Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240713

Exchange, where we bring you todays market moving news from around the world. Our bloomberg voices are on the ground with this mornings top stories. We begin with a ron striking back with iran striking back after the u. S. Air strike that killed top iranian general Qasem Soleimani last week. For more, simon foxman joins us from doha. What is the latest on the retaliatory attacks on the part of iran . Big question has been whether or not there are any casualties caused by this attack. We just saw, as i was sitting down, it appears u. S. Officials are saying no casualties. That they were informed of this before it happened. If there were casualties, it would have caused a much stronger u. S. Response, the thinking goes. If not, perhaps we could see ourselves moving towards some type of negotiation, some sort of diplomatic resolution. The ayatollah, and he the Ayatollah Khomeini saying this is a slap in the face to the United States. The foreign minister, though, taking a bit more of a conciliatory note, saying these measures were proportionate and do not think escalation or do proportionate and do not seek escalation or war. Lisa thank you for that. In washington, eyes are turning to reaction from the missile strikes. President trump said, all is well. , so far so good. Do we have any further sense of exactly how the u. S. Is thinking about the retaliatory measures on the part of iran . Kevin good morning. That decision is still very much being held under close wraps. President trump last night meeting with defense secretary mark esper, as well as secretary of state mike pompeo, here at the white house. No other formal comment coming from the administration. The president saying that later this morning new york time, he will be delivering some type of remarks. We will bring you the timing of that as we get it. Meanwhile, on capitol hill yesterday, lawmakers in both parties briefed on the situation, and both Party Members for there to be prayers as the u. S. Weighs its options. A headline crossing the bloomberg terminal says there were a piece, citing a u. S. Official. That has gone into the trajectory of the president s thinking. However, we should note that it was on sunday when President Trump tweeted out that should iran retaliate, there would be a disproportionate response. Brentturning now to oil, paring gains after the iranian airstrikes. Oilrding to the uae minister, hes not expecting major supply disruptions. We are not forecasting a shortage of supply unless we have a catastrophic escalation, which we dont see. Lisa Annmarie Hordern joins us in london for more. Right now, it seems like markets are kind of tempering their expectations for any kind of disruption. Annmarie thats right. No supply has been disrupted yet. What we are seeing right now, especially in asian trading, we saw brent go through 70 a barrel because of geopolitical risk premia. We should note this is a different market than 5, 10 years ago. The middle east is crucial, but there are still other oil supplies out there, most notably u. S. Shale. If you look at what the call options are on wti, the premium is the highest its been against the attack against saudi facilities, so it looks like investors are trying to protect themselves against any geopolitical risk, but right now, the market is still calm because until supply is disrupted, youre going to have a bit of spikes here and there. But do have these remain elevated for a duration of time, youre going to have to take supply out of the market, and right now we are not seeing that. Lisa thank you so much for that. Also in iran, a boeing 737 jet noun for ukraine crash and shortly after takeoff. Authorities in tehran, the incident was caused by an engine fire. Our correspondent joins us from berlin. Timing of this really raises a lot of questions. Oforter indeed, a lot questions still swirling on this. Iran coming out fairly swiftly after the crash, saying this was a technical fault, and they are investigating a possible engine fire. 737800, a different model from the max that has been grounded. It is considered very safe. The engine that uses our tried and tested, so this is not a plane that shouldve crashed. It was well serviced, it was young, and the question now turns to the investigation. Andmuch will boeing, indeed, any international organization, be involved in this . Is thismally happens would be a ron, and International Organizations would pile in and help out. Will the ntsb be given any access . That remains doubtful given the political situation these countries find themselves in. Lisa we will have more on this throughout the next few hours. Meanwhile in beirut, former nissan chair carlos ghosn is set to speak the First Time Since fleeing arrest in japan. For more, yousef gamal eldin is in beirut. What are we expecting to hear today . Sef about 100 journalists, a bit more, have gathered here and braved the rain and cold. If the statement overnight is any indicator, we could be in for an explosive set of revelations. Earlierthat nissans characterization was a gross perversion of the truth. The expectation is that hes going to name names, which he does far has been reluctant to do. That could not only include senior officials within exxon, but also some government officials in japan. He will be able for the first time to speak freely here in downtown beirut to give people an idea of what exactly went on from his point of view. This comes at a very difficult time for both renault and nissan , who are trying to patch things up when their stocks are at multiyear lows. Lisa stay with coverage on bloomberg of Carlos Ghosns News Conference in the next hour. I just want to bring you some breaking news here. Walgreens reporting earnings that missed estimates, with shares plunging more than 3 at one point in premarket trading, now increasing the losses. First quarter net sales were 34. 3 billion versus an 34 estimated 34. 5 billion. Seen howremains to be that walgreens merger is going to bear out and bear fruit to the degree a lot of people were expecting. Coming up, we are looking at the trade and analysis on the markets in todays first take. That is coming up. This is bloomberg. Lisa now for the bloomberg first take, where you get the news and the analysis on the markets. Vincent cignarella , gina martin adams, and also with us is Paul Richards, Medley Global Advisors president. We got the initial headlines on retaliatory attacks by iran. I wonder if this indicates how lopsided markets are in their complacency. Gina i dont know if i would call them complacent, but may somewhat confused. Weve been in a consolidation pattern for the last couple of weeks already. This is more evidence of that continuing in the near term. Obviously, the visibility in situations like this is pretty opaque. Nobody knows where things are headed. It is a speculative sort of environment. That is why you see really rapid moves overnight, and as people come in, you start to hear the figureheads speak in a more calm manner about where things might be headed, and the equity market take some degree of solace. Complacency is a Financial Markets at large, not the equity markets specifically. The equity markets are refunding what is happening broadly. This is constant sort of nobody knows, how so how do you price it in . This ticket of love the speculative flows were interesting. Most traded overnight more than double. If you look at to be uti, up over 500 . Flows, to your point, are there. Overnight in the price action, the chinese you acted almost like a safe haven. It actually rally versus the dollar when all of this went down. Started to do it twice, and is now back up, but it is kind of interesting to me because so goes emerging markets. Lisa is the take away here that Central Banks are dampening volatility, and if you invest in stocks, you are good . Or is the take away that markets are highly unprepared for an escalation that really does lead to something more sustained . Paul ive you last nights move as a deescalation, so that is a totally different view. The way i look at this is when you are looking at price action, looking at the news, it is incredible calm. I think theres a warning. We seen this before. I think that absolutely there was a retaliatory attack coming, but the way you can see this play out, it felt like there had been a warning. So to me, we knew we were going to get a retaliatory attack. It good news, as bad as obviously is, is it came soon after soleimani had been buried. Now the markets get calm, and we get back to fundamentals. Ample liquidity, stocks doing well, probably the payroll tomorrow will do well. I think the key is President Trump this morning. Calm,can keep the market it will keep up. Lisa i think that your view really is the market view. Basically, iran was trying to do something to say face. They did something that basically did nothing in terms of actual casualties or actually stoking the fire when it comes to provoking a response from the United States, which raises the question, why is gold still rallying . Why are we seeing new highs . This is a key question. Damian it came back. 1600 rallying over overnight. But it is really a repricing of geopolitical risk. If you look at credit default swaps since this all