Transcripts For BLOOMBERG Countdown 20141120

Welcome to countdown. Im mark barton. Im anna edwards. Im manus cranny. Caroline is here. It has been four years. Proposinghey will be . 11 on the euro. 210 euros is the net income. There was a loss previously to that. 127 . That is a beat on analysts estimates. Were seeing the Industrial Solutions picking up in terms of growth. Looks like the only real area of loss is the u. S. Unit. It has been a thorn in their side. Sell. Ave managed to also outlining savings targets. Had been 2. 3 billion euros. They are upping it. Lifts. Ture of this Companies History was all about getting steel out of the ground and back in the rural region. 20 of the revenue is what is dedicated to this area. They are ever supplying. Thehas been trying to turn company around. Theyre trying to get rid of their brazilian units. Trying to exit stainless steal as a. It is as well. It is slimming down. There is much higher margins that are far more profitable. Overall, i think you are right. The future is everyone is looking for growth. Distribution, the rest of europe is 21 . Where will it go . They have been expanding generally across the board. Interesting fact is where they will not eat going in terms of corporate culture. This is a company time to change from the inside out. They are also suffering from what the ceo called an old boys network. Your blind loyalty. Half the companys board had a state antitrust fines. He has had to get rid of the excess. Hunting lodges to shoot deer. The government of the corporate jet. The lavish executive suite and expensive furniture. The elevated the royal that role of Compliance Officer to get to the grips of this. It is not all hard times. It does not all hard times. It is a company trying to refocus. America is where the losses were. They give. Thank you. Be sure to stay with us. A contract has been extended. Policymakersserve are on guard for science that investors and the public are losing confidence in their. Bility to keep prices stable that is according to the minutes from the feds october meeting. Peter cook has more. No major bombshells, but we get more insight into the to bed whicho the bait debate includes weakness abroad and the risk of falling inflation. They decided the economy Strong Enough to end their buying program, but maintain insurance with rates remaining low within a considerable period. In the end, all that one member agreed became eddie she reiterated commit or eight reiterate maintain the true target range for the considerable time following the end of the Asset Purchase Program in october. When the birth that the committee should strengthen to underscore the committees commitment to its 2 inflation objective appeared there was a lone dissenter at the meeting. Most expect it to move back toward the 2 target rate over time. Hey did have worries the committee should remain inentive to a downward shift expectations. Some noted if such a outcome occurred, it would be were some. Also were some is not to let it and weakness volatility and weakness overseas. If situations to terry did further, it might be slower than currently expected. Many saw the effects of recent developments as likely to be quite limited. They skipped any reference to problems overseas and the recent market swings. One thing they agreed upon was communication policy will be a challenge. Peter cook, bloomberg, washington. That was peter cook on the fed. I dont know. I was reading the notes on the way. They are worried about inflation and growth. At the same time, they are talking about communicating more. It is almost equally balanced. Yeah. Fast willised, how they rise . They dont lamarcus to think they will rise to quickly. You dont want to telegraph too much. That happened in 2004. Yes. Dont want to go down that road again. It is one thing to give Forward Guidance. It needs to be a willingness to give over to guidance. You marry those two lets talk about china. Is flatliningy with the release of data in manufacturing. Lets turn to yvonne here at what clues do we get from the latest release out of china . Morning. The factory sector is stumbling to a halt. Number postedtest today. A sixmonth low. There is continuing pressure. 50. Ell at basically means the Manufacturing Sector is on the line between improving and deteriorating conditions there. It slightly missed expectations from economists were hoping for a fit he to reading. That 50 number a sharp drop from what we saw last month and in october. More or less back to levels we saw in april. That was before the many targeted stimulus plan to stabilize the economy. Rain culprits main culprits. 67 out of 70 cities posted a drop in new home prices. Employment also fell at a declining rate. It is a worrying sign. We are hearing from analysts that they are calling for a rate cut to stop this downward spiral of Economic Growth. Yes. You mentioned the target. Some are talking about whether we will see further stimulus to try to invigorate the economy. It wasnt all bad. Any signs of growth coming through . Dig deeper, there are some positive signs. Property prices may be down, but weekly sales data shows volumes. Ere consistently higher that started in late september there. Orders sought the new accelerated and exports expanded. A Slower Growth than what we saw. Ere in october the government seems to be ok with the Slower Growth. That is instead of the panic response from rate cuts that could deepen that debt issue that we see in china. Us. Hank you for joining let us know what you think of the show. Tell us the stories you want to hear more about. I felt bad. Cant sleep. P [laughter] no shame on you. All you. [laughter] im enjoying myself. Coming up, our next guest says china needs an overhaul. What can they do to get back on the growth track . Gaugechina, manufacturing fell to a sixmonth low. It is heading for the slowest growth in two decades. Lets bring in our guest. China direct their in the u