Transcripts For BLOOMBERG Countdown 20150528

World cup sponsors put pressure on fifa to make radical reforms on accusations of corruption. Referendum psychology, David Cameron asked britain to vote yes if it wants to stay in the european union. The Prime Minister heads to the eu to set out changes he is looking for in the uks relationship. Caroline good morning and welcome to countdown. Im Caroline Hyde. We bring you on the story of how he is bringing you the story. First, finance ministers and central bankers from the g7 nations met in dressed in today for the annual finance summit. Discussions on the Economic Growth and sustainability are on the agenda, but greece is turning out to be the talking point. Hans nichols is addressed and with more great this g7 meeting seems to be shaping up as a blame game. Hans there is going to be blame is there is no deal if there is no deal. They are quite far apart from a deal. Yesterday there was a flood in the market when news of a draft proposal was close. The eu shot that down and the french finance minister said it was incumbent upon the greeks to put things in writing. Late last night we heard from him saying he was surprised to hear about a potential deal. He said negotiations have not gone very far. Yesterday i spoke with the kind canadian finance minister and he said talked about the different perspectives on austerity. There is definitely a different perspective. I dont think we dont want to exit exaggerated too much but there are definitely different perspectives and different philosophies perhaps. We have confronted a whole series of issues which in some ways are a bit different. We emerged from the International Financial crisis like everyone did. We happens to emerge more quickly and stronger. Hans yesterday we had some stronger concern from the u. S. Side u. S. Treasury secretary sent to treat the next deadline as the last. He also spoke with the Prime Minister of greece yesterday and when i spoke with Larry Summers, a man who has been around a few financial crisis he said it was a incoming on both sides to find Common Ground. Both sides are going to have to move. Greece has to get more serious and determined and clear on what the reform is going to take. That is not going to be politically easy. The europeans need to recognize that there are limits to the degree of austerity that can be imposed. Ultimately problems get solved through growth, not just austerity. Hans we have to fault lines. The old one between austerity and spending, what you do on consolidation and the demand side. It is clear they will not give ground on that. Especially in the face of criticism from other financial ministers. Then we will have the issue of what to do on greece. Those are the fault lines. We will be speaking with private finance ministers all day. You can see behind me is the hotel and palace. We are close to the red carpet. Caroline. Caroline i wish. I look forward to all of your great interviews today. Thank you very much indeed. The 65th Fifa Congress in europe has been overshadowed by the biggest Corruption Scandal in history. Yesterday there was an indictment charging 14 people that detail rampant corruption dating to 19. 1 1991. Defendants are alleged to bribing and paying kickbacks. More now with mark barton. What are some of the specific allegations in this indictment . Phenomenal stories of bags of wads of cash. Mark you said it. Picture this, a suitcase with neat 10,000 bundles. Alleged payment to get the nod of approval from fifa officials to host the world cup. That is one of the allegations of the 47 count indictment by the department of justice. It is a startling indictment of the corruption, the alleged corruption that the department of justice said to place within fifa since 1991. Lets listen to the u. S. Attorney general, director lynch. Loretta lynch. Loretta lynch they were expected to protect the integrity of the game. Instead, they corrupted worldwide soccer to serve their interests and serve themselves. Mark white that suitcase of bundled notes was meant for jack warner, a former executive so says the indictment. He was the former head of the body that oversees soccer in north america, central america, and the caribbean. It is alleged he sent his cousin to meet with a highranking South African big official. In a room, in the hotel was this suitcase with these piles of notes. The allegations surrounding jack warner do not end there. Months before the vote on a venue in 2004, morocco is alleged to have offered warner a bribe of 1 million to vote for his country to win the rights to host the 2010 world cup. South africa alleged south African Bid Committee arranged for a 10 million payment to be made to a Caribbean Football union where mr. Warner was based to support it. Warner it is alleged accepted the bid. Ultimately south africa struggled to make the payment so it is alleged that fifa may be 10 million payment using money intended to support south africas 2010 bid. It is astonishing, just some of the allegations present within this indictment. Kirilenko caroline how on earth has fifa responded . Mark it is ironic you said it sounds like a film script a what lady was walking by earlier a lady was walking by earlier and she said she liked the whole affair to a roman alaska polanski film. Here is a statement this is a difficult time for football, the fans, and fifa as an organization. We understand the disappointment that many have expressed. I know the events of today will impact the way which many people view us. While there will be many people who are frustrated with the pace of change, i would like to dress the actions we have taken, and will continue to take. Let me be clear, such misconduct has no place in football and we will ensure that those who engage in it are put out of the game. We will continue to work with authorities and work vigorously with fifa in order to root out any misconduct. A five paragraph statement. The show goes on, the fifa president ial election will take place tomorrow. Fifa said the world cup will take place in russia in 2018. Caroline the likes of coke mcdonalds, sponsors are wanting to see them weed out the corruption. What about today . What is the on the agenda what is on the agenda question . Later, fifa executive will be arriving. That meeting will take place throughout the morning. This afternoon, the six confederations will meet and various hotels. We are exacting protests against the cast the world cup. The delegates should arrive later. The body which controls european football is against the holding of a president ial votes tomorrow. Listening to the secretary general the numbers are convinced that there is a strong need for a change to the leadership of this fifa and strongly believe the Fifa Congress should be postponed with new elections to be organized within the next six months. Mark despite the call for the president ial election to be postponed for six months, the show must go on. I will be right here to tell you about it. Caroline mark barton, thank you very much. Lets take a look now, shifting gears to the markets. Asian markets have been moving overnight. Lets catch up with the vonn and hong kong. Yvonne we talked about the nikkei to 25 up this morning. You are seeing 10 Straight Days of gain for japanese stocks this past week. We were on a rebound when we opened today. Now we have reversed a little bit. If you take a look at the shanghai, reversing course hitting the 5000 mark earlier this morning. We hang saying down 1. 