started, places like south korea, this is a distinctive message here. The way i look at this is theres a lot more risk now in korea. People completely overlooked positive news out of samsung earnings overnight, which is positive for em equities. People cant get their arms around it, with shale in the u. S. You look at the brent crude one your calendar curve, no disruption excited whatsoever. Lisa people are saying that kim jongun actually stands too amped up developments because the u. S. Could end up taking him out with a drone attack if there is the threat of nuclear war. Given that, it is even more surprising that we are not seeing much of anything. Repricing of risk, this is what a repricing of risk looks like . Lisa you think about what equities trade on. Companies are still doing business. Economic growth is still relatively stable. You have to have a bigger disruption. A lot of this is rhetorical. It is speculative. This may happen if this happens, this happens. Equities are going to trade based on real, Economic Conditions but initially deteriorating in the future. Can you make that case yet . I think it is a bit of a stretch to suggest that we are going to isculate something definitely going to happen in korea and crush equities overnight. It is just a little too fast. You have to actually have something happen rather than just speculation to see market prices really move that dramatically. Paul i like your point that Something Big has got to happen. If you are an investor, you are an investor, europe 30 in the last 12 months. You can live with a 5 drawdown. You know that event that will get you out. That event last night was not it. I think the next event, if it were to happen in north korea, and the middle east, then you will know to get out. That is when the market is going to go down. But if they can avoid this, the market now gets to a new risk. E had 18 months of trade i think the remainder of the Trump Presidency is in the middle east. Lisa we come back to how do you hedge. If everyone is waiting for that very narrow exit for something to happen, that means that exit is going to be incredibly crowded on the way out. Where is the hedge . Paul to me, my friends keep asking me, how do i hedge . You either sell your equity portfolio or you dont. Everybody went into bonds, look where they are now. Gold is gold. You either like it or you dont. You are either in equities or you are not, and it is your decision. Those that have made the decision to exit equities in the last two years have been proven incredibly wrong. This Trump Presidency is about volatility. However, if you can stay with them, stocks tend to go higher. Youve got to make that decision come about from a hedge perspective, i dont see it. At my golf club, people. Re talking about which bet dont get me started on which haven to pick. I think it has more to do with the beta regime at that point and time, but youve got to be looking at hedging up. You cant keep all of this beta risk on the portfolio with all that is going on right now. The equity market, the head has been the u. S. Equity market. This is the reality of the last 10 years. Everyone has hedged risk by going long u. S. Equities and staying away from everything else. This is happening again as we speak. Emerging Market Equities are suffering the most as a result of a global risk event. This is, there i say it, the brilliance of this president to some degree. It has elevated the risk premium broadly, which has benefited u. S. Assets and the u. S. Economy by default. What theont know conversation was at your golf club, but do you agree on hedges . Gina i dont have a golf club. [laughter] gina i prefer tennis to golf, so not a lot of time to talk in that sport. Lisa i guess this raises a question about the traditional haven as the hedge of treasuries. I have to wonder whether, at this point, it is no longer the hedge that used to be. Paul treasuries work because theres no inflation, Central Banks are on hold. Arguably, Central Banks went too far at the height of the august trade issue. At this point, everybody is worried about yields going back up. The fed is going to give you a lot of breaks here. They are all looking at inflation, likewise with the ecb, and saying we can live with an uptick in inflation. I think fixed income is relatively boring. If you take 1. 8 yield on the 10 year, take it. Said to dontou get you started on which haven to pick, but lets get started on which haven to pick, and are you going to take that lying down . If you look at the cdx highyield, one has barely moved. Em has moved up 10 basis points. Emerging markets are really the whipping boy in this. I would still argue that maybe some hedges exist in emerging markets, but there are definitely havens out there, and i would be advising people to take a good come along look at them in this environment. Lisa does that mean theres a buying opportunity in emerging markets . Gina probably, although youve got to see some longer fundamental shift. Theres just a fundamental lack of earnings growth. Youve got to save that transition and markets start to improve. We talked about china and the yuan as some signal. If we start to see that, maybe emergingMarket Equities can clawback. China isike the way floating reslating. I think this is really measured. I would like to see oil come back, and then i would go back into more em. Em probably does do very well in this environment if you think theres no further escalation in the middle east. Lisa well, stick with the golf Club Discussions about which hedge to make. Gina martin adams, damian sassower, thank you very much. Paul richards of Medley Global Advisors, we are not letting you go yet. You can find all the charts we just used and more by running gtv under terminal. Browse we should browse yourt features, save charts. This is bloomberg. Viviana you are watching bloomberg daybreak. Memory chip prices are starting to climb out of their persistent slump, and that is good news for the Worlds Largest banker. Samsungs Quarterly Sales falling short, but profit was betterthanexpected. Billionaire investor ray dalio suffering his first annual loss since 2000 and his most prominent fund. Bridgewater associates falling 0. 5 . Many of the funds peers posting some of their best returns since 2008. Dalios firm manages about 80 billion in macro funds. Ken griffins 30 billion citadel seeing its maidenhead fund its Main Hedge Fund sort last year. Bloomberg has learned citadels Multistrategy Fund gaining across all five of the firms strategies. That is your Bloomberg Business flash. Lisa another story we are following, bearish on the dollar. Jeffrey gundlach is doubling dow on his call is doubling down on his call that a still resilient dollar will decline. Foreigners start to divest from the United States, it may start this year, you will see a much weaker dollar. Coming up, more on the blicks of irans mentality of tory more on the applications of irans retaliatory missile strikes. This is bloomberg. Lisa this is bloomberg daybreak. We are seeing a slight positive tinge to equities, reversing some of their premarket downward draft. People reassess the situation. Nasdaq futures up more than 0. 1 . The dow still lower. Ftse basically flat as the stocks in europe are also basically flat. Weve seen oil, which had been up significantly, now slightly lower. Is trying to find its place. Brent crude still higher in london. The bloomberg Commodity Index reaching some of its highs over the past five years. Two year yields dipping lower, and the euro weakening versus the dollar. This is all on the heels of iran striking back. The country firing more than a dozen old more than a dozen missiles in retaliation for the killing of its top general. For more applications on what to come next, mark lyons, retired army general, joining me on the phone. I you for being with us. I want to go to Paul Richards of Medley Global Advisors, who is here on set. He said he thinks this is actually a deescalation. Would you agree with that . Mark i do. Now that weve established the Strategic Deterrence of what in effect is decapitation of iranian leaders should iran do something, i think this is not a response in kind. I think this allows the iranian government to save face with their own people in the propaganda they can put out by it. Theyve got great Missile Technology, and if they really wanted to hit the United States inside of the middle east, they could have. This in fact is that deescalation provides the president the offramp to start possibly talking, but at least the missiles will stop flying. Lisa some people say this is just the initial salvo of an iranian response, that there could be other issues. We did see an accused cyberattack in texas that has been attributed to perhaps iran. What are your thoughts there . Mark i dont think so. I think by taking out soleimani like we did, it has established a with regard to what the United States is willing and capable of doing, and that is striking right at the leadership at the heart of what is going on inside iran. We have not responded to anything theyve done over the past 10 to 20 years. They took our sailors back in 2012, attacking tankers, attacking saudi arabia and oil facilities, shooting down unmanned drones. The redlined came down to american casualties. I