Transcripts For BLOOMBERG Countdown 20140217

7 00 this monday. Bloomberg is standing by, ready to deliver the stories that will drive your day. Hans nichols is looking forward to renzis meeting with the italian president. Its rainygle buys start up slicklogin. Elliott gotkine has the details. Is looking at hunters. First, italys Democratic Party leader will meet with the italian president in what could be the first steps towards a new government in italy. Hans nichols joins us with the details. Of last week in italy following this story. What are the first hurdles for moscow renzi . Perhaps the biggest hurdle is the senate. This happens if president napolitano asks renzi to form a cabinet. That is what we expect. He would be the youngest Prime Minister in the history of postwar italy. First he has to cobble together a cabinet. Then he faces votes of confidence in both houses of congress. It is the Upper Chamber where we expect him to have more of a problem simply because of the way the coalitions are aligned. That is what he has been doing the last 48 hours, trying to put together a program that will satisfy all parties. This is not just about the personnel. If you cannot put together a new cabinet on his own, then he faces snap elections. Toledano and renzi have indicated they do not want that. Napolitano and renzi have indicated they do not want that. What is Silvio Berlusconis e in all of this quest arc in all of this . He is still very much a player. He consulted with nicole itano as one of the leaders of the major parties. Renzi needs to work with electoral on the reform law. That will be crucial to his success going forward. After they deal with that, this is sort of how cabinets and parliaments are formed, then berlusconi support is less assured, renzi may then faced fresh elections. Thank you very much. Had aernor mark carney clear message on the state of the uks economy and Interest Rates during his first sunday morning tv appearance in the u. K. Manus cranny is here. Forward guidance, we knew that already. It is forward. It is phase two. Jobs, wages, household, spending, they have got to rise before the threat of higher rates comes down the pike. Economy, thereur is a world that exists beyond the perimeter of zone one or two. Zone. Beyond the london there is a United Kingdom of Great Britain and northern ireland. What we are seeing is that there is a very big there are very big forces operating out. Now. The finishing off of repairing the Financial System, all of those forces conspire to keep that level of Interest Rates down. People should understand that. Governor carney speaking with andrew marr. The sunday show is an important political debate. It is about messaging to the real economy. I think what carney wants to get across is notes like reddit suites. Credit suisse. What he wants to convey is that there is latitude in terms of what we have got to do with rates. Lets talk about businesses. Goingy this is a message out to the country and we have had guests who have told us that Forward Guidance is a message to consumers rather than the market. What about businesses . What is the message they are facing . Businesses have yet to participate to the same level. The Business People are behind us. In terms of consumers. The Business People have to switch gears and lock into Business Investment. Until that happens, you have a strong sterling. That trade is not going to contribute to the economy. Going toat is what is carry us forward. And the housing market, is he worried . He does not seem to make seemed to be, coming off a very low base. Another survey confirming that house prices are on the up. The best february since 2007. Any impact at all . In some of the wealthy parts of london, things looking more sluggish. It a majorly call slowdown. Should have waited. Google has bought israeli just fiveicklogin months after the company was launched. Lets go to Elliott Gotkine in tel aviv. What do we know . Theot a huge amount about deal itself. Only that it has been confirmed on slicklogins website. It launched only about five months ago, organized by tech crunch disrupt. The company is trying to make it safer for people to be able to log in. I just got an email the other day from kick starter telling me that my password has probably been compromised after a hack on that company. These companies are very concerned about security. Ather than just writing in password that may be weak or does, what slicklogin you hold your phone up to the speakers on your computer and it sends an almost imperceptible sound to the human ear to your phone. When your phone says yes, you are who you say you are, then it will give you it will allow you to log in. This could be additional or it could be doing away with passwords altogether. That is essentially what slicklogin does. That is what google is buying. We do not know how much, but given that they launched five months ago, we do not think it is the league of 1 billion or anything like that. Tell us about some of those deals, u. S. Tech giants buying israeli startups. Thate landmark acquisition we saw last year. We have also seen apple buying primesense. We saw facebook buying lenovo. Officiallyeek, viber based in cyprus, but it is an israeli company, bought for nearly 1 billion by rakuten. A lot of Companies Looking to israel to buy Companies Either at the start of their lifecycle and even when they are more developed, but certainly a hunting ground. Sometimes they try to outbid each other. Thanks. See you later. London fashion week kicked off on friday and Jonathan Ferro has the latest with the company stepping out in style. This time, it is hunters boots. They have been making boots for over 150 years. The powers that be, the private equity firm behind the brand, want to expand somewhere outside of boots. This is a British Heritage brand and they want to penetrate the area that burberry currently accommodates. This is a big deal at London Fashion week over the weekend. The likes of anna wintour, if you do not know who she is, it is kind of like merit donna turning up to a maradona turning up for a football match. You know it matters. Up next, customers taking their Online Shopping experience into the store. How technology is shaking up the traditional brick and mortar experience. Time for todays company news. Gree says it will book a writedown. The French Construction Company holds about 25 of awesome. Of alstom. B. A. T. Starting a digital and tv campaign in the u. K. The ads will run on broadcast from today through april 6. They declined to say how much they are spending on the campaign. Led ticketo movie sales in the United States and canada for a second week. The animated film from warner bros. Collected more than 48 million. Pharaoh favorable reviews and a lack of competition helped the movie. To countdown. Is 7 13. When it