k and author of will tenet dominate the 21st century . Before i ask you that exact question, lets get on to that data. The data suggest the economy is slowing further in the fourth quarter. Yes. It will probably go on slowing. That is what the leadership in china wants. Can they manage the decline in growth . It is Pretty Healthy by global terms. Can they manage that or will falling too fast . Any questions to slow growth . Are people who have a vested interest in continuing highgrowth. That is what why they have a Anticorruption Campaign. That comes into play. He is using the Anticorruption Campaign to get people in line. What is interesting is in the last week or so, we had from official forces that the Anticorruption Campaign is not being used against other allocations. It is starting to be used in state owned enterprises. That is the aim of getting those eight, bloated into prices into better, more efficient the apec summit, president obama, and on the world stage, when you say beijing doesnt want to dominate, that it wants respect . It wants equality with the United States. He doesnt have to worry about elections or congress. He has got complete control of the communist party. He wants to make china a kind of equal number one with the United States. I dont think that china wants to dominate in the world. Can it win over the world . Probably not. Frankly if you go to china and i travel around a lot, there is former western influence in chinese cities in the boondocks and inland then chinese influence in the west. We earn a multicultural world you know one power can dominate no where aware no one power can dominate everything. The quality of the signonment we saw china along with the u. S. A deal on carbon emissions. Is that significant . There has been an increasing focus on the environment. What china signed up to was already in its plan. Is the sourceng of a lot of dilution at the moment. It announced they will solve the environment problem by moving industry abroad. They will move steel, cement, and other any fracturing that inses dilution pollution china. It is extorting about pollution which tenet would say the west imported into china over the last 30 years. It takes on one hand and give if on the other giveth on the other. Isbaba, Tencent Technology and be there powerful weapon . Want to bewhat they certainly, the leading edge if you like. The problem with china is they dont innovate very much. Theyre good at taking others investigation innovations and applying it to the chinse market chinese market. Export that or do you need homegrown innovation . It is causing problems. The first annual drop since november 2012. How close are we to a bottom . Think will reach the bottom probably the end of the First Quarter of next year. This is what they wanted. Property prices have gone far too high. There was a bubble in property. They are bringing it down little by little. Some will pay you to buy property or will give up the tax for it. They want to put a bottom under it. The problem is that is where the middle class money has gone. They put money into real estate, into property. Very quickly, will china dominate the 21st century . I can answer that in two consecutive letters no. Thank you for joining us. Fenby. N coming up, one of the stars of the show. Why this relic from the 50s is turning heads. Welcome back. What is your idea of a classic car . Stars of thef the classic car show in london. Take a look. Judge for yourself. Motor show. Ic opulence and refinement of an era when ordering was all about style and expressions of individuality. The a little surprised to see an unlikely start hugging the headlights. Was home to patients, this 1953 morris minor van is believed to be the second oldest surviving one in the world. Her own had to think long and hard about which road to go down. Restoration or preservation . Once restored, you cannot go back. It is originally how it was found. , youyou do something to it have got the responsibility that comes after. It is restoration he chooses, he is in good company. Cars do not look this good without a healthy application of elbow grease and tlc. Cars. Of them are driven theyre not just put in the garage. Of course, you cannot have a classic car show without the company of film legends. And silver ladies. 800,000 members would think twice before being seen in an old morris then. Van. It is a ride behind the silver lady. It makes me feel rather grand at times. Grand even if your motor is an old banger. Company news. Alibaba will sell Corporate Bonds according to people familiar with the matter. Alibaba will use the proceeds to refinance its credit facilities. The bonds will be rated a at standard poors. Thegetting more cash over next five years according to its finance chief. Arm profits set to grow faster than rivals. The company wont sit on the extra income. It will return it to shareholders through increased dividends and buybacks. We will take a look at how oil is changing the geopolitical landscape. Welcome back to countdown. Im manus cranny. The dollar index is rising. The focus is what and how to guide the market after we begin to raise rates. The dominant theme in 2015 is dollar strength. That is theres strongest conviction. On the parity on that euro dollar by the end of 2016. The euro yen, 130 on the way 140. Owed by 2014 seeing is a bit of a turnaround. Oil was declining. Almost in lockstep, but that has changed. Theres a big consensus view. We have seen the drop in the crone and theres a 15 low for it. It will rises say by tuneup percent in the First Quarter. Lets have a look. Significant call for 4. 