Im francine lacqua. We are getting breaking news out of italy. Possible qe next week in terms of that inflation figure that is due out any second. Weve already had a lot of macro news affecting the euro this morning. Though it actually hasnt affected the euro in terms of where the currency is trading. A little relief for mario draghi. The European Court of justice has given a favorable opinion on outright monetary transactions, seen as a precursor to the qe plan that many people believe draghi will announce next week. The court has said the omt plan is legal in principle. What can you tell us about this opinion . It seems like it is a green light. In principle, theres nothing behind me in announcing quantitative easing. It seems like the last potential major road brock roadblock has been lifted. The European Court of justice said it may be legal. The outright monetary transaction, which you can read as code for ecb when you look at what is going to happen with the market and mario draghi in berlin today told the newspaper that the ecb stands ready to buy sovereign bonds, the question becomes, is this 500 billion euros a ceiling . To what extent does the market hope that it is a floor when it may be a ceiling . And what restrictions might we have on quantitative easing . We will be reading through this more closely. It does say that some conditions may be required for omt even though it was never put into practice. Just what those conditions are and how that affects the ecb possibility to buy potentially unlimited bonds for whatever the total dollar figure is those are still the open questions. I see nothing but open space between mario draghi leaving berlin and heading back to frankfurt. This is an advisory, not the final ruling. Can we assume that this is the green light . We will have a four the sixmonth lag before we get the final ruling. When that 15judge panel does make their ruling in some cases, like the google case it does rivers it. But four to six months, if quantitative easing happens in the next eight days, that decision on the omt that is going to be at least four months after the ecb potentially starts purchasing sovereign debt. We get an announcement on january 22. That first purchase date may not be until later. It does seem like even if the full panel of the European Court of justice reverses its decision, you will have at least a several month grace period where the ecb could be buying bonds. Thank you so much, hans nichols. For more, lets welcome carlson, who joins us from frankfurt. This seems a green light. Are we confident that qe will go ahead and they wont be legally challenged . It looks likely that weve gotten staff approval. I think this is the green light. Nothing that can stop the ecb from announcing qe next week. This would have clearly complicated things. I think it is a big relief in frankfurt for the ecb. Nothing can stop them right now. Is this going to be i guess we are dealing with nuances. Nothing can stop the fact that we are likely to get qe from the ecb. Is there anything in this that vitamin can latch onto . Is there anything they can use to maybe limit the scale and scope of the qe that we are likely to get . Honestly, just browsing through the text, it looks like a green light on all aspects. They more or less give the green light to do whatever the ecb wants to do. This is what qe will be about. Qe will be about finding deflation. This is a severe issue for Monetary Policy. I think they got a big backing from the European Court of justice. It is a nonbinding opinion but advisory opinions such as these are usually followed by the court in majority. We also heard from mario draghi in the paper saying he has to do Monetary Policy for 19 countries, not one. This is directly addressed to germany. How much are we going to get in terms of qe from the ecb next week . Because weve had such a buildup to this it is going to be such a disappointment if we dont get it. I think there is no way out but to announce qe next week. The big question is will they put a number on qe . I doubt it. I think the ecb will refrain from attaching an exact number to the qe plans. What they will try to make clear is that the low Energy Prices are not for the rest of the eurozone, because in the rest of the eurozone, they are feeding through to deflationary risks. This is what the ecb has to find. It is making Monetary Policy for the entire euro zone. Lacks have we done have we done away with the issue of the ecb being super senior . Are they going to be buying debt on a level Playing Field . I think this is the big question. Looking at this nonbinding advice from the European Court of justice this morning, they also said the ecb should be just a normal market player which means there is no senior ready. Because of this opinion, do you think it will quell the noise that we heard from germany . Will it quell their fears or at least temper them a bit . I think it will temper the noise. Im afraid the noise will not go over. I think the noise will become louder after next week but with the backing of the European Court of justice, the ecb is in a very strong position. It will have to convince the germans. I think also Jens Weidmann will play a special role here in how he will communicate after the qe decision. Will there be risk sharing . Are we going to see the credit risk being subbed out or do you think we will see risk sharing across the union . Right now, it looks like no risk sharing would be the price the ecb is willing to pay to accommodate the germans. Banks will only buy or purchase National Government bonds. The question is whether markets will react. I think the biggest thing for the ecb will be to stress that this intention of increasing the Balance Sheet is the overarching goal. I think it should be of lesser importance whether it will be with or without risksharing. I think markets will react positively to a nonrisk sharing qe version. Thank you so much for that carsten brzeski. Heres what else is on our radar. Copper prices have dropped on speculation that demand for Raw Materials wont be enough to eliminate a supply gap. Other Industrial Metals also fell. In his annual policy address has said that hong kong must follow chinas law that candidates for chief executive should be vetted by a nominating committee. It was his first major address after almost three months of prodemocracy protests. President obama has unveiled new Cyber Security measures in the wake of a hacking at any pictures and pentagon central command. The proposals would allow increased sharing of cyber threat information, require companies to notify consumers, and criminalize the sale of financial data. Obama says that effective Cyber Security requires cooperation. Neither the government nor the private sector can defend the nation alone. It has to be a shared mission. Government and industry working handinhand as partners. Love him or hate him activist investor bill ackman now runs the worlds top hedge fund. That brings us to our twitter question. Does activism work in europe . Let us know what you think. Join the conversation. Welcome back to the pulse. We are live on bloomberg tv and radio. 2014, a rough year for hedge funds with firms on average returning just 2 . Some of the passive funds did a little better than that but that wasnt the case for bill ackman. He went from managing 11. 