Transcripts For BLOOMBERG Countdown 20150217

Coming up, ukraine gdp plunges as the ceasefire in its Eastern Region is tested. Back to our top story no deal. Greece and its creditors have met, talked, and failed to bridge their differences on dealing with aid. The meeting broke up when greece called conditions for more money absurd. The finance minister was ready to do whatever it takes to reach an agreement, noting optimism that a deal will get done. Time is fast running out to break this impasse. Any new deal would need to be approved by each National Government before greece cost current bailout. Lets go to brussels. Hans nichols is standing by tracking the company. Hans, talk us through the latest. What is the reasoning . It probably wasnt that late in the night by brussels standards, but the argument is essentially that the deals they are being asked to complete our illogical because they were elected on a promise to repeal that very deal. He said they went backwards last night, not forward, but his optimism sprang from the fact that they had a collapse of negotiation. He pledged to continue to negotiate. We have been saying steadfastly from the very beginning, we want an honorable settlement. We want to wake these principles, the principle that we are government that challenges the logic of the problem. Lets find common ground. This is what we have said from the beginning. It is the only option we have. There is no plan b. While it might have been a short meeting, it was certainly a dramatic one. His claim that he was presented with a document he was prepared to side or it again before it began but it was withdrawn. He said they were offering him some flexibility. Those two terms are far too nebulous and are up to the eu to define. The finance minister leading all these negotiations said it is up to greece to make the next move and that they have to decide what they want to do by friday. There is flexibility in the program. We are open to discuss replacing measures, but not by taking unilateral action. It is up to the greek authorities now to decide whether they would want such an extension, whether they would take up the offer to look for the flexibility within the program. That also to give off the kind of commitment that i have just mentioned that are very important. No one has flown home yet. There is a meeting in brussels today so all the leaders are here. They could get together on the sidelines and we could have more development later today. Thank you. Hans nichols joining us from brussels. A reaction to the fallout in asia. Lets go to the touchscreen with the latest on the euro. If you look, equity markets are remarkably sanguine. You will see quite a it to volatility. The dow jones is down by a third of 1 and the s p down by nearly half a percent. Volatility, some beautiful numbers a move in the Stock Exchange just under 4 since the low on the asc was made. These are some of the main names that we will be focused on today. These banks have issued quite a lot that they can use at the ecb, which is the only funder. Hans werner was in this morning, introducing capital control. That is what is needed to stop deposits flowing out of the greek system. The euro had a mild dip. You can see that it moved a little bit lower. The talks broke up in the language of absurdity but the Foreign Exchange markets seem to be less than perturbed at the moment at the risk of no deal. Where you may see a more protracted reaction of the next couple weeks is the cost of funding. We will retouch this cornerstone throughout until the 28th of february. The consideration is this with this succession and the demand, the similar kind of Political Group in spain is going to cost spain another. 5 . They will have to pay a premium for their funding because of the political risk. I leave you with the irony which is this. Italy will grow four times. Spain will grow at four times the speed of italy. But the cost is dropping much more precipitously. Stocks in china are heading for their best rally since 2007 after a slight reaction off the back of failed they allow talks failed bailout talks. John, a good day to you, what is the latest . Good morning. China is quite encouraging. They saw prices fall before the rally. They are brushing off the greek concerns and it is all go here. There has been your creditor easier creditor calls. These factors are driving a property. Home sales in december after 12 months of decline, the home front is quite encouraging. John, the Lunar New Year begins on thursday. It is the year of the goat, i gather. What does that mean . You are a dog apparently. I have researched this. It is also a dog anna is also a dog. This is the year of your career. The advice is to recharge after work and dont be impatient. These are the words regarding a dog. Manus is a rat. I think, according to reports. [laughter] this is my year . The year of the dog as well. For our viewers who want to know which your job was born i have done my research. John dawson is born in the year of the rooster. I will let you check what your that is. Manus is the year of the goat. Latest of all time. Greatest of all time. I think we are losing the plot. Thank you very much, i think. Very insightful. Lets turn our attention to something which is a little more luxurious. It has been a tumultuous few months for the company, slowing sales Caroline Hyde is here with a little bit more in terms of what we can expect. Gucci continues to be the weakness in the armor. Gucci has really suffered from weakness in chinese demand, if they lost their way, their air of sexiness. But they are making big changes over in karen grew. Group. We are expecting an increase of 7 in sales. When you are looking at a particular brand gucci is likely to see falls. Meanwhile, vanessa is going to rise 9 . Some good rise as much as 70 17 . It is the executives who are falling in or out of fashion overall, because energy because guccis executive has been rearranging. Take the vanessa executive and christopher ckkane, in sergio rossi they will see some improvement. Another French Business reporting today a leading french mobile phone company. They are talking about looking for a continued improvement in the chief Performance Indicators despite the competitive environment. It is because of that level of competition that we have all this talk about m a. It was talking about buying some companies that would actually move orange out of the mobile phone market. That is a sidebar conversation to these numbers. And in the continental we are chatting with Richard Solomon later. What you mean be watching out for . About the fact that he is trying to get more