Transcripts For BLOOMBERG Countdown 20140930

Welcome to countdown. It is 6 00 here in london. Meet our demands are the demonstrations will increase, that is a warning from row democracy for testers in hong kong prodemocracy protesters in hong kong. Ultimatum. Ssued an unless the chief executive of hong kong is stepped down, the civil unrest will escalate. Roslyn chen is on the ground. Good to see you. What is the mood on the street today . Crowds are starting to swell again. It has been called the umbrella revolution. Right now, the scene is generally peaceful. A lot of young people out here. Waiting. Handing out food and drink, diligently recycling plastic bottles. No clashes with police. Police have held back since yesterday. The occupy central group, the activist group demanding democracy in hong kong want protesters to stay at their location until the first of october. In hong kong, it is a national day holiday. It is a public holiday. Therell be a lot more people joining the protest. There have been more people joining protests in the evening after they finish work. It is expected they will see crowd swelled a lot more. Wednesday is a public holiday. People are wearing black tshirts with yellow ribbons. The occupy central leader has asked for the chief executive of hong kong to resign. A few hours ago, the chief executive spoke to reporters and asked occupy central to stop the rally immediately. Retailers have been impacted by the closure of the roads and the inability for people to get through. The impact may not just be for three or five days. The cost on the reputation could be huge. That theysponse says warrant they warrant. Nternational union may bean getting ready to take a bite out of apple. The Eu Commission revealed new details in its case that apple cut and illegal deal with ireland to lower its tax bill. Hans nichols joins us from berlin. What is at stake for apple . Millions, even to iris in back taxes coffers. Illegal state aid irish coffers. The question they are getting if it is true and how apple cut these low tax rates with ireland. Take a look at one of apples subsidiaries. What they paid in taxes from 2009 until 2012. 30 billion in overall revenue. Tax bill zero. A lot of this comes from the true and how apple cut these low tax rates with ireland. Take a look at one of apples subsidiaries. Last may. At the sameu. S. Senate report ru increase taking place. George osborne speaking about Companies Like google, Companies Like apple avoiding taxes. Some Technology Companies go to extra dinner he links to pay little or no extraordinary engths to pay little or no taxes. We will put a stop to it. Ireland says theyre confident no tax rules have been broken. Week, we may hear from the eu on investigations into fiats Financing Group and starbucks and what sort of deal they may have cut with the netherlands. Apple in trouble in europe, but good news from china . They will be able to sell those iphone 6s in china. They can go on sale on tuesday. That is ahead of a big national holiday. They got the state license and they have clearance. Thank you. Hans nichols in berlin. Some of the biggest names in retail are gathering in paris to talk about the challenges and opportunities and what the industry faces. Caroline hyde is in paris. The economy has to be top of the agenda. It is going to be the first thing they talk about this morning. It will be about the macroeconomy. Ive just traveled from the u. K. Today where we were going to be getting seven straight quarters of growth. I traveled to france, where they have not managed to beat out growth for two quarters eke out growth for two quarters. Clearly differences across europe. The retailers are trying to work out how they boost sales. U. K. Hile, they see the bringing back Consumer Confidence and spur the spending. Who better to speak than ian fisher . He says, the divergences are so stark between various countries. I think it is fair to say inhe overall eurozone france, we saw quite a sharp downturn. By contrast, the u. K. Has been stronger than we thought. We are seeing the tale of two very different markets. The u. K. Recovering, higher employment, more people learning. France, still having a confidence issue. He is giving a wonderful flavor of the divergences. Many of them are taking to the stage today. We will be hearing from the likes of john loomis. They have managed to propel growth within the u. K. Many countries trying to navigate. Ian cheshire is never short of an opinion. He had some advice for mario draghi as well. That is where he is recognizing the divergences. We had George Osborne yesterday tough in will stick terms of cutting the deficit, 25 billion pounds. They are managing to stimulate growth and purchases of houses with low borrowing costs. He wants to see more of that coming from the ecb. I think the ecb has to do more. At the moment, we are seeing anxiety, concern over deficit, and there is no offset. It is hard to see how you come back out of this. The combination of loose monetary and tough deficit. We have to see that across europe. Added tor voice being the nudge nudge wink wink for quantitative easing coming for mario draghi. Ian cheshire will be handing over the reins to the female head of capital armor in france. She will be taking to the helm of the kingfisher group. How were her voice how will her voice add to it . Well be talking about disruption. These guys can talk the talk. It says something about mobile, online. Mentioned seamless about six times within a particular interview. They are all very aware of the disruption, the move to online is happening. They are talking the talk im it but all they walk talking the talk, but are they walking the walk yet . We will be talking to the ceo of dominos pizza. Of sexinesstle bit going on. Coveringlking to everything, i think. We have so. Caroline hyde with the latest on shopping. Covering everything. Uncovering everything. You can join in the conversation on twitter. Break. We all need a time for todays company news. Lufthansa pilots resumed strikes today. Much of the service will stay grounded. The pilot strike have reduced profit by about 100 Million Euros this year. This values europes largest retailer at over 5 billion euros. Forbes says it will earn 6 billion this year, falling short of its target of between seven and 8 billion. Shares in the second largest carmaker fell 7. 