Transcripts For BLOOMBERG Countdown 20141202

Models, designers and powerbrokers turnout for the British Fashion awards. Welcome to countdown. It is 6 00 here in london on Tuesday Morning and a very good morning to you all. The man who could be the chancellor has been drawing up his economic battle lines. The u. K. Opposition finance spokesman told Francine Lacqua a referendum on britains membership of the eu would be a risk and that britain needs to stay in the European Union. That our economy is growing in a strong and Sustainable Way and to do that we need to stay a member of the European Union and europe has to reform. The walk away from the largest Single Market would be a disaster for british jobs and investments but we also have to win the argument of the public in europe and in open Trading Company can deliver for their company budgets. Moment have at the seen that our economy is not working for open people. What are the chances of the u. K. Leaving the eu . It is a real risk, if you have a conservative government in 2015 when there is little or no prospect of reform at a time when the eurozone is in a sluggish state that is a dangerous thing to be doing. Withnt to win the argument the public that being in europe is good for jobs and investment. We need reform to make that happen. That David Cameron proposal has spoken more to his weakness and division than anything to do with the British National interest and i think business and labor here are on the same side saying that would be really dangerous for britains future as an economy what do they say, the guests we have on here seem to say this is a huge risk and why would you put yourself through this . Our partners in europe want to stay and i think they have their own problems to deal with at the moment but they have also shown that they want to find solutions which work for all of europe including britain. They know we and they need reform. And i am hugely frustrated because it always looks to our European Partners that the current government is making only shortterm reddish politics and when David Cameron stormed out at the stability tax summit a couple years ago he did to the net Margaret Thatcher, tony blair and john major had never done, to walk away. That blackmail politics is not something we want to be part of, we need to reset our relationship and show we can be a firm partner and a good partner. We will say no when we need to and put our interests first but in a constructive way. Way that one would argue to keep the u. K. Within it to grow. R when will that happen . Not as fast as any of us once. We have moved from the crisis plays to a long and drawn out chronic phase. The man that ed bowles once wants toe ed balls replace is who he will be speaking to tomorrow. Corporation tax could be divulged to Northern Island according to the financial times. Such a move would be politically significant and hand the province a chance to compete with low business sectors in the republic of ireland. s rocky ride and we are seen another slide in the past toy four hours. Comfort fortle russia from the head of the International Monetary fund. She says the drop in oil prices will provide a net used to the Global Economy while posing risks for Energy Producing nations including russia and that it it is the latest sign that the economic ties are beginning to fray and moscow has scrapped a National Gas Pipeline project. The 45 billion project has been dropped with russia opting to ship more fuel to turkey instead. Bitging directions a little weve heard some of the preelection positioning from the u. K. This morning lets move on to the election on the way in japan. Abe launched his campaign for Prime Minister with a focus on the economy. He is been on the streets of tokyo and japan goes to the polls december 14 despite the fact that japanese economy is in recession. The ratings has cut the companys Credit Rating and obvious has said his economic wallace sees are on the right path. The labor market is improving and wages are rising. This is our chance to rid japan of deflation and im convinced that the path we are on is the right one and im determined to move ahead at full speed. Is a big deal that has broken overnight blackstone has agreed to sell its u. S. Unit in Core Properties to the wealth fund for a . 1 billion. They own and operate a portfolio of Industrial Properties throughout the united states. Night the stars in fashion turned out on the red carpet in london. There in the red carpet she joins us now with all of the details. No bags under the eyes . A little, we were there till late i was pretty starstruck at times. Not only the loads of fashion talent we have that the amount of celebrities we managed to woo over. There was the great and the good. The british power couple that are Victoria Beckham and david beckham. I think this teaming of celebrity with fashion is a way that people are trying to show off their ran at the moment but i asked each and everyone of them what does reddish style mean to you and one of the key greats has come forward with rita orin, lets have a listen. Where do we start . I love this. That is still here today and the people are here as well. [inaudible] absolutely maybe more impressive. British style is really influencing all. Music think whats amazing is how close with come together this morning and working together. Very close. Theres never been an experience with Amazing Things to do. Sure what shete was saying about it being so free to have a tom for dress because for everyone else it is not free but an interesting conversation going on. You call her the queen of the u. K. Fashion pack . Victoria beckham was there. She does an iconic brand. And against many naysayers, many thought she could not do fashion but she proved all of them wrong and she was incredibly humble, she won rand of the year and was incrediblys excited excited. Cute future is to try to incentive i incentivize those who are young. And because what you just said mark 26 billion pounds of value to the u. K. And in fact for a 6 billion pounds worth what you include the supply chain and all the money splurged on the stresses so Victoria Beckham was pretty excited about this. We should be supporting young talent and encouraging young people to fulfill their dreams if they have a passion and focus and do it and i think giving that support is very important and i love to go to universities and talk to the students and say if i can do this you can do this. Jobs is who0,000 the fashion industry supports the United Kingdom see have to keep going out to all those potential people and universities for studying at the moment. Obviously womens fashion is the dominant theme but men still has a big areas of growth, it is not just about commercial there are loads of british designers. People like you can go out and support. But youre right jw addison is one of the new kids on the block and he had the first year designed for men and one