5 . There are concerns about the brokerages, they are tightening regulations on it comes to market margin lending. Liquidity a bit strained today. Interesting article on the terminal today if you want to take a look at how you can make the bet best bang for your buck, do nothing at all. Apparently investors were better off buying stocks, putting portfolios on hold than actually looking at technical indicators or tidying the market to buy or sell. Theyre basically saying holger notes and ignore the bad deal. Hold your notes and ignore the bad deal. Do remember what you are doing on december 2, 2002, i sure dont. That was a time when we saw 124 spot 92 on the yen. Continued weakness, but we hit that high mark today. Sloping the most among asian currencies for the past five days. We could be flirting around this level for some time, especially tomorrow we have to see because all eyes will be on that second reading of the First Quarter gdp numbers coming out from the u. S. If it beats market expectations, some say we could see weakness in the end yen. They say the focus now shifts to the long term with the yen. These are of versions in policy with the u. S. Getting ready to lift Interest Rates. The bank of japan looking to see when they can expand their policy. Japan talking about retail sales. Ecodata is disappointed disappointed. We saw 5 jump from april last year. That was a time when they hiked the sales tax increase, that hurt spending in japan. It could be a weak start to the start of the Second Quarter because this economy is still weighed down by that sales tax increase. Caroline thank you very much. Lets check in on other top stories. Zurich is gearing up for protest against fifa practices after a number of officials were arrested. Meanwhile, the governing body called for fifa to delay the election. For all the innuendo, and labeling there has never been something harder than corrupts and bribes. A lot of other people did that during his governing that is why he is being labeled for the rest of his life. That is why it is a critical day tomorrow in zurich win the presidency is being resolved who will be the next president. Will be the man who carries this label or will it be prince ali from jordan. Caroline more cuts on the way as bank of america chief executive says it will have to reduce expenses further in its market Trading Division and less revenue improves. They had a 28 drop in firstquarter profit. Goldman sachs bankers had the biggest bonuses in london. The average payout was 194,000 pounds. That is 24,000 pounds more than Morgan Stanley which came in in second place. You can join in the conversation on twitter. Trending today, fifa for the corruption of arrests sparking concerns amongst sponsors. The queens speech is also trending. We will be looking into what David Cameron is up to today. Lets look at some of the Economic Data out later in the day. We will get a second reading of the u. K. Gdp. Then Eurozone Consumer Confidence is out. And then u. S. Initial jobless claims. First, with all of the uncertainty in greece, you might think Foreign Investors would be weary of europe, our next guest says the opposite is true. Stay with us. Caroline the greek story was the initial evidence for the sovereign debt crisis that plagued europe. Has become a focal want point four little animosities that have gotten big and angry. There is no clear dividing line between politics and economics. Caroline that was robert shiller, the economic professor at yale. He spoke at the g7 meeting in dresden. Despite worries about greece and the eurozone, a survey out this morning shows that western europe still remain the most attractive destination for direct foreign investment. The region overtakes china and north america according to the 800 decisionmakers questioned. We will talk to the global head. You go out to experts, 808, is the number, he actually said that europe is now number one when it comes to foreign direct investors trade yes, they like europe. They like what europe is to them and has been any past which is compact, resilient, slow growth, but sophisticated in investor and consumer markets. We look at 43 countries in europe. We go to russia, turkey, and investors like the diversity of situations. Marc compensate some of the disappointments that may be emerging and provide for more growth and also uncertainty. They finally at last like europe for what it is, a safe haven. Caroline they have kind of fallen out of favor for that reason. Marc china has fallen out. Central and eastern europe, including russia have gone up 8 . North america has also come back from a tough spot a few years ago from the crisis. Caroline russia is fascinating. Marc longterm bets, on the fact that it will probably get better. They will solve the geopolitical obstacles it is facing. Probably some investors including Chinese Companies and European Companies not circumventing the sanctions, but making sure they can still do business in russia. The longterm, as is a critical economy for us. Caroline the u. K. Is sort of the number one spot when it comes to the eu. What about concerns of an eu exit, we have David Cameron trying to woo some of the leaders. Will that distract in the next year . Marc the poll shows that one third of Foreign Investors in one report have worries and are concerned and would even freeze or reduce their investment in the case of the u. K. Coming out or going out of the eu. I think they are worried. The european economy is important for Foreign Investors when they are in the u. K. It is a successful location for investments. Longterm, these issues may be solved. I think it has to be said or observed what types of drawbacks investors would get from the u. K. Coming out of the eu. The fact of the matter is shortterm, they are worried it would create more problems. The Foreign Investors we interviewed at the european level safety say the eu should change the bureaucracy, the simplicity of europe is not there and is not efficient for business. We have a lot of that in the survey. Caroline about sectors . What businesses are luring them in . Marc there is a mix. The Digital Economy is a big story. A growing type of client if i may say in europe, very much liking what the Global Cities of europe have to offer, london, paris, berlin barcelona, cities more than countries. In terms of function, we see a lot of new headquarters and central back Office Operations for chinese investors. 210 chinese investors have set up new investments in europe and have chosen germany and france for new locations, business expanding into all of europe. Caroline can we take away from this that greece is not a worry . Marc it is a problem, but not a major worry. Foreign investments have been up by 10 in 2014, 12 in terms of employment. Those are the two indicators our survey looks at. Caroline that will be on the forefront of peoples minds. Inc. You very much. Thank you very much. Coming up on countdown. Larry summers speaks up on greece. He is calling on both sides to disarm and come to an agreement. Caroline welcome back to countdown. Lets count lets kick off with the aussie dollar, it is down. 4 . In the Fourth Quarter of last year it sold twice as much as had been expected, decreasing 4. 4 that is capital spending, the estimate had been for its fall 2. 