost contact. We will find out more when we get the black box. You can see the snow line appears to be at about 2000 meters. That is well above where we suspect the crash happened. That could help with the recovery. Officials say they are scouring the mountain side. They are looking for clues. The velocity with which this met the earth is such that it scattered and is going to make recovery a little difficult. No survivors are expected. Hopefully some information on what happened inside the cockpit. Was it an external event or an internal event . What explains the rapid descent . It wasnt rapid if something catastrophic happened. Then you might have it in three or four minutes. This took place over eight minutes. Explaining that rapid descent, was it controlled, and why were the pilots not in contact with air Traffic Control . It was french air Traffic Control that initially noticed it. They made several attempts to reach the pilot. It was the french air Traffic Control that called the emergency and made numerous attempts to contact the cockpit. All of them were unsuccessful. A little light as to the type of aircraft this was. They are called the workhorse of the skies. They are very reliable. This was in 1991 a320 made by airbus. It has a pilot with over 6000 hours of experience. Quite a bit of experience. The plane had close to 46,000 flights under its log. That is about 2000 flights a year. That teases about 6000 to 7000 flights per day. The last time this plane had a checkup was last summer. It had a minor routine maintenance done. One other final note on the weather condition, it wasnt windy yesterday. About the same amount of wind we had right now. We have some cloud cover. It does look like recovery operations will not be impeded by the weather. The helicopters have been flying. We will get information and report back to you. Thank you so much. Spains Prime Minister will travel to france to visit the site of the crash. Charles joins us from the dread. It is perhaps from madrid. Give us a sense of how the reaction is. I think the reaction has been of concern. This was a german aircraft that took off from a spanish airport in barcelona. Spanish authorities are mobilizing to try and contribute what they can to this accident. We saw tragic scenes yesterday at barcelona airport. Families, etc. The government said there were 45 people on the plane with spanish surnames. Another vignette is these Opera Singers from the barcelona opera house who died in the crash. A tragedy there. Spain is coming to terms with the tragedy and trying to respond in the best way it can. What is the government saying . This is one of those moments where they will muster a great deal of assistance. Have they made a more formal statement yesterday . We had a meeting of the crisis cabinet yesterday where the deputy Prime Minister made some comments in relation to this event. They are Holding Another Meeting today at 10 00. We should learn more. We didnt hear much from the government last night. Prime minister rajoy is making his way to the crash site today. We will learn more about this accident from spanish authorities. Thank you for the latest. Back to some dealmaking potentially bringing together 3g capital. They are said to be in advanced talks. Caroline has the story. 3g capital seems to have eyes for craft. It makes mats will craft as well. The future idea is to combine two key players in the food industry. Craft and heinz. You know it from eight beans. You know it as the stall work that is catch up. It could be combined together. The stalwart that is catch up. Craft were valued at 36 billion. What is interesting about this deal is who it draws in. A team worked together. 3g capital and Berkshire Hathaway, teaming up. They did it two years ago. We saw two years ago Warren Buffett helped 3g capital buy heinz. That is why they are coming together. Berkshire hathaway joined up to help with the burger king unit buy a Canadian Company back in august of 2014. We got hints they might be joining forces again. Warren buffett said, we are partnering with 3g in the way we are looking to go. Speculation has been right. Would it he craft . Would it be kelloggs . It is notable Berkshire Hathaway knows their stuff when it comes to ckraft. They started to just slightly reduce the overall holding. At one point they were the biggest shareholder of kraft. They started to reduce the overall exposure. They didnt like the fact kraft was selling pizza brands. Warren buffett said those deals were down. It looks as though we have got belief in the company once again. Now it comes to the price tag. What will they pay . We saw the spike close to 17 . Check that out. The amounts are being bandied about. That is an 11 premium. Investors are slightly more hopeful they might be able to get more money from 3g capital but clearly they feel it is an asset worth buying. This is a company that has a lot of experience in improving operations. Kraft hasnt been performing well. The chief executive stepped down. He retired because sales are basically stagnated. We saw them at a complete flat level for 2014. Can they rejuvenate the food brands and bring them into the future . We will see how it does, but we want to see what the price tag will be. Manus that is the big question. Lets get you up to date with top stories. The ecb has banned greek banks from increasing holdings of shortterm debt. The