best new designer of the year but whenever you dig into the fashion designers like burberry , menswear is where it is at particularly in china and i have to say my moment of absolute joy was when i saw tony pepper and i asked him about british style and he was rocking it and this is what he had to say. Feel wereng i definitely in my opinion we seen victoria style and [inaudible] still my beating heart. The dribble coming out of her mouth bloomberg. Com dribble coming out of her mouth. Away is there shouting think i could do this paparazzi thing. You have a whole next career ahead of you. If you want to know what Caroline Hyde had to say at the red carpet join us on twitter. You can join the rest of us on twitter. mannuscranny. annaedwards. A blow the day before campaigning begins and what is japans downgrade mean for the worlds Third Economy as well as are nextprospects guest from the bank of tokyo is in the building. Time for todays company news. That led to the 787 dream meyer last year was caused by inadequate design and testing. That is the verdict of the International Transportation and safety board. Boeing said the overheating and one cell of the battery could not spread to others and in the thert the ntsb blamed kumbaya for not anticipating the ways it might fail. Company gaveiggest most of it back by the end of trading but the slump rippled through the tech stocks in the retreat comes a week after the market value goes against above 700 billion. Apples share of the pie more than doubled in the past three years. Lewis will take direct responsibility for the u. K. Business. Tesco trying to recover from a fallout on its overstated earnings estimate after which the chairman said he would step down. The accounting problem that took probe of the company by the u. K. Series. Internationalain raised its Company Hours before the deadline. International races club med bid. The offer stands at 23. 5 euros per share and fosun is a planning to expand club meds reach into china. Japans Prime Minister abe has begun his campaign for reelection. With the country in recession the economy is in the Center Ground of the political battle. So how many seats does he need to win to stay in power. Abe said last month he would step down if they failed to win a simple majority of 238 states and the ldp and its partner agreed target of 270 seats which would provide a full safety margin over the absolute stable majority of 266. A would need a super majority of three heads of 317 to override the upper house. Derek a very good morning to you. Simple majority 238, stable majority 266. To be the target is there a risk he will not reach the seats . There is a small risk, i think the hurdle has been set pretty low so it would be a disastrous result if he did not reach that. He will definitely lose seats but the hurdle should be achievable. We see downgrades to japans debt. Are these ahead of the stories are reflecting what we are ready no know. I think reflecting what we already know. Deficit have by 2015 and then to surface by 2020. And where we stand today youre talking about concerns of achieving those targets so i think it is more a reflection it does not really change the dynamic in terms of the demand for jgbs foreign investor flow to japan with sin seen 6. 5 trillion over the last four months and the largest foreign investor purchase of medium term jgb debt is 2004 and it is a story really of global yields falling and making jgb yields relatively attractive. Just this morning we saw the note yield down to a record low. Jgbs, the 10 year bond spread is at its lowest level since 1980 so i am sure that dynamic in terms of the policies of the other Global Center banks is drawing criticism. Liquidity. Part of your notes say any dip or drop in dollaryen has been a fairly capital movements of the ucs and opportunity to buy. With those moves into jgb assets, how does that square for the currency . First of all in terms of the flows that are going into japan and giving the outlook on Monetary Policy a lot of the foreign investor inflows are being hedged by a very large degree perhaps, obviously for an Equity Investor if you look at inflowbased or on hedged into japan you would have made nothing through most of the. After the initial rally. You really need that hedged to make a return. The story is about what happens from japan into Global Markets. Flowu mentioned the gpi f is some thing that will become more important to the bankers are probably already underway. This is the big shift in foreign bonds and foreign stocks and reweighting. Just getting to the new target levels. There is about 15 trillion in the end of outflows that are ahead of us and there is our event evidence of foreign equity but there isestors more to follow. The real question is, not the gpif to a degree but whether the Retail Sector buys into this. For 15 had deflation years in japan, that will not change overnight. If that mindset duster to change we will see the Retail Sector gpif and going to foreign markets and thats where well see a potential for we will see the biggest decline on the closing basis since 2009 yesterday, derek will talk about the ruble. Derek calpine the european head of Global Market research. You are welcome back to countdown. Derek calpine ahead of Global Markets research, i will not do what mark did with george yesterday. We will start with russia. Belt,the top of the news the ruble dropped by over 9 yesterday. The lowest level since 1919 . I think it was the biggest oneday drop since 1919 but the close was the biggest oneday move. Where do they intervene because it is an free float . 5052, there is talk that could be the new equilibrium level based on the oil prices at the moment. Dynamic started where you saw crude stabilize, like yesterday but dollar ruble theinually to march higher vast dynamic would continue for a couple of days. And ite in a free float is an oil dominated economy so when oil is falling to the floor there is not a lot they can do about it. In that sense intervention is foolish and that is the most important policy shift which makes an awful lot of sense to be blowing away your reserves like they did after the collapse but still seeing the ruble fall sharply. That was a mistake and they have stepped away from that. Good to get your thoughts. The european head of Global Markets research at the bank of tokyo mitsubishi. Chancellor is set to speak on her latest Energy Policy plans. Welcome back to countdown. Lets to the foreignexchange markets as we run toward that take number. This is the bloomberg dollar index over the past week and i can tell you on the day basis it is trading high, we are on form probably one of the strongest years since 2008 in the reason i show you the fiveday chart is because after payroll numbers the dollar has taken a breather and is actually come back. We will have ubs with their look ahead. Blackrock staying strong against the yen in 2015 and we had a conversation with mitsubishi u. S. J with Derek Calpine he Oil Continues under pressure. The was a bit of a reprieve yesterday for the ruble and last week we are down on the ruble, the worst in the emerging market space. Possibility that dollarruble continues lower. Ruble down by another 10 in economistsirst, 23 have assigned that positive and oil at 70 bucks gives you a 1. 