Transcripts For BLOOMBERG The Pulse 20141215

On a hostage situation in a sydney cafe entering its 10th hour. Is in sydney. What is the latest . Unfortunately, we havent had much of an update in the last couple of hours. It has been three hours since we saw two of those hostages escape , or at least were released. They looked terrified as they ran through the doors of the lindt cafe in sydney. About an hour before that, there had been three men that escaped. An update into get about 15 minutes from the New South Wales premier, and the Police Commissioner. Hopefully, we might get a little bit of an update. They certainly have been keeping everything under wraps. We heard from Deputy Commissioner Catherine Byrne saying that they are going to monitor social media feeds to get more of an indication as to what may have prompted these hostage situations. They have also indicated that the gunman is known to police. They wont be releasing the name for their purposes. Im sure that the area around the cafe is in lockdown. What about the rest of sydney . The rest of sydney is going about as usual. Certainly, that was the message that Prime Minister tony abbott and the premier said earlier today. There was quite a lot of lockdown in sydney earlier in the day. We had never had anything like this happen before. There were some mixed reports. The harbor bridge right behind my shoulder, and traffic has been flowing freely. Probably the only main change to the Public Transport Network system is the martins station which is underneath this cafe. That has been closed all day. Other than that, it seems as if commuters have been able to get home and get out of the city quite easily. There have been delays, but it is really just that pedestrian area. It spans about five blocks. Police have cordoned off probably about three of those blocks. That includes the Channel Seven thisrk which first saw unfold. Also, the reserve bank of australia which was under lockdown, and a few of the stores like tiffany and jimmy choo. Still under lockdown. A lot of people down there having a look. Bey certainly dont seem to worried about what is happening at the moment. It seems it is a bit more of a spectacle. Tensions have called somewhat. Thank you so much for the update. We will bring you any developments with this situation throughout the hour. We will bring you more context and more analysis of the situation. We will be doing that very shortly. In the meantime, let me take you happening, what else is on our radar, to corporate news. Bts negotiations to acquire one of britains Wireless Operations has gained momentum. O2 which is owned by telefonica is competing with rival mobile operator ee, which is owned by Deutsche Telekom and orange. Bt is looking to expand its operations into the bundling of mobile, broadband, and television. Sony pictures has requested that news outlets stop disclosing material from the computer hacks. That medias wrote companies should destroy the information and would be held responsible for damages. The head of the studio plans to sharpton after the exposure of a racially tinged email exchange. Petsmarts. Retailer has agreed to be bought for about 8. 3 billion in the largest leveraged buyout for a u. S. Company this year. A group will pay 83 a share for the company. They beat out Apollo Global management to close the deal. Oil trades near a and agar low and uaes minister tells bloomberg opec wont cut production even if prices hit 40 a barrel. Exclusive interview with russias most famous former prisoner. The man who calls himself putins personal opponent. The contact that we have will be ongoing and will be based on our best assessment of how to get those people out safely, which is what does count most. That was Deputy Police commissioner catherine burn. Lets go to australia. Lets go to the australian capital and talk to clark jones. Good morning to you. ,rom a london point of view good evening to you. What is the context of what is happening in sydney today . What was the buildup to this . Was there any warning . Can you put this in context . Waxed there was no warning. To speculate at this stage because there is no profile of the offender. As you expect, the police are very closed up on what is going on. There is potential to upset police operations. It has been very hard to ascertain the exact nature of the incident. From what i observed, i think it is certainly a lone wolf if you can call it that. But i also think, considering incident,on of the two months ago, we had another incident that was disrupted. Had b was to be ehead an innocent bystander. It wasnt significant at that another ow, with you can say at this stage, act of terrorism it is a very busy section of the city. Just near theated Channel Seven news studio, other government buildings. It is a very strategic place. This particular person would have been planning this potentially for some time. That the remaining hostages, and it is unclear how many are left, one new station was saying up to 15, and five were released recently. Lets hope the remaining hostages are safe. As time goes on, Police Negotiators are doing the best they can to get the others out. Australia of course sent fighter jets in iraq to fight the Islamic State. How vulnerable is this country . Look, im confident in our security, our intelligence agencies, our police agencies. Im very confident that they are capable and able to disrupt or prevent this type of incident, which leads us back to the scenario of the lone wolf. This person i dont want to speculate too much is unlikely to have come to Police Attention previously. Agenciese and security have done a lot of work in relation to community engagement, to bridge the gap between government and minority groups in australia. Part of that program is also to develop friendly relations so that they will report back to the police. Also, just bridging trust. The government has done all it can. In relation to legislation, some say it is going overboard in relation to legislation, in that it seems to be focusing on the Muslim Minority in australia. The government appears to be a little bit u. S. Centric. There is a few things the government has done that i dont want to say counterproductive but overall, there are arrangements which prevent this type of act. Clark, do you think this incident will change behavior . Do you think it will impact Public Perception of the way the government is conducting Foreign Policy . How will this impact the longerterm story . I dont think this incident will stop we dont know the demands yet of this particular offender. Police may know the demands at this stage but we dont know. I dont think it will change the governments perception or their Foreign Policy. I dont think that will be the case. In fact, it