comes to changes in the retail industry, our next guest says it is not about what you are buying, but how you are buying it. He joins us now. Consumers could sit in the street withford their 3d spectacular glass and see the top shot walk at the tate modern. What is next . I think a huge convergence of technology. We have already seen a number of retailerss, lots of bringing together on the online and instore environment. We have seen it across the board. Does innovation equal more consumers which equals more spend . Is it that simple . I think it can help that way. If you are offering a multichannel experience, there are clear commercial dynamics, more Online Stores launched in the u. S. Last year and france on the way this year. Multichannel tendency is hugely important. A lot of these Technological Innovations are more about savvy than they are about commercial. The top shot initiative, great headlinegrabbing initiative, but possibly not an overhaul there. How do you separate the pr and gimmickry from real moves and trends in the industry towards the convergence of technology and retail . How do you work out which of these Technology Pushes are really going to stick and make a difference . I have given up trying to some extent. Is a great way of getting free publicity around the world. Qr, virtual posts as well. It is a great way to try to get coverage. Inh tesco, having qr codes subway stations, it means that shoppers are able to scan different grocery items on their way home. That has actually become commercially meaningful. It is a great way of recruiting shoppers. Lots of this technology is purely getting this on trade coverage and engaging shoppers with the brand will always be a good thing. Notable, bigname cadences, fashion was late to the online game. About masse talking retail and fashion, some thought that it would not take off because you cannot try on the clothes. At the luxury end, people thought it was demeaning to the brand. Some fashion retailers relate to take their offerings online. That is one of the big surprises of mobile channels. Fashion people do like the like to trythey stuff on. And the cost of returns, remember, we are seeing pure play business is having huge success and most major fashion brands are now embracing online all around the world as well. Shelby bryan, hunters. Me about the heels, these lovely hunter wellies. They have shown in the London Fashion week and they are expanding like burberry did in its day. Could they become the next burberry or not . Rainwear, i suppose. In a good about it way rather than a bad way after the flooding. They are legacy products, great brands. Level,ly a very niche but the sort of reviews of the outerwear ranges are very positive. I think there are a few Flagship Stores around the world married to a decent online presence. A can successfully spend into becoming more of a global brand. Lots of retail people have told us in recent months that it is all about much more understated luxury these days and not having logos emblazoned across rocks. Across products. You know people are wearing hunter wellies because it says it on the front. Different rules apply. It has that quintessential English Heritage or British Heritage. I think it could be very successful in markets in the u. S. Where there is so much rain. Thet is very keen to play rain angle of it. Well, they were waiting through puddles. Wading through puddles. Theoretically, they could be another great success. In lastd mastercard week with their monthly report on spending trends. She told us that luxury has not done well, especially in the month of january. So far, not so good . I think it is very patchy. Insulated. Ping is shoppers arel driven by tourism. That bit has really fallen off. Retailing andury tourism, very important for some of these brands. Until we see a big pickup in then spending, retail sales out on friday in the u. K. Is that thereve will be a minus sign in front of them. There was a question in terms of the figures in september. December is always a decent month for retailers. We get a sense that fashion retailers are cutting back across the board. Verywill be another inconsistent year for retail and the news might get slightly worse before it gets better. Thank you. Hits Rio De Janeiro early. This is one of a different breed. Hotshots is coming up next. Welcome back. This is countdown. Seven time in london is 23. Once a privilege of the superrich, Charter Companies are using new technologies to democratize the kind of singleill planes you will not be embarrassed to board. We got access to lunajet. The valley is remote. Train from geneva and a couple of connections. There is one way to make the journey a little less painful. Flying private is an option that may be getting more affordable. Lunajet offers speed and convenience in a market that routinely overcharges. Are jetdriven, activity. We want our clients to pay the best price. It is a bit different from your regular flight. You can choose the size of your plane and just exactly when you want to leave. Weekendill go for a from london, take your plane on a friday evening and come back on sunday evening. You would have spent more or less three hours traveling from without anyoint b delay whatsoever. You will still need your passport stamped out rustem, customs, stamped at where the lines are shorter. And it gets you to an airfield closer to the slopes. Just a short drive away. What about the budget price . Or 4 person, 6000 euros. 8,000 flying private. Hans nichols, bloomberg, Geneva International airport. , lookingor hot shots at some of the most compelling images of the day. Carnival in Rio De Janeiro begins on february 20. Over the weekend, some animals got a head start. Dog owners and their canine companions gathered in valacabana for the precarni celebration. Runners showed up for the oncoming marathon on sunday. Youd hell be in runners took on the top prizes for both the mens and womens races. People were prohibited from taking any selfies. Last years race had a number of pilots as runners stopped to take pictures of themselves. Arentists estimated there fewer than 30 albino alligators in the world. Arrived at one just the paris aquarium. They were purchased from a reptile collector in florida for 40,000 euros each. Albino alligators are not able to bite as well because theyre white skin quickly attracts predators. Away from thetes start of todays European Equity session. Stay with us on countdown. I am anna edwards. These are the top headlines. An ethiopian a flight was hijacked and landed in geneva. The flight was forced to proceeded to geneva. All passengers and crew are safe. A press conference will be held later today. Japans economy grew then lets than half of the case. Projected an expansion of 2. 8 per analysts had expected 2. 