Good morning. That is right. We have Central Banks and the two largest economies in japan. The boj is steady as she goes. They are looking at getting rid of something old. Interest rate reform. I will be back with details later. Whats the view for the update. Watchingata and we are mark carney posta testimony. Testimony. Neys is it a bubble . Inthe London Property market a bubble . A big debate there. The futures were higher and took a little turn in the last half an hour. This is the open. 100. Ave it up 2 10 of it was lower for the past two days. We are waiting for the price on the dax. It is better than expected. The exports are higher and the importance have more signs of that. They are over four percent. Ring this up. It is pretty flat right now. One dollar buys you ¥103. In april, we will get a sales tax hike. Does the bank of japan need to step in and do more . They started the policy 12 months ago. Check out copper. Look at this. The biggest twoday slump in 24 months. Lower concern over china. We are getting a slowing. That is something we will watch through the morning. Thank you so much. Jonathan ferro with the latest look at the markets and these commodities. Joining me now is charles siegel, the head of Market Strategy at lloyds bank. Give us a sense of how optimistic you are about valuations and how optimistic you are about growth in general. Where do you see the most might be made . The key aspect is the investment world coming into this year with bullish expectations and how this year is a different year from the years that we have had because of the weather affects and events in the ukraine and thailand. There have been a suppressing effect on growth and this is hard to distinguish at this point in time. Whether there will be a rebound when the weather improves or whether in fact we are dealing with a continuation of the previous years, where growth is more fragile. That is what i am in. It is an inventory buildup that you had in the second half of last year and that is partially responsible for the weekend data. It is not of the world is going into a big recession or. Ataclysm we are in a slow growth story. The valuation and the stock market has not fallen at all. Is beingorrection recuperated. You are looking at areerterm measures and we not at the year 2000 feet. We are at second order peaks isds the equity market looking from a longer tour longerterm point of view and is richly priced. You can sign other asset classes. Is there a correction question mark do you still want a place where valuations are cheaper . Exactly. That is right. You need to have an Asset Allocation process going on and the u. S. Has better deals in europe as long as you believe that europe will get through the structural reform process. I do believe that but i think it will take a long time and i was surprised last week. I think they need to give the economy a push and i think Something Like asset purchases or some form of nonsterilization gives it a bit of a left. We will talk to china in a few minutes. What is your favorite pick . Biggest winning of a medium risk portfolio . I would have government bonds and more distressed debt. With the yield curves as steep as they are, there is a lot of carrier rundown and i think that is the best way to make money in a world where we are not certain about the prospects. Do have to pick . And are sold off in one go Structural Reforms look weak. Yes. That is right. It is on a country by country basis and two years ago, it was a simple asset class. That is not the case anymore and we need to say if the valuations and thailand are correct based on the political risk. Will there be a resolution to that . What is your favorite country . I like thailand. I think others have been hit worse. Potentially, brazil, when they get their Interest Rates under control. Stay with us and we will talk about china. Here is what else is coming up. Mark carney faces a tough ready forday and get a heavyweight fight. A bank president. Snowden speaks. The contractor calls on Tech Companies to lead the fight him privacy. Keep it here. Welcome back in london, this is on the move on Bloomberg Television on your phone, on your tablet, and are. Com. And bloomberg. Com. From hong kong. Anything new . No. Nothing new. That is all. Back to you. I am kidding. It is steady as she goes. I have a statement here and they are keeping the current pace of expansion, as far as the Monetary Base is concerned and they are continuing on a path of using until they reach the two Percent Inflation target and keep that stable. 1. 25 and where they think the economy is right now, they think that japan has recovered moderately and they believe that the recovery will remain intact in 20 days from now. Problem markets are a and the pace of recovery in the u. S. China has been left out and that is interesting because a lot of machinery, exports, machinery, or parts, they are a big deal. Lets switch to china where we have had a lot of headlines over the last couple of days and today we heard from the central bank governor. Absolutely. Today was about financial reform and to sum it up for you, two things, he was talking about Interest Rate reform and the ceiling. They have a timeline of one or two years and there is a floor in lending and a ceiling on deposits. How they plan on doing that or will they do that in a go, no details there. When they lifted that, they can be compete for deposits and attract clients by hiking deposit rates. Obviously, that takes out the traditional margin that banks enjoy and that is the risk is part with financial reform. They pointed out that Interest Rates will initially rise once the ceiling is taken out. Another comment was on the recent drop of the currency and he says it reflects a growing role of the markets in the economy. Thank you for that update. Now, lets go back to charles, the head of Market Strategy at lloyds bank. Thank you for sticking around. We spoke about europe and emerging markets overall. Talk to me about china. This is the most difficult to read across because we do not know what we are looking at. That is right. It is worth keeping in mind that they are the second largest economy and they are in a process of trying to carry out shape the economy for the next 1020 years. Currency andcheap ask for driven model, theyre moving a juggernaut into another direction and the fallout from that and the