Transcripts For BLOOMBERG Countdown 20140625

To former u. S. Ambassador bar rain will join us to discuss the crisis in iraq. The joint effort between the u. S. And iran to tackle sunni extremist in the country. The Guardian Newspaper says news corp. Faces possible corporate charges related to phone hacking and bribery, according to prosecutors. Here with morris ryan chilcote. They may interview Rupert Murdoch as a suspect in the case. The u. K. Police. We also know now that prosecutors are considering corporate charges against news corp. It dealt. The fact that they are considering corporate charges is not new. In fact, it was revealed many times during the eight months trial. However, because of the u. K. Law that calls for national a doubt the groundwork for fair trials, reporters were not allowed to report until the trial ins. Rebekah brooks found not guilty, jurors are still deliberating over whether he should be convicted for bribery. We are getting a sense now is the trial wraps up where this could go. How likely is it that corporate charges will be brought against news corp. . Colson has that andy been found guilty of phone hacking makes it more likely there would be appropriate prosecution. If there is corporate likelytion, its more there would be actual charges against members of the board , the controlling officers who were supposed to be making sure this kind of thing was not going on. Cooperated,ays we we paid compensation to victims of the hacking, and we have changed our Business Practices to make sure this never happens again. About Jeanclaude Juncker. He is confident eu leaders will pick him as the next Top Executive. His candidacy is on the agenda at this weeks eu summit. That spring in hans nichols in berlin. Lets bring in hans nichols. He was speaking to a Defense Industry lobby, a very confident man, as you mentioned. When i put the question directly to him, he had a oneword answer. Give us a sense of how confident you are that you have member support. You have this in the bag . Yes. Everything is indicating that the council will take a decision next friday. All this is going to make things very difficult for David Cameron. Be opposedlled he when eu leaders meet in brussels at the end of the week . He is our man. Believeutely refuses to that the public really have a proper understanding of the grand european project. He belongs to that very Outdated School of eu thinking. He is not quite attempting to mend fences but at least he is throwing out an olive branch to skeptics. He did make one thing very clear , the stability tax will not be altered. That will be somewhat consoling to eurosceptics. He made a joke about being transgender. He clearly thinks hes going to be the next eu president. He will likely be ratified on friday. To become the number one geopolitical threat, yesterday we told you iraqs key oil refinery had fallen into the hands of insurgents. Now the army says it has retaken the facility. Confirm that the oil refinery is completely under the control of security troops. We repelled all terrorist work thehat tried to determination and persistence of our armed forces. Meanwhile john kerry is in the capital of the semiautonomous kurdish region in northern iraq. Hes trying to get the kurds to help counter isis. He said they pose a legitimate threat to baghdad. Capitalops in the iraqi are assessing the possibility of american airstrikes. Citigroup and bank of america both warning of the conflict in iraq is a bigger risk to longterm oil prices than traders anticipated. Later in the show we will hear firsthand the difficulties of managing relationships between the u. S. And the middle east when a former ambassador joins us on the set. Dont miss it. Here is our markets editor, manus cranny. One categories about equity risk and the other is about market risk. Indicated lower at this stage, despite yesterday , the best in 22 years. Society is changing. Lets take that off because obviously the paris market and the dax market are not open. Lets look at the u. S. Futures, a little bit better indicator. Risk associated with geopolitics, i was reading through gold and crude. Why is the yen not stronger . Why is gold not higher . Why are these the typical markets that one goes to when there is an escalation of risk . Markets are either dissuaded from the reality of risk, or there is the ongoing sanctions discussion due to come on force on friday in russia and the ukraine. Have a look at this, Goldman Sachs say valuations are very supportive. Lets look at the topics. They have a target of 1450. Not going to happen. What about bubbles . Could we be back in bubble territory . Have a look at the dow jones and the s p. The dow was up 104 over the past five years and for march 59 . Roughly where does it off fit in with the. Com bubble . We looked at the metrics and 2014where are we now in relative to the. Com bubble. Well, get ready for it. According to the price to sales ratio, im looking at price to markets in both those are up 200 . And they still have three more years to go, in the read. It is dominated by one over aggressive theme. Free money for all my friends for as long as you need to be dont worry, were not going to raise rates for a considerable time. You were going to sing a song for us from 1996. The last time these markets the producerevels, who helped do the hit for me was seven years of age. Bill clinton was only beginning to talk about what to do in the white house. See you later. More from our exclusive interview with the japanese Prime Minister, next. We will bring you Prime Ministers question time at noon in london. Dont miss it. Time for todays company news. Abbvie has been rejected on three different takeover offers. A bid of about 51 Pounds Per Share would do the trick. About 26bank lost junior bankers in hong kong over the past four months, according to people close to