Transcripts For BLOOMBERG Countdown 20140804

A very good morning for you both. Virus continuing to strengthen. Why no cure . We will be talking about where there are positive moves to be made. We expect litigation costs to fall. Number should occur. We are going to focus on it in just a moment. Now isu need to k portugals central bank has taken control. Israel has announced the seven hour ceasefire with gaza. This follows yesterday which included chilling of the United Nations shelter. The ceasefire would occur from 10 00 until 5 00. Portugals central bank has taken over. Amounting tos 5 billion euros. It is still a costly venture for the country. Essentiallyit works. The Portuguese Central Bank is taking control. This was financed by its biggest bank. Then when they are ready they the juniort. Bondholders have those parts. It is an empire a compass thing encompassing so many things. Positive is that it has been sorted out, recapitalized. What that says is this is an example of menu efficiency with which of the new efficiency with which potentially failing banks are dealt with. Loans anding is liabilities. If it contained . Oath got both shares have fallen 10 to 20 in the last month. They only had just over 6 Million Euros left from the bailout. Taxpayers wont be shouldering any of the losses. Linkim is to break the between banks and the state. Those who by the riskiest loans understand what the risk is. Therefore if they go on to , it should be those whose stomach it. Were trading at 37 on the euro. I think investors knew what was coming over the weekend. The chief executive did say the move does remove key uncertainties around the bank. The lender is stronger. There are uncertainties. The China Central Bank Released its policy review. The peoples bank of china looks like it is shooting down expectations. David is in hong kong with the details. Thats right. It is not surprising they have come out with this assessment, given the amount of money we have seen injected. They did acknowledge there has been a rapid increase in a lot of things. Credit lending. They did express when it comes to solving underlying structural problems. Of thevent lost sight reform agenda when it comes to financial markets. China will likely refrain from broadbased. Say toh they did ex expect monetary stimulus to come into place. That raises a point about borrowing costs. Able to Lower Borrowing costs. I think it is continuing to fall. There are places that need financing to be cheap and available. That is the key take away. Just stepping back from the markets. There was a strong earthquake in china. It is the southwestern part of china. At least 381 people have been we understand. Here are torrential rains we know 2500 troops have been sent over. If you look at the forecast, it is a fairly mountainous region. Were looking at a forecast of rain. We are continuing to follow closely. That is the number of casualties so far from that earthquake. Thanks, david. Hsbc will they continue . The big issue is they have gotten rid of it. Chris was here on friday. I like what he said. Litigation was mentioned just over 60 times. Approximately 63 or 65 times. Rbs pull the chain. The number of litigation just under 600 million. The estimate is to come in considerably less. I think it is the elephant in the room, which is litigation. Fear is subsiding. Underperforming the stoxx 600 index. This is evident in the futures market. Owlish bets are getting more popular. The worst is over for a just hsbc. For litigation is meant to decrease. Firste inspecting the pretax profit since 2009. Both. S you have got to say profitability is going to drop. You are going to have revenue drops. You have got investment banking. They could buck the trend. That is a question. You have got currency rates in asia. You have about 40 of the business in asia. Exposed. Is even more hsbc has got a better spread. It is. Ultimately they are much more asia focus. Standard chartered has better capital. Better capital. It is to be considered. Coming up for my increasing sanctions against russia. What do investors need to know . That is next. Aeroflot suspended flights from its low cost unit due to European Union sanctions. They annulled insurance contracts with the unit. This is among the more visible result of un extendeds the against russia at the end of last month. Im there will cut costs for its mercedesbenz in china starting next month. The company made a government investigation into whether automakers manipulated prices. Price cuts range from 15 on average to a 29 decrease on windshields. The private equity firm has proposed a possible stake in the company according to two people familiar with the matter. They dropped out of talks earlier this year, but permit talks permira is also in for a possible stake in the company hugon boss. The pressure is on to increase sanctions against russia, but the impact has already been felt. Manufacturing output is down. The weak ruble is weighing on companies such as volkswagen and adidas. Richard joins us on what investors must know to navigate troubled markets. Are we factoring in concerns about russia enough . We can get more of these ampanies starting to hold up hand saying, our business is going to be hit. Russia is a large trading partner of europe. Fors the third largest. Russia it is the largest trading partner. 