luxurious. They are trying to focus on the boutique area. That is interesting, the disruption that has been happening. You have got online disruptors that now airbnb has more rooms available. Meanwhile it is a huge company that has got 5000 hotels, nine different brands, and while they do have a boutique brand, it is a bit cheap. They recently made their first big deal, they purchase. Kingston hotels. They splashed about at the end of last year. They are adding another 16. The reason they are willing to go with it is because perhaps they could dilute these Amazing Hotels where you get leopardprint ropes on the back of your door. Just like home. There is an element that people may think it may lose the sick whje ne sais quoi. Thanks. Make sure you stay tuned. Richard solomon is just after the break. Top stars this hour the ceasefire which began sunday in Eastern Ukraine amid claims of violations. At least five ukrainian soldiers were killed in the strategic attacks and a separatist Spokesman Says he is right to withdraw. Preliminary gdp figures show an annualized fall of 15. 2 . The reserve bank of australia has doubts about domestic spending and chinas weakening appetite for raw materials. The rba cut the countrys cash rate to a record low, 2. 25 . The bank also reiterated that the and dollar the aussie dollar remains too high. Of march through copenhagen to commemorate the victims of the shooting. Two people have been charged with assisting the attacks. You can join in the conversations on twitter. Tell us what you think. The market moves, anything you want. Coming up, greece isnt playing games. What is to come for the future of the indebted nation. If you are not playing game theory and you are not playing poker and not bluffing, what game are you playing . How can you show voters you arent playing monopoly money . I have never played monopoly with fake money. I have always played monopoly with monopoly money. That has a your question. Let me as your question. I have had a chance as an academic of studying game theory. One of the things i wrote in a recent article that i taught my students, is that game theory is based on a very unrealistic assumption, that the players are fixed in selfish. Inand selfish. I think we are perfectly capable of rising above our narrow perspective and embracing the perspective of europe. On the question of bluff what does a bluff mean . That means that you have a seven and pretending you have an ace. We dont do that. What we have been saying steadfastly from the very beginning is we want an honorable settlement. We want to wake these principles. The principle that there is a government that challenges the logic of this problem and lets find common ground. This is what we say from the beginning it is not a bluff because it is the only option we have. There is no plan b, therefore no games. The greek finance minister speaking yesterday after talks between greece and its creditors broke abruptly. Lets bring in our guest, the director of fixed income. Thanks for joining us. Do you agree with him that he doesnt believe that the interests and motives of all the players are selfish . I dont think the motives are selfish i think they will come to some form of compromise. That is the nature of europe. I dont think europeans are looking for the greeks to exit. What is the crunch time for you . They have two weeks to make this deal that the parliaments need to agree before that deadline. How close do think it is . Before the market starts to react. We have seen some reaction, that things arent falling. The euro was a little letter weaker but not precipitous. I think they have to come to some form of compromise, some form of wording that is acceptable to both the greeks and broader europe by friday so they can push that through the various european parliaments through next week. So we have some form of extension or alternative. He is playing perfect game theory. They have yet to have anyone come out of a News Conference and the fine they are talking about 30 of what europe wants them to do but no castiron numbers. 30 is a big number and politics. They are looking for some compromise. On the one side, they have got a mandate from the people not to have an extension. The europeans want to have an extension and have to find some form of wording and compromise. But with the conditionality that the europeans require. They will require conditionality, for the greeks to commit to some form of improvement in their economy some form of structural reform. How does this all play into your view with european government bonds . Which part of the european government should we be buying which part of individuals should we be barring . I think the two aspects on the one side you have the power of qe, which is going to be buying u. S. Government bonds. The next supply of german bonds is going to be negative through the next year. It is a powerful supply demand dynamic to much of the traditional European Market and the yields need to be stable. Last year they were already negative. Then you have the risk side of it, which is the outfall from whatever however they end up. That is the risk scenario you have to be aware of. We are standing on the sidelines with regards to, particularly spain where if the greeks end up winning this battle the risk of spain in particular seeing an upsurge in support along the same issues as powerful. How much visibility do you think we have around the greek situation . To come up with all those Investment Strategies you need to make some assumption. You are not assuming that greece leaves the eurozone, what kind of probability to attached . What could happen if greece does leave . Do you have visibility of what that does to the rest of the bonds margket . I dont think greece will leave in the next two months. The great burden is unsustainable and needs to be either renegotiated or greece needs to leave his own but that can be done over the next two or three years. It will typically take a lot longer. It depends on how you position portfolios. At the moment, relatively low risk in european bonds. In germany the supply demand rate is so happy with investors. Lets shift the u. K. We have inflation stays you have lost nearly 4 and the market is shifting on where it thinks Interest Rates are going to calm. To come. How do you think . You have lost 4 in the last two or three weeks and 18 last year, which is a phenomenal return. Completely contrary to what most investors were expecting. That you have got the inflation date today that will come in really, really love on the headline really low. That is driven by the retail price wars, the core inflation number is going to trend toward 1. 