Transcripts For BLOOMBERG The Pulse 20140606

Bloombergsfrom European Headquarters and we are right here in london. I am guy johnson. And i am Olivia Sterns. Straight to our top story. Bnp paribas under pressure. A u. S. Regulator is pressing them to release top executives over sanction violations. Hans nichols joins us with more. It looks like heads are actually going to roll. The top regulator of banks for the state of new york, that is what he wants to see happen. That is according to people familiar with the matter. 12 executives he wants out, including the chief operating officer. This is in addition to the 10 million in potential 10 billion in potential fines. There is a report from reuters that it is up to 16 billion dollars. French officials are glancing at that amount and wondering what it will do to not only help the bank, but the overall systemic healthiness for the european banking system. This is an argument that Francois Hollande made to president obama last night. Obama said going into the meeting that he was going to give a stock response, that he does not have actual control over the department of justice. Listen to how he put it read my answer on the banking case is short and simple. The tradition of the United States is that the president does not meddle in prosecutions. We do not call the attorney general. Phone untilk up the the attorney general to prosecute cases that have been brought. I do not push for settlements on cases that have been brought. That a version of that exchange played out over dinner. Dinner, no dessert. Dessert, for mr. Hollande, was reserved for mr. Putin. What do you do with those two ships . Russia is going to be expecting to receive those in october. The u. S. Wants to suspend the potential sale as a way not to reward russia for their behavior in annexing the ukraine. We are now in a situation where the french are going to go, you are going to . No problem. S we are going to sell warships to russia. Is there a link here or do you think these are actually two separate things . They seem separate and distinct to me. What is uniting them is fear conflicts. Much controlow obama has over the department of justice, which is basically zero. Leave aside the fact that obama cannot control that. What we have here are fundamental differences on banks and a fundamental difference on arms sales. France wants to go ahead with the sale. They see some 400 jobs. These are carrier cruisers, the lighter version of an aircraft carrier. You can put a bunch of helicopters on there. It would be tremendously useful for a seaborne assault. After the invasion of georgia, the russian admiral in charge of it said that the invasion took 26 hours and had he had these ships at the time, he could have done it in less than 30 minutes. Russias crucial to national security. France wants to build them. 400 jobs are directly tied to them. There is just conflict. Someone either has to give or there has to be an agreement to live in conflict. So politically unpalatable to discuss getting rid of those jobs that are on the line. Very interesting to see how this plays out. Our thanks to hans nichols. Ok. It is one of the big stories we are talking about today, seaborne invasions. It is the 70th anniversary of the dday landings am a one of the largest ever seaborne place. S that has taken leaders are gathering in normandy to commemorate. Ryan chilcote joins us from there. The french president has been speaking this morning. Planes in the skies overhead. The president ht, has been speaking at this ceremony in cannes. Just one of several commemorations of dday. This is the 70th anniversary. The french president is not the only leader here. President obama is here, the german chancellor, the russian president , and the president elect of ukraine. They are all meeting with veterans to mark the 70th anniversary. They are also talking about politics and the war in ukraine right now. Those discussions began in brussels. The g7 minus russia. They continued in paris with russia. Trying to find some way to deescalate the tension, to find some kind of solution that might end the war in ukraine. What are the chances that could actually lead to anything concrete in ukraine . [applause] there is a lot of applause as president along is that as president hollande is making his way through the crowd. It comes down to the situation in east ukraine. There is still fighting. People argue that the longer the fighting goes on, the more difficult it will be to find a diplomatic solution. What we do know is that president obama yesterday, when he was meeting with president hollande, while there were going through their squabble about a 10 billion fine being imposed by u. S. Prosecutors on bnp paribas and the u. S. Was complaining about frances sale of warships to russia, they were discussing what could be done here in normandy. Both sides saying that what they really want is president putin to sit down with president poroshenko of ukraine. Interesting that the french have become intermediaries between. He russians and everyone else the United States, almost acting as an envoy for the ukrainians. It looks like that meeting might take place. This ceremony ending, but many more continuing. It looks like that meeting might take place. Obviously, if there is a war in russianbacked separatists are involved, it is easy to understand that it will not end unless president poroshenko and president putin do step down. We have the ceremony and the anniversary celebrations. Just behind the scenes, as all these people make their way out of here, an awful lot of discussions going on. On camera because the french said they do not want to jinx the prospect of a meeting between the russians and the ukrainians. But that stuff is going on. Astounding that the anniversary of an event 70 years ago that was so central to the european story about the division of europe and unifying europe, it is kind of being played out today again in the east of europe. You have all of these forces gathering to try to find a way to get through it. We will leave it there. Thank you very much indeed made Francois Hollande already in normandy. You are looking at live pictures in the other box of the president of the United States. He will be making his way towards normandy very shortly. As that aircraft goes through standard procedures. Time now for another bloomberg exclusive. Says tensions in ukraine are impacting businesses in russia. Banks have become reluctant to Fund Projects there. The first thing we should do the first thing which is having an impact on the business of everybody is russia. Not only total, but also americans. It is the financing of projects. A lot of Financial Institutions takingready been cautious positioning, which means even if it is not forbidden, lets wait and see before we continue to lend money. Totals ceo that was totals ceo speaking to us and an exclusive interview. Acquisitions after the collapse of the planned megamerger with omnicom. He explains to us why that deal fell apart. The issue between the omnicom people and our sides has very little to do between cultural differences between the americans and the europeans. It is cultural differences between two companies and also maybe some hidden agenda. Nicomact that publicisom merger has not happened has absolutely nothing tween governments between governments or issues between people. It has to do between two companies who had, at the end of the day, different cultures, corporate alters. Cultures. Not national cultures. Our largest operations are in the u. S. Aremost important people americans. We respect them. We value them. We love them. There is absolutely zero problem of culture between these people and ourselves. The only issue we had was the issue of equality. And i guess that the word equality has exactly the same