5 on the news, erasing all gains. Welcome back to countdown. As we enter the last three forbes says it will earn 6 billion thismonths of the year,d chartereds remains releases its global focus report. 2014. Ting on we are joined by the reports offer the reports author. He was last in the studio seven years ago. I was here, nothing has changed. Good to see you. Transition is a big theme. Global monetary policies will become unsynchronized. What are the implications . That is the big change for next year. It is not entirely reflected in market activity right now. Why am i concerned . Time in yearst that we are going to see major Central Banks falling following following policies. Time in years that we are going tothe secondd is that i am not entirely convinced that the u. S. Economy is in a state to tolerate much higher Interest Rates and i am not convinced the u. K. Economy is also in a position to deal with much Interest Rates. At least i expect Central Banks that will be hiking Interest Rates to be very careful, very measured, and Interest Rates may not go as high as markets expect. Perhaps the great divergence is not as divergent. If we are to take what Central Banks are preparing us for, it might be a little more consternation that the market appreciates right now. There is a lot of slack in the u. S. Labor market. It can quickly catch up. If the fed is too early, the consequences on the fragile recovery can be much more serious. When you look at the two most ,owerful economies in the world china missing its growth number this morning. Who is driving who for the morning for the world . In terms of growth, it is china driving the world. If we were having this interview this time last year, the popular opinion was that it is the end of the emerging market party. 2014 was going to be about the recovery in the west. It wasnt. The u. S. Is growing exactly at 2. 2 . That is what they have done since 2009. Europe and the eurozone economy are in a state of Global Growth is picking up, but it is because of the pickup and emergingmarket activity. And it comes to liquidity Monetary Policy, the biggest impact on the World Economy has been from the actions of the fed. If the fed hikes, this will change. Just coming back to china, are we fixated with this headline growth number within china . Are we fixated on it whilst overlooking the structural progress that has been made in the country . We are fixated on the headline growth. We are using the previous decade to judge the next decade, which is wrong. We should get used to lower growth rates in china. The old model of growth in china, which was driven by investment and exports, is dead. What we need to see in china is consumption picking up and service becoming a much more important driver of growth. It is happening as we speak. We are underestimating the true extent of the rebalancing already taking place in china. The big problem in the global. Conomy is inadequate demand the big hope is that china is trying to solve this, trying to create its own demand. Every company, there will be a slowdown in the chinese economy. This is a cost worth paying. We will pick this conversation up when we return. Stay with us. We will take a short break. Welcome back. Back with us, Standard Chartered head of research. We promised we would talk about the ecb. They prepare to meet in a day or two. Isnt doing enough to resolve is it doing enough to resolve the eurozones problems . No, that it iss not the ecbs fault. They have been left with all the heavy lifting in the eurozone. It is trying its best. The problem in the eurozone, suppressed salaries, inadequate demand, governments are not doing enough to boost rose in the economy boost growth in the economy. We need to do more. It will not be enough and i think the ecb will have to do more next year to purchase sovereign bonds to boost liquidity into the system. To be honest, i do not even think that will be enough. In order to see a pickup in demand, in order to see a decline in savings, we will have to see governments spending more. It does not look to be on the agenda right now. All the heavy lifting will still be left to the ecb. It will boost liquidity globally. Im not convinced this will be enough to make the eurozone economy turned the corner. Currency,line in the he touches on some of these points. Governments are not prepared to do more. The ecb will be left to pick up the slack. The decline in the currency is there. Will that help momentum . Will it help the export story question mark doesnt need will it help the export story . Problems that run so deep, we need everything. We need more liquidity, we need to see the europa weaker. We need to see increased government spending. It is interesting to see how the euro is performing. Happening, what is one would have expected a decline to be bigger. Surplus thatccount the eurozone economy is running. Look, the economy is healthy. I see the surplus and