Transcripts For BLOOMBERG Countdown 20150313

Expected to cut its key Interest Rate as the economy heads for its first recession in six years. Mark u. S. Backlash as the u. K. Eyes membership with the Asian Infrastructure Investment Bank. We look at why joining this chinese club could cause a risk between london and washington. Anna we tell you what the stakes are of the bank. Mark welcome to countdown. Anna a warm welcome to the program everybody. Also coming up disney is not letting go of its frozen it are you the company hit. The Company Announced a sequel and a release plan for future star wars hits including the next title. Drumroll please, the title of the movie is rogue one. Mark the search for a greek bailout deal took another turn in a filed a complaint against the germany finance minister against show bowl schaueble. It comes as they prepare to meet the eu minister jeanclaude today. Mark what is the response and are the greeks buying it . Hans the responses that he didnt buy the foolish part i had of it that he maybe naive but not foolishly naive. They lodged a formal complaint and the germans are saying wait a second, this is being taken out of context, what mr. Schaueble was doing was making sure that he reads the letter that he signed onto for clarity and he suggested that if he didnt understand what was going on that it was a communication strategy that would be a surprise for mr. Schaueble because he did not necessarily think he was naive. What the greeks are saying is that it has been correctly translated and there is a foolish and front of that come i dont see that in the french german translation. But they are saying it is in essence what he called them and they are not backing down from there claims. All this gives mr. C press a chance cypress, a chance to plead for more time and fiscal space. This is why we need reforms and this is why we are here today, to cooperate. This is why we need fiscal space to be able to tackle the basic problems of the economy of the relationships of the state with the economy and of the state with the society. Cons so the Good Cop Bad Cop routine continues between mr. Schaueble and mr. C press tsipras. It is an interesting to see the way this developed, he has been sending love sonnets to the german press saying he is the most brilliant and intellectual of the finance and now this comes out. It is unclear how this will help. Mark greek banks getting a little help from the ecb. When i say a little it really is. Hans it is 600 million more in emergency liquidity assistance. This raises the total cap to 69. 4 billion. But some believe that emergency liquidity assistance should be is is a funding mechanism and here is what mr. Vitamin had to say veidmann had to say. Both of these conditions had to be met and we had to respect the other conditions that can allow financing. So the judgment is the situation where the government is unable to tempt the market where banks are unable to test the market is in my view where there are concerns. Hans you take that six to 9. 4 and compare it 69. 4 i do compare it to what they had before and the total for february for greek banks was 104 billion euros, you compare that with 87 billion euros in january, clearly the greek banks are availing themselves of these windows but when will there be outright concerned there is financing . Dont call me naive or foolish, either i will take as an insult. Mark mr. Hans nichols, neither foolish nor naive. Anna in and true exclusive interview with bloomberg, roubini outlines what a greek exit would look like youre in lets listen in. Roubini if there was a greek exit there would be massive contagions down where they are right now. If they run on other eurozone banks and once one country is out they will last who will be next but thats why i think economically and financially it doesnt make sense. Also geopolitical consequences the germans are becoming more aggressive not just in the ukraine and the balkans from bulgaria to serbia there a lot of countries where if greek exit the eurozone might end up in the russian bear. You have jihadists from even from a german point of view it doesnt make sense to have an exit of greece from the eurozone. Therefore, where there are market concerns about greece there will be a compromise between the two sides. I dont think the greek exit in the eurozone is likely. Anna we will stay with bloomberg throughout the morning and we have plenty of interviews you dont what to miss including one with the former fred fed chairman, alan greenspan. Anna mark Russias Central Bank is expected to cut the Interest Rate to the ruble. The move comes ahead of next weeks anniversary of the annexation of crimea. For more lets go to and a andriy anova anna andriy anova anna andrienova. Anna there have been a lot of great inflation in the past month, as for the Economic Forecast we see that we expect a 100 basis point cut which is really conservative and the market itself expects the rate to be cut about 200 points and if that doesnt happen i guess they can be disappointed we dont expect the ruble to react in the long term. But also what people in the market are saying since the Russian Central Bank had an emergency rate increase in september now they are just unwinding those spoils i got from 10 to 17 . Back in january at the previous meeting almost no one expected them to cut rates. That is, what i would say unexpected. This time around, the median is for a 100 basis point cut but still we have room for surprise. But the communication of the central bank all last year they were saying they were targeting inflation, that inflation is still accelerating and the minister of economy is saying that inflation can be in april at 17 and right now it is a little about 16 . It is not accelerating as fast so there is some hope that maybe it will happen mark sounds like we lost anna that was our reporter, Anna Andrianova speaking in moscow. As she said, an economists polled by bloomberg forecasts them to cut Interest Rates by one percentage point to 14 . Rates were cut from 17 to 15 only a month or so after that massive rake rate hike. Anna i spoke to the boss of the et be bank earlier and he was expecting raises points to be down by 10 Percentage Points later this year but said it was a hope not an expectation. He expects things in line with the estimate that you cited. Lets take a look at the top stories, utterly federal officials are investigating possible government funding of herbal livestock. That is according to a person familiar with the matter. Billionaire Ackermann Ackman has been accused of inflating prices and the white house says it hopes and expects the u. K. To ensure that high standards of governance are upheld. In a rare public reach in the special relationship, the white house signaled its unease at britains decision to become a Founding Member of the Asian Infrastructure Investment Bank by raising concerns of whether the new body would meet the standards of the world bank. Investors have joined millions of young girls in cheering the news that walt disney is working on a sequel to the smash hit frozen. Sales of the toys jumped after the announcement. Disney also reveals that the eight film in the star wars series will be released may 2017 and will be called rogue one. The governor says Interest Rates in the u. K. May rise at a slower rate than expected. Mark carney says he expects inflation rates to return to target within the next two years. Carney there is a risk that the accommodation of significantly low inflation and the price of sterling could way on prices are sometime very despite this, a solid u. K. Connection underpinned by strong domestic demand growth leaves us on track with her inflation targets in the next two years. Anna commerzbank agreed to pay out pay 1. 