omnicom level and the publicis level. It is not only management positions. It is much more important that one or two people, for a merger of this magnitude, one or two people are extremely important. Everybody is extremely important. What was at stake is the future of 130,000 people, not one or two people. Stake was out to make sure that the new model will deliver the fruits that we promised to the market. Levyce leavy explains why the deal with omnicom falls apart. For some people, that deal was a nice way of him exiting the business. Europe braces for a possible gas supply disruption over the standoff in ukraine. A European Energy union. When we come back, we will bring you our special conversation with him. Welcome back. You are watching the pulse. The heatas is feeling in the big apple. New yorks top banking regulator is pressing the bank to dismiss one of the chief operating officers as part of a negotiation process. Bnp is also facing a multimillion dollar fine. Mark is in paris with the latest. His story keeps expanding lets talk first about whether or not bankers are going to lose their jobs. One of the extraordinary things over the last few years is that very few heads have actually rolled. Lets write. Right. Will bankers lose their jobs . We do not know at this stage. U. S. Prosecutorss are extract their pound of flesh. Or several pounds of flesh. Those talks are ongoing and i think we will not know until we know, as they reach a deal. The news today is indeed that they are asking for bnp to fire its chief operating officer and a number of other executives. That is going to be painful. Obviously, this has become a big issue on what was already a busy agenda for the g7 talks. Francois hollande addressing it directly with president obama. What are the chances he will have success in trying to make proportionate, as he says . Obama came out yesterday evening in a press conference and said, basically, in the u. S. , justice is independent. I cannot touch that. I think that suggests that there will be no real political help for the french in this case. , you read what is on the wire, bloomberg, other media , there is a lot of pressure on prosecutors to extract a big fine and a big price out of bnp because previous fines on bank such as j. P. Morgan or hsbc have not resulted in that much pain. They think that the banks can take it. It leaves the french between a rock and a hard place. Question. It was not a question that was asked to mario draghi yesterday and it is not his thing to get involved, but the fact that we have a categorical problem for european banks right now and we have huge fines coming through probably makes it a bit of an issue. Do you think central bankers will get involved in this . Governorank of france has spoken out on this. He is part of the ecb governing council. I think that central bankers are concerned. Again, the question is what they have is leverage. Is part ofthat this the reaction about the french read the french finance minister came out saying this is why we have a monetary union. We want to be able to talk on an equal basis with the u. S. Authorities. There short term, i think is not a lot the ecb can do. In the longterm, maybe things will change. There has been some criticism that a lot of these fines are now disproportionately being levied on foreign banks. The french Political Community is rallying around the financial industry. Give us a sense of how angry people in france are over the fact that it does look like a much bigger sum than any u. S. Banks have paid. Although it is not exactly apples for apples, because what we are talking about our criminal charges, allegations that bnp paribas did business with countries that the u. S. Says are funders of terrorism. Of terrorism. S rex the fact that the french are very concerned, whether they are angry they are frustrated. Francois hollande has been dealing with a stalled economy and he needs help the banks. Healthy banks. The potential 10 billion fine is coming at a bad time. At the same time, he and all his ministers have said that if there was wrongdoing, bnp should be punished. They keep repeatedly saying that they do not want bnps punishment to be unfair relative to find meted out on other Financial Institutions. U. S. Prosecutors are saying the opposite. They say our experience from the other fines we have handed out suggest that the fines should be higher. At the bnp just being wrong place at the wrong time . Perhaps. Joining us from paris. Europe is based is bracing for a possible gas applied disruption. He spoke with paul and finance minister, who has three answers. Airline hide sat down with him to find out why he wants to see a European Energy union. We need more interconnection countries. Opean our situation is not that bad because we are importing gas from noneuropean countries, qatar, for example. We have been working on this for quite some time now. Europe, it is important to be able to help each other if supply is disrupted for whatever reason. Is necessary and it is not particularly controversial among europeans. To make sureing is that we use the resources that we do have. This is also necessary. Surehird factor is making that the pricing policy is not used politically. Market to pricing and reduce the monopoly of power. Gazprom ast used by a method of extracting rent, but also political influence. Is aiming atoland creating a Strong Partner to gazprom on the other side, to allow these negotiations to be on even ground. Talking about energy, talking about europe, and the problem that ukraine raises. Coming up, wifi in the sky. A british satellite provider wants to bring highspeed internet to european flyers. The ambitious plans when we come back. Welcome back to the pulse. Lets have a check on the markets for you right now. We are in the green if you are looking at european trading today. All pointing to the u. S. Data. Yesterday was all about europe, of course. The ecb, really a big bang. Is it enough . Not quantitative easing for the euro, but stocks are trading nonfarmhead of the u. S. Payrolls. That is jobs data. Checking in on the euro, currently stronger. Why . We did not get that quantitative easing. We are not able to drive the euro lower. Is certainly what mario draghi wants to achieve eventually, but he did not manage it with the splash that he made yesterday, putting the deposit rate into negative and more money fueled towards companies. Lets have a look at the Industry Sectors that are moving at the moment. Only onegoods is the lower. Lets drill down because i am sure this will be going lower on luxury goods, in particular. Lvmh trading lower this morning. That is on the back of prada, european sales lower for the luxury goods maker. Why . Apparently, the euro is too strong. Chinese buyers are not spending quite so much on those luxury items. Overall, lets move back to the exit now because we are going to break. The morning. Welcome back. You are watching the pulse. I am guy johnson. I am Olivia Sterns. Here are the Bloomberg Top headlines. New yorks top banking regulator is pressing bnp paribas to dismiss one of its chief operating officers. Authorities also seek the departure of another Senior Executive and 12 employees as part of settlement negotiations with the u. S. Over alleged sanction violations. The bank is facing a potential 10 billion fine. We were speaking to polands finance minister. He tells us his country is feeling the effects of the situation in ukraine. Quite significantly affected in the First Quarter. Have been declines almost two digits. Copeh firms are able to with this to a large extent thanks to the Better Business bureau and it in the west. Also there has been a substantial increase in exports. It is the 70th anniversary of the dday landings. World leaders are in normandy to commemorate. French