i see a big problem. It is a symptom of with everything is wrong in the eurozone economy right now. Inflation and the eurozone . I think it will not get better. It is funny how when we say better, how things have changed. It will be difficult to get it higher. The ecb will have to be a bit more aggressive in 2015, purchase more assets. Thank you very much. Week, another strike. This time it is lufthansa. The pilots refusing to enter the cockpit. Find out why after the break. Welcome back. 6 30 a. M. In london. Andforeign Exchange Markets play today. The dollar coming in a little bit lower. A slight selloff in dollar. You have the aussie dollar rising and a little bit of a lift for those two currencies. They had the best quarter since 2008. Has the dollar run too far too fast . There have been warnings about the strength of the dollar. That is the dollar story. Eurorms of the euro, the dollar down over the past five days. Inflation data set to come out at. 3 of 1 . Bank of america, the call on the eurodollar. These are the top headlines. Ultimatum. Unless the chief executive resigns and his replacement is democratically elected the civil unrest will continue. Another night where tens of thousands took to the streets. He called for an end to the protests but a technologist they could last for more than a week. Gaugeinese manufacturing came in at 50a point two. That is lower than the preliminary figure of 50. 5. Todays report marked the seventh straight months the final pmi reading was below the from larry figure. And a u. S. Judge has ruled that argentina is in contempt of court. The country wants to shift to one aser payment areas. The judge said the move is illegal and cannot be carried out. Argentina faces a deadline to make a 200 million payment. Iran is trying to bamboozle the world into lifting sanctions. Elliott gotkine was listening. This is the third year running that netanyahu has focused in on iran during this particular speech. There were no cartoon [inaudible] vividlyyahu sought to illustrate the countdown. The israeli Prime Minister has hoped that his speech would be widely heard and remembered. At a time when Nuclear Talks are ongoing. They set a deadline for november to reach an agreement on Irans Nuclear program that would result in the lifting of sanctions for iran. Israel does not want that deal to go ahead. It says iran cannot be trusted. In the future at the time of most sing irans the that it would obtain the most dangerous weapons. Along allowing that to happen would pose the greatest threat to us all. Speechnyahu peppered his , trying to suggest that iran is in the same ballpark as the militant zone of Islamic State who have been waging their campaign of terror. He called on like minded arab countries who are opposed to Islamic State militants. To forge a new area of ties between israel and those arab countries. Defendedahu also israels role in the recent conflict in gaza. He said he rounded on , accusing israel of carrying out war crimes and genocide. If your intention is to kill as many as possible you have to send them wantings in advance to tell them to get out of the way. He also used some visual aids again this time. A picture of a hamas rocket launcher. Thatng up the claim militants were using civilians and children as a human shield in that conflict. Also taking a more conciliatory tone. T israel was prepared for this was rocksolid guarantees for israels security. Thank you. Elliott gotkine reporting from tel aviv. If you booked a longhaul flight on a lufthansa flight you may have to rethink this. Joining us, another day, another strike. You have got them going on strike. It is about the age of you have to ask what is really going on. It is about the Bigger Picture of the airline and the shape of the airline and the pilots are concerned about this. They are struggling to do that. Both of these airlines as you say have worked out what to do. We have been toppling talking about this. I have not been talking about it for decades. The industry has been talking about it for decades. You have to they did not want to cannibalize their brand. They wanted and they were not worried about this. Were notming coming into their hub airports. They are pitching themselves to business passengers so this is a huge threat. In terms of success, they dealt with strikes at British Airways and iberia and managed to push through change. ,hen you think it can be done lufthansa and air france have a ways to go. Pursuing anstill agreement. They have not actually in terms of what they are asking for, they have not changed that much. The company wanted to develop their lowcost unit. The pilots were worried about contracts. It does not seem they moved away from that very much. Atay they will be striking the main hub at frankfurt. This is their longhaul operations. The core of their operations. Is 35 flights have been canceled and the airlines say they will be operating 30 flights. Ryanair is flying from these main airports. We have been talking about business friendly policies. There are advertisements pitched out the business travelers. Kong sayters in hong teargas and riot police will not keep the more way. Time for todays company news. Analysts say yahoo shareholders could stand to reach 11 billion. The proposals include yahoo selling stake in ali baba and yahoo japan emerging with advertising rival aol. Netflix is set to make its bigscreen debut. Teaming up with Weinstein Company to release a sequel to crouching dragon, hidden tiger. And i complex next year. And the ecb needs to take more action. I think they have to do more at the moment. All we are seeing in is anxiety. There is no offset