impact from that is going to be more dramatic than people think. There is a lot of overcapacity in china and they have built to much to produce. Certainly, the basis of them moving to more consumption and less production. Time, things like reforming the shadow Banking System and the amount of credit contraction that they are presenting is significant. While that may be appropriate for the longerterm, that has implications and that can be exported to the asian region. Having seen japan weaken their currencies successfully, they are in the process of suggesting to people that we are pretty much done with appreciation of the yuan and this is about the right price. That is what theyre trying to say. If that is the case, you could can yuan we can we weaken. The other problem is credit and we saw that. This was taken as a positive because they thought the government had a good handle on it and the markets take their course was small companies. How do you protect yourself question mark it is difficult to do so, to be honest with you. The reason being is that that is almost like a trial balloon and lets have a default and see what happens. It was not of a sufficient size peoplele that, you know, presumed there is a backstopped with chinese assets and if things get too bad, the chinese will step in and ease the Monetary Policy and bailout levers required weber requires that. Whoever requires that. Default . He small what if it signals that is not the case and the much larger credit that is more vulnerable , perhaps the government is like, we warned you. You. We warned we could be talking about a weaker story then anticipated. But it is difficult to read. Message . S the in theink china is process of exporting weaker growth and inflation to the region and that will have global implications. Speak to me about japan. We are running out of time. It did not pan out as we thought it would. You know. It is few we qe. Deflation is hard to break as a mentality and there is substantial demographic problems. There is a debt to gdp ratio. In the population that is getting old, these are people who do not like that. They like equities. Its hard to say that japan will grow at a massive rate when you have demographics as they do. It will be hard for them to achieve sustained strong growth and inflation. Quantitative easing, while it is cannot go ony indefinitely. Thank you for all of that. The head of Market Strategy. Mark carney faces his toughest challenge today. Nowmarkets and are joins us from westminster with the latest. This is the second big nonregulated market and libor was a debacle for them. The Fort Exchange market does not get bigger than this. At the heart of the issue is the eight years ago. There was a form of manipulation and all was not well around 4 00 p. M. In london. That information was known within the bank of england and why was that not as collated . Who is responsible for that information and where it went wrong . Banks billions of dollars and carney had his messages. D instant is the internal investigation enough . That is the issue. That is the issue. What are the details about . These are part of a investigation. It is. Lets put this in context. We understand from sources that we spoke to that a dealer at of an order details with a trader at a company and the trader is named martin. 2013, where itto is alleged that the chancellery revealed the details of it and it is alleged that he shared that with bp. At this stage, we have a number of information. It would be inappropriate to speculate on the outcome. Bp says that they strongly refute any suggestions that they have engaged in inappropriate trading activities. And its been suspended shows you the stories are coming to the front. They certainly are. Thank you with the latest there on the testimony. Up, Edward Snowden calls on Tech Companies to lead the privacy after. We have the details from the sxsw conference next. Welcome back. Im francine in london. At the south by southwest conference, Edward Snowden called on Technology Companies intake a leading role protecting user privacy. Hans nichols, he caused point a stir. He caused a stir and it was a rare and well received appearance. There is a fire going on in the attempt to burn the internet and he wants people to be the firefighters. An interesting point is that he made it clear that Tech Companies have the right to gather data of their consumers. I want to say that you cannot collect any data. I want to say that you should only collect and hold the data for as long as necessary. Whether you are google or facebook, you can do these things in a responsible way where you still get value out of without the abuse. The constitution behind him is clear and the sound is spotty because they bounced around from server to server as he spoke from an undisclosed location in russia. He called on entrepreneurs to have a Tactical Response to this and he said that they would have more responsibility or more thanty to do this legislators. Snowden the nsa still does not know what the journalists know. Are companies that profit on gathering as much consumer data as possible. The aclu is advising edwards noted and made the point when they spoke was noted that having Big Data Companies guard consumer data is not the most obvious safeguard and there is going to be tension there. Techpeed at which companies can react, that is what snowdens point is. Mark carney faces his toughest challenge yet. Welcome back. We are in bloombergs european had corners in london. The fate of the missing Malaysian Airlines jet baffles investigators. Routeight of 370 was en with 239 people on board. In a News Conference earlier today, the immigration professional identified one of the suspects as a 29yearold iranian who intended to migrate to germany. Rates will be liberalized in 12 years. A majority of economists predict that policymakers would remove all restrictions in 2016. Dealer is saidcy to share details. Alerted the other traders that they had received to swap pound for dollars and the investigation is ongoing. Bp says that they refute any suggestion that any of this affects traders. It has been a good start for a profit that reported up 56 . We are joined with the latest and this is a sickly a state agent in london and it is the first results we have had. Let us be clear that it is an estate agent that is a pure play on the London Property market. We