We are live from bloombergs European Headquarters in london. Fax coming up, taking on the transformers. We check out the Wearable Technology that gives you superhuman strength. Italian fashionistas invade london. Valentino tells us that is where the money is. It is the business that makes more money. Quite a tan. A lufthansa is bracing for three day pilot strike kicking off today that will see canceled a vast majority of flights. The airline is calling it the most severe in its history. David tweed joins us from frankfurt. Talk us through the disruption. Destruction taking place on two levels. One is the level of the operations. 3800 flights are going to be canceled over the next three days. That includes cargo as well. Wings,so includes german a subsidiary here in germany. As you mentioned, 425,000 passengers have seen that their travel has been disrupted. That is the operational side. The other side is what it is going to do to the bottom line of lufthansa. Lufthansa earlier today confirmed that the cost is going to be somewhere between 40 Million Euros and 50 Million Euros. They cant come up with a precise idea until the strike has ended but that is going to make it difficult for them to achieve their operating profit euros for2. 65 billion 2015. It is going to be difficult. There are some lufthansa subsidiaries still flying. Swiss air, austria, the brussels airlines, lufthansas city line also not affected. 425,000 fairly angry passengers around. Pilots exactly are the striking about . There are three issues being discussed at the moment. One is pay. The second is transitional benefits for pilots that want to retire at the age of 55. The third is corporate pensions. The pilots are focusing on just one issue, transitional benefits. That means there are two other areas that are still being negotiated between lufthansa and the unions that could spur further strikes. One other point the pilots are making, lufthansa for 2013 returned to dividends. It declared another dividend after having no dividend in 2012. The pilots think, isnt the money coming from these cost savings, isnt that money supposed to be going towards buying new planes and not towards paying investors . They are a little irritated about that too. Talks will be continuing today. Lufthansa says even if they can sort out the current strike problem, that wont make any difference. We will still see strikes going on until saturday. They wont be able to resume them fast enough. I will be back later today with updates as they come. Thank you so much, david. We will have more on lufthansa in just a few minutes. We will be speaking to john strickland. And 8. 2 magnitude quake has hit northern chile. Hundreds of thousands of people have been evacuated. The quake has caused at least five deaths. Chile is the Worlds Largest copper producer. Lets talk about the impact with manus cranny. Iswhat you have got here mining throughout the country. This is the quake site just off the coast. Got tsunami warnings over here in the asian area. You can see the impact is in the northern part of chile where the president has declared a catastrophe area. Convicts have escaped. In terms of mining, there have been huge power outages. Of translating that story into a market and business context, lets have a look at some of the movers. Copper is hitting a threeweek high. The roll call of copper producers, glencore is one of the Top Producers in the world. You also have buildings in there at number six. You are seeing a rise here. There are a couple other factors that play in this morning. One is the overall growth story in the world. You have mining strikes in south africa. You begin to understand the complex story that it is. For the moment, you are looking at copper hitting a threeweek high. The litan is rising. Antofagasta is the main exposure. Going back to the map, antofagasta is based to the south of where the quake zone has hit. Back to you. Thank you. Illegal and absurd. That is what russia is calling a jpmorgan decision to block an embassy transaction on the grounds of sanctions recently imposed. Joining me now is ryan chilcote. Ryan, walk me through what is going on. This looks like the beginning of something serious. It is an interesting forensic exercise. Jpmorgan blocked a 5,000 payment from the Russian Embassy russiasstan to one of largest insurance companies. 5,000 is obviously not a lot of money particularly when you are talking about how much money the russian government moves. The Foreign Ministry took issue with this and said it is absurd and illegal. It also threatened countermeasures including what sounds like making life difficult for the United States mission in russia. What is the reason behind this block . You were explaining to me that it is all about subsidiaries. They are trying to figure out what it entails for these transactions. This is where it gets slightly complicated. The recipient company is partially owned by bank rossiya, russias 17th largest bank with about 10 billion in assets and the first and only russian bank to ever be sanctioned by the u. S. Government. Sanctions rules appear to be pretty straightforward. If a sanctioned entity owns more than 50 of controlling stake in another entity, that entity is also subject to sanctions. Jpmorgan would not want to actually carry out a transaction to that recipient. The funny part here is that just the day before yesterday, three days ago, bank rossiya came out and said, actually we have a 48 stake. Those sanctions were introduced against bank rossiya, they sold 2. 5 stake, reducing their ownership to less than 50 . Sogaz is not subject to sanctions. Jpmorgan thinking this one through. This is why lawyers get paid an awful of money. Ryan, thank you so much. It is difficult to understand how the sanctions affect different banks. I spoke to the chief executive of them has a son paolo and asked whether he was looking at sanctions. Sanctions are coming from u. S. And from european authorities. 