will make them more determined to continue on with military operations. But we do need to assess the domestic situation and those relationships i was talking about between police and security agencies and the community. We still need to do a lot there. There is still a great divide. Racistave a fairly population. We are doing a lot to try and deal with that, but obviously there are groups here that feel marginalized. Groups like the Islamic State are tapping into those marginalized, and in many cases, vulnerable individuals. Thank you so much for your time, clark jones. Lets move on and turn to japan. Prime minister shinzo abe has been reelected in a sweeping victory. Bloomberg News Reporter james major joined us now from tokyo. Story in terms of the japan, how much will it actually change in reality . Shinzo abe didnt look particularly evil eight when he announced victory particularly elayted when he announced victory. This is policy and will carry on in the way he has announced. Thats right. For a lot of the economic what we aresically looking at is the same policy as before the election, just three weeks delayed by the campaign. We are now looking at the supplementary budget the government was talking about. 25 billion of extra spending to help japan out of the recession. It looks like that is going to happen on boxing day for christmas. Is now looking like it is going to be announced sometime in the middle of january. Things like security policy, energy policy, things like the growth strategy, the only change in those policies is going to be that they are three weeks later than they may have been if there had been no election. Little or no change to how japan is being governed. James, in terms of what the government was trying to achieve , is this now are really strong mandate . Mr. Abe said that he wanted to go to the people to put to them the question of whether japan should raise the sales tax again. The first increase in april this year push the economy into recession. He decided that he was going to push it back. He said he wanted to go to the people and have them vote on this. That is one of the reasons for the election. Another reason is to say he wanted to get an increased , butte for his policies also to convince the opposition within his own party that the policies he was putting forth were actually the right way for japan to be going. He did get a renewed mandate on those things in the sense that they have one more seat than they had at the last election. Time, half the populace in japan, half the electorate in japan, didnt bother to come out and vote. Froms a renewed mandate maybe half the people who are eligible to vote. Doesnt look like particularly a strong mandate for doing something more radical. James, is it possible the real surprise of this election becomes moreabe hawkish on the policy front . I read some statements over like and you felt like you were getting hints of that. He is pretty hawkish on the Foreign Policy. He came into power saying what he wanted to do was revise the constitution. Has territory disputes with china and korea, also with russia. He has been quite strong on the dispute with china and less so on the one with korea. I dont think it is going to be a surprise if he continues with that policy. Have been slight increases in Japanese Military spending. I dont think there is going to be a massive change in any of the policies. He may take this election as a mandate to go out and push further the policies he has already bought out on defense spending. I dont think there is going to be a big change in the actual composition of those policies. He may just push harder than the has in the last few years. James, thank you for your time. Coming up, bloomberg exclusive with mikhail khodorkovsky. We speak about why he things it will take a black swan event to unseat president putin. And a reminder, you can follow both of us on twitter. We are back in just a couple of minutes. It is 22 minutes past the hour. You are watching the pulse. We are live on bloomberg tv. A quick check on the price of oil. The two main contracts and what is happening here, both up. Nymex is up by 1. 4 . Brent is up by over 2 this morning. 60opec monitors went below earlier on, which is fairly significant. Let me take you to what is happening in sydney now. We have been monitoring events very closely. We have a News Conference taking place as we speak. Lets listen in to what is being said. Ultimately, we are doing all we can in these difficult circumstances and we will get through it. The commissioner will make a few comments. Thank you, premier. Good evening, ladies and gentlemen. , our only goal tonight and for as long as this takes, is to get those people that are currently caught in that building out of there safely. That remains our number one priority. Nothing will change. Imre any questions sure there are many questions you have for us and im not in a position to give you that information. Not be going into the tactics are the strategies we are employing. Suffice to say we have large numbers of police. They are in contact and we are working to resolve this as quickly as we can. I too want to thank the community, particularly those in the city today, you acted in a way that made our job a lot easier than it could have been. There is much work to be done and much more for us to do over the coming hours. Again, for those that have loved ones that may be caught up in this, for those that may be in that particular building, rest assured, we are doing all we can to set you free. We will be looking after your safety as our number one priority. Im happy to go to questions. [indiscernible] im not certainly in a position to talk for the tactics or what we are doing. Certainly, when the time is right, we can talk about that. [indiscernible] again, what is happening thingsthose premises are that will need to be resolved amongst our negotiators. We have the best negotiators in the world on the job right now. At this stage, rather than secondguess or give them anything that might cause some grief for those people caught in there, we are not in a position to talk further about that. [indiscernible] one haserstand that no been injured and if that is true, we are grateful. [indiscernible] certainly, they will be working with us to assist in making sure we get a peaceful outcome. The one thing that i can say is, bypeople are being contacted hostages, particularly the media, we ask that you put those people and ask them to ensure that the men inside speaks to police. They are the people that can resolve this, that can help them. Certainly, they are available and will be looking to talk to them, and have certainly got control of that particular building right now. [indiscernible] we wont go into the