5 billion to more than 18 billion last year. That put his hedge fund at the top of bloombergs annual rankings. Bill, great to have you on the program. Give us a sense you have 18 billion now what is the next thing on your list . We are looking for very high quality companies, usually very Large Businesses dominant, simple, Predictable Companies that has the note around them. Moat around them. Things that protect the business from new entrants. That is what we are looking for. We are looking for a business like that that has lost its way. Perhaps they have not allocated capital effectively. They might have Hidden Assets that are misunderstood. We can buy a large stake and help make the business more successful. The question everybody is asking is, what is bill ackman doing on this side of the pond wearing a suit and tie . Good question. We took a Company Public here Pershing Square holdings. No one knows it actually exists even though it has almost 7 billion of capital. I think it was the largest ipo in europe last year. I would call it the bestkept secret. If i said, we have an Investment Holding company with an 11year record and compounding equity at 23 and you can buy at a discount, people would say there must be something wrong. Pershing Square Holdings today trades at a 10 discount to book value. It is part of a group of funds that have earned 20 for a long time. I have a great piece of pr advice. By a big company in the u. K. Make a bang, go after it, and people will know instantly. Is that something you are thinking about . We did look at tesco. Weve had our difficulties with retail and a lot of structural changes make that more difficult. We look occasionally at companies in the u. K. When did you look at tesco . In the last six months . Yes. Did you bring up Warren Buffett . No but he is probably giving up for a good reason. We were a shareholder of cadbury prior to the crash. Other than that, weve done nothing here. Weve not been active in any way here. In the break you said there is plenty of opportunity at home. Do opportunities exist over here . This is a timeconsuming strategy. You find yourself in a proxy contest. The vast majority of what we do we end up in a consensual arrangement. If it goes otherwise, it gets complicated. You have to spend your life away from home. That causes us to focus more on what is close to home. You know the directors better . You get a feel for the business better . It seems like opportunities in the u. K. May be more right. More rife. I would say we have the benefit of a very favorable governance environment. Directors are more in tune to what their shareholders have to say. We have much Larger Companies generally. Very big, liquid stocks. And of course, it is a shorter plane ride to go visit headquarters. That is probably the biggest driver for us. We focus on the s p 500, canada to some extent. That is where we spend our time. Do you think there are opportunities for activism over here . When i talked to Money Managers these guys want to come over the states and influence management by the company dont take stakes is there a different attitude over here . Im not sure. I would say what is interesting is, large cap private equity in the u. S. Is almost a business thats disappeared. The reason i think is because of shareholder activism. If you are a shareholder, your alternative was to sell the stock or hope that private equity would show up. What has changed is we will buy a percent or 10 of the business. After we own it, any value created goes to the shareholders. The value a private Equity Investor can create can also be created in the public market. We think many of the techniques used by private equity no reason why the public shareholder shouldnt benefit. Why shell out a 20 premium and leave a multiple on the table . [indiscernible] we are investing in that management, and we put our money here in good faith. Why should a guy owning 10 of the business that is the argument that gets articulated here. We only step into situations where a business underperf orms its potential. If you think about the ownership of corporate america, it is not that different. The black rocks, fidelitys, vanguards. I think investors are looking for returns. The kind of changes we make to businesses are not ones that create shortterm value. They create enduring value. No plans to come to the u. K. Not yet. But you did look at tesco. Weeded. We diod. You are invested in 3g right . Those are people i have enormous respect for. That is a tiny part of my the vast majority of my investments are in Pershing Square. We have an investment with 3g. We own Restaurant Brands international. Before christmas, you mentioned something about mcdonalds needing to get shaken out. Is it something you are looking at . We are a burger king shareholder. Burger king is taking significant share away from mcdonalds. I think it would be unlikely for us to be competing against ourselves. Mcdonalds stock is not cheap. Because there is a strong Balance Sheet, it pays almost a 4 dividend yield, that supports the stock price. It is not as interesting because the dividend supports a value that i think is maybe not justified. Weigh in on the opportunities in front of you. How much do you think about the macro backdrop right now . Copper down massively. Treasuries below 2 . People wondering whether the fed raises rates this year. When you look at the economic story, what signals are you getting . Im very bullish for most industries, and for the economy. You have an unusual time where unemployment is heading down to the mid5 range. You have gdp growing at a pretty nice clip. You have longterm Interest Rates that are very low. It is ideal for most of corporate america. If youve got exposure to the Energy Sector, you make drill bits, it is probably not a good time. I think if Energy Prices were up, people would be complaining about the implications. It is a huge boon to the american consumer. That sees through to asset prices in particular. I think it is a very positive factor. The reason for some market disruption is more because of Portfolio Managers having Energy Exposure being forced to reduce overall risk. I think that creates interesting opportunities for businesses that benefit by the lower Energy Prices. Will there be opportunities in the Energy Sector is that an area you will be looking at . Theres going to be a lot of moving parts. My guess is that opportunities will appear. Im not sure that we will pursue them. We look at macro factors to determine which we like businesses where Energy Prices can go up and down and it wont have a Material Impact on the companies we own. We look for resilient businesses. Getting back to Pershing Square holdings, perhaps that is why Pershing Square holdings is trading at a discount. Can i give you a pitch . I think it is one of the cheaper stocks out there. If you look and it is cheap because people havent realized the potential . We took the business public a little more than a quarter of the stock was bought by event driven hedge funds. October, very difficult for those funds. Most of those investors are exiting. You look at the universe of companies in the world that have earned 23 on equity, there are about 300. You can type in figure this out on bloomberg, in fact. They traded an average of 2. 7, 2. 8 times book value. You also had a great 2014. How are you going to do that in 2015 . Are you looking at similar returns in 2015 . You will have to be pretty aggressive. It is hard to predict shortterm performance. But we are not traders. We begin the year with 70 of the portfolio in investments that we are likely to own over the course of the year and 30 that is being acquired by activists. We are going to have a large amount of cash that we take in when this transaction closes. I think a big driver of returns will be what we do with that capital. We are scouring north america for a place to put that capital. Big names . The focus is large companies. Cocacola, pepsi . Im not a fan of cocacola and pepsi. I dont like sugar. I think it is bad for children and bad for people. I dont like the fake sugar either. I dont like the product. I like to invest in things where i like the product. Do you feel that the beat is on the other foot when you have to explain why this company is worth more . It is an interesting spot. We have an obligation to the investors for them to get the benefit of what they purchased area what they purchased. As Pershing Square holdings becomes a more publicly known entity, regulations in the u. S. Prohibited us. You cant take a hedge fund public. We had a choice of london or answered him. Our first choice was the london stock exchange. They said, you are a fund. All the other funds are 700 million market cap. We are on the list with unilever. The theory was, people are going to think about us more. It is an Investment Holding company. Do you feel that you are you are a guy that spends his time explaining to people why there is value in a business. How hard is it to explain to people why there is value in this business . We raised 2. 