5 . It depends on what the bank of england wants. Excluding food, excluding energy. Is the bank of england right saying as much in an interview this weekend, to look at the oil price . Is that the right strategy in implying that the next move is up . I think it is the right strategy and that is what they are telling you they will be doing. Although we know from the last nine months that they are keen to vacillate periodically. They flipflop. Unreliable boyfriends. [laughter] from that point of view, they want to keep the idea of a rate increase in the markets mind but im not sure they are going to deliver inside the next year. What about the eurozone economy . All of those conversations if we lose sight of an underlying data picture, that seems to be the message indicated from industries you look at. Citigroup europe has surprise indicators. I think what happened was that the markets perception of what was going on in europes economy was a depression. That got priced into the market and is ultimately why we have had qb. Qe. In reality, the Economic Data has been coming through, and it has been trending positively data coming in slightly better than was forecast. What you are seeing in the u. S. Is a slight slowing, a slight disappointment because expectations got to strong. Too strong. But in europe expectations were so depressed. We may find that we may not need a cure after all. Thank you. Still to come the tumultuous few months for the luxury giants releasing earnings in just two minutes. We will bring you those numbers. We will also get numbers from the french mobile company orange. You are watching countdown. Keep an i on eurosswiss keep an eye on eurosswiss. Jordan speaks at 615 a. M. , that is in brussels. Switzerland at the heart of europe. You can see where that is coming. You begin to understand it is really struggling to find this new level, the new floor. The euro is something to touch upon. It dropped yesterday on the back of the breaking up of the talks but it more or less, has recovered. It is a game of prisoner they are playing. In terms of the aussie dollar we are seeing the minutes. The minutes came out for the decision from the australian central bank. The consensus from the market, aussie dollar is rising. They prevaricate it, they were not sure whether they wanted to cut rates in february or march. The market is convinced, you will have to do more. The rba will have to do more to get the currency lower. Slightly nearer term, the momentum is upwards. Before the Rate Decision traders were backing 77 probability. A little bit hawkish. One or two decent calls, it looks cheap versus the canadian dollar. A 4 lift aussie dollar, new Zealand Dollar trade. Some breaking news on the French Telecom sector. If we look at the sales number for orange, that looks ahead of analyst estimates for the fourth quarter. 10 Million Euros. They have restated for 2014, 12. 1 9 billion. They say they see sales stabilizing in 2015 or 2016. They say the sales trend will continue improving. They did describe the forecast as cautious and that will be of interest to analysts, no doubt. Orange has sold a number of assets under the ceo. To bolster its operations in countries like spain and egypt. Orange and Deutsche Telekom have agreed to sell their british ee. That was their biggest takeover attempt in almost a decade. That is being reviewed by the european regulators. Focusing and doing its own m a and watching as competition in the french domestic market continues that pace. Algaes already owns out to an intense competitive market, it seems, and france. Just getting some breaking news from the french luxury goods maker. Caroline is here with the numbers. It is a beat. Up almost 5 . Operating on an overall basis, that was a bit of a mess. Foreign currency, that is impacting their little bit. Stellar results if you are looking at saint around st. Laurent. They have managed to double the revenue in the past three years, according to the statement. It is the shining light. They have managed to still have relatively strong growth, 6. 8 but it is slowing down. Gucci interestingly is still slowing, but not as much as analysts feared. Hopefully, we will start to see gucci take a new course. You have also got a new creative director. It is all changed at the top. They have changed everyone people at the helm. They are trying to reorganize their chess pieces and make sure the right leader is at the top of the right brand to be able to cope with a slowing in chinese demand. They say organic growth is the top priority. If you think of what has happened to the luxury stables, picking up Luxury Brands some of the italian purchases. It is organic growth for them. Puma as well, they signed rihanna. Another example of management reshuffle. He is trying to get a grip. He is quietly he has quietly managed this brand. He can take some direct forms of how you change the company. Puma did manage to see some growth. You have to strip out the issues of foreign currency. They have halted the slide. The company was bleeding, they managed to take some wrong turns. Now they have rihanna. Usingpatients is what patience is what pums is asking for. No longer about mergers and acquisitions, it is about organic growth. Yesterdays meeting of eu finance ministers in brussels broke up with greece calling conditions for more money absurd. Any new deal would need to be approved by each National Government before greeces current bailout expires. The finance minister says he was ready to do whatever it takes to reach an agreement and sounded a note of optimism. Europe will pull a good agreement or an honorable agreement out of what seems to be an impasse. We did it last wednesday and we will do it again now. The rise comes after the removal of property curbs. It is the second straight month of price increases following the chinese Central Banks decision to cut Interest Rates. Singapores economy grew more than expected last quarter. Gdp grew at 4. 9 in the fourth quarter. The growth was thanks to a strengthening recovery in the u. S. And Falling Oil Prices. Irans oil minister says his ministry will not be able to pay staff or invest in production if parliament proceeds with a plan to slash funding. A jobs bill would cut the Ministry Budget down to 3 billion. Irans crude exports are banned in europe because of a dispute over the countrys nuclear program. You can find more about that story on bloomberg. Com. Join us on twitter. Yes, do join us on twitter. The year of the goat. Join us on twitter. I was trying to remember i think i have done the china story. Our great leaders born or made a re great leaders are great leaders born or made . Stay with us. These are the Bloomberg Top headlines. It is planning to sell 2. 