details about who is in there, how many. We are not in a position to do that at the moment. [indiscernible] [indiscernible] at this stage we are putting that picture together. At this stage, in terms of numbers, we are not at liberty to go into that information. [indiscernible] again, they are out of the building. At this stage, rather than talk about how that happened, we are just pleased to see them out. [indiscernible] look, again, at this stage, there are many out there that would be surmising there would be many out there that are guessing. We are not in the business of speculating. We are in the business of investigating. We will get to the bottom of it. Sureis stage, all i can do you is, we are doing all we can and we will do even more to guarantee the safe release of these people. [indiscernible] it is too hard to say, lucy. We are certainly looking to increase those numbers in the coming days. We are hopeful that we get an outcome. That is what we are all praying for. Having said that, we will put as many police as we need to in this operation. It is that important to us. [indiscernible] i understand one hostage did go to a hospital for a preexisting condition and was treated for that. There was nothing that came from this event that caused that person to go to the hospital. [indiscernible] a again, we wont be in position to go into that. Id like to give you as much as i can but right now that is as much as i can. First and foremost, we are going to make sure we do nothing that could jeopardize those that are still in the building. [indiscernible] theres no place on earth that doesnt have access to social media. We know that. Our plans are built around that. [indiscernible] again, the means by which we are communicating is something we would rather keep close to our chest. At this stage, suffice to say we have got contact. [indiscernible] understandable, because when there is not a lot of information, people dont know what is going on. Want toaid that, i praise sydneysiders for what theyve done. Clearly, in behaving that way, it has made our job a lot easier. I can only ask that that would continue. Theres no reason for people to be around that area. Again, if we can get that level of support tomorrow, we will be in a good place when it comes to managing crowds. You seen the opera house and other buildings . Stageare only at this dealing with one location. We are not concerned about any other. [indiscernible] we needed to be sure that those locations were safe. We were acting on advice. If people see something, we want you to tell us. We want you to ring the National Security hotline. Ring and triple zero. Of dont hesitate. Thats what its there for. We have had a lot of support from the public and we would encourage that to continue. If if you see something, say something. To talk aboutng numbers and were not going to talk about those that might be inside that stronghold. At this stage, we know its at least one. Looking at some of the posts what would be your message to other people . Somethingl attacks or that should not happen. Settle to let everyone down. We want people to remain calm. There are large numbers of police the will be involved in ensuring that we have a level of safety and confidence that people can go about their in any part ofly New South Wales at this time. Those police will be out there. You have seen them a in operation appleby. There was Community Confidence that the police were there to serve. That will continue. [inaudible] we are working towards ensuring that everyone is kept safe. That will continue. Ok . The most significant aspect of that which affects sydney. That press conference is coming from sydney. That is the Police Commissioner. Really speculating about anything and giving very little information. He was very careful. Thats just given the facts are clear at this stage, but not going further that are in he said they are working on it. They have demands, but he did not say what they were. Your listing to that News Conference. What you make of it . I think the police have really decided to take that stance for a couple of hours that they are trying to keep the operation under wraps. The Deputy Police commissioner said about an hour before the press conference that it doesnt help anyone if they start speculating on the operatives of what police are doing and how they are trying to deal with the gunman inside the cafe. You have to respect the fact that the police are trying to give as much as they can to the media with that giving away their game. They want to keep their negotiations very much close to the chest at this stage. Premierting to hear the that the city will resume as normal tomorrow. That has been the stance that has been taken by the Prime Minister. To thesebow down terrorist threats. We have to continue to live our lives. Unless you work in that exclusion zone, work from home. Inrybody else should come and treat tuesday as a normal day. Did you get a sense from what we have heard that this is going to be something that is ongoing at tomorrow . It is unlikely to be resolved tonight . It does not seem to be wrapping up soon. Absolutely not. P. M. And this happened at 9 45 a. M. This morning. Its heading into the 11th hour. You have to feel for these people who went in to get their Morning Coffee overworking their shift and are still held up a net cafe. It would be quite frightening for them and their families. The fact the last escapees that we saw, the girls that ran out that look frightened, that happened at 5 00 p. M. , three and a half hours ago. Since threeve hours men burst out the fire door. Escape. Had five people we dont know if the gunman did release him them. There is been no update on even the amount of hostages that remain in the cafe. You would think that the five hostages would have updated the police. Even that, the police are Holding Close to the chest. Its the only Public Interest to know that. Why they are saying that we dont know. You have to respect what their procedures are going through at the moment and trying to ensure that the sens peacefully. That is a message that they have been saying. They want this to resolved peacefully. Thank you so much for the update. Well be crossing live to her throughout the morning. Lets bring you some other headlines. The japanese Prime Minister has won a sweeping victory in an election held over the weekend. Thirds ofe than two that seats in the house. Election victory is seen a strengthening his mandate for continuing with the economic reform program. Dick cheney has defended the cias use of enhanced interrogation techniques. In a tv interview yesterday, he said the Senate Report on the program was seriously flawed and the use of techniques such as waterboarding had been effective. It