see the profit up and the revenue up against continued expanding. They are pushing hard on this and as most people say, this is about London Property and that is the underlying story. It is not the company itself. You have two sides of the argument. One said that it is in a bubble and it is a bubble that could burst and 1520 years. Another says that this is not a bubble at all. Limited supply is being talked about this morning. In september, i got tweets and emails that this was a bubble and it is up over 60 right now. You are not seeing a sign of it popping. The market is interesting and there is a big debate over whether it is a bubble or not. People are saying that it is going to change. Limited supply is going to continue to carry on their. I want to talk about property and london and what you see is a massive transfer of ownership from domestic owners to foreign buyers and we have seen leverage declines. Theyre coming into london and buying with cash and theres nothing the bank of england to do to pop the bubble or contain the price. On the other side, there is a speculative nature to the market right now and buyers come from asia and are buying properties. They are doing them before the profitability is built. I will leave you with one line. The average flat is 36 Million Pounds. That is echoes of dow 40,000. You remember that. Softening the Property Market to foreigners is a way of saying that they are open for business. Theyre going around and saying that london is open. Russia, china, bring the money over. Thank you. Lets get back to the big story. Mark carney testifies on the currency scandal. It is a major test of his leadership. Man is cranny is at westminster and standing by with lawmakers. I have a conservative mp. Would have a lot to discuss this morning. Thank you for taking the time. What do you want to really get out of mark carney today . A lot ofovernor the issues did not happen on his watch. Theres a lot of speculation going on at the moment and from a Treasury Committee point of view, we want to understand what that, weon and beyond need to look at what is andening as a fair independent process. There are a number of instances with the governor of the bank of england and this is the first real crisis test for the since the implication of the 2012 Financial Service act. Robust interrogation and there are stories with thousands of emails and a great deal of groundwork. This is an investigation with integrity so far. So far, we do not know much and we know that that the the court is doing independent reviews and is looking at it. Until we get the report, we do not know much. Has a different freshe and this is a very and independent set of eyes looking at one of the oldest institutions we have. It will be interesting to see what they think about the howncial services act and we have done the bank of england. You aref the words talking about is governance and we have the libor scandal and investigations, as you said. Made a globalhas perception of what is going on in london. For gooda roadmap governance and this is about reputation for london. It is important. I cannot stress how important i think it is. London is a Global Financial center and is wellknown if you want to have a big bank for small bank and the problem is that what we can dictate. We cannot dictate the rules. They come down our way from europe and it is important that london is a leader from europe and we have to engage well. If the rest of europe are aoking and saying, hang on second, youre the banking crisis, there will be serious watches about our ability to create these regulations. This could be a problem and the governor has a real challenge in europe over financial regulations. Do think that there is too much on the late, in terms of the amount that they have to look after or regulate . Can you see a case for structurally changing . We have gone through an extensive process of changing and it is a good point. We have these investigations and i understand you have gone back. Problems looking of that started before the these arecrisis and emails. We need to have a robust regulatory regime. Crises. T have any more lets change it. It is going to step down. Have spent the last years analyzing this in depth and have scrutinized the process. And i hopearliament to bring that experience to this process. England is at the head of this and we are looking at the consumer interests and nuts and bolts of the system. And wellto be robust defined regulatory structure. Once you have the police force in place, you had to make sure that we do not have any new and fresh problems coming out. We can cut them a little bit of but, anything that happens now is on their watch. Ongreat to have your take that mark and we look forward to the opportunity. Thank you so much. Mark carney is on the treasury subcommittee and he has a huge day ahead of him. Forward guidance and establishing independence. Back to you. We certainly will. Coming up, more on the Japanese Company plans to promote competition in the u. S. Is coming up after the break. Welcome back. Is on the move on Bloomberg Television and streaming on bloomberg. Com, your tablet, your own, and any phone. Change in the rules is forcing teams to change their cars and smaller teams are hoping to challenge the richer rivals. We talked to the performance director. It is a big rule change and the biggest change in the last 20 years. Packaging, chassis, almost anything. Fundamentally, we are changing to an Electronic Energy goingry system and it is to a smaller capacity engine. There are dynamic changes on the car and we have improved. Have a helmet to support the upper rear wing it. Were trying to be more relevant arehe industry and we starting the race with two thirds the amount of fuel and still covering the same distance almost as quickly. That is a massive efficiency increase. Moreill see hopefullybility and the racing will be enhanced because of diversity. It is innovation and you will see Different Solutions and down the grid. Converginge people on the best solution. And wepulse is coming up will say a thing or two about these. Yeah. , i have not driven one. It would be fun. The rule changes are massive and the big question is are they ng to level the langfield Playing Field . That is the question that i put to the owner. I have been vocal about the cost. I think the rule changes will increase the