Transcripts For BLOOMBERG Countdown 20150310

Producer reports earnings just a week after it has sold its north sea business. Will economic sanctions way on its bottom line . We bring you those numbers in just a moment. Welcome to countdown. I mark barton. And i am anna edwards. Also, we will speak to greg keeler. Breaking numbers from rwe. Lets bring those to you. We have some fairly good guidance in terms of how the numbers of 2014 were going to shake up. Not surprisingly, they are somewhat in line with estimates. Net income has come in at 1. 28 billion euros. That is exactly in line with estimates. A little higher up the profitlost account, that is 1. 73 billion euros, nicely ahead and estimate of 1. 659 billion euros. Because of what is happening to energy prices, just last week, they sold their north sea business. They sold it for just over 5 billion euros, trying to mitigate the Falling Energy prices as they go. Concern from the u. K. Government about how the sanction environment against russia might impact on the north sea oil producers. But that is the background story as we head into these numbers. About 6 billion euros of impairment losses on power stations in germany and the u. K. They are proposing a dividend of one euro per share. That matches the estimate that bloomberg had for that. A lot of focus on the Capital Expenditure plan and the dividend going into the future as a result of the Falling Energy price. Operating cash flow target is originally scheduled to be achieved in 2015. They are now seeing they say they see recurring income at stay with bloomberg. We will bring you an interview with rwes chief Financial Officer later this morning. Big move at the top. Credit suisse is said to have a replacement for brady dougan. That puts him at the top of Credit Suisse as they are battling with investigations that hurt earnings. Brady dougan has been under pressure to shift the lenders strategy and posted one of the worst performances among european banks this year. On the nichols joins us from berlin. Hans nichols joins us from berlin great what qualities do you think Credit Suisse sees in thiam . That is best for the shareholders and the board to decide. What we do know is that take an insurer to be a banker and a frenchman to run a swiss bank. That is after an american, brady dougan, was the First American to run switzerlands secondlargest bank. Its take a look at his bio. He cut his teeth at mckenzie. He spent about 10 years at the acid managementconsulting firm. Then he took a little break and worked where he was born, in the ivory coast. He spent about four or five years at the technical studies and development in the ivory coast and then he was appointed minister for Planning Development before leaving in 1999 following a military coup. In 2009, he went to prudential, ultimately becoming the head of prudential in the u. K. One thing we do know is he is close to the white house. Treasury secretary jack lew tried to persuade him to join the world bank as the lead investment banker at the world bank. That did not work out, but it gives you a sense that he may have entree into some washington circles as Credit Suisse tries to clear up any remaining litigation. He is close to the white house. That may help him. He has got to figure out what to do with fixed incomes, commodities, and currencies. You look at the stock price of Credit Suisse over the last year, down 18 , underperforming its peers. Then there is the crucial question of it trading against its tangible book value at 1. 1 . Ubs is 1. 4 . The questions on the direction. Also some relationship questions how close is he to washington . What is he going to do to have profits increase at Credit Suisse . What might be brady dougans legacy at Credit Suisse . You are only asking me this because manus is not around. He is a man who is so clearly inside brady dougans head. He spent a remarkable career there in many ways. He was ultimately undone by litigation. He did have challenges with litigation towards the end. Take a look at some of the fact from his bio. 1990, he joins. 2007, he becomes the First American to be the ceo of Credit Suisse. They plead guilty and have a 2. 6 billion fine to helping americans evade tax credits. In 2015, they had to revise fourthquarter profits. Fourthquarter profits for 2015 on litigation targets. The big question is, how much more litigation is to come and what is the price tag . Thanks a lot. See you later. Hans nichols in berlin today. Now lets turn degrees and euro area finance ministers are piling pressure on the greek government to open its books. Greek officials resumed talks in brussels tomorrow. That is as cash reserves begin to run low in athens. One official says their funding might last 1, 2, or three weeks. What happened in brussels last night . There was a lot of drama last night, but not too much progress on greece. The main thing that came out of this meeting is that the technical discussions will start as soon as tomorrow. And some discussions on the Technical Details will also take place in athens. That will determine whether greece can or cannot receive the next tranche of aid of 7 billion euros. The eurogroup head says that the last couple of weeks for greece have been a complete waste of time. Last night after the meeting, i asked him whether he could tell me or not whether greece could run out of cash in the next few weeks. Have a listen. I do not know if and when they run out of cash because i do not control the till in aston in athens. That is their responsibility. All i know is that we can formally release further loans from the european funds if there is a full agreement on the package and if they start implementing reforms. So far, two weeks have gone by and neither of the two have happened. At the moment, they are still on their own. We stand ready to work with them, hopefully, starting on wednesday. This question on whether greece will or will not run out of cash was on everyones lips last night. One greek official who did not want to be identified said that greece may have 1, 2, 3 weeks. It is hard to assess. The economy commissioner told me that this was not specific to discuss. Even the greek finance minister did not want to elaborate on the exact cash position of greece. How did the greek finance minister react to this than . Then . Of course, he said no time has been wasted. He said that greece was working on reforms and that there was a big misunderstanding this weekend with the press that the batch of reforms which were presented on friday in this letter to the finance minister he said that was just the first batch, that there will be more reforms coming out of greece. He was also very critical of the troika which is the name given to the ecb, the commission, and the imf during this crisis. He said he did not want the troika to just walk into greek ministries and impose their reforms. I am quite happy that some members of the eurogroup through inertia if they want