46 within europe. Thats much larger than the next largest, which is china. The scale of the difference is a lot of companies have a large export market to it. Volkswagen saying the top market is down 11 to them. Figureally mars that when they release it. The real exports are manufacturing and automakers. 47 from europe. Are there companies you anticipated coming from . The germans are particularly they are relying on energy from russia. They have a. Arge Manufacturing Sector err r we do look at that. Also if you look at some of the scandinavian companies, it is predominantly russian earnings. Then you have also got some beverage companies. Was wiped offon Global Stock Markets last week. It seems investors have used dips to buy. Does that change . There seems to be more to worry about. If it is not russia it is portuguese banks, which we will talk about in due course. There is other geopolitical risks. Gaza of course as well. Is the trend coming to an end . I think what we have seen is , especially selloff in small caps. In america they have been hit. It is despite a good numbers. We are seeing growth come through. It is opportunistic. Where you see a Company Growing at six percent or seven percent and against a macro backdrop, that is pretty positive growth. There are opportunities which come up where you can buy companies at a significant discount. Todays,dropped 10 in having beaten expectations and raised its fouryear forecast. Can you possibly do . The market got ahead of itself expecting more. Drop. O saw a big positive as not as the market expected. Those were individual opportunities. Portugal,ee recapitalizing, splitting the bank and two, what does that say to you about where we are in the of markets and banks . I think its a lot positive the banking where crisis has gone on and on and recapitalizing took a long time and really weighed on the euro. It is still a concern. We have been expecting the stress test to come in this corridor. Back theeen banks pay money. Markets were starting to get a bit more positive on the fact banks were recapitalized. Problemse lots of within their. Rather quickly. Yes, in the last few weeks the markets got wind of it. The debt was trading at such low values last week. We will come back to you in just a second. Asset Management Joins us again after the break. I am manus cranny. With us is the fund manager. It is a week of central banks. No one expects anything material to change. What is the possibility of dissent in the u. K. . The u. K. Has been talking about rate hikes after janet yellen back down from what she said in january. There are concerns about what that would do for the economy. 140 per capita is our debt limit in the u. K. I think mark carney would. Ave to talk long and hard my personal opinion would be that the u. S. Goes first and we would follow afterwards. I think by the beginning of next year the u. S. Will raise its rates. I expect the u. K. Wont be far behind. Butothing like next month and inflation figure has the Investment Community coming. The lending will take a long time to come through. Seeing a lot with Small Businesses on the rise in europe. There is a small impact between that stimulus and companies actually wanting the money. Banks would be willing to do that until the stress tests are passed. It is up seven percent in the first quarter. Has heckuva job to do. Are we going to have inertia . I expect little inertia. Is the companies we were seeing this time last year goes more towards stirling. Sterling is a real issue. It hasnt been seen at this strength in two and a half years. Were going to leave it there. Great to have you with us this morning. 7 26 in london. Still to come, israel announces a ceasefire in the gaza strip. We are alive in tel aviv to find out after the were are going to look at the euro against the dollar. Investors are holding the largest position in two years, betting on a drop in the currency before the central bank meets this week. Consumer prices have been the piece of data investors have been talking most about. Futures traders bet the euro will decline against the dollar have risen the most since august, 2012. 1. 342 five is the price today. The president of liberia says his countrys economic process could be destroyed by the current evil outbreak. Outbreak. Ebola he admitted europes reaction isnt quick enough. The controversial measures have it then adequately put into place. We need to move it very fast. Has injuredquake 2000 more. 1200 homes were destroyed. Power and communication are still cut off. Israel will begin a seven hour ceasefire in about 90 minutes. The humanitarian window will apply across gaza except in the areas where the Israel Defense force is still operating. Israeli troops were deployed across the as artillery hit targets in the south. Have both sides agreed to the ceasefire . This is basically israels moved to allay international. Oncerns we had the shelling of a school that led to the death of at least 10 people. Did call toor rats look into this. She called it horrifying. Do you think netanyahu is listening to some of the International Condemnation . Ban kimoon was talking with serious rhetoric on the israeli side. There is more pressure being felt in israel. The Israeli Government and israeli media are aware of that. They