move comes out of concern the government is funding itself by week lenders with central bank cash. Blocking the path buts more pressure on greece to present Economic Reforms acceptable to the countrys creditors. The billionaire bought the company, paving the way for the biggest u. K. Wireless provider. The rest will be paid through financial targets when they are met. Telefonica expects the transactions be completed by june of 2016. Brazil is scaling back the support as it sinks to a 12 year low. The Central Banks program wasnt enough to prevent currency swings in volatility. The sales of new foreign Exchange Swaps will end at the end of this month. Charles manus will be Caroline Manus will be tweeting about all things currency. Unsurprisingly, the top trending thing many people are tweeting about is german wings. Up next the german chancellor has tough words for greece. My view it of the greece should not have joined the euro but it is in the euro, i think it is typical for it difficult for it to leave without dramatic impacts and considerable impacts on the broader eurozone. Caroline that was George Osborne on the complications of a greek exit. Despite those troubles, our next guest is pretty optimistic about european stocks and bonds. To find out why, gabriel, thanks for joining us this morning. It was just a couple days ago mario draghi was accused of blackmailing greece. We are seeing greek banks being prevented from buying more greek debt because they are worried about their exposure in the fact they might be funding the government via banks. Do you agree . But i think its the lesser rather the latter rather than the former. The key thing is you have this essentially poker game between what they call the institutions because we must not say the troika, and the greek government, and the institutions are doing their best to define the greek space, where there is no way the greek government will be able to raise any money except in normal terms imposed by them, so stopping greek banks from buying more bills means they dont lend more money to the government. Its one thing dealing with emergency lending. All of that boils down to, you are not getting any more money unless you do exactly what we tell you. Thats not going to go down very well in greece, where the government is trying to think of ways to get money. The institutions have got to bring i dont mean to bring greece to heal, because that sounds inappropriate. This is a dangerous roadmap for europe. Of greece is to stay in the euro, then the institutions have to win. If greece leaves the euro, the institutions lose. As i think everyone currently things, the eurozone cannot serve can survive greece leaving pretty easily. It does mean it is broken. Caroline do they think they can survive . Yes, contagion has been eased far more now. We are not seeing a rampup in portuguese borrowing costs or a worry about italian banks the way we did in 2012. If we see greece part ways does that not just spiral . What exit greece were to leave, there are a lot of people who say the germans would lose out. We actually think the euro would weaken if greece leaves. There was always contagion from everything, but i would agree the contagion from greece leaving in the near term is not going to be an issue. The really difficult bit, and this must be the nightmare of the ecb and the rest of the eurozone if greece leaves, they do have a couple of terrible years, but by virtue of devaluing by 30 , 50 or so in two or three years time, they start to grow when they start to do well, and they show that in spite of the shortterm pain, maybe it was the right move. That means the next time another country has Serious Problems and there will come such a time, they might think maybe this is what we should have done or what we should do. That is the big problem for the eurozone. Manus are you converted to European Assets . Or are you skeptical . If we leave greece aside and look at leading indicators in the eurozone, you have very strong broad money growth, and thats one of the first things i would look at. You have on a sixmonth annualized basis, broad money growth between 8 and 9 . Rapid broad money growth is good for assets. Look at the leading indicator of Household Spending like car sales. Households dont pile into car sales unless they feel good about the futures. Car sales are picking up in the eurozone. Look at retail sales. The weak euro is beginning to have an effect. It seems to us there is a lot of potential for some positive surprises in the eurozone, and that should be good news for the eurozone equities. Meanwhile, eurozone bonds the ecb is buying. Thats good news. Manus will there be enough of them to buy . Are you worried . If not, more will be created. If the ecb will buy there will be bonds for them to buy. I dont know how likely it is but i would not rule out a brief foray into negative Interest Rates even for 10 year bonds. I dont think it could last. I wouldnt say its the prime case, but its not something they can dismiss and say its not going to happen. All that being said, this is against the background of the fact that the weaker euro has been extremely helpful. If you are a long euro in vest you have to factor the gains in Capital Gains against currency weakness. Thank you very much. The director of Asset Management telling us here comes negative Interest Rates. Manus next we are going to take