7 billion in capital. Now im in the u. K. What is the feedback you are getting . Feedback has been very favorable. Most people dont know the entity exists. Because they are not doing their work properly properly . I blame it on us. I cant go on bloomberg in the united they can talk about pershing holdings. I think the u. S. Has favorable tailwinds from an economic point of view. For an investor who can only invest in european stocks, this is an interesting way to invest through a publicly listed u. S. Investors that can only invest in europe buying u. S. Exposure. In europe, buying u. S. Exposure, this is one of the few ways to do it. You can invest in shareholder activism. It is quite transparent. Going back to the oil price, are you concerned about Canadian Pacific . We think the energy price going down is neutral for Canadian Pacific. There will be less goods transported, probably less oil sands, less drilling, but this is one of the great industrial turnarounds ever. Management has done a fabulous job. What is your estimate for the price of oil . If it sticks at 50 to 60, it is a problem going forward. Is not a problem for cp. Copp makes less money from transporting oil than almost any other commodity. It is a Single Digits percentage of revenue. Does it have some impact on growth it is the least profitable growth we have. The benefits to the economy of Energy Prices being halved overwhelm we make a lot more money on Intermodal Transportation then we will lose in terms of at least our ceos point of view. You really see the u. S. Economy as isolated. Does it feel that way . Maybe not the u. K. , but elsewhere in europe, it feels really doom and gloom. You are exuding quite a lot of confidence about the u. S. Economy. Is it capable of being isolated from what else is happening . To some degree. One of the factors that people are not talking about, just spend time talking to a venture capitalist. The rate of new business formation and growth of companies that youve never heard of is probably the fastest ever in the history of the Global Economy. There is only one silicon valley. We have a number of attributes that are very favorable. What is interesting, right now you would normally see rates rise fairly quickly. The combination of low cost of capital plus a meaningful improving economy is an unusual event. Stock prices in light of that are attractive. Apart from getting more pr for your firm Pershing Square holdings. What is your biggest firm for 2015 . I need to find a place to put a big chunk of capital. Weve got 6 billion soon to be lying around. We will have at least 4 billion. We have to find a place to put that capital. There arent i do think it is a favorable environment for what we do. Despite the volatility. Volatility is a good thing. If you are a longterm investor and your capital base is stable volatility is positive. Bill ackman, ceo and founder of Pershing Square. His rise to the top is a cover story. Let me as we put that nice picture of onscreen, let me bring you some of the top headlines. The European Union court of justice has given a federal opinion on the Central Banks outright monetary transactions program. In a nonbinding opinion, the court has said that the program is legal in principle. The opinion offers some relief to ecb president mario draghi as a precursor to qe that he is expected to announce next week. The world bank has cut its forecast for 2015 Global Growth. It projects the World Economy will expand 3 this year. That is down from last years projection of 3. 4 . It points to low fuel prices as a drag on growth. A special issue of the french magazine Charlie Hebdo is released today, one week after the attack on its offices. The cover shows a cartoon of the prophet mohammed holding a je suis charlie sign. 5 million copies have been printed. Lets check on Commodity Prices. Copper, one of the big stories of the day. The chart is pretty spectacular. We are down by 6 . That is reading through to some of the big mining stocks that have exposure to the cover price. Since seems to be that as Global Growth continues to get downgraded, the glut of copper that we see being produced is unlikely to go away. As a result of which, the price must come down. 6 . Now we turn to italy where the nations longestserving president is set to resign today. Lets go straight to bloombergs italy bureau chief. Of course, a lot of people are asking, what are the reasons . But he is 89 and hes had enough. Yes, hes had enough. When he accepted this second term, he made it very clear that he was not going to serve another fullterm. So what is going to happen today he will formally resign and that starts the complicated process of trying to find a successor. Why is it important . Mr. Renzi has an ally right now, for a few more minutes. He needs to find another candidate who will back his reform agenda, which as you know ranges from reforming the labor market to getting new rules in place on how italy chooses its legislature. He needs someone whos going to brokerdeals with the opposition if hes going to push this through parliament. The first objective is to come up with a name. They are going to propose someone. Maybe not right away, but theyve got to come up with a name who is prestigious. Dan, in terms of how we should think about this guy, this is essentially a ceremonial role that hes transformed into something bigger. Hes had a much bigger impact on italian politics than you assume by the authority he has. Thats right. The italian president is not elected. By a popular vote. He is elected by parliament. It is generally a ceremonial role, but weve seen in the last few years with this unstable political environment, that he has used the powers to dissolve parliament when necessary, appoint a Prime Minister in situations when renzi came to power and declare legislation unconstitutional. Hes taken advantage of that as he weaves through the machiavelli and system that requires compromise. Dan, thank you so much. For more on the italian president nicole itanos napolitanos decision to step down, we welcome a professor. He was not without controversy, but he was considered one of the most important president s for italy. He took on more of a rolled in the ceremonial president usually has. Do we need someone to get more involved in politics like he did . In the first place, i would like to state that in fact the italian president according to the constitution is the strongest of the weak heads of state. The week heads of state are the monarchies and the parliamentary republics which italy is one. Napolitano is certainly stronger , for example, than the German Federal president. He can also sort of influence, and even lobby, in various ways. This is the first thing to know. The largely ceremonial role is appropriate, but there is also some minimal executive power to be considered. The next president should be, in the first place, a person of great prestige and a person capable of attracting support from both the current majority and the opposition. This is the design that Prime Minister renzi has had in mind since napolitanos announcement that he was going to step down. There are many italians who match this profile. The problem is, who is going to make it . There is an old saying whereby the one who enters the conclave as pope exits as cardinal. I think this also applies to the italian presidency. I think renzi is very superstitious and doesnt make any names so far. I think he has somebody in mind. I dont know who. You think about what this guy did in office. Do you think his successor will be able to continue to exert more influence than the post affords him . Yes. The soontobe president will have to certainly help the Prime Minister and parliament carry on the reforms scheduled. He or she for the first time in italian history, there are serious rumors about a woman that could be elected as president , which would be of course absolutely welcome by the overwhelming majority of the population. The problem is that, no matter whether it is a man or women, he or she would have to continue with napolitanos work of supporting, helping, advising the process of reform that is so badly needed in so many respects. What is your biggest concern right now . It seems that matteo renzi is delivering on a lot of the reforms, but they are taking a lot longer than expected. Is there a danger that if we dont get qe next week, we are going to see more unemployment in italy and the situation will be no better than 20 months ago . You remember the last time i talked to this program was around 30 months ago, when renzi no, it was two years ago when renzi was appointed head of the democratic party. The main problem for him was not his willingness to reform, but the roadblocks that he would encounter on his way. Thats exactly the point. There are many democratic resistances. In many request there are bureaucratic resistances. I think renzi has enough energy and commitment to make it, but slowly. Im not quite as pessimistic as you are. Im not quite as optimistic as the minister is but i think italy has the resources to get out of this situation. Federico thank you so much. We going to take a break. After that burberry releasing numbers. We will break down the figures and look at the year i had. We will be back after the break. We did look at tesco. I have to admit that. But weve had our difficulties with retail and a lot of structural changes. We look occasionally at companies in the u. K. When did you look at tesco, in the last six months . Dallas bill ackman. Lets look at those tesco share prices. Tesco having a lot of trouble. Currently at 216. 