5 move 814. Er going to the hope of the day is gdp in norway. Barack obama is the parent to outline his plan to reprieve up to 5 million undocumented immigrants from duplication. President obama will deliver a tv address on thursday evening here in the u. S. Will grant temporary visas to undocumented immigrants whose children were born in the u. S. That is according to people familiar with the proposal. The minutes from the latest fed meeting reveals concerns on what the fed is sure to be communicated to the public. The minutes said that both communication of post policy would pose challenges. Citigroups global head of environments has been found dead in his apartment. His found in his bathtub with a neck wound. A doorman found him after his partners said he was unable to reach him. In the u. K. , voters go to the hole in the parliamentary by election. Expected early on friday morning. Strengthening some government and weakening others. Here is Ryan Chilcote. Who were the winners and losers . We got a poll. They said the u. S. Emerges as a big winner. That is just because of the oil and consumers. Crude production in the u. S. Is one of the reasons why we have these lower prices. It has contributed to energy security. The biggest loser would be a russia. They need a Higher Oil Price than it is getting right now for its budget to break even. That is a big problem there. Of how thethings landscape is shifting 25 years ago when you have low oil prices at the end of the 80s, i a contendingit was factor to the collapse of the soviet union. Iran. Not just russia, but venezuela is in big trouble. On the beneficiary side, norman people talk about oil prices they talk about the shift of wealth from the oilproducing companies as the price of oil falls. The United States is the worlds oil is aonsumer of beneficiary in that sense and also china but reports 60 of its crude. The should be big beneficiaries. Why havent we seen evidence of that in terms of growth . Story, they talk about how it has geopolitical effects. The u. S. To take a tougher stance on iran. ,peaking of the middle east opecber is when we get an meeting. Any clues . There a few clues. Has been very quiet. I think the expectation is we may not get a cut. Cutting prices instead of increasing prices. There seems to be a turf war going on. If were going to cut, you have to cut with us. Opec weutside of will have to see. Were hearing about the need to stick to their quotas. They do not actually need a production cut. Aey wanted to cut up to certain number of barrels a day, they could follow their own rules. That is something that will be factored into the saudis thinking. Going. Knows where oil is that doesnt mean it is going to go at 60. Does it mean it will stick at 80. There are a lot of analysts who say you need a black swan or a change in the demand picture. No one sees demand picking up that much in the near future. You could to a big shift in the oil price or the opec cut. Maybe early days. They are very conservative. The could always do what they want outside the meetings. It may be they do not do that much and that my encourage the price to go lower. I will be in vienna during then and probably after then and stay there forever. [laughter] the mobile startup uber is facing criticism about comments made by executives regarding the treatment of journalists. Is the time for them to bring in seasoned executives to steer them through rick next beat . Had a blue bumps in the past 10 days. They have certainly had some bumps in the past few days. Certainly. It was suggested that michael said we might spend millions of dollars looking into journalists personal lives. One woman has written critical articles. He said this was born out of frustration of an informal debate over what i feel is sensationalistic media coverage. We spoke to sarah lacy in san francisco. She thinks some of this criticism might are make her look at rivals. Ubere past, people is different because it is the real world here youre getting into peoples cars. Nothing changes Consumers Behavior . There are other alternatives. There was another incident saying, ah, you were here. I was tracking you. I guess he wanted to show off the amazing nature of ubers technology, but it came off as crazy. Asreferred to uber [indiscernible] saying it helps him the girls. This is a multimillion dollar evaluation company. They have come back and said look, the comments have been terrible and the do not represent the company. We have investors comes out and say these guys are working around the clock. They are not sleeping. This is probably why they are making mistake. Is it the moment to bring in an air schmidt like character . Character . Midth like is it all too much . Do end up not really getting your fax in place . Plouffe is on board. The waiver criticism seems to be building. Resales out this morning. What will it take to win this Christmas Season . Stick around for after the break. Time for todays company news. The Los Angeles Auto Show brings many influential car makers. Bloomberg about his company having a new chinese market. Chinese market has been growing very rapidly. It is now our biggest market this year. It is good for the company. It is good also for the u. S. Having a strong foothold in china. And speaking to bloomberg alitalia. The chief executive says nothing stands in the way of the Company Becoming a worldclass airline. It is clear were working to expand our ability to connect intercontinental pounds to wns. It is the most important area of our new business land as well as from improving from three stars to five stars. Steve wozniak told us what he thought the company would be helping out. Change comes quickly in this enterprise. Trying to plan for the change is difficult. That is where primary data will be helping apple in the future. Will get a picture of how the u. K. Streets are performing. Retailers have turned their attention to christmas. What will it take to tempt shoppers . Lets hear from the customer intelligence agency. Of the us now is the ceo agency. As we look at the rise of discounters and the traditional process writing with these where are we on the subject of loyalty . Data tell us about loyalty . Is there such a thing anymore . Work werinciple of the have done is to try and understand