think that showing we can do Something Like we did, taking out soleimani like we did, and the fact that he was planning targets against americans, shows that we are willing to do that across the line. I think the iranians are going to think twice now about doing any kind of attacks against americans, knowing full well that it will escalate quickly and lightly go right after the leadership. Lisa lets talk about kim jongun and north korea. Some people saying this is a warning shot to him, saying he better get on his Nuclear Development because otherwise, the u. S. Could do the same kind of thing toward him. What are your thoughts there . Mark i think it is a little different because what is important is containment for him , and hes not done things out of the ordinary sense trump has been president. Hes got the selfimposed nuclear banning that hes not done. Hes not fired any of the longerrange missiles. He claims theres going to be some kind of announcement soon. I think it has to do with maybe some kind of rocket propellant that would likely get his Missile Technology more boost and power, but without a space platform, they really cant threaten the United States. So i think they are different. Obviously, governments send different signals all the time. But i think the situation in north korea is different. Also, the fact that the president does have a relationship with kim jongun, he could pick up the phone and talk to him if he ever had to. Lisa i am wondering what you said about President Trumps prior comments about possibly withdrawing troops from iraq. Do you have a sense of whether the recent escalations make that less of a likelihood or more of a likelihood . Mark lets talk about the kind of troops we have in iraq and what their purposes. We dont have combat troops in iraq. We have soldiers there supporting the iraqi government, assisting with the counterterrorism mission, helping our troops we have in syria with counterterrorism. We dont have formations there that can really defend themselves at some level, but also threaten any outsiders. It is just more like aligning with our allies there. I think the president made a Campaign Promise to bring every buddy home, and maybe hes explained what that means, with the troops are doing there. If we had to take the troops out based on what iraq wanted to do, i guess that is fine. The question is whether the embassy closes, whether we shut down business iraq. Then iraq becomes a vassal state of iran, and that would be a failure. The president has got to quantify what those troops are doing in iraq because, if youve noted, we havent had combat casualties because they arent doing any frontline fighting. Lisa what are you hoping to hear from President Trump later today . Mark lets hope he doesnt declare victory too loudly or make this more than what it is. Lets give everybody to benefit of the doubt that the missiles have stopped flying for right now, and possibly, we can Start Talking again. Lets hope thats what he does here. Obviously, the message will be both for our consumption internally, as well as the rest of the world. At some points, both sides have to put their weapons down, or if the irradiance start a war, the thehe iranians start a war, americans will surely finish it. Lisa thank you so much for being with us. Still with me on set, Paul Richards of Medley Global Advisors. Is it over . If President Trump d escalates or doesnt necessarily respond and gives iran and offramp, is it over . Paul i think for markets, it is over in the shortterm, but they need to be aware of ongoing risk. I think it allows markets to get back to fundamentals cautiously. The only thing i would say is youve got geopolitical risk. Next comes political. Weve got an impeachment trial coming up. What if bolton actually testifies. You have some difficult democrat primary is coming up. I think super tuesday poses real risks. Predicated on the risk of Bernie Sanders winning the nomination. These risks cannot be underestimated in the markets. To me, the markets in q1 are about volatility with a mild upswing, but not much. Theres too much political and geopolitical risks still on the markets. Lisa i want to start with the impeachment trial, which has been ongoing. Weve seen no reaction from markets whatsoever. I am wondering, what will make that change, to your point that this could actually be a risk . Paul we havent had that moment that we had with nixon and clinton. If there is that moment where you think that actually, some of the republican senators could actually move over, that key moment, a little bit like what i said around the geopolitical risk in the middle east, you will know when it is time to get out. That moment would be a testament to or something that says this guy is in trouble. That moment we havent seen, which is why the market gave him the benefit of the doubt, but they are going to be watching these trials very closely. Lisa im struggling to square the idea that fundamentals matter again, and we can start caring again about how much Money Companies make until they dont, and you are forced to flee the market in a crowded exit with no ability to hedge. Basically, why not then go the route of taking a safe road, building in some protection, and understand you are not going to necessarily get returns . Paul that might be the way to do it. This is something of the trump returns we have seen in markets, and it is not going away. If he is reelected, it is probably not going away in the second term either, so markets have to get used to this. Going back to hedging, when you say lower volatility is a time to consider perhaps s p puts. The problem is you go in on friday after you see soleimani taken out, thats a really expensive hedge. It is frustrating hearing analysts and strategists coming on and saying just by puts. Look at volatility versus a week earlier. That is a really different scenario. The time to look at scenarios around this is to say that in deescalation, that is the time to buy some put risk. Lisa lets talk about fundamentals. Is there a place to go that is a more short bet when you look at fundamentals . Paul i think the world looks really good. Just coming in this morning, i it andaround at congress was like, well, this place is alive. Lisa but did you have for breakfast . Let me tell you, its not great. [laughter] paul i think europe is picking up. I think the phase one deal is going to get the world going again. Obviously, getting a brexit resolution has helped as well. The world feels a lot better if you take the middle east issue out right now, and obviously the political issue. There is still risk, but economically, this is to pretty strong because Central Banks, and my opinion, went too far last year. But they cant back it back. Lisa are investors positioned in that more moderate, having a balanced portfolio, or are they all in, saying the world looks pretty good . Paul this is what i keep saying to people. You talk about people like you and i, and if you were in the market last year, you are feeling pretty good, which is why you are going out and spending, having a good holiday season, and why amazon is doing so well. People think investors are the investors or the Money Managers would have been coming back. They are more of the hedge funds of the world. Investors are relatively long, relatively comfortable, and in my opinion, need to get through the q1 geopolitical risk to know when to add more. On a scale, i would say if youve got 1000 to invest, youve probably got about 600 in this market, and youve had a turbulent 2019, but youre looking to take that up to 750, but you want to get some of these risks out of the way. Investors, to me, have got more to invest. Lisa Paul Richards of Medley Global Advisors, thank you for your perspective. Its get an update on what is meeting headlines outside the business world. Viviana hurtado is here with first word news. Forana a boeing 737 down ukraine boeing 737 bound for ukraine out of iran crashed. The Ukraine International plane is not the same version of the 737 that has been grounded. That is the 737 max. In the wake of the Iranian Missile attack, opec is trying to reassure oil markets. The cartel second terry general speaking to bloomberg in abu dhabi. Leaders in particular in this region are currently doing to restorepossible to arrest the situation before it spirals out of control. Viviana the uae Energy Minister doesnt see a shortage of oil unless there is what he calls a catastrophic escalation. In beirut, former nissan chairman carlos ghosn holding a News Conference. It has been more than a week since he staged a dramatic escape from japan. Hes hinting that he will identify those he considers responsible for his downfall. His News Conference is set for about 20 minutes or so, 8 00 new york time. