European headquarters here in london. And i am Francine Lacqua live from davos. We have a huge lineup of guests for you today. We will be speaking to Boris Johnson and Antony Jenkins, the mayor of london and the ceo of barclays. Then we will delve deeper into iran. We have some top ceos discussing iran and whether they want to do business there. I spoke to the nissan ceo. He said there is a lot of potential for the french carmakers to the big in iran. Need so much more investment that there is real potential for business deals and contracts here in davos. Is this what everybody is talking about at davos . You have an event taking place in the ukraine that is capturing the headlines as well. Rouhani seems to be the center of attention looking in. It is the first time we have an iranian president arriving in davos in a decade. I spent a lot of time trying to speak to him yesterday. I did have a couple of brief moments but he was backtoback meeting with the Prime Minister of the netherlands, ceos of Oil Companies now, he wouldnt really commit to what businesses he is focusing on but we know iran is open for business or at least that is what he wants the perception to be. ,hen you speak to carlos ghosn he says i would love to do business iran as long as the sanctions are lifted. I dont know what the political situation will be in 12 months. He is certainly trying to change the profile, isnt he . You havent seen this kind of event take place for quite some time. A very different approach being taken. Looking forward to it. This is going to be a great show. Great guests coming up. And hans nichols did a little bit of james bond. Teaching people how to drive on icy roads. Lets bring our International James Bond correspondent, hans nichols. Focusing on iran first of all, the speech from the iranian president is what we have all been waiting for. For. Have all been waiting it is clearly a challenge for him to speak to these different audiences. Whatever he is saying to Business Executives here privately, he had a meeting over here at the continental just over my shoulder moments ago, he has to make that jive with whatever he is going to tell the conference later today. That will be this and to by the hardliners in iran and he also needs to worry about what is happening inside the United States congress. This is just a temporary lifting of the sanctions. We are talking about a sixmonth window and none of these companies he is talking to want a sixmonth investment. They want a longterm investment. They want to develop oil and gas fields. We had the interview yesterday with the ceo speaking about going back inside of iran. Just moments ago, one of our producers asked rouhani what his message was to businesses, what his argument was. He just smiled and walked on. We will have to wait and see when he addresses the congress. I just had a great conversation with the ceo of Renault Nissan and he reminded me that french carmakers were very big in iran. Want to go do business there. The market is potentially huge but he doesnt want to start negotiating before the sanctions are lifted. We must remember that it is not only the oil makers but infrastructure, carmakers, and consumer companies. You have a thriving middle class in iran that is sitting on a lot of money and they are going to start spending, theyre going to want to start spending. When you think of the potential lifting of sanctions and what the iranian middle class would spend money on, you see corporations salivating. Companies like reynolds, 1 reynolds renault do a lot of assembly locally. They could scale up pretty quickly inside iran. Thank you so much. Hans nichols there. It is day to of the World Economic forum here in davos. The event has brought together nearly 300 political leaders from around the world. We are pleased to welcome london mayor and conservative Party Politician rs johnson. Great to have you on the program. Always good to be here in davos. Do you do business here . You do a lot of business. Every time i come here i find some idea or some opportunity that crops up. If i look back over the last four or five years, there are maybe almost 100 Million Pounds worth of sponsorship or investment that we have managed to attract just in davos alone. And this is from Foreign Companies . It will be from all sorts of people. London is a got in situation where huge sums of money are coming into the city. We have had a very big success. London is seeing huge increases in Property Values because of International Asset classes of london property. That is a great strength for us. It means that we have to build hundreds of thousands more homes to help londoners built capital. We have had a lot of billionaires on the program. Hadi always ask them if you 100 million of your personal money, where would you want to invest question mark they say real estate. Is that the question you get asked the most . Huge sums being put into real estate in london. That is good if it drives the creation of new homes from londoners. New bonds, new family homes, fantastic. What is important is to show these investors where they can put their money. We have 33 random aside, these incredible opportunities for development. What is the question people want . When you come to davos, you meet with delegates, participants, ceos. What is the first thing they asked you . What is your biggest problem . What is your biggest problem . We are selling it. We are building huge numbers of affordable homes. That is a big issue for a city like london. We are facing the problems of global success. That is what i got an olympic developing andre having very interesting decisions here in davos about that as well. Because it is changing it is moving to the east. You see all this tech business happening now. Which we cover a lot of the program. You are quite right to do so. Thatn is sort of all trendy activity is moving to the city. The londoners are getting younger. You know that. Londoners isge of now 35. That is down two years from when i was elected. The population is going up. Much that is why i am here. Mayor, thank you very much. We will get back to you in just a couple of minutes. That was of course the london mayor, Boris Johnson furious Boris Johnson. Now we know the question he gets asked the most. My haircut. [laughter] i wanted an answer to that next. That is the question we now need the answer to. I am interested in hearing him talk about london moving in. Francine, looking forward to the conversation already. Take two with boris coming up very shortly. In the last few minutes, we have had breaking news from lenovo, the largest easy vendor is going to buy ibms x86 server business. Lets get the details of that deal. Jonathan ferro has been running through the numbers. Is how muchion lenovo is going to pay, a mix of cash and stock. This is the lower end of the talks they supposedly have last may. That is an interesting point. I think it is worth discussing what is in it for lenovo and what is in it for ibm. Pretty clear what is in it for lenovo. They have bought the pc business , they are just cherry picking parts of ibm. You saw a six percent pop in sales last year in the last quarter. They are doing very well. The idea is onward synergy. So the pcs to corporate, offer them the server business as well. Staying perhaps it is with software and services. What does ibm now do with that cash . That could be interesting. Less cash than they may be thought they were going to get. Maybe it highlights the fact of how keen they are to get out of this sector. They dont want to be part of the Hardware Service anymore. They are out of this lowmargin business. The other big question mark over this deal is concerns over national security. Once more a Chinese Company moving in and buying parts of a u. S. Company. We dont know how smooth this one is going to run. Thanks very much indeed. Jon ferro on the latest news out of lenovo and ibm. What else is on our radar . Chinese manufacturing may contract for the first time in six months. That is adding to stress in the worlds secondbiggest economy. The purchasing Managers Index fell to 49. 