the matter. Thats the biggest number of departures in at least five years. Bankingg investment revenue from the region contributed to the departures. The companys largest natural distributor come the move comes as the french government looks to raise funds. The time in london is 6 14. In exclusive interview with bloomberg, the japanese prime the stateade it clear has the country has emerge from years of deflation. Thanks for joining us today. The end of deflation has been declared. Clearly we have seen inflation moving away from that thatbound, that tendency has been in selecting paint on the japanese economy for the last decade or more. The question is, is that enough to get us to that inflation target . Zeroy have moved away from but i dont think we are necessarily getting towards that target on a sustainable basis. What about a sustainable pace bygrowth, 2 on average, 2020 . That seems to be the target, jeremy. He has outlined more specific measures. Are they achievable . Detailsl will be in the when we actually roll out those reforms. The ultimate problem of course is not the Prime Ministers plan, perhaps the rulety or the desire to out the structural reforms. That may be the longerterm issue. We are talking about increasing the number of foreign skilled workers. Are the old guard going to be called as and of those risk factors because of the issues related to demographic change, or are they going to allow the changes to go through . Will bergets increasingly compromised. We will talk about again. E will talk about the yen what is going to break it out of this narrow trading range . The question is, you can argue that the risks are providing a little bit of lift for the end. Nevertheless i think it will be that willates spread be the catalyst to get us up to that area. Why havent we seen further weakness in the euro territory . Pmi data that came out earlier this week missed estimates but the euro barely budged. Why have we not seen further moves to the downside . Becausenk partly its the market is already short euros. Ever since we saw the precommitment from the city back in may, the markets are gradually moving further and further. We also need more support from that u. S. Leg of the equation. I think we need to see more support and more positive data from the u. S. It is provide showing some signs of creeping up. The gg gdp data today is old data. I think we need to get through the Second Quarter and start to think about the third quarter. Presumptionde this that those u. S. Deals will climb as the markets consider the end of tapering and what it implies for the supply chain. Jeremy stretch is with us. Stay with us. Welcome back. This is countdown. Stretch is here. Unreliable boyfriend, flip flopper, he has been called a number of things in recent days. Was it a fair criticism . At think is reputation has taken a little bit of a knock in terms of political angle. Last summer he was talking about rates not moving for longer than you would have regarded as an normal. As a normal period we have now seen market being forced to come back in and consider timing much earlier. Shaket really wanted to nurkic complacency. Theink we are now back to data watch. The wage data that he highlighted yesterday suggests they are not ready to lift borrowing costs. Those are the two elements. Process. Ebulous its a difficult backdrop. That one line got all the attention. There were a number of caveats if you read the speech. Thats really what he has repeated. Media justeam news picked on one line of the speech and amplified it. We had the assumption that sterling was pretty fully valued. Its always been the case that iness you really believe maturity hikes sooner than the markets have seen, it was very difficult to suggest sterling should rally more than they u. S. Dollar. Sterling remains well valued against the euro. The data is moving very much in the opposite direction. How should we be positioned for tomorrow when it may and probably will announce some measures from last week to slow down parts of the Housing Market . New zealand is an obvious case in point. There seems to be some evidence in new zealand. Basis it willonal be lower. Consequence, any measures announced yesterday to slow the Housing Market will mitigate the top side risk. Ultimately it will be another challenging day for those who bought into that announcement at the press conference. The Swedish Krona or is the worst performer. The talk of the town is a rate hike in july and another in the autumn as well. Spiral. Le deflationary is it that serious . Clearly there are uncertainties with a inflationary backdrop. I dont know fools he that reflected by further action from the central bank. Ultimately is a case where you do get rallies that will provide some good value. There value in the danish krone are or the norwegian kroner . Have been a guilt by association immigrating from the swedish story. Producer and events in iraq suggests there should be an element of the shorterterm coming through. Buts a relevant point probably will underperform the Swedish Krona. Thanks for joining us today from the bank of canada. Stay with us. Welcome back. Manas has a check, affects market. Coming off of fiveyear high, acting like an unreliable boyfriend. A more dovish tone to his performance yesterday in front of parliament. Is 167. 