customers better than anyone else. It is a journey that never ends. When to start understanding them , their become more channels. We dont just like luxury things anymore. We like some that i really great value that are really great value. We get more complicated. Understanding what customers want becomes ever more difficult. Adverts are the frames for everyone. Ive got a couple of different brands. A big retailer card. It is airline card i most loyal to. A real proposition to stay with them as an airline. The other one. I dont know what im getting. What is it that draws us to these Loyalty Cards . I think the point is it is not us on the whole who are loyal to companies. We have very few things that we absolutely love and mostly it is things other than brands. Were not really passionate about most brand. What beloved is our music. They will be devastated. [laughter] there were a few things that we like, but we love other things much more than brands on the whole. We can measure that. Liken see that you might cycling or movies more than anything else. It is by factor of about one quart 10. Loyalty is about companies being loyal to its customers and recognizing them and rewarding them. If one piece of collateral in your wallet isnt getting much attention, it is because the company that is trying to communicate with you isnt doing it very well. How much is it affecting various industries. Including arts and sciences. Yeah. I think the arts world is a very interesting one. People are very passionate about the cinema or arts festivals around the country. If we consider it, and there are people who are going to some kind of arts performance over 20 times a year. We can measure that. We can find where those people are. That is high disposable income. Those are people who are really engaged. It is quite revealing about peoples lifestyles. Your business is very much based around technology. Youve met many people without math skills. Get more people involved. How do you get through to those people . The gap that businesses tell us exist in terms of their ability to hire, thousands of too few graduates every year according to some business surveys. How do we close that gap . It is a big challenge. The challenge is young peoples perception of what science means is rather steeped in what it was. To them they are in niche roles. They are stuck in laboratories aware hardhats covered in oil. A lot of the signs of what you do is figuring out where customers are loyal and what fell. It is data skills. Creative. Story data is brilliant. It is about finding the language that people can respond to. There are certain words that are very offputting. We have to find a language that suggests this is a very exciting career and one in which it will fasttrack and reward them very well. Terms of closing those gaps, where does social media play into . This is the thing that fascinates me. The great thing about social media is it is what we choose to do in our spare time. It is very revealing. It gives us a frame of how people are choosing to live their life. Quite an exciting way of getting into what people are listening to or watching. What is the most exciting trend you are seeing . What is the most exciting trend out there . The things that you guys are saying are followed by an awful lot of people. The combination of who people follow in news, politics is a very defining element for community. We can find a community of people who follow you very avidly and we also can find the people that not only follow you, but who are amplifying everything that you are saying. It is absolutely fascinating. We could talk about this for hours, but thank you for joining us. Coming up, do you think your profession might make you dishonest . Stay with us. Just over an hour ago. Welcome back. This is countdown. Monetize caught my eye. Bloomberg has also as well. A fascinating study. They recruited bankers to try to work out where thanking the tracks dishonest people. There is something about the weight that banks operate professional norms within the banking sectors that made these bankers in this particular test or dishonest after youve reminded them about the jobs that they do, which i thought was a fascinating experiment. It is not just that they are dishonest, it is that you reminded them and they became more dishonest. Fascinating. This has been given a pg rating. Crediting bear pg. Mild sex behavior, references, mild bad linkage. Paddington . It is a love them lovely film. Brilliantly adapted. Charles the first will one day be king some set. Allies of his Royal Highness Prince Charles says when he becomes monarch, he will have heartfelt interventions. He will be shipped the monarchy. He will have opinions and reflect upon two issues. With the queen have status and is it a danger . For nine yearsng in terms of freedom of information. Interesting one. You can join the conversation. Join us on twitter. Obama and the fed focus on the year ahead. The president prepares to n onine his pla immigration to read back in proper germanys biggest steelmaker. Welcome to countdown, i am mark barton. And i am manus cranny. Confidence in their credibility. That is according to minutes from the october meeting of the fed. Peter cook has more. No meter bombshells, but we get more insight into the fed table and the issue janet yellen her colleagues were dealing with. Risk ofluded the falling inflation derivatives that of the economy was Strong Enough to and their bond buying program. They decided to maintain the assurance that rates would can remain low for a time. The one member thought the committee shouldnt stand strengthen the Forward Guidance in order to strengthen the commitment to the 2 inflation objective. There was a loan be center at the meeting. Falling inflation was the topic. Most participants expected it to move back toward the 2 target over time. They did have some words, many participants said they should to ang remain attentive