39 individuals who we have to consider for sanctions. My bank is not involved. We have no accounts with these 39 individuals. Also, european banks have to respect the sanctioned. It was interesting. He wasnt talking about entities. Was saying bank rossiya the european banks just have to look at individuals. The banks are very gun shy now. After the iranian story, you need to dot every i and cross every t and take it very seriously. It gets very expensive. Some big events today in the u. S. As microsoft gets set for its event nine months after last years and in the new location of San Francisco. We are also expecting a big unveiling from amazon as it ups the competition against apple and google. This time we are talking about video streaming. Lets find out more about this. Lets talk to Caroline Hyde. Start with amazon. He has already tackled apple and google when it comes to tablets, ureters, even ee readers, even Package Delivery drones. He wants the battle to be on your sofa. Whether it be broadcast or tv on demand. Going against apple tv and googles chromecast. The reason he is going up against these is to try to get us more sucked into the amazon ecosystem. It is all about online purchasing. He wants us to get in there. Also, this is a company that has got so much video in its portal. It has so much that it can stream. Netflix they are going after here. It is. They have such a huge library of video. Thes about getting us onto more premium subscription that they offer, getting us into prime. Some analysts say it is a smart move because amazon has already built in their ecosystem. Talk to us about microsoft. Second time we see seti annabella going up on the stage Satya Nadella going up on the stage. I am not expecting a rerun of the flamboyance we had with steve ballmer, the sweat dripping, the screening of developers. Fascinating that last week it was all about getting into software, looking more at what windows provides in terms of word, excel, powerpoint. If you cant beat them, join them. Offering ipad the office. Today, he is refocusing on the windows operating system i understand. Siri, a sort of personal helper for the Windows Phone . Will we see an unveiling of the windows 9, the new updated operating system . Last week it was all about software. Offering it onto android and apple. Now it is about focusing back on the operating system and Getting Developers excited about getting on their ecosystem. Caroline, thank you. We will talk more about microsoft and amazon later on with hussein kanji. I need my personal helper. I am here. I want a raise, by the way. Tradersfrequency escalating and ipo amid scrutiny of traders following michael lewiss book. He will be on bloomberg tv later. Elite turned up in london to celebrate the importance of fashion, one of italys against exports. E caught up with nikola bvlgari. We are going through a crisis but fashion is still on. Everybody admires it and is trying to copy it. We have something i think to be proud of. We have a new Prime Minister, very young, full of zest, full of ideas. We think he will do well. I think it will be a change. We also spoke to Elizabeth Hurley who said italian fashion and Italian Women are fabulous. Dont forget it. I wonder why youre bringing that up. Bouygues is keeping its earlier sfr offer open. It says vivendi shareholders can choose between its two different bids. Coming up, consider yourself lucky if you travel or if your travel plans dont involve lufthansa. The airline has been battered by a big pilot strike. How will the strike impact lufthansas image . That and much more surrounding this carrier when we get back. Good morning. Welcome back. May not be a good morning if you are a lufthansa passenger. The airline is scrapping the majority of its flight this week. Pilots start striking. This affects 425,000 passengers and could cost the airline more than 30 Million Euros. Lets bring in john strickland. Good morning. We are ending up with the worst strike in lufthansas history. We have a backdrop that the years agobout three introduced a Major Campaign of costcutting. This is essential to legacy carriers like lufthansa. Go through aiag similar scheme. The difference in success has been dramatic between the european carriers. Ieg has had the toughest management style. They have had some strikes. Now their financial record is looking much more solid. Lufthansa is profitable but it has a long way to go. What they were saying is that it has an impact of 10 million a day. Does this have a longerterm impact . What i two weeks from now decide to book someone else because i concerned about lufthansa strikes . I certain i think certainly in the medium term, if they like the airline they will come back to it. But lufthansa has had over 50 strikes since 2008. It was hit last week and again a few months ago by strikes by security staff. That was not lufthansas fall. ,hen people come to believe especially business travelers, that an airline cannot give reliable service, they are more inclined to book somebody else. If you give them the taste of another carrier and that carrier does a good job, they may stick with that airline. Then the airline does lose repeat highmargin business in the future. Lets talk about the other end of the spectrum. The lowcost offerings designed to compete. To competedesigned with easyjet and ryanair and the other local carriers that fly in europe erie it europe. Another reason why the legacy carriers are going to struggle is because their offerings get caught up in the strikes. This is ironic. German wings has just taken up a mantle of operating all offshore flights except those that come through frankfurt. The raison detre behind that is coming out of a christoph france scheme. The operation must make money. We dont see strikes from ryanair, easyjet has had a couple of small skirmishes but they are not striking either. Customers can depend on those airlines. They deliver reliable punctuality along with pricing. It doesnt suggest this issue of , thenor shall cost level it will lose ground in the future. Do you think they will . Do you think this is something ont they are trying to be top of . I know you cant always be on top of it but this is one of the priorities. There is a likely chance that it will be fixed. The question is whether management can be tougher. Lufthansa has done a good job at reducing costs but when it comes to labor disputes, there is a tendency to concede more. We have seen that with cabin crew, pilots. They have already had some givebacks in terms of what the pilots are demanding. We have a new ceo coming and who is a former pilot with lufthansa. Only pilot inthe a Global Airline who has been truly successful, walk from one side to the other. Speaks what he finds. He means what he says and does what he says. He is taking the tough challenges and seemingly got good results. We have to see whether lufthansa is prepared to toughen up. The fact that they are accepting the strikes today is indicative that they are trying to get to a stop point. Thank you so much for all of that, john strickland. Italian to come, designers invade london to flaunt their style. Elizabeth hurley tells us they are a league of their own. I think we all associate fabulous dresses, fabulous women with italy. The designers here tonight are among my favorites. It is thrilling to be here tonight. I am in mr. Cavalli. It is time for todays hotshots. In las vegas, the worlds tallest ferris wheel. It measures around 550 feet at its highest level and is covered with 2000 covered lights to add an extra sparkle to the skyline. Russia went headtohead with ukraine in the boxing ring for the quarterfinal of the boxing world series in moscow. A bit of Political Tension there. The russians fall to a victory. Lets check on the european markets. Manus cranny is at the touchscreen. Lets look at these equity markets. A splendid display. The s p made records yesterday. Emerging markets are coming back from the dead. It is going to be datadependent. We are waiting on the price index. Will leave will that be the one last kick that mario draghi needs . The stoxx sick hundred up. I was just setting this up. Lets have a look at the euro dollar. 