worked. We have avoided another mass casualty attack against the United States and we did capture bin laden. Of al qaedalot operatives. I would do it again in a minute. Opec will not cut output even if the price of oil drops to 40 a barrel. This will remain unchanged for now. The Member States said the market will stabilize itself and the Current Conditions do not justify an emergency meeting. Lets bring in ryan. Are we likely to see 40 . We havent seen that sense 2004. Even in the depths of the financial crisis. Is ase need to focus on far as they are concerned, theyre not targeting a price. The think the market is going to stabilize itself. The Energy Minister just tweeted something to further that thought. If shell producers keep production where it is now, the market will work itself out. They are not targeting the price. They are targeting shale producers. They need a Higher Oil Price for their budgets, they have big reserves. Their production costs are much lower. He is making the point that what we are targeting is not a specific oil price. They are targeting shale producers. 40 a barrel would be have a Significant Impact on it russia. Lets talk about that in more detail. Youve been speaking with a man who calls himself Vladimir Putins opponent. I caught up with him on friday. He used to run the Largest Oil Company up until 2004. He was convicted of money laundering. He was in prison for a decade. He says that was the original persecution for his political opposition to the russian president. Prison for out of almost a year. To lookit interesting at what happens over a year. I asked him if he feels safe. I understand perfectly well that i am his personal opponent. Maybe even an enemy. I dont how he views me now. No one from his team is going to touch me without his order. If there is such an order, i will have a hard time staying safe. I am relaxed about it. Arrested, youwere were worth 15 billion. How much do you think you are worth now . Whats it like to lose all of that money . In the oilorked company, 15 billion was my share in the company. Today, ive got more than enough money to spend. How much money do you have now . I declared that ive got more than 100 million. Thats enough. Thats more than enough. Are you funding any of the opposition parties in russia with that money . Would bet think it right to be a sponsor of the political process. Russian society should fund its own projects. We have talked about it before. He is channeling lenin. He was plotting the revolution. He is doing the same. He is calling for a provisional government that would take power if you would get pushed out. He is lauding that. Plotting that. There should be a government that undo is undoes all the rules of that of, about under putin. You could have democratic elections, but they would be pointless night right now. It would not lead to a transference of power to anybody else. More later. Ear gamblegreek governments gets its first test. How worried should the Prime Minister be . We are going to go to athens to get an opinion in just a moment. Welcome back to your watching the pulse. Were live in london. Difficult week last week. We are transitioning to a more positive story. Most of the main markets have been trading higher this morning. I draw your attention to the athenian markets. They are up 2. 5 . Greek Prime Minister is risking to move up the elections. The first round of elections begins wednesday. Joining us is the president of the Athens Chamber of commerce. Thank you for joining us. How concerned are you that this vote will go to extreme parties . We have to wait until the third election process takes place on the 29th of december to know we will have positive results on the first two votes. They need two thirds of the parliamentary majority. I have to say that i dont subscribe to these doomsday theories that we have seen over the last few days which resulted in the Confidence Index dropping by 30 last week. The infrastructure of the Greek Economy remains strong. I should remind our viewers that over the last eight months, we have had positive comments laid by all parties concerned concerning the Greek Economy. What has happened all of a sudden in order to force everyone to subscribe to these doomsday theories. Good morning. What we dont need is a political instability. View, point of the that is clear. Political stability is of paramount importance. Democratic procedures are also of a democratic paramount importance. Any potential failure of the vote on the 29th will continue negotiating along the european byameters which of been set European Partners. Think all of a sudden the Greek Economy is going down of the doldrums. This has been per trade over the last two and a half weeks. I do hope that at the end of there is as, president elected so that we avoid an early election. I have pointed out the last thing the economy and the market needs is an early election. Elections should take place every four years. To the point of political instability, does the drop weve seen in markets indicate the change . Is the domestic investor misunderstanding the situation . Is the International Investor misunderstanding the situation . They expect a significant change. Is that the story you think we would get . The think initially International Investor is misunderstanding. Will havey government to follow the European Program provided we want greece in the euro zone within the european union. This is been made crystalclear by the main opposition. They subscribe fully to the european fear he. Thierry. Theory. I dont think that is normal. The leadership of all plug a parties with the exception of the commonest Party Subscribe to the european identity that greece should have. Opposes thethat he mainline agreement. This is effectively what the main markets are concerned of. Its not the markets overreacting. No. On the other hand, Everybody Knows that all the government can do is continue negotiating and our European Partners with our lenders. There is no other option. The only other option is to exit the euro. Im sure that no one within the greek clinical frame once to exit the euro area. Its only a process of renegotiation double take place, whether its a government or new democracy and socialist coalition government. Just to encapsulate this, your members dont believe what he talks that he would be more radical than the Current Administration . You believe and they believe that he would move toward the center and sound different that he has over the last two or three years . What our members believe is that they want a government irrespective for which partly political spectrum may come from that will renegotiate for their fates. Theave to understand that greek people have undergone tremendous sacrifices over the last