kospi in a slight decline. australia is closed. [indiscernible] >> the city of karachi is tense where a night-long gun battle with heavily armed militants were third team people died before the army was able to regain control. after a long. history of violence entrenching. >> yeah. there was an attack on a military base there two years ago. this is considered the biggest attack since then. .t is hitting the heart of happenstance and the pakistani government. >> the economic heartland of pakistan essentially. well forsn't bode efforts to resolve a standoff with the taliban, if this proves to be the taliban. >> do we have any claims of responsibility? >> that haven't been any public claims of responsibility yet. there was some praise for the attack on a couple of telemanagement. it doesn't mean it is the taliban necessarily. i assume they have an idea who is behind this attack considering they have 10 bodies and quite a bit of weaponry that has been seized. we also have islamabad on high alert. >> and flights canceled. very disruptive. it wasn't just a bunch of gunmen shooting weapons. it was grenades, rocket rappelling grenades. there was a a lot of damage and the fires look pretty big. very dramatic video on the web. and driving up in a van opening fire on a city checkpoint. >> what about the peace talks? have they been put on ice? does that mean that those talks are dead in the water? >> if this turns out to be the taliban, it is not good news for the peace talks. under- he has come criticism. the taliban had already dropped her cease-fire a month ago because talks were not going very well. this would certainly be the nail in the coffin if it is the taliban. some other stories we are following for you -- opec ministers meet this week with growing pressure on saudi arabia to him more oil. to produce a need record 11 million barrels a day to cover the shortfall in global supply. that is as production in libya, iraq and iran failed to rebound as expected. the fight is virtual but the competition is real. facebook add aon videogame exhibition today in l.a. rivalsget virtual-reality goggles. gdp rose by an annualized 6.7% last quarter, more than the government previously estimated of 5.9%. still, economists are projecting a contraction after the sales tax increase kicked in. back to the markets now as it digests all of that. , the overallll impact [indiscernible] japan, i can tell you, first of all, the nikkei in the topics in the dollar-yen. that is the impact overall. x moving. panasonic and casio are seeing strong gains. the strongest gains in the u.s. were electronics. the advertising giant in japan is one of the big gainers as well. bit of a break up. health care, more defensive players, and power and gas stocks are not in favor today. let's look at the the risk on an risk off appetite. way stronger than forecast coming in at 6%. that is after the first half. for those who were buying all the big-ticket purchases for example, whether it is a car or ,uge for sure whatever it is that is why the gdp is stronger than forecast. electronics seeing strong gains. those are the ones that are driving because gdp, what are you like it or not, was that her than forecast. japan -- howat about china? >> you have the sunday figures coming out. experts will -- exports were the encouraging sign. it has since recovered significantly, green all the way. it rebounded and rebounded and rebounded. best performers in five days. one,was going to pick out it is gray wool which is down. there he goes, 5% down. fell 17%. that was a concern. one of the biggest stock performers today is of course great wall. inglis joining us to shine some light on the shadows. issome of these places already on a hard landing. when you have growth rates from if that isn a year, not a hard landing, i don't know what is. wave of credit defaults following already a record number of ratings cuts. trillion usd of corporate that is maturing this year. and a lot of it was swallowed up by these companies when growth rates was at 9% or more. some are being affected more than others. is saying you look at property, mining and steel. that is where you have the worst credit quality because that is where you see a lot of these earnings coming lower. lower earnings and lower returns on investment. i mentioned the number of defaults we have seen. a lot of downgrades as far as credit ratings are concerned. if you look at the first five months of this year compared to the first five months of last year, we went from 15 to 20 this year. that is as far as downgrades for the credit outlook. actual cuts,t the we have gone from 13 to 17 this year. if you want to interpret the numbers, if that was bad, wait until june and july and in the coming years. that is when you will have the snowballing effect. as you have these yields between a lot of these top-rated and lower rated companies, that starts to widen because what loosening has done on reddit is help bring down borrowing costs for the top-rated firms but further down the line the spread is actually widened. we will be getting growth -- growth rates of some 20%. that means that a lot of this debt will get repaid. >> thanks. major world cup sponsors come including sony, have called for an urgent investigation to allegations of corruption in the world cup. we could ask what these sponsors are actually saying. >> they are