95. The stock actually moved on his comments. We have retraced some of those gains. There was also [indiscernible] nevertheless, mr. Ackman having his influence on the company. Mr. Ackman looked at tesco. Can you imagine if he was an activist in it . That brings us to our twitter question. Does activism work in europe or should it work . Time to look at luxury. 2015 could be a challenging year for the luxury goods industry. One firm did end last year on something of a high. We will take a look at the year ahead for luxury goods with bloombergs intelligence analyst. First, Caroline Hyde joins us to look at why burberry has some unexpected numbers this morning. I think optimism being founded there on the profitability side of burberry. Sales did climb 8 , matching the previous quarter. Many analysts thought it would slow down. When you dig into the regions europe, middle east, africa looking strong. We also saw strength in the americas. Robust even in china. Perhaps that is a sigh of relief for many investors. Hong kong was where the problems were. Disruption because of the protests that we saw on the streets prodemocracy protests surrounding the golden week. The issue is profitability. Caroline, we will get back to you in just a second. We are getting breaking news out of italy. The italian president has resigned. In terms of how these things happen, they are right ceremonial. The secretarygeneral will take the letter he has signed and go first to the senate, then the parliament. He is in a car right now, i imagine, taking that letter. Making his way across rome. The possibility is that we could see our first female president of italy. Looking for a new gig . [laughter] we heard from matteo renzi saying that he is ready to propose his name to his allies. Everything is political. The different parties need to agree on a common ground. Someone has to be liked or at least a set did or at least accepted by all parties. The names being batted around, maybe not the names we think they will be. Should we go back to luxury . Lets check out burberry. Caroline is here. Sales of burberry were good. A little more concern about profitability. A lot of it was boosted by the profitability of Romeo Beckham. The beckhams do sell. It seems that ponchos were a particular fashion this year. It is also the digital influence. It not only saw a Romeo Beckham take to the screen. It saw him across all sorts of digital media. You can actually go onto the runway they have their male show. It was gorgeous. Quite amazing. Also, they had this amazing knack of booking live performers. It makes it much more of a show. Christopher bailey, ceo and creative director, really supports musicians. Their fragrance is really all about music as well. Interesting that some people are saying, burberry is light in terms of digital. You have bnp paribas and they say gucci comes out number one. They say, burberry talks the talk but look at click and collect and it doesnt deliver until tomorrow. We all wanted yesterday. [laughter] for more on the state of luxury this year, lets bring in deborah atkin, who covers luxury goods for bloomberg intelligence. What can we expect for the year ahead . Similar to last year. We are looking at around 5 sales. We can really cover that by saying, if we are looking at the consensus, 5 sales and around 15 eps growth. There is a mixed picture at the moment on impact, different regions, how well established digital is for different companies. Menswear versus womenswear which companies are better exposed, there is a lot going on this year. Interesting to see what china this industry builds itself on the china story, and yet that has slowed down a little bit. What does it look like in 2015 . The outlook is still around 5 , 6 growth. Just for china, if we look at the numbers behind the context, around 9 10 is purchased in china. You can more than double that when you count the chinese traffic. They are taking advantage of things like yen. An increase of Chinese Tourists into japan. They may not be going to hong kong to shop. They still have a penchant for luxury goods. Deborah, thank you so much. Right, one more fashion highlight for you. Bloomberg spoke with legendary Fashion Designer diane von furstenberg. The designer of the iconic wrap dress gave us some insight into the secrets of her success. I always was as inexpensive as possible with great quality and great design. Always. That has always been my niche. I never would change for that. But my product is indestructible. You can find on ebay 30yearold dresses for the price that you buy one now. An icon in the fashion industry and the luxury industry. Should we have a look at eurodollar . Lets show you what is happening. Big move, down to some quite significant levels. We are down at the moment. Big move lower. This on a day with an opinion that is fairly positive for qe. I will leave you with that chart. More analysis when we come back. Welcome back. You are watching the pulse. Elon musk said that the company probably wont be profitable until annual sales reach a half million cars. Tesla is investing in growth and new models. He also said the business played a little bit in china this down to charging concerns. We should probably get to at least a few million cars a year. By 2030 . 2025. Sticking with the luxury car sector the new mercedes is as much about the driver as it is about the passenger. The elongated sedan pairs Mercedes Technology with the exclusivity of maybach. Hannah elliott discusses why this was her favorite car at the auto show. Ive seen a lot of really cool luxury cars. If you ask me what my favorite was, it might be this mercedes maybach. The s 600 is a perfect pairing of Mercedes Technology and maybach exclusivity. It is as much about the driver as the passenger. This is a 523 horsepower car. It has 612 footpounds of torque. This car is eight inches longer than the regular s class. The s 600 goes zero to 60 in five seconds and hits 155 miles per hour. The driver is going to love this car. In the backseat, theres hand stitching throughout, plus would and crown accents that are the trim of basically everything. Theres a panoramic sunroof and automatic roller some blinds that will give you lots of privacy as you work on the business console. If thats not enough, it has a system which pumps fragrance throughout the cabin. The s 600 goes on sale in april of this year. Mercedes has not announced a price. It is kind of like, if you have to ask, you probably cant afford it. Still better being the passenger. Not sure on that one. Depends on the journey. And on the car. For those listening on bloomberg radio, the first word is up next. For our viewers, a second hour of the pulse. We are going to continue the conversation around the euro. We have comments coming from the ecb. That has happened on twitter over the last few minutes. Rajoy is in athens, meeting samaras today. We are also getting breaking news from barclays. We understand that it has hired an exbank of america executive. We will have plenty more on that breaking news after a short break. Attention for tesco Billionaire Hedge Fund manager bill ackman told us he considered investing in the market. We did look at tesco, but weve had our difficulties with retail, and a lot of structural change is going on that make it a more difficult business. We look occasionally at companies in the u. K. Look at tesco in the last six months . Yes. A green light for draghi. The Bond Buying Program is in principle in line with the e. U. Treaty. This clears the way for q. E. And dr. Copper gets a cold. Commodity follows sandoil drops its most in almost six years. Good morning to our viewers in europe. Good evening to those in asia. A very warm welcome that to have those of you waking up in the united states. This is the pulse live from bloombergs European Headquarters in london. Right, let us talk about what is happening at the e. C. B. Its a big day for the euro. We have what can be described as relief for the e. C. B. This as we see data coming out, Industrial Production data. Well break that for you in just a minute. Some of the data has been a little bit later to break. We had the inflation figures. Industrial production for pretty much in line with expectations. Industrial production for the month of november is backward looking, better than expected, right . We have minus 0. 