5 billion, closing the door on half a decade of legal woes over sections violation claims. The bank condenses into a third agreement with the Justice Department and agreed to pay penalties to over half a dozen Government Agencies including the Manhattan District Attorney the Federal Reserve and the treasury department. You can find out more on all those stories at bloomberg. Com. Mark i know frozen was trending earlier, it certainly was in the edwards household. Tell us what you are following today and what you want to hear more about. The barton household has not quite got into frozen yet. In the short plan you see some recovery and the Economic Indicators suggest a recovery over the mediumterm. The debt dynamics in italy and parts of the periphery are still unsustainable with private and public debt rising with the gdp. There is Political Risk right now in the eurozone. In spain, lorentz he is fragile lorenzi is fragile. So you have austerity and reform fatigue, you have antieuro parties emerging. The fundamental mediumterm problems of the eurozone have not been resolved and there will be a recover of the eurozone for the next year or so. Mark that was the prominent economist new rally roubini noureli roubini lets just stay with that as the ecb comes to its first week of qe. Lets bring in Patrick Armstrong who is the chief Investment Officer and managing partner. The beginning of the qe program pushing yields further into record low territory, do you worry about the unintended consequences of qe . It is not an explicit goal of to eat but the weak euro is the final outcome. Lower bond prices are good. Qe in the long run inflationary concerns of printing money, none of that has, but eventually as the money supply goes that will have inflationary effects. Following the playbook of United Kingdom has worked very well. Anna you were in early in terms of getting involved in european equities when you saw that the euro was weakening and if qe came it could mean a turnaround and that would be good or european consumer companies. Has that trend played out now . Patrick it wasnt so much that it would switch the m Economic Trend but that it would devalue the euro. I thought that would play out over this year but it has played out in the first two months. Anna does that not mean there is a second leg of the story . Guest all the companies i mentioned are up 20 percent to 30 this year. And siemens and phillips and snyder electric, theyre all going to participate in the European Growth and that is the nonconsensual part of the trade, everyone expects a weaker euro but European Growth is not priced in yet. I think janet yellen will not raise rates until september. Mark does she drop patients . Patrick it gives her leeway, it doesnt mean it is happening in june. It is just a progression. Anna what about the stunt in the u. S. Dollar that could result, will that hurt the economy significantly . Patrick the u. S. Economy is running at about 2. 2 four this year and the u. S. Economy is doing very well, obviously. Maybe i shouldnt say very well but compared to where we are in europe and the rest of the developed world. I think where janet yellen will have to continue to be patient is that she do not does not want to risk a rate rise and tell has take off velocity. Mark have we reached a peak in the u. S. Stock market . Patrick in our opinion we have u. S. Equities are very vulnerable to u. S. Rate rises when they occur. You are paying a premium for the growth that is there but that is all the price right now. Mark so you are shorting u. S. . Patrick u. S. Utilities is the biggest sector short in our portfolio. Traditional utilities trade at two thirds of that multiple and because they pushed up prices it is the bestperforming sector last year and this year it is underperforming by 6 but it is still in crisis. Anna some of the big writedowns are still to come because many of these businesses have not had to recognize the weakness of the oil price fully in terms of the reserves. Is that something that is still to come . Patrick yes, we are short oil we short the oil stocks 50. We have not got an out right short on all companies but that is a sector that has outperformed wti and brent rices. Mark china you said, still growing. How do you best play china . Patrick we have an emerging market in london it is listed emad, it is india china and a basket of Asian Countries and they are all in a fisheries of the weaker oil price and of the Dollar Strength beneficiaries of the weaker oil price and of the Dollar Strength. It is a very good situation for the u. S. Anna talking of supportive policy, the u. K. Going over 2000 for the First Time Since april 2000, is that qe driven . Patrick we dont have much at a position on japan and a moment but if you put me on the spot i would be buying Japanese Equities rather than shelving them. I would rather be a buyer than a seller. Mark it is still half of where it was in 1989. Do we ever go back to those days . Patrick at some point, who knows when. Mark not in the short term. Anna lets talk about greece. Does it worry you, the war of words . Patrick it is noise and it has to continue you need a lot of rhetoric and both sides have to make their cases and it is inevitable that they reach that conclusion at some point. Greece isnt as meaningful economically from a geopolitical context it is important that greece stays affiliated with the eurozone. Anna and that will outdo any economical setback . Patrick the u. S. Whether it is obama or hillary clinton, they are on the phone with merkel and maybe they will start siding with russia him a it is important from a geopolitical side. Mark the other big event today is russia, it could cut rates from 15 to make a guess, 14 lower . Has the crisis passed . Patrick they still have a lot of trouble with the sanctions and the oil price where it is. The currency has fallen so much that the cost of using the oil has fallen. Mark do you avoid russia . Patrick we avoid Corporate Governance issues in russia is something i do not want to get involved in. If sanctions do increase i could see some areas where foreign and russian equities are not entitled to dividends or Something Like that. Anna but european industrials have some exposure to russia. Patrick it is not about the economy so much, it is the russian equities and a governance issue. Mark Patrick Armstrong, chief Investment Officer. Anna you can find us on twitter. Mark why commerzbank has agreed to pay 1. 