1. 38 on the nose. The unemployment numbers down in spain, the number of people down out of work dropped. That was better than estimated. We are waiting on the adp numbers from the u. S. Intowill be a glimpse potential for the unemployment numbers in the u. S. On friday. Adp is expected to show a rise of about 190,000. 1881, just popping higher again erie it again. Today, itf the news just turned on its own. Copper, oil look at and some of the cars as well. You have the copper producer antofagasta up. Thank you very much indeed. Up next, we are going to check out wearable tech that gives you superhuman strength. Welcome back to the pulse. We are live from bloombergs headquarters in london. Forecasts show that japans inflation rate will be 1. 5 in one year and rise to 1. 7 in three years. That is a courting that is according to a survey released today. Successings show abes in instant inflation succession. Jpmorgan blocks a payment from the Russian Embassy to an insurance company. They said it was under the pretext of u. S. Sanctions against russia. Jpmorgan is seeking guidance government about processing future transactions. Said it still does to fixw why they waited the flaw related to 13 deaths. Crisis theiggest company has faced since it emerged from bankruptcy since 2009. Ryan chilcote has the details. When people look at the first 100 days of mary barra, they will look at what she says today and yesterday. She said two things that she got grilled by the senators and congressmen. One is that she will get to the bottom of what happened. How it is that they did not recall these parts and she said she will she has already to taked ken feinberg care of that. The issue is this going to hurt gms ability to sell cars . Consumers might say that maybe the car is not safe enough for me. Evidence thus far. There is a lot of uncertainty hanging over the stock. Shares are down 50 this year. Chrysler is up and fortis up. A people are worried that this is going to be a can of worms that hurts the company. Its charge doubled for these recalls to 750 million. Many surprised how how Little Information she delivered. At wellpoint everybody appreciates you have to be careful at what you say because of the legal aspects, but at what point to consider it stonewalling and thats why enervating answers and sly and evading answers. Is has lost 18 billion in europe since 1999. They have been trying to refashion opels image. In gm, youre going to think about this. It has not have the same residence. They do not have great names. Tainted by not being this scandal. At the moment, if you go around berlin or frankfurt, you will see billboards telling likens, most germans dont olives, however most have never tried them. This is an attempt to get people to try opel. If you look at the february data for sales, sales are up by 15 . Salesutpaced in terms of growth, the industry average. A lot of people are watching opel and see that the losses are narrowing. Europe wantsm in to break even in two years. Thank you. That is one expensive olive, buying a car to try something different. Here is something that can help gm workers assemble cars. A wearable robot that gives you superhuman strength. We checked it out. I am responsible for the development of the wearable robot. It is called body extender. It is an extension of the body or the user. The system is able to track the complex movement of the body. Has a load capability of 50 kilograms. They can be used to perform complex handling operations. In the manufacturing of complex or [indiscernible] we can claim that this one is the most complex one in the complete use of freedom. Rotate, not only to lift the object. The benefit is that you can combine the intelligence and the of theion capability human with the strength of the machine. That brings the system to the mark in order to bring the system to the market, we need a few Million Euros and a time frame of three to four years. That is one clunky terminator. Numbers. Eports Caroline Hyde has more on the story. We see profit missed analyst estimates. Sales are still rising. Sales up seven percent. Middle east, japan, that was strong last quarter. Europe remains a weakness. Theyre being strategic and foresee growth. It looks as though they will live up to expectations. You were at the event to be an in london. You caught up with valentino. Glamorous. We had celebrities, Elizabeth Hurley wearing spectacular dresses. Many have been worried about the state of italian fashion, saying is it as strong as it could be, our exports where they should be . This is why the new Prime Minister was at this event. Still feels they have something to be proud about. Ago, they weree talking about politics and they were angry to discuss it and to say in italy they do not care about fashion, but they have to understand that is the business that makes more money. That is true. Still front and center of italy. Legend, i would not cross him. Talk to us about there is concern about the fact that there may not be coming out of italy in the world of fashion. Valentino brought into creative directors. The large fashion houses that have grown up around since world war ii italys fashion forward sense, they handed down the to those in the family. Not bringing in or fostering new talent. I put this to tom ford. What is the state of play in fashion . Is it strong as it used to be . Happy working in italy. I am happy with everything i produce in italy. He is trying to focus on the quality of the craftsmanship that he feels belongs in italy. Were there to be seen. In cavalli ora dresses. I did not feel nearly fashionable enough. Im sure it was beautiful. Caroline hyde, on the italian elite dissenting on the the and vienna. A new racecar themed restaurant called ricky bobbys. That is the character that will ferrell played in talladega nights. According to a lawsuit filed by Sony Pictures, the name of this place is not the only similarity. Looking for a great name for your new business . Avoid litigation, stay away from will ferrell movies. Bobbysany behind ricky sports saloon and restaurant was sued by Sony Pictures for trademark infringement. According to the complaint, it was based on the will ferrell movie, talladega 8 nights. The restaurant features scantily clad waitresses, a racecar nearly identical to the one that. Ill ferrell drove in the movie like coming at you like a spider monkey that references lines from the movie. The publicly traded corporation behind the restaurant also runs nightclubs, has more than 1200 employees. Can they start a restaurant that looks like a