cost. Furtheravor of moving like whatgine is more the, man will drive every day. Think that is good i think we will have some parity and teams will develop quicker with the gap growing after that. The rule change benefits the smaller teams. Tony fernandes there. We have a fastpaced show of our own today. Shazam and youth will talk about the wider picture he sees in the landscape. We have the testimony coming up today and the governor will talk about the inflation report. We have a conference taking place at 10 00 and it is a racing show. A busy show. It certainly is. We are joined in 12 minutes for now does from now. Pets at home will likely sell shares. Investors are buying up retail stocks. Sean combs is said to will convert it into which is owned by comcast. President tells charlie rose that you will launch a massive price war. We have more on the japanese billionaires big declaration. He is tackling the weight of regulators had on. Tmobilelooking at u. S. And he wants to combined the players. Many fear that competition will hereduced and he said that sets himself on fire. Wantedistry of Telecom Access to ones quicker. He has a fiery temperament and he told charlie rose he has a price war. A heavyweight fight. You like that. I like to have the real fight. Not the fake fight. I want the real fight. There will be more massive price war. Lets that is your pattern. You under separate everybody. Postponee willing to profit to gain market share. Exactly. I want to be number one. This is his tactic in japan. When he took over in japan in 2006, he undercut the rivals in group the market share. And theof the market market value in japan. Is a character and he is trying to get with Market Players for lunch to show how he can inject competition. If that was not enough, he said that he promises a price for and if that is not enough to ease regulatory concerns, he says that he would bring competition in broadband. Internet and the home is not competitive and he is promising that. He is sitting down to washington and meeting people for lunch to put on a Charm Offensive. We will see how close he gets. The latest on a fascinating story. You can watch the full interview tonight on bloomberg. Say with on the move because the final thoughts are next. Welcome back. Describes israel as a land flowing with milk and honey. Israel as the most productive gary karr callous dairy ca ows in the world. Meet the super cows. The israeli cows produce more milk. They produce 10 higher than america and more than german callous. It is because they are treated largely technology. And and they are milked. They go on their merry way. The quantity of milk that they produce is being measured and the quality of the milk. That is not all. That determiners if the tao is not well or feeling frisky. The israeli milk yields remained higher because foreign farmers are more traditional. We do not think of technology on the dairy farm. Ande is an adoption issue it is a conservative marketplace. People think that it is a mechanical thing. However, you discover that technology has a Significant Impact on this business and it becomes tougher to make money. At the local and global rival, sales of cal monitors have risen since 2001. Measurer sensors to shoeing and body movements. Healthy. The heifers not adopt will technology and it will disappear. We have seen it in other areas and it is no different. Farmers have to struggle with in feed and milk. I think the only thing that can help is this. They are bullish on the future. This is even used in the arab world with cattle. Gotkine, bloomberg. For a recap on the market movers, lets check in with john. It is an interesting day. We have data that is undecided. Week, thed to last volatility says that next up is the bank of england governor and the problem is that it was not there. This is something. He was not there. We will try to get that right now. Back. Johnson and i are that is up next. Big test. S a grilling from lawmakers as the bank of england becomes embroiled in a currency manipulation scandal. Ukraines figure Union Position will speak any minute ukraines Viktor Yanukovych is scheduled to speak any minute. The missing Malaysian Airlines jet well a News Conference from interpol and one hour help solve the mystery . 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. Lacqua, this is the pulse, live from london. Ukraine, russia drawing account or professionals to u. S. Terms offered by secretary john kerry last week. Ukraine tests its military combat readiness in case of further escalation. Ryan chilcote is just back from kiev. We have a number of things happening. There is the beginning of a thought we are going to start to see russia downgrading detention here. The press conference with Viktor Yanukovych could be interesting. It is possible he is under russian detection in russia. The russians could use messagech to send a out. To test out a possible solution. Odd person to do it through. Dont you think . They say he is the legitimate president of ukraine as far as russians are concerned. They said he asked for russia to intervene militarily in ukraine. And thethe legitimacy justification. If he was to Say Something else, they could say you are right, the thing to watch is are we going to get a political and diplomatic solution. The suggestion is that everybody wants back. You have the u. S. And russia talking about this and exchanging puzzles. President putin invited to moscow. Erry the question is how likely is this. Not gone torry has moscow because the u. S. Says russia is not being constructive enough yet. Pictures. Seeing live he is about to speak any second. A lot of people were really interested in why he fled. Why would he gave a press conference . What is there that we need to know . He spoke he said he did not want to see any military action in ukraine. Two days later, the Russian Ambassador to the Un Security Council showed a letter from him requesting that president putin take military action. He might want to explain that. Reconcile those two statements. Thank you so much, ryan chilcote. Now we turn to governor carney. Facing his toughest public testimony facing questions from lawmakers. Westminster. Is at you just caught up with mark garnier, one of the guys who will be questioning carney. What did he say about what he wanted to hear . He wants to hear that there is a robust regime of investigation. He