Transcripts For BLOOMBERG On The Move 20140122

Called for the investments in new machinery. That is the promise from a lot of companies at the moment. It looks like a big vacuum at pimco. It seems unexpectedly he has resigned. The chief Investment Officer will stay on, but the question leaving . He is there a clash of personalities . I will be back with the details a bit later. Equities are rising. Francine has already had a discussion. What is the overall view on markets . 400 quack 400 10 days. 408 days. It has been a longtime since we on vat index. Ease futures pointing up for todays trading. We have the ftse up. More outperformance in italy. Storyoing to tell you a in the bond markets. About the eurozone and borrowing costs in spain and italy. The average yield for these bonds at a record low. Is this a false dawn . I will let you discuss that. The epicenter is not in the eurozone. It is here in the u. K. Because today we get unemployment from the u. K. , expected to come down. This matters because we inch closer to the seven percent threshold. Debate for you sitting at home worried about your mortgage rate. This impacts everyone. This is sterling, the best performing major currency in the world. Pound buys you 1. 6 473. Unemployment will affect this. Lets get back to francine. She is in staff posts in vivos in davos. We have the political elite. We have heads of state. We have ministers, and we have matt miller here with the latest. There are 80 billionaires here but yesterday we caught up with africas richest man. He is the 25th richest are certain in the world. Concentrated in nigeria. He was talking about african issues. We asked, does he expect the bull market to continue in equities across the world, and he said yes. He thought all the negative things in the economy are gone. Thes very bullish on economy. He is bullish on manufacturing. He said the only thing that could get in the way is youth unemployment. He cited young people unemployment as the only thing that could get in the way of Global Economic growth this year. We talk a lot about philanthropy. A lot of alien errors. We talked to the ceo, and he was keen to talk about each quality and what he was doing to be more transparent. We did a story about how they are anticipating the bull market is anticipating they will get richer. Out a reportput talking about income inequality and how that could be one of the major risk factors affecting the world today and the pope giving of thege to the delegate World Economic forum, talking about using their wealth for good and not just to control the world. I think that is on everyones mind as a talking point. The pope might show up, but he is not. He sent the message. We have 80 billionaires. A couple of hidden billionaires. I was trying to find them, but i didnt find them. That as a whole different conversation. One of the youngest early in errors became a billionaire yesterday. Facebook pushed her stock north of 700 million. She is a billionaire this morning. We will catch up with matt throughout the day. We will have plenty more from our billionaire team. I dont know how you spot a billionaire. Is it dark glasses . It is pretty easy. We will have more from matt later on. Lets get to our reporter. He has been looking at where the rich and famous stay. We have been speaking to some celebrities, and you got on with matt damon. My good friend matt damon, we met last night, but i could tell they are going to be good friends. Isa flows is always davos always a good mix. I asked matt damon what he is here for and what he hopes to accomplish. There are 700 Million People who dont have access to water. Who are you partnered with . Corporate a number of partners. Pepsi, ikea, there are a bunch that have really stepped up for us, and they have been really great, and they are taking a proactive role in this, which is wonderful, but it is going to require more than that obvious way. As you both know, there are a lot of corporate sponsorships here. Some 200 million in corporate sponsorship. This is a big party. It has serious issues. The president will be speaking tomorrow. That will dominate the conversation. Back into bring iran the situation, and how do you make sure they stop Nuclear Ambitions . I am sure you will mix it up between a debate and the little partying. Have a good couple days. Here is a look at what else is coming up. Surprise resignation of pimcos ceo. Resigns after six years. Why . No bonuses for the top executives at ibm after a second Quarterly Sales decline. We are going to break down the numbers, plus syrian peace talks begin today in switzerland and already with controversy. We will have the details on the expectations of the world watches on. All the events in switzerland, stay with us. I am Francine Lacqua at the World Economic forum. Bloomberg. Mr. Racz newson rassmusen joins us. We are in davos. They are here to have conversations about the big trends. What is your focus . I would say consumers. Society, communication, so most going to spendm discussing Consumer Trends but also networking. I spend a lot of time networking with colleagues and politicians to understand what is going on in the world. Its a great place to learn