from fiscal policy. We have got to see that now across europe. Welcome back. Lets get back to our top story. The chief executive of hong kong has acknowledged that protests are likely to last more than a week. Of meetingo signs the demand. Demonstrators say unless that happens they will escalate civil unrest. Guest. Us now is our thank you for coming in. Give us your reading on the situation. Are we heading toward violence or negotiation . Anwe are heading toward uncomfortable standoff between the two sides. You got the demonstrators who i think are something new in hong kong. There was never any of this kind of violence in the radicalization in the air. And you have a new generation coming up in hong kong. Their parents wanted to conserve freedoms they got and the you have the generational change with the students and it is not just the question of the election of the next chief executive. Re is the or savings [indiscernible] enoughong kong resilient to weather the storm . , can itered sars weathered this . This is an institutional challenge. You have the hang seng down 3 this week. If things getthat much tougher, that might have the most effect on beijing. This happened between 1997 when the chinese stepped back, when the tycoons told them if they did certain things in hong kong they would move their business to singapore. It could the that business will have a political role to play here. Where theyd choosing the battle offshore, is this the demonstration of power, is this a global demonstration in china, this is how i will do with my nation . She took over almost two consensus andr a he set his stamp on i am in charge, i will pursue what he calls the china dream. You can say that is a er phrase. I think it has been missed judged from beijings point of view but wishing has a record of misjudging hong kong. Is one country, is that intact because that seems to be what is being tested. The problem is, i was writing this at the time of the handover in 19 97. People always concentrate on the systems. The second system. But what comes first is the one counts more one than the systems and that is what is being asserted now. You said how we could lose out to singapore businesses. How about hong kong losing its hub status to shanghai and shanghai becomes more liberal. Is it a matter of time before hong kong looses its gateway to china status . That has always been the question. Having dinner with a senior official there and i said how do you see hong kong and he said we are going to need you in hong kong to finance us so we can develop shanghai in takeover. That was the kind of idea. You have the shanghai freetrade zone which has not lived up to expectations area do have the investments between the hang seng and the shanghai index of that is going ahead. Brushd say with a broad baseline, until you have the independent rule of law and reliable corporate commercial law in shanghai, hong kong is going to have a big advantage. One of the most worrying things in the chinese mainland white paper back in the spring was a phrase that judges should be patriotic and should love the country. Dangerous be quite for hong kong. Take us or youre thinking in terms of how the next set of moves go. These protesters are not going anywhere. This is getting more bellicose and stronger. Do you deflate the nextll see in couple of days when we have a Chinese National holiday which would be celebrated with fireworks. You have this standoff. The chief executive is regarded and lackingte weak authority. The demonstrators will press for his impeachment which some legislators are at the moment. I do not see any way that aging could give in to that. I think you have a rather messy confrontational situation going on with probably the demonstrators calling it off. The protesters should think about what is good for hong kong in the longterm. What does he mean this morning what did he and by that . Getting the economic benefits , mainlanding has had pushing up retail. A lot of hong kongs prosperity. Or falling is static. It depends on the mainlanders. The front of the guardian has this image. You were the editor at the time of tiananmen square. When you look at this kind of imagery that you are seeing at the moment, it is a very different moment. In terms of communication and education. This is the thing in the background and hong kong has a memory of this. Helped theng kong protesters in tiananmen square. That was that link and it was always in the runup to the handover for the chinese, there was the fear that somehow hong kong would bring the democratic disease as it was called into the mainland. This is quite touchy stuff. I do not see myself, the chinese army rolling out the tanks. That happening. What it depends on is the silent majority in hong kong. The mass of people who want a peaceful, straightforward business like city as it has been in the past. Whether they are seeing the influence of aging is becoming too big or the students and protesters as were the people. We will tell you how long George Clooneys formal wedding ceremony lasted. That is in the countdown newspaper section next. Welcome back. Hans is in berlin. I have not taken the mickey out of you about the ryder cup. There was a copper thrashing. They played good golf. Bild so i show the can get some nudity. It is there is some cute leopards down here. For a bride in berlin, 32. The average age for the bridegroom, 35. More than it is in london. This is a family show. Talking about weddings. A lot of women are sad. George formally got married today. There is there was a 14 minute ceremony. Well done. I will finish with the image we brought up. It is about the technology