You are very welcome to the bloombergs from European Headquarters in london. I am manus cranny. We begin with the worlds mostwatched sporting event. Germany has won its fourth world cup title. It beat argentina 10, scoring that goal in the second half of extra time. Hans nichols and Ryan Chilcote are with me now. Look at that. It is a phenomenal site. Sight. I came in from london last night and stayed up and watched the game, foolishly, i might add. It has been remarkable for the german public. Can you ben is, celebratory if you are german . It is a handwringing conversation every time. One thing that is clear, every time germany does win, the economy gets a little boost. . Hat do you think is it a feelgood moment . I do not think there are going to be too many lionel messi won the golden boot. Mayor donna had something maradona had something to say about that. He said the marketing people wanted him to. It andse, maradona has messi has never had the world cup. So it is the capitalist fall. Fault. We talked about how beer sales were going to get a boost if the germans win. This brings us into russia. The host country, on average, gets a 1. 6 boost. We most important thing love, having a direct correlation between a teams winning percentage and beer sales of their home brewers. It is not true. What does matter is the weather. When you look at beer sales Going Forward in russia, yes, russia can have a good year, but for them to have been or years, they need the sun to come out. If argentina had won, would we be talking about stake sales . We go straight to corn futures. And one thing that will help worldales come the next cup, because russia is hosting, is that the russians have just allowed advertising around and on television. Bans and aeen crackdown, in general, on drinking. Sochi in russia. You are our russian expert. Talk about the challenges for the world cup for these guys. . Hat can they learn from brazil i think there is a lot to learn. The russian president said who is there with the german chancellor and the head of the for at the World Cup Final last night. They have had people watching all of the brazil games. There are a few things they can learn. One is infrastructure and avoiding problems and making sure that the infrastructure happens in time. The russians have an ambitious land. They will build the 12 stadiums in 11 cities spanning 1500 miles. You have got to get people between these places and make sure the venues are ready in time. The russians have seen what happens when it does not happen on time and they want to avoid that. They had problems when it came to the winter games and they already have three out of the 12 built. One was actually built for the winter games down in sochi. One was built in moscow already, which is going to be the russian football clubs stadium. It is already ready to go. And then there will be the third. They are on their way and they are keen to avoid the embarrassment of not having a structure ready in time. Line assic had aellknown newspaper , the germans are mortified for winning late. They were not on time. Great to have you with me this morning. Hans nichols and Ryan Chilcote. Words, the largest air show kicks off today. Lane makers already have seven years worth of orders on their books, so what is on the agenda . Anna edwards joins us for more. Quite a lot of news so far. Bring us up to speed. What has been announced . It is all about new engine options, i believe. Absolutely. Good morning to you. A sevenyearlong backlog of aircraft they are committed to make. The news this morning has been around airbus and the launch of ption, footing newer, more Energy Efficient options onto existing models. Youre going to be speaking to the coo of airbus later on this. Our we know that air asia are very interested in this aircraft. He thought this would be a killer model and has been bugging airbus to come up with this kind of aircraft. Now aircraft now airbus has come out with it and we will see what kind of appetite there is ,r that kind of longhaul widebodied aircraft that only has two engines. That makes it popular with the lowcost crowd. The u. K. Government is expected here as well. We could see the announcement of a 1. 1 billion pound investment in various parts of the technology and aerospace arena. In particular, trying to take on cyber terrorism. That is a big theme at the moment. Some of the other big names we are talking about, you mentioned the backlog that the manufacturers have, seven years of aircraft already on their books. 11,500 planes with perhaps one trillion u. S. Dollars that they have committed to make. Where are they going to find the bandwidth to manufacture any more orders . He talked about the a330 neo. That is one of the headlines. Aside from the drive to conserve energy efficiency, there is a concern about overcapacity. Es particular on roots rout were some of the middle eastern carriers are making headways. You can see behind me a terror ways eight Qatar Airways dreamliner. It is the move to bring some of the transatlantic routes as well. All of that has led to concerns about capacity. Profit warnings recently put that on the agenda. Some orders possibly from leasing companies. That could be a big theme, geopolitics adding an extra attention to the backdrop. F35 was supposed to make its national debut. It has been plagued by problems. Is it going to arrive . What do you think . There is a possibility that it might still arrive. It is not going to be displaying today. So there is going to be disappointment on the point on the parts of Lockheed Martin and the other manufacturer, but the organizers