6. That missed analyst estimates indicating contraction. We will wait for the official number. Frigid temperatures are set to reach the u. S. South, parts of texas and louisiana may receive snow and freezing rain. That as an arctic air blanket that we have seen in the northern part of the country pushes south. The region will remain in a deep freeze. Says activist investor carl icahn has proposed splitting off ebays paypal unit. Icahn is also nominating two of his employees to join the board. Shares of ebay rose following the enough and. Coming up, we are back in davos with Boris Johnson. He is sitting there chatting with francine, brushing that famous hair. We will find out where he gets it cut. He says that is the second most important question he gets asked. Back in a moment. Welcome back. The president of iran is giving a special address to davos right now. You looking at live pictures. Hassan rouhani is talking about his countrys place in the world in a panel with kyle strub. He wants to can this clouse schwab. He wants to convince Business Leaders that there are opportunities there. Lets welcome back our special guest, london mayor Boris Johnson. Thanks so much for sticking around. It is pretty cold. It is fantastic, nice to be here. Everyone is optimistic. Are you optimistic . Obviously, Interest Rates will have to go up at some stage. We will see what happens when that happens. I am very optimistic about london. When i look at what is happening to the u. K. Economy, its got huge Forward Momentum now. We have got to build on that. Do people ask you whether there is a chance the u. K. Will leave the eu . If they do, they are worried about that. They say, what is the plan . Have areally we want to renegotiation. We think there is a better deal to be done. We think europe as a whole needs reform. It is a great zone of stagnation or has been largely because of the euro. Look what is happening when france. Is not fantastic. The supplyside in europe has been grossly neglected. Why not have a different approach . I think David Cameron is ideally waste to lead that. Placed to lead that. What happens to london if you leave the eu . I dont think that is likely to happen. Ways thehat in many stakes are lower on the eu than they were 20 or 30 years ago. In the sense that the European Union as a whole now accounts for much less of the Global Economy, it is not so vital to the prospects of the u. K. As it was. It is still vital, hugely important but not as important. Secondly, dont forget that people prophesies to that if we didnt join the euro than the whole city of london would crack and fall apart and gigantic mutant rats would call out of the sewers and not the faces of it was all going to be a disaster. That didnt happen. London remains the actual capital of europe and the world. I think that will continue to be the case. I am in favor of saying in the single market. I think that is the right thing. We have to come up with some new approach. They should join us. London or the u. K. . Some of the other that seems a little bit messy. I think it is vanishingly in probable that the british ,stablishment, the business they wont really want to leave, to relinquish british influence in europe. For our u. S. Viewers, you do have a great sense of humor. That needs to be put that needs to be said. I Say Something in a joking way that they will take seriously. Just saying, it is good but the dots on the eyes. A lot of people that travel through london heathrow, is there any chance that the commission will look at your airport in detail . They are looking at it and i wish they would adopt it. That is the obvious thing to do. When we began our conversation, we have a huge housing crisis and london. We need to build hundreds of thousands more homes. Is Heathrow Airport area about the size of the royal barrel of kensington and chelsea. You could put 2000 200,000 people there. You could put the airport east of the city where it should be so that aint planes wouldnt have to fly airplanes wouldnt have to fly over the middle of london. This wasnt discussed a couple of months ago. What are the chances of you going through . It hasnt been formally adopted but Howard Davies has said that he wants it to continue to be elaborated. They havent shut it. It hasnt been machinegunned in the water. Give me a figure. 25 chance . Ultimately, it will happen. Having exhausted all the alternatives, we will do the right thing. In the short term, the mediumterm, i am afraid we will try and experiment with various other sub Optimal Solutions such as trying to expand heathrow. We will come around eventually to the right idea. Good morning, welcome back. You are watching the pulse light on bloomberg tv. It has been an interesting trading session thus far. A few assets only on the move. Jonathan ferro joins us now from the touchscreen. In a word, busy. Have a look at this chart right here. This is the map of European Equity markets. What is leading a slower . Chinese manufacturing, a surprise contraction coming out of china. Not a good sign. Germany came out with manufacturing data just after. Not enough to lift these equities. Positive territory on the cac 40 in france but only just. And off to lift the euro. You see the euro popping through , 1. 36. One euro now buys you 1. 3635. Of unemployment data out spain this morning indicating how tough things are. 26 of the population are now unemployed. Forget borrowing costs, that is your economic reality. Plenty of moves and fx but have a look at these emergingmarket moves. The lira against the dollar, another record low. The euro up by 1. 5 against the turkish lira. The euro and the dollar absolutely spanking emerging markets right now. You see it coming back a little bit right now. Euro now buys you pre. 10 3. 1076. I will let you speculate. Nothing substantiated at the moment. Thank you very much indeed. John ferro running us through all the Market Action this morning. Lets turn our attention to the ukraine. Antigovernment protests have turned deadly. Police were granted new powers to disrupt demonstrators. The opposition says five people have died. We are joined on the phone by Bloomberg News reporter and kiev. The opposition has said it is now putting a deadline in place. Feelsl make clear that it that action is now required. Walk me through the next 24 hours. What is the set up here . Hi, the opposition yesterday and they hadident similar meetings in the days. Eading up to the latest crisis. Hey have another meeting today we are not sure what the deadline means exactly. Maintainingon is antiections and revoking protest laws. We are looking at some fairly dramatic pictures. How dramatic is the scene in the center of kiev . Actual drama is pretty much contained on a side street where the clashes have been going back and forth basically within a stretch of 200 or so meters. On the main streets and on the independent square itself, there is no real drama really. When i was there this morning, people were rather cheerful. Ok, thank you very much indeed. Welcome back to the pulse. Were live here in davos 2014. The iranian president has just taken the floor about 15 to 20 minutes ago here in davos. We have some breaking news from him. This is the first time in 10 years that an iranian president is showing up in dallas. E is trying to in davos he is trying to send some deals with the oil makers. He had a big meeting with them here in davos. He says the