president Francois Hollande began the day by paying his respects in cannes. Big move in the spanish bond markets. Tenyear yields trading down quite significantly, continuing a trend we have seen. E we have seenv over the last month. Partly a reflection of what we are seeing from draghi today. You can see that on the right side of the chart. Points over26 basis the last month. Today, Prime Minister Mariano Rajoy will approve the details of a stimulus package designed to improve the job situation and improve competitiveness. Keep the spanish economy on track. For more on the plan, we are joined by bloombergs government editor down in madrid. Then, what can we expect from this morning and talk to me about what the likely reaction is both in terms of markets and the country. Ajoy has given us a few outlines. He said he wants to use this eu money to finish longterm investments in key industries. He didnt specify what those were. One would assume he is talking tourism, possibly automotive said infrastructure. He also wants to reduce barriers within the spanish domestic economy to make it more efficient, more flexible. We are getting details on that about half past 1 00 local time when we have the weekly press conference. This news comes after the king of spain said he would step down in favor of his son. It looks like it could be the last Major Economic reform package before the general election. Talk to us about the politics behind this move. Why an announcement now . This comes at a time when all sorts of longterm trends are reaching a crucial point. The abdication being the longest term of all. The transition to his son, felipe is something that the spanish establishment has been preparing and choreographing and agonizing over for a number of years. Alongside that, you have the issue. Catalan that is a challenge to the current constitutional center. On top of that, the government is looking towards next years general elections and trying to work out if air is a way they can avoid becoming the latest set of leaders to fall victim to the economic crisis. Spains economy is growing now. Rajoy is doing everything he can to translate that economic pain into political capital. In the european elections last month, he took a bit of a hammering. It looks as if he is now coming accelerator tohe try and consolidate the recovery and turn it into votes. We believe it. Thank you. Ahead of the world cup kickoff and brazil next thursday, lets look at the latest news about the tournament. Rio de janeiro police are clamping down on ticket scalpers. The citys Tourist Police have arrested two people for advertising tickets at inflated prices online, charging more than face value is a crime in brazil. It should be everywhere. Tickets priced at 440 are being advertised for resale online at at least 4800. That is incredible. Nearly 5,000. A lot of money. Teachers taking to the streets to protest the world cup and demand better salaries. Teachers are angry about the amount of money being spent on the evidence and say it would have been better spent on education and health. In recent months, brazil has seen demonstrations mostly in o on a dailypaol basis. Germanys players face the most uncomfortable start in brazil of any team according to data compiled by bloomberg. The german team faces an average temperature of 20 degrees centigrade and high humidity for its first three games. Italy faces the second highest of the discomfort rankings. The italian team has been sauna tog in a prepare for the conditions it will face down south. Lets look at the world cup by the numbers. Brendan greeley reports. The world cup is the most viewed sporting event in the world. The 2010 world cup was shown in every country and territory on earth including antarctica. Watched people 3. 2 billion people watched. In 1930, first cup more than 34 million fans have attended the matches, making for an average attendance of around 44,000 fans per game. Won a 14 will be the 20th world cup held in 12 stadiums across brazil. The World Cup National teams will get at least 8 billion each to compete. Himwinning team will take 35 million. Germany has promised all players a bonus for capturing the title. The famous brazilian player ronaldo holds the record for most goals scored in a world cup. Americana stadium in rio is the site of this summers final game. It is the largest stadium in brazil and has a Seating Capacity of brazil has made more appearances at the world cup than any other team and has taken home the trophy five times. Of the repeat winners include italy and germany. That is a lot of numbers. Lets bring in our football aficionado, mark barton. You know he is something of a fan of football. I say expert. Aficionado sounds better. The average heart rate of mark barton over the next few weeks. Especially when we play italy next saturday. Saturday at 11 00 p. M. , i am gone. Is going to be a big night for me. They have these things called video recorders. You could go to bed, wake up. Knowing that the game is going on . Wake up in the morning, have some breakfast, watch the game. The screams, you would hear the screams. I thought you lived in the suburbs. Who is going to win . I tell you what, when the world cup is being held in the talking aboutam uruguay, brazil, chile, a European Team has never won. Keep that in mind. A European Team has never won when it was held in the americans. The heat, whatever. Has a 2. 9 chance. They have done all the calculations. I would go to bed. Who is going to win . Brazil. 19. 9 chance. German, 12 chance. Argentina, 12 . Spain, 9 . Bloomberg sports doesnt even think we are going to get out of our group. Us, uruguayons say, and italy roughly have a 62 chance equally of getting out of the group. It could go either way. The dark horse of the world cup, or apply. Why is that, olivia . Uaybecause we have urug jerseys. With our names. Interviewed the head of a utility they have a number of investments. They are building hydroelectric in peru. We ended up talking about uruguay and he did send them to us. I am number 10. I am number five. If not england, uguguay. I think germany is going to win. Really . Chances of germany winning, 12. 2 . England, 2. 9 . By the way, go onto the website. You can put in your own projections. Definitely check it out. Ok, on that note, i feel left out. I want to show you some pictures that are coming out of normandy. From the u. S. Military cemetery, this is just behind omaha beach. The u. S. President has just arrived at the cemetery. Just over 9000 tombstones at this cemetery. It is, for those of you who have been, and incredibly moving place. It is just behind omaha beach. Some of the most fierce fighting on dday was seen in this part of the normandy landing. We will continue to bring you the pictures as we see them coming in from normandy. We are back in a couple of minutes. Welcome back. You are looking at live pictures coming from normandy, just behind omaha beach, the site of some of the fiercest fighting on the dday landing. This is the american cemetery. It is near the small village just behind the beaches. Just over 9000 tombstones are there. President a few moments ago stepping off marine one, he is paying his respects as the world watches the commemorations of those landings. We will continue to bring you pictures. Ryan chilcote is also in normandy for us. Ryan, the latest . You are looking right there at live pictures from the cemetery, the First American cemetery established during world war ii on european soil. Most of the 9000. There died during dday. President obama is waiting for president hollande to join him. They met yesterday for dinner in paris. Thisof them trying to use 70th anniversary of the dday landings to broker a peace deal in ukraine, try to find some way to end the war there. The french delegation saying that while