Hello, welcome to countdown. Im mark barton. Bloomberg reporters are standing by, ready to deliver the stories. After much talk, the fed finally tapers. And nichols has the details from berlin. Asian shares on the move today. Airasiaorate news, plots its way back to europe. There are line height is looking with the companys dealings with airbus. Sochi,he countdown to covering the worlds most expensive games. The taper begins, the fed will trim its bond purchasing by 10 billion per month, down to 75 billion. Our kids have been waiting for it, they loved it. Hans nichols is here to explain it. Did ben bernanke finally get full guidance right . It looks like it. On his last press conference, bernanke convinced investors tapering did not mean tightening. That is the crucial part of what we got yesterday, the fed could actually be more dovish, in part because they are keeping short term Interest Rates at close to zero through 2014, well pass the time the jobless rate is below 6. 5 . Givingre certainly not up. We intend to maintain a highly accommodative policy. Nothing we did today was intended to reduce accommodation. We will still be buying assets at a high rate and increasing our Balance Sheet and holding onto those assets, and our guidance today, we strengthened guidance to make sure we expect to keep rates low well beyond the point that unemployment reaches 6. 5 . He also said that janet yellen fully supports his decision which is crucial. There was one dissent, in part because they do not think the asset urges his shows slowdown, so it was 91 the vote. It will be dated depended. Were talking about the fed having on their Balance Sheet, if they continue at this pace of 10 billion per month winding down, they will end the end of 2014 with a Balance Sheet of four oil 5 trillion, about 5 billion in the next round, 5 billion on the mortgage site, 5 billion on the asset side. What bernanke insisted his they would be looking at the data and it would be dependent on the data. Supports the committees expectation of progress towards its objectives. They are likely to reduce in further measured steps and further meetings. The process will be deliberate and dated dependent. Asset purchases are not on a preset course. One thing we look forward to in the coming months is not so much the jobs number being important but the commerce inflation number. They want to take a close look at the inflation, at least the preferred index by the fed. The october numbers were. 7 , far away, mark, from their two percent gauge. We want to look at inflation and the jobless figures. The jobless figures everyone has been obsessed about the last 2, 3 years may be less important in the future. Did noteason the fed taper in september was because of the political impasse in washington. Another hurdle cleared overnight with the Senate Passing the budget. That is good news for the fed as well, isnt it . Ben bernanke has put on his political analyst hat in the last year or so, if he looks at congress and tries to predict, in addition to what the economy might do, what the president might do, it is a dicey game. All of the talk about this being datadependent, he should have said it was also politics dependent because we have another debt ceiling vote in february. If that is a problem, you could thejanet yellen looking at politics of capitol hill as much as she looks at inflation measures. Thank you. Hans nichols live in berlin. Lets see how the asian bond markets have reacted to the fed tapering. Higher forrkets are a third day. Call it an early Christmas Gift for the outgoing fed chairman ben bernanke, the gains pretty much more pronounced in north asia. Looking at what is happening in the morning session in tokyo, Strong Performance from the. 75 . I 225, up 1 the hang seng index is going back and forth between gains and losses, but australia up over two percent. Helping the benchmarks. The dollar is stronger, most of the majors falling, helping seal some of these gains. In terms of volume, it is important to look at that, quite heavy as investors are taking the chance to get in, given that mr. Bernanke says rates will stay low for the longerterm and perhaps well beyond unemployment thresholds of 6. 5 . On the currencies, emerging market currencies are falling, led by the south korean won, the biggest drop in six months. Overall, a good day for asian markets. Chinese stocks falling for an eighth day. Chinas oneyear interest swaps slumped, as they refrain from injecting money. The shanghai composite the biggest losers so far, off by about one percent. Broadly, the shy bore index, a gauge of funding availability, that is in the banking system. That is trumping it today. The big concern is ahead of the ipo that will now be about to occur in china next month, there is a fear there is too little money chasing too many stocks. Liquidity is still tight within the economy, so the shanghai composite off about. 6 . Thank you. The European Finance ministers last night agreed on how to deal with failing banks. A big step towards completing banking unions. A between his in berlin. They heededoks like angelas advice to hurry up. She asked them to hurry up, and it looks like the European Union leaders will get on with their job today. Last night at about 11 30, finance ministers reached a decision. Certainly the ministers did not hold back on their rhetoric. If you listen to the Financial Services commissioner. Today is a vague momentous day today is a big momentous day. Many financial firms, it is unprecedented. There are two areas to look at. One is the resolution mechanism. It looks complicated because you will have a board that is going to decide on whether the bank needs to be resolved or move ahead, but the euro qb and but the European Commission can weighin and the finance ministers themselves can also vote on this. They are supposed to do it in 24 hours, but it is still very