the troika we can send it to them, but we are not having it again. The referendum, he also said that was a big misunderstanding. He said the referendum was only a last option if all the greek reforms were rejected. There was some conversation about france . There was some conversation about france. In fact, the german finance minister said that greece was not the main point of discussion. France was also on the table. France was given two years to comply with their deficit targets to bring back the deficit within 3 of gdp. I spoke with the economy commissioner yesterday and asked him about france. France has to now deliver extra measures for 2015. We also asked france to deliver a National Plan of reform, which has to be detailed and ambitious. This represents a positive pressure in order to change the economy of france in order for this economy to be stronger. Some finance ministers from spain to ireland actually expressed concerns that the activity of moscovici, the former minister of finance of france but when i asked him he said it was a serene discussion. Thank you very much. Tim cook took to the stage yesterday to unveil the details of the apple watch, which will be available next apple watch is the most personal device we have ever created. It is not just with you. It is on you. Since what you where is an expression of who you are we designed apple watch to appeal to a variety of people with different tastes and different preferences. Here to help us navigate us through the potential headlines i have waited 24 hours for this, caroline. The price what does it cost . I know you want the highend device of gold. That is 17,000. This is one of their three models. If you are going on the cheaper side of things, we might be looking at something a little more circumspect, 349. That is the minimum you would half to spend on the aluminum watch sport. You can have different faces. You can have steel, aluminum different straps. 17,000 at the very top line. A little cap to angela arent. If you are going to be buying a highend device, you want some highend places to buy it from. You can get it from Galeries Lafayette france and maxfield in los angeles. This is a luxurious device. You can start to preorder next month. You can try on by appointment in the apple store. April 24 is when it starts to ship. That is what we know about when it is available and how much it is going to cost. Did tim cook do enough to win over those who might have been skeptical about whether we need this . Why do you want to spend 17,000 on a watch . Some of the apps are impressive. They have developers really working on this. You can use apple pay without even having a phone on you. The main issue with smart watches is that you are never really just wearing a watch. Say you go out for a run. You can stop by the local shop and pay using just your apple watch. The payment, i like. You can also use uber and watch your taxi arrived on a mini screen. You can send pictures track your workouts. They are really keeping fitness first. A novelty comes in when they got star board hotels involved. You can have online boarding passes on your smart watch. There is novelty in terms of apps. Also, they had to do a lot for battery life. If you do you really want to take your watch off every night to plug it in . 18 hours is how much they say it should last one normal usage. That includes three hours of talk time you can send messages and have calls. 45 minutes of avenues of app use. I think the proof will be in the pudding. When people get their hands on it, will it become invaluable to their life . Interesting reports from people who have had their hands on it later in the program. Thank you very much. Still to come, Virgin Airways returns to profits. We will speak to craig kreeger. Breaking news just crossing to bloomberg. Brady dougan is to step down as the chief executive of credit squeeze. Credit suisse. Thiam, the current ceo of prudential, will be replacing him. A look at how he performed on at prudential. Thiam has been at prudential since 2008. He was finance director to start with. He was made ceo in 2009, succeeding mark tucker. He has a largely successful career betting on the asia part of the business to drive growth. He returns total shareholder returns, 24 compared to sector returns of 11. 3 . Outperforming the sector in terms of his stewardship of the business. I cannot help thinking back to 2010, when he made a massive that on taking over aia, the asian part of aig. That fell through. The company faced fines as a result and shareholders would not back his move in the matter. There were plenty of cause for him to step down at that time. A real turnaround story in the sense of his ability to reinstate himself as a strong leader at prudential. It is fascinating, you comparing his performance to the marketplace. When you compare brady dougans performance to the marketplace there is quite a big disparity. He took over as ceo in 2007. His total return, 10 . His peers have fallen by just 3 . This year, the disparity is even wider. This year, Credit Suisse shares have fallen by 7. 5 . It is the fifthworst performer on the stoxx 600 banking index. Only for banks have fared worse and they are all greek banks. When it comes to regulation, investigation, shaking up the bank, investors have been looking over the corner at ubs, which is totally shaken up. Shall we get to hans who is focusing on this . We saw this coming. We knew it was coming. Is it a big shock that brady dougan has had to leave at the end of june . It has been something that has been asked about for even a couple of years. I interviewed him at the beginning of 2012, and even then, there was talk, are you going to keep your job . He managed to hang on for three more years from then. That is what is remarkable how long he has been able to hang on through the financial crisis. He was only ceo that lasted throughout the entire financial crisis. In a way, it is remarkable that he lasted this long, given all the challenges. Not all of them his making or solely his responsibility, but he was put in his position to lead a bank through a financial crisis and clean up litigation crises that range from tax issues to a whole host of other issues. It is official. Mr. Dugan will be out at the dougan will be out at the end of june. We will see how the share price reacts today. We will also see what he will do in the final three months that he is in the position. Will he continue to try to shore up and pare down fixed incomes, commodities, and currencies . What will he do to prepare the field for mr. Thiam as he comes in . I am interested, when we get there next earnings report, what fixed incomes, currencies, and commodities, what is their debt trading doing . At is the one part of the bank that mr. Dougan refused to shrink as fast as his competitors. Is that sector going to be coming back . Will that be a potential Growth Engine for the future . Or will mr. Thiam have to shrink that further . You made an interesting point about thiams relationship with regulators. When the chief of Standard Chartered was pushed out, he was replaced with someone who had a Good Relationship with regulators. That seems to be what matters at the top of big banks these days. The problem is there are always more regulators then you can have Good Relationships with. Mr. Thiam may be close with jack lew. How about the attorney general in the states, the state of new york . So many want some sort of a billet sensor ability on these banks. Thank you very much. Hans nichols reporting from berlin. China deflation in february came in higher than expected 1. 