2 . The Central Bank Still has work to do in terms of pushing investment and growth outside the mining industry, it clearly has two grain traction. One of the key movers today, as is the south korean won. If we look at its currently, it is rising the dollar is rising. The one is decreasing. We saw the Korea International trade association cannot with numbers that exporters cannot maintain competitiveness when you have the yen weakening and the euro weakening. They have the bank of korea governor saying exports are a problem as well. Looking at yen, on the downward trajectory once again. The dollar rising, the yen weakening near the lowest in a decade. Japanese equities are up. We are seeing the dollar in command here. Janet yellen said she is foreseeing rate increases this year. Yen has been the biggest hit when it comes to the dollar rising. Yen retrenching just a significant difference in centralbank policy. Lets take a look at other stories. Jpmorgan chief executive has branded shareholders lazy for casting votes in annual meeting space on the advice of property property advisors. The board is reviewing how they pay top executives after shareholders voted to approve the latest packages. Visa says it will reassess its sponsorship of fifa if it fails to satisfy any face of the bribery scandal. Last week, the visa also told fifa they had great concerns about reports of Migrant Workers building stadiums. Apple has poured more fuel on speculation they are working on a car. The Senior Vice President of operations it was confronted by a shareholder in a public forum about where they are looking to invest cash. The Automotive Industry is where it is at, he told the investor the car is the ultimate mobile device. They said apple is exploring a lot of different markets. Finance ministers and central bankers from g7 nations meet in dresden today for the annual finance summit. Discussions about Economic Growth and sustainability are on the agenda, but greece is turning out to be the talking point. Hans nichols caught up with Larry Summers and he says both greece and its creditors need to move when it comes to aid talk. Larry summers it would be much better if they could work it out in some way. Both sides will have to move greece will have to get more serious and determined, and clear on what the reforms will take. That will not be politically easy for leadership. The europeans need to recognize that there are limits to the degree of austerity that can be imposed, and ultimately problems gets all through growth, they dont get solved through austerity. They will need to work with the greeks on a strategy for growth. I hope, and i expect there that something will get worked out. Hans at the summit . Larry summers not at this summit. I think there is time with good spirit on both sides, and looking into the real of this it would be for greece if this does not work out and this terribly risky situation, it would be for europe if this does not work out, i am hopeful that Common Ground will be found. Hence point hans it seems like we are talking about contagion . Larry summers i dont think anyone knows. No one couldve imagined a Hedge Fund Like lcm couldve brought the system to a halt. Bernanke, wise as he was famously said that some pride subprime was not a big deal. They believed the world was cushioned and ready for what happened at lehman and what how wrong they were. I think seeing a greek failure and seeing what it contagion consequences are, as an experiment no one wants to run. Hans is the u. S. Doing enough . Larry summers i will leave them to speak for themselves. There are a lot of people there with a lot of experience and skill, and i know they are very much aware of the United States stake in successful europe. Hans the imf has declared it is now accurately valued, what is your be of what is your view . Larry summers i think u. S. Policy has had a triumph. Against chinas partners since the days when they had 10 trading surplus, it is about a 2 trade surplus right now, that is in the range of what happens to countries. I dont think there is the kind of systematic systemic undervaluation problems there was. I dont think that happens automatically, i think that was a tribute to the economic diplomacy of president obama secretary geithner, and others. I think it is time to recognize that is no longer the kind of issue for the Global Economy that it once was. Hence point hans what is the role of the g7 . Larry summers secular stagnation is a big problem, the growth recovery has been inadequate, working out what to do about it for the industrial world should be a primary preoccupation here. We are not going to solve any other problem, whether it is chronic budget deficits, no other problem will we solved unless we are able to accelerate growth. Caroline great interview. Join in the conversation on twitter. Hans nichols is doing some phenomenal reporting at the g7. Join me in the conversation still trending about fifa. Coming up, 42 years since the u. K. Joined the European Economic community, coming up, plans for europe for the u. K. To stay in the eu. Caroline welcome back. Zurich is gearing up for protests against fifa, a number of its officials were arrested yesterday. Meanwhile, a call for fifa to delay president ial elections tomorrow. For all of the innuendo and labeling, there has never been harder for sub letter to move forward. A lot of other people did that during his governing he is being labeled with this stuff now for about the rest of his life. That is why it is a critical day tomorrow in direct, when the presidency is being resolved, who will be the next one . Will it be the man who carries this label . Or will it be the young prince from jordan . Caroline more cuts for bank of america. The chief executive said it has to reduce expenses further in its market Trading Division and less revenues improved. Goldman sachs bankers had the biggest bonuses in london this year. The lenders average payout was 194,000 pounds according to a website. Morgan stanley came in second place. Prime minister David Cameron is heading off to a today to her for countries he will be lobbying for a u. K. Referendum on eu membership. The chief executive of British Airways gave us an exclusive interview. I dont mind admitting i have always been positive towards the eu. As an irish person i understand the benefits the eu has. I understand the issues the u. K. Has with the eu. I strongly disagree i strongly believe the best way to influence the eu is from within. I dont think it will way too heavily. I am hoping that some progress will be made with reforming the eu. I think that would benefit everyone. I would be helpful that when it comes to a referendum that people will vote to stay within. Caroline that was willie walsh of iag. Joining me now talk to us about what David Cameron is looking to achieve by his whistle stop to her with. Tour. I think it is not a charm the way it has been for trade in the media. It is reassuring the domestic audience that the government is up for the job. It ties up with the queens beach where it has been said that legislation on the referendum will be introduced today. It is really about keeping the momentum going, and not giving ukip and skirt euro and opening to seize the agenda. It is about keeping initiative. On the other hand, it is about making sure that when negotiating, britains