8 . In april. Tax alone at the british film awards. Steve mcqueens trauma drama about a man sold into slavery took the top prize. Welcome back to countdown. I am anna edwards. I am mark barton. Won besttor of gravity director for the Science Fiction directed harrys potter. Our next guest is the director for he is finance films ise kings speech. The u. K. Becoming the preferred hub for the filming industry. Thank you for coming in. You missed a big party. We do appreciate it. He is missing a good party. We appreciate that. You were last you were there last night. Pretty split worthy awards. Gravity won 6. Is that about fair . Yes, i would say it was. It has been a terrific year. It shows the spread of influence of films in hollywood. 12 years a slave is a british film and directed by a brick. Brit. I know lots of the special effects are british. It was filmed. What is a british film . You answered your own found question. It was filmed here. Being shot in hollywood at this moment in time. We are boasting fails. There are draws in california. Things like avengers 2. Slavesaid 12 years a was a reddish movie but was not shot here. Is one that originated. Not beenueen, he has given the book of by his wife. Filled in the u. S. In a very american story. , something that is mentioned. It is simply a matter of where the Film Industry or is it much more, kate . Not that much more complicated. The tax Credit System and the u. K. And hollywood really understands it. We have kept it simple. Huge we also have a in front of and behind the camera. Most of poorly, we have greg golf courses. Morere important importantly, we have great golf courses. That is more important. The americans love coming to london. We are seen as a vibrant city. You provide film financing. Take us through the types of financing that you provide. We do everything. The development to the marketing costs. We would profit. We do debt finance and will provide equity in films just a actual investment that pays rewards at the end of the day when a film is tell us about the reward. Usually hear about profit and the money is very opaque. Explain the reward side of things. That doesnt get more complicated. A film is sold around the world. That has been at same for one under 20 years. We engage with people in the international markets. And that has been the same for 120 years. What to do audiences look like for films today in the different parts of the world . Are we seeing the declining audiences or people watching at home or watching through the internet . Is a change in the business . Changing onness is a daily basis. The big horror story is teenage boys are not going to the cinema. Everybody is watching films in greater quantities tom a but as you said, they are watching them at home. They are watching them on the mobile phone. Going to cinemark is becoming extremely we get to these big event films being made. Is i gravity and the am trying to think of a never 3d one that slipped my mind. We get 3d films that are best seen at cinema. Filme best place to see a is at cinema. No question. We are in a competitive environment where kids have to pay for mobile phones and internet. They are having so many ways of ding leisure time to do leisure time. I was thinking the great gatsby. Of the economic seem to be the studios are making less films but more expensive. What does it mean for somebody like you a you are investing in smaller, independent films . What are the economics of a hundred Million Dollar blockbusters versus 2 Million Pound film that is being financed into the u. K. . My career like to say has focused on the synergy. The small films are getting smarter. If you see a film like the king speech, hopefully you will see it that the best place to see a film. You broadcast television, paper via, video on demand. You have the normal channels. You have dvd. Bluray. There are so many different ways of recouping that investment. It might be harder now to make a smaller lower budget film a not necessarily true . No. Thats british instituted that toinvesting in local talent make sure films are seen after the cinemark and on other devices. There are enormous polity films being made quality films being made. There was great interest for the invisible woman. Some people think it should be doing more. A 365 day a Year Organization stop they do a great job agreeing all new talent. That is what they see as their main driver. Yes, the talented does arrive. But, as their main focus is on supporting new talent. That was given a lot of attention. What films are you excited about all your slate . Sin city two. That is the closest they wouldve done to a blockbuster. We hope nina will be wordy for ca will be ready for cannes. Will open the sxsw festival in austin. You are part of the reason why the guard was made. Thank you for saying that. The most successful film for us. It really is. He is a power strip. A force to be reckoned with. The year we had the king speech and the guard was quite something. I remember. Greater to chat with you stop go back to the party. It might be is still going. Great to chat with you. Go back to the party. It might still be going on. Take us with us. A British Fashion week. The first ever fashion show for the british brand. More on the Company Making a splash. Making a splash. Nice. I will not take it. That is a good one. 150 years, they have made just. They want to do something else. It is about taking british harwich heritage and trying to penetrate like the burberrys. And was not the just tweed wellington boots. It is more color. Very classy. Wintour wasward there as well. They want to make it more scalable. Some data to think about. A difficult thing to do. Burberry, sure. A massive success story. Of thees of the makers jackets you see on the high street. The stucco making quilted jackets. They are trying to keep the heritage feel, not an easy task. You had a guest earlier talking about marketing. They are one step toward doing that. Lots of celebrities endorse the wellington boots. Check this out. As somebody performs a seeival, it is nice to shoes i can walk and perform in and keep them on. Wasnt she board last week . That apply when there is water of the catwalk and a lot of splashing . Maybe next year. Second new trend. Thank you very much. Angela merkel steps up calls we will explain what she means. Time for todays company fell the most in four months in tokyo trading after the Company Announced plans to buy a company last friday. It is an internet messaging and calling service. Thedeal to sell stakes in it may end up with a structure that could hinder decisionmaking. And thech government persian family would end up with equal stakes. Persia will meet tomorrow to vote on the agreement. Hotels and resorts is said to fromattracted interest hotels and resorts. Alscidentally occident main shareholders also on the the parents of a clothing