talladega nights themed restaurant without permission . Consumersossible that will be confused about who is behind ricky bobby, the court is likely to find for sony. Ricks Cabaret International has yet to respond to the complaint. You stay classy, san diego. My role model. The anchorman. Very 1970s, in terms of look. Will portugal make a clean exit from its rescue program . That interview coming up next. Investorsed to focus that we are the Strongest Bank in europe today. As an italian bank, being the Strongest Bank in europe, stronger than french, german, spanish bank, we have more than 12 , and equity common equity. He spoke to asked in the last hour in the exclusive interview. Lets turn to another bloomberg exclusive. Portugal is close to announcing whether needs more support after its bailout program. , ollionomic commissioner rehn, says the government should be safe rather than sorry. That overlooks major improvements in the portuguese economy. We are joined by bruno macaes. He is one of the Prime Ministers closest advisors. Thank you for coming. Give us a sense of what the preferred position for the government to be right now. One option would be the cautionary program or a clean exit, much like ireland did. Is our preference . We have not made a decision yet. We are considering the data. Comings important data in. We are talking to our partners. The important thing is to stress that we are going to exit the bailout successfully. Some people had doubts about that. That is clear now. The format will decide very soon. We do not have a decision yet. Can you give us a sense of the mechanics of this . How does that work . What is the feedback you are getting as you talk to your partners, countries like germany and finland . We are free to make the decision that we think is best for the country. This is the message that we are getting from our partners. There is nok transfer of funds. There is a credit line that can be activated. It shows you it is entirely different than a traditional assistance program, like the one we just concluded. , and it hasion is not been made, it would be interesting for investors to understand your thinking. Youre seen as a store like the irish. Ing for theopt cautious program, you will not be seen as an irish followup. That would put you in a slightly weakened position. With that be the case . Cautionary program is an insurance mechanism. You have to weigh your advantages and the costs. One cost is perhaps people will be less inclined to think that we have concluded our adjustment process. The advantage is that in case of external risk, because were not thinking of internal risk, we will have the insurance. This is the what we are considering right now. Lisbon ofe a sense in surprise that the expense of the decline in yields and how aggressive it has been . It is remarkable. Few people would have guessed this months ago. We thought this was going to happen. Our Fiscal Consolidation process has been solid moving in the same direction and getting results. Results oncredible the economic front. We have had the Fastest Growing economy in the e. U. Is part of the because the european economy is not recovering that quickly . On thursday we will talk about the ecb may be needing to deal deflationinflation or environment. That may count for some of the yield dropped we have seen. I dont think so. We have seen a contraction the spread. The difference between our yields and german yields. If you are about deflation, all of them would be falling in the same measure. We have seen the portuguese yields falling more than member states. I think it has to do with Fiscal Consolidation and good news on the economic front. Can this trend continue or are you concerned about the fact that because you have exceeded expectations you have fallen in a trap . Keepthink were going to on this path of economic recovery. Exports everything hangs on exports. You have to export more than we did in the past. This is something we are working on. I am here to meet a minister to new about opening up markets and make sure that the expert growth, 25 in five years. Is there a trap you can fall into again, that you can say phew, done that, we can take the foot off the gas. With this government. It is not going to happen. I can tell you that. How do we know that . Can you put statutory measures in place, can you communicate more strongly . That would be the sense that a lot of people would come to. We establish precise targets for the future and it was signed ies in main part portugal. This was a learning process. Everyone understands how important fiscal discipline is. Im optimistic that this can be sustained in the future. It is not a temporary adjustment. On the precautionary program, what factors are you looking at . You are expecting to have a decision by may 17. Are we trying to gauge the terms and conditions that other countries would allow this to happen . Have you spoken to your counterparts in other countries within the e. U. I cannot talk about private conversations. This is going to be our decision. You talkedoint about fiscal compact. Flexibility,more he does not want to abide by the rules. Italy does not want to abide by the rules. How does portugal feel about that . This will be a topic of discussion for the next few years. I am a defender of fiscal discipline. We have gotten into trouble in the past where there was some relaxation applied to germany and france and this is a strong memory for everyone in europe. We have to be cautious and careful about this. I want to hear the arguments. Is it about investment expenditures that should have a special status . I look at this with caution. I would want to resist most of the arguments that i am hearing. Thank you for all that. Bruno macaes. We are back in a couple of minutes. The latest ipo to understand this complex world. You do not need to read a whole book. You need to read a copy of the superman 3 script. It is not that complex. It was a major plot point of superman 3. With the crappy one Richard Pryor in it. How did you do that . I do not know. I just did it. Paycheck isees always rounded down to the nearest whole sense. That raises the question, where do all of the fractional cents go . Yors character deposits of those fractions into his own account. In the aggregate, it nets them a ton of cash. What likeys, this is highfrequency traders do. They buy stocks and small and sell them a small increase. Paycheck scheme, each transaction is so microscopic, no one would notice or care what is going on. Over thousands or millions of trades, it adds up. All you need is a very highspeed data connection and a computer. Just like Richard Pryor. What a clever way to analyze it. For our viewers, the second half of the pulse is coming up. We will leave you with a look at the lufthansa strike. Grounded. Passengers aresa left stranded as pilots start a threeday strike. We are live in frankfurt. A