registered with the eu at the end of june. With so many issues currently concerning other eu governments, greece, but also the ukraine, it is also about making sure the renegotiation if treated like a priority, if they get to work straight away. Caroline talk about a date set. He has tried to keep the momentum going, well that translate into a referendum in 2016 . Potentially. I think cameron has hinted that he might want to bring it forward but it is not his own choosing. I think what the government wants to ensure is that they have the room to maneuver to bring the referendum forward if it would help them to achieve their aim. Or if they make progress on the renegotiation if they can seize the moment and make sure that they keep uncertainty to a minimum. Caroline it is also being effective affected eye political risks elsewhere. One of the main reasons why it might be a good idea to bring it forward is if you want to stay out of the electoral competition and friends france the german elections will take place in october 2017 once both countries shift into election mode there will be less inclination to listen to what the premise or want to achieve. Also less room to give the u. K. What it once. Caroline try to get it sooner rather than later. What are the goals . What is deemed success when it comes to renegotiating with the eu . It is a good question. It was something brought up yesterday. They said the Prime Minister needs to define what he considers success. So far he is not told his European Council what he wants to achieve. They have a vague understanding about the areas he wants to discuss print it we look at his statement throughout this year and last, i think there are three key areas, one is a highly emotive issue, to tackle concerns. One thing high up on the agenda, to make sure people who come to britain to seek work actually come to work, and not to use welfare. The other one is to make sure sovereignty does not only flow to the brussels, but also some powers will be repatriated. The third issue is the clause in the lisbon treaty. This is a Sticking Point where they say we want an opt out for britain from this clause to make sure we are not drawn into something that will be akin to the United States of europe. Caroline any chance of that . I think one should never underestimate the eus ability compromise ability to compromise. It is extremely unlikely cameron will get the treaty change that he initially set out to achieve. I think it is something that would be extremely difficult. It would come with more uncertainty. The french and german governments have already said they will not open up the treaties to reform the eurozone which makes it very difficult. I think we should not underestimate that they will come up with a solution that might defer treaty change to the future. A promise to the u. K. That once we open up the treaties again they will accommodate concerns. Caroline thank you very much indeed. Coming up, looking at our favorite stories from bloombergs output area include the film Sony Pictures does not want you to see. Caroline welcome back. The business and restaurants go hand in hand. Now one former banker plans to serve the Business Community again, only this time with spicy dishes from india. Hi, i have been running for running restaurants for 10 years now. Sometimes when youre in the middle of a service, you feel like being on a trading floor. There is a difference in terms of time. It is instinctive in many ways. In the restaurant, you use instinct, but you have time. It is dangerous because you can talk yourself out of good ideas. You always miss certain aspects of the past, when you are here and you get the restaurant open, you think why on earth am i under the stress . This is all upon you. I love running restaurants. I love the intensity and stress at the end of it when you see someone enjoy food, it is a real joy. We are creating food we like. The flavor might be indian, but the dishes are not always. If you expressed great food you love, hopefully people will like that. Hopefully this allows us to do something different. Caroline making you hungry . Time to look at bloomberg. Com. A key story from sony, once again unveiling from sony. The hacking scandal continues to bite the company. It is called aloha. It is not getting much press the reason, because it has already been panned by the former chairman of the sony studio, amy pascoe. She was kicked out when it was seen that some of her jokes which were not very funny, she was ousted as a backlash from the hacking scandal. She wrote in november, the Cameron Crowe feature quote makes no sense and quote not even once worked. According to her emails she was not always in control of the bush language. The film starring Bradley Cooper has basically no campaign because she has called it ridiculous. How peculiar. It seems as it is already being panned internally. Painful if you are scaring painful if you are starring in the movie. Chat to us on twitter. Make sure you are involved in the conversation. We have many things trending notably, fifa, number three in my trends list. It is being called for fifa to change and move on from the scandal. We will be live with mark barton in zurich. We will be going live to dresden where the g7 nations meet today for the annual finance. Caroline greeces creditors are in dresden. Live there with interviews you will not want to miss, including former secretary Larry Summers print he told bloomberg a greek breakdown should be averted. Larry summers seeing a greek failure and seeing what the contagion consequences are is an end experiment no one should want to run. The japanese yen sinks to a 12 year low. Stocks head for the longest rallies since 1988. We bring you up to speed with the markets. Caroline rampant, systemic, and deep rooted, sponsors put pressure on fifa to make a reforms in the face of radical corruption. Live and direct with the latest. Manus David Cameron asked britain to vote yes if it wants to stay in the european union. The Prime Minister has on a eu tour to set out changes he is looking for on the u. K. And their relation relationship. Caroline welcome to countdown im Caroline Hyde. Manus we bring you the story of how the Business Community is being served this time with spicy dishes. Caroline finance minister is from g7 nations meet in dresden for the annual finance them it. Discussions around Economic Growth and sustainability are on the agenda, but greece is turning out to be the talking point. Hans nichols is with more. Is anyone saying a deal with greece is in striking distance . Hans good morning. You are hearing that from the greek side. They are very close to a deal. The problem is it is not being echoed by any of the creditors. The idea of a deal is being shot down by some. You heard some saying they are frustrated and it is time for the greeks to put something on paper. Also last night, the host of the g7 summit the german finance minister talked about how he is always surprised when he hears about any potential deal. He is he said negotiations between the three institutions and the greek government still have not come very far. That raises the prospect of a default, a miss payment, i spoke with the canadian finance minister joel abul are joel oliver and heres what he said. It is up to the ims clearly. There are issues which can impact the domestic situation. They