downward shift. Such a noted that if downturn occurred, it would be even more worrisome. Also, weakness overseas. Ifwas observed that conditions deteriorated further, Economic Growth might be slower than expected. Many participants saw the effects of recent developments as likely to be limited. They skip the references to problems overseas and the recent market swings. They agreed on was continuing policy Going Forward would be a challenge communicating policy Going Forward would be a challenge. A littleght there was something in there for everybody. Subbing for the dogs, which was delves something for the dogs, which was clarity. A lot of focus not just on when rates went up. You talk about the mutual rate, giving description around when we might get to there. A long ways from where we are. If the committee starts raising rates in june and follows the path described, it would take 2. 5 years after june to get to 3. 75 . About quite aing mediumterm horizon. Do remember what stood out for me on the 2820 ninth of october when the fed had the meeting . Just after big moves in markets. Decline. Nded a 10 when the fed released the statement that day on the 29th of october, it did not mention Global Economic of elements. It did mention it in the minutes developments. It did mention it in the minutes. This is the important part. They judged the impact on the u. S. Economy is likely to be limited. The u. S. Will continue to steadily grow, despite concerns about europe, japan, japan a china. There was a lot of mention of slowdown in the eurozone from american quite critical as europe. There is a great piece about avoiding the greenspan. Raised rates. What did not happen was rose theyrates gave. The impression that rates would not run away. They would be anchored and rise at a steady pace. The dangers led to you think of Forward Guidance as a new problem, but that is not the case. Talk about the chinese economy a little bit more. Signs that the economy is under pressure. The latest piece of evidence that downward pressures persist in china. Lets get analysis in hong kong. I had a hunch it would be you. What we got from this data and what the expectations are now in terms of what the Chinese Government might do about the slowdown. Good morning. About the david reference. If it is a complement for me. We are touching about the latest morereport, showing pressure. It fell right at 50, which essentially means the Manufacturing Sector in china is on the line between expansion and contraction. Sector essentially stumbling to a halt in november. Less0 number is slightly than what economists were expecting. They were hoping for a 50 point 50. 2 reading. The april levels we saw. Which was before the central the here in china added targeted stimulus. Fell at a faster rate, which is a worrying sign. We keep hearing from analysts to happencuts need to prevent the downward spiral. Yvonne joining us from hong kong. Financialom the conduct authority. They are to be fined 56 million pounds. This goes back to 2012. Their systems broke down, people were not able to with draw money. Leave theird not account. To meet their debits. Did not have adequate systems and controls. Banks qualified for a 30 discount. This is rbs, natwest, and ulster bank. Primary this goes back to 2012. When the systems failed. You can join the conversation on twitter. Let us know what you think. Tell us the stories you want to hear about to read the stories that are interesting. A lot about getting more women into science, technology, engineering, and math. What have you been tweeting today . The Geopolitical Impact of oil. Cover that story. I think it is fascinating in terms of High Oil Prices. Can america can stand up europe stand up to russia . Do not have oil independence. Germanys the guest steel producer returning to profit. We are going to speak to the ceo. Joins us live. Stay tuned. Time for todays company news. Alibaba, the Worlds Largest ecommerce company, has around 20 million 20 billion in orders from u. S. Investors. The bonds will be rated a plus. Investors will be getting more cash over the next five years. Produce more than 95 of smart phones. Are set to go faster than their rivals. The company will not sit on the extra income. It will return it to shareholders through increased to dividends and a buybacks. Renew broadcast recordfor they paid a show premier League Matches in 2012. Has been spoken to bloomberg about a new tie up. It is part of the. 76 euro plan to put them back in the black. The chief executive says nothing stands in the way of his Company Becoming a worldclass airline. It is clear we are working to expand our ability to connect intercontinental towns with italy. Aircraft is the new most important area of the new business plan. From three stars to five stars. Still to come, germanys biggest steel producer returning proof to profit. We speak to the ceo and two minutes time. Heinrich hiesinger. Stay tuned. I am mark barton. Germanys biggest steel maker return to profit. Lets get more from the chief executive, heinrich hiesinger. A good morning to you. As i said, first profit since 2010 on a full your basis. Year basis. Has thyssenkrupp left intensive care . We are proud we have achieved that meissen milestone. Based on that, for the first time, we intend to pay a to ourd two hours shareholder. What is your dividend policy Going Forward . You are paying out 11 euro cents a share. The first dividend since 2011. What is your policy Going Forward . We have not decided on that one. We intend to pay a dividend because we want to give a strong signal that we care about them. To receive money. Secondly, show our confidence that future earnings will come. We are focusing on lifting up our profit level. That is the reason we have ourined we will lift up profit to 1. 