powerful earthquake rocks chile. It left five dead and caused the country to enact away coastal areas. We look at the impact. To bite of the apple. Microsoft takes on serious amazon is set to takes on siri as amazon is set to unveil a new tv device. Good morning. Good evening to those in asia. A warm welcome to those just waking up in the United States. I am guy johnson. I am francine lacqua. This is the pulse. Coming up, italian. Ashionistas invade london valentino tells us that is where the money is. It is the business that makes more money. That is true. Lets start with our top stories. Lufthansa is featuring facing a threeday pilot strike. It is canceling the vast majority of strikes. It is the most severe strike in its history. David tweed joins us live from the Frankfurt International airport. We have just seen about four 400 or 500 pilots to march and protest their positions. Here is my question 125 thousand people are stranded. What is your message to those people that are stranded . Wei am really sorry that came to that that so many passengers got stranded or are having inconvenienced by this action we had to take. The message we want to send is directed to the lufthansa management. I want to apologize to all of the passengers who have that inconvenienced. You are wearing a badge. Many people are wearing this nonstop profit badge. It is a pretty clear message. Has lufthansa gone too far with what it is doing with its costcutting drive . You always have to look at the cost. Lufthansa is making good money. We make real profit and we are negotiating about how many of this profit is going to the toestors, how much is spent satisfy our customer, and how much is spent to satisfy us. There are three areas under discussion. One as pilots wages, the transitional arrangement for retirementement or after 55, and the corporate pensions. You are striking out at the transitional arrangements. What happens if the negotiations for the other areas, done . Come undone . Will the strike repeat itself . I doubt it. The best would be to sit together and negotiate everything in one step. You cannot strike once a year and do it again in a year and again in a year. That is not our goal. We want to have a solution for all of the open problems we have. Ofcould not solve any one them for the last three years. If you are an investor in lufthansa, and you are looking at what is going on, this is going to be the one strike that lufthansa has to face this year . I cannot promise this. We still have our Striking Force in the background. That is the only one we can do here in germany. The only thing we can do to make lufthansa management move is to strike. That is german law. I cannot promise you if lufthansa is not moving that we will not be in the situation again. Thank you for the quick conversation. Active in the studio. Back to you in the studio. Thank you. Earthquake has rocked northern chile. People were evacuated and it caused at least five deaths. Largest is the worlds copper producer. Lets put this in context in terms of where we are. This is the epicenter of the earthquake. 90 kilometers off the shore of chile. We had tsunami warnings issued. The big issue is to whether the ports begin to close down and chile. If the risks of tsunami rise. A catastrophe zone has been established by the president. The scale of what we are dealing with is nowhere near what we saw in 2010 when 30 billion worth of damage was done, 500 people lost their lives. So far, five people have lost their lives. In the southern area, youre seeing operations at a normal level. Electricity is working. That is critical to the mining. Around here, we have had that things are fairly normalized. Lets look at the Market Impact and the Business Impact from this story. Atterms of copper, we are up a threeweek high. I want to bring to our viewers attention, copper is one of the most bet against commodities on the london metal exchange. This news is beginning to squeeze the price of copper higher. The other three stocks, anto fagasta rising 1. 7 . American alsonglo rising. The underlay to all of these minors is that they will produce more cash, they will begin to pay back, and there are strikes in south africa coming on board. Squeeze a commodities story in conjunction with chile. Back to you. Manus cranny with the latest on the situation. Lets talk tech we are expecting big events. Wooosoft gets set to developers. The last one was just nine months ago. This time, we are in San Francisco. A little further south. Expecting a big unveiling from amazon. Lets find out what is going on. Caroline hyde is here to tell us all. Lets start off with amazon. Jeff bezos going front and center in the competition on hard weight hardware. He has even readers, package this time, itnes, is the battle for your sofa. A Television Viewing device will be streaming from the internet, television programs, movies, making use of the huge portfolio of content. It is about sucking us into the amazon ecosystem. They want more of us to get their reamy him t premium subscription called prime. They are coming up against Google Chrome cast and against netflix. People familiar say it will be the online tv. This is the battle they have been starting, that has been started a couple months ago with comcast. Stick has beenst available in the United States. It is getting you sucked into the content story. Netflix is the other big one. Talk to us about microsoft. About ifnadella was you cannot beat them, join them. They were admitting that they wanted to make the most of their office subscriptions. If you are not going to buy the surface tablets, the nokia lumia phone, you can have office on your ipad instead. This week, it is about focusing on the operating system that window has windows has and App Developers to make apps for them again. Understand they could unveil a. Irilike feature i do not think there will be sweating or screaming from the rafters, but they are going back to woo and market the windows operating system. It will be interesting. That little helper may come in handy. I have a helper. Lets move on from tech to cars. Ra gets another grilling today. She told congress that gm does not know why it waited 12 years to fix a problem related to 13 deaths. They will be looking at her testimony that she is set to give today and the testimony she gave yesterday. She told lawmakers to things. One, she is going to get to the bottom of why to 12 years. This has happened on her watch. Two, she has appointed ken chargeg, who was also in of claims for 9 11 in the bp spill, to award or at least look at the issue of compensation for the alleged victims of this ignition issue. In terms of investors, the big issue is car sales. Are people not going to want to buy gm because of the issues they have had with safety. We got numbers yesterday for the month of march. Gm sales rose year on year by four percent. The beat expectations. Whole industry sold more cars than expected. We should take that with a little bit of a grain of salt. A lot of uncertainty hanging over the stock. One of the reasons for that is the unknown when it comes to the cost of all of this. We saw gm doubled charge that it million as to 750 a result of that recall. Tell us about the european footprint. Europebig issue for gmac europe, they are losing money. 