could run out of money domestically and that would create its own social and political repercussions. These are very serious issues and that is why we are taking them seriously. Hence point hans there was the g7 talk on austerity. As mr. Oliver told me, there is tension there. Or as he put it, didnt different perspectives. Caroline interestingly, the americans are paying playing a bigger role, what is the message. Hans cut a deal. Find an agreement. Treat this next deadline as the last. Mr. Lou spoke to the Prime Minister of greece. When i spoke to Larry Summers yesterday, he made the case for both sides to get off of their positions and find Common Ground. Larry summers both sides will have to move. Greece has to get more serious and determined, and clear on what the reforms will take. That will not be politically easy. The europeans need to recognize that there are limits to the degree of austerity that can be imposed. Ultimately problems gets all through growth. They do not get solved through austerity. Hans anytime you get this many economists and bankers in the same room, there is going to be a lot of historical talk looking backwards print i have heard the talk of lehman in the background. It is interesting because no one quite knew the consequences of that. They let it go, we saw what happened then. That is a big question overhanging that. The risk of contagion, how big is it . Those of the conversations that will be dominating the sidelines. Caroline 2000 and eight continues to haunt. Mark manus yvonne, we have the yen really beginning to move. China is just coming off the board. Those the guys stocks are roaring ahead. Yvonne we are seeing gains in the nikkei 25 up about. 4 right now. This this rally is the longest one since 1988 because of the week yen. We are seeing shares in china plummet. The hang seng down to present. I tell us stocks in hong kong saw the lowest in three weeks. There is concern on securities. The brokerages rather are trying to tighten regulations on margin lending. We have some new share sales coming up in the next few weeks. Liquidity in china market, a bit strange. There was an interesting article on the bloomberg this morning, talking about the best way to get the most out of the booming market is to do nothing. Investors ended up doing better just leaving the portfolios put and putting things on hold as opposed to actually looking at technical indicators of whether they should buy or sale. Lets take a look at the nikkei 25. The japanese yen flirting with this level that we saw all morning. December 5, 2002, if you guys remember, 124 spot 92 was what we saw back then. We close to that. We are seeing things lower 123. 83 today. This resurgence of the u. S. Currency we might find out more tomorrow because we are getting that second reading of the first order gdp data from the u. S. There are some people saying it beats the market expectations. We could see further weakness. Jpmorgans looking at the long term for the yen now. This is all from the diversions in policy out of the u. S. A lot of talk about is and when they will lift those interestrate possibly this year. The pan is talking about when to expand their policy. We also talked about retail sales from japan, missing estimate, rose about 5 from a year ago, that is when they hiked up the sales tax. That took a hit on consumption overall spending in japan seems like we are having a weak start to the Second Quarter for the japanese economy. Manus thank you very much. Caroline it is the 65th Fifa Congress and direct. It has been overshadowed by the biggest Corruption Scandal. Yesterday they unsealed an indictment charging 14 people as well as guilty pleas by four others. Rampant corruption dating to 1991. The defendants are alleged to paying out more than 150 million in bribes and kick tax to obtain media rights to soccer tournaments. Now with mark barton he joins us on the phone outside the stadium in zurich. What are some of the specific allegations in the department of justice indictment . Quite phenomenal stories of bags cash mark a suitcase with neatly bundled 10,000 piles, this is an alleged payment from to fifa to host the world cup. It rivals the worst in sports history for linkedin breadth. We have Money Laundering racketeering, bribery, and kickbacks. All of these things were embraced by fifa officials, so say the authorities. Lets listen to loretta lynch. Loretta lynch mark she was essentially detailing abundant corruption. Jack warner, the former head of the body who overlooks football in north america, central america, and the caribbean, he was the man for whom the suitcase was allegedly waiting. Warner also arrived to fly to paris to meet with a south African Business official in a hotel where prosecutors say the catch was waiting. There are further allegations surrounding jack warner in 2011, years later, the indictment said that he directed caribbean the ball officials to pick up a gift, an envelope containing 14,000 in cash ahead of the election for fifas president. Warner sat down in 2011. These were a couple of examples from this massive allegation of corruption within this. 47 counts of indictments i the u. S. Department of justice. Caroline it sound like a film script. Luggage filled with wads of cash. What is on the agenda today . Mark i am standing outside the stadium in europe in zurich. It is a meeting that takes place every year to look over the past year, as we know it is the past 24 hours that will overshadow todays event. Nine former and current officials indicted as we just said by the department of justice. The body that controls european soccer says that tomorrows election should not take place. This is the secretary general ofuafa. The members are convinced there is a strong need for a change to the leadership of this fifa. And strongly believe that the fifa should be postponed with new elections to be organized within the next six months. Mark there are echoes of 2011, the last President Shall vote when the scandal with more with jeff with jack warner called for a step down. Here we are, four years later,uafa is saying that the election should not take place. The election is taking place tomorrow. And the world cup is in russia in 2018. Caroline thank you very much. Calls for mcdonalds and cocacola and some of the sponsors to clean up their act. Manus the World Biggest bank card networks, visa, joins a growing list of companies fifa against. Lets join aaron. What has been the reaction thats far from highprofile sponsors in regards to the scandal . We just heard mark outline neatly lined up cash. Any response from the sponsors . It is important to understand how much money and visibility is at stake here. Every four years you have this huge event, the world cup. It is the premier sporting event in the world. You have 2 billion people in the world to identify themselves as soccer fan. You have huge sports gear makers, mcdonalds, cocacola visa, hyundai motors, they all want to be associated with its prestigious events that literally everyone in the world watches on tv. They pay a lot of money to do so. My story that has been running since yesterday and was out this morning took a look at these sponsors reactions. You can tell they are trying to walk a fine line here. No big global brand like adidas, mcdonalds, or cocacola wants to be associated with corruption. On the other hand, it looks bad for fifa