The ibex up 7 but when it came to the storming triumphant return it was the greek market 25 . The dollarrussian index was up 22 . In terms of individual names willie walsh quite happy at ied. Their stock up 5 . Operating profit up 81 . North america doing quite nicely. Caroline will break these numbers down. Lloyds has the first dividend since the crisis again. They missed on their overall headline numbers but a dividend of. 57 tenths. They had more people he i hundred Million Pounds. Cells be now, that is how the equity markets performed. I will use of marks stats. If you use a bar chart stat you are usually in safe territory. 9. 3 is where we are in terms of yield. The best performing bond market on the global basis. If you had any mind at all, some would say that you would have cut and run. If you had proverbial nerves of steel you wouldve been handsomely rewarded for the month of february, 14 return on greek bond investments. A market for the brave. Jonathan looking at some breaking data out of spain this morning. The cpi year on year coming in at 1. 1 . The survey was for 1. 5 so better than expected that by all means, not very good. We will get germany numbers a little bit later. Germany is focused now and it vote today on the four months extension of the greek bailout. Hans nichols joins us now from berlin. Hans, this is expected to pass despite growing concerns in berlin, how does this play out not just today but for the months to come . Hans it is expected to pass because there has been a straw poll and it will be 22 members of miracles block who will defect. That is nine more than last time but her block has 311 members and you combine that with the spd where there is no one who will defect. These lawmakers are feeling the heat from alternative for deutsche land. This is the antieuro party. And many ways it is just about the expected fight. It may happen if and when greece needs more money. There is a lot of talk about a 20 billion bailout package. Since we are talking about the press we can do my favorite thing the front page of the build. I dont think there is nudity on the front page today. They ran a big campaign they want everyone to take a selfie with nein on there. Everyone is sending it in saying no to the bailout package. There is the inside spread, we have to do the nudity check but that gives a sense of how strong Public Opinion is against a potential third bailout. Today the vote is a prerun prelude to what could be a much bigger fight. Jonathan. Johnny boy jonathan that is the situation in berlin. All is well in greece. The eu commissioner says he does not consider a greek exit an option. Francine lacqua spoke with the economic commissioner yesterday. There is no problem economically with greece. Lets not try to raise the constants which has nothing to do with the present situation. Nobody feels that and the presence is strong in the euro area. Everybody feels that we are looking for a solution to invest in a calm way that we are doing that strongly. I see no movement at all of panic. Jonathan an optimistic person. No panic and no fear, some might disagree. I what to bring up a chart to take it back to the 1930s in the u. S. Here is a chart of the post crisis growth compared to the great depression. Greek growth is still 23 from a crisis high. Hes with the chief Investment Officer out of london in capital. Powell, you thought the depression was bad even worse than greek it seems. It will get worse. What we are witnessing is theater and a tragedy. Everything that we thought of with the Greek Theater was all about. It is really quite incredible. How things go further the greek situation is getting worse and worse. But the commissioner was saying all things were good but things will be extremely dangerous. The greek bargaining position is as weak as it will ever be. Jonathan we are seen the chart there and that gives a pretty good read, how bad could things get financially . The greek banks have no way of financing themselves so the greek government has no way of paying for critical surgery or critical removal. This is quite serious and just because there is a lot of theater around of scenes and everybody is playing a public game, the reality is the greeks have got nothing out of the agreement, they voted for the relative calm in exchange there is an extremely weak set of cards from the negotiation in june. In the eurogroup, i am shocked that anybody is questioning, this is as bad as germany can get. The greeks will have no Bargaining Power at all. You look at the situation right now, how much will they need in june . 67 billion dollars immediately. 6. 7 billion immediately. The greeks are now running a significant ribary budget which isnt sustainable in a country with a 25 unemployment and 50 youth unemployment. It doesnt make any sense. When we hear will greece be forced to precipitate an asset or will we want to see some kind of haircut it is inevitable. It is one of the other. While it you think that the only two possible scenarios is a scenario where greece grows at 4 and as a primary Budget Surplus for 15 years at 5 . Where are the unicorns, it is incredible what is going on. This is what worries me about the market. What worries me is that the european markets and greece markets in general dont price perfection but price for the white unicorn scenario where everybody will build to run a surplus of 5 . They will build to grow at 3 with this employment, it doesnt make sense. You and i will talk about the bond market after the break but for now we talk about political theater. Lets stricken out strip out greece from the equation as well. Some are saying that pmi is picking up have a week euro and Lower Energy Prices as well. Why . Unfortunately if we strip out politicians wear leveling the fundamental of the economy and the market wouldnt be trading at what they are trading. The markets would be trading a lot lower. Its because of this political theater or banks are not as independent as they should be. The danger that the eurozone is growing a little bit but the eurozone structurally is all wrong. You have Monetary Union without