Welcome. You are watching the pulse. We are live from bloombergs European Headquarters in london. Lets get straight into our top stories. Telefonica raising the stakes. The company has lifted its bid for vivendis gvt units. That counters an offer from Telecom Italia. This is getting very incestuous. It is a battle for one of brazils fastestgrowing broad brand providers. Caroline hyde is here to answer our questions. Why is it so important . It is all about brazil. It is the Fastest Growing in brazil. It is a young, growing community in brazil who all want access to the internet. You want data, videos, facebook. This is a tantalizing asset owned by vivendi. They want to clock into that expansion. Both telefonica and Telecom Italia already have friends. They want to become more present. And want to merge with gvt gain more dominance while at home their domestic revenues have been easing off. Putting it politely. Of course, we are not using these two. We are going for whatsapp to send our messages. We are going to skype for our phone calls. Revenues are what they used to be. Who has got the better deal here . Valuation states it is obvious. Telefonica is offering more money. 7. 4 5 billion euros. Almost 5 billion euros of cash. Then you have got 12 of telefonicas brazil, when it merges with gvt, they are offering vivendi a stake in the merged asset. Then, interestingly, they get the option to have italians boater too. Italian exposure too. The brazilian regulator doesnt want us to have them anyway. It pits Telecom Italia in terms of valuation. They are only offering 7 billion euros, less cash. 16 of that is going to be exposure to Telecom Italia. Say, we willitalia distribute your content for you . Canal plus,ey have they have music as well. Also, they would get again a stake in the pizza pie that is brazil. There is such a tussle going on. Many are feeling that they could end up with the brazilian unit of Telecom Italia being tied up as well. Oi, i love that name. Is the asset actually for sale . Vivendi has so far said previously when telefonica came with its bid, we are not putting anything up for sale. Now, they have got a Board Meeting. The reason we have this flurry of offers coming to the table is vivendi, the board meets. They are going to be digesting these offers, trying to see which one they prefer. Then of course we get the vivendi earnings. All this comes as a media conglomerate is exiting telecoms. Atther they are making out or indeedot for sale wanting more of Telecom Italia, it is quite an amazing rearrangement. Lets focus on france and frances future. French politicians and ceos gathered near versailles today. This of course follows a week of political turmoil. We have seen the Cabinet Reshuffle after the resignation of president hollandes government. Caroline connan is onsite is on site with the latest on how business is responding to political change. Caroline, we heard from mr. Valls. We can say that the Business Community here is responding quite well to the Cabinet Reshuffle. They say the nomination of the new economic minister is a sign that president hollande and me minister valls tax cuts for a company that is part of the socalled responsibility pack. Yesterday was the Opening Ceremony of the university. I talked to one ceo. Frances largest insurer. Here is how he reacted to the speech. It is the first time we see a Prime Minister from the socialist party coming to meet this guy and tell you, i love you. I love corporations, the private sector, i am supporting you. We have been waiting there for a long time. S type of radical change the old labor, new labor, tony blair says we will succeed only if the success of corporations. Comparing Prime Minister valls to tony blair. Valls wasech of mr. Quite interesting. It was a speech that we all expected for france. It is a speech, historical speech, where he was pragmatic and he was very willing to challenge things in france. A speech which could be able to change the way we do business in france. The medeas the head of f that i spoke to earlier today. Prime minister valls saying entrepreneurs, france needs you. I love business. He said the tax is too much and he wants to accelerate france for businesses to keep hiring and investment are. That was the message here from Prime Minister valls to the medef. Head did to say that the tax cuts were not enough and he wanted 100 billion euros that was necessary to boost french worth. Back to you. Thank you very much indeed. Interesting that the labour party has now gone the other way and is being seen as antibusiness. Caroline connan on, thank you very much indeed. Lets get to another top story. The fbi is investigating a coordinated computer hacking attack which targeted jpmorgan and at least four other banks. It is believed to the hackers were russian. None of this is confirmed yet. Anna edwards is here. That is this kind of idea maybe they are responding to sanctions. That is what is being investigated by the fbi and others. People familiar with the investigation are telling bloomberg Russian Hackers attacked Jpmorgan Chase and at least four other banks during the month of august, resulting in the loss of gigabytes of customer data. One of the five banks has linked these attacks to the russian state backed hackers. The fbi is investigating whether this is a retaliatory action against u. S. Sanctions. The nsa is also said to be helping out here. What has been stolen . Account information that could be used to take money out of banks. No evidence that that has happened yet. Nsitive information was taken. There could be some european banks in there. As you would imagine, there is layers of Security Systems in place. Most often when you see this kind of information