05. D dollar. 05 have a spike might that intervenes. These are the Bloomberg Top headlines. The u. K. Shadow chancellor says the written should stay in the European Union and a referendum would present a risk. Speaking to Francine Lacqua ed balls said it would be key to the labour party if he were elected next may. We need big investment in our country if you ticket twentyyear view where ive it investment is needed in our economy it will be in the Energy Sector and we change the way that energy works and with Nuclear Power running down i want that investment to work in a way that gives us a lead in terms of technology for the future. Is no doubt that we performed the market to make it butmpetitive but hit it has not yet started working well. We will sort it out but i want britain to be a leader in alternative energy. European banks may be facing a black hole blackhole. They say the europe slate is the stress test for flaws and lenders including Deutsche Bank and it may not be sufficient. Hedge funds are shutting at the fastest pace since the financial crisis because of financial performance. Plug onk it hold the the commodity sums. The hedge fund on average has returned just two cents this year that is their worst performance 2011. The India Central Bank has left Interest Rates unchanged in the fight against inflation. They pushed the policymakers to Lower Borrowing costs. It was the same story in australia at a record low to an half percent and stevens says the most prudent course is likely to be a. Of stability. Period of stability. She will lay out her strategy today in berlin. Our International Correspondent hans nichols is there, what is merkels goals . Its pretty clear, Angela Merkel wants to bring the energy to the autobahn. She wants to potentially introduce a 50 tax rebate for the purchase of electric cars by companies. You look at many fleets in germany and some years it has been almost a third of german so itales. By companies is an ambitious goal and lets take a look. 6 million electric cars on the road by 2020, 10 million carbon cuts in the transport sector in here is the irony. Germany has a ways to go, they have not embrace the purchasing of electric or hybrid or plugin automobiles. France is up there at 14000 and the netherlands up there, 19,000 vehicles. Norway has the highest per capita and germany one of the lowest. What were seeing among the industry here in germany all the Auto Companies are investing heavily in the electrical vehicle segment and there is a that oneer the weekend company was considering a 12 million to 14 million investment. I believe they will be up there in london, i pulled up my last drive and this is a weight you can get a bmw because they will be introducing electrical vehicles for the three series, the x five. I had it for 49 minutes and i will show it here but i do want to take the credit card out, 49 minutes and it can to a grand total of 16 euros. The problem for anna if she rents one, i dont know if they have automatics. At this point anna gets the boast and brag about her driving ability. Suggesting that i can drive . This is a very thin line of inquiry. There is no note of doubt in my voice. Im not bad at driving stick shift or automatic. Any reports of me having damaged any wing mirrors are entirely overstated. Mark could not make use of this service from bmw thank you hans. Joining the conversation on twitter, whether you think any , that touchyve subject of ladies in cars. Never go there. Mark barton came in and the art chart ranked and stay tuned for that. annaedwardsnews, is she a good driver . No but he is qualified to answer this question nobody is qualified to answer this question. We caught up with victorias secret angels ahead of their multimillion dollar london debut after the break. Welcome back. I am mark barton. I am definitely manus cranny. Lufthansens a says it expects a pilot strike. Travel on long flights from germany and they will not be affected for the 36 hour walkout which ends today at midnight on german time. It is the latest industrial action over pilot retirement benefits. Russia was asked to retract a statement about nondairy Companies Using nondairy fats. They said the use of plant oils instead of raw milk is hurting local russian farmers and they and the allegations that saying it is deeply insulted by the minister comments. Raised its International Takeover bid for club med. Outre trying to edge global resorts by . 50. The offer stands it 23. 5 euros per share in their pledging to ask banded club med to china were trouble is growing. It is a big week in fashion but also for london. The hottest ticket in town was last night at the annual victorias secret fashion show. Catwalke first time the extravaganza has come to london and bloomberg caught up with the angels and found that what it takes to walk the runway. We have been very lucky to have a chance and i think that is the biggest thing, luck. We have to work a lot on the way that we look but we have to be healthy all year long so if you months before the show i start pumping up my work out and watching what im eating. Careerwise it really opens the door for many different jobs. Youll be on the streets around the world and everybody recognizes you. Whole lot of confidence and a good sense of health and being able to take care of yourself and be strong. [inaudible] say pretty hot ticket they after you get into that but a little bit more about what it takes to make it in the fashion industry. Our next guest does a thing or two about holding a brand. The founder and director of her clothing line. You entrust really a came back and sold into the markets and you get the call from top shop and the rest was a trajectory that most Young Designers can only dream of. It was fantastic, good to start in the market. I got great feedback and it was more of an act organic growth from there. I went around to the beauty being sold their first and that prepared me for someone like top shop. What sets apart those Young Designers who make it from those that do not. Is it hard work or who you know . Creativity or all of those . It is probably all of those things, i think you have to really have a strong brand identity and you have to know who your customer is and really what youre collections are about and what you want to say. It is a lot of hard work it sounds like graft from brick lane selling stores. Making all the close myself. It was nice to move into a factory and not have to do that. And nothing will pay you but if youre passionate you will do the work. What is your relationship with celebrities . I went