50. Look at the overall trajectory of sterling and you begin to understand we are beginning to change direction. There is a different view on euro sterling. See euro sterling, this is where you want to sell. You sell into that rally with an objective. Playing the sterling trade as opposed to the contra side. Cut are of a rate overstated, says the Commonwealth Bank of australia. You are now looking at a potential rate hike in the next six months. But these are the Bloomberg Top headlines. News corp. Fetes is possible charges including timesy, raise several throughout the trial of andy corson. It was found guilty on one charge of phone hacking. U. S. Military advisers have begun operating in iraq. They will gather intelligence and establish an operation in baghdad. As many as 300 troops will be sent to help the Iraqi Government combat a growing islamic insurgency. The white house is working on a plan with the u. K. Of reducing tension in ukraine. President obama spoke with Prime Minister cameron by telephone and they agreed to coordinate countermeasures if russia fails to deescalate the situation in ukraine. President obama is ready to issue sanctions against russian interested. It is becoming the number one geopolitical threat, the violence in iraq. The key oil refinery has fallen into the hands of insurgents. The army says it has retaken the facility area. Meanwhile john kerry is trying to get the kurds to help counter isl. Situation in the middle east im joined by the vicechairman of the Public Affairs Strategy Group at the tomer u. S. Ambassador bahrain. Thank you for joining us today. Insurgencyhas said in iraq depends on one thing, iraq he leaders reaching agreement on the unity government that addresses fighting minority sunnis and the kurds. Can this be achieved . I doubt it. Its too little, too late. The world has been surprised by the rapid advance of isis and its partners, the sunni population of iraq. For those who have been watching iraq or while, it is no surprise. We saw this coming in 2010. The Obama Administration was warned about it by the embassy in iraq. Minister0, prime maliki has been systematically excluding, alienating the sunni population for a host of very repressive measures. The fact that theyre rising up against him and saying we have had enough, you are done, should come as no surprise. Is there a plan to reunite all the factions . Its hard to say. The equation has flipped. Is there someone who can put Humpty Dumpty back together again . Frankly, i doubt it. What is the best Case Scenario here . Goes, that there is a unity government formed quickly. That is contrary to past practice. Factionsthe different can unite in pushing back the insurgency, but i give that less than even odds. Between the shia majority in the south and the sunni majority in the center and wes and a , more autonomous region in the north. Interesting he used the word selfdetermination. The kurds have always been very cautious about saying that, about leaning in that direction publicly. The fact they have done it is very telling. If you have three autonomous regions or separate states, will that fueled the sectarian conflicts in other middle Eastern Countries . Yes, absolutely. Seismican earthquake of forces, the disintegration of iraq. Iraq is the center of gravity for the arab world in many ways in terms of resources, culture, history, and power. As it loses force, there will be ripple effects with turkey, iran, syria, jordan, israel. I dont want to say or not fathomable, but very hard to predict. One thing that is certain is that you will see ripple effects and consequences throughout the region. Is there anything the u. S. Can do to slow this . Should be ison there anything the International Community can do. The u. S. Is a major power, but clearly what we have seen in iraq is that it alone is not sufficient to move things in the right direction. Thats why it is good that secretary kerry was in brussels to talk about iraq and talk about the region. This requires a multilateral, international approach with one thing in mind, that there has to be an arab component to this. Its not a question of the u. S. And europe coming in and helping them fix it. If there is not arab leadership and ownership on this issue of iraq, then outsiders cannot fix it themselves. Meanwhile there is talk out there that the u. S. Could soften its stance on iraqs Nuclear Program to get some sort of cooperation. That would be a deal with the faustian be careful of bargains. Iran is a dangerous lets be clear, it is a clerical regime whose basis is implacable opposition to the west, the United States and everything it does not stand for. Are atlear negotiations odds with the fundamental tenets of the state. That is why do not think it will succeed and i think its a bad idea to go to bed with iran. Meanwhile, describe your best estimate of how to improve this relationship with the u. S. President. The story emerging on bloomberg today that further sanctions will be considered as european leaders prepare to meet over the next couple of days. Do you see that as the next step . As messed up as things are in iraq and particularly u. S. Management of that issue has been, i think the ukraine example is a good one of cooperation, the effective use of all tools of international power, the military sending troops to poland, economic, diplomatic. The outcome was the preservation integrity, minus crimea. We reacted to the takeover effectively and prevented them from doing what he wanted to do in crimea to the rest of ukraine. When we talk about next steps, its clear to me that putin desired a different outcome than we have now. It is the result of our board made it efforts. But the danger has not passed. Putin is still a leader who russia to atore position on the world stage that he believes it has been denied for too long, as result of a cabal. K thats what motivates him. Therefore, we need to be vigilant and firm and leave him him willthat action by have an equal and opposite reaction from us. If he moves in a great direction, wonderful. We will welcome that and respond in kind. But if he moves in a negative direction, the same rule applies. Dewdrop in the next time you are in town. The former u. S. Ambassador to bahrain. Still to come, taste of victory as uruguay beats italy. Again is in the spotlight for allegedly sticking his teeth into an opponent, again. Shareholders are