Europe, good evening to those in asia and a warm welcome to those just waking up in the United States. I am guy johnson. I am francine lacqua. This is the pulse in europ bloombergs European Headquarters in london. The coldest weather in 20 years is heading towards east coast right now. Are extreme. Their high is 18 degrees. Snow and ice that other major cities as well. Officials are warning people to remain indoors as much as possible. Dangerous conditions are causing chaos for travelers. More than 9000 flights had been canceled over the last few days. Even more have suffered long delays. New yorks jfk has a huge backlog of flights. The report forced to shut for a couple of hours after a plane skidded on the runway. There is some good news for some children. Thousands of schools have canceled all classes this morning. We will keep tracking situation and bring you updates on the impact of the arctic weather. To whether or not so great in britain. It is warm and wet over here, ironically. That is not stopping londons boat show from sailing into town. Following hard times after the financial crisis, britains boat industry surges back to profits. Ryan chilcote is on the ground. Maybe not on the ground, are you actually on a yacht . Almost on the ground. You can give flight, maybe he can take sun seekers 92 footer. This is a 9 million boat here disses the dating deck are you dive into the sea from. London boat show just kicking off here. I will give a little to her. Im learning all of my boating vernacular. Site is the saloon. Pretty nice. They have a nice 55 inch screen there that is a lot less than the rest of the boat. If were going to be a little ambitious. Return to go up onto the flight bridge. Ray is a good man in endeavoring to do this. It is pretty extraordinary appear. This is a trilevel boat, or so heres aively table, which is no fun. It has three decks, right . Obviously they put a hot tub appear for me. You have got your bar and of course normally you have a crew of about four with the chef, a captain, a stewardess and somebody to help you with all the ropes on board. You can ask a operator yourself. This is one of the two homes. They make one of these boats a month. 10 of them last year. It takes about six months to make this both start to finish. Sun seeker, interesting company. The soma than 200 votes last year, employment at 2000 people in the u. K. And in a few minutes well be talking to their managing director. Francine, guy . Fantastic work, ryan. Never work with children, animals or large odds. Hes setting out his vision includes tax cuts by reducing spending. He may not be the chancellor at the point to which is now beginning to reference. Theres an election coming up in 2015. He is looking beyond that very he thinks the pressure will be on any party that comes into power after the next election. Nevertheless, this really is about politicizing what were seeing right now. Were seeing is a recovery. An improvement in the economy, a downtick in the economy. Be message today is going to on the contrary, we can step back from austerity. We will not be stepping away from listening this pursestrings either. This really sets us out for an Election Year next year. Is going to build throughout the next 12 months. Everything will be very political. Absolutely, francine. It will be on two fronts. Not just on the economic side but on immigration as well. When you look at some of these polls, ec 30 of those who voted conservative back in 2010 to you kip, which is an antieuropean party in this country. That is going to be a big fame as you go into the next year. Is going to be interesting he has got a core constituency of voters. Recall the mo a piece here usually a big part of the conservative movement, theyre worried about their pensions. Theyre all kinds of changes afoot. This looks like it will be a core era for this as well. Guess where they sit guess who they are saying they will protect . Pensioners. Many people who arent pensioners. When you see many people who are quite well off and they are receiving benefits such as a bus pass and may not use, such as a Television License and that that they probably dont need, it is difficult for people on the other side of the spectrum who arent pensioners that are struggling to make ends meet. This is what they are calling a costofliving crisis. You can see other two parties are really going to face up against each other in next years election. John, thank you so much. Jonathan ferro at the very latest on the u. K. Tech companies and google are looking to transform Smart Technology to four wheels. European Business CorrespondentCaroline Hyde joins us now with more details. Today we had an announcement from google that they launched an open automotive alliance. Carmakers, General Motors is in there, honda, on develop looking to Android Software and customize it for cars. Samsung similarly partnering software thathave will run in car systems as well. Why these Tech Companies falling over themselves . Because her market could be huge. We understand that ihs thinks 150 million in excess of 150 million cars will be on the road and connected to the internet by 2020. Thats more than all the cars that will be reduced globally this year alone. In fact, we are seeing the amount of chips, the value of chip Net Technology in each car is just wrapping ever higher. In fact, the value is Something Like 65 higher than it was a decade ago. The way younating, can get technology into phones. Panels willflat allow you to see displays was still sitting to the windscreen. Sensors will analyze how youre feeling. You can match your music your mood. Of course while analyzing traffic, helping change your route as youre driving. The potential is fast and no wonder you have a Record Number of nine Car Companies presenting it. If you get into a tesla is like somebody put a flatscreen telly in front of the dashboard. Some companies are already doing it heard a big week this week for technology. We have some some reporting numbers tonight, but a to