iranian economy has be a the potential to the has the potential to be among the worlds top 10. This is a very interesting point because it is a point that the rental nissan ceo said to me just a couple hours ago. He said french companies, french Car Companies have a very nice report with iran. They used to sell a lot of cars there. There is potential but he doesnt want to start negotiating until we have the Nuclear Agreement and sanctions are completely off the table. We will continue to watch that panel where president rouhani is talking and bring you any breaking news on that. Now do and it was a vendor before you, my colleague Erik Schatzker sat down with the chief executive of citigroup, the third biggest u. S. Bank. When you go back and look at rate transitions, they are never smooth. I think we actually go into this one probably a bit better than we have historically. Taperve to remember that is actually a taper, not tightening. It is removing what was put in. In some ways, that is excess liquidity in the system. We are just getting back to where we think we should be. There is a tremendous amount of confidence and i can feel it from you as well. In the fed possibility to manage this without creating a lot of market volatility. Why is there so much confidence . It is unprecedented, it is. I think when you look, you look at why we are beginning to taper. It is because as i described earlier, the world and the u. S. Is becoming a better place. If you are extracting that excess liquidity as the rest of the economy, with powerful engines coming behind it, it should create for a better transition. S International breath make these things more difficult because you have sizable operations and so Many Companies that are on the one hand adversely affected by the feds withdrawal of liquidity and on the other, still stuck at a different phase of quantitative easing in Monetary Policy in europe and japan . Growth, weook at will probably see 2. 6 growth in the u. S. This year, up a bit. You are not in the 3 cap . It could trend up towards that. Our own belief is around 2. 6 . Overall, Global Growth probably around 3. 25 . Developed markets at 2 with europe are covering. Emerging markets at 5 . We are going to see growth in the emerging markets still at more than twice the rate of the developed markets. When you think of the mix of our franchise, having big presences in the u. S. And europe and other places around the world, we have got the balance of that. Lets stay with the banking theme. Barclays chief executive Antony Jenkins has been on the job for almost a year and a half since taking over. On february 12 he is taking over april unveiling a plan. He joins us now in his first interview of the day. Thank you for joining us. A greats always been way to gauge the modes, the relationships between the bankers of the world. They were flourishing here six or seven years ago. What is this year like . This is my third time at davos and i think the mood has improved. There is a greater level of confidence in the Global Economy is moving in the right direction with the Banking System beginning to address the issues, the crisis and the regulation changes beginning to take root. It is cautious optimism in terms of the general economy. To really see whether the banks are sustainable, whether things have changed, do we need to wait until tapering start . I think tapering is going to be very important. It will change some of the Global Market as we know. About culturemake and values is very important. We can make all the changes we like around regulation, capital, leveraged liquidity, but we have to change the culture in banking institutions. That is what were focused on and barclays. Change takes a long time but what i require of the organization is steady continuous progress in building the right culture and rebuilding trust in the institution. I think that is very important for individual banks but also for the system at large. This has been one of your main focuses. In a recent memo you also said, if you dont agree with the values of the bank, you should leave. Why not fire them . I sent that memo out on january 19 last year. It is a combination. What i really think about values is people have to buy in. We have to give them the opportunity to buy in. This at the end of the day, if a person doesnt get it, they cant be and barclays. We will remove them. This has been over the last 12 months, have you seen progress . I have seen i have seen a lot of progress. You have to define the culture you want to build. What does that look like . As last components of this you referenced, is coming out when we do our results on february 11. This is very important. We will be talking about a series of commitments we will make to the end of 2018. They will be eight commitments with hard targets. Were going to update every year so that our shareholders and customers and hold us accountable. That is the last piece in this big transformation i am making at barclays. This is a huge transformation. If you were to speak to shareholders now, what does barclays stand for . What i say is we are the go to bank. We are the place where shareholders come to invest because they can get great sustainable returns over the long term which is what our investors one. Also a great place for colleagues to come build their careers and a place where society can count on us to do the right thing. You need to make sure in the u. K. To lend to the small medium enterprises. This is the backbone of the u. K. Economy and something that Governor Carney has talked about throughout the process. Is this something you are focusing on . Very much so. We have consistently increased our lending to the small and mediumsized sector. When you come through a recession, people are much more adjusted in starting businesses. New Small Business counts are at record levels. It is very important to us that we continue to support the real economy. That is where jobs get created. Are we going to see more job losses at barclays . The Bank Industry is going through what i regard as a hundred euro transformation. We as an industry have to do the things other industries have done in the past, get more efficient, get more effective, focus more on the customer. As Technology Comes along, that will mean that we lose jobs in certain areas. What will remain are Higher Quality more interesting more Career Development type roles. We employ 140,000 people around the world. We are still going to employ lots of people. How can you make sure that legacy you have put in place remains . We have seen with barclays and other banks saying, i dont want to focus too much on the investment bank, i want to be a more ethical bank and that can slip around again. The key issue for any ceo is the legacy that he or she leaves behind. And our values, we have five values. The most important to me is stewardship. What is the quality of what you leave behind . What i believe is that the changes we are putting in place now, the definition of the culture, the way we measure success, doing the right thing in the right way, i think that will sustain. The reason why it will sustain is not just because it is the right thing to do but because i think it will drive real commercial value. As the commercial value comes out and people say this is not only the right way but it is commercially the right way. Because this is what shareholders and customers want. Exactly. If you have happier customers, you get more business. Your shareholders are happy. It reinforces itself. We started this interview with you telling me the most had changed the mood had changed a lot. We see it through rosier tinted glasses. Is there a danger of being too complacent . I think that is right. We have to accept that the world is a very different place than it was 30 years in the runup to the financial crisis. If you look at ruvell rocker what global macroEconomic Growth our forecasted 3. 