5 billion euros. Can you give us an idea about the longterm goal . You said you are hoping to reach at least 2 billion euros in the longer term. Can you tell us how long it will take to reach that target . You know, we dont intend to finalize the precise year. Naturally, the phases are deducted or defined by the market environment. We have a growing uncertainty. We cannot clearly commit a day. It should demonstrate that we outlook thatave an we will surpass 1. 5 billion year. We want to keep a clear signal that we will not rest. Of 2ow well that the level billion euros is what we need on a solid basis to from that point onward, also state a clear dividend policy. It should be a signal to shareholders that we have understood where we need to go. What can you signal to shareholders . Tenure . Second 1 toit time for thyssenkrupp exit steelmaking after 200 years . Is that a possibility during your second term . Know, we said whether the cons all edition or not it will happen, nobody can predict it. For any movement, we need to bang partners. We dont see any substitutions right now. We have to look at your performance. Performance. We can generate cash flow from our steel operations. The team has committed to taking out another 500 million euro. We have created a plan which will work with the portfolio we and to lift profit earnings. We are open to react if opportunities are existing on the market. How much of a Culture Shift toward it be to exit it is no longer the core part of your business, but what has been the core part of your business for over 200 years . That would be a big decision, wouldnt it . First of all, let me come again. That, letstend say, giveaway are still our steel europe business. But if you look at what we did, selling a quarter of our company, it says if we believe it is the right step to be done, we are not limited by our heritage. Can you give us an idea . About how the other disposal, the progressing i am talking about the brazilian steel plant, the stainless steel plant in italy how are those disposals progressing right now . The situation which we have created in our American Steel plant with the sale of alabama and in the pond steel is a ippon steel is a solid basis. We have decided to turn it into the profitable side, and then opportunities will develop. If you look at what happened, the brazilian plant could improve profit by 400 million, it is going in the right direction. Next year, we can come very close to break even on either side. Tot might create the base sell it to read midterm, and statement is clear. We do not want to own this asset. European, we have to keep them for a wild. We have outlined a Restructuring Plan to the italian public and our team. We are in negotiations. It is kind of a public negotiation, part of the italian but we believe we can take out costs of 100 million euro and make it profitable. We have options to do it early or later. We are comparing the value of our own Business Plans with offers which you might get from the market. The decision is not made to is it conceivable you could sell noreen systems, which is producing submarines . You know, there is a lot of discussion right now in the german market. Sooner or later, consolidation might be a positive thing. We do not deny that. Have turnedus, we it to be profitable. We have a backlog that goes to 201820 20. We are not forced to do it. And areit running trying to get more orders. It would be remiss of me to ignore the price of steel and in the interview with you. And even more, the price of iron ore, which has fallen to a fiveyear low. Chinese benchmark is resting at 70. See Group Citigroup says it could fall. How low can the price of iron or go . Not comment on the prices of iron ore. For us, what is important is the spread between the iron price and the market price. The spread is growing and that gives us better earnings. Andspread between iron ore customer prices is too low to earn the cost of capital. That is what we are targeting for. We do not have guidance on iron ore were steel prices. Your contract has been 2000 20. Until congratulations. What are your omissions during your second term ambitions during your second term . First of all, thank you. The level which you have achieved for us is nothing more than a milestone in the transformation of our company. We know the level of income is too low. The next up, we need to achieve a level which is good enough that we on a protectable basis can generate free cash flow. On a growtho back path. To support that, im getting involved heavily in identifying Market Opportunities that drive our innovation pipeline. Thank you very much for joining us. Ofnrich hiesinger, the ceo thyssenkrupp. For the Company Since 2010. First dividend since 2011. I pushed him again about, could you give up steel . It is not off the stale table. He said they would not give away their steel europe unit, but not limited by their heritage. Company. Year old steel to give up the product you started with, that would be a big shift. They could not find a buyer for the america side. Get it back to, break even, and then try to resell it again to read they are in the market to do deals. He said, if we have the cash, we will do businesses. 7 26 in london. All about oil and the political impact that has on the global map. Geopolitics. Ryan chilcote, straight after the break. Welcome back to countdown. You have the dollar rising. Calls for biggest 2015. The dollar will rise to decline. The euro continues to decline. Dollar yen, get ready for joining the policy. Fiction call on the dollar. Conviction call on the dollar. In locksteps almost move. It looks as if that relationship may be changing. What you see over here is the krone having a bit of a fight. Quarter,d of the first it is going to pump a little bit higher. Estimate. E he quite likes euro knocking. 