5 billion to u. S. Authorities. Anna welcome back time to take a look at the Foreign Exchange markets. Focusing on the danish kroner are the troubles over . The governor of the central bank was in london yesterday evening saying they have not had to convene and the Foreign Exchange market since the end of february. You may remember this all goes back to when the swiss drop their currency peg. Some invested whilst asking the question, too. As to whether the central bank would keep its peg with the euro and now the central bank is saying those efforts have not had to do that recently. To the central bank was forced to sell danish krone to defend that pay to stop them from increasing too much. How they won the fight against the hedge funds and how they resolved in commitment being found to be there in the way that it was with the swisss french centralbank because as rubber it succumbed to pressure and they ended their peg with the euro. So the danish krone to the euro plus or minus two point 25 . You can see some of the volatility that the swiss move created but that range is quite a small one because as i say about the paik. Mark the chief executive of Alexander Mcqueen pays tribute to the late designer saying that five years on from his death the brand has become one of the biggest and best in the u. K. Speaking exclusively to bloomberg he says the company was now enjoying huge and unexpected growth in asia. America is our biggest market and we have had exceptional growth in asia and the Brand Awareness is getting to be something that really surprised us. Mark speaking exclusively to bloomberg, Sergio Marchionne has said his company is open to retire with General Motors or phot ford and the deal with one of its counterparts would be economically feasible. Gm and ford representatives said they are focused on their own. First Quarter Sales may be more than 1 billion lower than was forecast. The chipmaker shares fell to their lowest level since july and revenue will be no higher than 13. 1 billion. Commerzbank says it will pay 1. 45 billion to settle multiple probes in the United States that is after a decade of legal woes and and trawled and one of japans biggest accounting schedules. Lets get to bloombergs shane strohm at shane. They agreed to pay 1. 45 million and they will also be installing an external monitor which is somebody who comes in and looks at their compliance processes to make sure this thing doesnt happen again or it so it looks like a standard package and weve seen other banks that settled with u. S. Authorities and also for example banks consenting to external monitors at Deutsche Bank or hsbc and barclays. Mark has the bank set aside enough money to cover the settlement . Shane that was one of the Big Questions because nobody could see what they had the legal provision set aside for. The only disclosure for all legal provisions. The bank cannot yesterday and said they are going to take a onetime charge of 338 Million Euros to cover the rest of the settlement. That gives investors clarity how much they had set aside for the case and how much they still had to put aside. Mark what does it mean for the bank in the coming year . Shane this coming year theyre working toward targets set for 2016. They set these targets a few years back and just a few weeks ago the ceo less things came out lestings, came out and said we didnt know the euro would be stuck and this slow growth rate for such a long time. Now with this payment the 1. 45 billion that everybody is saying they could have used in a better way to reach their targets, they have a capital ratio target. They could have used this money for that and now people seem to think it is very possible or they may have to sit down at some point and revisit the topic of capital, particularly the capital ratio. Can they make their target . How do they plan on doing it . Mark thank you. Anna chinas answer to the Asian Development bank is a surprise endorsement from the other side of the world. The u. K. It was to join the recently established asian Investment Bank. The u. K. Counselor said joining the ai ib at the founding stage will create an unrivaled opportunity for the u. K. And asia to invest in growth together. Lets get to yvonne washington seems a bit skeptical about londons decision to get involved in a club that some Asian Companies have decided Asian Countries have decided not to join. Yvonne very interesting developments from the u. K. Saying they want in on this ai i bank. Overall they said they would be the first major western country to shine for membership and china reacted today saying they are welcoming the u. K. In their decision. Lets talk about why this is interesting. China is thinking that italy has the world bank, japan has the Asian Development tank and china says this looks skewed when it comes to the u. S. Japan alliance. They essentially created a 50 billion bank, the aib as a potential rival. It is spearheaded by trout china and is china backed and the u. K. Say they will be in talks with the Founding Members later this month. Anna what is the white house response . Not pleased . Yvonne girl yvonne they have raised some eyebrows. Any development will need funding for construction in their area, but the one concern is governance and environmental and social safeguards. The white house says they are worried that the ai ib doesnt have the status on the world bank and the Development Bank and they sent out a response saying we hope and expect u. K. To use its voice to push for high standards. Anna think you very much yvonne man eunice the latest. Mark Bloomberg Markets managing editor Joe Weisenthal explains why the dollar is the strongest it has been in 12 years. Joe a funny thing is happening the dollar has been surging massively, up 24 since june. It is at its highest level in 12 years. That is quite the turnaround them a few years ago when everyone was down on the dollar. In 2007 gisele insisted she be paid in euros and jayz flashed euros in a video. And after the financial crisis we were told everything was going wrong for the dollar. Gigantic u. S. Budget deficits were eroding confidence in the dollar, plus other countries seemed to have Growth Prospects that make them more appealing to investors. So what happened . The u. S. Recovery is now the envy of the world and it looks like the fed is ready to hike Interest Rates before other major central banks. U. S. Government deficits have shrunk massively and the collapse of Oil Prices Mean the import bill is disappearing. While japan has created fresh easing programs, the u. S. Dollar is once again king. Mark did you know that jayz flashed euros in a video . Anna joe has a long memory. We will take a short break and you can join the conversation on twitter. I have been tweeting out details with the ceo of alexander the queen Alexander Mcqueen. You can find us on twitter. Mark coming up, we will take a look at alternative investments. How much is that stamp collection in your attic worth . Mark mark here is a look at the top stories, federal officials are investigating possible manipulation by herbalife stock by ackman that is according to a person familiar with the matter. Ackman has accused herbalife of inflating sales. The leader of the u. K. Government Opposition Party labor has described the idea he made to a Coalition Deal with the Scottish National party after the election. Speaking during a question and answer session on bbc three television he said i dont want a coalition, i dont need a coalition with them and i am not planning on it. It is nonsense i promise you. The s p is expected to make huge gains in the may election after joining a search in popularity following the Scottish Referendum last year. And were launching Bloomberg Politics and u. K. Election, 2015 every day between the budget and the general election we will be bringing you a special program looking at the key election issues and how this could affect his this is, markets and industries. That is tomorrow. The founder of Everest Capital told investors last month their closing six of seven funds. They were wiped out in less than a day after the Swiss National bank unexpectedly decided to restore the flea frodo free float of its currency. They lost confidence and everest suffered a high level of redemption. And the auction house will unveil a 100 million coin collection in london. Ahead of the sale in new york, the display includes 12 individual coins estimated at 1 million or more each. We will have an interview with the vicechairman today at 10 30 