will also the disappointed. This is a fifthgeneration advanced aircraft, agile and supersonic. A short takeoff, vertical landing. It can go straight up and straight down again on takeoff and landing. It would have been an impressive sight to see. Enthusiasts will be disappointed if it does not materialize. There was a fire in florida and that means the whole test fleet had to be grounded and they are waiting for the necessary clearance to get that into the skies again. Roger. A huge roger a huge project. Partnering with the u. S. To make this particular fighter jet and all of those countries will be buying this aircraft, as well israel, japan, they korea when materialize. This project is very over budget, it is very late. It was conceived 20 years ago or so. It is taking a very long time to get off the ground. This concern about the safety and a fire that took place in june is the latest in a catalog of bad headlines. But there is still hope that we might still spot one later on. You down as a plane spotter, but i am seeing a whole new side to you now. Enjoy the next couple of days. Just a reminder, later in this hour, we will speak with the airbus coo, john leahy. We will also be live with the ceo of boeing. Lets talk a little bit about pharma. Shire shares are gaining after the company said it is willing to recommend and offer. Scheier had refused several bids. Caroline hyde joins us now. Time is be that this lucky . Looks like it could be. Up 35 from their initial bid for this company. First of all, they offered 39 pounds. Today, we understand they are. 20. For 53 that values them at more than 31 billion pounds. A lot of money being thrown at this. Why . It is about the Corporate Tax rate, being able to ship your address to the united kingdom. Inrently, scheier is based ireland for tax purposes. Its central headquarters are generally in the u. K. More politically palatable to move to the united kingdom. Bbvie gets to reduce its Corporate Tax rate. That is probably why they do not want to come up quite so much. And they are getting their hands on prize the drugs within the scheier family. Shire family. But the clock is ticking on the deal. Is verye moment, abbvie dependent on one drug for rheumatoid arthritis. Almost half of their sales come from that. Shire is about rare diseases, adhd. You are getting diversification. You are also managing to put some of the money you have a broad to work rather than bringing it home to the United States. Bbvie wants to spend it wisely. It thinks shire is a wise way. It has until friday. That is when u. S. Regulation would kick in. If you do not get the deal done by friday, you have got to cool yourself down for six months before you can come back. That is our regulation in the u. K. Tight timeline. Analysts think this is basically a done deal. Scheier is recommending shire is recommending this deal, at last. Investors have been on the case for them to talk about this. And that in new york on the weekend and it looks like a deal is being struck. Caroline hyde on the shire deal. Turns to gotkes gold gold for germany. How big a boost will the germans win . We will discuss that after the break. Those are the scenes. It was a long road to victory for germany in the world cup read for the world in the world cup. The football brands do the best job of winning over the masses . Pratt. Discuss is rupert great to have you with me this morning. We were just chatting about the Global Brands trying to patch themselves to this tournament. Bothusly, adidas was on sides of the pitch last night. They could not lose last night. What does a world cup victory mean to someone like adidas . Particular, itin is a competition on and off the pitch. So you have the competing nations competing for the world cup trophy. And then you have the official and unofficial sponsors competing for shared voice and engagement with fans throughout the tournament. We have seen that a lot through social media. They are talking about twitter moments and facebook moment. The whole engagement. Talk to me about how brands have used social media within this world cup. A great example for me is adidas versus nike. You have adidas, the official sponsor, against nike, the unofficial sponsor, if you would like. Each with endorsements all over the world. Forball is a huge haul their companies. For me, adidas won the world cup this year. What did they do that was so different . They were creative, they took risks, there came than their campaign was but it was very socialmedia focused. Risky, it was creative, but it cut through. , it was less risky. Given the number of sponsors that played it safe this year, adidas was naturally the standout. There is mcdonalds, Johnson Johnson, sony, many brands. How do they latch onto a german victory . What does a german victory mean for Johnson Johnson versus an argentinian victory . First, you have the overall mobile exposure. Hat is a win then you go into a market specific benefit side. They win for germany would be very good for those brands. The tv audience would have been much bigger in those competing nations. Again, argentina is an economy on the turn. The interesting thing that i have seen from this world cup has been how the Global Brands led mixed and matched their pitch side branding and made a very specific to the country at play. You are talking about the electronic display. Technology before ame in, if your brand was not in croatia or italy, that was a waste of exposure. What the companies have done is say two specific countries are playing, they have brands that are specific to those markets. The winning goal in the extra