814 by the end of the First Quarter. Ands like this is overdone oversold. According to some of the analysts. These are the top headlines. To rollbama preparing he iss plan to expected to say that the u. S. Will grant temporary visas to undocumented visas immigrants. That is according to people familiar with the proposal. The minutes from the Federal Reserve meeting have revealed concerns on exactly what the fed should be communicating. The meeting discusses whether the central bank needs to clarify its approach. In new york, citigroups head of environment and social risk has been found a dead in his apartment. He was found with a neck wound. Police say there were no weapons or signs of forced entry. A doorman found him after his partner says he was unable to reach him. Going tos have began the polls. The voting began at 7 00 u. K. Time. 13 candidates in the by elections. Results expected early friday morning. The new age of abundant and cheap energy is changing fortunes. More is of Ryan Chilcote to are the winners and losers . Of the big winners is the u. S. That is what allowed it a couple of years ago, when shale production came online, to put the squeeze on iran. Beis allowing the u. S. To tougher on russia. According to the same poll, russia is perhaps the biggest loser. The High Oil Price for revenues. Have the money comes from oil and gas. Many people argue that is a contributing factor. Russia is not the only country on the hot seat. A venezuela and iran. Break even price of not going to get into thousand 14. When people talk about falling oil prices, they talk about the transfer of wealth from the theproducing countries to oil consuming countries. That is another way the u. S. Is a beneficiary. China as well. They imports of the present of their crude. They imports 60 of their crude. Earlyit is fair to say days. It has only been a few days since the prices started to come down. The u. S. Is freer to be more combative or challenging towards russia . This has global ramifications. The policies are murky. On one hand, you have russians saying actually it is the are lowering their prices to collude against the russia. Meanwhile, you have many people in the u. S. And not only in the u. S. That think the saudis are lowering their prices to protect market share in the u. S. Maybe colluding with the russians. People dont know. You go into the meeting. Do not know. They are split about whether there is going to be a cut or not. Road which isrd following their rules. 30 Million Barrels a day . Three options, cut, stick to the rules, or not cut. A two in three chance they will cut their quota or try to appeal to their quota. If the price falls by more than 20 , opec is predisposed to do that. The argument against a quota quote is it is not an option. They need the money. They have to cut not because of opec because but because of problems in their own countries. Thank you. 7 36 in london. At opec next thursday. He will be there prior to thursday. During the conversation join in the conversation if you have anything to say about oil. On twitter with us. There, tweeting heresy. We are going to talk about said and risk opportunities in equities. After the break. Time for today upon todays bar chart. Light of the minutes released from the fed, these were the minutes that talked about many things. It was a meeting that ended the tapering process. They got in january. Many investors forecast that yields and bond markets would rise. I thought, lets look back at 2014 and see if the predictions came true. I have looked at three bank components three components, starting with the Corporate Investment grade bonds. You can see it rising all the way through august 15. That was the alltime high for the global Investment Grade Corporate Bond index. Today, up by 2 . Is 3. 8 trillion. Alltime high. The middle chart, the global chart, is up by 2 . Admittedly, the top chart, the high was on july 9. Since then, the price has been declining. It was august. Bondse year, highyield have been rising. A record low for highyields in july. Up by 2 . The global sovereign graph, the bottom graph, this is the Bloomberg Global developed sovereign bonds. Now actually negative for the year. 1 . Outperformings sovereign bonds. Washigh for the year, that an 18 month high. What is happening . Interest rate expectations have changed since the beginning of the year. Tapering has ended. Evidencedscussion, as by the minutes, the fed are talking about how to Committee Kate once they start to raise rates. How are they going to communicate that . The average gain for bonds of all types is 6. 4 . That is the best year since 2002. It has been an amazing year. Back in january, at the start of the tapering process, investors did not expect prices to head that way. Keep an eye on the global bond of market. There is a man that can pick up on that. He is equity portfolio manager. Listening to mark, a lot of where are we in the hole rates debate . You say, get ready for a sustained time of mediocre returns. Should we leave now, edmund . It is not that bad. I do think when you talk about the bond market, sovereign bonds, you have to put this in context. We have had a 30 year bond bull market. Yields the german 10 year yield what do you get . 0. 8 . Switzerland, 0. 4 . Why would i want to do that . How can you expect yields to go lower in germany when they are so low . Safety, dont expect any return whatsoever. There is a risk at some point in the future that you will be whipsawed by rising yields. You are encouraging investors to buy equities . I think so. If you reduce it down, the Government Bond market, the biggest market in the world, markets yields are low. Cash is even worse. Where does that leave you . We could not about property and commodities, but they are small markets. You are forced back to equities, whether you like it or not, if you are searching for returns. The day that china shows another indication of slowdown. Property prices falling in shanghai. Worryies inown china. You are not worried about shadow banking and the lack of stimulus . These are all well known stories. Im not denying they are true to some extent. I dont deny that. I think the shadow banking story is somewhat overblown. Property