they need to say something. You see a lot of statements that say this is tarnishing the brand of global soccer. This is not in keeping with the high ethics we expect of fifa you are not seeing the sponsors take concrete action yet. You are seeing tougher words than they have in the past. Manus some of the Companies Like adidas and coke, hyundai said anything . Have they said anything . The words we keep hearing from Companies Like adidas and cocacola, is we expect high ethical standards of our partners. We want more transparency. Tarnish the brand of soccer, the sense of tarnishing, high ethics, trance and see, hear these words over and over again any statements certainly there are discussions happening behind closed doors, and what they are saying oakley is a little bit tougher stance than in the past. In the case of ideas yesterday, we were first to report their reaction to the scandal and the arrests in direct zurich. They are not ready to take a step back, it seems these Companies Need to wait and see the repercussions and how far this suites. Sweeps. They are certainly being a little bit tougher on their friends at fifa then they have the past. Manus i suppose this is their opportunity to be the vanguard for change. Thank you very much. Make sure you stay tuned, we will have more fifa coverage throughout the day. Coming up later, lord peter goldsmith, the former attorney general for england, wales, and northern ireland. And a former member of fifa. That is at 1 00 london time. Girl meanwhile caroline zurich is gearing up for protest against fifa practices. The governing body called for fifa to delay the elections. For all the innuendo and the labeling there has never been a time when they took bribes. Other people did that during his governance. He is being labeled for that for the rest of his life. It is a critical day tomorrow in direct in zurich. Willoughby be man who carries this label, or the young prince from jordan who represents a change. Caroline more cuts on the way for bank of america. The chief executive says they will have to reduce costs and less revenues improve. Goldman sachs anchors got the biggest bonuses in london this year. The average payout was 194,000 pounds. That is 24,000 pounds more than Morgan Stanley, which came in and second at second. Manus one country and Southern Europe will be the talking point at the g7. What country . Greece of course. More after the break. With good spirit on both sides, and looking into a real of this that it would be for greece if this does not work out and this terrible you terribly risky situation for europe if this does not work out. I am hopeful that Common Ground will be found. Caroline that was Larry Summers speaking to hans nichols in an exclusive interview. Lets get another opinion. We are joined by senior global economist. Give us a sense of your perspective of how much you are factoring in the risk of a grexit right now. Both sides definitely have an incentive to find a compromise. There will not be a desire on the part of the troika to have any uncertainty related to a greek exit because the euro is just beginning to recover. They have incentive. The Greek Authority have incentive as well. The greek population still wants to stay in the euro. All opinions say they still want to be in that area. There is a need for a compromise. It is getting down to the wire. There is the possibility you might have a default on this payment. There could be further negotiations after that. As you know, you have a onemonth grace. A default does not exactly mean a default on the wider institution. We still have a few more rounds of negotiations. Manus janet yellen is worried about china and greece. Thats because youngs about the unintended economic consequences if something bad happens greece. As an economist, even though small in gdb terms gdp terms what is it in terms of risk what does it rank for you . You hit the nail on the head. It is very small, with the ecb supporting the wider area, the impact him in terms of contagion should be limited. I would rank any worries about u. S. And china higher. At this point in time we do not have those worries, if they were to materialize, definitely those with be higher than greece. Any uncertainty is not good. The fact that greece could lead to uncertainty would not be something good for other economies. Caroline we will be speaking about the u. K. Talk to us about the u. S. We are seeing what janet yellen wants to be on the agenda. Do you expect that . Definitely. I think it has to be seen in the context that you have an employment rate of 5. 5 the market is doing well. You are not at an emergency level that you are at right after the crisis. This is more removal of this emergency rate of interest levels. In our view, any tightening that happens is very gradual and moderate. Caroline you will be staying with us. Manus coming up David Cameron has a whistle stop tour and it is about his proposed referendum. Is there such a thing as a sure thing in business . Some say buy gold. Others say buy soybeans. I say, buy comcast business internet. Unlike internet providers that slow down when traffic picks up, you get speed you can rely on. Its a safe bet. Like a goldplated soybean. Reliably fast internet starts at 69. 95 a month. Comcast business. Built for business. Caroline welcome back to countdown. A look at the Foreign Exchange markets. Focusing first on the aussie dollar. It is down. Down by. 3 . Coming off its lows. What really seemed to shake the markets was capital spending. For the last quarter of last year. Relatively old data. Coming in much worse than had been expected. Estimate have said for 2. 2 deterioration. It seems as though australia is failing to readjust itself bringing in the investment needed to grow outside of the mining sector. This is what the central bank is hoping for to show growth elsewhere that that growth outside of mining is yet to gain traction. Companies predict they will in fact spend 104 billion aussie dollars in terms of up until june next year. 25 lower than previously expected. Deterioration on the aussie and the south korean won. The u. S. Dollar, eightweek low. Coming down flat now. Overseas sales, Economic Growth being put into question. Exporters cant maintain their competitiveness when you the euro and yen weakening. Lets check in on how the yen is weakening today. Since janet yellen came to the foresaying we might see a rate hike later this year. We saw the yen in fact at the lowest in a decade. The weakest level since 2002. The u. S. Dollar coming off a little bit as we speak. Manus the Prime Minister David Cameron is headed off on a twoday fourcountry tour. The c. E. O. Of i. A. G. Said he is clear that the u. K. Should remain part of the european union. I dont mind admitting that. I have always been positive towards the e. U. Ireland has seen benefits. I understand the benefits that the e. U. Has. I understand the sthause people in the u. K. Express. I dont disagree with reforming. I strongly disagree leaving it. I think the best way to influence the e. U. Is to influence it from within. So the uncertainty around an e. U. Referendum will weigh on business. I dont think it is going to weigh too heavily. The ability to reform the e. U. Actually i see it as a positive. Im hoping that some progress will be made on reforming the e. U. Everybody at the e. U. Would benefit. But i would