complex. As for a financial backstop if there is not enough money in the resolution funds, there is not a financial backstop. Countries will have to find the money themselves. The irish finance minister said the banks will eventually have to repay the money, but it still looks as if you have this relationship going on between the banks and countries. David, the ministers did not hold back on the rhetoric. Assuming this goes ahead, what happens next . Go to thes to european parliament. The legislation is not in place. What will probably happen is the ecb as the single supervisor will get on with doing it stress test. If the stress tests go through, you will have a certain amount of transparency. Countries and banks will no the order of the banks and maybe it will kickstart the intercountry lending market. If that happens, it might start a wave of mergers and acquisitions, which could lead to actually a shrinking of the european banking industry. Just to give a figure, the total assets of european banks since 2008, down by 12 . We may see the at continue. Thank you, david tweed. Airbus has benefited from the growing demand of travel in asia with another big order from the region. Caroline hyde, it is a sizable order . 6 billion in the bank for eads, which owns airbus, selling 25 a330s to asia air ax. Really, it has been growth in that part of the world. What should airlines in Southeast Asia with 1000 new aircraft in the past five years. This is where the likes of boeing and airbus have been focusing. The chief executive of airbus thought it was a nice present for this time of year. It is a nice Christmas Gift for us, with 25 a330s, from an airline which is used to it. Asked year they order just before christmas 100 other vehicles. For another decade we will see these a330s in production, updating them a little bit, making them carry more people, carry more fuel, more lightweight. And the new order means that air asia could come back to europe, which intensifies competition . Airbus,es, love times, theyre saying, oh no. Norwegian air is the only discounted airline traveling to asia and there have been no competition in several areas. Promiseteresting, the that it is coming from air asia, a330s widebody could help them return to europe. Are major points are still in china. Australia, the middle east. But definitely we want to come back to europe. It is a massive opportunity for us to exploit europe, which is not far away. Clearly the focus is still asia, but i want to come back to europe. They left in the first half of 2012 after their older aircraft were not making it efficient. He must be worried about getting burned again. Certainly, but they have big ambitions. They want to build the equivalent they wanted to be an emirate. In the headlines, the world does not want to wait, but the worry is expanding too fast as well. I have grown from two planes years, yet our margins have increased dramatically every year. The easy part is buying plans. The harder part is getting the money from the planes. The harder part is financing the planes. The most hard part is to fill the planes. I think we have done it carefully, it is aggressive, but well thought out. Said morernandes efficient planes would make it more comfortable in europe, and im sure European Airlines are cringing. Caroline heidi, thanks. Within a few days of the opening of the winter olympics, where the eyes of the world will be in sochi, with a 25 billion dollar price tag for the most expensive winter games ever. Ryan, what have you got . The eyes of the world are very much on russia in the run up to the games. Canada last night said they would send an openly gay delegate to represent them. Saidafter president obama he will not attend, but he will send an openly gay 70yearold Billie Jean King to lead the u. S. Delegation. All of these countries expressing their disapproval of russias antigay laws. Later, we will have the deputy economy minister of russia, talking to him about the reaction to that. Also asking the logic of spending so much money on the games. And we will ask him about tapering. Last time theyd tart they talked about tapering. All of that coming up later. With the start of tapering upon us, how will markets react . Our next guest says that volatility, not valuation, will drive returns. Welcome back to countdown. Says the feds decision to taper could cause a market change. Us, a chief executive with over 30 years of experience. Good morning. Surprised . Slightly. We thought if they do not do it by january, a serious mistake, so i guess it is nice to see they are ahead of the curve. A more modest beginning then i thought, but then there is a greater commitment to the data depended of 10 billion per meeting, which would take us to virtually nothing. Market reaction, s p record, emergingmarket currencies down, the 10 year yield up by six basis points. Where did the markets go from here . And it be a repeat of may june or not when they started to float the idea of tapering . I dont think it will be a repeat of that. The old one is the reaction to the 10 year yield. That is slightly surprising, but it is one days reaction. Numbers, goinghe through what will happen at some stage next year is there will be a spike in volatility. When that spike comes, the markets will selloff. I think they have done enough by the way of Forward Guidance this time around to reduce the threat of that in the first couple weeks of january. But at some stage, right at the bottom of its range in the last 20 years, at some point that will have to go up. When that goes up, the markets will selloff. What will prompt this volatility . That is the strange thing, im partly going to go something will happen and we dont know what it was. Almost by definition will have to be a surprise. But somewhere along the line, investors will need to react to what is the official fed policy, which is in 2014 they want the equity market to go up in the bond market go down. Sooner or later, bond Market Investors will get ahead of that and say, well if they wanted to go down, lets see how much they wanted to go down, and that is the sort of logic that gives you the spike in volatility. That might happen next year. Improving data, the Unemployment Rate at seven percent, creeping closer to 6. 