u. K. Time. Anna lets stick with massive valuable, there are plenty of ways to make money but how would you feel about investing in rare coins. Here to tell us more is keith the managing editor of Stanley Gibbons investments. Great to meet you, thank you for coming in. I never really thought of stamps as an investment or something to collect but it happens to have a lot of value. So how may people are actually investing . Guest the interesting thing is you are spot on. There is an undercurrent of people collecting across the world that only about 1 go on to invest because the investment market is driven brilliantly by supply demand economics. You have an asset chased by collectors and an increasing base of sophisticated investors. Mark so every little person who collected stance when they were young knows about the penny black and hopes one day they will come across one. You have one here, i have never met one before. It is laminated so it might not be easy to see but you have four there. Why is it so valuable . Patrick guest the great thing is people talk about it with reverence. It is the 175th anniversary of the launch this year and this one is worth 175,000 pounds but you can find them for 400 or 500 pounds because 68 million were printed. Queen victoria was the steve jobs of her day. She unleashed a communication revolution in may of 1840 which is one of the reasons we have our iphones nowadays and this is one of the things you are buying into. You are not buying a piece of paper someone else has licked, you are buying a slice of history and that is what makes them valuable. Anna i was reading that the ones that are not used are more valuable and i thought, and other areas of collecting items with a story are sometimes more valuable than those that are untouched, but that is not the way it works. Guest there are a whole series of nuances and factors which make a stamp valuable. One of them is condition but the most expensive stamp we have ever sold at Stanley Gibbons was just over half a million pounds. A terrible looking thing. Stamped, frank, battered the because there are only seven in the world it has that anna rarity. Guest exactly. Mark so there are three of these in the world . Guest this is a great example where there are only three in the world, a queen owns two and one of our clients owns the other. Mark what is it and why is it special . Guest in the 1970s it was worth 13 p at face value but one of the stands has lost its face value so therefore it becomes a way of making money through other peoples mistakes. It is an error stamp and should not exist, all the rest were destroyed and now it is one of three. Anna is this a slightly eccentric british affair or a global is this . Business . Where is a geographical focus . Guest u. S. Is the second biggest market and we have offices in hong kong and singapore. Chairman mao did us a great favor, he banned stamp collecting as being bourgeois so the chinese seven coming back not just to collecting that investing in rare tangible assets. Anna and more since the financial crisis . Guest yes we have seen a big kick since 2008. First everyone was like rabbits in the headlights and then people started knocking on our doors. Mark and coins are not correlated to other assets. Our stamps are stamps . Guest know and this is why we are finding an increased interest from investors. There is virtually no correlation. In 2008 our rare coin and rare stamp index jumped 32 when pretty much every single other asset class was going south. Anna how much is this worst . Worth . Guest this is the largest british coin ever built. It is a wonderfully impressive looking thing because charles the first had to move his meant to oxford because cromwell was rampaging over london and to show off to his supporters, he minted this huge coin which in true politician style he has himself holding a big all of sword to cleave his enemies but also entering all the branch. This thing is wonderful, this is alexander the great this is one of the oldest anna a global nature. Guest exactly. With stamps you talk about 175 years of history and with coins you talk about 2. 5 millennia. People sometimes get into coins and drop correlation with precious metal value, that is negligible. The charles the first is worth 125,000 pounds and the alexander the great even though it is in beautiful condition and old is worth around 5000 pounds. It is very accessible for both collectors and investors. Mark if you are thinking i have a bit of money to put aside and buy a stamp or coin, what would you recommend . Guest what we would recommend is that you come in and take your capital and by a diverse range of assets. So even with one of our diversification assets, you diversify and we build you a portfolio of a range of coins and stamps because i still have not found a functioning crystal ball and we do not know what will happen on the market china is going strong, india is going strong islamic coins are going strong, british coins are going strong and american coins are phenomenally well. Mark a diversified portfolio . Anna no one is going to bite your stamp collection mark. Mark i know. It is somewhere in the loft. Coming up with a look at our favorite stories from bloomberg and the 27yearold who made a penny stock fortune. Mark time for a look at the bloomberg digital universe. The story that has me going is disney. There will be a new frozen film. So all of those i was going to say it little girls but it is little boys as well. John lasseter who is disneys animation chief said we will return to erin dell erindell knows that is the fictional kingdom. He did not give any details other than the snowman olaf, will return and the other thing which is more my scene, star wars. We knew there would be essentially six new star wars films. Three following the original six and three others following different characters from the same world. We now know what one of them will be called rogue one. It will be released in 2017. The eighth episode the force awakens is this years. Anna disney just couldnt let it go, could they . Did you see what i did . Writing the death spirals of penny stocks. It is not about jordan belford it is another 27yearold who invested his own money in penny stocks. It is a legal stock and he had a Good Practice where he was lending money to these Desperate Companies and got a heavily discounted stock and return and has made millions. Things you can do with your winnings. Countdown continues in the next hour. Anna war of words. Greece files a complaint against the german finance minister as leaders had for brussels. Plus, ruby dee weighs in on a grexit. In an exclusive interview, the Economist Says the two sides will find common ground. I think there will be a compromise between the two sides. I dont think greek exit from the eurozone is likely. Mark billionaire ackman is said to be under investigation for the manipulation of herbalife stock. Anna Russias Central Bank is expected to cut its key Interest Rate as the country heads for his first resection in recession in six years. Mark we look at why joining a chinese club could cause a rift between london and washington. Anna the nikkei closes above 19,000 four the First Time Since 2000. We tell you what sent japanese stocks surging. Mark also coming up today, disney isnt letting go of its frozen hit. It has announced a sequel. Chief executive bob iger detailing his plans for future star wars, including the next movie title. Im very pleased to announce that the title of the movie is rogue one. Anna welcome to countdown. Lets get some of the top stories we are covering