five and half years. We have seen tremendous changes and reforms. Of laborn terms relations and taxation and other social issues that need to be rectified. Everyone recognizes that the progress that greece has made, but over the past two and half weeks everything seems written off. This is the agony that greek businesses have at the moment. In the courseange of the policies followed by the european union. This is not just a greek concerned. Concernsving the same from italy, france, spain, other main European Economic powers. We wish you good luck with the vote. This is a more eminent problem in greece. He is the resident of the Athens Chamber of commerce. Up, the power grid will soon decide when its time to switch it on. We will show you how europes most advanced smart grid works. We will show you that after the break. Bloomberg visited the most advanced power grid. We spoke with the head of the smart grid research. Importantchnology is for the future of energy. Greaterabout making utilization of the Network Assets that we have. Rather than building new Cable Networks or new transformers, we make better use of that through increased automation. Is alex webb. Now it is great to see you. What is this smart grid and walk us through why its needed. Its fundamentally software that aggregates and collects data in real time and then makes a decision about how its going to dish out the energy. There is a huge surge in Renewable Energy. People dont know in the sun is going to shine or the wind blow. They have to react quickly to those circumstances. What makes this unique . Iswhat they have done here they are integrating the individual household into the grid. We were shown a washing machine. You can put clothes in the washing machine and then your Network Operator says this is what its going to be cheapest. We will send a signal and turned it on. Those solutions are increasingly what we see going forward. This is a trial. What happens next . When do see this go mainstream . They were saying that this could come into effect in about a years time. Its really hoping and pushing operators to implement the solutions so they can roll out these Renewable Energy solutions. The likelihood of it happening nationwide, thats going to take longer. There is a certain amount of hardware that needs to be installed. That will be the costly element. Thank you so much. For those listening on the radio, the first word is up next. Towe are going to take you sydney. We will give you an update on what is happening with the hostage crisis. You can follow set follow us on twitter. We will see what moment. Sydney is in shock as gunmen take over a cafe. Japans Prime Minister gets a new mandate to drive home his plans. The Energy Minister says they wont cut out but even if prices drop to 40 a barrel. Good morning. Good evening to those of you in asia. I am guy johnson. This is the pulse from bloomberg in london. As night falls in sydney, the hostage situation is entering its 11th hour. We heard from the Police Commissioner. , our only goal tonight, is to get those people that are currently caught in that building out of there safely. Lets go to australia. Lets go to sydney. We are working our way through the story. This ad we learn a from briefing that we had in the last hour . The police are very tightlipped. Absolutely. Im not sure if we learned anything other than they are keeping the tactical part of the operation there he much to their chests. One of the reporters asked if the lights of gone off. . S that a police move he would not confirm. The police are keeping their negotiations with the hostage takers to themselves. You can understand why they want to do that, there are a large number of hostages within that cafe. We dont know the exact number. They wont even confirm that. We know that five people have been released her and one of the nicest things that has been happening in the last hour or so is something that started to trend on social media. Illridewithyou is trending. They are offering rides on public transport if they feel threatened. There are fears the could be retaliation attacks on people that are dressed in muslim headgear. Some women have felt threatened since this happened today. That is a nice turnaround of events. I was going to ask you more hashtag. E our people concerned about retaliation . What is the mood like . Are people taking this in stride . I think there is always going to be people who give the country a bad name. The majority of australians have been moved by this. Feeds,look at twitter there has been a lot of out point of feeling for the people in the cafe. It is dominating twitter at the moment. Their feeling for families and that they must be exhausted or need medicine. Thoughtful things like that. I think this is very australian. Against the core of what we hope our nation represents, looking after each other. I do think its quite heartwarming that so many people helping people get rides. There were some people in martin place there were yelling some inflammatory things about islam this afternoon. Responseere been any from the general public . Any sense in social media the people are angry about australias Foreign Policy . Are people late in government for what is happening here . I think its got to that stage yet. That was comment antithe government. Remember that their biggest stance is they dont want to have an open immigration policy as the previous government. Theyre going to be people that say its the governments fault. Most are just focusing on the fact that there are still people not with their families tonight and con up and that cafe. This could have been me. Never thought Something Like this would happen on our shores. Everybody is familiar with the link cafe in sydney. Its in the heart of the city. Its a popular cafe. You can imagine number of people just getting off the train thinking they would get their coffee. It could have been them. I think there is a feeling of comradeship and make ship mate ship. At this stage, i dont think this is at the forefront of most australians mines. The Terror Threat level was raised in september. As the country vulnerable in any way . The response seems to have been quite reliable. Ande had News Conferences people are kept uptodate with what is happening. Whats the sense on the ground . I guess this is the first time. There were antiterror raids in september across New South Wales. It was frightening to learn that there was a plot to kidnap an australian and behead them with the is flag. A vestry location is and thoroughfare. There has been the sense that this could happen. The police a been conducting an antiterror raid. In one sense, they were prepared for Something Like this to happen. We have seen that the movement has been quite swift. Capital