Transcripts For BLOOMBERG Countdown 20150422 : vimarsana.com

BLOOMBERG Countdown April 22, 2015

Could be the worst year in tescos history. Yanis varoufakis says greece and its creditors are narrowing their differences. A european official says the deadline for the reform to unlock funds is now in june. Welcome to countdown. Coming up, the concoction that could make you invincible. A former executive says the key behind brain function is butter in your coffee. That story later on the. Futures trader out of a suburban house has been arrested in london and charged in the u. S. With 22 criminal counts relating to the 2010 flash crash, which went 1 trillion from the u. S. Market on may 6, 2010. He is due to appear for an extradition hearing at westminster magistrate. We are outside his house in hounslow, good morning. What do we know about this man . Ryan we are learning quite a bit. He lived in this neighborhood, it would appear, with his family in west london just beneath the flight path to Londons Heathrow airport. He was presumably arrested around 12 30 yesterday. What we know is that a large number of people in the neighborhood here have entered this home yesterday afternoon. He has been accused of contributing to that may 6, 2010 flash crash. We saw a total of 1000 points wiped off the s p 500. 1 trillion in value of u. S. Stocks. Prosecutors when they announce this criminal complaint which was filed back in february, says that he was operating out of his home here alone, and on that one day on may 6 2010, he profited 900,000. They say that his illegal activity began long before that. In 2009, and it continued through 2014, over which they say he netted a total of 40 million in illegal profits. He will get his day in court. He is going to appear in a london court at an extradition hearing later today. We have not heard anything from the defendant yet. Mark what exactly was he doing . Ryan well, the prosecutors say he was doing something called spoofing and layering. They say that is an illegal trading strategy, whereby a traitor places a trade with no intention of ever actually filling it with the goal of pushing the prices on the market in the direction that is beneficial to his trading strategy. In other words, he chooses a price that is just a few takes off the best asking price, and other never gets filled or he himself, cancels that. He does that with large volumes and throughout the day. What the prosecutors in the United States are say it is that it creates market imbalance, and it was market imbalance that was the decisive factor in that crash. It only lasted for several minutes, but nonetheless. Mark ryan, thank you. We will have more from you later. Getting some breaking news from volvo. This is the truck maker, not the carmaker. The swedish truck maker. Details of a new chief executive. He has been named as president and chief executive officer of volvo group. He will be assuming the position in october. He has been the chief executive of all those big rival since september 2012. There will be an acting chief executive until he assumes his possession. It comes today as the truck maker announces firstquarter results. It has an operating income of 7 million swedish krona. 74. 8 billion, ended it intake its order intake increased. The big news from volvo the truck maker, not the carmaker, is that the current ceo will become good news out of japan. The countrys trade balance has swung to its first surplus in 2012. With more on the full story, good morning. Tell us more. Good morning. For the first time in three years, japan has posted its first Monthly Trade surplus. It has been a day deficit in the wake of the tsunami several years ago. That was largely due to the fact that japan, with its nuclear plans, had to import lng and crude oil. Crude oil has surged in prices but for now they continue to turn lower. That had a Significant Impact on this latest finance ministry saying that preliminary data is showing at 14. 5 drop. The trade balance as we said, is now in surplus. However, the forecast is that it will not last that long. It may switch back to deficit in april. Mark we will come back to you later. Apologies for the audio. Dublin has had an undeniably terrible year. Dramatic changes by the incoming chief executive to cut costs, to stem the loss of market share. Dave lewis is Closing Stores and the companys pension scheme, not to mention slashing prices. What can we expect . Caroline is here to explain. Caroline they want a moment of clarity that is what the shareholders want. A want to get underneath the skin of tescos balance sheet. We know it has been a terrible year. When you look at what the numbers will be in terms of where your trading, a collapse in trading profit. We are expecting it to fall by half expecting sales to fall. Pricing pressures sweeps through the supermarket in the united kingdom. Clarity, hope for clarity, when it comes to write down, when it comes to potentially 5 billion pounds worth of writedowns. This will largely be based on property right down. Persons, one of their competitors we could see 5 billion pounds in terms of impairment charges. Barclays see up to anywhere up to 23 billion pounds. Also there is piling pressure on the pension deficit. We are seeing this across many u. K. Companies, even german companies, they have to admit that they have these big pension deficits. Font yields are giving you anything in return, and suddenly they have a problem of the deficit. Short capital says this could be 4. 5 billion pounds, jpmorgan says it could be 5 billion pounds. How is it going to close the gap . Well i have to give oneoff payments . Maybe a quarter of a billion every year for the next decade . What does that do to the overall financial strength tesco . Also, the debt is swelling as well. Tesco is no rated as a joke company. What could be done . This is the biggest employer in the united kingdom. Done holmby this is a club card element. Analytics could be worth up to 2 billion pounds. Will they sell that particular asset . International assets, as well. What about their asian businesses . What about the banking part of tesco . Could that be sold . Remember, they have restaurants, too. Who there are also centers could those be sold . The key issue is persuading investors that this wont happen, that there wont be more capital raising, there will be more share sales. There could be more asset from the block. He has done plenty already. Check out what he has already taken on he has already promised to cut costs by a quarter of a billion per year. How was he doing that . He is slashing jobs, shoving headquarters. Stores are being closed 49 will not be opened. 