4 year on year. That is after the countrys central bank stepped up easing moves. Jpmorgans chief emerging equity step strategist. How much should we read into this when it comes to the Lunar New Year . I do not think we should read too much into it. There were three areas where you saw increases. One was food prices particularly fresh vegetables. The cost of transportation going up train tickets, airline tickets. The other thing was general services. You have a big migration of labor back into rural areas. Were going to have to wait until march to get some sign of what the trend is. But the trend is running into this data point one of increasing concerns of deflation. 37 months we have had Producer Price deflation. This predates the oil price. You cannot just explain it away. I think it is about the china growth model being inherently deflationary. You have capacity in an economy that already has too much capacity and then lack pricing power. Does that make it a good decision to bring down the growth forecast . Yes, although we have to understand there is a middleincome economy. They typically grow between 2 4 . The 7 number is probably too high. Behind the scenes, there is a lot of good policy going on. They do recognize many of the challenges. But they do have this ongoing problem with how do you address the longterm sustainability of growth yet still try to have a growth number that looks reasonable versus your history . All of the versus quantity. Are they getting the balance right . I it is still too much quantity. What we are seeing is industry reducing the amount of capacity additions. We need to see the closing down of excess capacity. I think we are moving in the right direction but probably a little bit too slowly. Thank you very much. Good to get your thoughts on china this morning. Up next, we will bring you handson with the new apple watch. As they moved further into the luxury market, should the switch the swiss watchmakers be worried . Stay with us. Welcome back. You are watching countdown. Time to look at foreignexchange markets. Lets stop lets start with the dollar against the euro. Richard fisher threw his latest thoughts into the ring could this, his latest speech as the helm of the dallas fed. He was talking about how increases in rates a delay in increasing rates risks triggering a recession. The key is the relationship between when you tighten Interest Rates and the state of the unemployment situation in the country at the time. He was saying that every time the fed has tighten policy after achieving full employment, it has driven the economy into recession. Also, unemployment is likely to reach the bottom of the range of natural rate estimates by the summer of 2015. He is suggesting that rates should be going up before the summer. If you look at the options rates market, that is telling us there is a 23 chance, according to options traders of a hike in u. S. Raids by june. That number was 18 prior to payrolls coming in on friday. The new Zealand Dollar has been falling as a result of suspension in the trading of the dairy producer. That stock was suspended and then restarted. The ministry of riemer industries say they are working closely with the police with regard to a criminal threat to contaminate infant and other formula. The new Zealand Dollar a little bit lower on that story. These are the top stories on bloomberg. Chinese deflation came in higher than expected 1. 4 year on year, even as Producer Prices fell more than estimated. The Lunar New Year holiday helped boost spending on travel and food. The exports number suggests a strengthen u. S. Economy is helping chinas outlook. Preparing to pay as much as 1. 45 billion dolalrs 1. 45 billion. Commerzbank will enter into an into an agreement with the Justice Department to avoid a criminal investigation. Heres told a Parliamentary Committee he was unaware of tax evasion at the banks with unit. At the hearing of the Public Accounts Committee hsbcs chief executive again defended his personal tax rate. His ability to convince anyone that these results are not tax evasion clearly caused reputational damage to the bank. Run affair had fairhead was on the committee. Also chairman of the bbc trust she was either naive or incompetent. The trust said she is committed to her role. The pressure is on for greece after a meeting yesterday. European finance ministers are pushing the cashstrapped nation to open its books and follow through with pledges agreed in its rescue package. For more, lets go to athens. Good morning to you. What can we take away from yesterdays eurozone meeting . Good morning. There has been a strong message delivered yesterday and that is it is time to hurry up and get the job done. The two weeks since the last eurogroup meeting were deemed by some as a waste of time. With a cash crunch looming, time is of the essence. There has also been an important development. We are not moving on from the political discussion of the situation. This is quite crucial to get the numbers down in order to find the essence of the problem in itself. We are going to have technical talks in athens on the validity of the data the greek government puts forth. In this way, any kind of will be avoided. What are the main hurdles for greece to finally gain Financial Aid . Keep in mind two things. The first one is they demand certain pledges agreed government has taken upon to be delivered. From the greek people that voted for it a few weeks ago. The rhetoric of the greek officials and government does not bode well, to say the least. On the labor market front, the fiscal front, among others. We do not know exactly how much the way the eurozone is willing to give degrees and how many pledges the greek government will not deliver upon that the greek people are waiting for. Already the humanitarian crisis was deemed by the german side some form of unilateral decision. It will be very important. Thank you very much. While apples new launch new watch was launched a select group of journalists were invited to the european launch in berlin. Nate langston went along to find out what the watch means for europe and whether the swiss watch industry should be scared. Welcome to berlin, where apple has summoned a select group to come and preview its apple watch. Behind these doors is apples event, which is being streamed live. How much is it going to cost . What is coming out . Is it worth the hype . We will find out. We are just a few steps away from the event, starting in a few moments. There is one other question we came to find out. How will the swiss watch market field . 