4 instead of the. 7 we were expecting. Actually, look, theyre not great i know, but very very low basis. I think this is part and parcel of the conversation were having that surrounds the need maybe for a more aggressive approach from the e. C. B. Draghi cleared a big hurdle today. There was some concern for the european justice with a negative reading on the outright Monetary Transaction Program that was announced in 2012. This effectively is a precursor to q. E. Which were expecting at the end of this month. That comes next week. Lets get the details of the nuances and subtlities surrounding this opinion, i guess thats all it is at this stage, an opinion. Hans nichols is our International Correspondent and joins us from berlin. Guy, this is the advisory opinion. Well get the full Court Decision of the 15 members of the european justice in about four to six months. As you mentioned, in principle, they say it does not violate e. U. Treaty laws. The e. C. B. Has, in the last few moments, responded. Heres what the e. C. B. Has said on twitter. Theyve noted it, say they take note of the general opinion, and they say this is an important milestone for a preliminary ruling. O. M. T. Is ready and available. Clearly theyre celebrating the folks in frankfurt who think this is a positive sign. If you take this view that o. M. T. Is a precursor and clears the path for the quantitative easing, were getting into a quantitative easing likelihood january 22, and then we get into the expectation game. The question is, is the 500 billion, is that a floor or ceiling . What kind of restrictions may be put on quantitative easing . If you take o. M. T. , they say certain conditions are appropriate, so you have conditions on quantitative easing. Draghi in berlin today says that the e. C. B. Is ready to buy sovereign debt t. Seems like quantitative easing is all but a certainty at this point. I know its difficult to say never say never, but usually the opinion of the advocate general is followed by the court. Yeah, the majority of the time it is followed. There have been a couple of important decisions, like the google case from may where the advocate generals decision went the other way from the formal decision on the right to be forgotten, the final decision. But even if the final decision does go in a different direction on o. M. T. , we could get that in four to six months. At that point, quantitative easing could be out the door, could be out there, could be purchasing assets. The lag between the advisory opinion and the final ruling may play an Important Role in this case. Guy . Hans nichols our International Correspondent, thank you very much indeed. For more on the e. U. Advocate generals opinion, lets welcome our european economist, who joins us from frankfurt. Great to have on you the program. Does this mean that q. E. Now has the are there any more legal hurdles . Usually, you know, these opinions are followed, so theres no reason to think this is not a fullblown green light. I think this is a good move for the e. C. B. , and i would say its pretty much green light want only for the o. M. T. , but largescale effort purchases. The advocate general says this was legal, but that was partly expected. The devil in the details sort of speak, and the advocate general made a very important point that the e. C. B. Could be there without creditors that hold government bonds in case of a hypothetical sovereign debt restructuring. Thats a very important point, because as president draghi said, the imposition of seniority would have been highly counterproductive also to any Quantitative Easing Program. The advocate general said, the e. C. B. , should such an event ever be on the agenda they couldnt actively pay for such an event in terms of bonds with collective action claupses, but they could certainly participate passively. And so they could contribute to a sharing across the system as a very important feature. Ok, so the seniority here but do we still think that its likely that we see credit risk being sent out to the National Banks rather than being kind of assumed at a frankfurt level . How is that going to work . Well, theres still ongoing, and the funds bank and other councilmembers have brought up the issue, you know, that you could restrict the risk sharing to some extent, although we dont think that its going to be very likely to be adopted, because as i said before, it would be highly counterproductive, and we could see again a spread across the area and again some fragmentation of market. So i think, again, well have to wait till next week. We believe that the e. C. B. Will announce an expanded Quantitative Easing Program that also includes government bonds, but whether we will get the full set of Technical Details on that, thats still a question mark. What do you mean by Technical Details . I know theres a question, but are they going to give a figure about how much theyre willing to buy, and if its 5 hundred billion, will the market be disappointed . I wouldnt expect them to deviate from the target they intended a target they announced, which creates roughly one trillion, may involve the number from bond buying, but i dont think that they will give us a specific number. Id rather expect them to say that they would start buying a government bond, or start purchasing assets including government bonds, but they may specify the monthly amount, but they will then also of course, keep the flexibility and say that that pay may be varied and will depend on economic developments. But thats one thing, the amount, the quantity, so to speak. But i also wouldnt expect them at this stage to really talk a lot, what would happen in the hypothetical case if one of these bonds that they buy would be restructured. I think they would point to the advocate generals opinion, and they would again say its very much in line with the conditions they set out. Thomas, if we get q. E. Announced at the next meeting, which way do they go on that day and in the week after . Well, theyre already at record low levels, but nevertheless, we would expect probably a further downward pressure, some fur compression in the spread, especially yields at the long end but we would think the main transmission channel is the impact on the economy will be the euro and they have been under pressure since june last year basically when president draghi started to signal the extension stance of the e. C. B. And that we would expect to continue. So thats the primary channel, but nevertheless, you still see a compression when it comes to yields. Im just wondering why that is, given the fact that the first round of q. E. From the fed generated exactly the opposite response for treasuries. If you look at when they started purchasing, you need to take that into account, and i think it was seen over the past few weeks or months do reflect the expectation that a largescale Purchase Program is coming. So some of it has been priced in and there may be other factors driving yields, but nevertheless overall i would expect further flattening and a compression in yield spreads. All right, thank you so much for your time. Heres what else is on our radar this wednesday morning. A couple prices have dropped on speculation that demand for the raw material wont be enough to eliminate a supply glut. Other Industrial Metals also under pressure along with shares in mining companies. In his annual policy address they have said the city needs to choose between having an election in 2017 or abandoning it. He also said that hong kong must follow chinas law that candidates for chief executive should have a nominating committee. It was the first major address after almost three months as prodemocracy protests divided the city. President obama has unveiled new measures in the wake of the hacking of Sony Pictures and the pentagon twitter account. It would criminal size the stolen financial data. Obama says affected cybersecurity requires cooperation. Neither government nor the private sector can defend the nation alone. Its going to have to be shared, government and industry working hand in hand as partners. After the break, all eyes on italian president who has just stepped down. This was very largely expected. Hes 89. He was almost forced to have a second mandate just because the country desperately needed him. Who will replace him . Thats the question serve waiting for to see whether the next person will have such a big political impact in a role thats largely ceremonial. People are talking about the first woman president. Thats when we come back. Quick look at the currency markets right now. Big day for draghi. The Program Effectively gin the green light by the European Court of justice, which is a precursor to the arrival of fullblown q. E. We have seen a dip in the value of the currency this morning. Weve also seen a big flag. Theres a major risk for the Global Economy, now trading through some key levels trading at 1. 