5 Million Euros of property. The lender seeks to strengthen its balance sheet. Italy, germany, and austria are among the assets that unicredit plans to target. Rbs may have to set aside an extra 10 billion pounds in conduct costs following probes into currency market rigging. The figure will include shareholder losses over 2008 fundraising. A former ubs banker who won a 104 million whistleblower award after serving time in u. S. Prison for tax conspiracy has been summoned to testify in france. That is according to a court filing. He is seeking permission to travel to paris for the case, which is an investigation into whether ubs and tax fraud. What makes a good leader . Is it something that can be taught . We are joined by a mentor to ceos and a bestselling author. David, thank you so much for coming to talk to us today. How do we become the best that we can be . I am struggling myself. I think that everybody has an idea of what the best or a better version of themselves looks like. I think every day, we face hundreds of choices about how we can behave, react, respond. We always know if we could have done a better job and if we become more conscious about what we need to do to get it right most of the time, i think that leads to better selfawareness which leads to better self leadership. It is how we judge ourselves different to how we judge others. The criteria is different. I do not think how we judge ourselves we then apply a different set of criteria to ourselves than other people, but i think very often, our awareness of how we show up in the world is different to how other people perceive us. Very bad at seeing themselves through other peoples eyes. One of the most powerful tools is a 360, where you ask people who know you well to assess you and comment on your behaviors and attitudes and very often, i use this tool with all of my clients, and very often the wow, that is interesting, 80 of the people surround me around me seemed like this. In the tool we use, they provide examples of that behavior. It is difficult for the client to say, i have no idea what they are talking about. When you meet ceos who want to go on a jury, do you on a journey, do you find the initial conversation is very different than when you reach the end . Where you end up on this journey is very different. In my own case, i think the answer is no because i choose my clients very carefully. Actually, i have a narrow niche that i only want to work with people who want to make a difference profitably. The pursuit of success, more money, more fame, more power is not really my bag. I do not mind helping them do all that as long as what they are doing is making a difference. I think making a difference has lots of levels. Make a difference to the employees, the communities, the country, the world, the ecology the environment. I want them to want to make a difference. You have a nice diagram which sums up success. If you find something you are passionate about, pays the bills i call that being in the zone. When they read about me to start with, i do not think they ever once thought of having a mentor. I have been doing this for 18 years all around the world. Inside themselves, they have this itch. I brought the business to hear over the last 10 ive brought the business to here over the last 10 years and i would like to bring it there in the next five years. They are thinking about it, i wonder what i need to do to shift. Somebody introduces them to the fact of working with a mentor, working with me. During that conversation i tease out of them what success would look like in a few years time and even that process is it part psychoanalysis . I am just curious. Ive never thought of it like that. Very often with the client, they have an awareness of certain things, but they have a lack of awareness about other things. During the process of the twoday retreat, we put all of the pieces of the jigsaw puzzle on the table so they become consciously competent of all of those components as opposed to consciously incompetent. What was your greatest failure, david . Gosh, i have had so many. My greatest failure was not waking up. I do not mean at 5 00 in the morning to get here. Not waking up to myself and my own potential and i think i sleepwalked through the first 25 or 30 years of my life and i kept making the same mistake over and over again. How did you wake up . Through a mentor. You keep falling over the same time and the same way. I think that incident made me realize i could be more consciously competent about life instead of blundering my way through it. David, thank you so much for joining us. Yes, it is early we know. We will be looking at our favorite stories. Get ready for 10 oil. There you go. Just over an hour to the start of european trading. What is your digital pick . If you thought they were going for thanksgiving in the states, think again. When the chinese get going for new year, a whole new thing. 89 of those trips are made in cabs. Retail sales restaurants and retail, 610 billion. The new year starts tomorrow, i should point out. Spring festival 700800 million chinese will watch the program. Anything greece can do estonia does the opposite. It is a lovely article. The corner of europe which is the opposite of greece. Greece has a lot of debt. 170 . Estonia has no debt amazing. The debt is forecast by the European Commission to be 9. 6 of gdp. Compare that to 170, as i said, from grace. From greece. It borrows money from the European Investment bank. It has looked at greece and decided we do not want to go down that path. I found a story about oil. Get ready for 10 oil. Shock, drumroll. This is written by a gary shilling. The average cost of production all of this is incredibly important. He sets out the weak demand environment from the u. S. And china. What matters more is marginal cost of production. In this game of chicken between saudi arabia and the other producers, nobody will start blinking at 40 a barrel. Supply keeps rolling. Ok, drilling rate counts are going down but they are not the horizontal fracking, which is a very efficient. Oil could go down to 10 or 20 a barrel. Countdown continues in the next hour. We will be speaking to this man, richard sullivan. Richard solomons. What more could you want . This is where we are on twitter. Tell us about the stories you find interesting and the stories you want covered here on bloomberg. Nothing good has ever come out. Those with the words of the greek finance and minister. Failing to reach a deal on his countries aid program. Mark manus the giant battles the boutiques. We bring you the numbers. Hello and welcome. Gdp plunges the most in five years. We will bring you the latest. Manus we are bringing you numbers from Intercontinental Hotels. Countdowncaroline they are seeing a fully operated profit. It is down from the 660 previous year. Sales coming in at 1. 