700 miles away, in geneva, they will discover the rest of the details of the apple watch. Apples presentation is over and we have the allimportant details. The watch will be coming out on the 24th of april. The same day as the United States. It will cost 299 pounds slightly more expensive in the u. K. Then in the u. S. , though not uncommon at all for highend products. I was fortunate enough to get my hands on the 18 karat gold edition of the watch and it is every bit as luxurious as you would imagine. The last russian we need to answer is whether or not the swiss watchmaking industry should be concerned. Most people i have spoken to suggest probably not. The jury is still out on what effect this device will have on the swiss watch market. In a few days time the luxury goods fair coming up and everyone will be asking what happens. I think it is going to be a bit of a rising tide. Getting a generation of people who do not wear a watch to wear a watch could be good for the industry overall. Joining us from berlin is nate langston. Good morning to you. How important is the apple watch for apple . To be honest, this is probably one of the most important launches for the Company Since the iphone. This is an entirely new category for the company. Which is something we have not seen since the ipad. This is apples chief focus for this year. This is the day everybody the thing everybody is going to be working on. Apple is trying to guarantee every bit of success that it can for the smart watch in the new markets that is smart wearables. Is there is much demand for a product like this as apple is anticipating . I think there is. It is a demand that seems to be growing with every passing few months, it seems. One interesting comparison is the pebble smart watch. This is a smart watch that is impeding with the apple watch, but it is crowd funded using the kickstarter website to fund itself. It was originally only asking for 500,000 to get its new model on sale, but it managed to raise 1 million in under an hour and is now sitting at 10 million. The demand is from people putting their money up front before the products even come out. When you expand that to include the extra attention that apple products always tend to get, i think it is quite likely that there is some real demand starting to be seen in this industry. How is the pricing of apple watch being received by the media and analysts . They are trying to compete in a number of different markets, down to 300 to real highend luxury prices. That is right. In the u. K. , the pricing is going to start at 299 pounds. That is for the entrylevel model made of aluminum and geared towards sports use. The next model of is the regular watch that most people are probably going to see as the main product in the category. That will start at just under 500 pounds and goes up to about 1000 pounds. This is a very expensive product by some peoples standards if they are only used to paying maybe 50 pounds for a watch. At the top end of that, you get the 18 karat gold version of the watch, which will start at 8000 pounds and rise higher from there. Thank you very much. Up next, the biggest cruise line the u. K. Has ever seen. We will speak with the u. K. Chairman of cruise operator carnival in his first interview of the day. Do not go away. The largest ship ever built for the u. K. Market will be officially named by the queen later this morning. Joining us live from southampton is carnival u. K. s david dingle. Good morning, sir. Thank you for joining us today on bloomberg television. Good morning. Lovely to be here. A very simple question to begin with when it comes to cruise ships, is big always better . In this case big is certainly better. We have been able to build into the ship and unprecedented range of facilities for our customers which makes this a most exciting ship that has ever been here in southampton. Some of the stats i was reading earlier completely blew me away. It is longer than the shargh is tall. And you have a 1 million plus Art Collection on the britannia as well. Take us through some of the mind blowing stats that is the britannia. First of all she weighs in at 141,000 tons. That is the weight of the water she displaces when she sits here. That makes, for instance, twice as big as the first cruise ship that we build 20 years ago. She has over 1800 cabins onboard, guest rooms onboard. We normally carry 3,650 passengers and they are served by officers and crew numbering 1,350. This is a Floating Community of over 5000 people. That is what blows me away more than anything else. Why didnt you go for the biggest ship in the world mental . I looked it up mantle. I looked it up on the internet. The biggest ships are the lure of the seas and the oasis of the seas. They are owned by Royal Caribbean international. Yours is 330 meters and 141,000 tons. Why didnt you go for the record , the biggest in the whole world . Well, this is always a question of balance when you are building a cruise ship. You are thinking of a number of things. In particular, you are thinking of the roots around the world you routes around the world you want to take the ship. If vessel become too big, certain areas can become inaccessible. From a business perspective our growth in the u. K. Is measured. This ship is 20 larger than the recent u. S. Ship. In terms of growing the market, you have to take the right approach for the Passenger Capacity of the ship. Tell me about the economics behind this ship i think i am right in saying it cost 473 Million Pounds to build. What are the economics behind it, the costs versus profitability . How full does it have to be to be running at a profit . We do not actually look at breakevens in that sense because the model in the cruise industry is that our ships sail full. We sell 100 of our beds. There is a good reason for that. When passengers come on board they spend a lot of money when they are on board. That revenue can add another 25 , 30 to the ticket price that is being paid. It is important that we sell our beds. In terms of cost economies, this ship is 20 more efficient in fuel consumption compared with the last new ship that was introduced into our fleet. Because of her size, her overall unit costs can be up to 30 below the average. That makes her very efficient. 