chain. Also owns the parent of a clothing chain. Welcome back to countdown. I am mark barton. Angela merkel plans to step up interest in internet. David tweed is in a berlin. What exactly is she calling for . What she is calling for is a European Union communication and , derivedhereby emails from the European Union remain within the European Union. She had a podcast. Her weekly podcast and in it she was told by what will be on the paris onr her talks in wednesday. When she was asked about the communication network, this is what she had to say. We will talk to friends about how we can maintain the Data Protection. Will talk to european providers and security. One should not have to send emails and other information across the ocean. She is speaking in very simple terms to explain what she is talking about. The german public can understand theseey have been hit by allegations of spying. Angela merkel also sensitive about the spying allegations. It was her mobile phone that was cap. She is talking to european suppliers because the Deutsche Telecom just this year has been putng the government to into place political decisions so that network can be set up. Be seenils can actually within the European Union. It fits with the agenda a Deutsche Telecom. She was especially critical of a google and facebook. What did she say exactly . Thing that is taking place which is that european regulation. This is very difficult to arrange we got 27 Different Countries all with the Different Levels of protection. She just made to point is that yes, google and facebook will choose to the in a jurisdiction where Data Protection is a low. She is talking about island where Data Protections are not like they are here in berlin. Quickly david tweed. Thank you. A david tweed. Thank you. 12 minutes to the start of the equity session. Frank whitlock watt joins us now. Francine Francine Lacqua joins us now. In the u. S. , president the day. Big pizza data from china and japan. A record increase in china. The economy grew less than expected. That is putting a damper in japan. The dax futures and the 5100 futures are staying at 1 . Individual stocks, you are watching construction. They were week. Not have a lot of corporate news. Not a big corporate movers. One company will write it down 1. 4 billion euros. Navarro might also move. They acquired a research program. And politics . In the background . Investors a little attention to a tightening turmoil last week. It may change today. Foreign forms a government who he might issues. Reactions after japan it will be looking ahead to a slower forecast in the Fourth Quarter. That is after the break. Welcome back to countdown. I am anna edwards. I am mark barton. For more on japans gdp figures. Joined by an analyst. We have the gdp numbers. Estimated byd been analysts. A negative rating. I was absolutely. A bit of a concern with the sales tax coming in april. We are concerned about the impact on gdp. Last time in the consumption tax country in the recession. We do not see the type of growth we were hoping for is a concern. Present the third week in a the word week of the month and it is data heavy. Meeting, unemployment, retail sales, inflation data and unemployment figures. Quickly does it mean anything anymore . Forward guidance is being three cards. Exactly. Not the most reliable barometer of activity. We have already seen with the u. S. , the drop in the unemployment rate. Into question if it reflects the u. K. Economy with productivity not improving. It is difficult for the bank to look at a whole host of data as opposed to the unemployment rate. If we get a slightly lower price on inflation tomorrow, inflation data for the u. K. Economy, does it give a mark carney and his team at the bank of england more time to think about the future of Interest Rates . Absolutely. A good time for the u. K. We have had so many problems with inflation over the past couple of years. One thing the bank will be grateful for is the lower rate with an inflation on monday at which will be more freedom to keep Interest Rates as if you lower levels. Of data. Bject a lot of data in the u. S. Missed estimates. A lot of the reason is the weather. Knocked the fed off of his path of steady tapering this year or not . I do not think soap star janet yellen said last week during her testimony she does not think it will impact i do not think so. Janet yellen said last week during her testimony she does not think it will impact tapering. You cannot pay too much attention to the weather especially when in the u. S. Ended the year so strongly. In housingestment was improving. These are some the figures we have to focus on at the moment. It is been a complicated year and since of trading, hasnt it . January does not look like february is shaping up to be. Where are the markets heading . The markets are looking more positive. It was more pessimistic at the beginning. People are using this as an excuse for overcorrection. People almost welcomed this correction in the market so they could start looking. Thank you very much. On the move is next. A right totching down. We will see you tomorrow. Welcome to on the move. I am Francine Lacqua. We are Just Moments Away from the start of european trading at our markets team has everything covered from companies to currencies. David 20e and winter our european reporter is in berlin. This is phase two of the guidance. Clear on make it very the bbc yesterday. The rhetoric and phrases into something that will be used for business. Wages and needed to rise. Slack needs to be used all. Things need to get pretty darn better before they go for higher rates. I love an optimist stop i applaud an optimist. This is a new Forward Guidance. Without boundaries. Thank you. To berlin. You are covering Angela Merkels data plan. I am. I am watching to shares in particular. Deutsche telekom and also a german Internet Access provider internet which owns where the biggest email companies in germany. This is because Angela Merkel said on a weekly podcast she will go to paris on wednesday to back a proposal for communicationnet network which will mean emails do not need to go all the way to the United States and bounce back here. Top a bit moreto about that in 15 minutes, francine. But citywide. Elliott, youre watching another deal. Thank you. Elliot, youre watching another deal. A Little Company called slicklogin. Acquired by google. Google is not disclosing how much it is paying. Since a sounds it imperceptible to the human ear to your mobile phone so your phone it hears the sound and verifies you are who you say you are. It was used in the israeli army. They have their first day of work at google today. Thank you so much. Well have plenty more later on. This what i am watching. In terms of what the indices are doing. Little change. No movement in the u. S. Because of president s day. Asian stocks rose with the benchmark. Eight times in nine days. After that chinas new credit. To record. Optimism about china. However, Japan Economy was less than the forecast. We will have plenty of Market Reaction throughout the day on that. What else are we watching . Solidt week was a pretty week. We rallied over 2. 