this morning for you. The white house says it hopes and expects the u. K. To use its influence to ensure that high standards of governance are upheld in a new chineseled Investment Bank that britain is to join. In a rare public breach in the relationship, the white house has signaled unease at britains decision to become a Founding Member of the Investment Bank by raising concerns about whether the body would meet the standards of the world bank. Japans nikkei stock average has closed above 19,000 for the first time in almost 15 years. It was boosted by robot makers, which saw shares soar to a record high. Its president says the company is considering increasing returns to investors. Toy Company Investors have joined millions of young girls in cheering the news that disney is working on a sequel to frozen. Shares of mattel jumped after the announcement. Disney also revealed that the eighth film in the star wars series will be released in may 2017 and will be called rogue one. The governor of the bank of england says you can u. K. Interest rates may rise slowly if global inflation remains subdued. Mark carney expects inflation to return to targets within two years. There is a risk that the combination of persistently low global inflation and the strength of sterling could weigh on prices for some time. Despite these headwinds a solid u. K. Expansion underpinned by demand growth leads us on track to return to inflation targets within two years. Anna commerzbank has agreed to pay 1. 4 billion to settle multiple u. S. Investigations closing the door on half a decade of legal woes over sanctions violations claimed in its role in an accounting scandal. The bank has agreed to pay penalties to almost half a dozen Government Agencies, including the Manhattan District Attorney the Federal Reserve, and the treasury department. You can find more at bloomberg. Com. Mark lets keep the focus on greece. Theres a standoff between greece and germany as they had to brussels. In an exclusive interview, roubini outlined what a greek exit from the eurozone would look like. He had some strong words. Lets listen in. If there was a greek exit there would be massive contagion spread. Once one country is out, another will be next. Economically and financially, it doesnt make sense, a greek exit. Also, geopolitical consequences. The russians are becoming more aggressive in the balkans, from although the to bulgaria from moldova to bulgaria. The eurozone may end up in the hands of the russians. You had terrorist accidents. You had jihadist comebacks. The middle east is a mess. Even from a german point of view, doesnt make sense to exit from the eurozone. Greece is only 2 of the eurozone gdp. I think there will be a compromise between the two sides on the reforms. I dont think that greek exit from the eurozone is likely. Mark be sure to stay tuned to bloomberg for interviews you wont want to miss, including this one with alan greenspan. That is around noon u. K. Time. Anna you can join in the conversation on twitter. My favorite quote of the morning, we spoke to Stanley Gibbons, they stamp and coin collecting business. She unleashed a communications revolution. That is one thing weve covered so far on the program. We will be on twitter later, tweeting out the details of that interview. Mark. Mark greece has filed a formal complaint against germanys finance minister. Mark welcome back. Bringing the Economic Advisory board to the International Finance corporation. You may know the former chairman of Goldman Sachs. He joins me now for an exclusive interview. Good morning. Thank you very much for joining us today. Guest good morning, mark. Mark you are in italy. Bond yields continuing to fall to record lows after four days of qe from National Central banks from the ecb. Draghi is confident, isnt he that his targets will be achieved. Then walk her was less bullish saying the recovery is reversible. What are your views . Is qe going to work . Guest it depends how we try to answer that question. Im about to go into the opening session here. One of the things im going to say is the big cyclical news this year is that the eurozone is positively surprising. Despite all the attention, the u. S. Is actually slightly negative. Compared with where people thought we would be you are doing better for the first time in years. Of course, because of the amount of output lost in some cases, italy still near 10 , what you want is a big recovery, perhaps double what the optimism is for. And of course inflation getting back to target. So many issues still remain. The absence of any real nominal gdp growth is likely to mean that the underlying debt ratios are sharp. Problems remain, they are significant below the service. Mark the obviously is helping big time as it continues its seemingly inexorable decline toward parity. The ecb must be happy with that. How soon before it hits parity and how low does it go . How much benefit is that going to provide to the eurozone . Guest ive got a few thoughts about it. Im glad i dont have to forecast these things for a professional living anymore. With that in mind, bearing in mind how much time i did used to spend on it, slightly disconcerting just how strong the consensus is that the euro is going to parity and below. From what i recollect of Foreign Exchange, it doesnt usually do what everybody thinks. The third thing is, obviously it is helping the euro area a lot but it is not it is just the expense of somebody else. At some point, the u. S. Will stop it, as we have seen over the past few decades. I dont think this notion that the dollar goes down forever sorry, dollar goes up forever is going to end up being that persistent. If you look at the big picture of the World Economy and the recovery the u. S. Has enjoyed since the crisis, it is becoming a bit consumptiondominated again. The u. S. Consumes more than 70 of its own gdp. It is not that sustainable. This is helping europe, but the yens weakness is helping japan it is taking us back to where we were six years ago. I dont think that is sensible for anybody. The Oil Price Decline is also playing a positive role. We want to see european consumption of investment spending being a bigger influence on this recovery than the euros tech line. Mark is the fed going to touch on it next week . Do they do they cite the strong dollar . Is the strong dollar going to put back expectations for when the fed is going to raise rates . Guest i think thats the single most interesting aspect of the fomc meeting. Everything else would suggest the rotation will go. Because of the issues i just said, a couple of fed people have already made some reference to it, it wouldnt surprise me if the Dollar Strength will feature in their discussions. It wouldnt surprise me if there was some reference as to why they continue to take their time before they raise rates. Mark when is the first rate hike . Is in june, september, or later . Guest i have no idea. I dont worry about those things anymore. It wont be next week, thats for sure. Mark what is happening today, jim . Russia is making an announcement on Interest Rates. It has cut from 17 to 15 having raised rates in december taking many by surprise. Russia is in your bric acronym. What is happening with russia . The ruble isnt as low as it was. Oil prices arent as low as they were. The ukraine crisis is simmering. The ceasefire is fragile. Where is russia heading in 2015 . Guest i was kind of hoping there might be a bit of russian contingents at the seminar here. There often is. I look forward to discussing that. I think it is interesting that the russian issue has shifted away from market attention. I think there are two reasons for it. We are seeing quite a bounce in the oil price. Russian markets are always heavily influenced by that. Secondly, maybe this is just temporary, but the fighting in ukraine and the latest ceasefire appears to have held. I constantly keep at the back of my mind something that an exfinance ministers said to me a couple years ago. He predicted to me that at some stage putin would become a different character than we think of him. I ended up joking that he might be even crazier than hes been. I think he meant he would be shifting course. I dont think it is necessarily as predictable as we often superficially think. I think the general view is, it is just a matter of time before they all stop fighting again and russia is back in the heat of market discussion. Certainly when people are looking for Value Investments around the world, russia is very cheap compared to anywhere else. The other day, i was looking at the equity markets from 13. 