75 of the cabins have a private balcony. Such cabins always command a premium in pricing. If you take the two in together, this makes the vessel a highly profitable one. You have had pr issues carnival has in recent years. Today is a real pr coup for you. Only a number of years ago carnival was damaged by the coaster concordia Costa Concordia incident. The fire aboard the trial that left passengers stranded in the gulf of mexico. Do you think it is fair to say you have wonback won back the trust of customers following those incidents . There is no question that is the case. Fortunately, here in the u. K. , with our two brands, we remained unscathed by that. But the corporation, as a whole, has done a fantastic job, i think, in rebuilding reputation reassuring customers, putting in place many new policies, procedures to ensure the safe and efficient operation of our vessels. Absolutely, the confidence of cruise customers around the world has been restored. Just remind us how british is this ship, because i know it was built in italy. Can we call it british . We can absolutely call it british. One of the most important things is when you start putting the people themselves on board the ship, the people who serve on board. That is the first point where the ship becomes british. 100 of the customers are british. The products, the service are all absolutely pointed at the british market. Finally, the whole of the interior design was created by eminent british architects based in london. When you go through the ship, we believe it has a what essentially british a quintessentially british feel. We have reflected that style of modern britain in the interior of this vessel. Good luck to you. It seems the weather is holding. Good luck to you later for the official naming of your biggestever cruise line, the britannia. Of course, that ceremony will be presided over by her majesty queen elisabeth. David dingle, chairman of carnival u. K. The top stories on bloomberg this hour. Speaking about gender equality, saying the u. S. Has more to do in empowering women in all types of work. The cochair of the Gates Foundation told bloomberg i do not think we are even close to where we need to be. We have a qualified woman for president and you get more women in congress, then i think we would see a lot of policy changes for women in the u. S. I do not know that a president ial candidate can do it on their own. You need the commitment of all branches of government if we are going to make huge policy changes for women. In new zealand, police are investigating a threat to poisoned baby formula. A group threatened to contaminate supplies unless the government stopped using pesticides to control animal populations. Tests of more than 40,000 samples have found no trace of poison. Solar impulse the solar powered plane attempting to fly around the world, has landed safely in oman after the first leg of its epic journey. The flight took 13 hours. The next leg will be to india. The 21000mile trip will probably take about five months. Chinas largest search engine, baidu may introduce an Autonomous Car this year, joining the ranks of google and apple in developing vehicles. The ceo said baidu had been researching the smart car and has been working with auto manufacturers. Coming up looking at the top stories from bloomberg digital output, including why the drought in chile is threatening the countrys vineyards. Welcome back. Lets have a look at some of our picks from our bloomberg digital output. A story about chiles water shortage threatening wines and mines. This is a story about the dry spell they have experienced. Eight years of dry weather in chile has been hurting wine producers and the Mining Industry, causing hydroelectric prices to increase. They are the highest in latin america. Wildfires are being created as a result because the forest do not have enough humidity to protect themselves. The Mining Industry, of course, chile is the number one copper producer. The government is encouraging the Mining Industry to create their own desalination facilities and many of the businesses are doing that. Of course, the wine producers can afford to do that. On bloomberg. Com today, i saw this picture of the avengers, as in disneys avengers. They said disneys new avengers film could smash the openingwe can record set by the first film in 2012. 207 million. This could gross 217 million over a weekend. Will it smash the total box office of 1. 5 billion . There you go. Mark brady dougan. The chief executive. We will bring you the latest. Anna the European Finance chief piles on pressure to keep on economic reforms. We are live with the details. Mark apple goes for the gold with luxury smart watches. Bloomberg has been hands on with the gadget. We will bring you our verdict. Anna half a decade left behind. Sanctions violations and we are live. Mark welcome to countdown. Himanna we speak to craig on the companys tone. Mark Credit Suisse is named the chief executive. They are confirming bloomberg reports. The switch puts them on the he left Credit Suisse in 2007 and has been under pressure to switch the lender strategy. The European International correspondent. What people see question mark they see the insurer. They give the job to the insurer. He is a man with an interesting life. He caught up early and asked where he saw himself. He had an interesting answer. There is faith in my ability. I remember december of 1999. They had a country and recovered 10 days later. I have become philosophical about my hopes. I hope to be surrounded by people whose company i enjoy and i see every day. Credit suisse had the american running the bank. Lets take a look at the biography. He was there for eight years. And back in ivory coast. He moved to prudential in 2009. The big question is what he will do to turn around the bank. Credit suisse is down. Compared to peers it is underperforming and they do not know what they will do with debt trading. This is a big question and brady dougan was paring it back slowly. Others were going more quickly. Credit suisse is at 1. 1 and we look at ubs and they are at 1. 4 . Another note is that jack lew reported him as wanting the legal issues out there. And where do you have treasury . Other regulators have a lot of questions out there. We will see how he responds. How will investors judge brady dougan . The luxury the legacy is surviving the financial crisis and he came in in 2007 with a long tenure for banking standards. The question is, what is the share price. He has had bad news he wanted to impart and they have to announce another legal challenge. We still do not know what the total cost is going to be. He settled a claim. We still do not have a price tag. Until we have the price tag, it is hard to get a final verdict. Anna piling on pressure to open the books. The cash reserves begin to run load in athens. Lets bring in carolyn cohn into the conversation. What happened in brussels last night . A lot of talk and pressure. A lot of drama and not much progress in brussels. The main decision they agreed on it is the Greek Program of reforms that will start tomorrow. Some more discussions will take place in athens with different delegations from the institutions. That may determine whether greece can receive the next tron should of aid. The head of the eurogroup last night, i asked him whether greece could run out of cash. I