being very diplomatic. but the message is very clear. sony, visa, and castrol are some of the major sponsors of fifa and are concerned about the smell around the bid process that saw the 22 -- the 2022 bid go to qatar. that they expect these investigations to be conducted appropriately and fifa adhere to integrity and fair play. to allegationsng that appeared in a book with the sunday times," the british newspaper, a couple of weeks ago. it is alleged that he was overseeing a slush fund worth millions of dollars and at effectively encouraging support for the qatari bid for 2022. an official member of that committee and denies any wrongdoing. but it doesn't look particularly good. fifa's has responded to these sponsors who have contributed $100 million in the last year, they have 100% confidence in our investigation. at?hat stage are we it is not just the world cup in qatar, but also the world cup in russia that is under scrutiny. >> that's right. michael garcia has been looking the 2018 world cups, in the 2022. the investigation wraps up today. he will take six weeks to prepare his report and it will be presented to a german judge who will then decide if there is a case to answer. so the timing is a little unfortunate in terms of brazil. fifa doesn't like these events overshadowed like this. so as soon as the final is complete in brazil, i would expect the report on that 2018 and the 2022 world cups to become public around that time. >> thanks, paul. coming up later in the program, --are talking all's, not the talking space balls, not the mo brooks movie, but the ones they will be using in soccer. ripee the conditions still for stockmarket investors? joining us there's [indiscernible] bruno, let's talk about chinese data. what was the real rate of growth as far as the economy goes? >> nobody really knows. [laughter] >> was 4% to 5%? >> possibly. gdp growth so-called has come from fixed asset investment, construction of a lot of new list of the structure projects. it's not really growth you can count on. as you know, a lot of those buildings in cities and towns are now vacant. government-sponsored façade of growth but it is not translating into profitability. >> instead of putting it under the mattress, they put it in empty buildings across china. but now we are starting to see a slump in property prices. do you think that addition of weakness ish import a red flag of what consumer confidence is going to look like in china for the coming year? china is not at the start of a super bowl downturn in property presses. i think we are at a major peak in property prices. if you look at these booms a have gone for several years, historically, they have ended very badly. end in a huge decline that lasts for years. >> what will it take for all of this to end in tears? what will be the catalyst? >> bad debt and bad loans. the nonperforming loans are going to spike and eventually you will see a sae of -- a sea of debt that will be serviceable. is the merchant of down. >> actually, a lot of people are calling out warnings on the dental downgrades and ratings downgrades and the like. a lot of people just looking at the horizon of what chinese companies are going to look like and it doesn't look good. >> if you look at the proper validating -- property value of real estate in china, it is almost 400% of gdp. this ratio has now surpassed the levels we saw in japan at the top of its peak. we know how that ended. this time is different in this country is different. you need to learn a lesson about history. it is never, ever, ever different. >> you are not advising clients to be invested there. >> no. kong, isin china, hong extremely overvalued. i wouldn't be surprise if he saw a 40% to 50% drop in property values in china. >> wow. a lot of people still think there is some upside for china but not you. where are you putting your money? >> stuff that is been down. those areas of the world which are the big slump already, the big rush, you are talking about the relative economies. for photos in america, in europe, and also japan. >> this is something that hasn't changed. every time i talk to you, you are very bullish on the u.s. in particular. >> if you look at the secular trends, we look at the big themes in the world. 2011, the00 and developing world outperformed the developed world by a long margin. but then by 2011, we saw a big divergence. the to us was a secular change in trends. now we have been running with this for years. i wouldn't be surprised if for the next four or five years the stock markets of the developed world do much better than the emerging world. is going to rejoin us in our daily discussion later on in the show. >> how much would you pay to join warren buffett at the buffet? > on tuesday, we got the south korean ferry captain due to go on trial. more than 300 people dead or missing. most of the vick dems were students from a single school in seoul. penalty --face the the death penalty if convicted. one of the companies that led --lines among this you know among casino managers. aiming for a six tournament win and they are taking on croatia in the opening game taking place in são paulo. brazil will be lifting the trophy at the end of the tour. on friday, the bank of japan deciding on policy. expected to key policy study friday. -- policy steady friday. how much would you pay to dine with billionaire investor warren buffett? apparently, somebody from singapore has for out more than $2 million for the chance at an annual charity auction. let's get to singapore. here?de the winning bid >> a mysterious man by the name of andy. we don't know more about him. we have not managed to track him down. a lot of money, enough to pay almost $2.2 million for lunch with buffett and seven friends. the amount paid is more than double last year's. his bid was made for delayed, less than 10 minutes to go in the auction. this auction has gone on for years. 