a deep dive into the u. K. Housing market. Manus youre watching countdown. Fx traders, speculators and hedgers are looking at the dollar. The dollar rose some pretty tight data. Costofliving popped higher. Home sales at a sevenyear high and the dollar traveled higher. It got swagger back since the fed will tighten. Thats what the dollar market was telling yesterday. Today you will get durable goods. Have a hop on to bloomberg. Com or go to my twitter account and you can see the goldmans report. Goldman says the jobs was the fastest, above 200,012 month in a row and the jobs growth is running too far too fast. It will have to slow down to catch up with the other data they say. So you can call that virtually in different at this stage. That translates a cross into the euro is fairly flat. They cannot get through 110. Today is the Sentiment Index in germany. The European Central bank putting the squeeze on greek banks and some people would say as gabriel from oxford just discussed it is the germans trying to push the greeks into doing the deal that they want and the german and greek banks have been banned from buying anymore t bills. When that gets up and going in new york, theres how we finished yesterday. The central bank will scale back their support, Goldman Sachs says it was a financial liability trying to support a dead donkey. This was the second worst performing emerging market currency in the basket. There was only another basket case which was worse, the russian ruble. So again, the central bank calling time on that endurance test which is supporting a currency. Lets take a look at some of our top stories, Barack Obama Says he will not follow the yuan led push for statehood. Such a move would represent a major shift in the policy. Singapore extended viewing hours. This coffin will remain so people can pay their last respects to the former leader. In crimea we were considered the founding father of the a country and the economy grew. The bank of chinas highestpaid executive left his job amid pay cuts. That is according to people familiar with the method. The Chinese Government said last year it will reduce sell a two executives because of public opposition to what they call unreasonably high income. Manus the home bell weight earlier this hour it is a crucial time in the property market. Housing takes the spotlight. Lets bring in an expert. The head of u. K. Residential development and investment joins countdown. Please to have you with us. Things are tightening along quite nicely say analysts and not just in the central of london but around the country there will be mortgage data. It has been dipping all the way for the past six months, where are we . Guest the mortgage data is changing and is getting much better in terms of the number of mortgages coming through to the market. Only by small amounts. The reason being that the sentiment we had at the backend at the beginning of this year, theyre waiting to see what happens with the election. It is actually, the political debate is ready to nine. Between the parties. People are deciding just to get on the move there in move. Prices dont seem to be going any lower. But if people are analyzing investments within the home buying areas at the moment when will they themselves the the person, what is there in terms of distinction, are there any differences . With marginal tax gains imposed by the likes of labor and perhaps a little bit more difference when it comes to the renting side of things. Guest i think focusing on the rental market is interesting that the overseas investors have invested in Central London it could potentially make an issue. Most seasoned investors now are looking further afield for london. Theyre looking at the birminghams, the bristols, the ratings. Caroline because the prices have gone too high . Guest its because theyre looking at a lower unit price. Manus i was doing a foreignexchange check and you talked about the doughnut, is that just about london or is that going to be on the m 25. It is a metaphor, most people actually focus on it but in terms of returns and opportunities the and 25 ring inside and outside is really interesting for terms of domestic affordability and overseas investment. The returns are much better. Caroline you seem to be painting a rosy picture am a you are saying that mortgage numbers are improving and people are up and buying, what are the risks . If im thinking of investing my money right now, what are the risks that youre trying to spell out . Guest one of the major risks are supply or is been documented recently. One of the other key elements is bill cost, the lack of Skilled Labor force. Really interesting that in the next fiveyears time. Plumbers electricians and rickys are going to retire, that will be a huge risk for the Building Community and one effect which is increasing bill cost. Kirilenko girl surely that just drives Prices Higher . Guest absolutely and reduces margins for developers as well. Manus part of your domain expertise is mixed use development, how is that holding up . Is that part of the solution or just one of the great compromises put in front of us all, that we are doing Something Wonderful or is it a real policy that makes a real difference in terms of social highs and an integrated society. It integrated society. Because one of the great debates is there is such a large gap that there is no integration