18 billion worth of money since they started counting their losses here. Opel, theirat brands here in europe and on the sales losses are starting to narrow. The other thing were starting to see is it is getting a little bit more market share. Isot of people say this going to be an issue, but it looks like gm europe is coming around. You have the numbers for the month of march. Car sales are up by 15 . That outpaced the industry average by twofold. The issue is not really gm, it is that opel has an image problem which they are trying to turn around. What else is on our radar . Elite turned up in london. It was to celebrate the importance of fashion, which is one of italys biggest exports. We are going through a crisis. Everybody admires fashion. Everybody is trying to copy it. I think it is something to be proud of. We have a new Prime Minister, very young, full of zest and ideas. We think you will do well. I think it will be a change. The Foreign Ministry of russias calling a move by Jpmorgan Chase illegal and absurd. Payment toocked a an insurance company. They say they are under the pretext of u. S. Sanctions against russia. Jpmorgan says they are seeking guidance from the u. S. Government about processing future transactions. Comes fromst ipo screwing see from such traitors. Highspeed traders have rigged the u. S. Stock market. Coming up, we will take a look at highfrequency trading. You do not need superhuman powers to tackle its complexities. Apparently, a copy man of superman 3 is just as helpful. Has 99 problems, but his sports brand is not one of them. We will break down the jayz effect. You are watching the pulse. Lets talk about the currency markets. I want to talk about eurodollar. Has super mario lost a little bit of his magic . Ecb has beenhe able to talk down whatever he wants, be it yields or currency. The bumblebee speech here in these since he offered ,ncreasingly not famous words talking about the currency. It has barely budged. 1. 3790. Are we going to get action from the ecb . Strike startsilot and affects 400 25,000 passengers. It could cost more than 30 Million Euros. 420 5000 passengers. It could cost more than 30 Million Euros. Sense of whether this is considered a loss or not. Certainnvestments in investments, the numbers seem in line with what we would expect from an airline loss. We have a precedent from lufthansa back in 2010 when pilots went on strike. That was four days. It was called off after one, but most of the damage had been done. The damage was 48 Million Euros. Something like 10 Million Euros a day looks about right. You have to put that in context this year. Lufthansa will earn over a billion euros at the pretax level. It is relatively small when you compare to that. Profits can be hard to come by in the airline business, so you do not want to give them up lightly. They have been trying to restructure for some years now. Ilots are pushing back a the management is not taking as from the line as you might have thought. The pilots think they have some room to put some pressure on the company. We see other airlines faced with those of the sort fight back strongly with court actions, injunctions to make strikes impossible. Boot passengers onto all their carriers, trying to get people to their destinations. Network ready well. That worked pretty well. Se are not seeing lufthansa management do that this time around. They are amongst the highest paid in the industry . That is correct. With a bit of overtime, they can earn up to 200,000 euros a year. That is the top end of the industry. There are plenty of airlines were able be half that or even less. You can see why they are key to make some keen to make some changes. Guys are running two or three services a day from big german airports like frankfurt and their costs are a whole lot lower. They are serious matters. How does this get resolved . Lufthansa clearly needs to restructure. What willyelivering walsh has delivered a ba. What is management need to do . If you were running this business, what would you do . What else can be done . A tougher line would be one thing. They have plenty of advantages, management. They are blessed with a strong balance sheets. Euros in or 5 billion cash in the bank. Would you book a flight with lufthansa in the next few weeks . If i had the alternative of going with emirates or ryanair, or easyjet, all of these airlines have fun to your flights in and around germany. A few people will take that view. Plenty of people will take that view. Come, rapper musical mobile and sports agent, jayz is a global phenomenon. Will his brand last . We will talk about that when we come back. We have a bit of a cabinet shuffle in france. A new finance minister and it is interesting to see whether this is a political move. The previous finance minister did not have much popularity. Credited with a lot of social development, labor laws, and he was also a real socialist. That was probably a counter act. In terms of some of the other fairly close or not. Mark the bird is staying at ministry. Is staying at the foreign minister post. The head of the treasury is nternaled i ministry. Ryan, how much kelly read across this . Jpmorgan blocked a 5,000 payment from the Russian Embassy to a russian insurance company, one of russias largest insurers. It is not a lot of money, but the russian Foreign Ministry is upset about this. Theyre threatening countermeasures to affect the u. S. Mission in russia. In terms of the implications of this, walk me through it. How much further can it go . I do not think this is like another wave of sanctions. What we are seeing is how complicated sanctions can be. Trying tos clearly stay compliant with u. S. Sanctions. Bank rassiya a stakeholder in so gods in sou. What they are is they own 51 , but they sold 2. 5 nine days before the sanctions came into effect, so we should not be liable. Jpmorgan is a little bit concerned and looking at this. They could turn out to be nothing, but it could be a huge deal. Coming up, the future of microsoft. They kick off their annual developer conference today. Ken Satya Nadella continue the momentum for office for ipad . Welcome back to the pulse. We are live from European Headquarters in london. These are the top headlines. Tsunami warnings in northern chile that trigger the evacuation of hundreds of thousands of people. The sirens sounded after a magnitude 8. 