85 8 million. That is basically down on last year but gangbangin in line with analyst estimates. We are seeing slight slowing and expansion. We wanted to see how revenue per available room was. This is a company that is starting to change itself, becoming more to take focused. Boutique focused. How do you battle this new disruption . They bought something, they went in and bought a hotel. You are going to get your robes and pets you can bring but the Boutique Hotel is growing. Airbnb has more rooms. They have one million rooms. I am an airbnb convert. The reason is it is bespoke. Youre staying in someones unique house. It is not a carbon copy but a lot of Business People want to know exactly to expect in a hotel room. They want to know that the Hotel Standard will be the same in thailand and north america and london. That is what some of their brands to offered. You know what a holiday inn will offer you and these are the brands they have but now they are offering a more this boat alternative with their m a. Numbers coming in line but we want to see the strategy. We want to understand if they have a new executive director coming on. Operating profit slightly down on last year. Mark they have how many rooms . Manus lets bring you some auto numbers. The accelerated last month and it is the 17th straight month of gains. You saw over one million sold. Renault sold 10 more cars in europe. Registration jumped for their namesake. And volkswagen. All if you look at some of those failed out countries ireland portugal, cyprus putting in some strong games gains. Manus General Motors were the only sellers in the top 10 to post groupwide declines. G. M. Dropped the chevrolet brand in europe. Those are the car numbers. Stay tuned. We will have more discussion on all of those and have u. K. Inflation data at 9 30 a. M. London time. Some pretty important stuff on the day. They the meeting in brussels broke up with greece calling conditions for more money absurd. Europe will do the usual trick. It will pull a good agreement or an honorable agreement out of what seems to be an impasse. We did it last wednesday and we will do it again now. Mark a new deal would need to be approved before greeces current bailout expires. Lets go now to brussels. Hans Nichols Nichols was up late and he joins us now. Talk us through the reasoning that the greek team are giving for the fact these talks fell apart. Hans what he is saying is it is illogical to ask the country to stay in the program. He said they won backwards in last nights meeting. He was optimistic on that front noting that last week he went back before they had a step forward and he pledged to continue to keep negotiating. We have been saying steadfastly from the very beginning, we want an honorable settlement, we want to win together these principles. The principle that there is a government that challenges the logical problem and lets find common ground. This is what we have been saying. It is not a bluff because it is the only option we have. It is plan a. There is no plan b. He was offered an agreement at the beginning of the meeting some language he could agree to and then that language was withdrawn from him. He said he was prepared to sign it at that moment. When he said as he objected to the agreement that was handed him and that had two words in there that said some flexibility. He said that was too nebulous to go back to his voters and government to sign. He said it was up to the European Union to define those terms. Coming out of the meeting i caught out with the luxembourg finance minister and asked him what the void inside, what it was like. The mood was there was no progress compared to last week. And there were no data available. No numbers. So it was for difficult to make progress. Was their frustration . I would not call it frustration. There were some expectations that have not been met in a short time and for the rest i think he set everything. There is finance ministers are in town and they could always meet on the sidelines and restart the talks but its is saying it is up to the other to make the first move. What do we know about the deal that was on the table for a while coming from somewhere that he could have agreed to because i read that Jeanclaude Juncker put something on the table. What was the deal he would have signed up to . It would have in the been the juncker deal. If he objected and wanted slightly stronger language. There was a split between the Eu Commission and the finance ministers group. This finance ministers seem to have a slightly different take on things than what the eu does and the offer that the eu proffered what quickly rejected. Caroline thank you. Mark how is the market reacting . Good morning. What do you think is the main issue facing greek markets . Definitely the ball is in greeces court at the moment. The group can reconvene as early as this friday. Greece faces two issues. It has to [inaudible] no extension to be accepted. And greece faces a time constraint. They are running out of time and running out of time fast. If no agreement is achieved greece and its banks will face a credit crunch as soon as next month. Then the Prime Minister will face an existential question whether he wants to stay in the euro or not. This will be taken up by the markets. Everybody will be looking on. There is a meeting tomorrow in any word on any liquidity assistance program. How do we expect the euro to react down the road . The euro has come along way. That has been true since last may. It has come down a lot but that was because of monastery monetary policy. The scenario and problems with the greek saga have been a supplement to this pressure. The scenario gets more strong down the road or there are capital controls imposed in the and you will see the euro facing real supply from a mixture of names and it will have to [indiscernible] test if that falls, then they describe possible that analysts predictions as soon as this year may be well true. However if he said we are able to manage an agreement within the next 48 hours, then a brief rally in the eurodollar is encouraged but traders in the city say that that will be sold because the feds are tightening and [indiscernible] the key theme to what is out here. Thank you for chatting. Stocks in china ok. Manus prenew year rally after a slight reaction. Finance leaders