5 years ago. By the way, quite interesting. Despite russias problems, still stronger returns in dollar terms than the u. S. And the rest of the world. The point is, india spectacularly outperformed the other three. A value person would be looking at selling india and buying russia or brazil. If we continue to see a calling of the tensions and oil prices remaining stable, you might see people trying to buy russia. [indiscernible] mark where does that leave china sorry, go. Guest i remain much more sanguine about china than ive seen people making reference to. Yes, the latest data is soft and maybe we are growing below the 7 target that the president recently announced. Im going to spend next week there. Im looking forward to that. There is slow evidence of rebalancing going on. A very interesting report in the media this morning that the Climate Change emissions have started to show signs of being better than expected in 2014. Main reason being, china is doing a lot better on emissions control than expected, which is an important part of why china is slowing. Second, if you look at the latest data everyone is so excited about the weakness of Industrial Production retail sales consumption continues to hold up pretty well. What chinas really focused on policywise is the rebalancing of consumption relative to production within a framework of better quality. Theyve got quite a lot of challenges. But i think chinas ongoing performance is pretty impressive. Interesting in the context of markets. Chinese equities continue to do very well compared to many markets. Chinese markets arent as worried about this stuff. Mark quick question on the u. K. Election. Markets here not really moving much of ahead of the election. It took them a while to move ahead of the Scottish Referendum. Is that going to half an going to happen . Suddenly we are going to see while gyrations . What are your thoughts . Guest anybody elses guess is as good as mine. Weve got next week the budget, and it looks to me from the way the ongoing deficit evidence is, that the chancellor is going to have a bit of wiggle room two with stimulus. The u. K. Economy is doing very well. I suspect theres a possibility that the polls will start shifting more and more in favor of the current leadership. I dont completely dismiss the possibility of a return of the current coalition. Obviously, thats a highly speculative guess. This presumption that we are heading for massive uncertainty not entirely clear to me that thats going to be the case. Mark our Manchester United going to reach the Champions League . Are they going to make the top four . Guest i knew you would end on that sad topic. We need new owners. Absolute shambles. Manchester united are struggling badly. Mark are you going to be one of those new owners . Guest well, i would like to facilitate any role i could play. It needs to be something that is better to the real fan base. We are poor on the pitch and not so great off it. Mark thanks a lot, jim oneill. Former chairman of Goldman Sachs asset management. Anna and a big fan of Manchester United. 22 minutes past 7 00 in london. The search for a greek bailout deal took another turn yesterday when greece filed a formal complaint against wolfgang schaeuble. Schaeuble has been cited as calling dennis varoufakis foolishly naive. That comes as greeces Prime Minister prepares to meet the Eu Commission president in brussels today. Lets get over to hans nichols in berlin. Good to see you again. What is schaeubles response to this . Are the greeks buying it . Hans schaeubles response is that he never said foolish and naive. s quote, i told him, that is quite new to me. He is criticizing varoufakis for always going to the press. The greeks are saying there is a foolish in front of that naive. They have launched a formal complaint. The ambassador went to germany last night. That is going to escalate now that it has been formally lodged. It is going to give it another level of seriousness. The germans are saying, all he said was the obvious. Mr. Schaeuble was talking about mr. Varoufakis talking to the press. We have mr. Tsipras. He has the opportunity to play good cop once again. We saw that yesterday. Heres what he had to say about greece needing more breathing room. This is why we need reforms. This is why we are here today. This is why we need fiscal space , to be able to tackle the basic problems of the real economy of the relationships with the economy, and weakness aside. Hans that is the good cop, mr. Siegrist. The bad cop is mr. Varoufakis. Mr. Tsipras has a busy agenda today. He meets with mr. Juncker in brussels. Finance ministers are going to decide what this bailout package looks like and whether greece is satisfying it. Anna hans, thank you very much. Mark moore controversy surrounding her life. U. S. Federal officials are investigating possible manipulation of its stock. Caroline hyde is here with more. Who is this focused on . Caroline at the moment, it seems to be a consultant hired by bill ackmans fund, pershing. They are investigating the consultant. It is all to do with whether false statements have been given to regulators about the Business Models used by herbal life. So much controversy. So far, we understand that the federal prosecutors have been conducting interviews, requesting documents, to see if the stock was manipulated. So far, bill ackman and Pershing Square havent been served with a subpoena. In u. K. Language, that means not asked to provide documents, appear in court, or give evidence. This is so important a bill ackman. The ongoing push that person have been making against herbalife shares, shorting the stock, betting that it would fall. There have been accusations that theyve been misleading distributors. Basically, youve got an illegal pyramid scheme. Investigation has been going on. U. S. Prosecutors and the fbi are looking at the marketing that her life has been doing. Herbalife shares halved over the past year because of this. Herbal life continues to deny this. They are saying look at the money Pershing Square is putting into this. The accusations continue. Weve got billionaires on the other side. Carl icahn and george soros buying shares in her life. Anna caroline, thank you. Mark how does a company all about pen and paper stay relevant in the digital age . Find out next. Anna welcome back to countdown. Lets get a check on the currency markets. We are talking about the danish krone. Are the troubles over for the Danish Central Bank . The governor was in london last night talking about his efforts to limit moves in the danish