fiscal union and regions moving at a very different pace. Youre a sense that there is no shoulder burdening of responsibilities. You have a country like spain which has the kind of structural problems they greece had five years ago that is not going to be receiving to help it needs from the north. Its not possible to sweep that out and yet the pmi numbers are positive. Quite frankly its we know things are still bad but to have a forwardlooking implied growth of 1 we are happy but it doesnt leave a lot of room to maneuver. Jonathan up next we will talk about the bond markets. To get everything you thought you knew about the bond market you need to pay a little bit of attention to the eurozone and sovereign debt. We talk about this bizarre bond market as the search for yield goes deep into the red. Jonathan good morning and welcome back to on the move. Lets check in on time of the top stories. Everest earnings beating estimates. You can see the stock up 6 as i speak. Iag is also flying high. The stock on the move by 4. 2 and lloyds, the bank swings back to black and they revise dividends for countries. The stock is up 1. 75 . It is not just the equity market index is breaking record highs but the bond markets as well. Record after record in the european bond market. The yield on the portuguese tenure dropped below 2 . For the first time ever, in germany the seven year marched into negative territory. About one third of euros sovereign debt carries a negative yield. Youre paying for the privilege to lend to these governments. That chart courtesy of rbs. Lets bring back the cio at london and capital. In a word, it is insane, do you agree . In 20 years there will be many phds writing about how everybody sensed the perspective was lost and have Central Banks with smoke and mirrors have created an environment where people are willing to put on a trade with a limited upside and the potential for significant downside. What is happening on europe is unfortunately a combination were on one side there are artificially low yields and on the other side there are low yields in Court European countries that are becoming japanese by the minute. Jonathan i can bring up another chart that says how much debt as negative yield and in germany it is way above 50 . For the ecb if they dont want to bite negative yield that strips out the sovereign debt. You factor in that there might be people who dont want to sell, we are questioning whether they can buy enough. Guest the problem with the ecb is they have a mandate to do what they do. And these biases and the range of choices. As i said, the ecb is really beginning to do what the bank of japan has been doing and look where they are. Jonathan when you looked at the bond market inflation still has a real yield with inflation running way below zero. It just makes a little bit of sense but i would ask the question at what point does inflation become so entrenched that we start to question the sustainability of these peripheral nations and when to the sovereign debt loads start to trade like credit again . Guest the problem is this sort of shift where people say when a minute, there is a reason people are the way they are. You said people were very happy because this is leveling slightly, low interest incredible. We are saving rates at historical minimums which are seeing prices falling. What are they going to do tomorrow . They wont by today because theyre waiting to buy tomorrow. This is a bad situation but just because you can justify it doesnt mean that once used that back and wait up the next day you can say, wait what is going on . Mi really expecting for this to continue to trade just on technicals am i really expecting this to trade just on technicals . Jonathan here is the question for you. I had a question with someone yesterday who compared the moves right now to the tech bubble. Not because it was a bubble because if you didnt buy into this you missed out on a substantial rally. Is that a reason to buy into this . Guest there are plenty of other places whereby you are still indirectly writing this underlying theme but actually getting compensated a little bit more. There is a fair amount of financial bond people which is indirectly linked to what yields are doing and yields are also falling indirectly in this systemically important financial situation which is a preserved species by the system is still becoming safer and safer. If there is some lesson the politicians learned to make sure the next crisis does not come from the source of the previous one. Things that are going on in europe smells like another round of disappointment. Certainly they will make sure that banks are not the culprit this time, so why not buy the debt which is safer . Why focus on the stock . Dont go for the Unit Liability of these banks which are becoming more like utilities. Europe is getting more than the pathetic yields we getting from these government bonds. Jonathan before modulation relative calm in europe. The eye of the storm, thank you very much. The german finance minister speaking right now and the german parliament, urging parliament to approve the greece extension period in paus words why wouldnt i improve it . The approve it. . Jonathan good morning and welcome back. Stocks are pretty flat. Japans industrial output jumped the most in three years but retail sales and inflation slowed underscoring their strength and industries but weak domestic demand. China is said to plan to collect the Capital Gains taxes from the foreign Money Managers who invested in the mainland markets. According to people with knowledge of the matter the government plans to collect a 10 tax on certain funds and the move could call back more than 1 trillion to pay authorities. And kyiv hopes the latest peace effort in the ukraine is taking hold. They say it is stabilizing and is withdrawing from the military. There have been no breaches since Late Wednesday night. In the u. K. We have had a wave of banking earnings and breaking news this week. We have the biggest mortgage biggest Mortgage Lender now. Here is caroline hyde. It significant. Caroline the first in