anymore. Guest i think youre absolutely right, having just commercial and residential and uses, we have a transport challenge within london specifically. People dont want to do that for me there is a lifestyle choice or an expense choice. When you look at the Tech Industry there is the news of the commercial industry coming forward, most of those employees want to live near their occupation and part of that has to include retail restaurants, etc. Caroline tell me what the landscape will look like, will it look any different in terms of property prices on the rise if we have a conservative led government or a labor lead or different. Guest whatever Political Party comes into power will see a major shift for the first time in 50 years we have a rental population going so i think we are beginning to break down these barriers with this obsession of being Owner Occupied and being saddled with huge debt burdens, i think the landscape potentially will be more property related and tenure related. Manus thank you for coming at this morning, the u. K. Head, thank you so much. Caroline if youre as property obsessed as our desk, both join in this conversation, we love a little bit of chat about u. K. Property, any member of the british society, do tweet us. Manus next well talk about israel, the countrys relations with the u. S. Could become even chillier. Manus these are the top stories on bloomberg at this hour, the ecb has banned greek banks from increasing their holdings. The move comes out of concern that the government is funding itself to buy greek lenders with central bank cash. Blocking it puts more pressure on greece to present economic reform. The billionaires plan had eight 415. 2 billion paving the way for the biggest the move comes with 9 billion in cash up front with the rest to be paid with the financial targets. Telefonica is expecting the transaction to be completed by june. Brazil is scaling back support for the real. The Central Banks program which began in 2013 was not enough to prevent the current swings and volatility. The new swings will and at the end of this month. After the real plunged 26 over the past year. Caroline president barack obama may not block a palestinian bid for statehood. Such a move would represent a major policy shift with a frosty relationship between obama and israels Prime Minister Benjamin Netanyahu. This all stems from netanyahus ruling out the palestinian state. Elliott Benjamin Netanyahu said a couple of things that raised eyebrows, he implored people to go to the polls because arab voters were voting in droves. That caused offense in many quarters, netanyahu was subsequently apologized for that, the other thing he said was on his watch there would be no palestinian state, you could be charitable and say even if even with the best one in the world if you forget negotiations and your reach an agreement and you agree to implement an agreement it will take more than one term. But United States certainly doesnt see it in charitable terms. President obama we believe that two states is the best path forward for israels security for palestinian aspirations and for regional stability. That is our view and that continues to be our view. Prime minister netanyahu has a different approach. Elliott president obama speaking at a News Conference yesterday, netanyahu is also said we can restart these talks so long as the Palestinian Authority divorces itself from hamas which the u. S. And European Organization European Union consider a terrorist organization and if you recognize israel as a jewish state. That is a nonstarter as far as the palestinians are concerned and also as far as the white house is concerned which wants to see these peace talks resume but doesnt think that netanyahu is in favor of a two state solution, something he said he was in favor of in 2009. Caroline , how might the u. S. Make its feelings even more clear at the u. N. . Elliott when it comes to the united nations, the u. S. Has always had israels back particularly particularly at the Un Security Council where the United States has veto wielding power. The resolution theyre calling for right now calls for the establishment of the palestinian state. Now traditionally the u. S. Would stop ruppel resolutions like that with the veto but now perhaps it could decide to not lock a resolution. Obama was somewhat vague when asked how he would support the establishment of a palestinian state. It could in theory support such a resolution although that seems far less likely. Whatever it does if it were to be less supportive of israel, it could have three things, it would mark a major policy shift from the United States which has always had israels back at the u. N. , at the same time it would send relations between the white house and Prime Minister netanyahu into the deep freeze. That leaves aside the strategic relationship between both countries, the other third interesting thing is the impact it could have on the 2016 u. S. President ial campaign a republican seen as being more proisrael there is not really an issue. For someone like hillary clinton, it creates more conflict because she used to be the secretary of state for president obama and she cannot really come out and directly oppose any positions he takes these of the israel certainly if she supports them and that is seen as being antiisrael in some way and that could impact not only her chances