are following that very and debated on television and everywhere you go. On the other hand there has been a lot on hamas this weekend. As you have heard there was supposed to be a 72 hour ceasefire. Hamas broke the ceasefire when it started to capture a soldier. The u. S. Did condemn that. A u. S. Official called it a barbaric act. There have been condemnation on both sides. On the gaza side there has been a tragic humanitarian toll, so israel has suffered a bigger part of that condemnation. Where are we on the toernational efforts to try broker some form of ceasefire . One who broke it . We dont have time to discuss that. Where are we in the next step of the International Effort to broker some kind of ceasefire . It has been very complicated. Over the last six years there have been three operations in gaza. Is becoming the worst one and the most difficult one, partly because its the most difficult to solve diplomatically. Unlike in previous times there are all these players seeking to get their voices heard and interfere or be part of the solution. And tried soe here hard to reach a solution, but it didnt. Now the egyptians are taking over the role of the mediators. The palestinians went over to to what theired demands are, which is basically to ease the siege on palestinians. Say, weelis continue to tried the 72 hour ceasefire. We were very disappointed with the way hamas acted during the ceasefire. They are taking a break from diplomatic talks. It is very hard to reach a compromise right now. Stay safe in tel aviv. Grounded after European Companies an old contract following expanded eu sanctions. Destinations included the regional capital of crimea. Why did they start flying to crimea . Were they told to by the kremlin . That is the suspicion. Company said it started flights because it was commercially attractive. It was making a lot of money. A lot of russians are keen to they crimea, but the idea did that without instructions from the kremlin is a little strange. To russian government wanted visited lot of russians to compensate for the lack of crimean visitors. Is the airline out of business . It is effectively. As it said yesterday it is because European Companies that have been. Ervicing its planes what message does this set russia . Its ironic that the European Union which has been dragging taking thes been measure which had a real impact on russia. Message it sends is the russian economy is vulnerable, that it depends on the outside world, and there would be further measures which would have a greater impact of the crisis isnt resolved. Thank you. We can bring you live pictures from the belgian capital working for leap is hosting more than 50 heads of state. Written is being represented by the duke and duchess of cambridge. The conflict officially began at 11 p. M. London time after lon germany declared war. Everill to come, the worst outbreak of one of the deadliest diseases. The death toll from the evil outbreak ebola continues to rise. We will get the latest after the break. The latest outbreak of the ebola virus started in february in guinea. It has spread to neighboring , making it the deadliest outbreak ever. We spoke to a biologist to find cure hasate why a not been found. We think it comes from animals. Came to humansit was 38 years ago. Since then it comes back every two years. Symptoms you have would look like the flu. Later it progresses to diarrhea and vomiting. To the end you basically cant sit up. There may be blood leakage. What the doctors are doing is essentially getting therapy. Fluid loss by diarrhea for example, you can improve the survival rate of 10 up to a 50 chance of living. And each kind of bacteria, they are biologically unique. Biologically unconnected with the rest of the tree of life. Is when drugblem usually isnt enough to stop this. Good at growing and changing. Its not just one drug we need ofy good we need a cocktail drugs and perhaps a vaccine. These will take a lot of money. There have been fewer than 5000 ple affected ie ebola infected by ibo up. By ebola. I dont know if there is enough to warrant a private company putting in the money to develop it. Joinedthe latest we are live by the World Health Organization headquarters in geneva. Us. K you for joining give us a sense. First you signed off on 100 million to go to help west africa deal with the situation. Where will you be prioritizing . I think there has been some confusion in the media. Maybe thats fault our fault. We need30 million, but another 70 million to fully fund the opportunities we think are necessary. We are calling on all International Partners to provide people and supplies to help us fight this outbreak. Wasperson on the form he alluding to the fact that we know what to do. Aeasures to stop the ebol outbreak are wellknown. What we need at the moment is bodies on the ground. Thats what we have been doing with this appeal. They spent around five to six hours together going through in great detail the measures needed. They have adopted a plan we feel is going to allow us to turn the tide against the wave of infections. In terms of measures it is ensuring people are kept in confined spaces, that there seems to be around pop in there is not a passing on. The way this seems to be spreading is bodily fluids. To what we said our priority areas. One is