the, etc. , messi wins golden boot. Some said he did not deserve it. Gotke went from on the bench to iconic hero. An agency about how would look for the best longterm Value Proposition for those brands. Because they are brands now in their own right. Absolutely. Sponsorships are about longevity. Gotke is a global brand overnight and there will be people clamoring for his endorsement. Should he hold back . Should he be a temptress in terms of my brand is sacred or should he just grabbed it all . You can become over commercialized. Quite often, less is more. Who has done it best . I think messi has got it very well. He is a tried and tested performer. Ronaldo, ronaldo has endorsements coming out of his ears. Quite literally. That is who he is. Messi get it done quietly on the pitch. Do we get turned off on oversaturation on these demigodlike men and women . There can be. Mean, am i going to spend the rest of my life in a gym trying to get a body like that . Potentiallyly you will be trying. And your football skills will improve immeasurably. That is what people will be paying for. Kids out there will be wanting is wearing. Gotke they want to smell like him and they want to have a haircut like him because they believe it will make them play like gotke. Does beckham fade slightly . Was it an accident that his kids were supporting argentina . I do not know. Maybe they make their own decisions. Given that he was out of the , he is a by argentina global brand and he has managed. We are going to have to leave it there. Forould talk sponsorship the rest of this show. Thank you so much for coming in this morning. , ready forme takeoff. Airbus unveils two highly anticipated new jets. We are live with its chief operating officer and the ceo of the rival, boeing. All of that in the pulse. Welcome back to the pulse. Time now for an update on the markets. Happy monday. Look at european equities this monday morning. The ftse 100 up by. 8 . Stocks are up across the board. Aredax, i imagine there some sore heads in frankfurt this morning after the world cup win. Euphoria. 9 . Certainly some happy boys on the trading floor. Big news on the ftse 100 has got to be shire, up by 2. 6 . Are abbvie and shire getting close to a deal . Shire said it would back a takeover. Abbvie could bring their tax rate down from 22 to around 13 . You can see why that deal has such a big price tag. Elsewhere, we talk about portugal anymore . It feels like yesterdays news. Everybody is still talking about what it could mean for the wider eurozone. Asset check throughout the year on eurozone bank. The euro keeps pushing higher. Big news this week could come on the other side of the trade, the dollar. Janet yellen, semiannual testimony to congress. She talks tomorrow and wednesday. That is the big market focus this week. Thank you for that roundup. Coming up, taking to the sky. We are live with the two giants of the aviation industry. First up, we are live with the airbus coo, john leahy. Later in the hour, it is boeings ceo, jim mcinerney. Welcome back to the pulse. I am mannus cranny. These are the bloomberg headlines. Fear inaghi addresses parliament for the First Time Since elections in may. He couldnt discuss the totralbanks key program stimulate the economy. A survey shows economist forecast the measures will give banks more than 7 billion of money. Are callingermany for renewed talks on ukraine. A meeting in rio de janeiro, president Vladimir Putin and Angela Merkel said today should have a ceasefire in the ukraine. Clashes between true between troops and prorussian rebels have increased. Citigroup and the u. S. A 7rities will announce billion agreement today to end a securities. It may be a payment of 4 billion to the Justice Department. More on thatbit story which has been going on for quite some time is hans nichols. Ofres been a great deal discourse. They dropped off negotiations begin in june. When it was 6 billion apart. The Justice Department wanted 10 offered 4. Up it is a big story but only a chapter. Chapter. Citi we still have bank of america. Those negotiations appeared to be stalled. Remarkable for its size. 4 billion to the department of justice, less than to the fdic. This all goes back. Precrisis,es back to morgan securities, bonding and not marketing them and actually lying. The volume of these sold ores that citi repackage is lower than some of their competitors. The reason why the Justice Department is going against them harshly its because they had emails and things that wascated they knew it crummy, lousy packages. And yet today sold them. All of the slicing and dicing. And bank of america, as you be next. Ld potentially the numbers in the story is adding up to 17 billion. It shows the quantum of what we are dealing with. These are huge fines. A massive fines. Going back will we talked about bnp paribas what outrages and perhaps the u. S. Is cracking down on a french bank. It is the department of justice that feel like they have to go after these banks. They really never had any before and now they are more intense and forceful and coming up with bigger numbers. 12 billion, 70 billion additionally for bank of america. 17 billion dollars additionally for bank of america. It will be easy if we said they had a formula. They had to this level of culpable ability. And that you can solve for x. Complicated. Re there will be a great book that comes out of this. I wanted from the Justice Department sid. Who was the most culpable . Wouldnt you love to be a fly on the wall . Its a more interesting job in the world. And hop on something else. We have citi numbers later. A position go through that, markets will be asking where it will hit in the numbers. It is whether the fine is priced into the share price. Nks for that. It is time for hot shots. A barbecue. He constructed a golf shot that combined timing, precision, and hotdogs. He served the snap with a perfect hole in one swing. A bull run came to chicago this weekend. A race track in illinois. 