be hopeful that when it comes to a referendum that people will vote to stay within the e. U. Manus Standard Chartered one of their main chief economists is here. Willie walsh there. We have a lot in ireland. We did very well. Is it publicity or is it actually proper lobbying . A bit of both. What he needs to do now is securing the kind of reforms he needs to get a yes vote in the u. K. And to contingency in his own party. The problem is before the election there was a lot of posturing which annoyed a lot of other e. U. Ers. Now it is bridge building time. Caroline were not seeing that much reaction when it comes to the market. Before the election everybody was fearful of the referendum. Will it raise its ugly head . Will we start to see markets i think it will become a point of uncertainty because there is a chance that the referendum isborough brought forward. They have been given a clear mandate by the population. If that does happen then markets will be a little bit more wary. Again, i think it leads back to the concept of uncertainty. If youre a business would you really expand or invest or hire more people ahead of a big referendum about whether you stay in the e. U. Or not . Of course it has implications. You going to see the impact of that on markets too. Manus after two days out on the road he has to come back with a message. He has to. He has to send out the troops on sunday morning and say this is what we managed to achieve. What is realistic . He can get some positive noises about getting the right kind of deal for britain. We know that treaty change is not going to happen. He privately admitted that it is not going to happen. What he needs to achieve is some kind of deal, some kind of property colorado that fall just short of that. What are the benefits for migrants . A big red line. If other countries show they are willing to support, back dating a change or just going toward admitting that theres there is a problem. Then he has already won a lot. Caroline you have put out this big report about Global Supply chains. We are talking trade here. Concern about u. K. Companies being able to export as efficiently when were not part of the e. U. Anymore. What are the trends that youre seeing within trade when it comes to the u. K. As well . I think youre very right. We have been very worried about trade. Trade needs to grow twice as fast as g. D. P. It has been growing half as fast now. I think part of reason is because there is fears of rising protectionalism. There is fierce of automation and when you have uncertainty again, you do not want to expand your supply chains. You want to keep everything localized. That is not the most efficient way of production of course. The way that we are seeing trade evolve there are really three big trends that were looking a 3 it will really boost trade in the western world. With the emerging markets coming up, they will trade more with each other which is not really happening at this point in time. There is concern about the fact that in china, the wages are rising. A low wage production that you have in china will go away. But there are lots of other countries, cambodia countries countries in africa that can take the place in china. That is another trend we see. The trend that this low wage production will move westward. And the last thing were looking at this terms of trade which is very, very important for the u. K. In particular is a rise in services trade. We think of good like things like cars and automobiles or aircraft. If measured correctly is now eclipsing manufacturing trade. Manus lets just sort of draw this together. Economically of course there is risk matter. Is there a Franco German alliance being built against this campaign from cameron or do you think merkel wants to engage but she is just not sure what camerons game plan is yet . I think she has made it clear she wants britain to stay in the e. U. What is clear is that france and germany would like to referendum to happen earlier. Cameron would like to have this going. You have the momentum going. It is going to dominate his term until it happens. There is also the issue of uncertainty for business. Everyone wants to get this out of the way. The french and the germans have elections in 2017 and they dont want europe to become one of the talking points. Manus the timeline from an Economic Investment point of view you worry that the investment will drop in the u. K. . It will definitely be something that will be pushed back until you get a clearer indication of whats happening. There is going to be investment but it is not going to grow as quickly as we would like it to. Manus senior global economist at standard charted. Always great to have you bright and early. Caroline you can join in on the conversation and follow manus cranny at manus cranny. Im at Caroline Hyde tv. Keep posting your thoughts about whats happening. Four countries, the tour, two days. Manus coming up well talk property reported earnings earlier in the hour. We speak to the companys c. E. O. After the break. Dont go away. Manus french and german finance chiefs are pushing back on the story that an agreement is near. Frances finance minister said that the greek discussion has to be transformed into something on paper. Fifa says it will reassess its spin of sponsorship of fifa. There is alleged corruption at the organization. Last week visa told fifa it has grave concerns about abuses of Migrant Workers. Apple poured more fuel on speculation that it is working on a car. The Senior Vice President of operations Jeff Williams was confronted by a shareholder at a Rare Public Forum about where apple is looking to invest its cash. He seemed to suggest the Automotive Industry. Later he insisted that apple is exploring a lot of different markets. Caroline lets talk u. K. Lets talk property. Helical bar just reported their earnings. Lets talk with the companys chief executive, mike slade. I want to talk to you about profit before tax. 87 million pounds. Dividend being raised. London portfolio value up. Are getting in a bubble . Are we overheated . Where is this growth coming from . The hightech. 30 demand now from london offices is in the tech spear. Sphere. The city was banking, insurance legals etc. Suddenly into that demand cycle comes 30 demand from the hightech. That is from houston right through clarneton. All the way down to white chapel. There is a whole new area of activity. Were quick into that. At about 12 we were buying and now were developing into that demand. Where you thought we were going to be 2040 pounds a square foot now 6070 pounds a quare foot. That is behind those results. They were good last year. They are very good this year. Then you talk about how far does this cycle go, go . Cycles sort of stop when you have irresponsible banking. Well were not seeing that. I think they are almost irresponsible banking. Some of us might like a bit of irpossible banking but we cant get it these days, thank goodness. The other supply is way down the line. Probably 2021. The banking is going to stay most of the investment going into london big big, big Global Investment is pure equity investment. So the whole scenario is looking a little bit good too good to be true. So some sort of nay sayers would say it is too good to be true. Therefore it must go plop. It aint going to go plop. I think it is going to be fairly strong for five or six more