there was squabbling over the prospect of a bnp paribas fine and frances sale , a bighips to russia bone of contention for the United States, they did talk about trying to get president putin to sit down with the president of ukraine. Both sides say that if there is going to be peace in ukraine, it is essential for those two to sit down. Extraordinary pictures on this 70th anniversary of dday coming out of normandy right now. All of the heads of state working to find some kind of way to end the war in ukraine. Back to you. Ryan, thank you very much indeed. Ryan chilcote joining us from normandy. A british satellite operator Just Announced plans to provide highspeed Internet Service to passengers flying throughout europe. Joining us now is the ceo. Thank you for coming. This sounds fantastic. When can we expect it to be in the works . The satellite takes three years to build and launch. The ground infrastructure should, along the same time. You should expect to see this deployed on airliners in europe within the next three years. How is it going to work . I turn on my tablet, ready to go . The exciting thing is it is going to be available on much smaller aircraft where you cant normally install inflight entertainment. We will be delivering wifi to your device. Speeds . About 10 times faster than the fastest thing you can access today. Megabitelivering a 50 pipe to an aircraft anywhere in the world. This will be about 10 times faster. In the u. S. They have already ruled out wifi. Why is it taking so long for europe to get here . You are right. The experience and ehrlich success in north america has driven our thinking on this. The difference in europe is you are dealing with 28 different countries. 600 Million Consumers desperately want connectivity. 28 different countries. The exciting news is we have been able to use the european commissions vision of five years ago. Five years ago they laid out a roadmap to deploy the s band spectrum across 20 different Member States for a single service. It is that ability for us to take a single spectrum band and deploy it in a Seamless Service to deliver passenger connectivity. How big of a Business Opportunity is this for inmarsat . How is this going to contribute to your bottom line . We are putting half 1 billion in to build the network and we are going to deliver a doubledigit return on that. This is a very exciting contributor to growth. Can i ask you a couple quick questions about what happened in dogha last week and your sense of where we now stand visavis monitoring networks. Recommendations come through. Anything missing that we should probably have in there . The recommendations on air tracking and the next level of Safety Services so we never see Something Like the mh370 crisis again, or at least do something about it, they are going to go through the regulatory process which could take potentially years. The good news about what we put on the table a couple of weeks ago is, it is available now. We are already installed on more than 80 of the worlds widebody aircraft and we are prepared to make a basic tracking service so we know where any airplane is every 15 minutes for free. That will be taken up by the airlines anyway. Is that enough . Do we need more than that . What we put on the table are two services. Basic tracking service means we always know where aircraft are. What we are calling a black box in the cloud, airliners will be able to stream black box data off the aircraft in real time as opposed to having to go find that black box. Should pilots be able to manually switch off the tracking system . I think it is important that that is impossible. Just one final question. We are talking about using the internet in the sky. Do i really have to turn off my mobile phone when i get on board . Turn offnt need to your mobile phone is the truth of the matter. Thank you. Kills your battery. That is neither here nor there. A lot of people are worried that we are taking away the last refuge that is true. The flight attendants run around like crazy trying to get you to turn it off. Thank you very much for joining us. We are going to take a break. Back in a couple of minutes. Welcome back to the pulse. We are new energy, looking there at live pictures of president obama and president gallant walking together on the beach of normandy to commemorate the 70th anniversary of dday. Lets keep an eye on what is going on there in normandy but also bring in our new energy guest. Withompany is partnering the netherlands. Joining me is the ceo, andrew birch. Thank you for joining us. Why start in the netherlands . The netherlands has some of the highest electricity prices in the world. You are seeing rapid rising in prices across these Northern European markets. Eon has 26 million customers. We are going to pilot in the netherlands with e. On. We think we can offer customers a lower price for clean energy and grow the business. There is so much regulatory uncertainty. How do you plan for the unknown . We are without subsidy now. The falls we have seen in seller ints, solar is now a parody eight of the european markets we studied without subsidy. We are selling energy lower cost. So you are saying solar give me the coal cost efficient the whole cost efficiency and analysis. Directlyt compete with nuclear. Versus wind and some of the others . We sell customers the ability to generate their own energy. We are competing against the Net Retail Price which is what utilities charge for centralized energy today. That is the . 27. We offer customers a lower price than that. Customers get Good Customer Service and take control of their energy. What are the next steps here . Billion spent on residential electricity across the globe is just the beginning. We are about half a percent of rooms across the world. We think it is going to be like washing machines and mobile phones. You are going to see an scurve penetration. You are going to see solar everywhere. Rather than having a local installation business, you can go to your home address and go solar very quickly. Thanks so much, ceo andrew birch. For those of you listening, you can also listen to bloomberg radio. For our viewers, a second hour of the pulse is also coming up. Stay tuned to bloomberg. B. N. P. Feels the heat. The banking regulators say top executives have to go over sanctions violations. Remembering dday. Live in normandy where praub and hollande attend. Omnicom. Erger with 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 United States. Im guy johnson. Im Olivia Sterns. This is the pulse live from bloombergs European Headquarters in london. First, our top story, the 70th anniversary of the dday landing. There you see president obama next to president hollande. President obama next to hollande. Ryan chilcote joins us now with more from the ground. Good morning, ryan. The ceremony is taking place now at the cemetery. The First American cemetery to be established on european soil during world war ii just two days after dday in 1944. This is the 70th anniversary. There are 17 heads of state here. The german chancellor, the president of russia and the president of ukraine and on the sidelines of course not just president hollande and president obama, many leaders working to try to find a way to deescalate the crisis there. The g7 minus russia who has been kicked out of the club but continued last night with the involvement of the russian president who met the Prime Minister and the frefrpbl president. The hope is those conversations can continue today so they can find some way to tend war in ukraine. It is interesting. Commemoration and politics on the sidelines. Given the fact that this event effectively some started at the end of the Second World War which ultimately moved into the coal and the steel union and then led to the European Union. To focussing