about these protests. You cannot get a mobile signal. You cannot get enacted to the a new piece of Technology Comes to the fore. You do not need a mobile signal. There was twitter for the arab spring. Osborne talks tough on Tech Companies avoiding eu tax. Publishrs prepare to information on apple and fiat. Will bring you exclusive interviews throughout the morning. A warm welcome to the second hour of countdown. P. M. 7 a. M. In london. Increase,ions will the warning from prodemocracy protesters in hong kong. After a night where tens of thousands took to the streets. Their bowing unless the chief executive sticks down steps down protesters will escalate. What is the momentum like on the ground . We head through the day . Is it building as we head through the day . In thele are setting out late morning and rejoining in the afternoon. It is quite amazing. There are a lot of young people here. Wearing black tshirts with yellow ribbons to show solidarity. There are people collecting rubbish. People are handing out cold tells soaked in icy water because it is very hot today. It has been peaceful. Peaceful and calm protests and there was a police presence. Cooler weather resulted in strong weeks but warmer weather has had a reverse effect. That is lower than the previous forecast. A statement saying that september was the driest september since records began in 1910. Commenting on the level of rainfall. Theyre keeping their profit forecast. Rea do if the weather changes, continues as it is in october we are likely to lower our fullyear Profit Guidance range. 775. Are sticking at if it is warm for the month of october as we have seen in september according to statistics they will be forced to change their guidance. We will keep an eye on that. May be getting ready to take a bite out of apple. The Eu Commission will reveal new details in its case that an illegal deal with ireland to lower its tax bill. Our International Correspondent joins us from berlin. What is at stake here for apple . Orfor apple, millions billions of dollars of taxes would be paid into irelands coffers. The issue is illegal state aid. It has to do with tax configurations that apple may or may not have set up with ireland. What is in dispute is the tax rate is remarkably low. Take a look at one of apple this is one of their operations. They had net income of 30 billion and their taxes are zero. That comes from a Senate Report in 2013. At the same time there is this move from brussels. Conservative politicians and the u. K. Talking about the need for having Tech Companies pay more taxes. Talking about Companies Like google and apple. Some Technology Companies go to extraordinary lengths to play hey little or no taxes. Theabuse the trust of british people and my message is clear. We will put a stop to it. Low taxes but low taxes that are paid. Irelands finance minister said it is confident that it broke no treaty rules in these tax arrangements. We will find out more from the eu today. We will find out about the case against fiat finance. They have their subsidiary set up in luxembourg and starbucks in the netherlands. Has apple apple is in trouble in europe but some good news out of china. The got great news. License to sell their iphone 6. They can sell the iphone 6 starting tuesday in china. We have some breaking news. A bit of good news from rbs. Down thetrying to wind bank but they are saying that they see a significant 2014, seeing improvement. This comes down to two big issues. One is bolster bank. Ulster bank. Million would be released from all stir ulster banks reserves. The expected to have empowerments of one billion pounds. That would be significantly improved so it is very much about the improvement in terms of house prices in ireland and to doing better in terms of less empowerments all around. They go on to say that if the market continued to improve there is the potential that further releases could happen so things could get at her in the future. Theyre watching talking , uncertainties remain. Some of the biggest names in talk are gathering to about the challenges and opportunities that face the industry. Caroline hyde is there. This has to be the top of the agenda. This is a tough old life. Weather is disturbing their sales and another thing , that isut of control a Monetary Policy issue. Something [inaudible] an interesting we have been speaking to kingfisher. The biggest Home Improvement company. A big payoff in france and the united kingdom. They were spelling out some of his concerns about Consumer Confidence in france. Out at the moment is markets are flatlining. That creates a double effect because consumers get worried and they see the government [indiscernible] growth to do that. Will pay morey taxes or have more cuts. Consumers are saying i have got money in the bank, i do not want to spend it because i do not know what next year will be like. Backing up has been what they are saying. French Economic Sentiment has been worse. This is something he wants to see turned around by monetary stimulus. Eurozone, a stagnant still sounding confident enough to splash the cash at kingfisher. Youre right. We spoke to him yesterday and even though he is worrying about these speeds that you are seeing , the consumer buying much faster. Still sounding pretty buoyant when it comes to m a. He says potentially now the opportunity is to get even bigger at kingfisher. Januaryshould happen in or march will we get all the work done. That was one of the factors in timing the succession. Theres always opportunities to do further. Is clearly that markets are tough. International expansion clearly on the rise. We will be talking