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im to vienna hurtado. This is bloomberg. Lisa thank you so much. Coming up, the Main Hedge Fund citadel beatss performance. That is coming up next in wall street beat. If you have a bloomberg terminal, check out tv. York, this is bloomberg. Viviana this is bloomberg daybreak. We begin with the price of gold, surging above 1500 an ounce for the first time in more than six years. All of this coming after iraq after iran fired missiles at u. S. Bases in iraq. Gold pairing its gains. Learned a big part of the music streaming giants push into original podcasts, spotify is considering a number of options. One of them, audio programs tailored to specific teams. Says his latest car will pay for the ceo telling reporters he is looking to trim costs. That money will be used on future technologies such as electric cars and selfdriving software. Im to vienna hurtado. That is your Bloomberg Business flash. Lisa turning out to wall street , dalios winning streak ends. Sees itser Associates First annual loss in nearly 20 years. Ken griffins midas touch. His fund soared over 19 in 2019 two top rivals. And roughandtumble bankruptcy. Own hugeter faces its bumps if creditors push for bankruptcy. Joining us is sonali basak. Lets start with ray dalio, who is arguably famous than ever and is underperforming, losing money for the First Time Since 2000. That is exactly right. So what does this all mean . Since it started in 1991, it had an 11. 5 annualized return. Since 2012, that dropped to buy less than 5 . In recent years, the overall performance has been really lackluster. Not to mention, bridgewater has a whole lot of change right now as a whole. Here, theng forward future of this fund and where it falls into the broader strategy of the fund will be interesting. Lisa theres also a larger question with respect to this issue. Bridgewater associates was considered a revolutionary fund that could always gain, no matter what. That is how it attracted such assets. Does this sort of suggest more at the luck and, the time running out for the strategy . Or is it just that everyone has a bad year . Sonali macro strategies have started to bounce back a little bit, so this is a little specific, for sure. Returnhoward had an 8. 4 . Another had 29 . Element capital has been doing really well. There is disparity in these hedge funds. With that said, youre talking about immunity. A waitlist of , and what didon people say about it . Its bridgewater. Its institutional. Its safe. Even though they had lackluster performance the last couple of years, that hasnt stopped a waitlist of money waiting on the sidelines. Lisa perhaps the waiting list for money at ken griffins citadel will be getting some more money. Ken griffins 30 billion citadel saw its Main Hedge Fund year, beatingt out a whole host of other rivals. Did you write . Old,i they turn 30 years and the reason i like annualized returns is one year is one year, but the Wellington Fund has actually returned 18. 8 since the day it started. And by the way, 20 of citadels capital goes back to its principals and employees. Im sure everyone can enjoy a proper payday. It is a Multistrategy Fund. Multistrategy funds have been doing better in general, and ken griffin at citadel is known for making quick and fast changes as well. Theregoing forward, is any changes that hedge funds are making to demonstrate how they can continue these performances that we are seeing as they deliver some of the returns. Sonali we have seen people moving across the industry, and citadel, bridgewater, theyll have scale. I think it is almost a unanimous viewpoint that people believe only the fittest will survive, so ken griffin has the full faith of billions of dollars behind him, as well as great performance. Lisa and perhaps they will get fit by doing tough mutter competitions, or maybe not, which brings us to our third story, which is that tough mutters creditors are trying to push the organizer into bankruptcy. They say they are owed 855,000 that they have not been paid. What do we know . Sonali theres a long list of people that are a road money by tough mudder. These are general contractors, former executives, one of the founders that says hes owed about 3 million. Can you imagine a company that has 5 million customers, started in 2010, explosive growth, and they partnered with a company that prebought a bunch of tickets, about 18 million worth, and they owed them that money back for those tickets as well. Lisa the reason this stuck out to me, theres a lot of people who engage in tough mudder competitions that are probably wondering whether they are going to be able to continue to do so, or whether this is the end, and also, how do they owe so much money to so many people given the fact that it is a race organizer . Sonali sometimes you can be really good at one thing and not that great at managing money. Either way, i dont get this tough mudder thing. [laughter] lisa sonali basak editorializing. Sonali but Something Interesting is the spartan race, another very popular race, has been considering buying some of tough toets, and it is buy these assets and there is a potential bankruptcy proceeding underway, so what assets will be there in the next year . But tough mudder has competitors. Lisa thank you so much for being with us. Right now, we are going to beirut, where former nissan and renault Ceo Carlos Ghosn is beginning his News Conference after his escape from japan. This is going to be an interesting delivery. It is a movie that is writing itself. He even did contact some hollywood directors months earlier, trying to get his view out there in terms of what went down. He has said that he is not escaping justice, but rather escaping injustice, by leaving japan. He talked about being in solitary confinement, not being able to make calls, not sleeping with the lights on throughout all hours, being treated very badly in trying to be coerced into confessing, something he says he did not do. Meanwhile, there has been an absolutely resounding silence from france, where he also has some ties due to his position at renault. That has raised some questions about why they have not come out. Carlos ghosn has said he wants to indict the japanese legal system, and is delivering this as we speak, and definitely a made for movie moment. How the legal system works this way around the world is one thing i cant understand in all of this. Lisa the whole process of exactly how he escaped, whether there was anyone else involved, there was a warrant out for the arrest of his wife this week. He says he acted entirely alone. There were some reports of him being in boxes or coffinlike structures and shipped out of japan and the dead of night. Lisa how one can do that alone sonali how one can do that alone is also what i dont understand. Lisa right, and people have been speculating on how they had been helping him. Interesting to see what the relationship will be like with lebanon and japan. They do not have an extradition treaty, so japan cannot come in and get him, and yet, still, how do you saws relations and not necessarily ignite some sort of spat between the two . Sonali what are we even excepting him to say today . Is this going to be a great defense of his behavior . Lisa i think he has maintained his innocence throughout this. He wants to show that he has not been trying to evade the law, and he wants to show that he really is trying to act on behalf of other people as well and trying to reform the japanese legal system. These are some of the things people are expecting him to say. Unclear, though. We are expecting him to take some questions, and certainly there will be questions about the exact manner in which he escaped, the sort of espionage aspect of it. Also, he has orchestrated his whole persona around this for so long. Each press conference throughout his tenure at renault and nissan was heavily orchestrated, trying to give him a very specific impression. He would watch over everything he would do. He was very image conscious. This is yet another piece in that puzzle of him writing his own movie. Sonali it is almost like every piece of his former career led up to this moment. Lisa lets get a check on where markets are at this point, given the volatility, as we get a push pull. Is this a deescalation from around . We are looking to with up the boards here. We are looking at some slight gains, at least in the s p and nasdaq, ahead of the u. S. Open. Nasdaq futures extending their gains. The ftse and stoxx 100 positive after turning negative. Youre seeing oil prices dipped just a touch. Youre also seeing bond yields a little bit lower, which is interesting. Now unchanged. The euro weakening slightly versus the dollar. We have all of that, as well as the carlos ghosn News Conference, coming up next. From new york, this is bloomberg. Lisa welcome to bloomberg daybreak on this wednesday, january 8. We are seeing a negative move reversed to a positive tone ahead of the u. S. Open, with as an be futures up about 0. 5 . The mile, we are seeing crude go lower, extending losses as people view the move on the part of iran as a deescalation. Theirutures paring back gains, but still remain positive , at new highs since 2013. 