also coming up, we will get reports that the drink maker could soon be a target of a takeover bid. >> let's talk about the big story of the day. it is the united states read it is the first friday of the month. the markets and the fed are watching for signs that the economy is recovering. >> we will hear from nouriel roubini and what he has to say on u.s. jobs shortly. he has been speaking to us from in anores of lake cuomo exclusive interview. but first -- >> manus cranny joins us to look ahead to the data. the weather has been a big factor. over here, we have been blaming easter. over there, we have been blaming the weather. >> a strong number is priced in. the 10 most accurate forecasters that we survey at bloomberg say 215,00. the adp number yesterday, services above the level. people are buying cars. how much of this good news is already priced in to the markets? it depends what evidence you want to look at. bmw, toys r us a bit slow to hire people. financial services under pressure. it is recovering. it is nice. it is good news. to that extent, fantastic. we are on the way, during the great recession, the u.s. jobs number retracted by about 9 billion people. we have recovered all of that bar about 66,000. can it be delivered today? yellen uses this dashboard of data. this is one piece of the puzzle. >> the data is very important because there are five elements read the unemployment rate, they are so passé. unemploymentnew rate. there is a great debate amongst the economic community. -- ishe dashboard confirm it a reliable evidence measure of how much slack there is in the markets? looking through these numbers, two thirds of what janet yellen , twoer board look at thirds of the dashboard is worse than when the recession began. big pieces,o payrolls growth and layoffs, which are back at precrisis levels. today, it is about the long-term unemployed. that is what the market will focus on. janet yellen using language like , it is aboutflak on picking your way that. rise six months after we finish tapering. she will never make that mistake again, will she? >> maybe it was intentional. very much indeed. we have already indicated it is jobs day. withouriel roubini will be us. he has given us an exclusive. we will get his take on what is happening in the united states and the story in europe. >> it is time for another bloomberg exclusive. we have been speaking to u.s. defense secretary chuck hagel about the crisis in ukraine. either cook asked him if he thinks russia will back down. >> did the obama administration misjudge vladimir putin and the challenge posed by russia going forward? >> i do not think anyone misjudged vladimir putin. let's go back to 2008, when president putin invaded georgia. this is not a particularly new approach that he is taking. what you always have to do is you have to always be prepared for any contingencies, any possibilities. i do not think it is a matter of misjudging putin. what is and tensions were, why he did what he did, we still do not understand. but the point of responsible government is to have strong options and capabilities and be prepared for any contingencies. it is a dangerous world out there. it is a very unpredictable world. >> you are having to negotiate that, an environment of dwindling defense dollars, a tough budget. is the situation in ukraine, has the crisis led you to reassess the budget you have just submitted? >> let's not forget, the number that i presented in the budget, which was not my number, that was a number that was already agreed to by congress in a bipartisan budget agreement in december. budget --6 million the 496 billion dollar budget, we have already presented a bigger number. president obama's budget was a bigger number. we have asked for $116 billion more than what the numbers are right now based on sequestration in the next two years. for this year, a $26 billion increase in the budget as well. president obama made that very clear. as i have. >> does this crisis, in some strange way, make your case for you? helpthe ukraine crisis chuck hagel get the kind of budget he wants? >> it is not just one episode. but what is it going to take to fulfill the missions and the obligations of our defense department budget in order to of thethe security united states of america? we laid that out in our testimony. we have weeks of continued testimony. we have senior members today on capitol hill explaining to congress what we need in the way of resources in order to fulfill those missions and ensure the united states, the people of the united states, that we can do the job that they want us to do to assure their security. we believe it will take increased resources. we have lay that out and given the numbers. we have given the rationale. >> we have to take a step back. in the last three months, the u.s. negotiating with russia. europe being completely cut out, it seems. brings us back about 20 or 30 years. >> certainly has the feeling of the cold war. with the ukrainian story, it is the last day to register in the presidential elections set for may 25. >> ryan chilcote joins us for a breakdown of those in the running. give us an overview. >> there are 12 candidates in all, but it is really a two horse race. you have the country's chocolate billionaire and you have yulia tymoshenko, a fierce prez -- a fierce opponent of viktor yanukovych. she is better known in the west because she has that princess leia hairstyle. has a lot of credibility in ukraine for her opposition. a lot of people think she was jailed on trumped up charges. the