4000 people register for the festival. A chance to run alongside 18 bulls. With a foodebrated fight. Comes to illinois. Who would have thought it. Man and machine went head to ehahead. Aniacs. They rom battle it out in the first stage of the challenge. Sharing,s, cars, ride an app was a schedule in new york but was held off when the company faced major regulation roadblocks. The authorities soon at the last minute. While a lift did not get its first bump into new york as they hoped. What does it all mean for the left lift . Is trading in the heels of San Francisco for the cobblestone streets of brooklyn. Doorually requires a 4 car and they allowed me to drive in style. Why do you pick a brooklyn and queens rather than a manhattan . The need for transportation is a greater. The outer boroughs a getting to it and 95 of taxis. [indiscernible] people need affordable transportation. Received 250 million in funding and it is burning through some of that cash offering the first two weeks of rides for free. What we are building is a scale of building out an international highway. An international railroad. , it is a matter of opportunity. Lyft said it is a social experiment rather than a limousine and want you to drive in front. What is the deal with the system bump . Just fist ice. Is a way to break the at first i did not get it and i started meeting people and a got a smile from the start and break the ice and have fun. If you want to be quiet and sit in the back, you are welcome to do that. They hold to disrupt and they aim to disrupt the taxi service. Cheaper than uber. The passenger decides if he wants to pay more or less. Crazy. The new york service must originate in queens or brooklyn. People can say i want to ride into manhattan and lyft will take them there . Exactly. They are allowed to leave . We started it one area, santa monica and expanded the Coverage Area and we plan to do the same thing with new york with queens and brooklyn that need it the most and access to the affordable transportation. Theres a lot of culture in the outer borough rose and interesting people. And so well get them to gather, we think it will be very well. Wait to be a shakeup and the london capital. We have a few new entrants. You choose what you pay on a cab in london. That is unique. Time for world cup news. Didnt notbody notice, germany beat argentina, in case somebody did not notice, germany beat argentina, 1nil. 113thal came in the minute. Germany last world cup win was 1990. No irony, it wasnt his argentina. It was the first for the unified company. It was against argentina. Industry washe down 50 . Dataes avoided setting the during the world cup because it was unpredictable if you guessed guests would have divided loyalties. World copper records. World cup records. It is the highest scoring average since 1998. Foranys set the record career goals with 16. Germany semifinal match against brazil, who would ever forget. It broke records not only for goals scored but most tweeted sport event for some 36 million tweets. Ars andshift ge focus on food. Let uss on trent focus on trends. Of myave been cooking all life and have always loved it. Food . T is the next trendy , we will go buy it right now. Just a different texture and flavor. Look at the broccoli, just the stem. You can go back. I think the broccoli will be less for a while. K cheek. Port 45 ounces. We will see more restaurants in brooklyn and queens. People will say we do not have to pay the highest rent in the community. Fish liver was always thrown away. You go to japanese restaurants and it is the most respected items. The japanese showed us how to value. We go to restaurant and it cost you 22 bucks a piece. Part of being a chef is defining your menu, and also a tone of fun and upbeat. People werent really hard today and they want to enjoy it people worked really hard today and when they go to the restaurant, they wanted to enjoy it. The price of pork bellies, that is protein. Not for me. China to silicon valley. A look at the green developments transforming one of the countrys poorest provinces. Aviation executives from all of the world have gather at the air show. Guy johnson is there with a special guest. Good morning. And welcome to the air show. Well great aghast we have lined upast guests a here is one of them. John mcnerney. The cycle the sense is peaking . It gets a little tougher. You have airlines in europe and asia talking. I think, we are not seeing any signs of it yet in our orders. The cancellations are at or below average. And the demand right now is driven by a big replacement cycle. People are buying newer airplanes before they have to retire your current ones because the economics are so much better. That is why we are growing at a multiple of the gdp right now and i do not see it stopping. You do not see any slowdown at this point . We are not seeing it. I think we are halfway through the year and we are already slightly above what we shipped last year. Above again will be this year. It is going pretty well. It is all replacement airplanes, new technology. Newer, more efficient airplanes. Thats why you get a multiple on the gdp. Replacement. Can you build airplanes to . Ound up ramp up take the process into another level . That is a fair question. We