isolating a person known bola so evil to have e that doesnt affect another. Touch the bodily fluids to contract the disease. If we can isolate that is a huge step. We need the facilities to do that, and we need more Health Personnel in order to provide aroundtheclock support of care. The other big thing we need to possible contact of known cases in the communities and else where. We need a lot of Public Health effectives on the ground going door to door, trying to figure out if we do indeed have all known contacts under surveillance. You are clearly working very quickly. You are taking precautions getting people out into west africa. What about longterm . Clearly Drug Companies are not being intensified. The money does not add up. The u. S. Government is doing a lot to support researching how we can attack this in the future. Are we getting close to a cure . There are very experimental drugs and vaccines in the pipeline. I know there is a new trial starting in the u. S. In september. We have to see how this pans out. Its not easy at all to do trials of drugs. This is going to be a long process. Are those fears justified or unjustified . Believes the risk of cases outside west africa is extremely small. Ok. Many of those listening cannot be calm. Thank you very much indeed. Our thoughts are with you. We wish you the very best of luck getting the people on the ground. Equities are set to open higher and london. Just under 10 minutes. Jonathan ferro is going to join us. Soon to be a bit of relief. More on the markets when we are back in two minutes. Jonathan has come on set to join us. You have got a little bit of relief after that a lot. I think you raise a good point. There is the money from the previous bailout fund. What happens if we get another bank . Days for the neck one . The other point is if it is enough money, we could be asked to raise more. If so, where does that money come from . Bank. Thisd used to be a bit of a relief in becauseet as well american data wasnt quite as good as anticipated. Are we going to live and die by the mood swings rather than potentially russian sanctions. I think they put out a. Ocument i thought it was interesting why Richard Fisher did not dissent. We have a very different view of where it is at right now. We have had a significant improvement on both of them. Why have we not changed our data dependent language. I think its interesting to see how this plays out in the next couple months. For a fed member to explain. The one line that caught my eye. Billion has gone into u. S. Equity funds in the past two months. Day of moneyggest and etf was the day before the equity markets tanked. You have to say when retailers eitherping in the money, they are right or canary in the coal mine. It was Caroline Hyde who called it. Not me. Volatility is rising. Wasonly thing anybody talking about was the lack of volatility. This is complacency. It has started to pick up again. 30 last week. Bear in mind these are summer months. . What about your mood index have you looked at your mood index . I have not. Pemira could be calling in their state. On the move is next. One of the stocks we are watching. I am going to separate it as the bank get set to report earnings. See you tomorrow. Welcome to on the move. Just moments away from the start of european trade. With theks closed worst week in stocks in two years. Are we going to get a rebound . I am going to start with you. Portugals central bank is pumping into asias to get bank. You know what i am talking about. Take any of the hit. . Hat have you got we will find out whether the litigation charges have fallen astrometric leeann as the market believes they should. It is just under 200 million. Hsbc . S going on with jonathan has that story. You make it sound so confusing. We are looking at futures indicating a higher open. Enough ofon is is it a bailout. We have another significant need to raise capital in portugal. Where does the money come from . You get u. K. Construction data. Above expecting something 50. The bank of england meets this markets are set. Interesting for me is the fact you got back into the trading session and despite the slowdown china is doing quite nicely. That tells the story. This is how the u. S. Equity market finished. Volatility is rising. Markets have risen. We are waiting for the psi index to open. You can see there is relief around europe. Nicelyre all doing quite in italy. Lets check in with harris to see if it tells the same story. Look. Have a you see an overall rally around europe. It is a good bank, bad bank story. For now it seems to say they have dealt with their current problems in the singular manner. Open up arall are half a percent. Up a third hsbc is of one percent. Treasuries are somewhere we saw open. Banktioned before the volatility rose. Byt is the index as measured merrill lynch. Do you still believe the u. S. Will go later than the u. K. . Do you still believe you will have lower rates for longer . You are declining slightly in london. This is the eurodollar this morning. 130 4. 19. Were just off an eightmonth low. The next short positions have risen. 134. 