minds on what europe needs to do and then on some developments on the ukraine . I think that is very much the case. I think it is astounding really that on the 70th anniversary, you have this large gathering of heads of state discussing what they consider to be a Current Crisis in europe, in the ukraine, that has led to divisions, as the russian Prime Minister was telling me a few weeks back, something that looks like the beginning of a new cold war. The french president met with president obama last night. Their talks were, aside from their squabble on b. N. P. Paribas, the u. S. Is in contention with the french selling warships to the russians, how they can get today, president putin, to sit down with the ukrainian president , president poroshenko, obviously if there is going to be this crisis, the political crisis dividing europe between eastern and western europe, between the e. U. And russia then those two have to be at the table talking directly to one another. Is it a sense, you know, that there is a danger of another cold war coming. The rhetoric we heard from obama talking about how the United States must stand alongside countries like poland and ukraine and the baltic countries because freedom is under threat and he said all we have to do is witness a russian aggression in crimea. I think it is extraordinary that these talks are happening on this day. Even world war ii and who won is a contention between russia and the west. Yet joy the russian president today on the beaches of normandy meeting with all of these people to discuss ukraine. Well leave through it. We are looking at lye pictures at the cemetery to have United States. President obama and hollande side by side. In normandy. Ast night not so side by side. Our International Correspondent hans nichols joins us now. So hans, few bankers have gone as a result of some of these big fines to be handed out. B. N. P. Could be different. What the head banking regulator in new york wants is to see the head officer of b. N. P. Leave the bank, in order to 12 other executives in addition to the 10 billion fine. Reuters was reporting late last night it could be up to 16 billion. 10 billion is the number bloomberg has. It could be incredibly difficult on the Balance Sheet of b. N. P. You see mr. Hollande raising the issue. Obama countered and gave the same response he said he was going to give. Lets have a listen to what obamas line is. My answer on the banking case is short and simple. The tradition of the United States is that the president in meddle in prosecutions. I do not pick up the phone and tell the attorney general how to prosecute cases that have been brought. I do not push for settlements of cases that have been brought. Guy, that may be the u. S. Tradition. The reality on the ground, at least france is there is the perception that the u. S. Is ganging up on this bank. You saw the finance minister yesterday in france give an interview saying because of the angsts between b. N. P. , the free trade deal between the European Union and the United States is in peril. That is the b. N. P. Paribas dispute. There is also another sore point over the potential deal of a warship that could help russia in its invasion. What is the deal on that . S these is no question, helicopter carriers would be advantageous for russias military. Obviously the u. S. Wants to press hollande not to go ahead and reward president putin. It mines 4,000 jobs for the french as a longterm contract. If you want to get an idea how important these ships would be for russia, when they invaded georgia in 2008, in 2009 they got delivery of one of theseships. The one ho led the invasion said if he had one of these ships what they accomplish had had that took 26 hours, sthrecked done it in 40 minutes. Maybe the d. O. D. Could buy them. Maybe that would solve problem. Time for another bloomberg exclusive. Total says the situation in you scrain impacting businesses. It is having an impact on business of everybody in russia. Not only total but also americans. Definitely the financing projects. A lot of Financial Institutions already been positioning which means if it is not forbidden, lets wait and see before we continue to lend money. That was totals crowe c. E. O. Speaking to us on bloomberg. Mark levy said he will have to make quite a few acquisitions. He explained why the deal fell apart. The issue between the American People and has very little to do between the differences between the americans and the europeans. It is cultural differences between two companies and also maybe some hidden agent there. Not ct that merge has happened and that the project had to be as absolutely nothing between governments, issues between people. It has to do with two companies who have at the end of the day different cultures. Not national cultures. Our most enty of portant people in our are americans. We respect them. We value them. There is em and absolutely zero problem of culture between these people and the only issue we had is the issue of equality. D the real equality has in the managing position . It is much more important that two people, for the merger of this magnitude, one of two people are extremely important. Every people is very important. But what is at stake, the future of 130,000 people. Not one or two people. What is at stake is how to make is that your the new model will deliver the fruits that we romised to the market. A language problem. Apparently equality. I think it looks more like a takeover than a merger of equals. What else is on our radar this friday morning . Bank of america could provide at least 5 billion in part of a proposed selt settlement. U. S. Prosecutors have been seeking more than 13 billion for the firm. And Deutsche Bank is warning investors that a deepening slump in trading and International Probes may lead to a bigger revenue decline in the First Quarter than in this quarter. The bank is seeking to raise 11. 6 billion in a stock sale announced just yesterday. Shares fell to their lowest revel in two years. The decline follows a tourist slump that hit sales in europe as well. Coming up, the e. C. B. Enters unchartered territory. Will measures be enough to protect europes fragile recovery . Well discuss with a senior economist. Coming up next on the pulse. Good morning, everybody. Welcome back. You are watching the pulse. Lets take a quick look at the markets. A look at whats happening in the bond markets. Equities are not doing very much today. You can see whats happening whats happening. This is the 10year. We are down significantly. Were now yielding 2. 70. Youre seeing a similar thing in some of the other peripheral markets as well. Youre not getting a big yield in equities. Youre getting it in the 510 section of the curve. The euro is back down again this morning. It rallied back up after the announcement yesterday from draghi after initial dipping. The market was short as well going into that. The positioning is quite interesting. Were going to show you pictures coming out of we have been listening to president hollande speaking. The u. S. President is about to speak at the u. S. Cemetery in normandy. Our veterans. If prayer were made of sound, the skies over england that night would have deafened the world. Captains paced their decks. Ilots tapped their gauges. Commanders pored over maps. Fully aware that for all the months of metic louse planning, everything could go wrong. The winds, the tides, the element of surprise. And above all, the audacious bet that what waited on the other side of the channel would compel men not to shrink away, but to charge ahead. Freshfaced g. I. s rubbed trinkets, kissed pictures of sweethearts, checked and rechecked their equipment. Asked one, give me guts. And in the predawn hours, planes rumbled down runways. Paratroopers slipped through the sky. Giant