revolting. Will they put pressure on executive pay packages . Time for todays world cup news. The fans were counting on a uruguay victory and they got it. They knocked out italy to finish second behind costa rica. The talents despite a oneman advantage, the light uruguay would have to withdraw. Be aictory could bittersweet one for lewis suarez. Protest on the striker hisr he allegedly bit opponent. Suarez has been banned twice before for biting opponents. These columbia fans celebrated the countries win over japan. Theyld you last week how are enforcing anelka hall band to cut out postmatch violence. Other towns and cities in columbia have followed suit. Curfews for people under 18 are being enforced in some areas. The interior Ministry Said after the victory over ivory coast, more than five more than 4500 fights mo cowan 10 people were killed. London is 6 46. The third arrow has been fired, or has it . Japans Prime Minister has announced a new strategy. John dawson has been digging through the fine print. What did he have to say . All, it hasnt been shot just yet. One of the highest corporate taxes in the world is japan, some 35 . It will come down to 20 . Also farming is a huge part of the economy. Childcare, getting women back to satiateade liberal or liberalization. Invest more aggressively in stocks and also foreign and domestic markets, and casinos. They would like to introduce , so overall casinos it is quite encouraging. To boost companies wages and spend the cash, otherwise the whole plan falls apart. What is the big concern as he fires the third and final arrow . It is of course the economy again, clearly. If it doesnt happen again, the whole machine stops and breaks down in the third arrow goes straight down, unfortunately. We shall see. Thank you very much, john dawson there in hong kong. Shareholder the issue is ceo pay. Teamberg industries has a of analysts providing Global Research and data on 100 industries and all major sectors as well. Thanks for joining us today. Wpp. Kick off with up tos year his pay is over 30 million pounds. That is the third year in a row he has been them most highestpaid executive in the ftse 100. Two years ago, shareholders voted against his pay. I thought they tweaked his package thin. They did tweak it, then last year it went up only 20 , but still a large portion. Under new u. K. Rules, shareholders get a vote on paid holidays as well. Bonus couldl annual be of 210 signs based salary. What do the new rules mean and what have been the effects so far . There is a binding vote now. ,eviously it was just advisory so companies dont have to respond to shareholders, but now they have to. Voted against the pay policies, they would have to respond. That means there is a lot more potential leverage. Rbs is very different. It comes against the backdrop of banker pay generally. You solve barclays, a quarter of shareholders voted against the pay there. With rbs, because it is majority owned by the u. K. Government following the bailout, the government came in and said were not going to support raising the eu bonus caps. Bonuses are capped at a onetime salary with shareholder approval. Do these matter or not . As shareholders become more and australiau. S. Where you have had more consistent Pay Reporting the last several years, if you have less than 90 shareholder approval. Below that, pay packages dont meetings. Rise on suarez is at it again. Is accused of biting another opponent as his team defeated italy to progress in the world cup. More on that story in todays newspaper section. Welcome back. Hans. T away, this is our version of the sun here in germany. Close to a million retirees are actually still working. Heres a figure that baffled me on this. Plus 74yearold still at it, still working. At 65, yourehere probably still going to have to work. Ive got a nice little place picked out for you up north on the baltic. Here is the big story in the newspapers today. Lewis suarez. Er, he was left with visible teeth marks after lashing with luis suarez. Banned twice for biting opponents in the past. Fee for is investigating the incident. Is investigating. This is the guy that basically knocked england out of the world cup. Am i smiling . No, im not. Take it away. The hackingt scandal and what it has meant for Rupert Murdochs money. She is still not out of the woods legally. He lost a quarter billion lawyers 270 million on. That is what they have paid so far in legal costs. But there are pluses. Point 5rth seven billion before the scandal and is worth about 12. 5 ilya and, according to our estimate today shareth 12. 5 billion. Performance did really well and even separating the newspaper from 21st century fox was a good thing, financially speaking. Bind the combined value is worth much more separately than when it was together. Anglin drew england gredrew 00. Does Jeanclaude Juncker have the european presidency in the bag . He seems to think so. Prosecutors say news corp. Faces possible charges related to phone hacking and bribery. Toeu leaders will pick him be the next president. Readies president obama is preparing specific sanctions aimed at specific parts of the economy. And the ceo in eastern france. Welcome to countdown, i am mark barton. And im an edwards. Corp. Faces possible phones related to hacking. A former news of the world editor went on to be an advisor to Prime Minister cameron. With the story is ryan chilcote. Police want to interview mr. Murdoch. That prosecutors are considering corporate charges. Pursuing news corp. Itself. We have known that for a while, but we were not able to report it. Due to u. K. Reporting laws. As the prosecutors were discussing the prospect of doing that, we were not able to report it. The trail is over and we can. The trial, we have rebekah brooks, the Top Executive in the u. K. She was found not guilty. Andy filson was convicted of phone