about the challenge of getting online with many of the players here today. We have them talking the talk create everyone is talking mobile this and omni channel that. Talking to dominos pizza. They have 70 of sales on the internet. Saucy in 30etting minutes time talking about the retail of luxury underwear and how they manage to woo female and male buyers. Maybe some 50 shades of grey has been helping. Communal hot flush going around. Saucy. E is getting here. Is all a sex, and they call it decollete. Are taking a break. We get investor strategy after the break. That is next. Welcome back. In 7 15 a. M. Ndon it is the final day of the Third Quarter. Joining us now to discuss this acetal. Irector of it is not quite yet the end of the Third Quarter. Worst quarterly performance in two years and it ends a winning streak that has lasted a year. For equitiesg run come to an end . It is a 2 drop. The first quarterly drop for two years. The underpinnings are a strong u. S. Economy and the data is still exceptionally good. And lack of inflation pressure. Chinese unrelated to weakness. Pretty bullish disinflation. What do you work for look for, you focused on the u. S. And whether the fed will tighten economy how weak the has to get. I focused mainly on the u. S. There is a big parallel. Japan was going into recession and it feels really similar at the moment. China is slowing down but that is keeping Commodity Prices under downward pressure. China is not turning japanese. That is europe. China ising about growth is gradually slowing down. What the authorities appear to be doing is letting the air out of the balloon slowly. The Financial System is not in loading. There are not the defaults and the more they get confidence, they can slow the economy down. You will see how that lays out. The top line is dollar. We have had the best run since 2008 and that trumps everything in terms of stocks and technology. And your scorecard is the most positive. Tell us about that and why are you so convinced there is dollar the Dollar Strength is a plus. World,ou look around the the japanese are printing money and the ecb is on the verge of printing money. Raisingis on the way to Interest Rates. That is such a big convergence, that is what is driving the Dollar Strength. That is good news for the World Economy. The Dollar Strength means euro weakness. Avoidps europe to do deflation. The u. S. Wants to avoid inflation. Dollar strength should take some of the heat out what would be a bigger rise in inflation. This is the longest ever. We have had a fed government evan are warned about the fed government warn about the risks of a strong dollar. You have a record long position in dollars. People are very long the dollar and that suggests taking money off in the short term but the fundamentals are in favor of the dollar continuing to strengthen. You have this selfcorrecting mechanism. If you believe the fed will raise rates the bond yields go up and mortgage yields rise. It is a stop and go recovery. Is there a disconnect between the picture you paint for a decent level of growth and what is happening in commodities . It is part of the story and that is where the emerging markets come back in. If you have a structural slowdown in china, that is the against marginal buyer of commodities so youre getting demand gradually disappointing. All the other emerging market economies are getting linked into china and they are in an environment where chinese weakness in Dollar Strength is a bad combination so you get this weakness in commodities. There are three big headwinds. China, the dollar, and service supplies. Thank you. More with him after a short break. Welcome back. Bonds, aht government good story on bloomberg today. Qus another orderly arterly stat. The beat corporate debt by most in three years. Leading me to the question, will that continue to be the case and why are you underweight government bonds . Ok. I would expect corporate debt to continue to do better in general then government debt. There might be they might be related. The exposure has not been great this quarter. The Strong Economy i prefer corporates to governments. The u. S. Is normalizing Interest Rates for the next three years and that is the gent just general upward drift. Think the dynamics are working again. Bund yields will be falling. Viewthat hold with your about yields going higher . Yields th3nd e 2. 5 is falling. Usled local recovery. Depended again. Hit the recession debate. You are the specialist. I am asking. You started to add to japan. Does the end just keep crumbling . Bank of america is shifting their view. The stock market is very exposed to exporters and this is not good news. Does not make any commodities. They love Commodity Prices to drop. If the dollar is strong i am am simplifying a little bit here. Position. N a perfect it is the opposite of the emerging markets. The stock market is in aftereffect place. You cannot have loose Monetary Policy and tighten fiscal policy. They do need further stimulus and that will get more positive on japan. We will leave it there. Coming up, we returned to the world retail congress. Ogarth speaks exclusively to bloomberg. Welcome back. Time for a quick look at foreign exchange. Conversation, time to take some money off the table on the dollar position. The market as long as long can be. Reaction thet as a dollar has had the best quarter since 2008. Up 1. 7 . Consumer confidence is showing a sevenyear high. Lets have a look at the euro story. We are a dime over 1 . German unemployment is expected and italian unemployment expected to show deflation. At one dollar 23 and by the Second Quarter youre looking at 1. 