your website for the first time, i love the website. Celebrities love one of your pages and now you can steal their style, too. How important is that relationship . For us it is hugely important, when i first started i was with lucky people like Eliza Doolittle who bought my close and that was the first press that i got that as i got bigger i moved to a pr company where they have my collections and then that obviously gets major celebrities and thats how i build the relationship. Doolittle buys your soft tissue let you know what you find out by the press . How does it work . With jesse jet, a slightly more interesting story, the owner of the shop said oh she came in the other day casually and she bought an outfit and wore it for the comedy gala on channel four life. That was amazing. Live. That was amazing. You dont know when there can aware it. You dont know when theyre going to wear it. Making that big decision versus taste in prison or made in britain, a lot of people are in portugal or italy, why british . How important is that . I think it is important for me because i was so young when i started and i wanted to have about everything i was doing and i thought if youre going overseas to china, obviously it is tempting but it is massproducing. I think if youre able to do it in the u. K. You have much more control so i visit my factories in london and i can visit them on a daily basis if i need to. If anything goes wrong with the printing of the fabric it is close by and you can manage the situation instead of having to waste weeks redoing the fabric or something. It is clearly your business and you feel very passionate about what youre doing. When you make this decision to invite other people to put their money into the company do you worry you might lose some control . Gift to find the right person so you know do you have to find the right person so you know will the on the same page . Im grateful for the is this advice ive been given i dont think i would have got to where i was without that kind of advice. I was very young when i started so i have learned so much in the last couple of years especially from investors. How important is your website and social media to bill and marr. Our website we are trying to now instead of having to what to relysales on ourselves for sales so building our website and the social media platform is hugely important. We are spent a lot of time focusing on instagram for example. Is you can buy through instagram you cannot buy directly through instagram with increased our followers through it by 8000. How does it translate, followers as is the great conundrum, success in social media but would you get bang for your buck . When you increase like we have seen to 10,000 instagram what is that mean bottom line . When we post a thing on instagram we instantly make sales on the website. You can see the direct results. Are you making money yet . Yes. . Can you give us an idea . [laughter] i would rather not say. Give us an idea of the sales trajectory. On the website in the last year because were been focusing so heavily on it our sales targets have gone up a lot and when we are really doing what catsuit collections because we want to launch things on a monthly basis we did that last summer with the festival connection we almost tripled our sales the following month because it is an injection of nudists all the time and then bloggers people who have a large following you look at targets like festivals and glastonbury you pick moments in the fashion calendar . Which rang to move away from strictly doing seasonal collections now. For sixdrop every month weeks he can really respond. How much does a cost . 45 pounds originally. Any discount . [laughter] i dont think they will suit you mark. Something for christmas. Up, finland and russia are said to work on a joint Nuclear Plant project but will there be fusion between the two nations. I prefer silence almost , i do like toe hear music when i have not elected to hear music. I dont necessarily like cusick when i go shopping. I like to elect the kind of physicality here and then concentrate on it. I also listen to music much differently than other people in that im listening to learn something. Staying incian conversation with betty liu. This is what he had to say about taylor swift putting her music on spotify. s i was interested in taylor stand because i thought it was a brave stand and she brought into public debate. People need to talk about this. What is good for music . Music is important to society and it must not die out because it is a vibrant part of society. You can see the rest of the interview from betty liu at in the loop a bit later today. Lets take a look at what has caught our eye in the newspapers. What is donating things in berlin . This is just a chance for me to try to talk football with mr. Barton. We have your club on the page of purdue much all the papers, dortmund is in last place. There is a little bit of rubbing it in, who knows what is happening with dortmund. I will pass it over to mark who knows if things about daschle knows a thing or two about which teams were glorious. Thing or twoa about which teams were glorious. He is on a roll. Final part of the hobbit the World Premiere last night. Im a massive fan of the lord of the rings films and the previous two hobbit films. I will read you a paragraph. It ends with a 45 minute barack virtuoso thatll seen baroque virtuoso battle scene. Elves and, doors and nnoly lay into each other in the mother of all sword battles. Despite all the sanctions from the eu it seems the two countries will be working on a and finland, 64 of their energy comes from russia. Mine is the banks will be up for pretty big losses giving their loans to the oil and gas industry. Stay with us and join us for the next hour of countdown. We need to stay a member of the European Union and europe has got to reforms at the walk away from the largest Single Market on our doorstep would be a disaster. The man who wants to run britains of economy is the u. K. Must stay in the European Union. Ride whatles rocky is in store for the russian currency after the biggest oneday fall in six years. Economic tiesins with europe are beginning to fray. Andow has scrapped International Pipeline project. And the British Fashion awards. Welcome to countdown. Here in london on britainsrning chancellor has been drawing up battle lines. The shadow chancellor tells Francine Lacqua a referendum on the british membership of the eu would be a risk. Sure that ourmake economy is growing and a strong and stable way and to do that we need to stay a member of the European Union and europe has to reform. To walk away from our largest Single Market would be a disaster for british jobs and investment. We also have to win the argument with the public for being in europe and then open to National Training could also deliver for the Family Budgets and i think too many people at the moment are fearing