5 . This week is all about minutes. The minutes from the United States in terms of the january meeting and in terms of the u. K. On the back of mark carney. His interview yesterday. Urgere going to get the managers delighted. We know drug he wants that. Just marginally higher. We know that mario draghi wanted that. It is u. S. President s day. The futures are trading. Board, the stoxx 600 as 2. 5 in value. Resorts and chemicals lose it in the markets. With had a nice bit of credit data in a japan. In china i am sorry. A transfer into the real economy. Bit of ass, a little boost on some of the commodities stop things going well in china. Copper, up. A oneweek high rising for a second week. Aboutn sachs is cautious copper. Gold is rising by 0. 25 . Hedge funds are the most the bullish on gold in almost three months. Crude oil, it will reopen tomorrow. 00. 95 on crude. Some of the companies. You have a right down. A French Construction Company. They own 29 of the train maker. Bouygues taking it on the chin. Will not impact their cash. They key concern is cash generation. Put into things. A nice Ripple Effect and raising the stock to outperform. Also bracing the stock price to its target price of 1900 from 1650. Stocksre some of these in terms of the currencies. Someredness is everything there you go. We will finish. [laughter] no, we are not finished. It will not come up. This is live tv. It up and get running. He will work on that and will get it for you. The stoxx 600 is gaining. Joining us for more perspective is a bob parker. A Senior Adviser at credit suisse. Great to have you. Sense of what you are watching. Japan, in the two disappointing. We are watching janet yellen. There is mario draghi. What is the main headwind . The main factors which are concerning investors at the moment is the first of all, was the weaker data we had out of the United States in january. Januaryy in temporary . Due to weather . It is not surprising we saw weaker data. Isnt purely temporary . Probabilitys a high. We are going to see quite a strong rebound and the United States. Some two percent growth, we will rebound to three percent plus. Confident that it is just a blip. On the u. S. E caveat is the pace of qe, the tapering may slow somewhat given the temporarily week january data. That is something we have to look out for. Slightly weaker u. S. Dollar over the past few days. Factor number two which really worries investors is what is going on and the chinese shadow Banking System and to what extent are bad along going to escalate . What will be the response of the peoples bank of china and the rest of the chinese economy from the shadow banking . That is one of our main concerns. Our view is the peoples bank of china, that is not their top priority. They are going to address it it very aggressively by basically setting up special purpose vehicles for bad loans. I think this year, i stick to my view that the growth will be seven. 5 . Nobody has to recognize the chinese park today is one the more under and worst performers. I want to get your third worry. Quickly japan, the key is a does all but name its worth it does abenomics work . Over time. The concern about the impact of a sales tax increase. Will have more on that very shortly. Bob, and thank you. Bob parker will stay with us. Japans economic engine hit the brakes and gdp comes in at a than half of the forecast. Matteo renzi could be the nations youngest premier since world war ii. He was meeting with the president this morning. Well find out if there be a cabinet reshuffle. With tape of the private jet company that expanding business beyond the 1 . We will tell you about the private jet company that is expanding business beyond the number one percent. I am Francine Lacqua. This is on the move. England governor mark r carney had a clear message of the state of economy and Interest Rates on his first tv appearance in the u. K. Manus cranny has all the details stop Forward Guidance for the masses takes hold. It does. It is called phase two. Guidance trots out of the picture. Big Political Program and the United Kingdom on sunday morning and the message was very clear. Spending and employment will have to rise. Before the bank of and him and before the bank of england raises the rates. He wants to underscore lower rates. Theres a lot of Spare Capacity in their view at the moment. Every comes you talked to said it is a bit of a dangerous tight rope. There is much Spare Capacity. They are trying to toes where unemployment was going to go. Carney was balance. He had a very clear message. Are there are saying are very big forces that are operating now and will persist. Weakness a europe and repair of balance sheets. Finishing off of the Financial System and all of those forces conspire collectively to keep the level of Interest Rate it down. People should understand, that is what we are trying to convey. A world existed beyond the perimeter that runs around london called to the him 25. Whats carney trying to do it. The market will pull the park is back from believing an abuse interviews of that bag of england is shifting. Theres a hold and that is the essence of what he wants to put across. Businesses have a key role to play in the recovery. You are asking about the businesses. This is the point. The consumer is pining i had. It is businesses and Business Investment that is perhaps a lagging. Through inbank comes a reasonable size and strength, he is very cautious. Europe is going to be tough. Exports are going to be tough. Sterling is resilient part of this story. Thank you. Manus cranny with the very latest on what Governor Carney said. The reaction to his comments. Reactionme get a quick to where you see the u. K. Headingfor the u. K. And a risk. First, the u. K. Forget the old, Forward Guidance which was interesting rates will stay low reaches 7 . Oyment we are at 7 . , think by the word quarter unemployment could be 6. 