screws began to turn on an armada that looked more like ships than sea. Nd more than 150,000 souls set off towards this tiny sliver of sand upon which hung more than the fate of a war. But rather the course of human history. President hollande, distinguished guests, i am honored to return here to pay tribute to the men and women of a generation who defied every danger. Among them are veterans of dday. And gentlemen, we are truly humbled by your presence here today. [applause] just last week, i received a letter i received a letter from a french citizen. Dear mr. President and the American People, he wrote. We are honored to welcome you, to thank you again for all the pain and efforts of the American People and others in our common struggle for freedom. Today we say the same to the people of france. Thank you. Especially for the generosity that you have shown the americans who have come here over the generations. To these beaches, and to the sacred place of rest for 9,387 americans. At the end of the war, when our ships set off for america tens of th our fallen, thousands of liberated europeans turned out to say farewell. And they pledged to take care of the more than 60,000 americans who would remain in sem tears on this continent. Cemeteries on this continent. In the words of one man, we will take care of the fallen as if their tombs were our childrens. And the people of france, you have kept your word, like the true friends you are. We are forever grateful. [applause] here, we dont just commemorate victory, as proud of that victory as we are. We dont just honor sacrifice. As grateful as the world is. We come to remember why america and our allies gave so much for the survival of liberty at this moment of maximum peril. We come to tell the story of the men and women who did it so at it remains sered into the memory of a future world. We tell this story for the old soldiers who pulled themselves a little straighter today to salute brothers who never made it home. We tell the story for the daughter who clutches the photo of her father, forever young. For the child who runs his fingers over colorful ribbons he knows signifies something of great importance, even if he doesnt fully understand why. We tell the story to bear what witness we can to what happened when the boys from america reached omaha beach. By day break, blood soaked the water. Bombs broke the sky. Thousands of paratroopers dropped into the wrong landing sites. Thousands of rounds bit into flesh and sand. Entire Companies Worth of men fell in minutes. Hells beach had earned its name. By 8 30 a. M. , general omar bradley expected our troops to be a mile inland. Six hours after the landings he wrote we held only 10 yards of beach. In this age of instant commentary, the invasion would and roundly been declared, as it was by one officer, a debacle. But such a race to judgment would not have taken into account the courage of free men. Success may not come with rushing speed, president roosevelt would say that night, but we shall return again and again. Paratroopers fought throw the countryside to find one another. Rangers pulled themselves over those cliffs to silence nazi guns. To the west, americans took utah beach with relative ease. To the east, the british tore through the coast fueled by the fury of five years of bombs over london and a solemn vow to fight them on the beaches. The canadians, whose shores had not been touched by war, drove far into france. And here, in omaha, troops who finally made it to the sea wall used it as shelter. Lead the way. By the end of that longest day, this beach had been fought, lost, refought, and won. A piece of europe, once again, liberated and free. Hitlers wall was breached pattons army to pour into france. Within a week, the worlds bloodiest beach had become the worlds busiest port. Within a month, 1 million allied troops tore through and as our armies marched across the continue innocent one said it looked as though the very crust of the earth had shicken loose. Shaken loose. Paris was punctuated by shouts le france. [applause] of course, even as we gather here at normandy, we remember the freedoms victory was made possible by so many others who wore americas uniform. Two years before he commanded armies eisenhowers troops stormed. Divisions like the fighting 36 fought their way through italy fighting through the mud for months, marching through towns, past waving children before opening the gates to rome. As the dog faces march victory to europe, the devil dogs, the marines, clawed their way from island to island in the pacific in some of the worlds fiercest fighting. Back home, an army of women, including my grandmother, rolled up their sleeves to help build a mighty arsenal of democracy. But it was here, on these shores that the tide was turned in that common struggle for freedom. What more powerful manifestation of americas commitment to human freedom than the sight of wave after wave after wave of young men boarding those boats to liberate people they had never met. We say it now as if its couldnt be any other way. But in the annals of history, the world had never seen anything like it. When the war was won, we claimed no spoils of victory. We helped europe rebuild. Reclaimed no land other than the earth where we buried those who gave their lives under our flag. And where we stationed those who still serve. But americas claim, our commitment to liberty, our claim to equality. Our claim to freedom and to the inherent dignity of every human being, that claim is written in the blood on these beaches and it will endure for eternity. Normandy, this was democracys beachhead. Our victory in that war decided not just a century, but shaped the security and wellbeing of all posterity. We worked to turn old adversaries into new allies. We built new prosperity. We stood once more with people of this continent until a long way to light struggle until a wall tumbled down and an iron curtain too. 70 years of the Democratic Movement spread. Nations that once knew only the blinders of fear began to taste the blessings of freedom. None of that would have happened without the men who were willing to lay down their lives for people they had never met. And ideals they could not live without. None of it would have happened without the troops president roosevelt called the life blood of america, the hope of the world. T home, barely more than boys, were turned heroes. To their great credit, that is after the war moved on. Some carrying shrapnel and scars, found was much harder. Many, like my grandfather, who served in pattons army, lived a quiet life. Traded one uniform and set of responsibilities for another as a teacher or a salesman or a doctor or an engineer. A dad. A grandpa. Our country made sure millions of them earned a college education, opening up opportunity on an unprecedented scale. They married those sweethearts and bought new homes and raised families and built businesses, lifting up the greatest middle class the world has ever known. And through it all, they were inspired, i suspect, by memories of fallen brothers. Memories that drow them to live their lives each day as best as they possibly could. Whenever the world makes you cynical, stop and think of these men. Whenever you lose hope, stop nd think of these men. Think of wilson caldwell, who was told he couldnt pilot a plane without a high school degree, so he decided to jump out of a plane instead. And he did on dday with our first airborne when he was just 16 years old. Cocowitz, the jewish son of immigrants who lied about his age. Dont worry, harry. The statute of limitations has expired. Harry came ashore at utah beach on dday. Now that he has come back, we said you could have anything you want for lunch today, he helped liberate this coast, after all, he said a hamburger would do fine. Hats more american than that . Ink of roth merit, who saw a recruitment poster asking him if he was man enough to be a paratrooper. He signed up on the spot halftime that landed him here on dday with the 508th regiment, that would suffer heavy casuals. 