15 years, to be exact. lunch with buffett at a steakhouse in new york, smith and wants to, and it is all in the name of charity. he is raising money for an end to poverty organization -- foreign anti-poverty -- he is raising money for and anti-poverty organization. it has done really well. two years ago, an unidentified man paid $3.5 million. buffettt has drawn admirers who would like to have lunch with the man. that is very incredible. let's get in on the conversation. $2 million this year. big in was the first 2000, calling it the warren buffett inflation. how much would you guys pay? >> i would probably pay that in -- what? taiwanese dollars? 200 syrian pounds perhaps? >> we would probably try to chip in our dollars, right? >> for sure. even if we chip in, three of us, it would not work at all. >> at least 24 dead after a night long done battle -- gunbattle. asian stocks are added eight-month high. gender gap, goldman's predictions for empowering women in japan. welcome back, this is "asia edge." >> china held their first high-level [indiscernible] we can get over to mumbai. talks -- whate did these talks concentrate on? >> economic and political issues. this is the fourth time president modi has taken meetings between india and china. economic as well as bilateral issues as well as the potential for tapping opportunities jointly with specific projects on the radar. we don't have details. it was a fairly long meeting, lasting nearly three hours. india and china have had a tenuous relationship. india has accused jon of occupying territory. china on the other hand has said that india has laid claim to nearly 90,000 square kilometers in another indian state. we have seen the escalation of those tensions. we saw distilleries last year led someone into the indian territory. escalating tension. [indiscernible] week, the dalai lama fled into thousand nine on the back of alleged harassment. china has been raising that issue time and time again. no confirmation on whether that was discussed. that is a clear step. president modi will be visiting china later this year. pakistan now says that at least 24 people have died in a night long gunbattle at karachi airport. heavily armed attackers disguised as police stormed a terminal reserved for vips and cargo. it is not known who launched the attack a crutch it has frequently been targeted by militant fighters. the army says all 10 militants were killed and 14 other bodies have now been recovered. the attack on june international violenceighlights the and underlines the security concerns in asia. the fighting at the airport has made all the headlines but there is also news of massacre of 23 shia pilgrims. tell us the latest on what this all means. these twomentioned, attacks were he in completely different parts of the country but they are all linked together. violenceou love the outside of the border areas have been sectarian violence, killings of the minority shias. groups that are carrying out these attacks, they are not necessarily the ones that carried out the airport attack, we don't know yet, but they received political support. security forces look the other way. militarythe intelligence agency, support some of them. there has been tolerance for these groups that allow these problems to grow out of control. >> that is part of international criticism. how does pakistan deal with it? do they do more talks or do they deal with it with force? >> they've tried both. they recently tried peace talks with the taliban that broke down. they have periodically tried to the terry offenses in the tribal areas, neither which i really worked. all they have really done is drive some militants out of the tribal areas and into cities like karachi. once they get there, they find a very weak security system. you have paramilitary forces that try to combat terrorism but the police is extremely weak them under resourced. karachi only has one policeman for every 600 people. the national average one for every 260. the police need more resources. resources oreek in are they also week in motivation? there are people who are wondering whether the military and police are fully committed to this fight. >> it's a good question. as i mentioned before, some of these groups have political support. sometimes it's local clinical parties. sometimes it's even the national ruling party. some of these groups have traditionally been directing their attacks against india, which has been a favorite target. so there is a tolerance for them. on the other hand come in terms of the police, you have the lack of resources and a lack of morale. the police have been targeted by these militants. hundreds have been killed. they don't have the credit they need. they don't the backup they need. they don't have the political support they need. so it's hard to get them to throw themselves into