wants more detail. He lacks detail at the moment. Our story says they have looked at 50,000 communications, 40 hours of telephone calls. This thissue is is the second schedule for the bank of england under libor they were accused of being naive. This investigation it was senior people within the bank of england having lunch meetings with senior fx dealers. There was a discussion eight years ago about manipulation of the market on the close. It divides the integrity and reputation of the city, nearly 40 of the fx market. Another scandal, another investigation. What are you doing to put a right . Is about the global reputation of london. Those are the thoughts from mark garnier. And we have the breaking news on the currency dealer at lloyds bank. What are the details . So far the details we have spoken to people familiar with the matter. A senior currency dealer at lloyds show details of an order he received with a trader at another company outside lloyds. The lloyds steel ors the dealer received an order to convert 300 Million Pounds to dollars. He was going to transact this how lowgardless of sterling went. Both institutions have said it is too early to comment. Have said they have nothing to substantiate this at the moment. This falls into the domain of market abuse and potentially insider dealing. Chancery has been suspended on february 3. He has not been accused of any wrongdoing by any institution at this point. Another day, another scandal. Fx looks like it has the heat cranking up on it in terms of news. A fascinating morning to see how he copes. They do very much, manus cranny joining us from westminster. The fate of the missing Malaysian Airlines jet continues to baffle investigators. It was traveling from kuala lumpur to beijing with 239 people on board would disappear. A malaysian immigration official identified one of the suspects with a stolen passport as a 19yearold iranian. The man isieved believed to have intended to migrate to germany. It remains a mystery. No clues as to where mh370 is. We know the identity of one of the two passengers with stolen passports. A 19yearold iranian Asylum Seeker in germany. His mom is said to be waiting for him in frankfurt. He is not likely to be a member of any terror group. About the surge it has been expanded further. It started in the gulf of thailand. Then to the South China Sea and out the strait of malacca. Authorities have said all possibilities are being considered. Lan searches are also being done. It is being investigated the possibility of mh370 turning back to the airport. This airport is in the middle of the city, 30 minutes from where we are now. It is not the airport where it took off from. On, we are short on details. Lumpur. G, kuala and drupal will give a News Conference at 10 00 a. M. U. K. Time. Addressingls will be details about the stolen passports. Has just reported numbers. Getting those throughout the moment. Speaking tol be bloomberg later. Someis the guy tipped by to be the next boss of vw. Hans nichols has been breaking this down. He joins us from berlin. It is the forwardlooking figures that are interesting. 17 new or revamped vehicles from 2014. N growth in china registrations will hit the above 500,000 new vehicles sold in china. Almost more than. 5 million. The other interesting figure is 22 billion euros that they are going to spend in the next five years on development. This is a division of the Company Investing heavily. They want to take the fight to bmw and mercedes. It is a fierce and intense competition to see who can be number one in the lecture he market. In the luxury market. They have challenges with currency in brazil and china. They have strong growth in those companies. The american demand is back. This will be an oldfashioned fight. We will see what happens with march numbers in terms of new registration. Will march be a rigorous selling month in january and february. It is exciting. The only downside is you and i cannot afford them. They are pretty expensive. It is all about new models. Areing through what they saying at the moment they are quite upbeat of the emerging markets. More than. 5 million car sales upbeat on Growth Potential out of brazil. Walking around the Geneva Motor Show the other day, the emerging markets are an open question for the car sector. Brazil jumped out at me. They are starting to localize production in brazil and they dont have to worry about production costs or currency fluctuation in one direction. When they repatriate it, they do. When i talked to Rupert Stadler five months ago when currency was a bigger issue, he thought the best hedge against currency fluctuation is going local. You really see that in brazil. They have not done that in china. Thehina, look at the yuan, swings it is making will impact profit and revenues for big luxury carmakers. Thank you very much. Hans nichols joining us from berlin. Live pictures coming from the audi press conference, ripper schadler in the middle. Later. G a little he will be speaking to us on surveillance later on bloomberg. Hiphop mogul sean combs set id 200 Million Dollars for the fuse cable channel. She will convert he will convert the channel into revolt taxes. Ked by the u. S. State of colorado collected 2 Million Dollars in marijuana taxes in january. Stores open for business at the beginning of the year, factoring in medical marijuana, colorado raked in 3. 5 million. The bank of japan has maintained a record easing. Keeping ammunition as in april sales tax threatens to deepen the contractions of march 2011 quake. Gets grill. Carney facing his toughest testimony an about the u. K. s role in alleged Foreign Exchange rigging scheme. Live picturesg at of Viktor Yanukovych who is speaking currently in russia. We will bring you the headlines from what he has to say. Pulse,me back to the live on bloomberg tv and radio. Streaming on bloomberg. Com and your smartphone. Breaking news out of russia from the former ukrainian president yanukovych. Basically talking about what happened to him over the last couple weeks. Seti ultranationalists and fascists have been acting in ukraine. Speaking from russia where he has been taking refuge. He says he will not resign as president. It is my understanding he has already been ousted. He is clinging to power and basically the russians used the excuse, saying president yanukovych, in their eyes, asked for help. This may spark