do not know if and when they run out. I do not control athens. All i know is that we can only release further loans from european funds if there is agreement on the total package and they start implementing reforms. Two weeks have gone by and they are on their own. They stand ready to work on wednesday. The past two weeks has been a complete waste of time. It was quite quick, according to an official. They asked if the discussion can start soon. It was noted wednesday and the deal was done. How did the finance minister react . He said he greece has not been wasting time in the past two weeks. And there is a ms. Handed a misunderstanding by the press. And this is the first batch of reforms. He was critical of the troika. Some colleagues of mine, through inertia, they utilized words. We are not having anything like this again. He says he will not accept the troika. They come together and impose on greece. He will make the Data Available and he does not want to hear the word troika ever again. Not a fan of linguistic ownership. Mark pushing the cashstrapped nation to push a rescue package. For more, lets go to athens. Good morning. What can we take away from yesterdays meeting . We had the eurogroup president call it a complete waste of time and they started to disagree. A few weeks ago, the Member States agreed to extend the availability of bailout funds. The greek government committed to ambitious reforms which included pension reform and eliminating streamlining and Public Administration of funds. They expect the greek government to start working on delivering reforms. Instead, the greek government spent the last few weeks drawing up a new list of other reforms. We have id cards and tax evasion. As we expected, the finance minister said this is not enough. We can have another. I have proof of the dispersion of bailout funds for greece. The government started delivering on reforms and there was a bit of a grant. What are the main hurdles for greece to gain Financial Aid . It seems that they have finally agreed on a process. The report i just described is complicated. There was an established process in place and it included officials from the greek ministry. And they spend endless hours and countless meetings to turn this into legislation and regulation. The greek government disagrees with the process and they spend a month. Finally, they agree and start working on this as of wednesday. The next is for the greek government to legislate and implement as promised. They have experience in the long process. Thanks. Anna tim cook took to the stage to unveil the apple watch that will be available next month. Most personal device we have ever created. It is not just with you. It is on you. Since what you wear is an expression of who you are, we designed apple watch to appeal to a variety of people with different tastes and preferences. Anna here to help with the headlines caroline hyde. Good morning. Talk about the costs. Theyre going for a range. You could cough up 17,000 if you are going for the highend edition. It has modern gold. 17,000. You are on par with the highend devices. They show it off and Christy Talley ctellington. They are selling the device in highend areas of paris. In down the releft eye at in gallery leftaffayette, they are going for highend watches at the sports watch will be open him. Will be aluminum. It will be in the 500 1000 mark. The highend is the standout price point. When you can get your hands on it is the 10. It is initially the u. S. And the u. K. They goes on sale in hong kong and japan. Nine key countries. Mark we need one of these things on our wrist. They have the tablet and they make a wearable. They make it ubiquitous. Why do we want to replace the watch . There are some who do not want to use it. With the apple watch, you do not need a phone out. It makes your life more efficient. You can take calls on it. You can pay for goods. You can walk into a store without a phone. You can order a car and see it arrive on your watch. This is where it gets really back to the future. You can open a hotel room. You can open a garage door if you have an alarm system. You can go to American Airlines with the boarding pass. We are starting to get there. Youtube is not on there. Google is not tempted to make the apps or apple is not showing them off. We have seen Android Devices coming out in the wearables space. It is not the first. And the apple brand in the sector. Only 20 of the world has the device. The rest is seeing the help. They have a big amount. It looks like an ipod nano. This is where the integration comes and it was the inspiration for the watch. Anna thank you very much. Mark top stories on bloomberg. The inflation on february came in. And the Lunar New Year. The strength of the u. S. Economy is helping. 1. 45 billion in investigations into sanctions violations. That is according to people familiar with the matter. They are entering an agreement with the Justice Department to avoid three criminal prosecutions. Hsbcs ceo says he is incompetent. He was not aware of tax evasion as the unit. Hsbcs chief executive defended his personal tax arrangement. My inability to convince anyone that these were tax evasion has caused reputational damage to the bank. There was criticism to fair head that fairhad fairhead. He was either naive she was either naive or incompetent. Fairhead is committed to her role. Anna you can join in the conversation, should you wish to. Let us know what you are thinking. This is where youll find me. markbarton. Mark apple watch is trending. Anna we will take a short break on the program. Mark we will take a look at risks and opportunities in european equities after the break. Stay where you are. Anna welcome back. The bowl run for u. S. Stocks entered the seventh year. What does it mean for equities . Lets ring in the global head for strategies. We love these conversations. Is it looking good . It is more advanced than it would be in europe. You have Profit Margins at a record high and earnings at a record high. You have the nominal gdp at a record high. You look at europe and it may be a 67year high. Mark what does it tell us with europe . It tells us we have come back into europe somewhat this year. If you look at the last 18 months, you have seen no net inflows. They came out through summer with big selling and they have just come back in the first quarter. Most investment is underweight. It is working for them and i wonder if they rotate it. What drives the slow pattern you described . I suspected it was something to do with greece. There was industrial goods orders that kicked the selling off and investors are wary of investing in the european region. Now, the data is Getting Better and we have downgrades. It is starting to come back. Mark does it equal equity gains . The currency is down and the currency is key. It will be outside europe and the affects translation. So it will lower fiscal austerity. Anna does that mean you are interested in