that the economy is not working. By having a referendum what are the real chances of the u. K. Leaving the eu . It is a real risk and happens to the government in 2015. Committed to a referendum by twice 17 when there is little or no prospect of them getting reform at a time when the u. S. Are still a sluggish state and that is a dangerous thing to do. We want to win the argument with the public that being in europe is good for jobs and investments. We need reforms to make that happen cap performs across a wide range of areas. I think that David Camerons proposal for 2017 referendum speaks more to his weakness and efficient in the conservative with than anything to do the British National interest. I think business and labor are absolutely on the same side. It would be dangerous for the victims future as an economy. Can even . Speaking computers and what they say . The guests we have have you been speaking leaders and what they say . Only have guests on here they say you believe. Want to make sure you would find solutions that will be good for all of britain and we know and they need reform but i am frustrated because it always looks to our you cap partners that the current ernment our new pay partners, the current government out from years ago is a pattern had ever done. Stormed when cameron , he didyears ago something that Margaret Thatcher and tony blair had never done. When will growth happen . I fear not as fast as any of us want. We have moved in the crisis phase to what feels like a long and drawn out chronic. Of slow growth. Balls speaking to Francine Lacqua. Breaking news . Yes, just this morning we are finding out that they are acquiring friends life. They will buy friends life for 5. 6 billion pounds. Aviva and friends life have reached a packed. The friends life shares will get new aviva shares in the proposed purchase values each friends life share. Aviva 15 to the closing price. 340 a premium to that gets you three headed 70 pence. 370 pence. Aviva management saying this deal secure their position as the leading insurance business. Scrambling in orion are they . That was on the Annuity Business and what more changes will he make in the legislation coming up . Will have a conversation shortly with a pensions expert. Back to british politics, the man ed balls wants to replace is a shadow chancellor. Among other measures he could signal the corporation tax, could we give all to Northern Ireland . Such a move would be politically significant and hand a chance to compete with low business in the republic of ireland. Onestory we are tracking is the rubles rocky ride. The biggest oneday fall against the dollar since 2009. Little comfort for russia from the head of the International Monetary fund. The drop in oil prices will would provide a net boost to the Global Economy well opposing risks to the Energy Producing nations including russia. On the latest side of economic tides with the eurozone beginning to fray. Moscow has snapped an International Major pipeline project. It has been dropped with russia opting to ship more fuel to turkey. The ruble is bouncing this at 1 . Is bounced back preconditioning on the u. K. Election. Now lets head to japan where campaignaunched his for reelection. Polls decemberhe 14 despite the fact that the japanese economy is in recession. Abe says his economic policies are on the right path. Improvingor market is , wages are also rising. This is our chance to read japan of deflation. Im convinced the path we are on is the right one. We had some m a news at the top of the hour. Blackstone has agreed to sell its u. S. Unit in Core Properties to singapore for a . 1 billion. They own and operate Industrial Properties threat the u. S. Lets change gears, fashion is a growing industry in the u. K. And the economy and even throw the financial crisis. Since 2009. 22 the British Fashion awards were housed last night in london. Hyde took to the red carpet and joined the designers, the celebrities. Ut glamour of it all you get all the good gigs. I did not strut or work the red carpet i was very much on the end calling out, someone talk to me. They did. You have to hold yourself down not to get us starstruck. There was rihanna and rita or. Top designers working it and the models winning the awards. I managed to thrust business in there as well am a it was not all purely talking about celebrities. I managed to see philip green the owner of top shop and ask him how much are we showing off at the moment . 26 billion pounds worth more than 46 billion pounds in terms of spending. That west goes to show are at the moment at the top of bring newnd we will talent out. [inaudible] base. K. Is an important what is one thing you would want to see businesses to help you keep on growing . [inaudible] it is a work in progress. There will be no free giveaways. I could not quite tease out of him what he wanted. He wants to control the weather. Really extolling the virtues of the British Fashion market. The industry has shown Remarkable Growth as youve been saying even as the rest of the economy has been contracting. What is the effect on building new design . Is,hat is where the focus you have rosie from ellen mark and is about where the next and it isand marr about where the next generation is coming from. And kylie noration less for what she things about the new trend. Yuan to work with people who are at the top of the game. There is always young talent coming up. I love to be connected. Up, news buying designers apparently but it is worth reminding ourselves that even since 2009 we saw an increase in terms of British Fashion and we see a hundred thousand jobs. Jobs. ,000 the tory a beckham won a beckhamard victoria one of brand award won a brand award. I wanted her to summarize in her minds eye what is british style . I do think you can define british style. Risktakingity and and eccentricity. Whats marvelous about it is that you cannot do find it define it. Britishoes keep pushing brand and fashion and to help people and this has all been done by the British Fashion council which is been really weird and terms of excitement and drive to try to shine a light on what is British Fashion and who is coming up the ranks. Every single designer i spoke to said sure the economy is not that easy and building a business is not that easy but they have a lot of people willing to help. And tinie . Tempeh. How was it . I did manage to court him a little bit. I was very pleased with myself. It was worth standing outside in the cold for three hours. You see them lineup and come along and you go trim, fit, goodlooking, stylish countdown stylish. When youre inside there was a hairdresser blaring music and dancing. It is quite fun. Lets see whether you dance in toilets with your Makeup Artist and a hairdryer. Join us on twitter. Ask a question. Still to, on countdown, the golden economy will extend steadily but not easily. The cio for altra High Net Worth joins bloomberg first for a