a civil war within the country. The current leadership of ukraine is speaking in kiev. Enyuk is saying russia needs to cut its deficit ukraine needs to cut its deficit. Are not whataine was expected in terms of ability to field trips. Yanukovych saying he will return to kiev when possible. Thinks he is still president. Ryan chilcote is following this. Lets return to westminster for more about what we could hear from mark carney. Testimony about the bank of involvement in an alleged fx rigging scheme. First we will talk about the inflation report. Manus cranny joins us from westminster. I am joined now by susie ring. We have a Financial Team of reporters at bloomberg news. It is her along with her colleagues who are involved with this. Talk about what we can expect today. Is going to be up for a tough time. The bank of england put out a Statement Last week that opened more questions than it answered. They refuted claims that have not even been leveled about officials being part of manipulation. People are saying how they condone the behavior, not have they been part of it. The fact that they have not answered those questions yet and we are still waiting for those answers. At the heart of this is that the bank of england had this knowledge eight years ago. There is a coziness. I spoke to liam, there is a coziness between the fx market and the bank of england. How does the Treasury Committee follow up on the issues . That is what they are going to be asking. They were alerted to this eight years ago. Issues about manipulation. Because of the closeknit world you are speaking of, perhaps officials did not see the need to escalate it. You may have had the information. Why did you not escalate . And why did you ask people not to take minutes at that meeting . As to whatsuspicion they did not what taken down that was said. That just at that time it is a nonregulated market. Did they really need detailed minutes . Is space to issues the bank has been criticized about before, not having consistent systems in place to make sure communication is noted down properly. It speaks to the culture. This investigation is going to widen. Going to see pressure on the banks to have an independent inquiry. Control ofy are in this investigation. The bank cannot be its own judge and jury. I think that is what we will hear the committee saying. Thank you, suzi. The green from me on at westminster. Chilly down here. You know how chilly it is going to be for mark carney. A little hotter than on the grain. Back to you. Manus cranny with the latest from westminster. Next, why israel is betting the farm on technology for cows. How the nation is leading the world in milk production. Behind the wheel. Go for a spin with formula one caterham to look at the changes of the sport. Welcome back, you are watching the pulse. That is how many lk israelf cows mi produces every year. Than more milk per cow the u. S. Elliott gotkine finds out why. Me is reals super cows. Holstein heifers are used around the world but is really once produce more milk. Produce almost 50 more than german callas in 2012. Partly because they are treated better. L cows enjoyed air conditioning. It is also down to technology. Here at the kibbutz, it is the quantity of milk being measured and the quality. Displayed on these computers. Odometers indicate if the cow is unwell. Afimilk exports technology to 50 countries. Yields remain higher because foreign farmers are more traditional. We believe technology belongs to the googles of the world, not a dairy farm. It is a conservative marketplace. People tend to think it is a mechanical thing. Them,ow cows, milk of everyone is happy. You discover technology has a Significant Impact on this business. It has become tougher to make money and the Adoption Rate goes higher. Globalcr, a local and rival, sales have risen. Cud wear tags to measure chewing and body movement. It keeps them healthy. Matter of survival. If farmers do not adopt technology, they will disappear. We have seen it in other areas of agriculture. Gary is no different. Today, Dairy Farmers have to struggle with many things. Volatility in prices of feet and ed and milk. Technology is the only thing that can help. Israels milk bullish, pushing into new markets. In the arabven used world to milk camels. Elliott gotkine, israel. From milk to the markets. European equity markets, struggling to generate any games. Dax just inac down, positive territory. Stocksftse, mining taking a fall. Anglo pushing up. Copper around an eightmonth low, concerns over china. Central bank focus time, mark carney in the hot seat. Those testimonies. The fx probe testimony is at 12 30. See what a moment. Wellconnected the pulse, live from bloombergs European Headquarters in london. I am francine lacqua. From theg data out u. K. Economy, january industrial slightlyses 0. 1 , below the estimate of zero point two percent. Factory output rising 0. 4 , slightly ahead of the 0. 3 associated with that number. The pound revised. Wards for both industrial and manufacturing. The pound, 1. 6624. Of bankcarney, governor of england, faces three different subjects today. The first relates to the inflation report. He is now briefing parliamentarians. Starting the questioning. We start on the macro situation in the u. K. Economy and will to what is happening with the fx probe. Start to 2014, the London Real Estate broker increased profit. Was in september. This is a take on the u. K. Housing story. They take a commission on housing prices. It is a play on the London Property market. Strong revenue, up by 16 on the year. Seven more branches this year. If you look at the stock, what a run. Ipo is 16 up on the day. Everyone was saying this is a bubble, up over 60 . Hard to call a bubble. This is a play on London Property. London has been getting it in the neck over the last couple days after the now famous piece in the new york times. It has been ruffling a few feathers. What about the rest of the year . We are talking about a bubble now but the train is on the tracks. Gains last year. People expected more of the same this year. The debate over whether we are in a bubble will roll on. In the prime end of the market, the debate is separate from the general market. The average Property Price is about. 