but hopefully to continue. We had that deal that was year. Talked about last are you here looking for acquisitions . Not really. I dont think its a place to look for acquisitions. For me it is a lot more about discussing the latest trends and getting some insights. What is the main trend . If i speed to you in five or 10 years, what is the main trend that will change the way we drink . Is it flavored beer or fruit beer or craft beer . I think you have to work with the consumer today and tomorrow in a way that is very different from years back. You have to engage the consumer. Sustainability, it is a different way of communicating, a different way of engaging, a different way of developing new products, a different way of innovating, and they can get some insights and ideas. Ran management. Do people engage more in social media . We know they engage more in social media, or do they also do it when they decide what to drink . Definitely. They would go into different websites and have conversations about whatever beer they may have drunk. It is not only about product. It is also about the experience in the environment. A little more complex nowadays than it was 50 years ago. Is sponsorship important to be seen in the right place . To create the right experience is as important as the products, so what is surrounding the product, and that could be packaging, when they consume it it could be the glass. A lot of elements you need to look into and try to get right when you want to give the consumer a great experience. Of course russia is a big concern for you. Can you give us an update on any tax issue or regulation that will make it even more difficult for you to do business there . It has been challenging the last few years, mainly driven by regulation and big tax increases. I also see russia as an opportunity. For theprofit boost industry. It is a challenge and an opportunity. I believe we have been through of worst in terms revelation. I believe the dialogue has improved. It needs to improve further. Ridiculous it. I still see a Bright Future in russia. Are you sponsoring any parties . Recognition,rand is this a Perfect Place to sponsor things, or is this not really your target customer . Customers, butet we do a lot in the club scene and music. Maybe not our core target group, so we tend to do slightly younger people and in different settings. Who will you meet with here . Is it to do business . I was trying to ask you about acquisitions. The consolidations will continue in 2014. This is one of the big stories. I think we will see more consolidation. In asia and other places. Moreare building consolidation. I am here to mingle with my colleagues. Thats not only from the beer industry. Discuss be to learn and and also the many markets we do business in have a discussion between businesses and dialogue. There is muching more social media. Gameou a little behind the . It is a real challenge for big seek the consumer directly. It is. We also have to learn and try. We dont always know what is going to be the outcome. We are scaling up a lot in terms of people being an expert in this field. There are plenty of people in the market. How to doocused on this. And having a conversation, have they got ideas we dont have, and can they help us get a complete new idea . Also the experience. Talk to us about your best new pic. We have a lot of new ceos. What is your top pick . I hope i can take a number of ideas. People a number of participating. I hope we can have more people. Can the weather stay like this . Not bad. Will hit theople slopes. Coming up, we have the former commissioner for europe house digital agenda. Dont miss my conversation with neelie kroes. Keep it right here. Welcome back. You are looking at live shots of the World Economic forum in data posts. In switzerland Francine Lacqua andingling with the elite the top of the global industry. That is going on there. Ons tell you what is going in the markets. For unemployment data. There is a high degree of uncertainty in china. Addy and liquidity money and liquidity. Lets talk about some of the companies on the move. Fourth quarter earnings were cut in charges. The company said its net income was heard i add additional restructuring charges. They will report for your results for abb. Much they will get from the sale of nokia handset units to microsoft. Is scheduled to report earnings tomorrow. Itscited challenges at serving unit as one of the reasons the profit fell last quarter. Isis the same unit lenovo said to be pursuing. Talks are said to be resumed over the sale of the business. Breaking news overnight. Elarian has now resigned as pimcos chief executive. David tweed has a little more from this story. We know he is going to stay as an advisor, but have we got to the root and reason about why he has resigned . There is going to be a lot of speculation over why he resigned. Is he carrying the can because pimco had record redemptions last year, or is it a personality clash . We know what is happening at the hodges going to take over as ceo. Joined by two deputies. Returning to that idea that maybe he has left it is of the clash of personalities, that is something pimco seems to be trying to