5 , which does not mean they will increase rates, but what piece of data will precipitate this volatility . I think it will come down in the end to the expectations of Bond Investors themselves, and the fed is saying we want you to lose money, but slowly. That does not normally work as a strategy. You said, its a strategy that could preempt volatility. Can they control the yield curve, forward rate expectations . They can do that. One of the things, they have been much more dovish than explicitly dovish than expected. They have basically said they will not raise rates. They are basically guiding people into the sensitive area of unemployment being lower. It is basically for Percentage Points below where everybody estimated where they needed to pay. By equities, not bonds . At some stage, understand that will reverse very sharply at some stage during 2014. The problem is equities and bonds in the u. S. And pretty are carrywhere else related. When bond returns go down, at some stage equity returns will go down by a lot. That is for the market to decide. Is the quinces that no correlation. An idea of emergingmarket whens, how they have fared the notion was put forth in may and june of tapering, what is different this time . We have seen currencies fall overnight. How does the emergingmarket asset class fare in the next few months, through 2014 . Draw a distinction between commodity producers and noncommodity producers. One of the things we have valued repeatedly is in 2009 and 2010, a lot of money went to commodities, which is unjustified by metals. Qe. Hen and because of now that is being tapered, we expect more to come out. The big question is oil, but that is more of a supply issue. The commodity producing countries are under pressure, and by contrast north asia should be ok. At least that is our view. Thank you. Have a good christmas. Simon goodfellow, joining us. Up, a multibilliondollar deal with brazil. Find out why, next. Beat out boeing and a 4. 5 billion dollar deal to provide 36 jets to the Brazilian Air force, as the president says alleged u. S. Spying on their government is an affront to their country. A Capital Fund Manager is being convicted of inside trading. My call steinberg is the hedge funds longest serving manager. The fund paid a record 1. 8 billion. Ford shares fell the most in two years, forecasting a drop in profit next year. To 8ill earn 7 billion billion next year, estimated. Up, warming up for the sochi winter olympics. Find out what investors are up to ahead of the event, next. The top headlines, finance ministers of the European Union that have come to an agreement on how to deal with failing anks over the next decade, backing the idea of creating an agency to handle failing banks and agreed to a costsharing procedure. U. S. President obama is expected to sign the first bipartisan budget deal from a divided congress in 27 years. The senate cleared the trillion dollar measure with a solid majority, reducing spending cuts imposed under sequestration and slightly lowering the u. S. Deficit. Rbs is said to have become the dealersank to ban interacting with other banks. Jpmorgan and Deutsche Bank are taking similar precautions, concerned about investigations into rate rigging and currency manipulation. Hello, welcome back to countdown. Im mark barton. 50 days from the opening days of the winter olympics, the eyes of the world will be on sochi, with the 48 billion dollar price tag. The resort town will be hosting the most expensive winter games ever in february. Looking at russia today with ryan. The eyes of the world are already on rush in the runup to the game. He had the overnight candidate, canada saying they will send it openly gay candidate to represent canada in protest of the antigay laws after president obama said he would not be going, but Billie Jean Cain who is openly but Billie Jean King who is openly gay will be going. Oft is giving russia a lot attention for perhaps not the right reasons ahead of the games. Also a lot of talk about if it is wise to spend so much on the games, how it is actually costing so much and the business logic of that. Nader this morning in an hour and a half, president putin is giving his annual press conference. More than 1300 journalists will attend. Not everyone will get to ask their questions. His record is answering 106 questions a few years back. Last years first conference win on foreign a half hours last onrs press conference went foreign half hours. Looking to the are a lot of president putin, particularly on back of the decision what he thinks about tapering means for russia. They took a hit the last time. Economy is notan quite grinding to a halt, but it is way off the growth levels experienced in president putins first two 10 years of power. They are down in the Third Quarter 1. 