10 year yield unchanged here. Just give you a sense of how much we have seen fluctuations ,ere, we saw yields much lower gold futures absolutely soaring. People now taking a look, reassessing and saying they do not expect an escalation further between the u. S. And iran. Right now, we are awaiting comments from former nissan and renault chief executive officer carlos ghosn, where he is expected to defend his you that he is seeking justice. That he was trying to escape injustice in japan when he escaped there. It is really interesting to see how this is being viewed around the globe, both in terms of taking a closer look at japans legal system. Lets take a listen to what he has to say. Thank you for taking the time to be here, with many of you traveling great distances to join me. [speaking french] he is speaking a few line which is. A few languages. I would also like to salute the french press who have joined us. [applause] as you can imagine, today is a very important day for me, one that ive looked forward to every single day for more than 400 days, since i was brutally taken from my world as i knew it. Family, my my friends, my communities, from ,enault, nissan, and mitsubishi and the 450,000 women and men who comprise those companies. I have not experienced a moment 19,reedom since november 2018. Thes impossible to express depth of that deprivation. In my profound appreciation to once again be able to be reunited with my family and loved ones. Today is also a poignant reminder of the day precisely one year ago when i appeared before many of you, as well as a japanese judge and prosecutors in tokyo. Whileded my innocence constrained by handcuffs and around my leash waist, which was used to lower me into the court room. I was in the midst of being held indefinitely in solitary confinement after several failed attempts at bail. The christmasnt and new year holiday alone and in confinement, and i hadnt spoken to or seen my family for six weeks. My only contact with them were letters shown to me by lawyers through a looking glass. Previous months being interrogated for up to eight hours a day without any lawyers present, without an understanding of what exactly i was being accused of, without access to the evidence that justify this strategy against my human rights and dignity. It will get worse for you if you just confess. The prosecutor told me repeatedly, and this has been taped. You can look at the tapes because the tapes are being held. You can see, he times they came you just confess, and this will be over. And if you dont confessed, not only we are going to go after you, we are going to go after your family, and they are going to suffer many things. Every day i woke up to make a decision. Do i fight for my innocence, or do i do as they say . There was no end in sight. Those conditions remained more or less the same day after day, week after week, month after month. The feeling of hopelessness was profound, and every day, for over 130 days in detention, i thought for my innocence. When i was finally granted bail for the first time, and so the opportunity to share with you all that i intend to share today, i was roughly thrown back into ladera confinement within thaturs, a containment flies in the face of standards of justice. Ans is why today is such important occasion for me. I am not here to talk about how i managed to leave japan, although i can understand that you are interested in that. About why i talk left. For the First Time Since this nightmare began, i can defend myself, speak freely, and answer your questions. Me to very easy to describe me the way i was described. Japanunately, not only in , but now i am going to be able to speak with facts and data and evidence, and hopefully you will , not by the truth people who are accusing me or the accomplices at only in japan, but outside japan, but the euro the is very different, and hopefully today you are going to discover it with me. I am not here to victimize myself. I am here to shed light on a system that violates the most basic principles of humanity. I am here to clear my name and to pronounce clearly and emphatically something that was interpreted as heresy and the japanese judicial system. These allegations are untrue, and i should have never been arrested in the first place. Begin i would like to expressing my profound gratitude to those who supported me during this unspeakable ordeal. In the face of a Systematic Campaign by a handful of malevolent actors to destroy my iputation and my character, for theful beyond words support of my family, my wife to my children, my sisters, my mother, carols children and family. They all endured unimaginable pain. They were barred from seeing me or even speaking of me. Endured shameless attacks by prosecutors, nissan executives, and unfortunately, many accomplices. I think my supportive friends, as well as the numerous anonymous individuals who sent me letters of support while i was in the detention center. I think of the lebanese authorities and citizens who never lost their faith in me. They show to the world that for people country, lebanese have a big soul and a big heart, and a true sense of righteousness. Lawyers around the group who waged a valiant battle in devoting their full energy against a corrupt and hostile system that presumed my guilt from day one, and was designed to break my spirit and force my confession. I also want to thank the human rights and criminal justice advocates globally, and particularly in japan, who have fought tirelessly against insurmountable odds to improve japans anachronistic and inhumane system of justice. It is a cyst that is indifferent to the truth, indifferent to fairness and process, and different to fundamental Civil Liberties and excepted norms of justice. I also want to take a moment to man,on an honorable husband, and father who was brutally torn from his work and his family on that november day, so much to tokyo under false pretenses when he needed to stay home for an important surgery. He remains a victim of the Japanese Justice system, with no 14 months insight after his arrest. We cannot forget gregs ordeal, and the pain he and his family endured each day at the hands of the japanese system. He is being punished precisely because he is honorable and refused to participate in a suspicious prebargaining alongside her bubbly many others. Thanks to the system of distorted information and the intentional withholding of exculpatory information by the prosecutor and by nissan, i was presumed guilty before the eyes of the world and subject to a system whose only objective is to coerce confessions, secure guilty pleas without regard. I have come to learn that my unimaginable ordeal over the past 14 months is the result of unscrupulous, vindictive individuals at nissan. It is important for me to emphasize that i am not above the law, and i welcome the opportunity for the truth to come out and to have my name vindicated in my reputation restored. I did not escape justice. I fled in justice and persecution. Having to endure more than 400 days of inhuman treatment in a system unwilling to provide me even minimal justice, i was left with no other choice but to protect myself and my family. It was a difficult decision, and a risk one only takes if resigned to the impossibility of a fair trial. With the strings being pulled and manipulated by those dead set on securing a confession or conviction, whose only goal is , defect justice are irrelevant to these individuals. This was the most difficult decision of my life, but let us not forget that i was facing a system where the conviction rate is 99. 4 . I will bet you that this number is much higher for the foreigners. The legitimacy of the Justice System should not rest on its conviction rate, but instead on the confidence that it searches for and honors truth and dispenses fair and just outcomes. It is the prosecutors, aided and abetted by petty, they did give, and lawless petty, vindictive, and loveless individuals at nissan who have destroyed and are destroying japans reputation on the global stage. It is them who should be held accountable. The charges against me are baseless. Why do you think prosecutors have leaked false information to the press against japanese law . Why have they intentionally concealed exculpatory evidence that supports my innocence . Why have the continually delayed the still undetermined trial extended the relentless investigation timeline why have me and concealed all of my arrest documents . Why were they so intent on not holding a press conference where i would set forth the facts and my side of the story . Why have they spent 14 months trying to break my spirit, banning me from all contact with my wife and surveying my every move . Let me, before going to your questions, try to give you some answer. I am going to follow, particularly, five topics. The first topic is, why all of this happened at the beginning. The second is, how did it happen . I am going to tell you a little but of what i have been free for 14 months. Third, we are going to come back to the charges that the prosecutors have put on to me. We are also going to talk about all the charges that have been at the base of what i call the smear campaign, that the prosecutor didnt dare put them in the accusation, but they are flying through the media as many interpretations, and unfortunately, with some official positions which are not rigorous. , some about renault and nissan. Of thesehe situation entities one year later then, i will let you answer all of your questions. So let me start with the first item, which is why. If you say this is a plot and this is something which is been organized, why . What are the reasons for this . Well, we have two reasons. There are probably many, but i am going to give you the main reasons. The two main reasons for this to happen. The first one was the fact