21. The top headlines. Prodemocracy protesters have issued an ultimatum to the cities beijing backed authorities. They say that unless the chief executive resigns and is his replacement is him a critically elected civil unrest will continue. The warning comes after another night where tens of thousands took to the streets. At a News Conference he called for the end to the protests but acknowledged they could last for more than a week. Datachinese manufacturing came in at 50. 2. Than the preliminary figure of 50. 5. Was belowpmi reading the figure. The Central Banks governor cap is rates lower and it fasting fighting the fastest deflation in asia. Us . Hat have you got for only early ins the morning on a tuesday but we will get a little bit sexy. We will talk to gary hogarth, all things lingerie. Be one of the biggest suppliers to marks spencers. What would you say is it like trying to build a smaller brand. Is it still about drawing everyone into the stores . It is about eating people into the store. Our Online Business is successful. Is a luxury brand. We want to draw people into our stores where we can give them the service and everything. That is important. Cultivating the brand. But getting them walking inside. Who is coming into your stores . Almost 75 women, 25 men. There is a philosophy of the brand, it is about empowering women. Making women feel attractive, confident, sexy. If they feel good that is what really matters. Men like everything. Where is growth coming from in terms of national and international . The most exciting regions . Our weakest city in the world is moscow. We have nine shops in moscow. The biggest market is america. We have opened three new shops in china. Shops in australia and where all over the middle east. It is a brand that travels well. There must he challenges going into each individual country. Females will have different taste versus the women in russia and the u. K. In the u. S. That is true. In some regions like the middle east and china we have turned down our windows a little bit. More discreet. In actual fact the styling is very similar. Billion,sell 32 different sizes. What is your topselling trotter, do they differentiate from one country to another are what would he the best question mark it is very a little bit. We have a classic range which is 35 of sales and that tends to be in the newer countries come a far still learning about the brand, the classics are still it is ant there but introduction to the brand and they move onto the slightly more interesting styles. Like. We have different types of styles. We have quarter cup bras and we have a lot of corsets. Also about accessories. We have writing crops encrusted with swarovski crystals. Lingerie inspired. Theyre really beautiful and they are doing really well. This is a brand you are expanding in terms of diversifying. You are very much a luxury brand. How are you selling this, it how do you grow, how do you diversify . Doing, it is important to keep that because we like to have the experience in the shops, the Fitting Service and when you go and it lingerie. T about everything is individually fitted. It is a fusion range which is not sold in our shops. Is wholesale and retail. Is that a cheaper price point . It is. T is half price it is to get people into the andd, introducing them making them work their way up. It is getting them into the slightly more expensive units you might offer. Grow ina do you want to terms of the economy, are you worried about certain things in the u. K. . Oft would you say in terms emergence and growth, we have consumerand confidence, a very different picture in france. That is true. In france they are over 20 . You have four shops in paris and one and can in cannes. What are you doing differently . , i think in luxury lingerie we are sort of fun our own and in new areas where we go, people have wanted to have us there. And now it is working really well. Canada last week and sales are up 40 in canada. It is getting the message out emma direct marketing and the right product and it is a very passionate brand. Rightyou have the product. Absolutely. Thank you very much. The chief executive of agent provocateur. They provided accessories to marks spencer. More niche area of luxury lingerie. I like the use of the term more interesting styles which seemed to be quite euphemistic. And what will sell in the french economy. It is not everyday that we talk about whips on countdown. Issues thatck to involve everybody. If you fly longhaul to frankfurt youd better listen up. You may have to rethink your travel plans. Islets are resuming industrial action. Pilots are resuming industrial action. Lets talk about lufthansa. This is a different issue to frack air france. In a stew the key issue of the pilots. Theyre concerned about their retirement benefits. What they want is to retire at 55 and still get 60 of their pay until the pension kicks in. That is what is at issue here. Costs. All about labor the Airlines Want to bring down costs and trying to develop avia. S trans trying to bring down costs and be competitive and develop in the face of incredible competition. Out of the middle east. For those of you who are not wellversed in payment, retiring at 55 and getting 60 of your pension and your salary until your pension kicks in, is that good, is that normal . The pilots have done very well. British airways, when he dealt toh the disputes, he managed resolve disputes and deal with some strikes. Analysts estimated that the cost at ba is lower. These pilots are the more comfortable than an easyjet pilot. And more unionized. The Lowcost Airlines are not so unionized. What does travel look like for anyone who has done lufthansa and wondering if their flight will take off . Aret looks like 35 flights canceled. These are destinations like mumbai. 