five years and the first dividend in six years. Sure, if youre looking at the net income number four lloyds it missed because once again you have a huge working break provision for ppi. One hell of a missile, 12 billion pounds are now set aside. But by the by, underlying profits of 26 . Yes antonio had to make big changes one billion pounds of cost to strip out and we are starting to see them make some symbolic gestures. Two the rest of the Investor Base because we get a dividend token. Symbolic developments, that is what they say in their own earning statement. They recognize the importance of growing this number in this in the bank plans to have 50 of an earnings dividend Going Forward. This is investors starting to reap some reward. Jonathan as you say George Osborne and the government lloyds for George Osborne, finally putting this back into private hands. They have been setting down their stake. They managed to get rid of another 1 without the market even knowing. That was back since december, they sold 500 Million Pounds worth but the share price is still rising in lloyds. They are set to get rid of their entire stake by the first of the year. This is why George Osmond is crowing saying look at the profits, this is good news because he wants to get lloyds fully back into private investors hands. They have to offload the rest of it in the first half of the year as i say and this is monumental. This is a rescue they made in 2008 so the fact we are getting the first dividend and a fact we are starting to see the share price continue to be about that rate for lloyds is notable. Interesting also is people working at lloyds are getting or money. Rbs has to cut their payloads and theyre saying remuneration is responsible and prudent. Jonathan investors seem to like what they see this morning. After the break we will take you straight back to europe and all things greek. We speak exclusively to the former president of the ecb, jeanclaude trish a trichet. Jonathan welcome back to on the move. Equities doing pretty much nothing but the headline is in the bond market. The spread between the german and the italian 10 year has dropped low for the First Time Since 2010. Record a bond yields but not so much in greece. A greek exit for the eurozone. Is it still as safe now as it wouldve been three years ago . Lets put that in the former president of the ecb jeanclaude trichet. I am pleased to say he joins us now from paris. Great to have you with us this morning. I want to start by talking a little about contagion risk. This is a general of and lets call it a consensus. Grexit has imposed the same risks as it did in 2011 or 2012 is that something you agree with . First i would say grexit would be a catastrophe for the greek people. That is the first point, second i would say certainly it would be something which would be very bad for the area as a whole. That is why i trust there will not be a grexit, neither now or in the previous years that you mentioned. When you look at the situation the reason people think there is a contagion risk is because the bond market is so insulated. I would say to you, why would it be a catastrophe for the rest of the eurozone, what would be the transmission channel . First of all my working assumption is that the grexit will not materialize. Second i will say of course it is true that the euro area is in a much better situation. For instance all the countries have no balance or surplus. So in that sense you can say the system is more resilient than it was. On the other hand, the credibility of the euro area has been constantly reinforced by the fact that in the worst crisis ever since world war ii trope, it was resilient. Will more two world war ii, it was resilient. So we are 19 when we were 15. This resilience is adding to the credibility of the euro area. It seems to me it would be a mistake to underestimate what it is bringing about for europe as a whole. Mr. Trichet, one of the risks remains firmly in the Banking Sector particularly for greece. Take me inside the ecb, how does one make the decision that a a bank is insolvent and be it is time to switch off to emergency liquidity . Guest it is something which is a judgment which has been made and which was made and has to be made by the governing council itself with all of its dimensions but it is absolutely clear that when the emergency liquidity assistance takes an enormous dimension and when it is absolutely clear that the level of the euro area as a whole, we have an abnormal phenomenon in terms of monetary financing then the governing council has to step up and take the appropriate decision. Its not easy to take but it has to be taken. Jonathan how close are we to that situation right now . Guest i would not say. What is important in greece today of course is that the new program which will have been discussed between or during the months and weeks to come between the government and the friends, namely the commission and the friendly countries of europe and also the imf, this program has to be given the stamp of confidence by the International Community and that is extremely important for greece if we went confidence to be backed as well and actively as possible because confidence is the key for everything growth and job creation and four an active economy which would be absolutely of the essence. Jonathan when it comes to the ecbs role when it comes to providing liquidity how big should they be in providing specific governments with how they should clean up their act and tying that to a provision of emergency liquidity assistance . Should they have a role in telling governments what to do . Guest the ecb has to make a judgment on the basis of its own monetary responsibility. They are responsible for the demand and policy of the euro area as a whole and this is its own legitimacy. On the other hand you have the commission and the eurogroup on the one hand to make a judgment on the program of grace from the overhaul Macroeconomic Program of greece from the overhaul macroeconomic standpoint. Of course without the extent of the International Community there is no stability. Jo