70 years later, it is said all across fort bragg, they know rock. Not just for his exploits on dday or his 35 years in army but because 91yearold rock still spends his time talking to the me and women of todays army. Whenever the world makes you the al, whenever you doubt courage and goodness is possible, stop and think of these men. Wilson and harry and rock, they are here today and although i know we already gave them a rousing round of applause, along with all of our veterans of dday, if you can stand, please stand. If not, please raise your hand. Let us recognize your service once more. These men waged war so that we might know peace. They sacrificed so that we might be free. They fought in hopes for a day that we would no longer need to fight. We are grateful to them. [applause] gentlemen, gentlemen, i want each of you to know that your legacy is in good hands. At a time when it has never been more tempting to pursue narrow selfinterests, to slough off common endeavor, this generation of americans, a new generation, our men and women of war have chosen do their part as well. Rock, i want you to know that Staff Sergeant melvin, martin, who is here today, is following in your footsteps. He just had to become an american first. Melvin was born in honduras. Moved to the United States. Joined the army. After tours in iraq and afghanistan, he was reassigned to the 82nd airborne and sunday he will parachute into normandy. I became part of a family of real american heroes, he said. The paratroopers of the 82nd. Wilson, you should know that specialist Janice Rodriguez joined the army not even two years ago, and just last mond earned the title of the 101st air assault soldier of the year. That is inspiring but not surprising when the women of todays military have taken on responsibilities including combat, like never before. [applause] i want each of you to know that their commitment to their fellow Service Members and veterans endures. Sergeant first class brian hawthornes grandfather served under general patton and general macarthur. Earned the bronze star baghdad for saving the life of his best friend and today he and his wife use their experience to help other veterans and military families to navigate theirs. Here, just yesterday, he reenlisted in the army reserve. This generation, this 9 11 generation of Service Members, they too felt something. They answer answered some call. They said i will go. They too chose to serve a cause that is great. Many few they would be sent into harms way. For more than a decade, they have endured tour after tour. Ergeant first class cory remsberg has served 10. I told his story recently before. Most recently when he sat with my wife, michelle, at the state of the union address. Hfs here when i first met cory right after they made their jump into normandy. The next time i saw him he was in the hospital, unable to speak or walk after an i. E. D. Nearly killed him in afghanistan. Over the past five years, cory has grown stronger, learning to speak and stand and walk again. Early they are year, he jumped out of a plane again. The first words cory said to me after his accident echoed those words first shouted all of those years ago on this beach. Rangers, lead the way. [applause] cory has come back today along with melvin and janice and brian and many of their active duty Service Members. We thank them for their service. They are a remind they are a the tradition represented by these gentlemen continues. We are on this earth for only a moment in time. And few of us have parents and grandparents to tell us about what the veterans of dday did 70 years ago. As i was landing on marine one, i told my staff, i dont think there is a time where i missed my grandfather more, where i would be more happy to have him ere than this day. So we have to tell their stories for them. Twow to do our best to uphold in our own lives the values that they were prepared to die for. We have to honor those who Carry Forward that legacy. Recognizing that people cannot live in freedom unless free people are prepared to die for it. And as todays wars come to an end, this generation of service me and women will step out of uniforms and they too will build lives and families of their own. They too will become fleersd their communities and commerce and industry and perhaps politics, the leaders we need for the beachheads of our time. And god willing, they too will grow old in the land they helped to keep free. And some day, future generations, whether 70 or 700 years hence, will gather at places like this to honor them. And to say these were generations of me and women who proved once again that the United States of america is and are he main the greatest force for freedom the world has ever known. May god bless our veterans and all who serve with them, cluling including those who rest here in term peace and may god bless all those who serve today for peace and security of the world and may god bless the people of france and may god bless our United States of america. [applause] president obama speaking at the u. S. Cemetery there. This day, 70 years ago started a process that would bring europe closer and closer together. Dday. One of the catalysts for that. The coal and steel union leading us to the Common Market and ultimately to European Union with a common currency for the eurozone and it brings in stark focus some of the problem wes face at the moment. Again raising questions about how much further that progress will deliver us and where we go from here. But on a day of remembrance, interesting to hear what the president had to say about the ongoing commitment of the United States to europe. Yesterday, a day for europe to think about its future as well. A day drivenly the e. C. B. , entering unchartered territory when it comes to Monetary Policy keeping together that single currency. Mario draghi delivering rate cuts. Delivering longterm refinancing operations and hinting at q. E. Where does this take us from here . Lets bring in james to think about economic implications of where we are now. In terms of what draghi delivered yesterday, give us a sense of how far went. What it means for small and Medium Sized Companies around europe and what it means for our banks. He went as far as expected and we were impressed. He cut Interest Rates a little bit. It didnt matter that it was only 10 basis points. He put in place incentives. Negative deposits. Thats right. The longterm financial crisis it will provide funding for banks. O small and Mediumsized Enterprises and to households. This e. C. B. Will buy from the banks. Why not start landing money to firms . Thats really the line that is driving the markets today. We are not finished. He did the rate cuts that everybody expected but now we want to see the more radical measures. The life of the i. M. T. s that will never be used. Always be just in the future we think there will be 1 trillion of asset purchases announce. Anks will start lending. Has to be sorted out. Draghi can endure. He can achieve anything. He is a mathematician. E waves that draghi magic. Within the last few minutes, gilts have moved to record territory. Were in a situation now where were getting big moves in bond market. What does that signal . What does that tell us about where we are in europe and the problems that draghi faces . It is more that this is recognition that draghi is like moses leading europeans to the promised land. You can part the seas of financial turmoil. Im serious. He has achieved so much by not really doing a lot. Just by saying the rige things. To start putting some of these words into action now i think he will. For firms, it means they are going to hire people. They are going to use up slack in the economy and ultimately lift inflation. The way the market is at the moment, a lot of the big funds are saying the spread between the fed and the e. C. B. Is going to get wider. That is what is going on now. What does that spread ultimately look like . Interest rates . Interest rates are not falling any further. The former head of the bundes bank wrote earlier this week this is where the can be y is going going. The dwergeens between the u. S. And europe. A broad sense in europe and in the u. S. Yes, you would argue it is going to get easier. That is already priced in. Looking at aggregate the fed doesnt tighten anywhere as soon as people think. You have payrolls coming out today. We think very weak. The effect which boosted the number may suffer. People will recognize the u. S. Economy is not doing that much better. Even though it had 288,000 last month. Look at 2011. Exactly the same thing. A very late easter. Means april gets a lot of jobs. They fall in may. It is a pretty poor performance. The economy shrank. 