2 , a big difference in growth levels. Absolutely, a consecutive quarter on quarter decline in growth. President putin said the reasons for this are domestic reasons. A lot of people talk about the need for reforms in russia, a crackdown on corruption. This is something they are very aware of and concerned about. One thing that has not changed is the price of oil is still very high. But that is unfortunately not helping the russian economy. Russias Investment Climate may be easing up. Russian deputy economy minister. Good morning, sir, thank you very much for joining us today. Good morning. I may, can start, if with the big global news of the last 24 hours, the Federal Reserve decision to taper its bond buying program. The you think emerging markets can withstand the beginning of tapering . In may and june, as evidenced by the rts performance in russia when stocks fell by 16 in just a month, emerging markets shook when the fed put out the idea of tapering. Can they whether it now that it has properly begun . Let me speak about the olympics and how we are prepared. Ok, lets start with that, then. How well prepared are you and is the price tag worth the money . I will tell you about money. Is it too expensive or not . Oris the most expensive games or not, and what that means for the russian federation. For my country. Of course we can speak about money, but the main question is what it means for us. It is not only the biggest sporting event, the olympics, but we had to create new conditions, new conditions for life not only in this region, but in the whole country. But i dont think it is too expensive. I cannot invite you to have a great rest in sochi because we have a lot of great facilities, options. Thats why it was very important for us. We are speaking about new Living Standards. Is it true that it creates new Living Standards or not . I think not. The World Championship is very important for russia, for our citizens, for me, for you. It is not put ins project, it is the governments project. It is a project to create ideas, technologies. Creating new conditions. Sergei, ryan here. What is your reaction to president obama deciding to send openly gay athletes, clearly a protest . Same thing from canada and vancouver, the german and french president s not going. What is your reaction to that . And more broadly, the outcry over the antigay laws, not just that but lets face it this year greenussy riot, with peas, all of the issues surrounding russia in the political space, to what extent is that it issue when you talk to investors . We both know the Investment Climate has not been great. Is russias politics keeping investors away . First, ryan, i am glad to see you. Hi, and i will tell you what i think about it. If the president does not want to visit, that is his purview. State you are a head of here to represent your nation, i think so. If you want to discuss some relative issues, not only for us and the industry but for you, you have to be with them to say is it true or not and the difference between that and reality. I believe i can speak professionally about some issues. To do ithe right way is to visit russia to see what the reality is here and the difference between perception and reality. Gei, i know that you are not part of the negotiations with ukraine. I want to ask about investor concern, rating the cookie jar, using money from that, the savings of russian pensioners to pay for the bailout for the ukraine, 15 billion. The alpha bank had a note out saying that a question the security of those savings at risk. What do you make of that . Do we need to be worried about russia selling off to china to save the ukraine . No, no, no. Please dont worry. Everythings ok. We had to make that decision. An 88 15 billion of billion fund. It is certainly the biggest investment russia has ever made in another country, a large amount of the savings. I guess you are confident the oil price will be good Going Forward . Well, ryan, dont worry about it. Sergei, can we talk about the economy . 1. 2 ow that is slowed to in the Third Quarter, president putin came to power in march last year saying there would be investment led growth. Where is the evidence of this . Reformse the structural to the financial sector, the Business Environment . You have egg targets. You one investment increased 185 of gdp by 2015. Where are these reforms, where is the investment led growth . There are some, difficulties in our economy. Our Economic Situation is not very good and we have to do something and have to be more active here to strengthen. Thats why the Business Environment and volatility here is a high priority of the russian government. I think that we can be more resolved than we are. Here, i think the Business Environment is not so bad as you think about it, but its not so good as we want to see it. Make ithy we want to better than now. But the reality is i want to remind you that russia jumped in its business rating. It means we have not only growth but we have achievements. I started with tapering. He said if i let you talk about so she first, we could come back to it. I will be persistent. Can i finish with the subject of tapering, because it is the big news story of the past 24 hours. Can the likes of russia weather the fact that tapering has begun . Back in may and june when the idea was put forward, there was a lot of turbulence in emerging markets. Can they weather it this time . Well, frankly, im not ready to discuss it right now. Ok. It was worth the try, though. Thank you for joining us today, sir. We will speak to you again soon. That was the deputy economy minister, speaking to us live from moscow. Up next, a senior vp talks about his second love in life after coding. Welcome back to countdown. I mark barton. Keeping bonuses the same as the u. S. Lender seeks to reduce costs. Traders could see cuts of two percent at citibank. China mobile is increasing subsidies to increase smart phone sales, trying to sell 221 million handsets next year. The worlds Biggest Phone Company has long been linked with the iphone but has yet to announce a new deal with apple. Le shares are higher after hours, the largest maker of Database Software forecasting thirdquarter sales in line with analyst estimates. Sales will climb two percent, to 6 . Oracle, mike workman, senior vp of hardware and software development, has two loves coding and setting off fireworks. When he is not coding the next project for oracle, he goes to homemade fireworks. Oracle,i am not at people can often find me in the desert making fireworks, blowing things up. I started making fireworks when i was just a kid. When