1758, big move in the morning. Also check out copper, because it tumbled the most in six years. This following oil lower, but also following the class weve seen in Commodity Prices. According to a note by Goldman Sachs, theres been some worse than expected Economic Data in china, which has been driving prices down, which means that prices slumped some 8. 7 overall here in london. Watch out for copper. The biggest tumble in six years. Lets get back to europe and back to italy. The nations longest serving president announced his resignation. Lets get the details and we know what happens next. Hes been monitoring the story. The reasons are quite straight forward. What do we know the kind of details surrounding this decision . Well, the statement that was put out by the president ial palace was actually quite short t. Just said that mr. Napolitano submitted his resignation this morning n. His traditional end year nationally televised address, he mentioned as among the reasons his age, 89 the fatigue. He was really called upon for overtime Service Two Years ago when parliament tried to elect a successor and that did not happen. This was widely expected. What happens now . There has to be at least a twoweek gap, 15 days i believe, before the first ballotting can start in parliament. As you would expect in italy, it is a complicated process. 2 3 of Parliament Approval is needed in the first three rounds, and then it drops to a simple majority after that. The Prime Minister who has italys Biggest Party is already quietly trying to find a consensus candidate. They might not propose a name in the first few ballots because they need support from the opposition. They see what names might be come out there. I was going to ask about names. Again, it has to be someone who is liked by most parties. He intends on staying on as president of the European Central bank. I know its very difficult because we havent had any official names yet, but what kind of personality will have to set . Well, certainly i think one reason draghis name came up was because he kind of fits the bill for someone who has credibility in italy, authoritative, and someone who is not a born politician who can rise above all the tension and political friction inity scomplee help broker and help compromise major agreements among the parties. Traditionally candidates have come from italys central bank, the bank of italy former premiers prodis name came up two years ago, but he didnt have the support at the end of the day. Even within the democratic party. His name is still being mentioned in the presses, but i think we could end up with perhaps a more lowprofile figure who can garner the support necessary from, if you will, the left and the right. Are there female candidates . Well, there was until, in the last couple of days the former e. U. Commissioner, her name had come up previously, but she disclosed in an interview that unfortunately she is suffering from lung cancer and is essentially not a candidate anymore. Italys defense minister has come up as a possibility. Im sure renzi, who has put in place the most female representation in an italian cabinet will try to come up potentially with a name that could gather support from the opposition as well. Thank you so much. After the break, were going to look at luxury burberry. Well break down the numbers and look at the year ahead for the highend retailer. Welcome back to the pulse live on bloomberg tv streaming on the ipad and bloomberg. Com. Now lets talk about whats happening in tech land. Theres a lawsuit, apple and google have agreed to pay a sum to the company not to poach workers from each other. The judge previously rejected a 324. 5 million settlement from being too low. Other companies accused in the ant trust case include adobe and intel. S. C. Is reportedly working on an i. P. O. That could take place as soon as this quarter, according to people familiar with the matter. The brooklynbusinessed brooklynbased business could be the biggest since 1999. In an interview with diane von furstenberg, we have revealed that her unique selling point is inexpensive as possible while retaining great quality and design. I always was as inexpensive as possible with great quality and great design, always. Thats always been my niche. I never will change from that. But my product is inconstructible. As a matter of fact, you can find on ebay 30yearold dresses for the price of what you buy one now. Now, a beat for burberry posted better than expected sales despite protests in hong dong. Our Business Correspondent joins us with the very latest. The takeway is Romeo Beckham sells, and he sells big in the u. S. He certainly does and it helps christmas sales trench coats, cashmere flying off the shelves, also ponchos seem to have been the fashion thumbs up. They seem to be extremely well. We need everything. Its all about personalization and sales meetings. Profitability is still a concern, and thats why were seeing a little bit of lack of optimism in terms of burberry, but sales up 8 in the third quarter, matching the previous quarter and much better than expected f. Youre digging to the underlying numbers, actually saw an increase of 15 . Theyre starting to nuance their sales outlook. Theyre saying because of the new opening, thats going to help sales by 5 , so thats slightly tweaking to the upward side of things. Elsewhere, they are being a little bit more cautious about profitability. While theyre saying lets double digit growth, were seeing strong, robust is what they call it, sneals china, which might be a relief. The problems in hong kong, the disruption they saw in terms of sales that is the protest and ongoing sales to changes means that profitability is not going to be as strong as we expected. Overall, theyre saying it offsets the benefits. All right, thank you very much, Caroline Hyde, and theres a whole discussion about digital. Theyve been at the forefront, but i guess the problem is its very difficult to retain the spot. Guche see catching up after the c. E. O. Was telling us he dent see a future. Yeah, i remember that conversation really clearly. Long time ago. Right, receipts move on. Greece faces a general election over the next few days, comments coming out. Greece shouldnt ask for a new bailout. Were looking for very high quality companies, usually very Large Businesses dominant, simple predictable, free cash flowgenerated businesses that as buffett would describe a motor around them. Longterm contracts, things that protect the business from new entrants, businesses that are not exposed to Commodity Prices fortunately. So thats what were looking for. He talks about tesco as well. Look at tesco in the u. K. Doesnt generally do on this side of the pond, but that was one example. Lets talk about our twitter question of the day. Does activism work in europe . Should activism work in europe . Does europe needs activism given the state of the economy on this side of the pond . Here are bloombergs top headlines. You can tweet us on that. You can also tweet us about these. The European Unions court of justice has given a favorable opinion on the europian Central Banks outright Monetary Transaction Program or o. M. T. The court has said that the program is legal in principle. The e. C. B. Has responded to the opinion on twitter saying that the o. M. T. Is something that theyre looking at. Yeah, its given the green light to the program, which were expected to be announced at the end of this month, which is fullblown q. E. The world bank has cut its forecast for 2015 Global Growth. The banks prospects report projects the World Economy will expand at 3 this year. Thats after the last projection we saw back in june of 3. 