currency against the euro. The governor of the central bank saying it does not have to intervene in the Foreign Exchange markets. The bank had been facing an attack against the danish krone. In january and february, they were forced to sell to stop the danish krone from increasing too much against the euro. Have they won in that fight against the hedge funds . Their resolve was being tested by some investors in the wake of the Swiss Central Bank deciding to abandon its peg against the euro. That happened in january when the Swiss Central Bank abandoned that peg. It seems that the Danish Central Bank has held their reserves and they have not had to intervene in the Foreign Exchange markets. Mark the fiatchrysler chief executive Sergio Marchionne has said his company is open to a tie up with General Motors or ford and the deal with one of its larger u. S. Counterparts would be technically possible. He added that conditions for any deal would be saving the highest amount of capital on developing new vehicles. Representatives said they are focused on their own business. Intel says firstQuarter Sales may be more than a 1 billion lower than forecast, hurt by sluggish economies. Shares fell to their lowest level since july after it said revenue will be no higher than 31 billion. A coin collection in london today. The display includes 12 individual coins estimated at 1 million or more each. Sales of rare u. S. Coins reached a record of nearly 536 million last year. We have an interview with the chairman today at 10 30 u. K. Time. Anna five years after the death of Alexander Mcqueen, londons victoria and Albert Museum is hosting an exhibition of his work. Francine lacqua spoke to the ceo of Alexander Mcqueen about whether he thinks the success of the exhibit will translate into sales. We certainly did when it was in new york. It was great. It brought the brand to a completely different audience. We havent really done this for any commercial reasons. We had to do it. As i said, this is more about mcqueen than the brand. Francine it is also doing phenomenally well. What is most exciting about the brand for you . What are the main challenges and opportunities . We proved to everybody, after losing a founder that was a true genius we are one of the biggest and best brands in the u. K. We are very proud of that. We are going to build on that. Weve gone from being a brand that was very much a conceptual designer brand to an International Luxury brand. That is what we are focusing on now. Francine you are one of the most successful brands. Is this in the u. S. Or worldwide . All of our brands are doing very well. America is our biggest market. Weve got exceptional growth in asia. Brand awareness in asia has really surprised us. Francine as ceo do you spend more time worrying about fx sales, strategy, or creativity . For me, it is product. If the product is not strong enough, you wont succeed. A brand like ours, you have to push forward and evolve the brand and excite your customers. Obviously fx and things like that are important but it starts with a product. Francine do you feel that fashion is taking enough risk . I think so. The world of luxury has really evolved over the last 20 years. It has grown and grown. The pressures are enormous when you are running a business. Now it is about in the last five years, it is much more about the customers. You cant stand still. You have to evolve your brand. That really makes you take more risks. Mark lets stick with the luxury theme. If you cant beat them, join them. That might be the thinking when the moleskin notebook when digital. How well is the brand known for its quality Paper Products doing in an increasingly Digital World . We now welcome the moleskine chief executive. How do you make the transition to a Digital World . Guest first of all lets not forget that in our industry paper is still very relevant. The digital market is growing 5 of year. We are growing almost three times as fast. We are doing something right. One thing we are doing right is, we have been investing early on in developing partnerships with evernote for example to come out with products that allow people to interconnect analog with digital. Anna remind us what these Smart Notebooks are about. Guest giving people the possibility to transfer in a seamless way content that is created on paper into digital formats using a commendation of a physical product, the notebook, and applications developed by our partners. Or, like in the days of adobe, developed in proprietary to moleskine. Mark stationery market you are growing three times as fast as. What percentage of your revenues come from digital . What is the race you going to look like in 510 years . Guest if i had the answer to that question, i would be a rich man. Right now, we are talking about something that is a niche within an niche. We are targeting people that have similar lifestyle but we are not talking about the general population. Those that are already at the stage of connecting analogtodigital is further upset. We lost something at the beginning that we believe will grow over time. Anna what is driving your growth in Paper Products . Is it an increasing appeal among the middle class in china . Guest i think basically it is the fact that, yes, while paper is still relevant in peoples lives, in a world that is becoming more and more digital for paper or any physical product, it has to come with something more than just itself. It has to come with an emotional dimension that makes it a show. That is where the moleskine brand comes in. The value of the artistic creators, the heritage of the brand that it carries, going back to hemingway and picasso, make moleskine a much more senior brand to some brands that are nonstationary. We all know that when we buy, we dont just buy something to cover ourselves. We buy something that we want to Say Something about who we are. Moleskine has been doing just that. We are the only brand in the industry that has created a product that is also a marketable identity. Mark how do you stay relevant . Guest new generations, the millenials show a stronger interest in anything that is physical compared to people of my generation. I was just reading about book readership in the u. S. 18 to 29 years old read in print more than older people. Children from six to 17 prefer reading books in print over ebooks. When you think about it, it makes sense. To them physical is Something Interesting because their life is becoming more and more digital. Anna all our lives. Should they be more analog . Guest as always, the happy medium. Mark great to see you. Arrigo berni, chief executive of moleskine. Anna you can join the conversation on twitter this morning. Let us know what is on your minds. I was very disturbed by some photos of james gordon, who is going to host the late late show in the u. S. He is on a photo shoot with gq. I will not be retreating the photos. Mark lets just say he is wearing his birthday suit. Up next, bart chart time. Why germanys dax is number one and number 11. Mark time for todays bart chart. Why is germanys dax both number one and number 11 . Confused . Ive been looking at the worlds bestperforming stock markets in 2015. Out of 103, we track here at bloomberg, germanys dax index comes in at number one, with a return of 20. 