years. Manus a lot of projects look deeply appealing when you virtually zero rates. Per sentence rates. We have seen an improvement in liquidity. Borrowing over libor has contracted. The rates have improved when we go into a tightening cycle it is when not if. Impact for you. Impact for your business. That takes my mind back to many decades. Ive been doing this for three or four decades. We were borrowing money at 8 and making money. We were bothering money at 5 and making money. It is a correction definitely. Rents, probably not. They are based on demand and supply. Not necessarily Interest Rates. Interest rates per se are not the issue. It is the yield structure and the yield of the investable to see that drives the investment. It is not quite as important as people might imagine unless it went way high. The concern was the labor government was going to do some silly things and that would have created a problem with sterling and they would have been forced to put up Interest Rates. If they are forced to put up Interest Rates to protect sterling youre going to have a crisis. Sfwu Interest Rate it is come up because the global cycle is improving, the question is when. The market is in balance and it wont upset the structure business to the degree that some commentators think it will. Caroline how upset will it be by the referendum question as we head into 2016 . It is beginning to affect now is it not . I have to look and see what is the effect of the referendum going to be on the city . That is where a majority of our investment is 20 gains, blah blah. That is our focal point. The city is made up of insurance, marine, legal sferses, stock broking, Investment Banking is probably there should be a figure. 2530 of it. If banksing was affected by the referendum because we might come out of europe it would not impact on the others necessaryly. Manus if youre banking what percentage it is 10 . If banking was 25. You know that is going to come down by 10 . That is an overall it is not going to completely crash the whole issue. Manus will tech be enough to suck that up . Tech might even go stronger. It is none overp this may saying is really of this may saying is really that effective. We need five million more square feet in the city over and above that it has already known about and that means because there is 55,000 jobs that will be being created by these 100,000 people coming in every year. So that is a very interesting whether they are right or wrong, who knows . Caroline thank you very much for coming in. The trend s that arehappening in u. K. Property. The c. E. O. Of helical bar. Manus the china come positive shanghai composite has declined. This goes back to an earlier headline from china. What we saw earlier, we have a on bloomberg. People in the bank of china is said to have sold repo agreements to a number of banks. That is they go to their banks and do an agreement to take cash from the banks. They are actually draining cash and liquidity from the system. There is a debate that it will be high leverage. Caroline property as well. A big area of concern. The government trying to rebalance the economy without forcing a sudden shot and stocks manus down 5 . Lets shift give gears a little bit. Business, restaurants. This time there is a bit of snow and ice a dish. Sources with india. Bloomberg went along to find out more. Hi. Im here ive been running restaurants for 10 years the now. With Goldman Sachs and price watershouse. Sometimes when youre in a service you feel like being on a trading floor. Is that different in interpret turnovers time you have, the trading floor. It is instinctive in many ways. The restaurant still use a lot of instincts. Quite dangerous. You can always talk yourself out of good ideas. You always miss certain aspect s of what you done in the past. When youre here trying the get your restaurant open. You dont have any safety net s of having people around. S the lack of safety having a job. I do love running restaurants. For whatever intensity or stress that you have to live through. When you see somebody enjoying the food it is an incomparable experience. It is a real joy. Were creating food we like. The flavor may be indian. Great foods you love and hopefully people will get that opposed to you have to work with tighter rules. Always be done. Absolutely. Someone doing something different. That is what this hopefully allows us to do. Manus joining us now for countdown to the market open is the head of great to have you with us this morning. G. D. P. In tuck. Manufacturing so it looks like this reading should be a bit of a lift for cameron. On his european tour. The u. K. Economy has been recovering for a while now. G. D. P. Has been steadily increasing. Obviously we would like for it to increase more rapidly but then we are in recovery phase. The quarteronquarter figure and yearonyear figure should be higher than expected. We should see a pickup on Government Spending as well. Ideally to focus on government espning. It is what it is. And as long as it is on the upward path it is not a bad thing. Caroline kingfisher. Big player in france. Big player in the United Kingdom as well. Coming in line . Coming along with expectations. Sales are good. What is interesting about kingfisher is it has big exposure to the french economy. Obviously were seeing q. E. From the e. C. B. That has had a little kicker to the share price for king is fisher. They are around the 360 level. The last set of results, well received by the market. Kingfisher did spice up absolutely. Restructuring the business. They have a lot of the bad news out of the way. Again, a recovery of play in what is a difficult market. Manus you have some of the big cause in media, oil and gas and mining. We toned focus on eventdriven stocks. Pharmaceuticals. These are obviously sectors that there is other m a going on or asset disposals. We look for these sort offense capitalists before taking position for clients. Vodafone was obviously very interesting. The last few weeks or so. We had john malone of liberty coming out making comments. Companies that liberty has a 6 stake. That is very interesting as well. Pharmaceuticals. Manus thanks for coming in. Thank you. Caroline on the move is up next. It is a big week for greece. Well get the latest in the g7. Stay with us. Jonathan good morning and welcome to on the move. Im jonathan ferro. Moments away from the start of european trading. What a strange day yesterday was. Greece is close to a deal. Are they really close to a deal . Japanese stocks rallied. The yen touches a low against the dollar. The nikkei rises for a 10th straight day. The longest winning streak since 1988. Chinese stocks plunge. The shanghai composite drops for the second time in eight days. The greek government says a deal with creditors is close. Finance ministers warn a deal is not there yet. Coming up later, well bring the late onse what a u. S. Official called yesterday the world cup of fraud. Accusing officials of corruption. The only that i think matters now is the open. Futures ahead of the open could see futures down by 11 points. The action is in asia. Manus cranny has got your European Market open. Manus youre right. You covered some of the top lines in the market. Let me show you how this looks in the maps. Youre seeing this precipitous fall on the shanghai index. You have three rate cuts. Liquidity up plenty