keeping their moves to themselves. They dont want to much to be given to the media. We havent even been get able to get cameras near the cafe. They think that they know what they are doing and hopefully this will be resolved peacefully. Thats what they were hoping for. Thank you so much. Throughout the day, we will update you on the developments. Later on we will be talking to a principal analyst. We will talk about where this leaves australia and what this does to change the overall global risk reception at the moment. We will have that conversation. We have negotiations to obtain one of the wireless operators. An announcement over exclusive rights good come as early as today. More embarrassment from sony pictures. An early script for the next James Bond Film was among the items stolen. Plot points from the film have been released online. This comes one week after the film was announced. The hack has revealed that it has the budget of 300 million. Petsmart has agreed to be bought. Led will pay 83 a share. Coming up, we could soon learn when a new Telecom Takeover will happen. What are the implications of a deal. We will list discuss discuss the shakeup thats about to hit the market. Welcome back. We are in london. Market with. Mobile or 02. Between bt and ee are details on who they likely to buy. What do we know and when will beget more . Couldsoon as today we understand who they will go into exclusive talks with. I am using the analogy of a marriage going forward. Bt isare two brides that having to choose between. Ee is the more attractive bride if you are looking at network coverage. If youre looking at what Broadband Services ee could provide, they have a difficult parents. It is a company that is owned by orange and Deutsche Telekom in germany. It is tough to negotiate that deal. We understand that Deutsche Telekom could keep 50 of the Company Going forward. Orangewood exit entirely. Different than buying a boat to. It would have a cheaper price tag and easier parents, just one. Those parents are looking to offload both of them. Woo bte both trying to to make a bid. Of price tag are we expecting or looking at . It could be in the billions it would seem. If youre looking at seven times before interest and tax depreciation, that would be a ballpark figure to look at. 02 would cost 9. 4 billion pounds. Ee, that would be 11 billion pounds. Ee is looking more expensive. We know bt is willing to spend this money. Have the landline in terms of u. K. Coverage. Ity were the monopoly when comes to your land lines in your homes. They have a lot of money in broadband and the fiber network. They have a clear winning area. They are fighting big. They have been putting billions into getting the sports rights. That is the future. Want mobile is well. Its to lock us all in his users. That is why they are willing to spend big to get a mobile operation. If it buys 02, it will be a complete full circle. And offloaded that business they would be buying it back. What could be more interesting is both of them being taken off the shelf. If bt does not snap up one of them, another company could be eyeing up the other. They own three companies in the u. K. They could be willing to i5 up a little bit. Be on 02 be the easier choice. Thank you. We are joined, good morning. Handicap the story for us. Candidate . Ost likely what is the story here . Its way more likely to be o2 rather than ee. Its cheaper. It doesnt have issues with excessive concentration or spectrum frequencies. Ee has a huge allocation of 4g spectrum. The combined spectrum of o2 and bt is a good fit. It doesnt create an excessive concentration. It is easier from a regulation point of view. Its cheaper. Acceptso likely to shares in return and not just cash. Altogether, it looks like o2 is the easiest option for bt. The easiest option goes through. What does that mean for the rest of the landscape . Means bad news for everybody else. Is trying to get into mobile. Network toing the o2 sell mobile. They dont have a network of their own. Bt, its as to difficult relationship. Let talk talklly get into mobile . Vodafone was to get back in. They want to use their own capabilities. Ee wants to do the same thing. By acquiringates mobile access, they will be able to repay their customers in a better way. Ee and vodafone would be difficult to get into fixed lines. Thats bad news for them. , vodafoneforward will have to end up making an acquisition rather than going on their own. This . When itoing got into the content business with sports, the move was sold to us as being bt selling more broadband. It was designed to drive that side of the business. Theis it getting into mobile business . How does this fit into the program that the Management Team has in place . The idea for each one of everything infer the media space. Bt is the one that is getting the closest of anybody to be able to offer six mobile tv. Its a larger share of the customer wallet. We are talking about on saturated unsaturated markets. They look at adjacent sectors. This is what they are all doing. Thats the rationale. Contentase of bt, the is about retaining customers. They are discounting or not making huge margins on the media or content offerings. If they are selling mobile, they will discount mobile. They will destroy a little bit of the value in the market for everybody. If they do by a network, they can afford to use the new asset as a loss leader. They will have to make money from mobile. Thank you so much per i guess there is one thing we have to say. Whatever happens in the next the landscape will be very different. Different andvery the next year even more different. Thank you very much. Nations comesed closer to fossil feel reduction, japan maybe getting further away from its clean energy push. Intoll put this perspective. Welcome back. Were live on Bloomberg Television and streaming on the ipad. Its that time of day. This is the new energy headlines. The push to resurrect japans idled Nuclear Reactors will be high on the Prime Ministers agenda. Involve keeping the Renewables Policy vega. Since the flick off the switch to the new energy program, imports have worsened the trade deficit. 190 countries agreed on key parts of a deal following two weeks of discussions in peru. Countries gave assurance that they are trying to mobilize 100 billion year and climate aid by 2020, this sets the agreement for the fight against global warming. Lets talk about whats happening in the global markets. Lets focus on europe during this how the main markets are faring this morning. Youve got a broadbased recovery. We saw a dismal leak week last week. Some markets are hit harder than others. The athenian a market was hurt as a result of concerns for rounding the possible snap elections in january. Today we are bouncing back a little bit. We are up by 2. 