have been successful. Getting the 737. We have plans to go higher as you know. A ramp is going well. Our supplant our supply chain is a keeping up. Longterm visibility and they have time to add just and and invest. It is going well. The second question together, no conversation happening internally. Maybe we will be delivering too many planes and not push the ramp. Laggingr minds, we are demand. That is the way this game is usually played. You keep a backlog yet satisfy customers as soon as you can without getting over the front of your skis. We feel we are lagging demand a little bit. A change, if there is or geopolitical event or something that changes the trajectory, will have to adjust. Lets do well and moment. Dwell a moment. They are revamping. They have done incredibly well. Si t is there concern there thed be margins erode on 787 . The narrowbody situation, we did in the same thing. On the wide body, we have a new suite of airplanes on new technology in every way. They are just reengineering in comparison. These are technological and performance disadvantage. Is up to them. But i think with todays fuel prices, the performance we have ,n that airplane, the new 777 you can make up for a lot of flight differences in a hurry with that kind of performance and these planes have. We are highly confident even if the prices morcha more aggressive than debt is much more aggressively than ours, it morebe very its a much aggressive than ours, it will be very good. Side, its ail little bit tougher. Rolling on. [indiscernible] taking off. To sense you have to use m a replace . We have selectively done some m a, sort of down in the mid tier with capabilities to support. It is true the defense market for us will be slackish. Andre not going to panic spending big premiums on property just to replace certain for example. 217s we have the tanker coming up which is a 3040 year program. The new bomber. A uav. New trainer. We have opportunities and we are wellpositioned. That will beh flying at largely we will be replacing an organic row the things that are rolling off. Will there be a additional on top of that . Programs,the three you are partnering up. Is it a new model . We partner up when it significantly increases our chances to win. With saab and the Lockheed Martin and we are doing that because we have a better machine would we do. I think that is the reason we are doing that rather than engineering. Do think it will be more lax on [indiscernible] i have seen the messages come out. Do you think . I do not know. I do not know. You would have to ask them. Theres always a between and having a enough competition. The best technology. Them and between having enough competition. They have persistently come down on the side of, you guys keep competing. That is better for the american a fighter. We have seen in the past, strikes have a direct impact on your business. Theres another one in europe. Especially in berlin. Do you have any sense if it will have a meaningful impact on your business or the u. S. Defensive business . Are you look at the International Model . I am aware of the geopolitical things. They are revealed. American companies and companies from other countries have gotten caught in the crossfire. There are the kinds of actions of reasons and i am hopeful that will not happen and we are working with our government as we always do so we will keep plugging away and try not to get caught in the crossfire. About talk [indiscernible] talking about your concern. What it will have . All of the noise [laughter] all of the technology. Your do you have any sense can give us how you quantify . How you are and where you are positioned . I am optimistic it will be redone. When you cut through the rhetoric and how it will happen. A very contentious issue and theres a chance it will not. It will be out of our own will. It would have a negative impact if not only boeing but the thousands of other United States companies that support boeing and caterpillar and Small Companies in their right, it will put additional credit pressure. It is unilateral disarmament. The other competitors we compete against what continue to have support. Of course as would the europeans. Right now, it is bound together in a agreement. All pursuing the same kind of levels of support risk, itand taking the will be a shame and a tragedy if the United States pull out. Her bad encourage behavior everywhere and disadvantage us and a lot of other u. S. Companies. To seefrench would like the euro goal down. Realistically, do you think it will happen and the fed . I do not know. In our industry, i think technology overwhelms other kind of financial considerations including currency. If i acted on the predations i had five years ago of where currency would be, i would not be sit here in front of you and will be a lot poorer man. I like to deal with what i have got a do the best i can. Quickly jim jim mcnerney, thank you. The ceo of boeing. Great interview. And a very bullish of them jim mcnerney. The fed is selected show slackish. Great interview. Days. Ge for the next 2 for those of you listening on bloomberg radio, we know you are there. Secondh hour of the pulse is coming up. Martinve from lockheed and an exclusive interview with the former governor of the bank of argentina. He joins me to talk post football and negotiations. And raisesrejoices the golden trophy for a fourth time after a stunning world cup win in extra time. Ready to pick up . New jets. Eils 2 take over on the table. Aire said is willing to back 31 billion offer from abbvie. A very good morning
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