19. You might not necessarily get it this thursday, but this market is moving. To give you a context on a trade washted basis this currency up seven percent. In the Second Quarter it is up five percent. Work marioamount of draghi and his colleagues need to do to structurally change the direction of the euro. See if thoseed to it hasave opened or not. Completely defiled me. Spanishe looking at unemployment. 30,000. The prior month was 122. A big disappointment. What does it mean for the ecb later this week. He is the portfolio manager. Welcome to the show. I guess we have to start with is that the start of something bigger . I think its a signal. I think the patterns we have seen every time there is a bad suddenf news is a rebound. We have seen it after the problems in ukraine. The trends underlying it i feel quite strong. I think that is probably going to be the pattern for the rest of the year. To look at thed problems to see there is. Omething boiling for you what the rails that . Why 2015 . We have three main risks. One is the euro under performs expectations in growth and we are seeing that increasingly in inflation and banish unemployment. There is a problem with geopolitical risks. In ukraine, a rack, iraq, syria. Thatingle biggest problem is going to derail everything is going to be the fed balance or the yields in government bonds, because that has the potential to cause crisis rather than crisis on fundamentals. We are going to see losses not only on those that invest on bonds but products people think are safe from losses. Return can be very bad even for a short term if rates in a market that is structurally leslie did that and it used to be. Maybe it is better to be in highfrequency low yield. Is that something you agree with . Yes, but not for now. The end of trick for the year. Take rough it profit. Position yourself for next year in a better liquidity environment. We will leave it there. Bank has been bailed out clearly 5 billion euros. We talk about the package in two minutes time. Welcome back. Pain going to bring to you a mover this morning. Speak. Theys we they are looking to sell their stake in hugo boss. We are looking at the stock solute at 4. 2 billion euros according to people familiar with the matter. 5. 85 . E still down another big story. A four point 9 billion euro bailout. Here with the details is mark barton. We were expecting some significant private sector involvement. We seem to have a hybrid of both. Backs they didnt want to involve the state, but the state had to get involved acres they couldnt get the money from the private stakeholders. Essentially the central bank has taken control. They have pumped almost 5 billion euros into the bank as a result of the Resolution Fund set up a couple years ago. It is going to split it into two. You get this new company. It will own it out right. It will finance the rescue with the treasury loan to be repaid. The bad bank is where they come into place. They are going to take the hit. They are going to be left with the most problematic assets. They will get the assets which include those loans through the other part of the group and lend a state to operations. It was the other loans through the other part of the bank os. Joe santo Banco Espirito santo group which got them involved. This morning i think there seem to be a little bit of relief. The authorities have drawn a line in the sand. Yesterdays move removes key thertainty around the bank. Lenders are stronger and safer than before. I spoke with a professor at. Obert Kennedy College he said there are still some unknowns. I dont think he drew a line in the sand. That is a positive to see it. That is on the other side a bit symptomatic. The evolution of the Banking Sector is not over yet. We dont know. It was a bit of surprise. That is the concerning side. That is why investors will stay away from banks. We have to be careful. You do the math. Its something you brought up. Or to bill had 6. 4 billion euros remaining from its bailout in 2011. The bailout cost 1. 43 9 billion. Who pays the next bailout . That is the big question. I am going to post that to you. Who pays for the next one . I dont expect the next one soon. Lets be clear. The senior bond holders have been spared any losses. If the government is not willing. O pay why did they not get one this time . They still tried to avoid losses. There money is not certainly we have seen it. It can happen very easily. Isone thing we talked about the involvement of the state. Portuguese thats rise by 20 or 30 basis words. Raised in the concern for you . Ask not at all. Not at all. That is the same with other banks in europe. Its not just something that controls the whole sector. We can see a spillover into. Onds that is not the case so far. I think that was the market reaction. Its not going to change just for this. Its going to be good after the bailout. We have had inflation come in at 0. 