5 . It continues down and Interest Rates will not be triggered by levels of unemployment. A are looking at a much broader range of data today. Where Governor Carney, his main of a is still the lack bubblelike conditions in most of the u. K. Economy. Overseas, without pockets of bubbles like london housing. , one looksis still at the u. K. For the past five years, a major feature all the economy has been low productivity and the assumption is as Capacity Utilization productivity will improve and inflation is not a threat. The three months will see the headline and inflation data a year on year at less than 2 . Up at thetes may go end of the year because economy is going to grow close to 3 . Lets be clear. This is a good problem. A good problem. Lets go back to the five troubles you see that investors are worrying about. You mentioned china. The credit and a japan. Number four is what is happening with the deflation and in the eurozone. We have to recognize that for the next six months, the Inflation Numbers and in the eurozone are going to be very low. We will be less than 2 for cpi. Are we going into a japanesestyle deflation . The answer is absolutely no. What you saw with the latest gdp numbers, portugal, the eurozone is decisively out of recession. The german numbers and the bell , we are going to see consistently better data for the next six months. That is concerned number four. Number five which really worries investors was in the emerging markets. Most notably, the hit on bond markets and the occurrences of countries like turkey, south africa, brazil and to a lesser extent india and indonesia. My argument is as investors overhang in emerging markets is actually very small. A last may on tapering the selloff just a few weeks ago, i think we are in the process of finding a basis. Not surprising that some of the fundamentally sound markets like china and korea was is not emerging, it is starting to see recovery. Quickly youre not seeing a bigger correction . That the time and a risk to which was large a last may was contagion. In january, i think that contagion risk is behind us because Foreign Investors are very underweight. Given the picture you just paint it with all of the world is out there and you said you are not too worried about deflation in europe a what is happening in other countries, where is your best bet in terms of a safe haven for investors . Equities andn Southern Europe and the bailout countries. But in valuation . Valuation and in the eurozone recession is now behind us. Investors are in contrast to america and japan, investors are underinvested in europe and in Southern Europe. The outperforms we saw in january and so far in february will persist in spain. Of bob, thank you so much. Bob parker. , welcome to google. A tech giants opens up to an israeli startup. Details are next. Welcome back to on the move. I am Francine Lacqua. Chancellor Angela Merkel plans to step up calls for a new internet. She is meeting with the president in a paris. With tweed is in berlin the very latest. What is Angela Merkel calling . Or the smart for the establishment of a European Internet Network that will not see data and emails routed by the United States. European to protect consumers. She speaks through a weekly podcast which is basically about what is on the agenda on wednesday in paris with the french president. Listen to what she had to say. We will talk with friends about how we can maintain a high level of Data Protection and above all the with european providers for security. One should not have to send emails and other information across the atlantic. Is not said exactly which european suppliers she will be speaking with. Francine, we know Deutsche Telekom has been urging and they should be a european or even a data area. Also, Companies Like sap and a French Technology company which are talking about bringing in standard to make the cloud safer as well. David, thank you so much. Staying on data security, google has bought slicklogin two months after the company was registered. Lets go to elliott for more. What more do we know . Much thenot know how acquisition was for. Noting that this is three guys and an idea. They do not have any customers or any investors. What did they do have is a novel idea that allows for greater security when a looking into certain websites. Consider entering a password. If you go to a website that has a login embedded in, it will send a sound to your mobile phone that is imperceptible to phoneman ear and your will hear it and will verify you are who you say you are or at least you possess of the phone that you say you have. Slicklogin ithe does. That is something google sees merit in. Time, this is googles fourth acquisition in israel. Among the smallest. Three guys, graduates of the israeli army. One part of the security division. They came out about five months ago. They register the company two months ago. One person said it is like a acquisition and part hire. And the three founders are joining google. They are joining the Security Unit of google. Today is in their first day of work. Elliott, for one of the Smallest Companies to the Biggest Hedge Fund today shot in the arm. Yes, very welcome i would imagine. His investment is controlled by the family. They started building up their stake last year. In the Fourth Quarter according to the latest filing, they may have their biggest holding. They may have four percent of and theyken up by teva own one percent which is a 37 billion company. The Worlds Largest manufacturer of generic drugs. You have to ask why would they go into it and now . They are among the cheapest in pharmaceutical companies around the world. That had a mention we shuffle they have had a management reshuffle. The largest shareholder. At the same time, a new ceo and their highest selling drugs may face generic competition stop a lot the potential concerns around the company. The latest earnings beat estimates. Management inks there is some upside. Hoping that is just the start. Thank you so much as a Elliott Gotkine. Copies on the move. The French Construction Company, bouygues, said it will face a writedown. The company said the charge will be booked in the Fourth Quarter and have no impact on cash. They hold and nearly a 30 stake. Ental is said to be attracting first round beds. By aotel operator owned billionaire and a spanish bank. It is said to have garnered interest by a. M. Resorts. As 1ay fetch as much billion. The deal would extend the research and novartis and they did not disclose details. Up next, uncertainty around the world. Japan is a gdp pressure mounts on all base shinzo abe. Forould be a good day renzi. Details on both the stores is coming up next. Welcome back to on the move. I am Francine Lacqua. Are 30 minutes into trading. Lets see how things are shaping all. The picture for the markets. Equity trading or bondage trading because of president s day. The scene of the cac. To behing seems unchanged. Look at investors paying attention to this a month that it made now changing their mind and become a bit of a bond yields. The currency markets. With a little bit of movement. In china and japan. In china, the credit at a record. Japan, disappointing gdp figures. Watch out to the watch out for that. The dollar overall has been falling. Against major counterparts. A little weakness in the data. They think the fed may consider less tapering. We had some pretty strong data. U. K. Housing data. The Bloomberg Top headlines. An ethiopian flight was hijacked landed in a geneva. To proceedwas forced to geneva. All passengers and the crew were safe. The spokesman said a press conference will be held later today. Bank said newl credit rose to a record in january. The measure of credit rose more than 2. 