5 . Those Percentage Points make a huge difference. The challenge for all of us is how to do more with less. In finance, business, government, that is the challenge of the next decade. That requires innovation, ingenuity, creativity and it also requires us to think about the problems we are trying to solve. A big scene here is inequality. Inequality is not sustainable in society. We have to find ways to address that. That is partly to do with the structure of the business world. Important is very that we begin to talk about these issues. It is also competitiveness but it takes decades. How do you deal with unemployment now . Youth unemployment is not the product of the crisis. In the u. K. , we have one million young people not in employment, education or training. This is a product of structural changes in the labor market and in the demand for skills. That does take time to address all of those things. I had an interesting breakfast this morning talking about innovation and technology. The president of estonia said they have been working on this for 17 years. Every child in estonia gets taught coding in school. What that has created is one of the most advanced technologicallybased economies in the world. Credit to them. That is forward thinking. That is what we need much more broadly at the world is going to flourish in the coming decades. This is your third davos. What are you most looking forward to in the next couple of days . It is always about the combination of meeting a lot of people in one place at one time and also testing the mood. Thirdly, perhaps most importantly, getting these policy issues on the table, getting them discussed, getting people thinking about them, getting people collaborating on fixing some of the things because it is can it is incredibly important. Antony jenkins, thank you so much for joining me today. We have plenty more to come from davos. It is swarming with vips right now and they all come with their own chauffeur driven rides. Hans nichols got some special training on how those drivers would handle an icy ambush. When youre driving, you are safe. You are only not safe when youre standing still. When you are in an armored car, you are always safe. Now, power. Power, power, power. So there is a roadblock in front of us. Someone with a gun. We dont wait for this. We go. Full power. Full power. Stier, steer, steer, faster. Change gears, change gears. Power, power, power. Break, break, break. How was your insurance . Pretty good . No. [laughter] hans joins us with more on the experience. A little bit like james bond. A little bit. A little bit. Im sure there has been a james bond movie where they have driven on ice. This is a serious point here at davos. You see corporations leveraging the World Economic forum to promote their brand. Concern in an unsafe world. Executives, we have seen them flying in by helicopter all morning. Their drivers can take an invasive driving course here. Audi is promoting their brand. We got a tour in one of the cars that used to be driving around angela merkel. The doors were, i dont know, heavy as i dont know, 18 stone. It was quite heavy. Thick glass. What you get here is this fortress davos mentality where there are dangers in a real world. Audi is trying to capitalize on that. Francine. Matt damon aiewed couple of days ago. Jason bourne or james bond . Youre asking who guy johnson is . Guy johnson is clearly more of a bondman. He has the accent, the quit. Bourne is too tough for guy johnson. All right, thank you so much. Hans nichols there. Guy, brotherly love. I think there were some complement in there. I am going to have to rewind the tape and. Hans nichols, i think he is definitely jason bourne. Good skills. We will be back in davos very shortly. Coming up, carl icahns tech attack. This time, ebay is in the crosshairs. We have the billionaires latest tunnel and the story behind it when we come back right here on the pulse. Good morning. Welcome back. Billionaire investor carl icon is back on the tech attack calling for some of the giants of Silicon Valley to return value to shareholders. This time it is ebay coming under pressure. Here with more is caroline hyde. He wants to break this business up. He does. He started with apple, demanding money back to the investor base. Now he is turning his attention to ebay, the Largest Online marketplace. Carl icahn saying, look, split it up, spin off paypal. This whole business of the divorce between a merchant and management, i think it is hurting our economy greatly. I think it is time that shareholders should have more to say. In the big picture, not micromanaging. It is a nobrainer that they shall that paypal should be spun off. He also suggests that two of his employees join the board of ebay. This all comes as ebay perhaps hasnt been performing as well as many had anticipated. Thirdquarter sales missed. Fourthquarter sales missed. Firstquarter Sales Forecast also missed analyst estimates. Paypal, about 40 of revenues now. It is growing faster than ebay. I spoke to the president of paypal just a few months ago and he said they are making forays into mobile payments. He said mobile is going to the epicenter of your money. They are doubling down on investments in mobile. They have been buying up startups and the like. The growth is there for paypal. The management didnt really like the style. We are going to see this battle develop. Caroline, thank you very much indeed. Head to 70,000 workers in south africas largest plants striking over pay this morning. Security was tightened overnight as the police seek to avoid a repeat over the labor unrest that claims the lives of at least 44 workers back in 2012. Jonathan ferro back with more on this story. They want a pretty punchy wage hike here. They want double the money. Look at the base, 550 a month for some of these miners. It is not a terrifically great paying job. What we dont want is a repeat of 2012. What you dont want is the impact to global supplies in 2012. We are talking about lonmin, three quarters of Global Supply coming out of south africa for platinum. You will see this impact the price if it intensifies. We have seen the price come up to a twomonth high. What is the cost of production . If we were to see a doubling of wages, that is going to change. Are these guys making money . Look at the business itself. Platinum mining happens deep underground. It is incredibly laborintensive which makes it very expensive. Theh estimates that 40 of overall cost for a platinum miner is labor cost. That should be an indication of how much these companies can actually absorb. The other side of this is politics. How do you absorb those pay hikes and job cuts, cost cuts . You have an Unemployment Rate of south of 25 . That makes this very politically sensitive. You see politics, business and socially sensitive as well. Thank very much indeed. John ferro joining us with the latest. Francine, back to davos and you. We have a packed show coming up. He says it was a tough year for european oil and gas companies. Our interview with the tetra tech ceo is next. They with us, live from davos. Wechsler comeback. Youre watching the pulse. Everyone is now familiar with the nsa and the nsa is probably pretty familiar with you. But why is this a threat to the nsa . This is a Free Software technology that allows users to keep their online residence anonymous, making it very difficult for the nsa to track your activity. Sam grobart explains how it works and reveals the surprising source behind the funding. With all this talk about the nsa and encrypted data, you might be wondering if there is a way to keep