4 . Meet later this week. I think they were waiting for the policy. That is not going to happen. We get thrown a load of questions saying, what else have you got . Have they got anything else . It is easy. Rstand they can do a little bit more. They can introduce another program for buying securities or similar things. For the time being, i think they will wait. Policy to work. Hopes at thecb meeting that they could weaken the euro. That didnt happen somehow. This is are seeing quite crowded. It can snap back very easily at this point in time. What we have also seen is individuals that appear to be in denial. Trading at record lows. I think they will stay down more or less. Tight range for the rest of the year. The real driver would be the u. S. Treasury. Any from september onwards. Also the european rates will go up. Us. Hank you for joining after the break we will have more on the deadly ebola quest for a the cure for the outbreak that claims 800 lives and counting. We will be back in two minutes. Toits time to bring you up speed with some companies. Aeroflot has suspended flights. Service to ginny has been suspended until further notice. Says operations will. Ontinue to senegal two weeks ago the fast food chain mcdonalds pulled some core items after the supplier was probed for using expired meat. Customers in beijing will be able to buy the items on the menu later this week. Toping to one of our stories, the latest outbreak for ebola emerged in guinea. Now the infection has spread, making it potentially the deadliest outbreak of the virus ever. The question is why is there no cure. That is a fragile virus difficult to catch and very easy to stop with good Public Health. We think it comes from animals. It has been coming back every two years. The symptoms you would have would look a lot like the flu. You would have joint pains, sore throat. This sound like any disease you can imagine. Later it aggressors to horrible diarrhea, vomiting. Later you get so weak you cannot sit up. There may be blood leakage, but the inside. Doctors give supportive therapy. Putting the fluid back to replace what is lost by diarrhea 90 can improve it from fatal to a 5050 chance of living. And each kind of bacteria they are biologically unique. Not just while logically different but unconnected to the rest of the tree of life. Enough tosually isnt stop it. Viruses are very good at growing and very good at changing. We need a cocktail of drugs and perhaps a vaccine that can be used. These all take a lot of money. There have been fewer than 5000 people who have been infected. It sounds scary, but i dont know if there are enough people who are potential customers that would warrant a drug company putting in the money it would take to develop this. For more on this story i am joined by Caroline Hyde. Are we coming to terms with this . Are we getting to a point where it will be contained . What they are looking for is more money, up to 100 million to get people on the ground. They are overwhelmed with the number of money being poured in. This is one of the deadliest diseases in the world. So deadly it is a National Threat to security. Have aleone and guinea state of National Security problems. Category a bioterrorism agent as well. This is who is supplying the money to try and find a cure. It is u. S. Government supplying the money. Tiny bits of money. They have the u. S. Defense department giving 140 million to a small pharmaceuticals company. Hopefully they are going to find some sort of treatment. There is a Japanese Company working on a treatment. They were looking on a drug to fight influenza. You have other small pharmaceuticals. One is a swiss company. There are vaccines developed but very slowly. As the man said on that film, it is not commercially viable for large Drug Companies. There arent enough people dying. Some of these villages the distrust of government is so high they are pushing back against getting more help. Is one question on my mind the business impact. Right now it seems minimal. Had the emirates stop some flights to ginny. They are saying so far they could be affected. Mining Companies Say they are ok for the time being. We will be back in two. Welcome back to on the move. I am jon ferro. Joining you from europes headquarters with 30 minutes into the trading day, lets see how things are shaping all. We were a lot higher. We were 0. 05 . This is after the worst for u. S. Stocks. We will dig deeper with Caroline Hyde. Two stocks to watch. The portuguese lenders. Over the weekend, rescues by the portuguese centralbank after it rose. Well, it gives a boost to the other portuguese lenders. Rules in placeng to save banks if they need it. Performer on the european stocks. Check in on hugo boss, german luxury company. You may have the suits or dress right now. It seems a private Equity Company that owns a stake could be looking to sell it off. Shares are trading lower. The worst performer once again, afren continue. We saw them plummet in share prices last week. Though most on record. The top two executives were suspended amid a probe. Discussing thes payment seems to be going to a nigerian affiliate. Thanks very much. Other top headlines. Is current outbreak of ebola threatening library is recovery liberias economic recovery. Must doer said in they more to stop the incurable disease from sparing spreading. This is an emergency, we have never experienced this before. The measures that we need in place are not being adult at adequate. Need toearing up so we move it faster before he gets out of control. In southwestern china has killed at least 391 nearly twoinjured thousand. It registers 6. 