5 million. Covers of to aly certain price. You have seen a transfer of ownership from domestic buyers you havewnershi seen a transfer of ownership from domestic buyers to foreign ownership. The chinese and russians in. Ging money what takes that money back out will define whether this is a bubble. You do see speculative activity. Especially people buying fields that are not even finished. You wonder whether there will be the referendum story that derails the situation. Where things get interesting. Over the next 12 months you could get a rate hike. The Property Market expected to be heavily politicized ever the next 12 months. Do you tax foreigners . A lot of people will vote for that. Thank you so much, Jonathan Ferro with the latest on foxtons and u. K. House prices. Telecom market. Softbanks president trying to convince u. S. Regulators to let him snap up tmobile. To charlieon spoke rose. Masayoshi son is a fiery individual. He once threaten to set himself on fire at the ministry for telecommunications in japan when they were not getting a license quickly enough. The fire is back. Interview by charlie rose and saying if you let me as the owner of sprint in the u. S. , thirdbiggest player, if you let me buy up the fourth competitor, tmobile u. S. , i will bring you a price war, it is a three heavyweight fight. You like that. I would like to have a real fight, not a pseudofight. I i can have a real fight, will go in a massive price war. Technology war. Pattern. S your when you get a stakeholder, you undersell everybody. You are willing to postpone profits to gain market share. Exactly, i want to be number one. Ease regulators concerns. Saying if i make four players three, there will be more competition because i am bringing you a price were with better rates to consumers. That is what he has done in japan. Softbank since he took over vodafone and 2006, they have now got only five percent of the market with double internet users. The market value of softbank quadrupled by offering cheaper phones. It is quite the Charm Offensive in the u. S. Aboutis not just competition to mobile users. He is saying if you dont buy that i will also bring you competition to internet users. He is saying i can bring it far more cheaply to the home. It is very many feel little competition when you are getting internet into your house. It is your landline provider or your cable tv provider. Invest inng i would infrastructure in the u. S. And bring you cheaper online provision. You could have more mobile spending potentially and more improvement in education, he claims. U. S. E get into tmobile because of what i can bring to mobile and the internet as well. Thank you so much, Caroline Hyde with the latest on softbank. Watch the full interview on charlie rose. Looks pretty entertaining, tonight at 10 00 p. M. Time for the latest in our special series. Behind the wheel. 2014 is the most eagerly anticipated formula one season. No one is sure who is going to win and how many cars will finish the first race in australia on sunday. The performance director of caterham tells us now. The biggest role change i can remember and my history, for the last 20 years. Fundamentally, we are changing to a new powertrain. And Electronic Energy recovery system. V8 to a smaller capacity turbocharged engine. Aerodynamic changes all around the car. A different nose profile to improve launching and safety. Lower element. We have gone to a stage where we are trying to align ourselves and become more relevant to the industry. One of the key aspects of the coming season is that we will of theaces with 2 3 amount of fuel we started with an 2013 but still covering the same distance as quickly. That is a massive increase in efficiency. Unreliabilityore and more unpredictability across the grid. Hopefully the racing will be enhanced because there is more diversity. It is about innovation. You will see Different Solutions up and down the grid. Of time, youperiod will see this conversion. We have been speaking to cater thems chairman, Tony Fernandes we have been hamsing to cater chairman. Tony fernandes. These rule changes have increased the cost. Formulafavor of moving one closer to the car industry. The is closer to what common man will be driving every day. Ground everyone is at zero in some ways. For the First Six Months we might have a little bit of parity. Teams with bigger funds will theyop quicker because have more resources. The gap may grow. The rule changes are better for the small teams. Chairmanas caterhams Tony Fernandes. Hear more from him throughout the week. Corvettesng time, seats were considered cheap and uncomfortable. Matt miller went along for the test of new seats. [tires screech] i am matt miller. I am slightly terrified. Also having the time of my life doing doughnuts in a 450 horsepower corvette stingray. My driver is a 28yearold engineer behind the cars new seat. How do you like the seats . Unbelievable. It is supportive. The seats were at the top of gms priority list when overhauling the legendary car. The old ones were criticized for being cheap and flimsy. The important thing about a seat is it is your main communication with the road. You are feeling everything that is going on. That will help you get the most out of the car. Guyour main job is to be a you have to look at the population that will buy the car. A broad range to fine tune where you want to see to be. General motors created the c drive team General Motors drive team with employees of different shapes and sizes. They recorded 4600 points on a t to createck and but a seat optimized for comfort and support. What makes them better . The previous generation did not have as much structural integrity. The new seats are molded of cast magnesium like for rem maserati like ferrari and ma vette, bringing the closer to superstar status. That has been the egos of the corvette. I will not kill your cameraman. That looks comfortable. Terham trackn the care and with a formula one driver. Not relaxing. Pictures from parliament. Mark carney has been speaking about inflation. The main event will be his testimony later. The governor is about to get a grilling. Talking fx probes. Welcome back. You are looking at live pictures from westminster. Mark carney facing questions and addressing the inflation reports as we speak. Later on he will be getting to the real story of the day the bank of englands involvement in the currency manipulation scandal. To discuss this is simon, a partner at the London Law Firm rpc. In bankingzes disputes