your Online Activity on the down low. Turns out there is a way. It is a software technology. It stands for the onion router. Referring to the vegetable wash many layers. Tor is Free Software you can download onto your pc or smartphone which will anonymize your data. How do they do it . They take your data and bounce it around the world over several different data nodes. Those nodes only know one thing, where to send your data next. That way, no person or agency can figure out where the data came from or where the data is going. Currently about 4 Million People use tor but it isnt for everybody. Bouncing that it all around the world slows things down. Tor isnt compatible with things like flash so watching video and online graphics is difficult if not impossible. Tor drives the nsa crazy because it is so darn good at masking all that online data. Who does the nsa have to thank for this . That would actually be the u. S. Navy. Most of the funding behind tor came from the navy, the state department and the pentagon. Usedis because tor can be by lots of people for nouri for very noble purposes. Benefits tos its people with far more net area schools as well. Tor users also include drug dealers, and terrorists. Kind of a rough crowd. If you want to keep yourself invisible online, there is absolutely Nothing Better than tor. Security a big issue in davos. We have been talking about Angela Merkels phones and i suspect many people in davos will be looking for extra security as well. For those listening on bloomberg radio, the first word is up next. For our viewers, it is more of the pulse. We are back in two post. Francine is back with some big interviews. Some big billionaire interviews. We are excited. We will speak to the first billionaire banker of india, uday kotak and we have michael dell coming up on the program. We have a very young female billionaire from china. She is the new breed of billionaires. Worker selfmade, hard and she has a couple of things to say about how you deal with stress. I am looking forward to it. I am quite looking forward to hearing that as well. I will be fascinated to find out how many twitter followers she is up to. When she was in the studio with us, it was an eyepopping number. I think it was 2 million at the time. I will ask for an update. I did meet someone who beat that last night. She is a musician who does some kind of electronic cello thing. You can also follow guy and i on twitter. We are back in two. It is billionaire hour. Guestrom davos with a lineup. Michael dell, uday kotak, zhang xin, also, petrofac ceo ayman asfari. Hiss president said country has the potential to be among the worlds top 10. Point 3 billion dollars, lenovo buying ibms server unit lenovo buyingn, ibms server unit. Good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u. S. I am guy johnson, this is the pulse, live from london. I am Francine Lacqua, live of the worlday two Economic Forum and it is billionaire hour. We do not often get to say that. It has a fantastic rain. The last hour has been amazing in davos. Event has set twitter alight light, amazing to hear some of the things he was saying. I hear the hall was ringing with cheers as he was making comments as well. He is the rock star of this davos 2014. We have not had an iranian president in davos for the last toade, he wants to sell iran Business Leaders, he wants contracts. Be among iran could the top 10 economies in the world. That is more than being bullish, an incredible statement. Work. T will take a lot of he seems to be up for it. You hide your conversation with carlos ghosn earlier. Klife balance seems to be slightly something that j ogged with davos. Party, went skiing, now it is more serious. Now they are talking about a balance. Goldie hawn here who did a workshop on meditation. We had someone working on meditation on the iphone, an application, ceos swear by it. Make sureyou need to you do things to deal with stress. Then you have ceos like sir martin sorrell, if you love your job, it does not feel like work and youre not stressed. Do you have an opinion . I love my job, but it feels like work sometimes. Ofhink a combination of all the above is relevant to most people. Finding that balance interesting to hear bankers talking about it. We will be back with you hour onbillionaires bloomberg with Francine Lacqua. A promo. Lets talk about deals outside davos. Ibms is leading to buy server unit, Jonathan Ferro joins us. Price, 2. 3 billion, a mixture of cash and stock. This is at the lower end of evaluation. Two Companies Going in two different directions. Lenovo is focusing on hardware, they cherry picked the pc business from ibm, they are doing well in a tough market, 6 shipments pop in the last quarter. Synergy, you sell corporate computers and servers. Ibm will go in the software direction and focus on services and software. With a couple billion dollars to look around the market and see what they can buy. Going tohink they are look back at a smaller business. A lot of speculation as to who they might buy. A thread runs through this that people are talking about, the possibility of security. A Chinese Company by a u. S. Asset, what does that mean for national security, a big question mark over the next couple weeks. Latest onro at the lenovo. Lets stay in tech, carl icahn is back, calling for some giants of Silicon Valley to return value to shareholders. Undertest target, ebay pressure. Here with more is caroline hyde. He wants to break this business up. Biggest online marketplace and owner of paypal, they bought it in 2002. Their is now 40 of revenue. Carl icahn saying spin it off, we want the Fastest Growing unit separate. The whole business of the divorce between ownership and management, i really think is hurting our economy greatly. It is time that shareholders should have more to say. In the big picture, not micromanaging. Onhave done a lot of work ebay, we believe without question it is a nobrainer, paypal should be spun off. A nobrainer. He is proposing that two of his own employees get on the board. Ebay not performing as well as many had hoped, thirdquarter numbers missed, foreclosures number fourthquarter numbers missed. The march, stealing their growth is faster than the parent company, making inroads into mobile. Withroline hyde joining us the latest on ebay. An interesting battle to watch. Billionaire hour on bloomberg, lets kick off. Fran . We have been speaking to world and Business Leaders all morning as day two of davos is underway. Matt miller helps us welcome our , foundert, uday kotak of Kotak Mahindra bank. Spoke to you was last year. 2013 was the year where we saw weaknesses in india. How concerned are you . We went through a bad patch in the middle of the year, things are looking better. Current account deficit under control. Finance minister promises controlling the fiscal deficit for this year. Better than how we look in the middle of the year. Some repair work has happened in the last six months. How bullish are you on the Global Economy for 2014 . 20saw a surge in stocks and in 2013. Can you remain bullish . My concern is areas like commodities, oil. One of thes, expectations, we could see a rally in equities. How concerned are you about the Banking Sector in india specifically. Fitch had a report saying that about 60 million of bank loans billion of bank loans are risk returning. Inking sector in india is state owned, there is pressure on the assets of banks. More in the context of state owned banks. The Balance Sheet challenges will be the key issues in 2014. Haverelative basis, we infrastructure, airlines, diamonds, we have not lent to some of those sectors, our Balance Sheet looks more robust than the sector as though whole. 