5 and hit late sunday. More than 12,000 homes were destroyed and power and communications are still cut off. Israel has begun a seven hour ceasefire. The humanitarian windows started 30 minutes ago and goes and until 5 00 p. M. Local time. The areas where forces are operating. For more on the latest out of their region, i am joined by david winer in tel aviv. We will start with a cease. Is this one any different than previous agreements must mark agreements . It is hard to tell. There have been few attempts to have a ceasefire only to eventually see it break. Israel has announced it will stop the fighting in now, but there is still fighting going on and certain parts of gaza where troops remain such as the raffa town. This weekend, israel said a soldier had been captured and later israel announced the death of the soldier. There is still fighting going on. So far, it seems to be no announcements from either side of a major breach of the ceasefire. David, what about all of the diplomatic attempts to stop the wider fighting . Are we anywhere near getting another one . This is been the most complicated of all fighting between israel and hamas and gaza over the last decade or so. Israel has stopped to previous in the past. Towas more straightforward solve the solution diplomatically. The last time israel withdrew was agreedeasefire upon mutually. That is something some local analysts and experts are starting to speculate. Israel may decided to unilaterally withdraw and decide the operation and decide it is out of there. That is what some are expecting might happen as well. Chris david wainer it a david wainer is there in tel aviv. One of our top stories. Our top corporate story. Hsbc as they prepare to give earnings later in the day. A 4. 9 billion bailout. On both offor more these stores is jonathan and manus cranny. We were hoping for Significant Movement in the private sector. To have a hybrid of both. The big question being asked, what happens next if we need another one . Where does the money come from . The group is very complex. Not see a lot of groups. It may be even harder to figure out what is going on. Across, thereread is no reason to suspect at the moment there would be. , if you of the response go back to march 2013, cyprus talked about a levy on deposits. This time around, they are very clear. It is on the front page of the website and it is not part of it. They have not paid the rest of the bailout money. Think the speed of response and the structure and the message they are sending is a positive one. Credit agricole, do they get wiped out . A 3. 6 billion loss. Pricestake and the share are more than 10 . Worst case, a 100 million loan. You put in the context of payouts and regulatory counsel. Is europe in a better state . Your the quality reviews made it a point not a big reader across. What you are saying, your view that European Banks, raise capital and should not be too atrocious . A far European Bank as in better place than it was. Things we have to remember, a lot of [indiscernible] this reminds us as well. On the one hand, the policy response and investors as well. You by bonds stressing the other thing. Sometimes the market overlooks [indiscernible] billion in july and then it did not. The stress test reminds people. How quickly you are with the trader. Not being negative. The risks reminds us there are. And in the context of this this it is a risk that bank even with a good access might have to raise more capital . You certainly hope. Almost certainly. Banks the largest spanish is picking get up. I cannot believe anybody will be silly enough not to ensure this hurdle. It atgacy and go expose be moment the risk should left with a clean deposits and lending. Lets talk about hsbc. It will be litigation and the number does not even touch. Chatted, thefly big headline is litigation larger as relative to last year. But, thetant litigation is coming through in the americas and here in europe hsbche price tag, probably does not have as many issues. Is that a fair representation . If you look at the latest data, the fact is, stressing 2005 the problem is the fines are probably bigger. Calculating is more difficult and costly. Hsbc relative to lawyers or barclays or world bank is small. Libor 7 of the market. That is not small change. Hsbc is 10 . 7 of Foreign Exchange markets. It is difficult to understand where the fines come from. 9 billion for bmp and lloyds, 30 million pounds. Of england and some the money repaid and inflating rates at the end of the month. It is an issue that will not go away. Billion is a lot of capital. The takeaway this year is Credit Suisse can shrug off the 2 billion fine and bnp has the doors open with the 9 billion dollar fine. Should the takeaway being that the fines are big that banks can continue . The banks are absorbency and forced to restructure. Probable there is profitability. Than two orh more three years ago. The spreads or wider. Even under the new regime. They can make even more the bankers, why not . They can make more when Interest Rates rise. Banksgood news for retail. Absolutely. The one thing we do not understand yet is the alan sheets. Analysts wouldve thought they had a reasonable idea. A lot of the expansion you can imagine and is difficult to understand Going Forward the different structures, the structural lending and what we are hearing. On hsbc, where are we with the exposure to china . Asia andposure to business in china, how do we look at that . Clear and they are focused on [indiscernible] the wealthhrink management problems. For thetin america moment. Brazil and argentina. Hsbcs