c, not exactly getting things after a great start. A numbers onsed sunday, maybe trying to bury the bad news. But the bad news is there for everyone to see. Chinese phone maker, sales down 29 . This company has a quarter of the entire u. S. Market in terms of smart phones now, sales less than three percent globally in terms of overall market share. They have lost sales for nine straight quarters. There been you have a first for your loss to the company, besides ordering ironman. A toy 14 will be a very tough year according to analysts. Caroline hyde our european Business Correspondent. Price of bitcoins the past 1000 again. Zynga said it was start accepting virtual currency. The coins first crossed the 1000 threshold in late november and thomas is to be worth six and 40 million dollars. Gauges of manufacturing fell in december and its higher market money rates. Mercedes is back on top. New entrylevel cla led mercedes to post a seven percent gain in november. The brand sales rose 14 to 313,000. From cars to boats, coming up our interview with sun seekers managing director heard fido at a prestigious john maker is looking east. And later this hour, pharmaceutical giantteva may leader. New we will talk to the top contender. First. Bloomberg. Youre watching the pulse. We are live from bloombergs headquarters here in london. Bloombergs European Headquarters in london. Pound versus your screen back. As we speak, the british chancellor George Osborne is on his feet in birmingham, laying out a vision of more austerity for the british economy. This is not the time for releasing the pursestrings. The story is developing in the u. K. As we head towards a 2015 general election. Also this morning we are seeing some slowing in the Service Sector in december. Come down to a 58 number on the pmi. That is still fairly elevated. You need to think about what is still happening here. Weird have seen fairly strong growth relative to other economies. Thursday were going to see the bank of england. Was the bank of england going to do . Announcement from the committee could be interesting. Rbc saying it believes it could lower the unemployment threshold , lowering percent that for the first rate hike. Bank of america and Merrill Lynch talking about that the threshold is not a trigger. Lots of moving parts, 163 points 1. 6060 is where we are trading. Guy, thank you so much for that. Britains most prestigious yet the list looking east to secure its longterm future. Since it was bought last year by a chinese billionaire. Ryan chilcote reports on their moves to convince rich chinese that super yachts are the toy they are missing. Sun seekers there is jack wilson fans back 3. 5 million bucks. If the company is right, buyers of its brandnew 75 footer and a modest to follow will come from halfway around the world to buy it. Sun secure made james bond roads. In the world is not enough, the luxury maker even made the villains vessel. Real worldd to the and you will find a kind of people who own sun seekers could change. Last year chinas largest Property Developer was going to buy 30 of them when he decided to buy the whole company instead. This is really beautiful. This is the 40 as and 40 , and a sun seekers boat for billionaires. It goes for 20 million. Give me one example of how boats are changing . Sun seekers is not selling many vote many boats in china yet. The new owners betting the half 1 billion to buy the company for, that will change. Well, daddy has a new boat. This is the sun seeker 92 footer. Is in an milliondollar boat we have the sun seeker director dirk mcintyre. Can you give me a discount . No. [laughter] all the bookmakers up and tell me that they are cautiously optimistic about 2014. Basically, everything up to now, since the financial crisis has been pretty ugly, yeah . It has been challenging, but think the world is being cautious. I think the violence of these two words are important. We are optimistic about what is happening in 2014. What is taken some very strong to 2015. Rders we are looking good. Gretzky may example of the financials. We are still working on our financial u. N. Our revenues will be challenged, as most of as most of our neighbors are. We made Huge Investment here in the new product and new product development. What we see is the outcome of that. That invested in texas forward to 20 14 and beyond. It looks like lecture in the sense that the highend, your hundred 25 footer, those always do well, but the smaller of more affordable boats we produce in excess of 20 boats a year of over 92 feet. Most of the higherend sizing is have hadstomers who many sun seekers before and use them for a variety of different purposes, either for personal use or charter. Clientgy of a chinese since last year. How big a market can china be . China can be as big as it wants to be. When we talk about china, we year be we have a 10 relationship with china. , potentially, i think america has 16e, million votes. Europe has over 12 million. China has a long way to go before it hits the dizzy heights of the free markets. Want asdoes china opposed to buyers elsewhere for stocks. China has [inaudible] them in situ in china is fantastic. It is fantastic to see the menus. There are many strong uses a boats there. Lets check out the saloon here. What is the saloon here . When does it tell you about how boats are changing . This is ultimate luxury. This boat is being used for it has all the functions you could expect for a private family house. He said open space for seating and you also see luxury dining with an enclosed galley. You can drive yourself very if youre fairly emphasis and you have some experience, you could drive it. Our charters guided by rules and regulations. Not wingefinitely it. This is not our biggest boat. The biggest boat at the show as a hundred 72 footer. Youre going to build even bigger one. We have a hundred 75 foot boat we have a 175 foot load. What is the biggest challenge of all . Keep going. Is a rule they should never spend more than 10 of your disposable income on