5 trillion won. The data added to better than forecasted suggesting that china may be able to limit the scale of a slowdown. Japans economy grew at a less than half of the pace that economist had forecasted for the gdp expanded 1 . Wasmedian economic estimate 2. 8 . Japan has said to be considering a Monetary Base forecast for 2015 which left the bank of board qualified its commitment to easing. Lets continue the conversation on japans economy. Christian joins us. He said abenomics appears to be losing its magic stop rated to have you on the program. There are almost more questions than answers. Of thisa data was headlined is disappointed. You do see evidence that autonomics is working. Abenomics is working. Consumption is rising. The monetary stimulus seems to have an impact. Government stimulus is still rising quite nicely where the onact is bit anticipated is the trade side. Yes, exports are rising. The unit evaluation has an impact. A strong rise in impact debt in imports, there might be Energy Imports but it seems the domestic economy is so strong that it overrides the improvement in competitiveness we should see because of devaluation. You think it is pretty much on track . On track. In the short run, serious downside risks. Overallto the risk, the picture is not too rosy. Not particular growth and consumption or investment either. Given that we know the turbulence in emerging markets will not have an impact on q1 and q2, web the sales tax increase which would depress consumption. Well, it is necessary step. We know japan had unsustainable and high debt load for the Public Sector that these to be brought down. Some adjustment is clearly needed and much more serious than that sales tax increase would suggest. Much more. With the Structural Reforms and labor market reforms and opening up of the Domestic Company economy to competition. Demographics as well stop women need to work more and more immigration. Theyre politically different reforms to do. This slowdown continues in q1 and q2 and will make it even more painful to sit this reform train going. Do you think it will work actively and of the day but mark end of the day . I speak to investors every day and they seem to be split. Of by the end of the year, reallyg run, the important one. And in the short run, abenomics is working. There is evidence it does stimulate growth and maybe they will go further with the stimulus to set off some of the negative impact or sales tax increase or monetary stimulus. Who knows if we have seen the last of the bank of japan. Be of the long run, we will exactly in the same position where we were before abenomics started. Will not see reforms the yet. The Growth Potential and of the long from which is necessary to make this mountain of debt sustainable has not really happened. Lets talk about china. A big surprise stop probably the biggest risk in the World Economy. Economics 101. The credit crunch. China is such an important economy for the World Economy that everything is important to us. In the Global Economy and Global Demand is so important that everywhere him a we are looking. It is issued to compare china and japan because they are struggling with emerging market turbulence. In japan, it seems to be. China and they have the figures. Is there a problem with that . You never know. I do not see evidence of a risk of a hard landing. China has huge foreign currency reserves that they can throw around. Huge savings they can throw around. Inflation is low so the central bank can do something if something were to happen. We cite the last year. They allow some volatility into the banks liquidity market. Bad, they too intervene. They will continue to manage. It will inevitably continue. It will remain gradual. Toy have all of the levels deal with real big problem was they do arise. Christian, thank you so much. Well be talking about europe and next. The political shakeup in italy. Meetshot matteo renzi with the president. It could be the first us in a new a tired government. Hans nichols is back from rome with the latest. What are the hurdles . The senate. Just back from rome, one of the things we learned talking to the analysts is it is not a done deal. He needs to get through the senate. Here is what happened. We expect and one hour, napolitano will asked him to be the governor. He would be the youngest in postwar history. He has to put together a cabinet. Find the people and personnel. After that he will face a vote of confidence in both parties of parliament. The Upper Chamber could be more of a challenge because of the math. That is why he is in coastal notation with all the parties about the program he is going to implement. Not just about the personnel. After theial deadline end of the week, ag 20 finance Ministry Meeting in sydney. Will italy have somebody in place of by the end of the week to represent italy at the finance meeting in sydney . To havealways great these deadlines and to see if they send somebody or not. I learned one thing. Never underestimate a berlusconi. What is his role in this . He was involved in the consultations. He met with the napolitano and the company one of its members. He said he will be in the loyal opposition stop what he wants to do is work with the renzi on the electoral. All bets are done, off. You can see berlusconi and his party with support from a renzi was a get through. You got snap elections and a fall of the government. More uncertainty than certainty. In the next couple of days, it is clear of what a renzi challenge is. , thank you with the latest on italy. Still with us is christian. Christian, the problem with italy is the time it may be completely awful. The electoral system has not been reformed. If he gets into power, it could be a mess like before. Same has to face the executive. Renzi will get anything done. Of course, renzi is a charismatic leader. He have more appeal to the center right component was. He may get something done. A labor forces reform is very good. A real opportunity for italy. If there are no elections that pressure off of politicians, 2014 could be a year of opportunity. Clearly the big risk is if he does not matter managed to get a coalition to gather and we get a new election with a law that makes it more difficult for anybody to win this, we see ofther po period instability and italy would fall further behind its neighbors with the italy is improving gradually. It only looks so bad because of other countries like spain and portugal and even greece is making more progress. Italy is