1 in the First Quarter. 2014 is not going to be stronger that 2013 on the basis of consumption. Draghi figured probably the u. S. Economy is going to disappoint and that is going to make it difficult for the eurozone to he comes up with all of these wonderful ideas that are good for europe in the longterm. Markets buy it. They buy the euro. He is easing policy. These are collateral issues that go with being a hero. It is not all roses for him. He is the man who has 5 1 2 years to go. He has achieved a lot of things. I wonder if it will be like greenspan, the whole thing will blow up for the predecessor. If he could have one thing, what do you think he would have . Wellcapitalized bank . That strikes me as being at the heart of all this. If you could get recap thridse he has got what he has got. He has bank system he is looking at intensely at the moment. He has made the judgment that this is the sort of program that the banks in the state that they are in, can possibly get onboard with and if they do, it looks great for the e. C. B. To print money. They cant print money and buy sovereigns or u. S. Treasuries. But what they can do is buy loans off the banks if the banks start making those loans. Were a long way away from that. The funding is not really there for 5 1 2 more years. He saved europe so far. The euro. I took my dollar poster off my bedroom wall. I say this all the time. And put a poster of draghi there. I dont want to be there. Thank you very much indeed. Lets take a break. Well be back in a minute. Welcome back. Youre watching the pulse. What to watch. Well, there is only one place to watch right now that is the u. S. Cemetery just behind the omaha. Of normandy on president obama has been speaking on that very subject this morning. He is now greeting some of the veterans personally. Lets talk to our colleague on the ground in normandy, ryan chilcote. Ryan, wrap it all up for us. Yeah. President obama and president hollande have been presiding over the ceremonies there. It is the final resting place for more than 9,000 u. S. Service men. The very First Cemetery established by the United States after world war ii began. That was just two days after dday. Most of the men buried there were killed in the invasion of normandy. It has been an extraordinary ceremony. It doesnt end there. 17 heads of state in all and they are going to go to the state lunch behind the scenes, many of the leaders including president hollande and president obama are trying to turn this into an opportunity to create peace in ukraine. The russian president is here the ukrainian president. The goal is to get those two to sit down later in day to try to find a way to deescalate the crisis. That is what im going to be watching throughout the morning. Well wrap t up there. Thank you very much indeed for this mornings coverage. Ryan chilcote joining us from normandy. It is said to be an historic jobs day in the u. S. Economists estimate 215,000 jobs were added to American Workforce in may, a gain of at least 114,000 jobs. It would bring payrolls above the prerecession peak for first time. We would wipe away all of the losses from the great recession. Were joined by a chairman at saxo capital market. Thanks for coming down. James said he thinks it is going to be 110,000 in particular because east where east fell. That does seem super negative to me. Ive been slightly above. There are a number of conflicting factors. It is always a nightmare to predict. You have had great or good regional surveys. You have had good reports of various kinds. Blockbuster vehicle sales. Which is an interesting predictor of the economy. You have got continuing claims that since 2007, those are good things. You have the a. D. P. Pointing that job cuts are slightly elevated. Unprovened a predictors of these figures were looking at today. The economy is looking good. It is on a recovery phase. I see no reason to see why we shouldnt break above the 215 mark into more the 250 range. By now, nobody is paying much attention to the headline number. The fed said it is going to drop that as its threshold. Is wage growth still the key . Yeah. Wage growth. Average Hourly Earnings and the relationship between Participation Rate and the unemployment rate. I think these markets are in a state of to the the Central Banks lacking in volatility. It is going to take a lot on the headline numbers, nonfarm ayroll to shape the markets. Is going to be above 300 to shape the market. If you do start to get weaker data, somehow the market going to respond . You had a very good run in treasuries. Particularly the back end of the curve. How do you position throughout the rest of the summer . Trying to chase yields higher is always difficult for fixed income traders. Youre fighting the whole time anyway. We have seen a blood bath in the last month in that sense. A lot of traders caught short period of time trying to explain why we have seen yields fall in the face of good data. Lack of supply . People talk about the fact that traders have been caught off side. I think that is the case. Timing is all. You know what . I suspect were not quite there yet. There are rumbling factors that can be if you like good for treasury issues, the e. C. B. s actions are yet another essentially injection of capital to the world. Q. E. In disguise in the form of nother ltro. There will come a time, that is the point, though, there will come a time when the yield curve will steepen dramatically. Lets say we end the year at 3. 25 in 10 years. That would be my expectation. Timing is so difficult. Fighting the curve. Well leave it there. Very nice to see you. Thank you very much indeed for joining us. Ok. That is it for the pulse. We have got plenty more coming up on bloomberg television. Including surveillance with tom kean coming up live from new york. 8 30 new york time. Plenty of coverage follow us at twitter. Im at guy johnson tv. Ivia sterns is Olivia Sterns have a great weekend. See you monday. America is trading jobs. Will your paycheck rise anytime soon . Bank, ands, Deutsche Bank of america single signal bedtimes for banking. Dday, june 6, 1944. Remembering it. It is friday, june 6. Im tom keene. Joining me, scarlet fu and adam johnson. We will do much on normandy today, but right now lets get to our morning brief on economics. Here is adam johnson. We will start overnight in inflationhere the forecast for germany, affecting the euro area battle for price pressures. Ecb head mario draghi, who put rates just amazing today. A 10 basisut it, point deposit rate. You pay them to take your money. It is like a penalty. Money,we dont want your we will penalize you for it. What else