that nissan performance unfortunately started to decline at the beginning of 2017. I would remind you that, in october 2016, i decided to remove myself from the operation of nissan because i signed a deal with mitsubishi, taking into role of mitsubishi. So i moved to mitsubishi as chairman of the board to support revising the company i said, we are going to propose u. S. Coceo. This is also something we should say, that ceos are not named by their predecessor. They are named by the board. They are proposed by the predecessor, but it is a board decision. Named byle say he was mr. Ghosn, wrong. He was named by the board. He was proposed by carlos ghosn, but named by the board. He has nosay legitimacy, it is dead wrong. It is not factual. The numbers of the board voted andimously to nominate him, nine months later, they unanimously voted him down. That is the reality. Lets come back to our story. Ceonated in october 2016, of the company, i moved to mitsubishi. I promise that one day, i would return this company after having years, they did company in 1999. I left with it 20 billion in cash, a company with was respectable, which was grand, one of the top 60 brands in the world. Now it is your turn. Renault andcare of mitsubishi. , a ceo is here as long as he performs. I was delivering growth. I was delivering profit. I was delivering dividends. That is our reason to be. Unfortunately, we started in 2017 to see a decline in the performance of the company. In 2018, another decline. But at the same time, he was ceo and he was was possible for it, so he has to come to a solution with his own team. There were some nervousness in the ranks of the top management that a certain point in time, patience would run out and change would come. That is number one. Number two, we have to come back to the history of the alliance. In france, there were double Voting Rights for the shareholders. Renaulte board of opposed this rule. We had the right because the law allows us, if there is more than two thirds of the shareholders voting, to pass over this rule. It was possible. We did not prevail because, as you know, the french state increased its stake into the company, blocked the majority of two thirds. We were not able to reach the two thirds of the shares. Bitterness with japan. Not only was the management of nissan, but also with the government of japan. , they considered that it is unfair that nissan on 15 of shares in renault, has zero Voting Rights, and different state has double Voting Rights. We tried to explain it. We were not successful, unfortunately. This is where the problem started. Ofre started to be some kind events from our japanese colleagues not only about the alliance, but also about me particularly, when i had been asked before renewing my mandate. I was ready to fire before 2018. I was asked that i was probably the best person to continue for the next step of the alliance. Unfortunately, i accepted this offer, and probably one of the reasons is because i accepted this offer to continue to integrate the two companies, converge the two companies, always respecting the tommy of each company because this is a management that will make a strong comedy with people thinking they are secondrate citizens in a big organization. I want to japanese to be proud of the alliance. I want renault to be proud of the alliance. Company to be totally, and i proposed a system to maintain that my even though i made the alliance irreversible. Unfortunately, there was no trust. Some of our japanese friends thought the only way to get rid of the influence of renault on the sun to get rid of me, which unfortunately, they were right because when you see execs what is happening today, where renault has very little influence on what is going on and nissan, even though they put a nice face on what is taking place, you know that she japanese have it right by saying we will get much more autonomy for this. Unfortunately, as you know, we are going to talk about the results, that are not the one that everyone was hoping for. People . Re the m going to give you names. Who was part of the plot . Are part of the plot, but there are many other people. And number of the board was the link between the board of nissan and the authorities. Now, i can talk about what happens in the government of japan. I can give you names. I respect lebanon and i respect the hospitality that has been extended to me by the authorities in lebanon, and in no way i want to do or say anything that would make that task more difficult. So i am imposing on myself silence on this part of the presentation because in no way i want to show anything or say anything that would hurt the interests of the lebanese people or the lebanese government. So i will stop therefore the government. Are the main people. Vesely, there are many other people participating, but im lamenting to the main people who are involved. Prosecutor, i will mention some of the names. Youre going to have the people who have been from all the sides lawyerfences, like the of the company that we were using in the past, and continue to help nissan, even though attacking some of the ice that they had given us when we were in charge, and now they are supporting the new team, so the story is very long, but im going to limit myself. The decline of the performance of nissan about the next step of the reversibility of the alliance, these are the reasons for which this happened. How . In november,d 2019. I did not expect this because i was no more the ceo of the company. I was the chairman. , my god,le asked me you didnt look at this . You didnt suspect this . It happened that was a colleague, what if your colleagues from the u. S. Did you see pearl harbor happening . Did you notice what happened in pearl harbor . You know . You are asking me how i did not notice, and i was not even in my country when Something Like this thisagainst me like was being cooked against me . This is true that when it is planned and it is confidential and secret, i was surprised. There is a stage arrest. I had been told. I did not know that the world was to know that i was arrested in the airplane. I was arrested in the airport. I came down from the airplane. I was taken in a car. They told me there was a problem with my visa. That took me in a small room, and this is where i found the prosecutor telling me, i need to talk to you, and you cannot use anymore your phone. I understand what is going on. And because i was surprised, i told them, can i at least get a phone call to the nissan lawyer . But i did not know that nissan was behind it, and it was all staged between the prosecutor and the company. This is the way it happened. They took me to the detention center. It took five hours between my arrest and me finding myself in a tiny cell. The collusion between nissan and the prosecutor is everywhere. It only people who dont see art maybe the people in japan. I am being told this is totally legal. How can it be legal, and at the same time we have so many traces , and nobody is talking about them . You dont see what you want to see. The collusion is coming from witnesses who were in the headquarters of nissan who told me exactly what happened before i was arrested, all the preparation, all of the visits that took place between the prosecutors and nissan, at least without company officials. Prison, andt to the the prosecutor told me, we are going to arrest you for underreporting your compensation. I was shocked at the beginning. Frankly, i dont understand that. Are arresting you for underreporting your compensation that was not paid to you. Ok, so we are talking about something which was not paid to me. And then, something which did not go to the board which was not decided. So i was arrested for a compensation that was not decided and that was not paid. This is the reason of my arrest. I can tell you that, in many tontries, there is no reason arrest. It is certainly not a criminal case. It is certainly not even an offense. A professor was consulted three weeks ago by my lawyers on the charge from the prosecutor. 30 months after the arrest, we showed everything and told them, please, tell us. Shame that japan arrested mr. Ghosn for this. We ask him to write, and he is going to write. That mr. Its a shame ghosn was arrested for this. Let me continue. Let me talk to you a little bit about it. 130 days in prison, solitary confinement. Tiny cell without a window. Lights day and night. 