with the voters but also with the amount of funds she might deal to raise. Very serious ramifications back at happen if there was a major change in u. S. Policy areas caroline thank you very much indeed. Manus lets shift gears a little bit bloomberg brought you coverage all week one of the biggest events in the advertising calendar. At week, we asked several leaders in technology for their take on whether the traditional advertising still matters. Advertising is more relative than ever but i think we need to rethink about the advertising, it cannot be more on a quarterly campaign basis it needs to be always planned with select partners with the brand epicenter. In that way advertising is more relevant and important than ever. It is great to have a combination of digital and traditional but you have to figure out what the customers are going to see, where they are going to see it and what theyre going to respect. We dont have an Advertising Agency at the moment, we are more focused on how to you optimize Search Engine optimization, are you trying to get your brand recognized on those platforms, it is not about above the line marketing or being on a banner with branding it is more about viral and get engagement. Traditional advertising is one of many tools, we have the cinemas and radio and tv and the partners have advertised in the stores so we have a story about music that we really want to tell the whole world so we what uses many of these as we can secondly we find a lot of our product through the sale of advertising so it is important that we talked to traditional advertising and explain how what they do will complement what we do today. It will help us reach an audience of Young Millenials are not always the easiest to talk to. We have two sets of consumers customers, the consumers and the drivers. But we find effective is wordofmouth, we get a large proportion of customers to sign up because they heard from a friend and use their give 10get 10 promotion and got a free ride and we believe that once you get in the car and have that experience they will write again. Lets shift gears and take you back to our key story of the day were looking at live pictures of the recovery effort, the breaking news is that the french minister says the plane crashed but has no suspicious passengers on board, we understand very sadly that 150 passengers crew and passengers died in this terrible accident that seems to have occurred in the french alps, but they say there are no suspicious passengers on board and we hope clarity begin in throughout the day. The black box that has been recovered with voice data and the cockpit is now in paris. It is damaged and will hopefully shed some sort of like on what happened yesterday and give some clarity to the family members who have been affected. Manus welcome back to countdown. Just a few minutes away from the start of trading day. The billionaire has but telefonicas 02. It paves the way for the wireless seen lets bring in our m a reporter, men well. How does this fit with telefonicas strategy . Digesting and going back to roots. Men well telephone manuel telefonica has been divesting for quite a few years already and they found themselves with a lot of debt. What they had to do was sell assets. This was one of the biggest that they had and it was one that the ceo considered its core until very recently. But there is so much in the company that they decided to sell it to clean up the Balance Sheet and be in better shape for the future. Caroline and taking on 02 making it the biggest player in the u. K. , what is it mean for both of them. They are building their presence in europe may acquired 02 from telefonica a couple years ago and now this is the next step, they are clearly betting on telecoms as they want to diversify their conglomerate and be more consumer oriented. It is a big step and it is a long year ahead to clear up regulatory issues so lets see how that goes, it is a big step for the euro. Manus lets see how the stock opens, caroline on the move is next and we will be talking to the executive director of china construction, part of their first investing china money. Anna good morning and welcome to on the move the account we are Just Moments Away from the start of european trading. Lets get straight to your morning brief. Brazilian Property Private equity group 3g said to be in talks to buy a u. S. Food giant. Independence day in greece. The nation celebrates its freedom from the Ottoman Empire as it remains independent as ever on creditors. Bills are stacking up and time is running out. We are following the latest from the german flight that crashed in southeastern france area and salvage crews are scouring debris for any clues as to what went wrong between barcelona and dusseldorf. Thats what we watching this morning. A little bit of m a in the market this morning. Lets focus on what European Equity markets are doing this wednesday morning. Lets get straight to manus cranny. Manus good morning to you. Equity markets coming back ever so slightly. You are going to get a confidence indicator coming from dax. The overall position on the european map according to oxford analytics, basically, money supply is going along at 8 , 9 . Quantitative easing is working. The deal is pretty much done. The pricing and the payout, that is going to be down to performance on telefonica. We will see how it opens at the