18 ,t on tier 1 capital of giving us some confidence. What do you think the overall mood is . You have had industry meetings at the World Economic forum, is their confidence . There is cautious optimism, people are resuming, at least in the indian context, a little bit sentiment. Vement in we have an election in india in april that could be a turning point. If Commodity Prices like oil soften a bit and indian politics can find solutions, india could be in for a better 2014. We talk about elections as a turning point, possibly for bric countries. What is your biggest concern . Does it mean that we are going to see more m a in the Banking Sector . Elections,erence to the expectation is a stable outcome. If we get a stable outcome that is good for india. If we do not, that could lead to instability. We are seeing a pickup and advisory business. Indian banking will require some consolidation and strength. Some new banks might come in, plan to open the Banking System in india. Have 100have fun, you Million Dollars to invest. You can put it in indian stocks, u. S. Stocks, bitcoin, picassos. 5050 between global stocks, u. S. And india. Why are you bearish on bitcoin . The question is how legitimate the currency gets, countries like china set it accepted as legal tender. On some level, it is creating money. How do you inshore it does not create new money without global monetary controls. Thank you so much for joining us. Uday kotak, founder of cuts at mahindra bank. And matt miller. Guy, more interviews coming up. Really looking forward to those. Before i. T. Is those interviews, let me tell you what is on our radar. Sectors manufacturing contracted for the first time in six months. Managerspurchasing index fell. Frigid temperatures will reach today, texasaff might receive snow. Ir blanketing northern u. S. The region will remain in a deep freeze. This has driven up natural gas prices. Driving uppposition pressure on Viktor Yanukovych, the president. Two have died in protests, talks failed to reach an agreement yesterday. You will hear from michael dell, exclusive interview. Coming up on the bloomberg billionaire hour after this break. Back, you are watching the pulse, live from davos as well. hour on bloomberg tv, let me pass you over to tom keene in davos. Thank you so much, how about an interview on technology. With terrific perspective, contributing editor david kirkpatrick. I love his book the facebook effect. Joining us, michael dell, founder and ceo of the very private company dell computer. We are thrilled you are here. Will rip up the script and go right to let novell, ibm distributes something over to lenovo. Will one over be a Different Company with this new transaction . There is acertainly trend of consolidation. We have been gaining share in server space and client space. We have our pc client tablet business growing. Doing that and servers. Consolidation, this is just another form of it. Switching from the client only is a fairlyd server significant shift in terms of the sales motion, the processes in the company. They will have challenges. This is what you have done best, the processes of making things work in a competitive business. Prizes cut pro, there is perfect competition. It is like wheat farmers in kansas. Where will lenovo be in five years when they compete . Where will dell be, this is going to be cutthroat. The product hardware part is still important. Value is shifting to new areas services, software. We have invested tremendously in these areas, we have done 30 acquisitions in the last five years, we have built a 21 billion Enterprise Business in those areas. As a private company, we intend to focus more on those areas. , david, before you jump in the michael dell ad on television now is a home run to left field. You went back to where all of these companies started. I had goosebumps. I cried. I appreciate that. Going to the shape of the computer industry, what do you have in your hand. How significant is this device . Inch tablet. Ui is this a shameless plug . Heres a keyboard. The other guy does not have that. An eight inch tablet, it is also a pc, you run it also runs microsoft office. Is this where the industry is going . Thinkis interesting, i the death of the pc has been talked about quite a lot. It turns out there is still a million of these devices sold every single day. Are you kidding . On a price competition basis, india as an example, this has been successful. How do you differentiate here versus what apple is doing . This product versus a more highend apple . Is reallylet business taking off in 2013. A double from First Quarter to Second Quarter, double again in Second Quarter two third quarter, third tripled. There is product differentiation, differentiation and services. The real issue is how do you integrate this securely into a companys operations, make it work. Not just about the product. It is about software and services, understanding how it works within a company to really make people more productive. Part of being private, you are going to shift the Lions Services ortware will you be thought of as a Hardware Company in five years . We would love to see our businesses grow that fast, we still have a substantial business and hardware. It is a Good Business for us. It is a Great Foundation for us to build relationships with customers. Into cyber security, systems management, information management, we are entering this age of the data economy. Hal has morality change at dell going private how has morale changed at dell going private . How many employees . About 100,000. A big start up. How is morale . People are excited, we are investing in the business. Thinking about the nearterm and five years and 10 years out. Within that within that, david is going to write the dell effect. Will write about how the luxury of being a private company enabled us to continue to evolve the business. Understand customer challenges in a deeper way. It,pe the lets face there is a shorttermism that shows up and finance, politics. A big topic of davos, shorttermism is hurting business, the economy, consumer trust. Icahnstermism, carl kitchen table. What did you learn as you moved out what to private as you moved public to private . What did you learn about activists . Some are more unique than others. In terms of revenues, dell was the Largest Company ever to go private. Certainly, there were people that objective. We had a long process, bloomberg cover it covered in. All swell that ends well. Ask you alet me question about an article in bloomberg businessweek. Apple executives said they are not going to come down in price. In five years, will that be the correct decision for apple . To distance themselves from the cutthroat steve jobs came up with the idea of being the bmw of the computer business. Apples market share is growing bigger than many expected. Michael and i used to talk about how he wanted to license the mac os. I would like to know your opinion, do you think apple remains the highpriced competitor, is that a given . You are seeing the ac phenomenon of 20 years or 30 years ago play out again. If you look at smartphones, there are markets where android is approaching 90 . Is, you know, they have done very well at the ultrahigh end. There is a very large market out there. Way, if youe in a look at tablet share, fastestgrowing how much . 