30 minutes per day, excluding weekend, you can go outside. When there is a holy day, there is nobody. You stain yourself. You just get your food. Without any human contact during the new year break. Hower twice a week when i asked for more, they said no. Prescribed medication is forbidden. You can get only the medicine from the prison. Interrogated day and night. To eight hoursp without the presence of a lawyer. Impossible to talk to anyone. No one speaks english or french. We need something important and disguise available once a week. Presumption of guilt prevailed from the beginning. Everything they were asking me as not to try to discover the truth. It is to try to find reason to make sure the accusation i heard from the beginning there was no interest in the truth. There was interest in trying to build a strong case against me. Sent back to prison the day before the press conference that stopped me from speaking out. Japan hadecutor in been nominated. He was interviewed by the japanese media. The japanese media said mr. Prosecutor, why do you forbid carlos ghosn to talk to the press . We dont. He said he can talk to the press. But we also can bring new charges. Which was a simple message. ,ure, he can talk to the press but we can bring new charges. Theyre very good at bringing charges. Obviously they cannot put me back in prison, but they put a warrant out for arrest for my wife on the declaration she made nine months ago in front of the judge and with the prosecutor. What is the reason . They said we suspect she said something. You discover this nine months later . One day before the press conference . What a coincidence. This is exactly the way it works. Months separated from my wife without any motive. Carol has a lot of courage. After i had been arrested, she left the country. The prosecutor asked her why leave the country . They talk her passport, they were very threatening, they left her without the telephone. She left because she was afraid. And then they start to say she has something to hide. She came back four days later. She interviewed with the court in front of a judge and prosecutor. Then she left. Now they are issuing a warrant nine months later. The me give you another example. The judge in charge of the bail fund, we asked him seven times to remove the ban over nine months. Seven times. Every time, he took his time to think. Nothing changed. Then he came back by saying no. Why not . Tampering of evidence. Tampering of evidence for carol. I was able to receive my sisters, my kids, my cousins, my friends. If i was intended to tamper evidence, i could tamper evidence with anybody. Why carol . They hope that by not allowing me to have a normal life they were breaking me. The question was interesting. They were saying why do they want to meet . How about a conference . He said what they want to talk about . It was like i was not a human anymore. I was something between a human, and animal, and an object. There is no feeling that a man and woman who are married want to talk together and i have to explain why want to talk my wife . The answer was no. The right for two hours and nine months, with a lawyer present in the room, and the poor guy was embarrassed. He just said please excuse me, i have to be here and i have to report about what you say to your wife. That is what im talking about. The second one i would like to hadion, i had mentioned i many pretrial sessions. In the pretrial session, yet the prosecutor, you have the defense, and you have the judge. Three judges. I was naive. I thought the judge was the boss. I was wrong. The boss was the prosecutor. Guy, very very nice polite. Why dont you bring the document, they said we will think about it. Then the days come and they say we are light. Why all of this . Try as much as possible to delay the trial. When i was in japan i still do not have a date for the first charge, did not have a date. Then they came with the idea, we cannot put all the trials of the same time. Yet to finish the first charge before we start the second one. When i asked my lawyers about how much time this will take, they said maybe five years in japan before i get a judgment. Five years in japan. , we is, we have messaging have a specialist in human rights. A speedy trial is one of the basic and most fundamental rights of any human being. Part of the treaty of human rights. I was far from a speedy trial. On the contrary, i had the impression they would take as much time as possible. With the judge being a nice organizer, and the prosecutor calling the shots. 99. 4 conviction rate. All of the signs there was no way i was going to be treated fairly, no sign i would have a normal life over the next four to five years. It is not you pleasant to come to the conclusion you will die in japan or get out. This was not about justice. Contraryostage of a that i have served 17 years. I dedicated my professional life. I was proud of it. I revived a company no one before me was able to do for 10 years. They were in the dark. Years i was considered a role model in japan. Or than 20 books of management are written about me. Minute, prosecutors and executives started saying this cold, greedy, dictator. That is what they said. Cold greedy dictator. Dismissa motion to because of all of the elements that the prosecutor violated. Obviously this motion is still being analyzed. Searchere is an endless for the charges by the prosecutor. In a certain way, i think we have the list. List of all the prosecutor misconduct that have and presented with evidence with facts and with data and with names presented to the court to ask for the case to be dismissed. Me doyers in japan told not think it will be dismissed. There is a zero case in japan where whatever is the reason of dismissal, the chase the case was dismissed. Some people were even acquitted. There is zero case of dismissal. Let me go to the accusation. The first accusation is the underreporting. This is the main accusation for which i was arrested. The amount of money not fixed, not decided, not paid. What is interesting. I will give you interesting facts. Nissan pleaded guilty in japan. Billion,rovisioned ¥9 recently and we are asked to pay a fine. Tennessee theyin took the opposite position. Not guilty, said there is no reason. This document is available. In japan we are guilty, in tennessee they said we are not guilty. Available. Nt is i justntences wanted to mention this. We can come back during the questionandanswer. There is no democratic country i know where you go to jail for this, even if they were right. There is a resolution from the board, a board resolution. Everybody voted unanimously for a resolution saying if a foreign direction or foreign officer want to have a contract of Exchange Rates to cover his income, he can do it at no cost for the company. There were signs on this. No cost to the company. I benefited from it. No cost for the company. No loss for the company. We return by saint where is the problem . We continue. This is another one. He received 14. 7 million from nissan but he did not do nothing. This is the accusation. We have a contract. We got the contract. What documents were signed between many executives inside nissan. I want to turn your attention to thereve been a lot of articles saying ceo reserve. These are the kinds of secrets that come over the safe, a lot of cash distributed to his friends. He can do whatever he wants. Ceo reserve is in the budget. You can access ceo reserve. It has no payment, no cash. How does it go . You have the Vice President asking for the money in sri , then he has to explain why he wants the money. Then you have many people reviewing it and agreeing on it or not. Obviously you have the controller, then you have the boss of this guy, who is usually the head of the operation, then there is me. Every single payment from ceo reserve follows the same procedure. There is not one dollar paid from ceo reserve. Have all of these people when you agree on the budget line, then you cover the payment. When you go for the payment, you have other people sign. The controller, the Vice President , the people receiving the money. All of these facts talking about the ceo reserve being Something Special were carlos ghosn is taking money and giving it to his friends. We have all the documents. Fortunately. When i was arrested they took everything from a. They took everything from me. I had to reconstitute everything to defend myself. I am using some of the documents has delivered to us to allow us to defend ourselves. Can we move to the declaration . Then we have a statement. Prosecutors in japan have been many people making statements. We heard about them. ,ne of the important statements the Vice President in charge of the middle east for nissan. Another one is the chief Financial Officer of nissan. Also the chief Financial Officer. They covered all of these areas. When we look at what they are saying, documents are available. You can consult them and make them available for those who look at them. When we are looking at them, want they say . They say it was an important region for carlos ghosn. The middle east is practically an asian country. The car selling our japanese cars. Then obviously you have mercedes and bmw. The europeans have practically no position in the middle east. I want to push the people who say lets go on the offensive. We will protect not only in volume but in profit. We need to change the way we do business. We need to innovate the way we do business. Pushing people to partner with local dealers. They do not have their own bureaucrats knowing into the region trying to do what they do. They say we have a good dealer, lets work with him. Lets give them support and give him incentive. Every time we did this we had higher sales and higher profits all of this is argumentative. At the presentation made by the prosecutor is carlos ghosn has special ties with the saudis and oman. They had this guy has a very cozy relationship. Everything we did with him on we did with dubai, we did with lebanon. They are not talking about that. On re just focusing what is interesting is when you compare these two people, it is totally normal and even below