10,000 jobs is the about that many feel could go across the company. Also closing out pension schemes. If you are joining the company, you wont be able to join the pension scheme. They are trying to rain that back. Reign that back. Tesco does seem to be turning a corner. In the First Quarter this year, sales outperformed the rest of the rivals. It is doing better than morrisons because they are starting to be the standout retailer in the four big supermarket chains. So will this continue . We saw a bit of a blip in the last numbers that we want to see the real scale for the fourth quarter. What can this man do to convince shareholders that the terrible year last years behind them . Mark banks. Tesco results due in 48 minutes. Greece may get six weeks by agreeing to hold local Government Funds added central banks. The ecb is studying ways to limit emergency liquidity. Lets get to our international correspondent, hans nichols. Good morning. We heard from Yanis Varoufakis late last night. What did he say . Hans good morning. He said it would be catastrophic if both sides didnt come together for an agreement. At the same time, it looks clear that greek will miss that end of april deadline to submit a list of reforms. Young this very fact optimistic and mostly positive, here is what he had to say last night. He said the convergence is clear and the institutions are admitting that. Whats interesting is that he is saying that the institutions are walking towards directions. We have a figure 1. 5 billion euros. That is the amount that is potential he in these municipality accounts that will be transferred to the central bank. That gives greece another 16 weeks time. At the same time the ecb are tightening the screws. What they are doing is discussing and it hasnt reached the governing council. But they are discussing whether or not to impose the discounts that are imposed on greek securities, posted as collateral. These are socalled haircuts, increase the risk of borrowing. The ecb is expected to meet later today. In the past, they have done it every wednesday on increasing emergency liquidity assistance. That is 74 billion right now. Im reporting with the ecb is expected to do. The euro fell on that news yesterday. Mark john isner of factors is optimistic he is optimistic. What did they say . Hans whatever he says needs to be filtered through, not only what is said in brussels but in berlin. Yesterday we heard from mr. Juncker. Heres what he had to say a bigger effort by the greek side is needed so that we can close the topic of interest on both side. He said that the intensity of talks has increased in the last four or five days, but they are nowhere close to a final deal to have a final push. This summit will be more of a status check. On thursday, eu leaders will be in brussels, and there is a chance that chancellor merkel will have a separate meeting to discuss what will happen next. Mark thank you. Hans nichols in berlin. Good news out of japan the trade balance has swung to its first surplus since 2012. With more, lets get over to zeb. Good morning. Zeb good morning. It is good news out of japan for investors today. Fresh Economic Data showing japan swinging to that trade surplus for the first time. The robust trade data is having an impact on stocks, as well. The nikkei is rising above 20,000, a fresh, 15 year high for the index as investors bet on japans economic potential. It could be shortlived. Some economists are warning it will swing back to a deficit in april. One of the reasons we saw the trade number swinging in a favorable direction today was the fact that crude oil import costs have fallen. Japan has been a big importer of energy. With the suit on me and its Nuclear Plant shutdown. They paid a lot of money for those lng imports. Good news in the shortterm. We will watch to see whether global demands for japanese exports continued to stay strong. Cars and machinery orders are playing a big role in this latest surplus. Lets take a look at the broader markets. We are seeing nice gains across the asiapacific including hong kong and shanghai. Shanghai composite is up 2 today a strong rally for chinese shares continues. The regional benchmark right now is at a sevenyear high as the financial tech shares lead. China resources power big movers. What if the key movers in tokyo today we will check in on the nikkei. Those banking stocks on a terror across the asiapacific. Mark thanks. Top stories on bloomberg this hour it was another Disappointing Court for yahoo . They reported a drop in sales on tuesday. The chief executive told investors the forecast for the current. Would be much better for the current period would be much better. Tech will be in focus once again, later, when facebook and ebay report. Israeli pharmaceutical firms have lost an unsolicited bid. It is resisting the move. It warns that any such deal would be subject to antitrust probes. A merger between the two would create a giant in the world of generic drugs. The actions of the Russian Central Bank have averted a crisis in russia in the country should return to growth next year, according to the chief executive. He told bloomberg the moment, both oil prices and ruble rate are up and it makes the situation much better. Frankly speaking, i am the one who will say if we dont have any prices in russia, we probably have negative growth here. Probably run 3 4 . But the russian economy will start to grow about 2. 5 . Mark you can join the conversation on twitter. The flash crash and surrouww trad remember, may 6, the day the dow plunged 1000 points in just minutes before later recovering. Some of those losses according to the justice department. Tell us what you are following today. The expected inflation rate is about the same five years forward, 1. 