30 fights will be operating if you want to fly. Check the website if you are flying today. It is a nice problem to have. It is hard to land the helicopter. Look at the Companies Looking to make it easier to get billionaires on deck. Welcome back. Todays [inaudible] is the s p 500. Why i have chosen that year is through today, the last day of 2014, thequarter of s p has risen for seven straight quarters which is as it so happens its longest Inning Stretch since 1998. This quarters gain is 9 . The weakest quarterly performance within that seven quarter winning streak since the start of last year. Since the start of that winning streak. The s p has risen by 39 . Allas outperformed the msci country world index which is up by 23 . That index is down this quarter for the first time in over a year. 500 isative for the s p this. One point away from its 50 day moving average. Down 1. 2 in september. The worst month for 14 months. The vix index, the fear index using options to protect against , it rose 32 this month. The most in 14 months. And this index is trading on 16. 5 times estimated earnings. Near a foreign a half year high. There are positives. This index has not had a fourday losing streak this year. It has not fallen more than 10 in three years. Its septemberow 18 record. The seven982014, quarter winning streak is the since 1998. We know need a jingle. Tomorrow special. Tune in tomorrow. And lets turn our attention to the monaco yacht show. Growing business but you need to right helicopter and the right yacht. It takes a lot of nerve to learn to helicopter on a yacht. Roughally when the sea is and the boat is moving. When youre landing at c versus at an airport or on a building, your references are all moving. You are still in a helicopter. The blades are turning and everything is running. What you are at sea so you feel all the motions of the sea once youre on the deck. Companies have been competing for the growing and lucrative yacht owners market. Within the community of the twin engined helicopters we old, around 50 were sold for yachting integration. As the size of yachts grow so too does the business. Shrouded tail element. It is important for landing. Also the weight of it is important. These cost around 7 million. With a pilot. It definitely has some benefits. You realize how much selectivity it gives you. To have yacht is a good thing. It takes if you have a helicopter they can take you 10 or 15 minutes to get back to the shore. If all of this appeals remember, you will need a big yacht, 60 meters if you want a [inaudible] you have to have a big yacht helicopter on the back. You do. [laughter] what more can i add to that . To your left is a yacht man. Shot. Dont have a live 8. Minutes to moderately pointing higher this morning. Higher than a little bit by a little bit. Analyst after the break. Stay with us on countdown. Welcome back. It is 7 53 a. M. I head of the start of european trading. Lets start with the markets. It has been a quarter of declines. The Global Equities what is going on . Is afterou are seeing so many quarters of rises investors are starting to think about longterm growth trajectories not only in developed markets but also in emerging markets. Maybe it is time to take some money off the table. We kicked off. E dollars. Re long it would show a Strong Economy and shows that things are often where a march america goes the rest of us will follow. Consensus isal even though things are not racing ahead, they are ticking along nicely. Who gets to the rate hikes first, the rate the u. S. Or the u. K. . It will be the u. S. Because of the political risks that next years election could ring. This economy has been [indiscernible] , there is uncertainty about the referendum. With respect to next years outcome for the general election. What does that mean for constitutional reform in the u. K. Particularly as it evolved involved englands mps. If youre looking at potential rate rise, the u. S. Just shades it. We have made great hay. You have seen money fronted first. [indiscernible] at longe are looking dollars, short euros, short again. How low can the euro go . It is crowded trade. Are weeks meeting, evil expecting too much. I do not think we will see qe. We will have to leave it there. Us. T to have you with five minutes until the top of the hour. You can join our conversation on twitter. On the move is next. Welcome to on the move. I am jonathan ferro. We are moments away from the start of trading. Futures inching a little higher. The fifth day of prodemocracy demonstrations and hong kong. Disappointing manufacturing data out of china and losses. The benchmark index has dropped to a threemonth low. As for scotland, that is yesterdays news. The people of catalonia want their day. They are blocking a vote. What did the uncertainty means for spanish assets. It is ecb week. Todays a big day for your row data. Justtion is set to stay at 0. 3 percent. Can the ecb do more to support the economy or is it finally government, the likes of france and italy to follow up on reform and they promised . What does it mean for the future . We could have a very busy day and one man will bring you all of the details. Manus at the touchscreen. If you look at global stocks, 20 trillion worth. As far as equities on a global performance, the Third Quarter has been the first drop in over a year. Equities are opening higher. The Asian Pacific and dekes, the biggest monthly drop in almost 2 years. Sovereign bonds are picking beating corporate