and Financial Market legislations. Give us a sense of how much heat mark carney is going to get. He has been very cool. Can he maintain this today . From will be getting heat the select committee. They have indicated that they are ages about what is going on in the bank of england. R carney is a very cool character. Reassurance to give around the process they have set to look at these issues. Comfort around the governance process generally. I expect to hear him saying they are supporting the investigation. I think he will make statements not condone market manipulation. I do not think he will be talking about details of the investigation because he does not want to prejudice what is going on. Wayn what way in one this is an opportunity for carney. He has made it clear he wants to change the culture of the bank of england. This is an opportunity to do that if things emerge that are not what they should be. It is an opportunity. He has only been around for a few months. He was not around at the time of the events under investigation. His difficulty is that the investigations are going to go on for some time. He is going to be a feature in that for some time. The timeline of all of this might not suit his agenda. We you talk us through have been covering day in and day out the fx probe. What do we know so far . Are two angles. The fx investigation is ongoing into the investment banks. A lot of traders have been suspended. Because they have been talking to each other, inappropriate behavior. Suggestions of chat rooms where they have been talking to each others about orders and potentially manipulating those. There is the bank of england to use, and now appears going back when the bank of england is talking to the market there have been suggestions that this conduct was going on. Whether they did not realize the implications of what batman, that is whether they did not realize the implications of what t, that is subject to investigation. We have seen issues in the u. S. And switzerland. Ultimately, this is very embarrassing for the bank of england if there is evidence found that they knew about these things. Governor king achieved a lot of things at the bank of england. One was to get the bank to assume more power. The arrangement in the u. K. Dissolve the financial crisis. The bank is very powerful. Does this have the necessary skill set to regulate Financial Markets . It does in the pra. Is the regulator responsible for day to day conduct of Market Participants such as the investment banks. The day has a fundamental part of the regulatory scene from a market stability perspective. This is embarrassing. It is important to remember we are at an early stage. There is an internal review going on. Hard to gain any solution. Ifno doubt that traders, they are under investigation, will be pointing to that meetings at the bank of england. To fortify their defenses. Whether that works is a different question. But they will be pointing to conversations at the bank of england. Do you see this becoming bigger than libor . This could be two or three times bigger than libor. There is a real risk of that. Momentum has gathered since december. There are Institutional Investors looking at their positions thinking about legal action. They are waiting for the regulatory findings. People are on the sidelines looking at this whole area. Thank you so much, simon hart. Lets get some company news. Vivendi is said to have asked firms for final offers. Chaoriholders of weighing a lawsuit. Investors will meet on march 26 according to an exchange filing. Tobeats music has raised up 100 million in a second round of funding from existing investors. The company is run by dr. Dre and director producer jimmy logan. Beats music is trying to challenge the market leader, music. , for its coming up on the pulse, an ipo for shazam . We discussed with the executive chairman andrew fisher. Back to the pulse, live from Bloomberg Television and radio and streaming on your tablet, phone, and bloomberg. Com. Ryan chilcote and hans nichols are here. Lets start with ryan. Whats the latest on ukraine . I was going to say what happens to president yanukovych s press conference. Maybe this is generating a solution. It was a Useless Press conference. All he says is i am alive, i didnt flee. I didnt flee, yet he is in moscow. Calls himself the commanderinchief, you would have thought he would weigh in on the presence of russian troops. He still says he is going to go back to kiev. But he did not say next week. Good point. You are also following malaysia airlines. Interpol press conference will again anytime. Two men had stolen passports. An iranian young man was one of those. Anything more will be riveting. This is a huge mystery. We will get more on that in a few minutes time. Lets talk about a great interview coming up later this morning. We have been hearing from Rupert Stadler at a press conference and will hear from him live on Bloomberg Television. What can we expect . To tom keenerward grilling Rupert Stadler on why he is so optimistic on china. They expect to sell. 5 million cars in china. That is against the other downward Economic Trends in china. What is the cause for optimism for aldi and china . Thank you so much. For those of you listening on Bloomberg Radio the first word is next. Surveillance with tom keene is coming up for our u. S. Viewers. For europe, asia, and the middle east, another hour of the pulse is coming up. This is because of the time change, the u. S. Has already made a time change. Ceo,lked to shazams andrew fisher. Big test connys big test. Live from westminster to give thethe latest in advance of testimony with the fx scandal. This is bloomberg surveillance. Nine nations continue to search andthe Malaysian Airline russia hunkers down in the crimea and ukraine tests combat readiness and all those electronic toys, be careful, it its a hacker nirvana. Good morning, everyone, this is bloomberg surveillance. It is tuesday, march 11. Joining me is scarlet fu and adam johnson comes back they after day. He is here once again. It is a strange day today. We will get right to it. Overnight, the bank of japan kept its pledge to extend the Monetary Base. Central banks around the world keep doing it in spite of the paper. Economic data, we have Small Business optimism at 8 30 a. M. At 7 30 a. M. Jobs in thisf the country come from Small Businesses. It is the