9 . But the real difference between those two figures is about 200 basis points. Quality yes but 200 basis points lower in germany says it is a whale of a buy. Im suggesting, if you dont want to hedge, that you should sell. Mark dallas bill gross dallas bill gross. We are joined by the director of fixed income, kevin adams. Do you agree . Kevin he is probably right, yes. But it is probably 18 months. People will be buying a lot of government bonds until next year, and the numbers weve seen and we have looked at means that it will be a real shortage. How are they going to buy government bonds within the constraints they have set . They are driving german bond yields progressively more and more negative. We will have negative german bond yields. Mark . 018, the tenure is point. 101 how soon . Kevin on this trajectory, probably in the next couple of weeks. The ecb seems to be quite systematic and their buying. They have a target per month. They are doing that and they just drag that bond yield down and down. Two year bond yields below 25 and they are just staying there. It is a really difficult environment for Bond Investors because there is no value. A fantastic short on a longerterm this is a kind of blackhole of qe buying. It is dragging european bond yields down. Mark where is the value within the eurozone bond market right now . Kevin it is tough to see where there is any value because of that distortion caused by q e. Some of them are looking at ok relatively, but that is relative to something fantastically expensive. Mark how long have you been in the bond market . Kevin 31, 32 years. Mark if i asked you 30 or lets just say five years ago that in five years time, all bonds going up to 10 years would be negative would you have locked me out of town have laughed me out of town . Kevin absolutely . Even five years ago would have been unheard of. You look at the impact that qe had bond yields down just to take them so systematically is extraordinary. Mark are you looking at bonds now which you wouldnt have looked at five years ago, or even 10 years ago . Kevin i think all investors are being forced to look at the spectrum, because we are required to deliver terms. Our clients want positive absolute returns and we are being forced to look at highyield bonds. You have to be very selective in your security. Mark give me an example of a Good Opportunity in an emerging market. Kevin outside of the Energy Complex in the u. S. There are some good opportunities. The u. S. Has seen quite a selloff. The Energy Sector was around 70 of the highyield index, so the rest of the complex has been driven wide. Some of the better quality, strongly positive sectors is where we see value. Mark kevin adams, director at henderson. Coming up, the biggest takeover attempt of the year makes an unsolicited bid for milan worth over 40 billion. Caroline welcome back. Time for a look now at the door and exchange market. Lets start with the japanese yen. After two days of losses, we are seeing the yen strengthened against the dollar. This is after we got some trade data from japan. They posted their first trade surplus since 2012, that is why you are seeing this trade here. It was far better that expected. The next day to look out for is april 30 when we get the semiannual price and Growth Outlook from the bank of japan. The day before we had the u. S. Federal reserve and the u. S. First quarter gdp. Some of so much of that depends on the dollar. The Australian Dollar jumped against major currencies today, and that is because we have inflation. In the first three months it was better than expected, at. 02 . It takes pressure off the central bank to cut rates. The key rate has been unchanged over the past two months. It was cut to a record low back in february. Back to you. Mark top stories on bloomberg at this hour hong kong is asking lawmakers to agree to chinas terms for the 51st leadership election. Lawmakers are set to vote in the early summer, and the hong kong chief executive says if they dont agree to the plan they risk of delaying. The proposal comes after it is rocked by democracy protests. The head of the you force the administration is stepping down following it drug scandal involving dea agents. Saudi arabia is holding airstrikes in yemen. They did not rule out further military action. You can find more on that story at bloomberg. Com. Lets get back to kevin henderson. Kevin adams. Yes there are factors donna spirathe deadline has been pushed back. Eu officials are now saying through the end of june. Will he get a deal soon . Kevin i think we have to. The great financial situation has been dragged in as much cash as they can. The municipalities are screaming about that and we will see whether there is any legal action to try and get their hands back on their cash. The greek government are trying to buy time by scraping in all the cash they can. The discussions on friday are dead in the water. Moving forward, they have enough cash to meet their payments in early may, maybe through the end of may. There is a hard deadline at the end of june. When the emergency Lending Program stops. Mark the big ecb payment in july. Those are the key dates. What is the bond market telling us . I know the greek bond market is at the most liquid but it has yielded 13 . What can we read into this inverted yield curve, going further and further into record high territory . Kevin it is difficult because the market is telling us there is a low probability of default, but the consequences of that default will be very severe. We kind of have a low probability but severe effects and that is really hard. That is the discussion we were having yesterday. From our point of view, we dont have any great exposure, what do we want to head some of our credit exposures due to the fallout . Credit exposures into the fallout . The market is telling us there is no certainty on how it will play out. It is absolutely evident. Varoufakis says there is convergence but that doesnt appear to be the case from the european side. We are stuck in this position of continue to deadlines being failed. Ultimately, or has to be some restructuring default on greek debt. How they do that is yet to be decided. They have to have some sort of default restructuring. Nobody has so far defaulted on the imf, and that is a turning point. To find a way they can make that palatable to the creditors. It doesnt have to be met gr

© 2025 Vimarsana