downplay, because they put out statements raising one another, and what i really like is a tweet followed up via bill gross. He says he is charged 110 , and he can go another 40 years. Considering he is already 50 years. Do we have any idea what el erian will do next . He is going to stay on the advisory board. What next . Bythere is a great article my client. He comes up with three ideas. Maybe he goes to the fed, at the he used to work imf. Egypt and politics. There was a rumor in 2012 that elerian could become the Prime Minister of egypt. Also maybe academia. Taught at Harvard Business school. We will keep an eye on that. That could make for an interesting time as they go to unwind 3 trillion worth of a balance sheet. As the Business Leaders gather, hours away there is another meeting taking place. You have the World Leaders gathering to discuss the political and to the civil war in syria. Assad andbashir al opposition groups as well as 40 other countries are sitting down for talks. John has been following this story. A lot of it is ceremonial, but it is very much trying to bring these groups. There is a serious tone. 100,000 lives have been lost. There are too many people displaced out of syria. Sohave seen refugee camps large one is unofficially the fifthlargest city. These talks fueled with allegations of war crimes by the assad regime, but also what really stands out, out of the 40 countries it is who is not there. Iran is not there, a country that has provided aid. William hague said the u. N. Was right to rescind that invitation. A said there should be traditional government formed. What would that look like . Bashir alassad does not sound like a leader ready to step aside. The Assad Government wants to see a sod continue to be the head of the state. A lot of people question how fruitful these can you. It is clear it is the beginning of the process, not the end of a conflict. With head back to davos francine next. I am concerned that basically after five, six years after the crisis, that it is done. The mood is getting better. But people forget that on the price side its a very muted recovery. Its a very slow recovery. And it would be really hard to expect this recovery to look like any previous recovery. It will be much more dragged out and slow. That was axle labor on the state of the global recovery. I spoke to him earlier on countdown. Welcome back to on the move. These are the Bloomberg Top head lines. Speak talks with opposition groups and assad begin today. At least 40 countries including the United Nations will attend 350 kilometers there. No change in policy from the bank of japan. The governors board will continue to expand the monetarily base for 70 trillion yen. The forecast includes 1. 9 in the year beginning april 2015. Nd he was wide reviewed. Arian resigns from pimco. Doug louse honch will become its c. E. O. Now im very pleased to say that the European Commissioner for the agenda and v. P. For the commission joins me now. Thank you so much for joining us. This is a topic that is really at the forefront of european growth. We talk about the startups, entrepreneurship. Are we doing enough to lend to Small Companies entrepreneurs. What can europe do better . Agree r one, i dont should be this one. Its a oneway traffic so to say from europe. Its not true. So quite the number of them are coming back. By the way also quite a number of startups u. S. Citizens. And that was marvelous. We i invited a couple of founders, successful founders in urope, the founder of skype, spotify of 20. And i offered them a cup of coffee. And they were saying why are you inviting us . And i said well, you already proved that you can make it and that you are doing a decent job and some of you did sell the job of but ok. That can be done too. And then i asked them please write down and make it clear what europe what National Government and both the European Commission should do to make a climate available for startups. And this is is what is necessary. Its a different mindset. But it is also talking about little issues. Its talking about education. Its talking about for example starting to teach coding at a young age. It is starting to make available a different way of approaching problems and solving them. But that group of founders, successful founders half of them seems to be european u. S. Citizens. And they came over because the culture in europe was attractive. The Business Opportunities were attractive. And i think we should get rid of those that it is only over there. Im absolutely motivated. Not only buying the hardware in the far east and buying the software in the far west and only consuming it in europe, we should do our own business too. And we have to help them. Young generation just thinking about instead of waiting for a banker, becoming a doctor, a lawyer, i can be an entrepreneur, an innovator. Thats the only positive point of a very negative point of the high unemployment. Im really sad with the latest figures of unemployment. But the Younger Generation is not waiting for years and years when there possibly might be an opportunity for a job. They are taking their own initiative. And you dont need a lot of money. Only the last couple of