specific charge she was convicted of was harming ukraine's national interest by agreeing to a gas price that was not in the interest of the country. people say that was a politically-motivated charge. ,e are going to take a look this hour, at the willy wonka of the ukraine. who is this guy? electorateof the already behind him. klitschko, the heavyweight boxer, he is behind him and has pulled out of the race. they're looking at a severe recession even with the imf money in ukraine. he has also got to deal with russia. stay with us for that chat. >> willy wonka into the population. -- a business update. itsdonald's is suspending operations at three restaurants in the crimean peninsula. they say they are having technical problems. wonder, talking about sanctions, if this has something to do with that. of course, crimea is very disputed territory. the ukrainians obviously disagree. they are saying that their employees will not be moving to any of the other 70 restaurants in ukraine. so mcdonald's in the mix. ,lso, miley cyrus extraordinary, she is somehow in danger of running afoul of these sanctions. she was supposed to give a gig in helsinki later this year. the problem is that the stadium is owned by three russian billionaires with close associations with president putin who are on the sanctions list. there is a question whether the promoter of the concert can pay the venue owner for the venue because they are lack listed. what she ask miley thinks. justin timberlake is supposed to play later in the year. we will see. it is really complex. tough to do business right now. >> a lot of the banks and companies have to form a team. >> yeah. >> it is really simple. we have been talking about this the last few days. bank russia is on the list. if they own 50%, that entity cannot touch them. >> we will talk more about miley cyrus next. >> i will bring my wrecking ball. >> what else is on our radar? credit suisse with a new cfo. has also been named as an executive director at the bank. >> tesco's finance director may leave as early as next week. he has been with the company for the past 15 years. biggest britain's retailer. >> nigeria may overtake south africa as the continents biggest economy when new data is published this week. the revision may boost the size of nigeria's economy by as much as 60%. jim o'neill spoke to us about the nation's growing importance. >> i have been traveling to africa white a lot. i realize i have been in nigeria more than any other part of the world other than the u.s. the past 12 months. i do not know if that is a leading or lagging indicator or what. >> that was jim o'neill speaking to us from the shores of lake cuomo. willeaking of which, we head back there in a few minutes time for a bloomberg exclusive. you are looking at live pictures. it does look a little bit misty. i am sure it is not too bad. >> there you go. you will hear from the real ruby need. find out -- from no real you -- nouriel roubini. ♪ >> you are looking at live pictures coming to you from the shores of lake cuomo. of aorkshop is something honeypot for economists and business leaders as they travel to the italian lake erie -- the italian lake. francine and i were reminiscing about when we were fortunate enough to attend this event. >> it would probably be best to get us out there. >> we would not want to miss it. nouriel roubini, let's take a listen at what he had to say about the ecb and the eurozone. the eurozone is one or two shots away from deflation. cuts, a negative deposit rate, credit easing. it will be the most effective to try to weaken the value of the euro over relative to what it should be. i do not think that one occasion easing will happen anytime -- that quantitative easing will happen anytime soon. maybe by the end of the year. has done it. the boj has done it. central bank who has not done it is the ecb. too little, too late probably. did not get any action from the ecb. they did talk about qe. what kind of qe do you see them deploying? i before they get to qe, think they will go to a couple of other steps. cutting the rate, a negative deposit rate. is insufficient to weaken the euro, eventually they might get to qe. they would buy a weighted average of the bonds of all the members of the eurozone and the weight will be based on the contribution of each country to the ecb capital. ogram,d say that the qe pr to be effective, would be close to one trillion euros over 12 months. ,t would have to be large otherwise the deflationary pressure will be too modest. they act in about a month, it will be too little or in week -- or are we in a japan-like situation? >> we are not in a japan situation right now. we might be one or two shots away from outright deflation. late.ore, too little, too i would have done qe already now. thelittle in terms of what ecb is doing in terms of monetary policy. doom talking to francine earlier, a bit down on what is happening in europe. andnd we talked about china the fact that if china slows down, it may have an impact on europe. we spoke to him about the u.s. and asked him what he is respect -- expecting from the jobs report today. >> the month-to-month jobs data can be volatile. i do not have an exact forecast for today. improvement is obvious. it is also the case that the unemployment rate is high. including partially-employed workers. the participation rate is due to cyclical factors. there will be plenty of slack in the labor markets. wages are going barely above productivity. costs are barely rising. that implies that inflation is going to