this i fully. -- this fight fully. much foryou so providing a broader context. >> getting at this feed on market action, if we look at the nsc i asian -- the msci asia-pacific, levels we haven't seen in a month. let's get it over to john dawson. on friday, you have the hang seng finishing below 23,000. now it is about it. that is quite encouraging. the markets rebounded again. you can see -- look at this really strong rebound today. that was the impact above the 2000 mark. significantly and it has now jumped up in that trading range right there. wall, may sales are down 15%. shares are down about 5% right now. is oneading range, that of the stocks we are following today. screen, china's market opened lower and has recovered. the top three performance are gas stocks, also declining. great wall, the biggest decline or. yan, thiscomposite, after the figure -- again, this after the figures come out on friday. you see the national retailers. energy stocks seeing gains. a bit of a mixed bag. that was the lift again but markets holding after opening lower. -- they have finished up their lunch in japan and we have the stronger than expected growth number you broke earlier today. what is the overall view and how are the markets reacting? washe first quarter pre-sales tax rise to 5%. the big-ticket sales in consumer spending in the first quarter. , waydrove the number better than forecast, is the fact that business spending is rising. also stronger than forecast. is this is our spending. consumers are spending. what is different is the second quarter of the year which is the post tax rise. stocks saw big gains in the u.s. on friday. limited gains today. later this month, the japanese government is expected to give us more details of how it will revive the economy. third arrownister's is said to convince more women to join the workforce. bloomberg has spoken exclusively to only one of 2 -- to one of only two women in abe's cabinet. >> prime minister ivica dacic not sibley trying to increase support from women by calling to increase -- prime minister abe is not simply try to increase support from women by calling to increase employment. it is a need for the mission to survive. referredminister abe to it in a major interview. >> i have to completely agree the comments.in japan is facing right now is a severe one. if you look at the demographic issue, everybody knows the entire population will be shrinking by one third by 2060. either you find america ways to ichst the birth rate, wh will be really tough, or you open the floodgates to immigration. female participation has been growing in the last several years but lags that of other economies. could -- if they could it allies male and female gender employment rates, a good boost to the economic level. this is easier said than done. there is a marry of steps that need to be taken by the government, by corporate japan, by society. this triad approach needs to be tackled for this needle to really be moved. e doing enough? is corporate japan listening enough? >> it begins with a message from the top at the manila mom. -- at a minimum. we finally have a leader who has raised this issue for the first time in history. we started talking about this topic back in 1999. the word diversity or womanomi cs was not a part of the language. now the question it is well promised her abe, corporate, and society be willing to walk that walk. we are seeing some encouraging signs. they are talking about neutralizing the tax system. systemow, a taxe discourages women from working. their gender statistics, their gender write-downs on boards for instance, these may be tiny steps but finally we are starting to see some of the top-down pressure being translated into bottom-up action. next, are we finally seeing some green shoots in recovery for japan? all that when "asia edge" returns. >> welcome back. so we were talking about u.s. equities. you are still very bullish there , europe, all the rest. you are selecting europe even though things are so kind of contemptuous when it comes to russia and ukraine and all the rest. >> you can always have a geopolitical problem at any time. but if you look at the economy as such, europe is past the point of no return. that occurred to an half years ago. they has a market is recovering in an employment rates are coming down. the ecb is extremely accommodative right now and that is the recipe for rising stock prices. >> the imf already warned britain about rising house prices there. people are kind of taking it in stride at the moment. >> they are. pakistan --sion now >> china, vietnam -- >> and china phil baines, there is no shortage of hotspots. philippines,ina there is no shortage of hotspots. no one wants to see war anywhere. there is confidence that politicians will do enough to keep them from getting out of control. atwhen you look at the vix the lowest in seven years, what does it tell you? you see a little bit of an uptick continuing. you like divine strength. -- uf to buy in strength. -- you like to buy in strength. we don't look at one indicator in isolation. we follow a number of them very if you look at the nyse decline line, it is at a record high. ph advance-decline line is several months before the end of the bull market. the recent surge in advance-decline line is very bullish. they are in excess of 700 on friday. >> it is time to sell them. >> it