2 . Lets look at the end. If we can bring that up for you, the yen is at 118. 63. Called a fresh mandate. He can go a step further. I guess there is a trade that says that people are nervous at the moment. In the mediumterm, we expect the yen to weekend. In the short term, we think people may use it as a safe haven. It is a sevenyear low. Look how much leather further it can go. Coming up, we will get information about sydney. That is coming up next. Welcome back. Im francine lacqua. These of the top headlines. Minister has won a sweeping victory over the weekend. As his Coalition Won two thirds ,f the seats in the lower house lower voter turnout was lower. It strengthens his mandate to continue with his program of economic reform. Dick cheney has defended the enhanced interrogation techniques. He said the u. S. Senate report was seriously flawed. The use of techniques such as waterboarding had been effective. We have avoided another mass casualty attack. We did capture bin laden. Id do it again in a minute. United arab emirates are saying opec will not cut output even if oil drops to 40 a barrel. The 30 million a day target agreed to in november will remain unchanged for now. The market will stabilize itself and that Current Conditions do not justify emergency needs. Lets give you an update of you need to know. Jonathan ferro, over to you. And ugly week for european stocks last week. You are not getting any rebound today. Gains in italy and spain and london. We are up by 8 10 of 1 . Lets by energy stocks. They are up by 2 the last time i looked. That is on the back of the oil move. A stunning collapse since the june high. We go from here . What levels will opec tolerate . At 60. Nt blink they wont blink at 50. They wont blink at 40 a barrel. Playingodity story against the emerging markets, down the most in six years. That is the emerging markets story. In the bonds market, yields are higher. Look at the levels coming up. 2. 1 , we are higher by two basis points. Lower, yields get compressed in the bond market as well. Also the, the story is European Central bank story. The potential that they could buy government bonds. We will leave you with a bloomberg survey. Just passed to 19 . This is where the bar is right now. Thanks so much. Will the on in about 25 minutes. What are we looking at today . Summaryught jon ferros was dead on. What i would emphasize is weve barely seen a rebound with west texas up . 43. Thein that, we will look at oil in and the american economics that we face. Bloomberg economics will join us on the markets. A conversation with a lawyer of new york university, we will talk about the bell curve and the americans that are out there. These linkages between the different asset markets. That is what he got for his very matthy nobel prize. We will look at the dominance of facebook. Are having a bang up year. The people i talked to intact say it could be a big year. We want to talk about the markets. We want to get a bid off oil. The deterioration in russia against that will bit of a bid is really something. Exclusive have great interview. Know you will play some of that. The ongoing hostage crisis in sydney. Lets at the latest. Bring us up to speed. There was a News Conference and the last hour. Reactions . What do we been learning . Thate main point from Media Conference was the premier and the Police Commissioner are trying to urge people to go about their daily business as normal tomorrow. Unless they work in that exclusion zone which is still being roped off. That includes the martin place precinct. There are a number of hostages, the number of which we do not know. Five people did escape earlier today. Workerales and a male who were dressed in suits. It looked like they were office workers. They are trying to tell the city to remain calm. The Prime Minister says we dont byo be defeated why these terror acts. Continue with your daily lives. The cafe lights have been turned off. We dont know if that is a police move or if they have just been automatically turned off because it is half 9 30 p. M. Now. There are an unknown number of hostages at this stage. Thank you for all of your coverage this morning. She is joining us from sydney. Dangershighlights the posed by lone wolf attackers. Ise to help us analyze this the principal analyst at ihs. What is your take on what we have been seeing . Is this lone wolf . Its difficult to know whats going on behind the attack. T is your take on it . Based on available information, this is in line with what weve been seeing in the past few months. The primary threat from australia is attacks by a small group of people radicalized by syria and iraq and carrying out small attacks by what we are seeing now in australia. We saw a similar incident in september in melbourne where who stabbeda man police officers. Was raisedat level in september. Do you think this is the kind of threat the authorities were anticipating . I would think so. Radicalized by the conflict in syria and iraq have the capacity to carry out coordinated attacks in australia. Out are likely to carry small attacks, hostagetaking. This is the first time we have seen it here. This will maximize the terror affect, the maximum media exposure. Its relatively simple to carry out. Are you concerned about retaliation . Is it something we should think about . A divided society in australia because the attack . We have seen in the past againstf years attacks muslim australians. This is not new. Increase the likelihood of that happening. Its something we have been seen in the past couple of years or so. Attackhis the kind of that other cities around the world should expect . Are these the kind of events that we will get used to . That is morehing specific to a still yet . I think this is a concern that governments around the world have said, the kinds of things they are worried about. Lone wolf attacks, people who by affected or radicalized the conflict in syria and iraq through social media. Even without prompting from isis, they carry out their own attacks. Its very effective in terms of causing maximum panic. It is very simple and straightforward. Thank you so much. Getting in on the action, some of sports biggest stars are throwing money behind a london startup. How will this change the way we watch the game . Who is going to benefit . We will find out. Welcome back. Media andalk social sport. A london startup is winning the attention in cash of some pretty big sports stars. The company aims to monetize realtime social engagement around tv events, particularly sporting events. Lets walk you through all of this. The company allows clients to grab clips from live tv. A clip of a footballer scoring a goal, you can create a video. There is