being stolen, it is via retailers or customers themselves. Typically, the layers of protection are less. It is quite tricky to work out exactly where this is coming from. Beenof these attacks have through latin america and other regions. The servers typically used by Russian Hackers, which is what has led the fbi and others to make these inquiries, how they are doing this is they are using software called zero day. It allows hackers to essentially Remote Control into your computer. They have to get through layers of banking security. We have heard from jpmorgan over this and they are not concerned as to whether they have been hacked. They say a business their size sitcoms do cyberattacks on a daily basis. It is something that the industry is aware of and they are spending a lot of money. There was recently a fairly highprofile warning that the next financial crisis could emerge as a result of some sort of internetbased financial institution. Every time we have a , you have tosis ask questions about where the next one might come from. We have seen a jump over the last several months according to experts in the number of attacks we have seen coming from russia and other Eastern European countries on u. S. Financial institutions. Interesting to explore whether this is linked to sanctions, whether it is retaliatory and to what extent or not the russian government might be involved here. This is something the fbi is looking at. To finde we will wait out. As jpmorgan has been saying, it is common that attacks take place. It is not common that they are successful. As i was saying, they have stolen gigabytes of customer data. They havent necessarily done anything with that. Our reporting suggests they havent stolen any money yet. That would possibly lead into further lines of inquiry. Interesting that jpmorgan was sold out. They were singled out for criticism when they blocked a payment to the russian embassy. Jpmorgan already being embroiled in the political evidence we find guiding 2014. Everything is linked. The known unknowns, the unknown unknowns. What do we need to worry about next . Thank you very much indeed. We are going to take a break. Coming up, german unemployment unexpectedly rises. We are going to head to berlin. And the french economic recovery or lack of it. Welcome back. You are looking at live pictures coming to us. The french president is addressing a group of ambassadors this morning, making some interesting comments. The euro zone economy the French Economy. Mr. Hollande is saying that europe is threatened by a long stagnation as a result of which, we need to devalue the euro. The euro is too strong and inflation is too low, he says. Monetary policy and budgetary policy to fight this. Kind of echoing what mario draghi said recently at jackson hole. Maybe you could argue that his outgoing economy minister has also been echoing as well. He says he wants a summit of eurozone countries to deal with this problem. Over in germany, unemployment has unexpectedly risen after eurozones largest economy contracted for the First Time Since 2013. Inflation data also trickling out as well. Lets go to berlin. Good morning to you. I want to start with the French Economy. Hollande says he wants a summit of eurozone countries. He says that europe is threatened by a long stagnation. Do you think that his desire for a summit and a need to fight this in a monetary and budgetary sense is going to be given any traction in berlin . How do you think these countries are going to be seeing eye eye to eye or not . It in a summit, why not . That might be possible. I think everybody who is expecting massive changes when it comes to rebalancing in the eurozone or a stronger role for monetary policy, i would be very skeptical about that. The consensus here in berlin that this crisis requires adjustments in terms of structural reform in the economies of Southern Europe and especially france. Do you think therefore he is going to gain any traction . Do you think he and renzi will gain any traction with berlin over the coming months . Today,ctually in paris the german finance minister. He has come out and said that maybe draghi was overinterpreted. There seems to be resistance to all of this. How would you rate renzi and hollandes chances of making significant change . Clearly there is resistance in germany. If we are talking about significant change, change on ones,rgin, more flexible more flexible interpretations of what has been said, that might be something that could be the result of this debate. Certainly this reigniting growth debate is not going away in the short term. In terms of actual substantial isnges, i dont think this very likely given the political consensus that prevails in berlin. Of economic deterioration do you think we have to see to change hearts and minds in berlin . In the German Economy, i would be skeptical whether this would have an effect on eurozone policy. Germany obviously has institutions in place to deal with this on a subpolitical level. If you think of the highlevel bargains between workers and employers, these kind of institutions help german employers and employees i just the challenges in the German Economy. I think what we would have to see would be either the return of significant market pressure, so that we are talking about the membership of one specific country in the eurozone as we saw in the summer of 2012. The other transmission mechanism could potentially be political. If we were to see in Southern Europe the rise of populist forces that would put the european project at risk. Short of these, i dont see a major change. Do you think there is a consensus in germany that the slowdown in the German Economy right now is a temporary affect . Pervades