299. S inhe price of four martini davos. Tie this all together, in the tablet war, what are you learning about the International Customer that we do not know . Take it to india, indonesia, the czech republic. A huge business in china. Everybody talks china, the others. What are you learning about the buy trigger, what the consumer wants . There are some unique requirements in the developing markets. We have products that we are developing for those. I would tell you that we are demand for the faerie best product everywhere for the very best product everywhere in the world. What did you come to davos for this year . To see our customers and to get a sense for the european economy. The european areou were saying that you finding the mood more positive than you have in years. Absolutely, we do not have a crisis of last year, there is optimism. Customers are investing. I mentioned the data economy earlier. Think about all the information out there we help customers store, this is a renewable source at companies are just starting to tap into. It is a source of growth, and socialrialism, change. Governments are starting to tap into this data. This is a whole new area of expansion for the economy. And they want to meet with you more than ever. Dell, thank you so much. Good to see you. What is your panel on . Developing role of infrastructure and how europe might be kind be behind . With matt damon . No. Matt damon and goldie hawn. A panel in davos. Guy . An allstar lineup in davos. Fascinating interview. Continuing after this break. She is a selfmade billionaire and cofounder of aging giant beijing giant developer soho. Zhang xin, coming up. How to escape and icy ambush, hansng lessons in davos, nichols at the wheel. Good morning, youre watching the pulse, live from london. I am guy johnson. Live from davos as well. Avivrading floor in tel opened this week. Elliott gotkine caught up with the chairman of israels second business bank. Talking about the damage done to the israeli economy by the superstrong chuckle. Shekl. Believe and are waiting to see what will happen in the states as long as the u. S. Starts to grow faster, i think israel will have reparations from currencies like the shekel. How does it affect customers . Most of them are hedging for the short term, if it is hightech, margins are higher economy. Every percentage is affecting them. Regulators say the bank needs to cut costs because of low Interest Rates. What costcutting plans do you have in place . How many jobs . What we are doing is early retirements of people we have pensioned. How many . We dont have final figures of what we are planning. Weeral, we are doing are taking many steps in order to cost cuts. It is people, also methods, systems, technology. Sometimes service by people. Will there be any redundancies this year . There will be, we dont know volumes. I dont want to come with figures, but we are active in coming in becoming more efficiency, seeing that Bank Hapoalim becomes the most efficient. A lot of Israeli Companies are going to overseas markets, is Bank Hapoalim considering listing on an overseas market . Not yet, we are one of the core shares in the domestic market. Our activityost of is domestic. We will continue to list on the tel Aviv Stock Exchange. We have volumes, for investors in our stock. The telcomfortable with Aviv Stock Exchange listing. The government has been in office for about a year. Out of 10, how would you rate their handling of the economy . Is ok, i do not give figures to my government or to the execution of economics. I would say that keeping budgets under control, which was the numberone task of this government, was achieved. This brought that confidence to the market. You have seen everything improving in terms of the markets, in terms of the attitudes of the fixed income markets and so on. In general, they are doing ok, this is the right direction. I expect them to do more with deregulation, not regulation. In order to have more competition here and more foreign investors. One of the netherlands Biggest Pension Fund managers recently divested of israeli banks, including hapoalim. We continue to do the best we can as a business unit, the leading bank in the country. We continue to attract investors in general. Many Pension Funds invest here domestically and internationally. They are interested in Bank Hapoalim, we live in an environment in the middle east and we hope to do better in the future. At the moment, Bank Hapoalim is doing the best we can, we do very well. You must have been disappointed with that decision . Listen, it is not that i am not feeling dealing with this. I deal with investors interested in the bank. Elliott gotkine speaking with the chairman of Bank Hapoalim in israel. Lets move on. Iranian president Hassan Rouhani so the best solution for syrias war is fair elections, he spoke in davos. Not give up will its right to Peaceful Nuclear energy and that his nation has no motivation to develop nuclear weapons. Tods manufacturing chinas contracted,g index the hsbc index fell 49. 6, missing estimates. A number below 50 indicates contraction. Ukraines opposition putting pressure on president Viktor Yanukovych. Afterts turned deadly three days and nights of riots, five people dead and thousands injured. The sides will continue to negotiate today after talks failed to yield a result yesterday. More on this developing story, bringing and ryan chilcote. We look at a situation becoming increasingly difficult to resolve. It is becoming increasingly difficult to see a way out of for either side. Ukrainians are really bracing themselves for this evening, we have had these three days and three nights of violence. The opposition has given Viktor Yanukovych a 24hour deadline to meet demands, that expires tonight. Maybe they will extend a, there are talks underway today. The scale of violence we have already seen, this is unprecedented for a country like ukraine. It is truly amazing. 2000 injured, 5 killed. Be verying to difficult, like you were saying, to move forward. Both sides are increasingly hostage to the positions they took. How will the kremlin be viewing this . The kremlin has bankrolled the administration. How will they be viewing the developing situation and what do you think putin will they be in constant communication with you and you can fish with victor will they be in constant medication with Viktor Yanukovych . He will want Viktor Yanukovych to deal with this on his own. Many thought that travels in ukraine or overt when they gave Viktor Yanukovych 15 billion. This has probably caught them by surprise. I expect president putin to talk about violence in the ukraine as an example of why you need consolidated power in russia. Why there has to be people need to of a the law people need to obey the la. W. We continue to monitor events. Ryan will be back tomorrow to cover that. Back to davos. Microsoft has found a way to address security concerns in the wake of the nsa revelations, allowing overseas customers to have personal data stored outside the u. S. Microsofts general counsel discussed this in davos yesterday. Our International Correspondent who has been following this has more details. If you donton, trust us, you can store it in foreign countries, the data. Appears to be an elegant solution to a problem that has vexed u. S. Tech companies. The interesting thing, microsoft is the only one saying you can make this move. There is a crucial distinction. These are comments from microsofts chief legal counsel, for customers that live outside the u. S. , their data can be stored outside the u. S. That does not mean if you are an american, your data can be stored and canada. Excuse me, quite loud, we have a couple helicopters. Francine, the u. S. One of the main u. S. Tech Companies Responding to a problem that could estimate a loss of 35 billion for companies. Sales inning about china, concerned that there is going to be a corporate outcome, some sort of ramification for companies that have been making quite a bit of money off of data storage. I love that you are next to a helipad. Waiting for the president of brazil, maybe she is arriving now. We also had a panel that was unveiled at davos. Are we any further to Global Governance . Yes and no. It is important that there