a depreciating asset like a boat what you make of that . There are lots of rules. Some rules are meant to be broken. Generally speaking, you should be a pretty wealthy individual. It will cost a few million quit to run every year. He and i going to talk about my discount for this boat just now. Then, ryan, you just need this to3 million just to get running. You should never own a boat. As the job market suggests. First. Bloomberg. To the pulse. Live on bloomberg television, radio, your ipad and bloomberg. Com. Manus cranny, our market editor, joins us now. U. K. And irish insurer. The irish subsidiary needed over 200 Million Pounds in capital. What were hearing today is that they have three proper wording three proper warnings by and them. It will not need any further capital. The company will not need a full rights issue. Knowis good news if you about stock. Biggest oneday gain in five years. Deutsche lufthansa when it comes to airlines reduced its capital. Down over one percent. Youre making cost savings but their costs are rising. Outweighing any benefit. You have transatlantic yields under pressure. Spencers. Rks theyre doing well with the food offering over this mess but the general merchandise side of the business is a big negative you right there. We are going to see drop in terms of the numbers. We would get those on thursday. Back to you. Manus cranny, our markets editor. Up, dave announced a new ceo. Announced a new ceo. Very shortke a break. Well see you in a couple minutes time. Welcome back to the pulse. We are alive from bloombergs European Headquarters in london. I am francine lacqua. And i am guy johnson. These are bloomberg stop headlines. Bitter cold sweeping across the u. S. The high is up to 18 degrees celsius. More than 9000 flights have been canceled. A jet skidded that new yorks jfk airport which cause it to runway for two hours. U. K. Chancellor of the exchequer has been speaking in birmingham this morning. He says 2014 is the year of hard truths. He says one billion pounds of welfare cuts are needed. Teva is getting close to naming a board member as head of the israeli company. He is currently heading the company that makes generic chemicals. For more details on the story, lets bring in our mideast editor. Elliott, at least you have some news for teva. Francine, if its not bad news i guess it must be good news. Certainly, people hope this will bring a bit of stability to teva. Lets not forget a few months ago jeremy 11 parted company with teva following a spat with the board over a restructuring plan. And very wellknown business circles. He is already a board member of former member of the strauss group. He is the still the chief executive of the Worlds Largest agrochemicals maker. Very wellknown known in the Business Community in israel. Respected as well. Vicki will be for him to translate that over to the United States whereteva is listed in where most of its shareholders reside, francine. . Challenges is going to have a series of challenges. Blockbuster multiple sclerosis treatment brings in 4 billion per year. That is due to face generic competition as early as this year. If it faces generic composition generic competition, and how many of them do so, it will depend on the dent that tevas earnings take. The second is regaining her confidence is regaining investor confidence. A sixow hovering around year low. You really need to do something to gain investors confidence once more, that this is a company that has a bright future. Finally, there is some support already. There is an activist investor known as benny landor. He has written two other investors encouraging them to support the appointment of the inchief executive of teva. That respect, at least he should have it their backing to hit the ground running, especially this time when people are suggesting that maybe he will even be broken up third this is israels largest listed company and a real flagship for the israeli economy. Guy . Thank you very much indeed, elliott. Edward snowden may have been bad for germanamerican relations, but his leaks have been good for some german businesses. Our International Correspondent has nichols joins us now. Our International Correspondent hans nichols joins us. They would have to be secure. But the other people on the the line that merkel is speaking to also have to be secure. That is why you need to components for this. What were seeing in response to this revelation is two kinds of companies. Such as applese and cisco. And those on offense who see this as an opportunity to sell new products and new customers. Lets take a look at two of them. Bombshells,owdens modifieds, a blackberry and the Samsung Galaxy were competing for one customer. The german government. Angela merkel and the ministers who texture. About nsareports listening post atop the u. S. Embassy in berlin, two companies are experiencing a surge in private demand for what may be this years diverse status symbol. A secured smartphone. Israel has always been very keen on security and confidentiality. We think that this is attractive to them. At a subsidiary of richard telecom, there are lines of code to virtualize the android operating system. Rice . 1700 euros. The crypto card, the so card security anchor, is inserted next to sim card. On screen you can toggle back and forth between the secure zone and the public one. If you switch to the light ispartment, then youll see a normal and. Their competition . A modified blackberry engineered by sacred spark, listed at 2000 europes, the after discounts for flow buyers. They claim their voices more secure. Voice becomes important. Snowden, voice was not important. There is value in your voice. Germanyspproval from office of security. Is a closely guarded secret which device will become the official chancellor phone. Merkel poses with the blackberry and public. Guy, the Company Makes a samsung version of this is in the process of getting approved for the tablet which is also secure. We have is to markets. You have the german government. I susp