2 quake struck off the coast. Wereast five people killed. The sunol minute follow headways up to two meters. Has told the u. S. House committee that the automaker does not know why it waited to fix the problem related to 13 deaths. It is the biggest crisis the company has faced since it emerged from bankruptcy in 2009. A french government reshuffle. Has replaced the finance minister. Has been named as the interior minister. He was previously at the treasury. Has kept his job as foreign minister. To manus cranny. Are down. R prices unemployment is at a record. Does that put enough pressure on European Central bank to act tomorrow . Not likely according to the estimates we have. Give you a big shock breaking news. House prices in the u. K. Are rising for the 15th month. Surprising house prices rising at twice the rate. S p 500 made a record. Up she went. The dow jones hit a record for this year. Up. 1 . S n 30 minutes, it is surveillance with tom keene. A mix of news in new york. Talking about the s p 500. Michael purvis will join us. He has been able. A bull. Ofwill focus on the linkage three days of Economic Data and what it means for a market that has a certain character, a certain feel to it. We will look at microsoft and the developers conference. We are going to speak to at microsoft. He worked there for about 10 to 15 years. It is a competition of the bowties, tom. We have a guest that has shown up with a very nice bowtie. He looks great. It is good. It is a microsoft kind of thing. We will figure out how theyre going to compete with iphone and apple. It is about mr. And adele and the idea of ok, now what. Nadella andut satya the idea of ok, now what . It is very cool. It depends spreadsheets, yeah . My first spreadsheet was my inventory of bowties. To speak to man about microsoft than a guy that has been working there about 15 years. Tom, thank you so much. I am reeling from the fact that we are talking about bowties and spreadsheets at the same time. Tackught to be cool and you did not cool in tech, you did not wear a bowtie. Unveil a gearing up to tv viewing device. Should amazon get into the set top box business . Lets see what he has to say. For those of us that have apple tv, no set top box, or a set topany of them, no box, a little tiny thing, no cables, no wires, no a deal. Big deal. Amazon will be a player in this. Many others will be. I think it is great. More on that interview later on. Barry is coming up at 11 00 a. M. Eastern time. Will talk about microsoft in a moment. Why not . You want to suck people into the ecosystem. Bezos wants to do this. He is getting into hardware. You have netflix out there, the chrome cast out there. He needs to get into the game. Has proven to be pretty successful. They have had to release the Software Version of kendall kindle on every other device. They have money, resources, and they have been able to build engineering teams. What do they have to get right to sell this . Is it better content . A lot of people are perfectly happy with netflix, why would they switch . It is content that drives everything. It drives consumption. It is the same thing in the cable world. The contentget going right and then you have to get the device and Service Working seamlessly. It sounds easy to say, but it is hard to pull off. Only a handful of people have been able to pull that off. That is why we love netflix. It works. In terms of where the competition is, netflix, we are over the top with netflix. Chromecast, a doesnt feel like the full product. Apple and google have been disappointing on their tv offerings. Apple has apple tv. You can get great downloaded movies, but theres no streaming service. It feels like it is underperformed relative to what it could be. Apple could make a run at netflix and build a product. It would make a lot of sense for them, but they have not done it. Google announced chromecast. It has kind of faded away. I have not heard about it in the last 12 months. What will be the winning formula . Is it quality, the actual contents, is a price . Andt is the content mix that the device and the service. Everything working together. You buy a box, plug it into your tv, it just works. Microsoft they are in San Francisco. That is interesting as anything else. The last one was nine months ago. We have seen the ipad announcements and were done with that. Are we going to get windows 9 . It is rumored. I would be surprised if anything is built at this point. It is too soon. Even though they are trying to shorten it. I think they will Start Talking about. 8. 1, that will definitely be announced and it is back to the basics. It is going back to the desktop interface and the start menu that they took away in the windows 8, much of their own chagrin. What do they have to do to not be a failure . The problem is you have two major franchises, windows and office, which are in decline acause the pc industry is in secular decline. Everything is transferring to mobile. Torosoft cut the price windows so that lowcost can use windows. It is a way to stop the bleed. Every pc has office and if wille are not using pcs, office sellthrough . Office was great. 70 of the tablets are android. They have to get android out there as well. It feels like a losing game to be dominant in the pc industry today. We are seeing that with intel and every other. We are a Cloud Company and a mobile company. Onwere putting office tablets. The problem with clout is price war. From 30 t their prices to 85 . Amazon had to follow suit. Do not have one competitor, you have two very strong competitors who know that this is a price war. It is a price competition and people will choose the best service. Is theicrosofts cloud st promising part of its business, it is the toughest part of its business. What about buying something . What with a by . Would they buy . Satya nadella will be different and have the vision to figure out what one needs to stitch together. It would have been interesting to see microsoft by oculus instead of facebook. It makes more sense for microsoft to have it than facebook. Why dont they get in the game on the mnj front m a front . It is great that they are in San Francisco for build. One of the clear messages is that they are playing with everybody else in the ecosystem, which historically, microsoft is a sheltered and insulated company that state in redmond and did not do much with the rest of the industry. The only way you can find out what is new and exciting and how is ifit into your roadmap your product team is talking to the people building new and exciting things. It is not in redmond these days. Thank you for coming in today, hussein kanji. Do you understand highfrequency trading . If you do not, we have a great package for you. Dont worry about reading a complicated book, you have to watch this movie. We will tell you why, when we come back. Head too paris paris to look at a successor next. Welcome back to the pulse. Coastal areas in northern chile have been evacuated after it was shaken by any. 2 magnitude earthquake. Five people have been killed. Thank you for taking the time to talk with us. The first question is, this is a very big quake. We have seen bigger and chile, havent we . About four years ago, there was an 8. 