you are 12, you cannot be serious about making fireworks because nobody will let you. As i got older i could afford better equipment and chemicals and the ingredients to make fireworks. Fire in the hole. There are a lot of parallels between developing a product and developing something that people like to see in the sky. Audiences expect particular things. They liked loud noises, different textures, colors, sparks, sometimes different intensity. They like a lot of things going on at one time. People i like to fireworks, they assume that i am a nut. That is partly true. It takes a lot of courage to make fireworks. They are dangerous, highenergy materials. One of the things fascinating about fireworks to me is it is a blend of art, chemistry, physics. Ng, it is the energy that you are able to control long enough for a short time to make something very pretty at of something very, very powerful. Most people like watching fireworks. I think it is universal. Some people get emotional. I get very emotional if you take full display with timing and colors come it does something that really affects me. I like to see what i do and what i do in the sky have the same effect on others. Next, secret santas, stocking, and food, how things can go terribly wrong for bosses and employees alike this time of year at the Holiday Christmas festivities. Welcome back. Im mark barton. Today could change the way that we look at the universe. There will be a launch of a highly expected mission from french guiana. The goal is 3d mapping of the stars with the largest camera ever made for a space mission. Been shopping for a new camera or phone, you know your megapixels. Check this out this is a one billion pixel camera. Kathy hart of this giant telescope at the heart of this giant telescope, it will be able to spot celeste teal objects 4000 times fainter than the human night can see. If you were to put something on the moon, we could see it from the earth. It is like the eyes of the universe. Using structure was built silica and carbide, a light and solid ceramic material able to resist high temperatures, part of the gaia mission to create 3 d mapping of the stars even beyond our galaxy. In 1989, the European Space agency launched a mission that t tothe first experimen map 100,000 stars. After seven years in the making, this will go much further. One billion stars, for which we will have plenty of data about their distance, their speed, their heat, their age, and may be some planets that are around them. The cost is one billion euros, but it could clearly be worth it. The other way to look at it is we are expecting to capture one billion stars. So it is roughly one euro per star. Thet will be mapping stars next five years, with a promise to change the way that we look into the night sky forever. Tom gipson, bloomberg. Away from ther start of most european trading, time to look at the topics from the newspapers. Caroline hyde is here, and ryan is here as well. It is all christmas today, so i will start. There is nothing i love more about christmas than Christmas Songs. These are the two greatest Christmas Songs of alltime, 40 years old. That is a very arguable point. You are not part of this discussion. I wish that it could be christmas every day. 40 years old the sheer. And they still play every year. A couple of facts that blew me away when i read this article get paidry year, slade because of this one song, how much money . One ballad, 20 million. 500,000 pounds for a song that they wrote 40 years ago, 500 grand per year. To them themselves, they get 500,000 pounds. Could thei wish i christmas is number four. Slade is number one for 4 weeks. Wizard did not realize that slade was releasing the song. It was the first rocky, boppy Christmas Song in many years and then slade release their version. I think slade just lightly he has a better song. I think theyre both great. Ryan . I cannot identify the song. Tell us what we should not do a Christmas Parties . News that you can use, page 59 of the times. The photo says it all, what can go wrong as you push it on that at the christmas party. That gentleman there probably had a little bad santa. Three pointers for the Christmas Season for employees and bosses. One, dont get drunk at the christmas party. I always just wring water. Yeah. Nor isting is not good, groping. These are shocking. Everyone will be learning. No groping. Dont give booze as gifts. They can be offensive and if you get the wrong ones i might be upset. Be a badt santa can idea. They have advice from lawyers, check it out, page 59. And be careful as you deck the halls. Health and safety. Youre trying to cheer up employees, dont trip them up. Any advice will about what to do with the mistletoe . Absolutely no place in the modern office. Advice is, because i have experienced this, dont sit opposite ryan or share a meal, you will not get any of it, because you will eat the whole lot, especially if it is great food. I will let that role. All . E you guys caroling at im in bed. Too lazy. I did it years ago. Its a great time. Fortunately, you can still go caroling. They want to draft a bill because they were worried they might stop carol singing. We all know about the antisocial gave your order. It will now be the new injunction to prevent nuisance and annoyance. The way it is drafted, it could stop people from performing on the side of the street, stop people caroling. It is a concern. Thank you both. Airbus wins a big order in asia. Stay with us next on countdown. The following is a paid program. The following is a paid presentation for hot polish. You love that feeling when you walk out of the salon, perfectly polished, freshly manicured nails. They boost your confidence and give you that glamorous feeling all day long. But whether you paint your own nails or go to a salon, regular nail polish smudges or chips before you blink. Gel polish has become the rage