years, 800,000 jobs were created and app developers. Thats great. In europe. And greece is thanks to what the ambassador there theres a huge accelerating program where you have little startups starting to flourish. That is quite fascinating. Unemployment is about 60 increase. We will lose this generation if were not acting. The dutch ambassador took that initiative. And it is just a coincidence that he is the deutsch ambassador. E started the rule for startups and for teaching from research, innovation and its a big success. Unemployed hose people are starting their own business and doing great. You proved that you can start accelerators anyone. Are her issue you have privacy. Do you think that youve addressed it . Friday was the statement by president obama that was a little step forward but not enough. But the plan is that president obama is paying a visit to brussels and im certain that in the communication and in the discussion there will be steps forward. We badly need for me it is a matter of being aware and that a positive point of mr. Snowden. And nobody can anymore deny that something is at stake. So we have to act. We have to put our strategy in a transparent way at the table. This is a global issue which is the second oldest professional in the world. Lets be quite realistic that we have to make it clear when for me its so important because i want every european digital. That is the new technology. Thats the new digital economy. We cant afford to have ditched overt tans. Everybody should be involved by the possibilities and opportunities. But people want to have certainty, trust of security, otherwise, they are fearing what is at stake. If certain u. S. Companies are seen as too closely associated right with the n. S. A. , theres a real opportunity there. Absolutely. We can make business out of this too. We can make a secured environment more secured than what is at stake and not having the feeling that we cant do that job. And now to mention clout. And cloud will be the answer to a lot of challenges. But we need to make it clear that cloud if its your own cloud and you have to keep that secure. Thank you so much for your time. We have to get you back on to talk about women in business. Commissionerropean global agenda. I. B. M. Falls short. More on that story next. This is on the move on Bloomberg Television streaming live on bloomberg. Com. Microsoft chairman bill gates says he will work on philanthropy for the rest of his life and contribute parttime as a board member over at microsoft. Gates speaking in an interview on Bloomberg Television with in the loop with betty lu. Heres an excerpt of the conversation. Well, im on the board. The board is doing some important work right now. The foundation is the biggest part of my time. But then, you know, i put parttime work into help as a board member. Are you involved at all . Or how involved are you with the search for the new chief executive . No, the boards working on that. Theres nothing new to say. But you know, its a good board. Do you feel a sense of urgency at all . Does the board feel a sense of urgency on this front . I think you always feel that way. Then again you want to pick the best person. So you know, theyll move at the bright pace. You know, we have the fortunate of having the mayor come back to this company and were very happy to have him back at bloomberg. Bill, has that ever hit in your has that ever hit your vision in the future of ever going back to microsoft full time . Well, my fulltime work will be the foundation for the rest of my life. My wife melinda and i are enjoying that. I get to do it in depth. So im not going to change that, although ill help out parttime. Great interview though with betty lu, with my bloomberg and bill gates. You can get it all on bloomberg. Com. That was after the computer giant posted sales that missed its estimates as demand for the servers dwindled. With a little more insight on the story, caroline hyde. All things tech, caroline. Talk me through this. Is it structural . This is a structural change in terms of demand . Theyre playing catchup. 28 billion is what they have in terms of sales in the third quarter. Not to be sniffed at. Thats more than the entire g. D. P. Of bolivia. Thats latvias output for a year. But its less than hewlettpackard makes. Sales are down for seven straight quarters in a row. The executives held up their hands and say were not going to take bonuses, theyre so concerned. Companies arent storing their data in service in their offices anymore. Theyre going to the cloud. Theyre storing it all on the internet. Put this in context because you and i had this conversation this morning. There is not enough business for everything on the cloud. You said look at hit the way, youve got amazon. The sheer volume of what we need. So theres enough pie for everybody. We are storing mega data and we have to have the companyity to serve that. Theyre arresting. 