33 , closely followed by the copenhagen 20 index with an increase of 12 . So on and so forth. If you had any doubt about europes preeminence in stock market performance, this chart should clear up those charts. You will see a lot of european names. Seven of the top 10 are european excluding the primary indices of venezuela argentina, and saudi arabia. Everything ive just said comes with a very small caveat. The numbers you can see right there are in local currencies. If you switch the base currency to dollars, the list looks very different. There are two bart charts today. This chart reflects a base currency of the dollar, which has risen by over 10 against the euro this year. There isnt a european stock market in the top 10 when the base currency is a dollar. That is fascinating. Venezuela comes up top. 17. 8 . In the other charts, it was six. Germany is 11 compared to its gains of 20 in local currency terms, germany in dollar terms, the dax is of a mere 5 reflecting the euros 12 drop against the dollar this year. Fascinating stuff. It is as good an illustration of the impact on currencies as you are likely to get. It goes to explain in simplistic terms why germanys dax is both number one and number 11. Anna that is perhaps why jim oneill says hes glad he doesnt have to forecast currencies anymore. Time to talk sports. The Hong Kong Derby kicks off this sunday with one of the strongest fields in years. Behind the scenes, the pressure is on the trainer and the jockey. John dawson spent a day with one of hong kongs best. The last time and australian was crowned champion in hong kong, zach was an eightyearold boy who dreamed of racing. His run to champion status hailed him 112 wins, including the fastest 50 in hong kong history. Hes racked up victories in japan, the u. K. , and australia. Like many jockeys, the biggest battle is with the body. The hard part is keeping the weight off. It is really difficult. Everything. John the diet is close to nothing. Zachs intake will be for breakfast, two sips of water, a mango for lunch, a tomato and three wheat crackers, and for dinner, a handful of rice and 100 grams of fish. The trainer regularly takes his rides and their partnership is one of the strongest on the circuit. Probably losing seven or eight pounds in a week. He can still get out there and get the job done. John theres two ways to lose weight. Eat nothing or sweat it off. Zachs regime revolves around workouts with a personal trainer. And then theres the sauna. Four times a week, 90 minutes each time with no water. Thats not good at all. You are there to take fluid out of your body, not put it back in. John to add to all that theres the stress of piloting half a ton of fragile thoroughbred at up to 70 kilometers an hour in top level competition. Theyve done a lot of testing on jockeys. One of the things theyve done was a bone density test. For many, that dehydration and the lifestyle, by the time im 40 years old, im going to have the bones of a 60yearold. John being a jockey is one of the toughest jobs in sports. Daily brushes with danger, even death. However, it is a sacrifice that doesnt stop the married father of one. It is all about the passion. You dont do it originally for the prestige. You do it because you love it. John john dawson, bloomberg hong kong. Mark lets turn to racing in the u. K. Chilton him, the festival, comes to a close today. We kick off a weekly business of sports segment with an interview from the shelton hamm sports complex. Bruce, thanks for joining us today. Give us a sense of the money sloshing around chilton. It is adding to the local economy in terms of everyone coming down for the week. The amount of money gets bigger and bigger every year. When arnie powell fell on tuesday the trainer [indiscernible] arnie powell just needed to win. They reckon that saved the betting industry 18 million pounds. All of a sudden there was a significant spike. That was a huge deal. Mark they are calling it the most expensive fall in history. Are bookmakers still wiping their brows and breathing a huge sigh of relief . They absolutely are. It was one of the most dramatic moments in racing history. The thing is even if they did get themselves in a hole, they still had to win to dig themselves out of it. The results havent been monumental. Rounds two and three have gone to the bookmakers. It is going to be fascinating to see how it goes. [indiscernible] the final race of the festival has been renamed the tony mccoy grand annual. That is sure to Carry National and sentimental support. If that wins, we will be safely able to say [indiscernible] mark and of course, he won his first race at this years festival. Does he have a chance of winning the gold cup . I suppose thats the romantic thing, isnt it . Without a doubt. He is a 10 to one chance. [indiscernible] every drop of rain that falls will help him. It is absolutely wide open. He is certainly in the mix. If he does produce drags his mount up the hill, not is it only about the money, but the noise, the absolute bedlam that follows will go down in racing history. It will tell such a great story. That page is also probably the front page tomorrow. Mark give us a sense for those who dont follow racing too closely. Is it in a good bill of health right now financially . It is holding its own, mark. It is one of the more traditional sports and it has got generally an aging fan base, but you wouldnt know that this week. There are so many young folk. [indiscernible] the crowds are up every single day. Cheltenham has broken record attendance. There is a top end. There is a real momentum behind horse racing. It is something that people flock to. All types of people. Whether it is working men or people coming down and enjoying a bit of champagne. All in all, it is an industry and a sport that does all it can to hold onto its market share in the sport market. It is doing ok. Mark when it comes to betting, i was reading football is still the punters favorite. Where does racing fall in the league table in the u. K. Of sports that punters like to take a bet on . If you take across all platforms, racing is still number one. It would account for 73 of all take. Online football is the big danger. There have been far more betting through football. Weve got more coming into the betting arena. [inaudible] again, it knows it has got to do that. It is trying to attract people of all ages, really. Mark in a word, bruce, who is going to win the gold cup . Give us a tip. [indiscernible] mark perfect. Thanks, bruce. Bruce millington editor at the racing post. That is 3 20 today, the gold cup. Anna we know what you will be doing. That will do it for countdown for this morning. Have a very good weekend. On the move is next. Jonathan good morning. Im Jonathan Ferro at bloombergs European Headquarters in london. We are just minutes away from the start of european trading. A very busy week. Nikkei 19,000. Japans nikkei 225 closed above 19,000 points for the First Time Since 2000. The index and the week with a fifth straight week of gains. Bank of England Governor Mark carney says the u. K. Faces challenges for week european demand and a strong pound. And, great Prime Minister Alexis Tsipras meets european commissioner juncker over in brussels today. The verbal sparring continues to heat up. And we are looking ahead to the Russian Central Bank decision. We are counting down. Is another rate cut coming . Our survey says yes. Im looking at the futures markets. Euro stoxx 60 futures up. Dax futures up 52 points. Lets get the Caroline Hyde for your market open. Caroline we are likely to end the week on a high note. This will be your sixth straight week of gains on the stoxx 600. Ftse up. Similar moves and france. This is the longest winning streak for european stocks since june. All of this on the back of ecb action. We are seeing basically the concern about a rate hike in the United States not