4 . The report points to low fuel prices and disappointing results in europe and china as having a drag on growth with u. S. Economy the sole price point. The top leader of al qaeda claimed responsibility for the deadly attack on the offices of Charlie Hebdo in paris. In a video mess annal, the leader said the attack is in response to cartoons depicting the prophet muhammed. Five million copies of a special edition have been printed. Right, to the markets now. By morning metals are moving. Lets talk to jonathan. Thanks, guy johnson. I dont know where to start. The advisors to the European Court of justice has given his opinion, rubber stamping the unlimited Bond Buying Program that was explained to us in 2012, still not activated. Q. E. Potential this will month thats one story. The other story is the European Market off the back of the commodity story. The dax is lower by. 4 . At the open, we were down by over 1 . We have come back a little bit. Were in positive territory on the ftse and italy. But the story for commodities really told right here on the ftse 100 in london, down by over 1 , and guess which stocks are the biggest losers this morning. The big copper producers getting whacked, and that is the ftse underperform the rest of europe. Copper down by over yesterday, dropping off. At 2 00 a. M. This morning, fall out of bed, down by only 6 , the biggest move in six years. Of course, the world bank trimming their forecast for growth. That feeds into a weaker story, and guess what yields this morning, sevenyear record lows almost everywhere. What really interests me is not just the u. S. Or in germany at. 46 . What interests semigoing further along the curve, going right out the longer duration debt the 30year bond in spain in germany, in japan the story there potentially is one where investors are not expecting the economy to inflate any time soon f. We do get q. E. , the bet is it may not work may not replace the economy, may not generate inflation, and that is why those yields at the long end are starting to come lower. Thank you. About 25 minutes from now, surveillance with tom keene, and he joins us with a preview. We have a lot of things, looking at a lot of things of course, copper oil, and treasuries. Well, it will be interesting to see and we will speak on surveillance this morning, francine with jeffrey of Goldman Sachs. Hell come to us from zurich, a report from Goldman Sachs that truly shifted markets a few days ago. You know adam with his service to the bank of england and adam posen will join us yes, on europe, draghi and the central bank. But adam posen simple on the times we live in when you see the flight to quality this morning. J. P. Morgan out with earnings. Olivia will have all the coverage of the earnings report. And Christopher Whalen will join us. Well talk to chris whalen not only about expense reduction, francine, but the idea of shedding businesses. These are challenging time for the too big to fail banks. Certainly is. Thats in 25 minutes from now. Autopsy up ahead will a victory mean troubled waters for groces shipping industry . Were going to talk to a shipping magnate and get his perspective on the eurozone. Looking forward to that conversation. Welcome back to the pulse live from london on bloomberg tv. We had a couple of headlines, of course, from greece this morning. Were just 10 days away from the greece election. The Prime Minister is in athens this morning. Hes been meeting with his current number, which is mr. Samaras. We are approaching elections very, very shortly. Weve been hearing from mr. Samaras this morning saying greece shouldnt ask for more bailout loans, but some sort of agreement is going to be required, visavis the debt this country currently holds. Yeah, the Million Dollar question. It comes january 26. The greece shipping industry could be affected by the outcome of the looming greek election. Joining us is michael. Great to have out program. Thank you so much for joining us n. Terms of what the elections bring, i guess its uncertainty until we have the elections and maybe more afterwards. What are you looking to the government to actually make your life easier in terms of contributing to g. D. P. And do it for greece business . Its not a greek business, it is an international business. Theres very little that can be done in greece to actually affect us. In the last few years of the crisis, no jobs have been lost in our sector, and no pay cuts either. We are really concerned about whats happening in the world. Theres a person in greece. Our neighbors live there. We want the best for the country. There have been some comments coming out from within that it has plans for a campaign against the oligachs. Some of those could be ship owners. Want all of them are. But theres a sense that too much power is concentrated within the country. Do you have anything on say from this . Do you think others within the industry have things to say from this . I think in greek shipping, theres not the longest in this category. Im not sure what category it refers to, but i think this is in this category. For many years they were in london and new york. They relocated to athens out of their own choice 35 years ago, 40 years ago, when infrastructure improved, and they win that choice. They arrive there, and they finance it. The income is in dollars. All of thats true, but you could they contribute a lot. Not less favorable, not lells able than our peers abroad. I do like an industry in this country in greece, which is an International Champion with our way, and they must make sure we do not destroy that. Do you think theres a fear amongst greek shipping owners that they will tax more . Do you think that will eventually mean that more ship owners go back abroad . I cannot explain this, and im concerned some people are thinking about it, but im not one of them. I believe that whatever government comes into power would be a choice, and they will play ball with the shipping industry because it contributes greatly to the economy, provides a lot of business, and its actually the flag ship the success of our country. You remember ship. Lets talk about that. Would it be a reason for exit if greece were to exit the euro . Would you be doing business elsewhere if greece was no longer a member of the single currency . That in effect, and this is our own chief from south america to north america, china, from australia to europe, you know very few companies come, and its not actually a major exporter, major importer, nothing really will affect it. Doesnt matter to you . It doesnt really matter to us as businessmen. It matters to me. What about as a greek . It matters to me, because i feel very sort of great disappointment with the way the country has been run with the state of the country these days. I feel very disappointed with basically performance of the political personnel of my country. Talk to us about the price of oil. It has an impact, the price of oil. It has a huge impact on your business. It does, it does. When one World Economy sells better theres more demand for world trade and this is how we basically make a living. On the other side on the other hand, right now, because of the previously high price of oil ships are going slow speed. More efficient at slower speeds. Yes. So we are reaching a point if it falls any further, were hitting the point to go faster. This will actually mean that additional damage is to the world, to the market, which will be bad for the business. How much overcapacity do you think there is now and how much overcapacity will there somebody i think at about 20 , and this can easily be added if the price of fuel goes to the rates will go even further down . Yes, im afraid so. But that would be temporary. Long term, the benefits are great. Greater. Low price of oil, and theres demand going forward. Michael do you have any sense you must be speaking to colleagues, where do you see it going over the next couple of months . Does it stabilize at 60 in the summer . Does it go down further . The price of oil . Yeah. All all i can do is read the report from the major banks and my understanding is for the next year, the price of oil will get depress. You see a lot of stuff around the world. What is your sense of the Global Economy at the moment from simply the stuff youre seeing shipped around the planet . What conclusions do you draw . Well, certainly everything goes on in asia. Thats a daily expression. Its