has been a panel, it will be run by swedens foreign minister. There is a sense from tech executives, whether in finland or germany, or china, it is a wild west out there in terms of technology and it needs to be some sort of global standard, especially when it comes to data protection. In some ways, a global standard like at airports, some sort of fools of the road with that some sort of rules of the road. We can see a helicopter right in the back. Much better, the glamour of it all. I cannot believe what they are charging poor day charging per day at the helipad. It is so much better in the new jersey helipad. A lot more going on, today is very political. Ian bremmer will join us on surveillance. Eight meeting we always have, nouriel roubini. Will you be talking iran . I tried to listen to what president rouhani was saying, he sees iran as one of the top 10 economies. Extremes it seems extraordinary. I had a conversation with a senior u. S. Ceo who said the number one reason he comes to davos is because it is so global. It is so uniquely in americans face how diverse it is. Speech. Ian politics folds in. Robert gray filled will join greifeld will join me. There is tension between london and new york about who will win out with the markets of the future. Great interview with london mayor Boris Johnson. He said london will always remain number one. Another thing is any quality, the crisis is over, that is good as long as it does not leave a legacy of more inequality. Is a first year of focus on that and talking about it. I hear a lot of wheels spinning on inequality. Andeed more Economic Growth some form of immediate, shortterm and if it to begin a dialogue to create the patients creatertterm benefit to a dialogue to create patience for a longterm solution. Maybe that awaits. Tom keene of surveillance, about 20 minutes from now. We have been speaking to ayman asfari, head of petrofac. We asked him how the year has been for the u. K. s Largest Oil Company . Demand willas continue, driven by demand in emerging markets. Theretry is facing is a huge amount of i am in the service industry, there is cost pressure. You find that everybody now is talking about a midterm oil price, which is flat. It is going to be difficult to see how it will drop significantly. Places like russia and even prices aroundeed 100 to balance the book. We are seeing more activity but it is costing more. In the north sea, we are producing the Oil Equivalent of one point one million barrels, we have had a 50 drop overall in production in the last decade. Ut 40there will be abo billion spent, more is being spent to produce less, you are producing more and more difficult barrels. That was petrofac ceo, ayman asfari. Coming up on the pulse, how to escape and icy ambush you never thought you would get these tips. Driving lessons in davos that could save your life. Welcome back, she is a selfmade billion air. Ceo of the Largest Development in beijings Central Business district. Down with me, we spoke about doing businesses and doing business in china and challenges. A i was jokingly telling friend of mine that if anyone is depressed and china, come to davos, it will be cured. Everybody seems to be in a highspirited mood. You talk to ceos of multinationals and they seem to be saying last year was the best year of their business in china. Is that not a concern, people might be too complacent . In china, we are having a different discussion. We were worried about the next stage of growth, there needs to be structural change. How will companies adapt . I hear a comparison between china and the rest of the world and i am like wow, we are not in such bad shape. Are you concerned there is a bubble in real estate in china, especially Office Real Estate . I still dont see a bubble burst collapse. The adjustment seems to be slower in china. It does not have the domino effect you see forceful market plays, not so much in china yet. Be the year of china . There is a lot of uncertainty and china, so much concern on what exactly the government policy will come out to foster in structural change. There is understanding, awareness. Translate that into executable plans, it has yet to come out. Talk about women in davos. We had a new billionaire this week with sheryl sandberg, you do have a lot more young selfmade billionaires here. I know. I am going to so many womens events at davos. 10 years ago, there was hardly any womens events. Now, there are so many. The womens participation and our weight in the economy is going up. Give me your best investment for the year. Maybe away from soho china, we asked some billionaires if they had 100 million, in art, real estate, or stocks . I would bet, with my own money, im european real estate. Anywhere in particular . London is a little expensive, most other cities are good. We had a lot of people say that. That was the soho china ceo zhang xin. She was very interesting, she was one of the billionaires we spoke to, it was great to get her take on china. She says 2014 is going to be tough for china, but it will be a much stronger economy three years or four years down the line. Fascinating to hear what she said about if you were depressed and china, come to davos. There seems to be a debate going on about whether or not davos is too optimistic this year. You are right. If you and little bit disjointed, i had one ceo, it was his first time in davos. Chaotic,t is a little maybe this year, the fact that we do not have a crisis also means it is difficult to find solutions. Ian president iran is a big focus, you have discussions on various topics without an overarching theme. Keene was talking about spinning the wheels when it comes to people trying to form ideas when it comes to dealing with the haves and the haves not debate. Fran, what else have we got . From theeavy hitters World Economic forum, i will be on with the imf managing erector Christine Lagarde imf managing director Christine Lagarde, a 30 minute conversation, you do not want to miss it. Welcome back, you are watching the pulse. Davos is swerving with the ip ips, very important passengers. Hans nichols got some training on how drivers would handle an icy ambush. When you are driving, you are safe. You are only not safe when you are standing still. In an armored car, you are always safe. Power, power, power. There is a roadblock in front of us and somebody with a gun. Do not wait, go. Steer, steer, faster. Steer back once, change gears. Power, power, power. Brake, brake. It is very aggressive, when there is somebody with a gun how is your insurance . They do not want to insure me. Glide, power away, that should be the motto of this show. Hans in Francine Joni from davos. Hans and francine join me from davos. What else have you got lined up . Ice, belowmeters of zero degrees all morning. It is starting to thaw, if i crack through this in the middle of this piece, rescue me. Fran, he is having all the fun. I am having fun, i am wearing sunglasses with tom keene and i have an interview with Christine Lagarde this afternoon. Of personale computers to cyber security. The Bright Future they envision. And cisco is betting on the internet of everything. John chambers tells us at the center of it all is video. And the u. S. Stock exchange has a crises. They face mobile competition. The nasdaq ceo confronts destruction. Good morning. Were live from our World Headquarters in new york. I am scarlet fu. Michael mckee is joining us. Switzerland for the World Economic meetings. He will bring us great meetings all morning long. You just wrapped up a conversation with michael dell. He seems relaxed. . Ow was that talk it was very different from when he was in that battle about going public. David kirkpatrick and michael dell will have that for you in a bit. To the talk