a platform that allows customers to share the videos through social media and optimize mobile. Lets talk to the ceo of the company. Good morning. Was our description about right . Its Editing Software that allows you to capture events and instantly send them out to social media. Sporting teams must love this. Most of our work is been done with networks and content providers. The platform is very simple. We allow people to own the hitts to take in a feed and few seconds later, the clips are available on social networks. We can allow people that own rights to distribute clips very quickly using a laptop and wifi connection. This becomes a bigger and bigger. We want reaction for live events. Could this exceed your expectations . The company is only 18 months old. The growth in demand for the platform has been significant in that time. The other thing i think is arertant is videos available around 18 months. Its a relatively new experience. Isone of the areas barry barriers of entry . Out and edit machine is not a particularly complicated concept. Editing content live in the cloud is more complex than it may seem. The most important thing is to build the best experience for your customers and grow that base. We believe weve got a market conditioned for the services that we offer. Continuebusiness will to make the proposition is the best and fastest. How important is scalability. You have to go grow quickly. It sounded coming to take that market share. Its incredibly important in terms of business and also the services we provide to our users. That goal is instantly available to millions of people. We see spikes of traffic on our platform in just a matter of seconds. We are now building relationships in europe and the United States which will help drive our business. Which of those markets is more critical . Describe the differences. Walk us through how the different markets look and the opportunities that exist in both of them. The u. S. Is a bellwether in this market. There are more users of social applications and more revenue generated per user in the United States. That is an important market for us. The scale is so much bigger than europe. Is catching up quickly. The social platforms are very important. The u. K. Is probably the most important market in your. We have number of customers in the u. K. Who is your main competitor . Company that was acquired by twitter back in june. There are a few Smaller Companies that do pieces of what we do. You can see with his conversation is going next. Mna, what is the story . Do you need to be part of a bigger story . Build a greats to business. Opportunities will follow from that. Our focus is building a great video platform. Been at nothing that i would talk about right now. It is very early as a business. If you look at who our investors are, there is an enormous amount of interest. What is your biggest challenge at the moment . Is it funding . Trying to get into new markets . You are a Smaller Company yet you are doing so well. Is to biggest challenge accelerate quick enough to take advantage of the opportunity. There is demand out there in north america and asia. You need a worldclass team to scale. We need to grow as quickly as we have. Model . You using the u. S. Is a greater example. I would be understood to know your take is on how you grow. In the states, we will give you a lot of money and scale it and see what happens. Where are you in that spectrum . There is money available in both markets for the right business. There is money to scale your business. You need to have feet on the ground of the markets she was to go in. We do have plans for expansion in north america. With her guards to what it takes to scale of business, if you put a bid Good Business model together, its relatively easy to bring in as much money as you need to grow quickly. Thank you so much. Coming up, an interview with a man who calls himself Vladimir Putins personal opponent. We will talk to him. This is he year after he was freed from prison. Now to our interview with russias most famous exile. He was once one of the richest and most powerful men in moscow. Fromear after his release prison, he is trying to rally opposition to vladimir putin. We spoke with him in zurich about the future of his country and its president. Has made a fantastic number of mistakes. He started making one after another. To boost his ratings with the military adventure in ukraine. That was his real objective. That was obviously a mistake. Was ukraine a mistake that could lead to his downfall . Its undoubtedly strengthened his regime in the short term. In fourlower stability or five years. I think he already recognizes that. The euphoria does not last long. What doesnt the west understand about russia today . I think the wests main problem is believing that the reestablishment of a totalitarian problem is only a russian problem. Its a problem for western europe two. The west could help ukraine build a normal democratic state, but they think the cost is too high. Ok. What was the take away from this interview . He talks about change in the kremlin. How likely is that . He talks about a coup. Overe no or for signs of that. Overt signs of that. He is very popular in the country. That, no one saw 1917 coming either. What was he like . Did he feel safe . Was interesting. Sitting for 10 years and a russian prison would do that to you. Lets talk about oil. It seems to be the critical factor in some ways. It could be undermined. He knows about this business. Lowers thethat it threshold for president prudent to make mistakes. He could have gotten away with that when oil was 110 a gallon. That would be a black swan event. Oil makes it more difficult for the president to operate. Thank you so much. That is a great exclusive interview. Before we were wrapup, lets take you back down to sydney for the hostage crisis is ongoing. You are looking at live pictures coming from the link cafe. All eyes are on that event. From the Conference Police academy commissioner gave very little way. We will have more the story as we work our way through the day. Surveillance is up next. You can follow us on twitter. We will see you tomorrow. Australia directly confronts islamic terrorism. Oil and bonds are catching a modest bid. Facebook crush the competition in 2015 . We speak with guy kawasaki. We are live from our World Headquarters in new york. It is monday, december 15. Im tom keene. Joining me is Brendan Greeley and olivia sterns. Possible tiesth to the Islamic State is Holding Hostages in a cafe. Five got up earlier. It is not clear if they escape your release. As many as 15 others are still a being held. The gunman has demanded to speak with the Prime Minister tony abbott. We dont yet know the motivation of the perpetrator