is time to buy. [laughter] question that is what i meant. -- >> that is what i meant. >> the yield curve is extremely' steep. that will only happen when the fed starts increasing in baby steps. you mentioned europe, are you concerned about an axis in shimon he? -- in cheap money -- are you concerned about an excess in cheap money? the monetary lever has been pushed up and down by central banks where the interest rate is set. you want to have booms and best. you cannot avoid it. when money is cheap, people speculate and push up asset prices. when they cost of loans go up, people are liquid and there is a crash. right now, we are in a boom phase and you might as well make some money. >> it is a calculated risk you are taking. looking at japan for it just saw two decades of going backwards with stagnant -- not even growth, deflation. gdp datarst quarter than expected, but still, we are waiting for second quarter gdp figures to flow through. >> exports become attractive. company start raising money. these days, the solution is to spend more money and basic currency. i am not saying that it is good for room -- >> what is your view about [indiscernible] he can do it is many times as he wants as long as the markets allowed him to do that. we had qe1, qe2, and this latest bout of qe. central banks and governments can do whatever is needed to stimulate the economy. yes, there will be setbacks along the way but i think japan has turned the corner. japan has worked out well for us and i think it will go on. >> down 7%. >> we had a huge rally. nothing goes up in a straight line until we have a consolidation. the moral hazard here of injecting global economy with so many dollars? whatyou strip it all done, is the productive innovative value of the economies as it looks to grow in a very organic way? right now, it is in organic growth. >> you will have a bus at one point. it will be after the inversion of a [indiscernible] and the yield curve to sever. that is why we are long. at some point, the federal reserve will start increasing the fed funds rate. will buyd, the public anyway and that will be the time to sell. you don't want to the long any assets that you don't want to be long -- you don't want to be long and assets. >> the world is ready for brazil 2014. but is brazil? >> more on that when we come back. >> five days before what could be the biggest sporting event on the face of the planet, world cup stadium is still not ready. sometimes chaotic preparations in the race to be ready on time. work continues on corinthians arena and time is nearly up. in just a few days, the biggest football tournament in the world will kick off here. against this chaotic backdrop comes a candid admission from the mayor rio de janeiro. retrospect, staging the world cup across 12 cities was not a good idea. citieshould have fewer hosting the world cup. >> with potentially four's stadiums [indiscernible] saved a lot ofve money. people are furious that money that went to stadiums could have gone to schools and hospitals. the media and sponsors are still in complete. the mayor admits it's a bad look. >> until now, we don't have anything ready by then. [indiscernible] the firstis not country to suffer protests or fall behind schedule when staging a major event. once the football gets underway, let's hope the excitement will overshadow the problems and that they will get it right by the time they host the politics. -- host the olympics. our look intonue the world cup, it is not just the players that will be in the spotlight. the ball will also be under scrutiny. a revolutionary design has so much interest that even nasa is involved. arrow dynamics basically is the study of fluid flow around objects. nasa is not in the business of designing soccer balls or any balls for that matter or testing them. here, do use sports balls especially in our lab for educational purposes. it is easy to get young kids interested in our field by showing them something they can relate to. we have here a wind tunnel, a channel -- a chamber through which air flows. soccer balls,to we are looking at the flight of the ball through air. there is a very thin layer that forms on the ball surface. it is critical to the performance of the ball. as far as the aerodynamics go, it is the structure of the outside of the material, the roughness. that is what determines the aerodynamics of the ball. the ball flies through the air, it may change directions. these towns with fingers on and i'm a it is compared to the ball in 2010. we are looking at the smoke patterns. where does that smoke leave the ball, at what point on the surface? and when the separation of when that location of separation changes. basic message for the players is that you will see less of a snapping effect. it will be have more like a traditional ball and i believe they will be happier. >> are you ready to watch all the games in the world cup? all of them? >> midnight or 3:00 a.m., along those lines. just get up a little bit earlier, i suppose. every world cup, there is a new ball and it invariably leads to censor controversy. we shall see what this one is all about. >> maybe the penalty kick controversy, too. >> the following is a paid program. >> sit back and relive the moment. it was the decade of eight track tapes, rotary phones, console tvs, tower size radio speakers, a.m. radio, and great songs on 45s.