falling behind. It is stabilizing stop im surprised theres been a very little movement. Investors are shrugging this off and the political coup we saw last week. Orthere a trigger point because they are behind everybody, italy is in no danger . If the ecb is firmly behind everybody is in the question . Whether this can really be used at the moment or if the safety net we are sitting on is as strong as we think it is is a another question. Overall, markets are calling the eurozone is recovering. Recovering slowly so we will continue to stimulate things and that would help countries like italy and spain. The risk is receding. The banking unit is making progress. The assets review. It does not like it will rock the boat as much as maybe people would wanted it to years ago. That may be going in the right direction. ,hese spreads over german bonds it still looks fairly big and therefore, potential for tightening. For the legality, im not sure how to read this. If they pass it, for me, it seems there is a ticker likelihood of it being considered legal. As regards to the European Court, they rule on the treaties. What we have to keep in mind is the german Court Reserve the final say on german constitutionality for itself. Once we get the results from the court, wouldve to go back to germany for the final verdict. Thekey is, in the meantime, German Government cannot really go against. If there is new turbulence, it might be difficult to approve a rescue package which will be necessary as a precondition. A lot of uncertainty. In the long run, we hope the European Court will approve. You are right. We do not know what we are facing. That is the problem. Thank you for all of your time today. Coming up, hunter makes a special on the catwalk. Pushing global growth. Stay with us. I am Francine Lacqua. You are watching on the move. Hunter wellies stepped out in style for fashion week. It hit the catwalk in his first ever in fashion show. More of the company. Llies, is a going highend . That been doing it for 150 years. Lets reserve judgment. A lot of people are wearing these now. Ow the brand they want to do something different. What is interesting is it was not the traditional tweed or black or boring green. You see that right now. A moderntrying to make British Heritage. They are trying to challenge the lack of burberry. How, it reminds weather ski jackets. The fashion houses. You do one thing and do it well whether people like it or not. To branch out. You had a lot of celebrities. Anna wintour. I use the example of mario up, itna wintour shows is relevant. A better looking. She is looking trim. Done. Le bit of work to be you have to say, a final line. Sure, with the do one thing right and expand it out. To have this bill of british to have this feel of british and generates skill on the back of it is difficult to do. Burberry has been successful just on their coats. This is not necessarily an easy thing to do. It does not mean it will be a success. It is difficult. It does not mean success. People still want to buy into lifestyle. If they want a rubber boots, it is a lifestyle. That is how you sell luxury or what ever you want to call it. J wearing themse and kiss will want to do. Thank you. Jon ferro on hunter wellies. Andnese retailer brackets rakuten had the biggest plunge in four months. This after the Company Announced er messaging vib for 900 Million Dollars. It is trying to boost sales after missing estimates for two years. Campaign ining a the u. K. They will run on broadcast from today. It declined to say how much it is spending on the campaign. Slave took home two awards. And bestst film leading actor at the uks most prestigious film show. Ofis seen as it an indicator the academy awards. It is nominated for nine oscars. , golf, coming up, the high life. That isbusiness expanding beyond one percent. Welcome back to on the move. I am Francine Lacqua. Ore adjust the privilege just a privilege for the super rich, Charter Companies are using new technology to democratize. Bloomberg went aboard lunajet, the largest independent private jet broker. It is looking at more ways to make money. The valley that permeates above it is remote. Two or three hours by train and a couple of connections. One way to make the journey less painful. Flying private is an option that may be getting a more affordable. Lunajet offers speed and convenience in a market that they said routinely overcharges. Budget way, we are a activity. Yes. We want people to pay the best price. Our plan is to make sure they pay. It is a bit different from your regular flight. You can choose the size of your plane and exactly when you want to leave. Weekendill go for a from london. You pick your plane on a friday evening a you come back on sunday evening. Spent more orhave less three hours traveling. Without any delay whatsoever. Would need your passport stamped at customs where the lines are shorter. Side,gne and service of flying private gets you to an airfield closer to the slopes. A shortage right away and your executive limousine. What about that budget price . Problem forke it no 6000 euros. Private. , flying hans nichols, bloomberg, Geneva International airport. Has landed safely in berlin. He joins us with the latest. Are you fly private to get your next getaway . How much does it cost to fly private . Contractually, i am not allowed to tell you how i travel. I suspect you are traveling commercial. 4000. It canfor cost you 4000 euros which they called the chevrolet. This company was founded by people who used to work at net jet and they saw an opportunity great more value and be less by the hour and lower the price. Is still a0 pounds lot of money to fly you and your family to a private airport. You know, two percent. Youre going to be skiing. You might as well go private. How that Family Travel stop very happy for you. What kind of people use it . Business or families or the super wealthy . A very and sharepoint. He wants to diversify toward family and less toward business. A very interesting point. He was too diverse a wide diversify toward family and less toward business. Oryou are within industry with a company, you are said to their schedule. Hans nichols, flying in style. Our correspondent. International correspondent. Stay with bloomberg tv. I johnson and i are back with the pulse, and we are next. We will beast he can go with jeweler to the stars. You can follow me on twitter. I will see you in just a couple of minutes. Get ready for renzi. The mero florence meets italys president this hour and could be named Prime Minister. Japan growth disappoints while chinas revenue credits boost outlook. And 12 years a slave wins big at the baftas. We will speak to the official jeweler of the awards. Good morning, everybody. You are watching the pulse. We are live from bloomberg headquarters in london. Also coming