year a look at his year ahead report. Time for todays company news, the battery fire. Last year it was caused by inadequate design testing. That is the verdict of the national Transportation Safety board. Boeing had said that overheating in one cell could not spread to others. Report reports in its they faulted boeing for not anticipating that the battery might fail. Apple lost nearly 40 billion in 60 seconds yesterday. The worlds Biggest Company gained most of it back by close of play but it rippled through the tech sector. The retreat comes a week after the apple market value rose above 700 billion. The share price has more than doubled in the past three years. In the Ceo Dave Lewis take direct response for the grocers u. K. Business. The companys biggest unit. Tesco is trying to recover from fallout of its overstated earnings estimates in september. Problems led to a probe of the Country Company by the u. K. Fraud office. Ceo William Lewis will head up the british unit on an interim basis. Lets turn our attention to the year ahead, the Global Economy will rises steadily. Smilesoined by simon will be a Wealth Management chief investment officer, the ultra high net individual. The 2015 outlook, that is a very long title. Is a good thing or bad . It is a good thing. At the verging world that investors currently facing to be a theme. Im very cognizant that im following up professional models. Rise to the challenge. 2015 these to diversions is will become more apparent while headline growth we anticipate 3. 3 to 3. 5 and the growth in polls will be very skewed. We think it will contribute to two thirds of the additional growth. Secondly centralbank policy is clearly diversions. We expect the bank of england and the fed to put up Interest Rates this year and convert to the ecb and bank of japan far from doing that. If we see the fed and bank of england putting up rates next year, is there a risk that either of those do not and if there is a risk which is that surrounding which bank could not meet that call . It is down to the economic data. Continues to show strength in the u. S. Did expectations of payroll or it hundred 30,000 on friday. As long as it continues to come in at these levels the fed will raise rates in the third quarter. They dont need much inflation . 5. 8 Unemployment Rate of we can argue about low participation rates but with the strength of the economy you ask where the risk is, i would say it is the u. S. Not putting up rates in large part because janet yellen is chosen to air on the side of caution. On the side of caution. Which takes me to page 60. You talk about how these diversion policies will play out and it seems to me that in the fx markets it is most absent. There,hat you just said perhaps hesitancy by yellen am a you say 20 15 will be alpha traits what are they . The question was where the risk was and i think the dovish this of the central bank puts more risk onto the u. S. But the Growth Continues to go through and i think high diversions is will lead to more opportunities more broadly within the hedge fund base and dispersions should increase this year. In addition it influences the largest macro trade we currently have. The dollar andin the way to u. S. Equities and conversely underway in both the emerging Market Equities and high currency corporate or it corporate. How do we as investors take advantage in the declining price of oil . Clearly is about risk and upper trinity. With respect to russia there is a concern to broader russian assets and we dont think this will become a sovereign crisis in part because the ruble has depreciated and continues to have large effect reserves. We think the debt market will not the fault however it will continue to come under pressure. The ruble we havent 53 in three months time. Conversely various sectors in europe and a fitting from this and more broadly from a Global Growth perspective. Rethought ready reshuffled your portfolio . A great story from blackrock saying many Money Managers are left without data folios. If you look at your data portfolios. If you look at your portfolio is it ready for 2016 . Lower u. S. Assets and oil assets is broadly supported by oil price. A significant tax cut with 67 days as gasoline falls the one areas where there is potentially great risk is the u. S. Highyield. U. S. Ishat index in the related to energy. If you are rebalancing is anna says, Christine Mcdonnell made a speech overnight and she did the math for me. Oil is equivalent of about a 10th of growth for the global developed markets. So my question to you is that kind of correlation 67 box is re we are how does that because there is his big debate for emerging markets that it is somewhat beneficial from these oil prices and some will be really hammered, how do you differentiate emerging market positions. First of all that. 8 figure is incredibly different depending where you look hence the broadview that the u. S. Would benefit from lower oil and that passed emerging markets will suffer completely. Where we are playing a more positive you and the emerging markets is more about the commodity exposure. That is the diversions that i was alluding to. Certain countries in particular are reforming and doing the right things and are not getting benefits that we expect to continue to be benefited by investors. That dichotomy looking at places like india versus indonesia looking at mexico versus brazil and russia being a special case on the lack of reforms. In europe looking at spain versus italy and france. You ask yourself all the key questions, not that our research was easy, but one of them is that by 2015 give me three worries and dont expand too much. My initial worry is a number of our clients have leveraged credit portfolios and when it usually comes back to the market that is another expectation, the potential for material and unexpected losses. I think the second thing that concerns me is i have a strong belief in our views and highgrade bonds they are very consensual views. In fact if you look around the level of congruity among Economic Forecasters it is eerily high. Economicf the forecasters forecasting anything above 2. 