hacking. How likely is it that corporate charges will be brought . Now that he has been successfully prosecuted, that makes a corporate prosecution more likely. If theres a successful corporate core prosecution, it is more likely the prosecutors would go after members of the board. Socalled controlling officers that were deemed responsible for not preventing this behavior. As far as news corp. Is concerned, they say they have cooperated. They put out a statement. They recognize there was wrongdoing. They are hoping to move on. Thank you. Looks talk about he is confident that eu leaders will pick him as the next Top Executive. Lets bring in our International Correspondent, hans nichols. Good morning, mark. Confident to his supporters. Hockey to his destructors. His detractors. You have Angela Merkels support and other leaders of his that you. You are going to be the next eu commissioner. Is indicating this is going to make for a very difficult thursday, friday summit. When David Cameron faces some of his of opponents some of the folks that are pushing for junker. His domestic opponents are all but taunting him. He is perfect. He is our man. He absolutely refuses to believe that the public have a proper understanding of the grand european project. He belongs to that Outdated School of thinking. Cker is aware of the ticket he will be waiting into. He did seem to hint he would try to mend the fences with written. He thought that the stability pact would not be changed. Look for this debate to move more towards policy questions now that the person now ones seem to be sorted. Many more personal questions to be asked. Westons on who is going to fill the commission. We have some more horsetrading ahead of us. Hans, our International Correspondent in berlin. Says iraqtelligence he ministers are gaining strength in the government. 130 u. S. First military advisers have Begin Operating in the country. Anthony isnt in dubai is in dubai. Give us the latest on the ground. U. S. Advisers are entering the country. Sign that the u. S. Has concerns about the insurgency and how the militants are consolidating their gains north of baghdad. John kerry, the u. S. Secretary of state, was there this week. Yesterday, he was speaking with the kurdish leaders. He was trying to get a National Coalition so the three groups can work together. To find a solution against the thatgency at the same time the u. S. Is looking for military assistance to help the military. Stopping the advance and rolling it back. Might there be a role for iran . Iran has already sent some personnel to baghdad as the u. S. Has. They have had consultations. They will attempt to use their influence in terms of picking what the next government of iraq is. There were elections in april. We dont have a new government there yet. It seems that there is additional pressure on the Prime Minister to perhaps to the side. To allow for a National Unity government. It seems the u. S. And iran will be attempting to influence that outcome. Whetherns to be seen that is on sectarian lines or something that tries to draw on more unity in the country. Latest on the oil markets and the ability of other opec members to pick up shortfall from iraq should that happen . The oil markets have reacted nervously. Secondlargest member. If there is a risk to production, that is a big factor for boyle global oil supply. Thee has been no risk to fields. The main fields are the south of the country, away from fighting. That still caused jitters and markets. Prices have gone up 45 dollars. Analysts say the future prices, the prices people see contracts selling for down the road, are not high enough. The risk is too longterm growth. In name in the mediumterm, opec says they could cover shortfall should there be an interruption. Thank you for joining us from dubai. Quark should be should we be guided by Forward Guidance . That is next. Time for todays company news. Their bidave to raise to 30 billion pounds. They have been rejected on three different occasions. According to the average a bit of about 51 bounds Pounds Per Share would do the trick. Lost juniork bankers in hong kong. That is the biggest number of departures for the firm in asia and five years. Management changes and shrinking revenue from the region contributed to the departures. France is planning to sell more than 1. 5 euros in the natural gas distributor. Frenchs as the government plans to raise funds. Welcome back to countdown. It is 11 minutes past seven. The cofounder is much fornk you very joining us today. Lets start by getting your thoughts on the u. K. Economy. We saw mark carney testify yesterday. Is he a double or hock . Dovehave is he a or hawk . I think the unreliable boyfriend is a little unfair. Guidance is a good principle. It is subject to the roller ability of the uncertainty. The idea of municating the path, the but Forward Guidance is subject to the uncertainty of the economies. The Monetary Policy has to adjust in relation to the data. The problem with our guidance is it that we get too much or too little . When Forward Guidance was with resume in word with regard to just unemployment, it did not convince anybody. Somet has the virtue of fuzzy. People understand what it is. It didnt work. They had to move to more complex things. Then theres the problem of communication. I looked at your u. K. Index. 