Consumer Companies . Mark we should be more defensive. They have done well. They have been getting industrials and consumer cyclicals. The financials have suffered the outflows and banks have been calling the upturn in the banking industry. It is on a quarterly or yearly basis. Some of the concerns are the low Interest Rates hitting margins and that has certainly been the case. If you look forward and see the higher asset prices, the banks will benefit from the asset prices and they are domestic and cyclical. Anna they are topical. It remains difficult for them, despite share prices. It does. You discount the liabilities of the low rates and it is hard to get returns to match the rates. Mark mining is cyclical. The have flows. Does it tell us the macroeconomic picture looks brighter with chinese inflation data . They have not had the best of times. Anna they have not they have not and they sold off aggressively. China may be stabilizing. Inflation is picking up. We are not going to get global the flechette and and, in the situation, we will see it do better. We are neutral on commodities. We are neutral on minors. We are neutral on oil. Anna credit is seeing inflows and phil was suggesting rates need to go up because of exposure to riskier assets. Is that a concern . The search for yield has driven them into parts of the market they should not be in and it gives concern. Mark the u. K. Election, how should we position . There is uncertainty and it is a close call. The markets do not like uncertainty. If there is a labor government some sectors may be under impact. Maybe there is a risk of a referendum. The equity market is a negative. Anna thank you. Mark coming up next, the Virgin Atlantic ceo joins us. Stay with us. Anna you are watching countdown. Time for a Foreign Exchange check. We have seen the dollar hit highs with the return of the dallas fed president. Richard fisher warns the delay in increasing rates risks triggering a recession. The key is the timing of the rate hike and he points out that the fed tightens policy and it has driven the economy into recession. The subject of unemployment is ending in the range of natural rate estimates. If he suggests the Interest Rates need to go up before 2015 lets have a look at what happens with the options market. That is where the traders think the rates will go with the chance of the increase by june. It seems there are increasing levels of betting going on in the market and we will see it. Lets have a look at what is going on in new zealand. The dollar has been decreasing on the back of a scandal at a Dairy Company that had shares suspended. The primary industry says they will work closely and there has been a criminal threat to the formula. No evidence of contamination taking place. Mark the top story is Melinda Gates speaking on gender equality and saying that the u. S. Has more to do. She told bloomberg that she does not think we are close to where we need to be. We have a woman for president and we need more women in congress. I think we could see policy changes. I do not know a president ial candidate can do it on their own. You need the commitment of all branches and the government. Mark the police say they are investigating a threat. It threatens to contaminate formula unless they stopped using pesticide. Tests of 40000. Attempting to fly around the world. The flight from abreu. B abu dahbi took 13 hours. The trip will take five months. The car this year joined apple and connecting vehicles. They have been researching. Anna after heavy losses, back into profits. It is owned by Richard Branson and posted rough its. Posted profits, thanks to a collaboration with delta. Joining us now is the ceo, craig. Thanks for talking to. Congratulations on returning to profit. Lets talk about the relationship with delta. They are big investors and you have a cool operative deal with them. What is happening on the bottom line . How is the impact increasing in 2015 . It has been a great year and it is a key reason for financial turnaround. The benefit to the bottom line has been over 10 Million Pounds in the first year and we expect that to continue to grow. We have done this while making things more convenient for customers to connect across the networks. We connect over 10,000 customers a month and it allows us to offer new destinations. They might have had to choose someone else prior. It has helped get to the point where we are at. Great for customers and us. Anna lets talk about the aircraft you operate. The leisure fleet. You talked about what you are deciding to replace that with. Any more details on what the thinking is . Bring us up to speed on the deliberation. Within the context of the fleet we will replace 50 of the current with aircraft. It has been introduced into service last year. We have a decision to make on the fleet. You point out the airplane is good for us. It is better at 60 a barrel. We need to make a decision to replace and we wont make a call within the next sixnine months. Anna any decision . What does it hang on . We have six on order or option that we could take and we have not made a decision. The airplane has been successful with operators. A bit of a stretch. They have allowed us to defer making the decision. We do not have anything that suggests it is the right airplane. Keeping it as an alternative is attractive. Anna we have seen the oil prices fall. What impact are you seeing from the Weaker Oil Prices . How much of the benefit will you feel as the year goes by . A great question. We hedge fuel and we take delivery of the fuel for our aircraft and we hedge over two years. The heaviest percentage of heavy of hedging is in. We saw little benefit in the first few months. The year progressed and it stayed where it is. We see the increase in benefit. It is better to have the price is lower and customers have benefited from it. It is something that stayed this way with an upside for both the airline and the customers. Anna interesting. Lets talk about the airport. We are facing the election and many wonder what the government will look like. Will be stable enough to make decisions on Infrastructure Investment . You would know better. My relative has been in the u. K. For 10 years and the process and commission has been good and open. That said, how it results and what action occurs your guess is as good as mine. Anna i think the experience makes you an old hand at watching. What about heathrow . You have experience. They argued the choice would be to build and they say they have the support of businesses. What is your stance on the airport capacity . What makes sense for the company . I am not sure. I feel that the u. K. Having a worldclass hub to expand is essential and best placed at heathrow. We love gatwick. It may be that the additional runway is helpful. The urgent need is to create a real hub. Anna how strong is business across the atlantic . How strong is the relationship between the economies that seem to be doing well for developed markets . You hit the nail on the head. You look at the economies that seem to be strengthening and it starts with a reasonable base. The u. K. And the u. S. Are the places you would want to be. As a result of the fact that it is performing well and we have customers on service, we have capacity. We create new connecting opportunities with delta and really focus on the efforts where we are doing the most success. That is the economic strength we are seeing. Mark follow us on twitter. Big trending topics today. The apple watch and there is anna. There i am. I see that wellbank is trending. Im not talking about that. Where is the value in u. S. Stock . Mark time for the part chart. The place to look is not the s p 500. It began year seven of the bull market. The nasdaq 100. Do not be put off by the reputation of being the birthplace of the technology bubble. When compared with the s p 500 david and his team of strategists say at Goldman Sachs say that it is trading on 18. 