2 billion last year on buying soft layer technologies. It was a deal to over more cloud services. Sales up 69 last year for i. B. M. That also trying to open a new product that, i mean, they know weve got to mind this big data and fascinating and the super commuter unit. Its a wholeew business unit. Apparently the super computer can answer question in a controversial language. Theyre having to take tough choices. Theyre having to eliminate jobs there wiping out its going to cost them in the shortstop but eventually they are wiping out jobs. And theyre die vesting. Theyre actually looking to buy their hardware business. It hit that probably for the fourth quarter. We have to question why le noveo wants it. Lenovo wants it. Theyre trying to exit the less profitable serving unit. It looks as though earnings 2015. T will write. 5 in its the same trade as the. I. P. Yesterday. Those are ones to watch. I love that caroline. Guy johnson is at the help. Youre having a lovely time. Youre going to kick back. Read a couple of books. Yeah. Thats my morning. Thats exactly how its going to look. Theyve already had some great guest. Were going to talk about what is happening next with the energy seen moving forward from here. But the at the same time were going talk to the any chairman. Europe has a problem paying for for our energy thats affecting the industrial landscape. Well talk to them and try to figure out whether we did next. Were yoing to talk to it final minutes. As shes going to be asking me on what happened in africa. Plus, also maybe a take on the energy story as well. Great guests coming up. The pulse will be starting very, very sportly. Guy, ill see you a little bit later on on that show. The numbers hit the tape at 9 30 eastern time. Jonathan far roll is spoken. Its all followed by the i. L. O. Unemployment rate. You see house pries climbing ant 2. 4 . But the big one is unemployment. They will come down a lot quicker than the bank of english would have started. 67 level. If youre sitting at home and youve got a mortgage that does that. It will be of interest to you. This is mark carney. He warned in restaurant last week that hes concerned about his level of death of you and me and how much pain we could take if Interest Rates rise. Can you absorb a rise. Ho you do challenge the focus . Yes, they look at unemployment. They look at the quality of the market as well. Over here you have to be locking the other way for age growth. That means really comes being eroded. The other side you could do is actually look at inflation. Imflation coming back to. That is something the fed is looking to doing as well. Whatever the bank of england does this is a redip. Theyre going fung as well. Ell keep an eye on that data. John, thank you for that. Lets head back to dabos. Onight after the break check nobodys getting not unless youre invited. Nichols was invited. To get it on the move is out. For the rich and powerful descending on davos this week only the most luxurious secure hotels are going to do the job. Enter the just opened intercontinental. Its the only hotel in town with its own hel ipad. Theres no get in unless youve been invited. Lucky for hains nichols, he was. The intercontinental davos a mountain layer thats easy to defend. Security seems to be quite expansive. Ou have a perimeter setup. We should have a similar secure area. We have a bit more than a handful of the head of state. Coming what does that mean, six or seven . Which one . I cant tell you. Who decides the one head of state gets the suite . Nestled like a giant golden egg, its the newest name in a valley that knows luxury. Theres a 10th floor bar to watch the city beloit. With the dedicated cigar lounge the offseason sweet starts 1 1,00. 1 rkeds we cant tell you. More than your normal rates . Yes. That is reflected in the race. You will see that the price structure is sightly different to a normal weekend. So higher . After the west the hotel is banking on the market from asia and the middle east. But still the new bell of davos s to get through its first one. Lets talk to nichols. I have it on Good Authority that youre on the intercome. I am not staying here because im not one of the curable heads of state. I will not tell you how arrived andly tell you the heli seal. Weve been watching tell copters land here all morning. It gets the strength of bran, royalty to bran. And when you look at the world of temporary stay of air, when we caught up with the c. E. O. Of the group. He said that wasnt a challenge for them but they did want some sort of regulation. Marks over the economy. A lot of what davos would be talking, how do we deal with some of the issues. The company bout and one of Similar Companies if you look at the hotel stay, security, safety, which is what the big brands can effectively do. This is a challenge of Building Hotel rooms both in europe and asia. And you to have such longterm planning. We know that it can be very short term. It is a giant golden egg. Net led in the foothills here. I have a feeling it will stay. Im not a structural engineer. This is here to stay. Guy, great package. Have a great couple of days throughout in da vote. Stay tuned. Live got a cracking day rom davos and our hopes of great entities. Davos optimism in the, air as leaders gathered at the World Economic day warm. One. Day one. Os theres optimism in the air. Facebooks chief operating officer makes a fortune and shares hit a record. s chief executive has resigned