8 magnitude located about 1200 miles to the south of this area. This zone runs for the much along the west coast of south america and this zone has generated a lot of quakes through the past. This was limited in impact. Five people lost their lives. That is sad, but it has been limited compared to the scale that it couldve been. Economic damage needs to be assessed, but the mines have remained open. Is there a danger of a second wave of us in on me or is this it . The thing Going Forward is that there will be a lot of aftershocks and these will occur over the next weeks and possibly the next few months. Particularly over the next couple of days, the risk is higher for a larger aftershock occurring. Generally, within a couple days of the main shock, that is the potential for the larger aftershocks. That is a definite possibility here. Any sense of the scale of what an aftershock could be . Give us a feeling of what you think we could be looking at. Been in thehey have mostly four and five range. We have had a 6. 2. It is a possibility that we could have some aftershocks into the magnitude six range. Of they, in terms geology of the area, come back to the beginning of a conversation. Why is this area so prone to this kind of quake at this kind of scale . When you talk about plate area ofs, you have an converging plates along the west coast of south america. We call it a subduction zone. We have the plate out in the Pacific Ocean with such wich converging on the south africa play. Plate. Along the zone where they are converging, that is where the earthquakes are occurring. When you get this convergence of 65 millimeters a year for such a that, you gete tremendous stress built up and you get these quakes occurring periodically. Thank you for your time. Up, Pierre Moscovici is replaced as the french finance minister. The breaking news when we come back. Good morning. Welcome back. You are watching the pulse. We are streaming on your tablet, and on bloomberg. Com. Lets talk about the Foreign Exchange markets. Sometimes, the magic powers work and sometimes they do not. Super mario has had magic powers in the past. He has been able to talk down yields in the eurozone, but he is struggling to talk down the euro right now. Actions speak louder than words. That is what the market is looking for. The currency has dipped very little since he started talking about his concerns about the elevated level. Tomorrow, the ecb meeting. Will we see some action . One year ago, jayz announced he would become a sports agent with nation sports. Has his how has this company done in the first year and what impact has he had on the business of sports . An Allstar Group of agents weighs in on the jayz effect. I thought the minute he entered the business, jayz would be a formidable presence in the in ministry in the ministry. He is a draw. We have to be concerned. Jayz and rock nation bring a lot to the party. He has reached two places that caa isferent than what involved in. It comes down to the ability to recruit players. Give a recruiter, i would him an a plus. He has done a superb job of picking players that can trigger multiple revenue streams. They are good for contract ,egotiations, endorsements Crossover Entertainment projects. The starting quarterback of the new york football team, he has a starting pitcher for the new york yankees. It does not give a whole lot better than that. In terms of negotiating, i dont think he negotiates the contract. Has people will experience in the business backing him up. Theres no limit to what he can do. There are more players recruiting jayz than vice versa. Are they overselling . , that there is an entree there that can be used. They will not change the business. They will make an impact. Piece ofe earliest advice i got was not to worry about competition. I asked about his rivalry with duke and he said he never focused on that. It was about doing what he thought was right for north carolina. That is how i view our business. We have had some breaking news from france in the last hour. This was expected. We were expecting a reshuffle. It was not necessarily that the finance minister would be replaced, but he is being replaced by this man, michel sapin. Of theless fringes socialist party naming the sky. Naming this guide. He may be a factor in balancing out the new Prime Minister. He hoped the socialists from the start in a Francois Hollandes campaign. Find some 60to billion euros in tax cuts and trying to have a more flexible this is a guy that will be out in brussels trying to convince the germans and the commission and everybody else that france should be given more flexibility when comes to budget deficit. Is he the right man for that job . I guess we will find out in the next couple of weeks. For a look at what else we are watching, we are joined by Caroline Hyde and manus cranny. David tweed is live in frankfurt. Registration starts at microsofts build event. They are in San Francisco. Where other than it being about the software, it will be about wooing them onto the operating system that is windows. They may unveil windows 9. We will get later, an amazon update. Will it be the new television, potentially streaming online webbased programs. Andcompetitor to Netflix Apple and google. This is an area in the north of chile, the earthquake hit late last night, early this morning. It was just over 8. 2 on the richter scale. Tsunami warnings were issued. Five people have died. The epicenter for this earthquake was about 95 kilometers off the coast. We have tsunami warnings. There is a tremendous impact here. In terms of how it will play out in markets and business, it is a little bit early to make a call. It is down to the shipping ports and whether they are closed. We will keep an eye on that. David, youre watching me lufthansa th lufthansa strikes. The president of the pilots union. This is a strike about early retirement. Would you want to have a pilot that is considered unfit for operation . He is determined to kick the ball into lufthansas camp. Theyre waiting to see how lufthansa response. That is it for the pulse. Keep it here on bloomberg tv. First, surveillance is next. You can follow us on twitter. We will see you tomorrow. We begin three days of key Economic Data as the stock market surges. The dow is 44 points from a record high. The new microsoft, they greet developers today. It is april. I need to get cut and chiseled. Of the surveillance steeplechase. Scarlett has to jump into a vat of mud. This is bloomberg surveillance. Live from our World Headquarters in new york. Joining me is scarlet fu and adam johnson. Tough mudder. The ceo will join us. This is tough stuff. Morning brief, here is what we have. In the u. K. , coal prices rose