8 estimated earnings and 8 higher than the s p 500. Close to the narrowest premiums. The average is 40 over the last 15 years and 30 over the last decade. The earnings are expected to rise 15 in the next 12 months versus 5 for the s p 500. The competition of the index tells the story. The Consumer Discretionary and Health Care Companies make up the nasdaq 100. No Oil Companies insight. One thing worth noting is that apple accounts for 15 of the index. Goldman sachs says that the nasdaq 100 has superior sales. It does expand by one point. The index is still 44 1112. That was the high. The closing was 4700. Since march 9 in 2009, when the market began and for the nasdaq 100, it has risen 322 and the s p 500 has risen 207 . Your choice. Nasdaq 100 or the s p 100 s p 500. Anna top stories on bloomberg are chinese inflation in february coming in a higher than expected year on year. Even Producer Prices fell. And it helps travel. A strengthening u. S. Economy underpins the outlook. U. K. Lawmakers tell the former banking ceo that he is incompetent after he tells a Parliamentary Committee that he was unaware of tax evasion. At the hearing of the Public Accounts Committee gulliver defended his arrangements. The evasion has caused reputational damage to the bank. Anna commerzbank could be preparing to pay 1. 4 5 billion dollars to settle investigations into sanctions violations and the accounting scandal in japan. That is according to people familiar with the matter. Commerzbank is said to be entering an agreement with the Justice Department to avoid criminal prosecutions. Mark lets get more on the story. Good morning. How did commerzbank get to this . We are looking at completely different issues. On one hand, authorities looking into whether they violated sanctions laws and certain countries cannot do business. For example iran. They are also expecting the u. S. Authorities were looking in to whether they neglected to report information about the japanese camera maker. It is separate issues being thrown together in a settlement. Mark how does this compare to other settlements of european banks in the United States . We have seen a large range. We have seen 100 million u. S. Dollars to one billion u. S. Dollars. It looks like they are in the middle and the issue of sanctions violations is that there are investigations going on in other european banks still and we expect that, in the next year or two, possibly, several banks will have more settlements. You have Deutsche Bank and unicredit. Mark what does it mean for the bank going for it . Really, we have to understand where the bank comes from. It was bailed out by the German Government after the crisis. It is the largest shareholder. The have been trying to boost profitability and increase the capital base. The settlement does not necessarily help. I spoke with the analyst last week who said that they really need the capital to increase. However, at this point, any settlement is good because the numbers are growing and it has been scary for investors. They want visibility. Anything would be loved by investors. Mark thanks. Shane in frankford. Anna were taking a look at london. Nice morning out there. Futures are weaker. No doubt, prudential, the u. K. Insurance business, and Credit Suisse will be in focus. The markets open up in 10 minutes and we will see you back on countdown. Mark Credit Suisse has named prudentials chief executive and he replaced brady dougan. The switch put him at the top of Credit Suisse as the bank was grappling with investigations that hurt earnings. Hans nichols joins us from berlin. Tell us about the new executive. One of his hallmarks is speaking on a conference call. Prudential has earnings out. Here is what he is saying. He says he is leaving behind a highperforming company. Never a debtor moment to leave. He says he believes the company is in great shape. That is the prudential side. The same has been called. It works when you compare to some of the peers. A big question on Credit Suisse is the main allegations. They have the settlement with u. S. Authorities on tax evasion last year. What other potential probes are out there . What do you do with the core fixed income commodities and currency . The bank has retrenched. Most of the industry retrenched more. The one exception is the debt trading and the have the French National running the swiss bank. It was the american. They have the insurer acting like a banker. Big changes and we will see how the market reacts. Mark how would you categorize brady . He lasted. He lasted through the financial crisis and litigation crisis. The had a long tenure. Whether it was successful, that is for historians. He brought the bank through incremental and not fundamental changes. This may be the indication of the bank going in a separate one. Mark thanks. Hans nichols, the international correspondent. Anna on the move focuses on the share prices of prudential. It will go to this man. This is coming up on on the move. Stay tuned. Well see you tomorrow. Have a good day. Jonathan good morning and welcome to own of the move. I am jonathan ferro. We are moments away from european trading. Changing at the top of credit squeeze. The ceo heads to the exit. The president ial ceo gets the call up. Greek crash crunch. Finance ministers mount pressure on greece tell followthrough. Concerts at growth that the nation could run out of cash and by the end of the month. The dollar index climbs to a new high. Amid speculation the Federal Reserve will go with a rate hike. Those are the things we are talking about for the next hour. So futures are down. Dax futures are up by almost 20 points. We are looking at the open to caroline hyde. Carolina by caroline the 60th day of declines. Greece could run out of cash by the end of the month. Wednesday is when it they would start renegotiating. Will they be able to strike a deal . It is dragging stocks lower. Cac 40 up by 0. 1 . Interesting data from china. Shares falling over there