and greece. Lets get to john dawson. John i am slightly shorter. Manus let update. s get an lets get an update. John sales were falling rather than previously 65. The stock market brushing off the great concerns. Seven days consecutively of chinese stocks, the best rally you have seen for quite some years prior to the leonard new year. Lunar new year. The city prices that are falling less than planned before, also the stock market itself. I know you did some research into the Lunar New Year, that begins on thursday. You have been looking at the zodiac impact. Tell us what you found. John the big question for all of us, is how old are you manus, i cannot figure it out. It could be the year of the horse or the year of the goat. You could be the year of the goat. I will not mention the year of that but maybe you are older than us. This is what it applies to. Love is better this year for you than before. Do not get ripped off and also career, a big moment in your career. The same of as mark in the year of the dog. Do not be too impatient. This is the most important thing. And anna also the year of the dog but for you, manus this is the year of the goat. This is your year. Manus you seem several very confident of the year of my birth. Anna thank you. Mark now moving away from that. Claims of violations on both sides. And a separatist spokesman said his forces are not yet ready to withdraw. Gdp figures show a fall of 50. 2 . The reserve bank of australia should doubts about the pickup in spending. Prompting its decision to lower Interest Rates. The rba cut the countrys cash rate to a record low of 2. 25 . The bank also reiterated that the aussie dollar remains too high and the Lower Exchange rate would be needed to exchange to achieve a balanced growth. Thousands of people marched through copenhagen to commemorate the victims of two shootings over the weekend. The gunman was shot dead eyed Danish Police and to other people have been charged with assisting the attacks. You can find more on the copenhagen story and those other stories we covered this morning. Go to bloomberg. Com. Anna you can join us. We will be talking about hotels. Mark i just tweeted out the markets that expanded last month. An increase in 28 . Coming up, there is no plan b for greece according to the finance minister. He spoke to bloomberg just after yesterdays breakdown of the bailout talks. We have got that story for you next. One of things the things is that game theory is based on an assumption. That the motives of players are fixed and they are selfish. I do not believe that anyones motives are fixed and i do not believe that anybody is selfish. I think we are perfectly capable of rising above our narrow perspective and embracing the perspective of europe. On the question of love, what does the bluff mean . Think of poker. It means you have a seven and you pretend you have an ace. What we have been saying from the beginning is we want an honorable settlement. We want to wed together these principles, a program that has to be respective respected and lets find common ground. This is what we have been saying. It is not a bluff because it is the only option you have. It is plan a. There is no plan b. Therefore, no games. Manus that was the greek finance minister speaking yesterday. Greeces future is uncertain. Isnt an opportunity for markets . Our next guest thinks it might be. Very interesting conversation between hans nichols and the minister. There is no plan b. Would you buy greek assets . Maybe there is a plan a minus or Something Like that. So the way we look at it, the first was nearly done, the eu deal, the finance ministers deal did not seem to get through but the way we look at it is when we look at greece we think it is a lot more sustainable than people might think. There is two ways of looking at someone and did it. In debted. The interest expense is very low. In greece the interest expense is 3. 5 of revenues. In portugal and ireland and italy, it is over 10 . For us the endgame is there and if you look at what the eu has done, they started with a loan. The eu is at libor plus 400. That was a fiveyear loan. For germany they do not like the idea of default. They have done a mathematical default because that went from five years to 30 years. It is a bit like if iou 100 pounds i pay you back in infinity. That is the ultimate deal will be along the lines of extension again. It is sustainable. If interest is small them a it is sustainable. The other reason we think it is an opportunity is the bond is tiny. The amount of bonds are about 10 or 15 . The risk is that germany the ecb the eu finance ministers together say we will extend but you have to burn the bondholders yet again. That is why youre getting your 9. 5 or 10 on tenyear debt. We have not gone there yet but i would rather be late. It will rally on an agreement. Countdown caroline do you have any visibility on what you felt your fixed income assets, if we see further tensions around this in the next few weeks . Alan we had a default, no exit. Politicians go with the people. The greek people want to stay in and interestingly, the german people want grace to stay and and generally. That would be very surprising to me. We are long portugal, for example. And were seeing very little contagion and any kind of selloff in that we would more likely buy into portugal rather than be nervous about it. Mark where is the biggest opportunity right now to make money . European equities. Were seeing a recovery in the economy. Things like retail sales at an eight year high. The economic surprise index is surging upwards and some of the top down analysts, not the bottom up they are raising their earnings estimates. And so equities is the big opportunity. You might want to hedge that currency risk back into sterling or dollars. European equities is where the value is as well. Mark we will speak to Richard Solomon, talking hotels. This is the Intercontinental Hotels group chief executive. Time to check in on the Exchange Markets. The euro has touched one of 647. An interesting one. The euro dollar had been declining as greeks and northern europeans came to a disagreement. The euro dropped during new york trading when these talks broke up after london went home. Lets have a look at the eurodollar. That is where we have seen a little bit of a bounce. You have a game of prisoner in the eurodollar trade. I can tell you where that is trading at the moment. We are at one 13. 