breakaway regions. China, the banks trader at five times, the markets are aware of the issues. Chancellorsf story, is a lot more difficult in terms of shrinking inflation. Hsbc is more in the spotlight. Personally, i am more interested in latin america. Great insight. That is Jonathan Tyce of Bloomberg Intelligence and manus cranny. On track to triple and the gdp past 6 trillion, africa may be an attractive opportunity but home to some of the most unstable governments and the world. We will look at the continents prospects. To do, thewhat measures to stop an ebola outbreak. What we need is bodies on the ground. That was spokesman Gregory Hartl sizing up the outbreak of ebola in africa. We will art with the risk of africa. More than 40 leaders met in washington. The idea is to promote trade. Hans nichols looks at the risk and opportunity of investing in africa. Africa, divided by language and culture but united in democracy. Andcontinent is a young populations are swelling. Is workforce could reach 1. 6 billion in 2060 on was triple what it is now. The economy could grow even more trillion to from 7 justssive growth but it is one third of what is in south korea. Those lines continue foreign direct investment. African leaders will have to guarantee stability. The numbers and oz are down 10. Most of the world fragile states are in africa. Like libya and egypt. Consider the Economic Impact of the arab springs up north. North africa saw a decline in funding from fdic. Subsaharan africa saw a 5 increase. Inhaps nigeria, home to one five africans a ploy in the u. S. Have the best hopes. Could reach 1. 4 billion 1. 4 trillion. Annuallys exceeded 4 but the economy relies on oil and gas which has fed insurrections. Harams kidnapping fuels anxiety about the stability. Nigeria is not the only country facing issues. Hans nichols, bloomberg news. Se is, golf. Africa, a key theme . D. C. Summit. About how it is affecting business. Getting back on their feet and pushing resources. This a big blow for them and what does it mean . The Gaza Ceasefire has started. What does it mean for israeli industry and we are going to talk about the terrorist industry. Industry. It has been affected by this. The Tourism Industry is different. They cannot fill rooms. We will talk about all of that and try to get a take on it. The banks. We cannot forget the banks. Hsbc is out today. There are some bigger Unanswered Questions surrounding this. This is people how we should be dealing with that but there are shortterm loans. By the portuguese authorities to make it happen. They hadunfortunate money left over. That money is kind of their but it needs to be funded in an obscure away. Quite a clearcut on the pages of the newspaper. Thank you very much, guy johnson. We will bring you companies on the move. The worlds biggest pork supplier will raise almost 2 billion it is hong kong ipo. Trying to reach a portion of a 4 billion loan that acquired smithfield. Cut partsid it was for is a mercedesbenz in china in september. Aat is pro if they theres probe if they manipulated prices. As we had to the break, we will our operations for the anniversary of, ration of the start of world war i. King felipe is hosting a has of states to her member award were one. Britain is represented by the duke and duchess of cambridge. It will start at 11 00 london time. That was 1914 after germany declared war on belgium. Around 9 million combatants lost their lives. We will be back in 2. , 25 years after berlin authorities will soon decide if communist buildings will receive protected land mark status. Hans nichols reports. A generation after the berlin wall came down, the city is still divided by this. Hub at the core of old east berlin and now the scene of conflict between developers and preservationist that cannot be swept under ground. Investors,n for which buildings will make way for redevelopment and which will be tied up in red tape . Dizzying butn be the house of statistics, it is scheduled to be demolished. This is the house of electrode technology. It is long like a skyscraper. As owners are worried landmark designation will complicate or slow development. Daniel holdske office overlooks the square say that need for a revamp is obvious. If you look at the highrise here for the Department Store and it looks pretty shabby. So much goingres on. Theres clearly money to be made and there is history to be lost. Nearly every room was bugged and prostitutes would spy on their clients and historically, it is interesting. Architecturally, 37 stories of glass. Developers have a nemesis. The earth. A project to build germanys tallest apartment is teetering. Support is wait. It would have stellar views like those from the house of travel. Even inside there are a few ands, not much had around not much room for a city to grow. Hans nichols, bloomberg, berlin. A little bit unfair. But becausedroom hans nichols is about six foot six inches. Se is coming up. In the meantime, you can follow me on twitter. Bailed out. Portugal takes control of banc o espirito santo. On thers left ceasefire. We are live in tel aviv to see how a key israeli industry is coping with the gaza conflict. And out of control. Becomes thetbreak deadliest ever. We are going to weigh the risk of doing business in west africa. Good morning, everybody. Welcome. You artc