5 growth. Underweight is highyield bond so my second key concern is that level of consensus leaves the market vulnerable to shock. It seems some are very concerned about geopolitical questions as well. Geopolitical shocks and shifts and yet the banks seem to write over those. As long as the fed wasnt moving too quickly away from quantitative easing their able to put some of those concerns on the back her and her. Does that continue back burner. Does that continue . Typically geopolitical shock impacts geo markets through a higher oil price. With respect to the oil market the vulnerability to shocks will increase next year and we are in an environment of various Monetary Policy. Usgreat to have you with this morning, simon smiles the cio for the High Net Worth division at ubs. Welcome back to countdown. Critics i am manus cranny. The rule, where will a goal . Last week several, where will it go . By 9 . Ek, it declined a bit of a turnaround. It odds are more than 50 will drop by another 10 . We had a conversation with ubs. Ask Case Scenario is no default in russia area not the first time with had that conversation. The 52. Arget of also if Oil Continues to follow and rises to 70. If oil drops to 60 you are looking at 62 on the dollar ruble. A little bit of a shift on dollars ruble. Keep in mind on this. We are heading toward the payroll numbers. That is the index. One of the best years since 2008 for the dollar. I continue that blackrock remains strong. We just had a conversation. Theirurally, one of biggest for 2015. The dollar will remain strong. On the past two job reports, the dollar was not. Its a big story. A big story. The business in the insurance sector. Here with more is Caroline Hyde and it will create a 821 billion powerhouse. 16 million people. A have to remember it is surprise to investors with a first was about the merger plans. Felt they were to focus on the United Kingdom and wanted to diversify. They are spending 5 billion pounds to their exposure. They are shoring up capital. They are completely fabric flabbergasted. Have to win hearts and minds about why it makes sense. Toy have until december 19 make a formal. Thats what we thought. 15 premium. That 40 billion worth of assets. A new fact, today will save. Theyre going to be safe than hundred 25 Million Pounds. Cost savings, is that the motivation behind it . Efficiency and thats where they are trying to highlight where the deals makes this. Many reports from the press and across the board have shown, is incredibly difficult to make savings and Life Insurance. If you look at what aviva wants, why is it a big deal in 15 years . 15 years ago was aviva created by a merger. Many are saying already, one analyst called and said awful that soup of companies happening. The whole culture. Alpha that offer alphabet soup of companies happening. To make a streamlined and strategize and get those 220 Million Pounds of cost savings. Said, is about cost savings. And the chief executive of aviva getting access to cash to give cash back to shareholders. Getting a bitut of cash. Exactly. Maybe he can give that dividends which have not been in play. Here is also interesting why is this deal suddenly making since . George osborne who will take to the stage on wednesday back in previous statements where they called out the desire for you and i to get annuity. We are not obliged to anymore. When we were tired previously, we were saddled with debt annuity and make sure we would be looked after for the rest of our lives. They said go and buy a yacht and off you go. That suddenly made annuities which Life Insurance Companies Really minimize martin on, plunge in terms of demand. Now difficult from a friends life and aviva needs more life assets. And on that sort of growth of business to start offset some of the declines that are seeing. , to a. Line a man on our right listening intently. Something to add. George osborne has a statement. Carolyn has been talking about aviva and what is going on. Would have that conversation. We will have that conversation. Great to have you with us. Will be at the ballot box soon and about pensions this week. Where are we in the great debate . Are we liberated about not buying a new annuity . I think the budget change is where we do not have to buy annuities anymore. What is surprising to everyone and clear that the market did not work. People were buying their own products. Making thewere mistakes and so now it is all freedom to do what you want. You can do it from 55. And that hinges on people getting guidance. They will not buy the right products of a cousin they have freedoms. Guidance. Government and saying they will give free guidance to everyone. Quite a few people will not take up the guidance. There will want cash or retirement completely. I think the other thing that comes out is now we have all of this freedom, what can you use it for . The products are not there yet. You can take cash. You can take a quarter of your pension in cash. Using test all of it in cash or you can take it all in cash or a quarter. Other products how soon before products are available . Chris a few years before they are really available. You can buy it all. Of those storebought products are very expensive. Not very visible. You can buy them. It is a product where you are too invested and you are drawing down every year a bit of your income. You can do that as you like. But for this, if you have a big pile of money, i would advise you may have options. You have very limited options. Doesnt make sense for the pension industry . These are Insurance Companies were talking about, doesnt make sense for businesses to merge in the face of these big changes we saw . One driver one piece of rationale or do you think the industry and Many Companies rethinking their strategy when they should be going out buying other assets as a result of these big changes. Pension is at that scale business. Scale is important. Some of the annuities, some of the Insurance Companies have had their margins that have not gone not what they expected. Sales have dropped 15 . And so the highmargin products are gone. What is the difference about your business . What do you bring to the market . What are you challenging . We are set up under trust. Productffering a simple , which is very cost efficient area where we do not offer investment choice. We have quite a sophisticated investment solution which is delivered out of denmark. But we do not offer people an investment. What if i want to have more control over what you are investing in emerging markets and you cannot do their product and that keeps the cost down . Exactly. It gives you the ability to do something with your money. That is quite different. A lot of people are taking it up. What is interesting for us to people, we have 99. 8 of the governments pension in a default. The 0. 2 that does something else, is it really worth focusing so much on them . A lot of people are paying for the choice. Exactly. Thats our basic philosophy. 6 of mps do not expect the state fund in 30 years. Are you with that . Do think there will be a state pension in 30 years . The interesting thing for me is people need to accept there are no guarantees. No guarantees in 30 years. I hope there will be a state pension. I cannot see a Pension System without some type of pension. You willt know when get it. Do not know how much you will get or whether you are getting it. Think the government has introduced in his own way. All of the work will automatically be enrolled into a pension and of course, that helps. Surenk based on this, make you make your own. Thank you for joining us. Morten nilsson, chief executive of now pension. European banks may be facing a black hole. A little into that. Well tell you what is behind that, up next. Welcome back to countdown. The barton chart. The inflationghi yardstick obscured by oil . That is the big question. Inflationrio draghis yardstick . The white line on the chart going back one year. Theyll fiveyear inflation. The gauge of future price growth expectations in the viewing area. See, one pointan 75 . On monday it dropped to 1. 