the level of incentive. This is something you never heard about. The potential of the middle east is important. That is what we were going after. Next one. O the it was reviewed by the prosecutor, interrogated for one day, never heard about it. He did not say one thing. He denied all of the accusations. He denied all of the accusations in a certain way you may Say Something different, but you need to know all of the bank accounts, my bank accounts, other bank accounts, have all been swept. All of them. If there was any payment which was suspicious, it would be come page before it would to the prosecutor. Then people say what is the story . There is money from nissan going to nissan and ended up with you, but there is no money from nissan but the money with. Issan stops we have all the evidence there was no transfer indicating there was any money from nissan better than being who you are. End of the road. There is no breach of trust because reach of trust is there is money of the company that is benefiting the executive of the company. I am sure will come back. Lets continue on character assassination. They have been very successful. Nissan hired a lot of people. I read in bloomberg recently that they spent more than 200 million for the investigation and for everything around this. 200 million to get how much money . How much money is at stake . And 5 million for my wife . If you spent 200 million. You destroy your company. You destroy your reputation, you destroy your image. You divert the attention of your top dollar strike. By the way, the market cap decrease of nissan since my arrest is more than 10 billion. They lost more than 40 million a day during all of this. Betterway, renaud is not because the market cap alternative went down since my arrest by more than 5 billion euros, which means 20 billion euros a look 20 million euro a day of liquidation. When i hear the statement made by french officials saying we need to concentrate on the 11 Million Euros of undefined expenses i say yes, sure. Why dont you come to me . I explained to you. The first person for the audit to be valued, you should come to the main person and asked him the question. If youre the one raising the question, that is fine. Sit come meet firmly around the planes. You just come to me and you say unexplained expensive. I do not worry about these 11 Million Euros. I worry as a shareholder of renaud of the fact that i lost 35 of value and i still do not understand why. I worry when renaud goes down the Automotive Industry is up 12 . The only companies which went down in market cap for this period of time are renaud, nissan, mitsubishi. Everything else went up 12 . Wire Companies Made . It is about value. The ceo is here for the creation of value. The board is here to protect shareholders. I am in it because as a got, whoer i say on my is protecting me as a shareholder. Who is caring about me . Where is the name of the brand . Where is the future of the brand . Lets go to character assassination. Some people think im prison because of versailles. Not at all. Is carlosaccusation ghosn mix a 15 Year Anniversary of the alliance in versailles. Versailles is the most visited site in france. It is a symbol of the genius france has. It is a symbol of the opening to the world. It is a symbol of the globalization of france. You talked about for side. Any foreigner will come to versailles. They are amazed by the beauty. That is why we love versailles. It is not because you want to mimic louis the 14th or marie antoinette. I made a speech. Where is the speech . The speeches here. All of a sudden i cannot give the speech i made which was a speech right thank all of the support they have given to the alliance. Why are the other executives of nissan not here . It was not for the executives. This was for the partners and the foreign partners. If you invite somebody in france to go to versailles, they do not care, but if you invite americans and chinese theyll run. That is the reason for versailles. The suspicion is this was a birthday party. Character assassination. The second one. You have the unfortunate reservation of the room in versailles. This is the bill. Let me tell you how it is done. We were big sponsors of versailles. The government does not have the money to maintain everything so they get a corporation. The image of versailles fits with the image we want. Lets do it. I agreed. That werted the fact have redone a part of the palace. It was horrible. We paid more than one million euro. Hopefully was not a breach of trust. For renovation. The image of versailles as this one. The head of versailles told me you are a big benefactor. Ifcan make rooms available you have a private party, we can make them available. I said thank you very much. Many months had passed. All of a sudden i the possibility for carol 60th birthday. She was telling me we need to have our friends from lebanon and the United States. As it may beat versailles can be an interesting place. I had this proposal. Versailles said no problems. We put somebody in charge. Expenses andf the then they put aramco on the room. Offered by versailles. By the people who organized it. They put zero euro. Ok, it is this i say a gesture. They are appreciative. I said that is fine. We will use their own people. Obviously this is not a cheap party. See thiss surprised to cost 50,000 europe. I do not know what happened behind the scenes. Somebody said no, we cannot pay 50,000. We will deduct it from the credit renaud earns by being a sponsor of versailles. We said ok. We are ready to pay. We did not know. We have all of the documents to prove and all of the people involved that we do not know, nobody told us. We thought it was a commercial gesture. We use all of the people working in versailles. Have a house in Rio De Janeiro, a house in beirut, come on. The houses all belong to nissan. Are were discovering this great you have done it secretly. Secretly . Let me show you the documents. These are documents signed by representatives of nissan, 2013. What these documents say is use of Company Reception accommodation in Rio De Janeiro, brazil. They say also as long as he is working for the company and we are committing these houses can be sold back to him at book value at the end. When i hear everybody was surprised and we were doing this hidden, i say oh my god . What kind of document . That is where you representative director plus legal, finance, treasury, the people who wrote this, the whole thing does not make sense. This is not at all part of the charges. It is part of the character assassination. Lets continue. , my contract with my sister. They made a contract, she did not do anything. She did not do anything . She was the head of the chamber janeirorce in rio de and she was key for benefiting from the huge incentive package and selecting Rio De Janeiro for the building of a more than one billiondollar plant. The Representative Directors are aware. All of the people who wire the money, transfer the money were aware of it. Obviously now people are saying we are not sure. Asked i signed the documents, he said he signed up. I did not understand why i was signing this. This kind of argument with him goes way with the prosecutor. They do not go away with me. Let me go to the last point. Our nvb audit. They went with an interim audit report. An interim report. After they have seen the interim audit report, no communicated reaud communicated and some official of the government communicated the result of an audit that is not finished. There are many questions for me. They have many questions for me. They do not have the opportunity to ask me. This audit, which is not contradictory, which will be the object of a legal battle, it did not follow any one of the rules of the audit. The first element of the audit is contradictory, the fact that you are exposed to the results and have to explain what is going on. Asare treating renaud nissan a small pup, like there is no controller, there is no finance, there are no outside people. All of the bills are being reviewed. People think these kind of things can happen without anybody, just people signing on it. Which islow a protocol extremely rigorous. Protocol asthe same nissan. Point go to the last before going to your question and answer. That is why all of this . What is the consequence. Who is the winner of this . Who prevailed . Alliance was the number one automotive group. Three companies, renaud, nissan, and mitsubishi growing profitable with a clear vision for the future. Strategy, bold strategy, and you know we were preparing to add Fiat Chrysler to the group because i was negotiating for Fiat Chrysler. Strategy, we know where we were going. This was 2017. We look today. Togethere set wire you , because it looks like all of the decisions made are consensual. I have been managing this entity for 17 years. I can tell you you have to make sure you force people to offer synergies. These blend you spend time to explain why the synergies work. If you say it is consensual, nothing happens. The three Companies Alliance no longer works. , the growthmpany has disappeared, profits are down. I am finding a hard time to see any strategic direction. No more Technology Innovation coming. , the line missed the unmissable, which is Fiat Chrysler did not go with the alliance