belief that most of business and the Economic Community . Yes, i think so. There is strong consensus on that front. I the same time, there is growing awareness of the importance of Political Risk. The finance minister raised that issue, warning of Political Risk , saying of course we are not isolated from that in germany and the eurozone. Many brush that aside. Looking at what is going on in ukraine, minds are slowly changing regarding the importance of Political Risk. Overall, given the high level of economic performance, the high that we are coming from renders this for now as a slight downtick and a temporary one. Do you think that is the correct assumption . Theing this morning about fact that maybe germany is making a mistake here, that germany is inextricably linked with eurozone partners which are experiencing a lets be nice about this a dismal economic picture at the moment. To bey appears increasingly seeing itself as isolated from that. Is that an error on germanys part . Yes. If you look at it from an economic perspective, of course. Germany withhat 40 of its exports going to the eurozone, 60 of the eu, 10 to france, germany is dependent. At the same time, i would say that of course the Political Awareness of these linkages in europe is pretty strong. Of the see at the end day is how difficult it is to translate what you consider right economically into something that wins you political majorities. That has been the problem with fighting the eurozone and the structural underpinning of the eurozone crisis from the beginning. Final question. Very briefly, can draghi go it alone without germany on qe . Probably not. If you expect Something Like omt, anything that would require political backing. Thank you very much indeed. We are going to take a break. Still to come, chinas richest man. Alibaba prepares to ipo. The sky is the limit. We are going to break down the numbers later in the pulse. The hour. Tes past welcome back. You are watching the pulse. To the markets now. Let me hand you over to jonathan ferro. Thanks, guy. Today is dominated by individual companies, individual stocks. To the sovereign debt market. I am going to give you a mouthful. A gauge ofcall it global sovereign bonds. Near record highs. Money keeps going into this kind of security. 10 year bonds, down by a basis point. You hear me say it every day, record low. It is not just germany. A real yield, where do you go . People are going to spain. You see the spanish yield come down from 4 by the start of this year. It is also a record low. Down again by another two basis points. The data in europe today is not pretty. German unemployment just taking higher. Rate over into the spain, 25 . Where do you go from here . You have bank lending contracting. They will tell you it is less bad than previous months but what will the ecb do . President hollande complaining that this is too strong. What is frances price target for the euro . Too strong at 1. 32 . Where do they want it . Down, i think. Keep it coming down as Economic Data keeps coming lower. Maybe that is what you need to have happen. That wouldnt hurt at all. My point is, i only hear it from french politicians. Not hearing it from the spanish or the italians. And if you were the germans, you would be happy where it is now. We will take a break. See you in a moment. Welcome back. You are watching the pulse. We are live from bloombergs European Headquarters in london. These are the Bloomberg Top headlines. Italys four biggest banks are seeking to borrow as much as 27 billion euros. The auction is designed to boost lending. Italys yard just bank is isortedly largest bank reportedly asking for around 7 billion euros. The United States says russia may be directing a. Ounteroffensive a spokesman for the russian president Vladimir Putin denied this, stating the information doesnt correspond with reality. Fighting in the region is worsening, spreading to previously peaceful areas. The fbi is investigating a hack attack from jpmorgan and at least for bank other financial twos four other financial institutions. Tosian hackers are believed have coordinated the attacks which resulted in the loss of customer data. Could be a retaliation for sanctions against russia. Lets get back to our top corporate story. Brazilse for one of fastest broadband providers keeps heating up. Plenty more twists and turns. Telefonica has raised its offer for vivendis gvt unit. That counters a bid from Telecom Italia. Joining us now on the phone is conor oshea, the head of the media Sector Research division. Good morning to you. A surprise is the action by Telecom Italia . That fits inhing the logic of what Telecom Italia should you doing in your mind . Good morning. It is something of a surprise given that they alluded there would be an offer for the business in brazil. We are not sure whether they are Going Forward or backwards in brazil. Maybe in order to flush out a. Id, they are looking at gvt complement their own presence. It doesnt look like a very compelling offer. Certainly on paper, it is only slightly above what the first offer for telefonica was. It doesnt look like a very serious bid. We wonder what the real game plan of Telecom Italia is in brazil. It may well be an exit and this is designed to flush out a bid. Hadnt looked at it from that point of view, fascinating. Where does that leave telefonica . Telefonica looks like the favorite in this scenario. , maybe not quite as high as some of the expectations building yesterday. It looks more serious. The increments in the offer versus the first offer. On paper, they have a clear advantage. Perhaps there may be some more regulatory difficulty with telefonica is offer. That is always a concern for vivendi who i