a daily input. Im optimistic. The consensus is bright, but my personal feeling is wasnt doing better. It will be surprised by new nations, like india, like africa. I think they will add and china, not china either. China will find a way to master their problems. Thee always been doing that quite successfully. All right, michael, thank you so much for joining us today. Thank you. Lets bring up some of the companies news. Go pro shares, the company is in steep decline. Investors are concerned that a patent just granted to apple for a remotecontrol camera system poses a threat to go pros product line. Etsy is reportedly working on an i. P. O. According to people familiar with the matter. The brooklynbased ecommerce business that allows people to sell handmade crafts could be the Biggest Technology i. P. O. To come out of new york since 1999. And amazon got another dose of hollywood. It announced that its hiring director woody al throne create a new tv show. The halfhour episodes are set to be released on amazon prime in the u. S. , u. K. And germany in 2016. This will be the first tv series ever made by allen. Hes known for his oscarwinning movies such as annie hall and midnight in paris. Coming up, well preview a speech by the chancellor tonight that will focus on the inflation situation in the u. K. In the meantime, follow both guy and i on twitter. We did look at tesco, i have to admit that. But weve had our difficulties with retail and lot of structural changes that are going on. We look at occasionally companies in the u. K. Did you look at tesco in the last six months . Yes. That was Hedge Fund Manager bill ackman speaking earlier about tesco. He also weighed in on the u. S. Economy. Lets take a listen at that. One of the factors that really people are not talking about is you want to get optimistic about america, just spend time talking to a venture capitalist. The rate of new business formation and the rate of growth of companies that youve never heard of is probably the fastest ever in the history of a Global Economy and really is only one silicon valley. I think that we have a number of attributes that are very, very favorable. Now, whats interesting, in an economy performing as well in the u. S. , and is expected to perform, youd normally see rates rise fairly quickly. The combination of very low cost plus a meaningful improving economy is an unusual event, and i think stock prices in light of that are actually attractive. For getting more p. R. For your firm, what is your biggest concern for 2015 . In terms of my job, i need to find a place to put a big chunk of capital. Weve got 6 billion soon to be lying around, and well find 4 billion, perhaps as much as 6 billion, as we have to find a place to put that capital. Weve always been able to find one or two new things. But there arent i do think its a very favorable environment for what we do. Despite the volatile knit volatility is a good thing. Volatility is a positive. Interesting. Really really positive on the u. S. Economy. He was even more positive than i thought he was going tofpblet hes saying hes going to focus on the u. S. Economy and basically saying, look, oil prices plus low rates equals a great story. At the moment, were getting rebalancing. But the asset class already were getting at the moment does not reflect the positive stories. When we asked your biggest problem for 2015, well, i have 4 billion to 6 billion i need to spend. Thats a good problem to have. Thats a problem they would like to have in the ufment k. Lets find out what we can expect to hear today. So inflation low inflation. Its pretty low. Theres not much. Ill tell what you i thought was interesting yesterday, when the c. P. I. Number came out,. 5 , we had all these comments from the governor of england and everybody debating how he would react. Look at this tweet from George Osborne after the number came out, welcoming low inflation. Their plan is working, its welcome news for family budget. Hes going to admit the number that inflation is falling, but welcoming inflation of. 5 . Clearly politics is a good thing. I think from his point of view the fact that slowly rising wages have been something the Opposition Party has been able to latch on to, the wages are rising. That number will flatter the wage number. So he basically has had concern. He was really talking it up, but to economists, and thats kind of to move onto the feelgood factor on consumers, which hes trying to do, but at the same time, for economists, he has to say, look, guys this is under control its an oil price problem. Yeah, and were not the eurozone. The u. K. Is not the eurozone. The eurozone has very different problems. Low inflation there is a product of many things, not just falling Energy Prices, and to really bat away concern, maybe the fact this is a good thing. But in the short term, it might well be a good thing, because he can paint the weak wage figures in a softer light as well. It puts them, it makes life easier i think probably is the issue, and theres a big debate about good deflation, good low inflation or bad inflation, and i guess when youve got a largely employed workforce you are going to get the former rather than the latter, because you get the benefit of people having more in their pocket and spending that money, and thats back into the economy. I guess you probably can make that case, and i suspect thats probably where hes going to focus the attention. And as a result of which, the british economy largely will be a beneficiary of all of this. In a word, thats what theyre calling it, jo ysilation. Whats good for the consumers isnt necessarily good for the markets. It happens really fast, really hard, and it represents through markets. Ackman was making point that the markets are going through a reaching at the moment. He says its Portfolio Managers. Portfolio managers. Once we get through that phase, really good news, picking for markets. I think a lot of people take that view. The net basis, this is good for the u. S. Economy. I was told to look at a lot of the cap ex spending over the last couple of years. The cap ex spending has held up, has come from the big guys that will suffer in these falling Commodity Prices. Thats something to look at. Im surprised about copper. I know theres been a huge commodity selloff, and theyre just following oil prices lower, and yet 7 fall in one day seems to be a lot. Was the market just not seeing this . Lets not underplace it. Its a big big move, but it predates it and standing off for a while, way before the move made it. It was ay move, and it came off the report from the world bank about growth. So that supply side story speaks very well to the move in oil and speaks so well for copper and base metals elsewhere. Maybe some people say were due for a correction. Interesting to see how theyll be reacting to a very aggressive move to the downside. And then lastly, theyre given the green light. Yeah, so 20 seconds excited, you sfld everyones ready. Well number davos. Were excited. Mario draghi is not. Hes got to win over the governing council, exactly. Its interesting to see him give an interview and say, im not here to do Monetary Policy for germany, there are other 18 countries i have to do it for. I thought he was direct. Thanks so much. Thats it for the pulse. Keep it right here on bloomberg television. Surveillance is up next live from new york with tom keene and the team. Just a reminder, follow bovet us on twitter, guyjohnsontv, flacqua. Have a great afternoon. If up to the carry on the conversation let us know. Well respond to anything you let us know about. What do you think of the show . Tell us. This is bloomberg surveillance. The flight to quality continues, the yen strengthens as copper plunges. Jpmorgan fortress dimon reports. Will they fire thousands . The internet it is making you dumber. I agree. A primal scream for a return to traditional learning. Good morning, everyone. This is bloomberg surveillance. Live from our World Headquarters in new york, it is wednesday january 14. I am tom keene, joining the Olivia Sterns and brendan greeley. So much going on, a terrific set of guests. Al qaeda says it was behind last weeks deadly attack on the Charlie Hebdo offices in paris. They claimed responsibility. Said the attack was a response to the magazines cartoon depicting the that mohammed earlier. People lined up to buy the new issue of Charlie Hebdo, and they quickly sold out. The cover shows a cartoon of mohammed holding a sinus as