1997. Near the high of the u. K. Economy is blazing, according to your now casting index. To tell your viewers who may not have come into this index, wyatt why it is a good way to gauge the health of the a company. The economy. This is the problem of reading the data flow in real time. Every day, policy markets policy makers and markets are bombarded with data. How should we read them . The index tried to answer that question. By reed a by reading data realtime. Appropriately. You aa way of giving synthetic view of what is happening in a timely way. Every day, you get something new. You a view of the state of the business cycle. Economy, according to our index, has been doing extremely well since 2013. This contrasts with you with the euro area economy. His measures of a few weeks ago were unconvincing. With inflation rates being so expectations, and they euro economy weakening monetaryterry policy should have done more. Mario draghi communicated that they will do more. So far, it has been a little bit businesslike, business as usual. He has communicated liquidity policies. Which they have done before. This is going to face the problem of lucrative the. Best liquidity. They are going to face the problem of liquidity. Of problem is the weakness the real economy and the readings of inflation. Arcs think referral do you think peripheral governments need to do more . Primefascinated by the minister citing germany so many times and drawing on that. He said it was it inspiration for his reform agenda and also asking for a little leniency. He sets the bar pretty high if he wants to pull off what the German Government started. Toweek we wish good luck our optimistic Prime Minister. It is a little bit too early to say if he will be able to deliver. Good political he has move quite fast but he is not delivered yet. Hopefully he is. Oing to do something i dont think it is very realistic he will get much flexibility. There is already some flexibility in the treaty. Kline ms as if john joncker will be named how might this influence it could be interesting when it comes to the u. K. Referendum in 2017. Ers positionnck determine the fate of the u. K. Position within europe . This whole thing has been very unfortunate in my view. Hand, i on one defend the principle that the council has to respect the parliament. The majority of the european parliament. They are banking backing juncker. On the other hand, he is a week candidate. This squirrel is making the issue of the role of the u. K. Very worrisome. Ammunition to the opposition in the u. K. And the and i. E. You front and the u. K. Although i think he is a pragmatic guy. Symbolically, this is not good. He was asking mike cameron was picking a fight over this. It is a symbolic role. Why not try to get a u. K. Candidate in . Do you think cameron picked the wrong fight here . It looks like it. It looks like he is going to lose. That is not going to be good for him or europe. Thank you very much. Professor of economics at the London Business school. And cofounder of the now casting index. It is almost 7 20 in london. The Obama Administration is taking aim at areas immune of the russian economy. But some eu members are not on board. We will have the details next. Welcome back to countdown, i am an edwards. Fox the white house is working tensions in reduce the ukraine. Story. Re following the sanctions prepare with people preparing the sanctions. We understand from three people that reached us that the u. S. Is on energy sanctions and technology. Specifically, technology that would allow or assist the russians in discovering, producing, and transporting natural gas and crude oil. We have seen this a little but already. The explosives used for the eduction of shale gas. One of the things that has already been sanctioned. This has been it in expansion of that. Administration can say the Obama Administration has to say, yes. Moreover, u. S. Jobs we have this sort of sanct ions arbitrage situation. Twoe interesting thing is, of the three people that briefed us on these preparations by the Obama Administration said it is quite likely the europeans will not follow suit. The u. S. Is concerned this would be a unilateral action. Lets are memory that the heads of state meet this friday. She ismerkel has said not happy. What not happy about resident food and has done. There are European Countries that are concerned, germany included, german business included, about the economic costs of introducing sanctions. Yesterday afternoon, president putin asked the parliament to resent his authorization to use force. He is signaling people that he has no plans to overly send troops into ukraine. The government announced a ceasefire. The rebels said they would announce follow it. A helicopter was shot down yesterday. Troops killed. Even if president putin promises not to overtly intervene, he is operating there already in a stealthy way by allowing weapons to go into the border and providing instruction to the separatist. This is all going to go to friday. We have had operations. The administration tries to do something ahead of the meeting. 28 the europeans along. The european stock for a long time. They end up with some sort of come or mice. We will see some thing like that this week. Just before he went to vienna, president putin did his part by saying, one of the things you to rescindhave is this. I will do that. Alleviatenot everyones concerns. Thank you very much. Works a programming note to read later, the Prime Minister questions. That is at noon london time. Dont miss that. Wantf the q1 qs you will to watch. Still to come, in previous years, google has opened its conference with sky divers. As they get set to show off their latest plans, we talked to a tech investor on what they can expect. Welcome back. Rton. Mark orton ba a check on the market. Is sterling overdone . That is the fundamental question. The unreliable boyfriend. Tradeestion is, do you sterling from the dollar perspective or a different perspective . To target is to get it down 167. If it goes wrong, you know what is going wrong at a dollar 71 1. 