68 . Lowest since bloomberg started compal and the data in 2004. The record was right there. 1. 72 . That was october 15. That was telling us the rate of the fiveyear had been below the ecbs inflation goal which is under 2 . Why the warning cyclicals are firing. The key metric for mario draghi has been coming as crude oil as measured by the others could be declining. Falling to a fiveyear low yesterday. Atone point it was trading 67. 50. A drop of 37 percent since june. What is my point . Michael rendell said the drop in oil prices is inevitably going to result in headline inflation rates around the world, dropping. If headline inflation dropped to zero or below in the viewing area right now, it is. 3 and is good inflation and a much of Lower Energy Costs at mario draghi and the ecb, things are going to feel a lot of heat. Over to mario draghi, who of course, meets with his policy makers on thursday, investors are waiting for further clues they will pull the trigger and do qe acted the same time germany does not want to them to pull the trigger. And in theboth now future might make his Communication Task a little bit tricky. Yardstick, on his the fiveyear, fiveyear versus the price of crude oil. A very important chart in the future. Away from thetes start of todays European Equity session. Lessig it over to our man. I think he is in london. Lets get over to our man. He is a regular guest bit marshall, a very good morning to you. Thank you for joining us. Marshall, i want to talk about the ruble. The ruble is rising. Yesterday, it had is the biggest intraday decline since 1999. You say the ruble is in big trouble. How big . Theell, obviously, countrys main export is oil and the price of oil is collapsing and the government budget deficit is going to widen. There is huge capital flight and you add that to the sanctions and freezing of russia out of the International Community and people do not have an incentive to invest in russia. Falling,n product is it is really a disaster for them. Hasprice of the ruble collapsed. How low can you go . How low can it go . It is quite dramatic. It is like over 20 in five days. That is just a Parabolic Movement has some reaction of forces. The problem is if you look at the technicals, uncharted territory. Theres no resistance or anything. From a ppp basis, it was undervalued. 20 before the collapse started. It started much undervalued. Sentiment,ter of capital flows, people panicking to get their money out of russia. Theres no particular limit. With oil prices stabilize and perhaps, reaction coming back into the market, it is quite reasonable that we would see some firming of the ruble temporarily. Howdoes the currency does currency investors positioned themselves in this oil prices . What do you recommend . Isyou have to look at who going to be the beneficiary and who is going to be hurt. Russia is going to be hurt. Canada is probably going to be hurt. Australia likely to be hurting. The Commodity Currencies are going to be hurt. On the other hand, some of the Oil Importing countries, emerging markets are stunned. They are going to benefit. Turkey, poland, south africa yesterday was the best performing currency in the market. All these currencies as oil importers. Some have been really hit very hard by the markets. A lot of upside. And in the dollar of course. The u. S. Not a major producer but a major importer. Marshall, i just showed a chart that showed mario draghi, the favorite gains. Showing inflation and expectations in the viewing area. It is almost at a record low. What is the most we can expect from the ecb . Moving higher from the likes of mario draghi. What is the most we can ask back from the easy day on thursday . Yes, they have been promising a lot and say if things get worse they will do more. That then talking about quantitative easing. I do not think they are planning on doing anything more after this meeting joe. A week after the meeting, they got the results of the longterm operations. I do not think they would take another step they would before they get to that additional information. And inwant to see that january or february after they see how things are going and the oil price, maybe they will take some action. I do not expect them to do anything at this meeting was go boost the euro temporarily. Has the euro found is lows for the moment . It has been a little bit lower. What can push the euro towards 120 or down . Ranged for the last couple of days. What would we need to see if the and they could follow. We could see something else. ,f they make a Firm Statement we will begin quantitative easing. Yes, we could see it down. The bad pmis yesterday did not push them aware. I am not sure any fundamental economic would have that much of an impact. Marshall, great to chat with you. Marshall gittler. Moves on the ruble. A look of how it is in the rural world. Markets. Equity cheerful in here. They will open a little bit higher snapping two days of losses. Is there an 82 billion hole in the Balance Sheet . Stay with countdown. Welcome back to countdown. Ecbs stress tests took part in october. How reliable are they . Hans nichols joins us. 82 billion undercapitalized. Tell all. We are three groups and they ran a different stress test and use a different metric. They looked at leverage ratios at 3 and under that new standard that will come out in 2018. Deutsche bank, a total of 12 banks would not have passed all quarter to two of the groups who ran the test. The Danish Institute of study a heres a shortfall. 66 billion euros. 82 billion dollars. The banks are saying that are rigorous under the standards of flight of by the ecb and this is a new metric. Will have to leave it there. A shot from berlin. We are on twitter. Move is next. Throughout the morning, stay with us on bloomberg. Welcome. I am jonathan pharaoh. From thements away start of french company. This is going to be the biggest takeover. A political risk. Chancellor says that if the United Kingdom walks away, they would be a disaster for british jobs and investment. Ahead to the statement and Morgan Stanley warning about the uncertainty in the policies that will drive down the pound. We are watching that and well be talking to Morgan Stanley. Now, a look at futures. Up. 33 . Futures on the stocks 50 are 0. 5 higher. The debate is whether you believe they have put in a baseline with all of the negative stories that you and i have been covering in perpetuity. Has oil put in a base . Has consequences for the whole commodity complex. This is a story do sure. Du jour. The ruble is crying. Ruble day, you have the rising