prices, yes, they are coming off. Country, they are very specific. It depends what you are talking about, which cities. There ares not still rebalancing and restructuring of the economy under the relatively new premier and government. To read7 is achievable you should not throw the baby out with the bathwater. Shares areo mastech open to foreigners for the first now these domestic shares are open to foreigners for the first time. Stocks, are you concerned about overvalued technology . Im not talking about facebook or twitter or even alibaba, although i think they are great companies. I do not think they are compelling investments. However, technology what about apple . Apple is about 10 times earnings. It is sitting on a mountain of cash. Old Technology Companies have been around for a long time and are sitting on mountains of cash. Evaluations are 10, 11, 12 times. Growth. Sitting on im a believer in the internet of things. It is not just smart phones and tablets, it is going to be more. Are you a believer in energy . Is that a brave call or not . Is maybe a stupid call. It has not worked so far. Is all about timing. The wrong time. Exactly. Theg back, if i look at longterm, yes there is a shortterm supply and demand in balance at the moment. I look long or mediumterm. Energy demand is going to rise. Chinese and indian consumers are going to want more oil. They still do not use very much. Emerging markets will support the price of oil. Stocks are incredibly cheap right now. They are discounting armageddon in the oil market forevermore. He stays with us. More from him when we come back. A live shot of the city of london. Looks like equities giving us a lackluster start. We will discuss that when we come back. Back. Edmonds is here. What is keeping you up at night . Top three worries. The slowdown in emerging markets in general. We have talked about china. I would not talk about india but would talk about countries such. S Eastern Europe and russia the questions over brazil read what is going to change if anything in brazil. Things keep me up at night. When we think about global aggregate demand, a lot of the delta and growth has come from emerging markets. Is somewhere around recession. Europe is doing nothing. Thats the big risk. Does europe keep you up at night . Not anymore. I live in france. You cant get any more depressing. When you have a president with an Approval Rating of 12 , you know the game is up. Give me a prime example, if you live there, of what could be done. If you could say, change this. Liberalization of labor laws. What does that mean . Being able to fire people. If you have a permanent contract, it is a most impossible. Companies do not hire people because they know that. They know if they hire this person today, and there are so someone who about works hard on a temporary contract and then slacks when they get a permanent contract. The government talks about doing reforms. That is the exact point. Is still at, it socialist government. You have to get it past the deputies in the parliament. Its not that easy. Talk to me about the fed. We talked about bond markets. How is the fed going to communicate the next phase . That was part of the discussion within the minutes. How rates that are to rise, are they going to communicate the path . I think would be useful if they were to focus on some of the indicators they use. The problem is that has been a low bit of a moving target. First they said it was the unemployment rate. Thats fine. What exactly should we be looking at . Which indicators are they looking at . Some indicators, like wage growth. There is no way to growth. Where is for inflation . It is going down, not up. The 2 a long way from level they should be aiming for. These lower food and Energy Prices are dragging down inflation and inflation expectations. We are getting further away from the target. I would like to know if janet yellen and her colleagues could tell us exactly how they expect inflation to get back up and over what time. Then we might have an idea about the rates. Is that the key concern . How do you invest in this disinflation aerie, lowinflation environment . With difficulty. I think volatility is on the rise. There are always opportunities to play things like volatility. Long volatility is an expensive business. You are prepared to offer that risk to us. What i do is i wait. In cash and wait for the spike. I know there will be a spike in volatility. People will be uncertain. The macro is a bit of be. Bumpy. When you get the bumps in the road, then i will sell you the protection because then it is in my favor. You like dollars . I like dollars. When i look again, i hate yen. I hate euros. One extreme to rid i think we can go further. I think euro one for the five has further to go because of the atense competitive 125 has long way to go because of the intense competitive pressure. How low can the yen go . Investments is to be longed the nikkei. I think the yen will continue to go down. Thank you. Hing, portfolio manager. Move is next. Welcome to on the move. I am Jonathan Ferro moments away from the start of european trading. Japanese exports surge, overseas shipments rose 9. 6 from one year earlier. Dropped toe currency a fresh sevenyear low this morning. Datase manufacturing disappoints hitting a sixmonth low, another sign the economy is slowing. The central bank may cut Interest Rates and this hour we turn to european manufacturing. A global slowdown, and i bothered the fed is not bothered apparently. On the u. S. Economy they say it would be quite limited. Dax futures where are we . Up eight points. Manus cranny with the opening. Dollaryen. Quite frankly i was more interested in norwegian krone. This is one of the most private trades in the world but lets look at dollaryen. 118. 58. Not being flippant but when there is this huge Momentum Shift one has to question how they deal with the movers. They actually said the eurodollar would