71. This is where, if there is any runup in the value, you want to sell sterling into these retracements. Position t that sell the rallies in euro sterling. The rally that is worth focusing on is the aussie dollar. The possibility of rate cut is negative. It possibly be looking at a rate hike and australia. Cks would be arguing against that. Thanks menace. These are the top headlines. News corp. Faces possible corporate charges. The raise the prospects of possible charges, including bribery. The former news of the world editor and advisor to David Cameron was found guilty on one charge of phone hacking. The white house is working on a plan with the u. K. Of reducing tensions with ukraine. President obamas oak with prime mr. Cameron by telephone. They agreed to coordinate countermeasures if russia fails to deescalate. To be readyama said to issue sanctions against russian industries. In the first 130 u. S. Advisers have begun advising operating in iraq. Operationset up a center and iraq. Ambassador in bahrain. Ofks this is a earthquake seismic proportions. It is the center of gravity for the arab world in many ways. In terms of geography and power. As it loses force, there are going to be ripple effects in the gulf with turkey, iran, syria, jordan, israel. Are, i dontces want to say unfathomable, but hard to predict. They may face shareholder revolt. He has been the highestpaid ftse 100 ceo for three years. They voted they were vote against the pay package, calling it excessive. Take you for joining us. Why is this pay package on the table what you think it is excessive . That is not excessive. There is a lot of shareholder activity over the last few dears years. That continues to happen. We have seen some moving in the economy. Were quarters of the pay talking about has come from a scheme. It has changed. Levels of pay that we think are the relevant. With as problem far as we concern are concerned, this is excessive. This excessive and this bonus scheme, the payments will continue for several years . Shareholders should somehow find a way to and that here and now . Clearly noy one is going to dispute that. Shareholders keep coming back and having conversations about the level of pay. There are six levels of pay. The complexity of his pay, executive pay at the company, is not clear. We want more transparency. What is the pay that a ceo should get . Is usual in industries throughout the world. What is the maximum pay, the top a . Theyis a conversation keep seeming to find ways to pay the ceo excessive amounts. This is the third or fourth year. The likelihood is, we talk about consulting with shareholders. They may want to consult shareholders and listen to shareholders. There should be more transparency moving forward. The business secretary. Ftse companies on the curbing excessive renumeration packages. He says he will implement new legislation that will limit pay. Is that the answer or not . Government has been slow to move on this issue. Keepis why shareholders coming forward and challenging pay. Until companies understand. They want to say and have the conversation with shareholders that this is the maximum level of pay are executives should receive. Do you agree with that . The ability to get that pay to executives that is the conversation that is happening. Future government should get more involved in pay. Listening. Re not thanks a lot. Chair of the local Authority Pension fund forearm. Its 2014 kicks off conference. What can we expect to see . We are joined by what is it going to be . Wearable technology . A new android tv . Something about a lollipop . Google is going to release a new operating system. The latest version of android. To namefer choosing these things after candy. Lollipop is the name. Better than ios eight . That is the big question. Is all aboution design and development. Distribution purity zone those are the big ds. They are making a push to attract a partner to designers. There is a push to make google docs beautiful. Is what they are trying to do. E will see if it actually does in good or not. Are we going to see them as a result of the mna they have been doing . They could do more about the connected home. Robotics. They have been buying up businesses in so many spheres. You wonder where they are going to focus. Google is making a series of concentrated bets in different areas. We have seen the stuff on google driving. They have bought nine robotics companies. One of the companies with a humanoid robot in japan. This is a personal robot. This is science fiction. It might be sent future for google. We dont actually know what they are building. The computer world was speculating larry page might be accompanied by a robot to read a robot. Because they bought all robotics companies. They might use a chance to show them off. Google knows. The search business is growing, but not as fast as he used to. We are all online and use google. Some growth comes from the mobile devices. They took the speculative bet on android. The same guy who is building most of the room x in the most of theuilding robotics in the company. They are backing him to make an exciting vision come true. But for this conference, a lot of the stuff is developer related. We wont see a lot of sexy, interesting things. Glass twobout google years before it shipped. These things take a while to get going. Google is way out when it comes to its acquisitions. Facebook and apple. Acquisitionse but nothing as far out as google. It is it the right strategy . Betting on things that might actually not be popular for years to come. You have to be seeing to be doing something. Google does both. They do acquisitions that are more near tear. Term. They are trying to build a hardware business. The last week some of announced an open api so your nest can talk to your car. This sounds like science fiction, but it is nearterm. They take these speculative but concentrated bets. Google ventures is one of the thats. It is unusual for a corporation to set up a venture firm. It is now one of the top 10 that your firms in the world, overnight to read that is very forward thinking. The thing that allows them to do all this is a tremendous amount of cash flow. They can take these kinds of risks. They almost have to. These profits to go away at some point. What excites you most is there could be a new tablet or operations system. Android tv. Android where. What is the most exciting . The tv market is up for disruption. The fact that we still get all our services via a cable box, that is going to change. Apple has apple tv. Is not a particularly great product. We will look at it five years ago and say it is a precursor. We will see if google pushes the bar. The tv product is one of the more interesting things. Joining us from french billionaire, the new steve jobs of friends. What he is trying to do to turn paris into the next silicon valley. Welcome to countdown. 