55. The bottom line for people interpreting, this is what the bank of australia has said. They were not sure whether they wanted to cut rates in february or wait till march. That was a sign of real dithering coming from the reserve tank bank. And mccoury traders before the rba minutes came out. That has dropped 41 . Mark interior the Intercontinental Hotels Group Reported earnings. They have seen many Macro Economic and political uncertainties this year. The chief executive Richard Solomonss joins us. The metric which i know you like to look at is revenue per available room. For 4014 the u. S. Was the driving force by 7. 5 . Will that continue to be the trend next year will the u. S. Be the driving force when it comes to that key metric . It is hard to predict but if you look at business in the u. S. Where you have low supply growth, fewer new hotels coming in but demand continues to be at record levels. We are positive about the u. S. Our secondbiggest market is china where growth was over 1 but we grew the revenues 9 in china because we signed more deals and opened more hotels than we have for many years. If you look at our company where we have got brands that Consumers Want we have thirdparty owners you want to own our hotels and where opening and signing lots of hotels and have record signings around the world, we are positive about where we are at. There is some uncertainty out there. Just listen to your headlines and one hears that. Is the china metric macroeconomic slowdown one of those headlines . When third of your expansion will be in the china region. Should we be worried by the economic slowdown . I do not think so. You have an economy in absolute terms bigger than the u. S. Now so it is not surprising to see growth slow little bit. In any business, you have winners and losers. We have a balance strong balance sheet. We have also invested very heavily so we have opened new brands around the world. We opened our first new brand in china this year, and we have the Second Coming shortly. Even hotels in the americas. In a business that is cyclical and an environment where there is uncertainties, investing for the longterm make sense. That is what gives us confidence in the future. Russia is one of the places youre looking to invest in as well as china. Lets talk about russia. Does the investment aspect look like such a good idea given the macro and geopolitical backdrop . Russia is one of our top 10 markets. We look and say wheres the growth going to be in the hotel world, 75 is in 10 markets. Russia is one or was one. It has been impacted. We run them on their behalf or franchised them. We invest behind infrastructure. Things will settle down in that market will come back. There is plenty of markets where we are seeing considerable growth. You made a big stir by buying this boutique chain in the United States. One analyst did liken it to their favorite or joint being taken over by mcdonalds. Is not is that not very fair . You will not alienate the loyalists, will you . It is a fantastic brand. It is the best and best known boutique brand. We have a stable of brands. We acquired kimton for what they brought to us. We can add value through our digital world. We can bring scale or take it outside the u. S. And we have appointed the coo and we are excited about how that business is moving. We will take nothing away from that great Guest Experience which is why we acquired the business. Mark are you determined to stay independent . One of your shareholders came out and said your share price could double if you merge with another large operator. What they were saying is that will provide that are shareholder value than if you stayed independent. Is there for d to that argument validity to that argument . You can always say in theory putting businesses together might create value but if you look at what we have done in the last 10 plus years as an independent company, we have grown ahead of anyone else in the industry. On a Clear Strategy which we are continuing to execute. We run the business on behalf of all of our shareholders, not just one in that strategy seems to be working. If it is someone out there who wants to look at us as an acquisition target that is that theyre called. We will carry on with what we are doing. Mark has anyone been showing interest there were rumors home i to do with speculation, that someone knocked at her door with a 6 billion pound offer, is that enticing to you or not . None of us deal and speculation which is always a loss in the market. If someone approaches us we will look at it. We will keep working hard for our existing shareholders. Mark a stat earlier came up to 674,000 globally whereas airbnb has over one million rooms. Airbnb has more rooms than intercontinental which blew me away as a state. How do you compete . You were wrong. 710000 rooms. How do you compete . We have signed and opened more hotels in 2014 we have done for many years. We are seeing considerable growth in the hotel market. Airbnb and the many other Companies Like a deal primarily with the Leisure Business at the lower end. 50 of americans never stand a hotel. Theyre looking for alternatives than just staying on somebodys floor or with their parents. The airbnb business can become from entry. When there is new entrance to the market they are probably regularly regulated and properly managed. People cannot open plaza hotels and a managed area. They need to be subject to the same rules we are. If that business grows to a serious size in terms of revenue, not just rooms significantly smaller, if it does grow and Consumers Want it it is something we should look like look at. We are good at Running Hotels but right now it is certainly at the margin. Mark great to chat to you. Anna you are looking at images of european officials arriving in brussels for the meeting at the Economic Affairs council. Talks on the subject of greeces debt ending in discord. Some of our guests are suggesting we need more news on that one. Those are images of officials arriving in brussels. Time for the top stories. Yesterdays meeting broke up with greece calling conditions for more money absurd. Time is running out to break the impasse. A new deal would have to be approved before greeces current bailout expires. He was ready to do whatever it takes to reach an agreement and sounded a note of optimism that a deal will get done. Europe will do the usual tricks. It will pull a good agreement or an honorable agreement out of what seems to be an impasse. We did it last wednesday, we will do it again now. The rise comes after the removal of property curbs. It is the second straight of price increases following the decision to cut Interest Rate in november. Singapores economy grew more than expected last quarter. Gdp grew at 4. 