7 45. Lets talk about the big theme the big themes investors have had to digest. Some good news from america in terms of housing. Two very different stories going on. With equity markets, is about growth and earnings. Having a look at the futures at the moment, we saw some german data come out as well. The highest since 2006. These are the u. S. Futures. Lets roll forward and look at the european futures. A tougher opening despite the numbers. Is down to iraq. Think, as iraq goes to a height sense of alert. Or ukraine. Gold, oil . Not so. If these havens, if you want to categorize them, are not performing. The way we would think. In itsdollar yen narrowest trading range in the last two years. Any strategist who ask about , Central Banks are the big story. Critics volatility. That is the debate. The fact of the day this is where we put our earplugs and in. Mark thinks im going to sing. It is relevant. The s p 500, have a look at this. I am working at getting him at the last 20 years. Heres the last five years. They have run up. The last time you saw a run up ls, bill lentils leve clinton was in the oval office. There was a song called the macarena, which marks it danced to. Im referring to the. Com bubble. Bubble. Otcom the last time we saw a run ups like this was 1998. Saw we arewe still not at the peak. Macarena was making it to number one. My point being, according to this argument, you could have a good two years left in the bull market. According to theory. That is not necessarily what will happen. One of the most 1890s of most iconic 1990s dances. Isnt that the year that the programming note, later on today, we will be bringing you Prime Ministers questions. We dont always do this, but this one might be interesting. Be at noon, u. K. Time. Break, weo to the will sing the mack arena. Tesco is on our radar for two reasons. A potential shareholder ruvell. And declining share price. The conversation is on that. Welcome back. Im mark barton. Time in london that is 7 52. Revoltaces a shareholder at the meeting this week. The issue is ceo pay. How much revolting are we likely to see this week . The one we will be watching today is tesco. We have seen their share price hit the lowest post amount since 2004. Almost a tenyear low. Around the 2. 80 pound level. It has been a serious problem for the firm. The announced a u. S. Operation which has had to close. Back investment in continental europe. Markets making noises about asia, expanding their. Core business is suffering from the attacks from competition. Recentlyrecently another competitor said they would slash prices. 200 that mean the tesco million is going to be enough shoppers back . A lot of questions at the general meeting today for tesco. Some could potentially be sort of result. If youre a shareholder of tesco shares, which are a lot higher were a year ago. You are not going to be happy. You want to see how they address what does them future hold . How will they get back that position . Stop the falling market share . Waiting, we are still yesterdays party address car ney address before mps. Is he an unreliable boyfriend . I would like to think after his speech, and what we heard from him yesterday, it still looks like 2015 is more likely to see the first rate hike from the bank of england. It is a line in the sand between whether it will be later this year or next year. Unreliable boyfriend . That is a little unfair. Questions about the way he is communicating to the market. He is giving mixed messages. Yous saying there is look at wage growth, it is way below the current level. Really he has got to make things clearer. Forward guidance has been thrown out the window completely. Unreliable boyfriend, i think that is probably a little harsh. Angus, thank you for joining us. Angus campbell, senior analyst. Flip flopper or unreliable boyfriend . Unreliable boyfriend, very personal. On the move is up next. We will talk more about the opening of equity markets when we come back. Welcome to on the move oh i am an edwards. We are moments away from the on the move. I am an edwards. Anna edwards. Here with me is hans nichols and ryan chilcote. Lets start out with you hans. We will be looking at Jeanclaude Juncker. His confidence that he will be chosen at the next eu president on friday will be a headache for David Cameron. Ryan . My radar. Ries on i am looking at the prospect of more sanctions against russia. We learn the u. S. Is preparing another batch and what is next for news corp. Following the trial in the u. K. Prosecutors say they may pursue a corporate case. It is a motley bunch of stories but i can handle it. Thank you very much. That is what the markets are watching. European markets opening. Lets check in with manus cracking cranny. A motley bunch of stories for ryan chilcote. Lets look at what this motley map can give is in terms of equity markets. Abe says that deflation is dead. Goldman sachs says that you can buy the topix index and get a target of 1450. Added 22 billion in new funds to hedge funds in the month of may. Youre today, that is nearly 93 billion. The best year since 2007 with money growing