9 for the fourth quarter, well ahead of analyst estimates. The growth was thanks to the strengthening recovery in the u. S. And Falling Oil Prices which boosted demand for the export. Irans oil expert if parliament proceeds with the plans. The budget would be cut from 13 billion dollars a year to 3 billion a year. And you can find out more on that story and oil prices at bloomberg. Com. Mark who wins when it comes to economic surprises . That is after the break. Stay with us. Mark who wins when it comes to economic surprises . They measure Economic Data surprises relative to market expectations. A positive reading means data releases were better than expected. One might assume given the weak economy relative to the u. S. The fact that the u. S. Is close to tightening policy and the eurozone is weakening or listening policy. The top chart would belong to the United States, you would be wrong. The top chart is the economic surprise index for the eurozone which right now if you look at the top right is 51. 58 51. 54. The highest level since september 30 2013. Only four months ago the green circle there, october 14, 2014, the index was 73. The lowest level since may 31 2013. Since then the trend has very much been an upward trend unlike what has been happening in the u. S. Since the beginning of the year. This is the lower chart, the economic surprise index for the United States which is at 37 the lowest level since april 11 last year. A recent example of u. S. Data missing estimates was the retail sales number. Less than two months ago on december 30. The yellow circle, the index was at plus 38. This shows the volatility of the series how people can go from positive to negative in a matter of weeks. If you are looking at recent evidence as the ecb embarks on its qe program, the data is beating estimates and the move since october is an encouraging one. The flipside of the coin is the u. S. Chart if the trend drop since it has been reconsidering as the first rate hike will happen. Time now for the top stories. Office buildings and Bank Branches and [indiscernible] armonk the assets are among the ones to market. And the figure includes 4. 4 billion pounds. [indiscernible] and other investigations into benchmark rigging. And testifying in a separate probe after the swiss bank in france. He is seeking permission to travel to paris for the case which an investigation into whether ubs engaged in laundering the proceeds of a tax fraud. Chinas billionaire boom. Lets bring in the billionaires editor. What is driving this Wealth Creation machine . It is not all about the ipos. Now it is looking for an exit and that is what is happening. That is a dearth of ipos. There were 20 new offerings that came from china. Everyone focuses on alibaba and jack ma. It spurred further billionaires. Jack ma was not in the ranking of the 200 richest people in the world. There were 13 people. It was an underestimation on part of the analysts who covered that sector. I am so drawn to the backup question. We haeve everything in here. Tell me about the alien are behind springer. Billionaire behind springer. It is a very broad spectrum. Mobile gamers and Budget Airlines and this is a company that they Share Hotel Rooms they eat instead roman numerals, this is a very tightly run organization. This is chinas biggest. You mentioned 1999 in the title of your peace. We know what happened year later. Similarities . Yes and the volatility is also recognized. Some are saying this is over and good get out while you can. The index is lower than the shunting index. You mentioned the finance arm of alibaba. What about other sectors . Are we looking at tech . There is an l. E. D. Light maker, and a mobile smart phone maker has increased in value. I see a couple mentions of these billionaires being thrifty. They do not the cash and they share rooms with other executives and eat noodles. Dont tell them. It is clear that these are pretty tightly run organizations. We did the graph that shows how much the chinese individual Wealth Creation machine has happened versus europe or russia or the u. S. It is a graph like this. You look at the graph that shows how much each of the 10 richest people on collectively and china is still well below, 40 billion per person. They have a long way to go. Thanks a lot. We had a little bit of breaking news through the morning. We have the auto releases, where do you want to focus . There is the expensive coats and tote bags they are selling well. We are seeing a 25 come 25 pickup. They are saying it is the brand returning to the forefront of the industry. We will give them that because it does seem to be doing incredibly well. Even the fall [indiscernible] the company that has not been able to get the offering right has been suffering in china, it is showing signs of improvement. They are down. 5 of 1 . It is about finetuning the offer. Big changes at the top. They have a new creative director and they want the sexiness back that tom ford brought gucci. There is the area that outperformed. They are making a statement of how independent they are. Theyre saying we are. Theyre saying we had the get any of our sales, we get most of our sales outside the eurozone. Cure line did not have a chance to answer Richard Solomons. You got the data from the website. It has 670,000 rooms. They i am sure if you dig into some of their statements they would have the uptodate numbers but it is less than 1 million and i thought it was a fascinating answer coming from him saying that we should look into airbnb, me they can help manage these rooms. They are saying it is an excellent year and they caught up about 1 . On the move is next. See ouyou tomorrow. Welcome to on the move. We are a Bloomberg European headquarters in london and moments away from the start of european trading. Lets get to the morning paris. Talks collapse as euro zone finance ministers failed to strike an agreement with greece. Greece says no deal. Shanghai rallies and it is the second day heading to the best rally since 2007. The new home sales snapped the decline and credit boosted the demand. The low inflation. U. K. Consumer prices rise at 0. 4 , the slowest pace on record. The bank of england insists the slowdown is temporary. We are looking at the future markets a little lower and lets get to manus cranny for your market open. The Exchange Market there is a word that comes to mind, stoic. They have temporary pause in negotiation and the euro is remarkably resilient. There is the tip with the greek and the dutch. They seem confident in the deal. The french talk about doing something logical with creating a deal. The chief Investment Officer says that the debt and Interest Payment that greece has to make is miniscule, relative to where he is