remain quite low. >> you mentioned the weather. how much can we actually blame on the winter weather? well, there was an impact on the soft economy in the first quarter. tieback for some excessive inventory buildup in the second half of the year. certainly, there are some elements of the u.s. economy gas suggest -- the oil and revolution, we will get some improvement in the labor market. there is also the advanced economy. gradually, into the second half of the year, the u.s. economy will be improving. i am not among those that believe growth in the u.s. will be 3%. i do not see the data for that type of a strong recovery. >> when do you expect rates to rise in the u.s.? do expect that the fed will finish tapering around october. janet yellen said six months until the rates are rising. that was not a ceiling. that was a floor. i expected will be more than six months. i expect around june or july of next year. it really does not matter. the most important thing is, once they start raising rates, their projections suggest that it will not be more than 1% by and it will be6, six years before they normalize it all the way to 4%. that is a very slow pace. it will take them 3.5 years to go from 0% to 4%. last time around, it took them two years to go from 1% to 5.25%. either way, the fed is going to exit slowly. >> the anticipation of rate increases will help the economy because we will see more capital, expenditure spending, and m&a rising ahead of it. if the economy is recovering, that will lead to some improvement in capital spending. that has been sluggish from the figures. as the economy is recovering, the fed will gradually normalize rates. there is not the expectation of a rise in rates. the recovery of the economy uses the fed to gradually exit, very accommodating monetary policy. >> nouriel roubini there. everything seems smooth. watch out for china. >> he says next month is when you will see a real pop in this number coming through from the united states. later, we will go back to the shores of lake cuomo. we will be joined by the chairman of j.p. morgan chase. >> also coming up, the american invasion. is taking on europe's fashion houses and it is winning. details ahead. ♪ >> welcome back. let's get you to our hotshots. isthe grand prix, ferrari gearing up for the challenge. this formula team has gone 16 races without a win, the worst drought since 1995. hurt his injured knee. now he is rated as the best backwards bowler in the world. look at that. impressive. >> moving on, one of saturn's moons may contain an underground ocean according to a master investigation. suggest a low density core and the ocean is sandwiched in between. >> now let's check on the markets. manus cranny is that the touchscreen with the latest. runquities having a nice into the jobs day. german manufacturer fact ready -- factory orders coming in three times what is estimated. focus.s only one france says they will see growth by june. sometimes you need a bit of structural change before you can invoke growth. a couple of companies we are watching. 4.8%.p they could be in the specter of m&a. there is a big family holding. we will see how that plays out. spencer, goldman sachs says to sell. they have not got the perfect buildings and they will have to spend some money. easy jet up three percent. carrying more passengers, bums on seats are nice and full. fx, let's have a look at that. the euro is down. mario draghi talked about unanimity in terms of extra measures or unconventional measures. he talkedit later, about the slack within the european economy. you saw the dramatic move in the euro-dollar. back to you. >> thank you very much. in london.tle smoggy it has been foggy on lake cuomo. ♪ . . >> welcome back to "the pulse" live from bloomberg's european headquarters in london. >> these are the bloomberg top headlines. said stationing a permanent u.s. army brigade in europe is among the options to beef up security on the continent. this as russian troops remain gathered along ukraine's border. he spoke to bloomberg exclusively. >> there are troops that are moving around. we know that. no indication of any significant movement of those large troop deployments along the border. >> hillary clinton and christine lagarde took part in a joint interview in new york. they were speaking at the women in the world conference. both are regarded as potential presidential candidates. >> madame secretary, is there any other job you would be interested in? [laughter] [applause] comptroller of the state of illinois or something. you know what i mean. >> not right now. between russia and ukraine heated up as russia said it detained 25 ukrainian citizens suspected of plotting terrorist attacks. russia also raised gas prices for ukraine for the second time. in ukraine it is the last day to register as a candidate for the presidential elections set for may 24. >> let's take a look at that last story and a little bit more depth. we are talking about a billionaire chocolate baron who is the front runner in ukraine's presidential elections. >> we are joined by ryan chilcote and robert franco. let's briefly start with you, ryan. >> i interviewed him in kiev, in the parliament. we talked about gas prices. he is already a political force. if the election was to happen today -- >> you haven't mentioned his name yet. >> petro poroshenko. he would get 46% of the vote spurs is yulia tymoshenko who looks like she would only have about 11% of the vote. he is the clear front runner. he has been the economy minister, the foreign minister. he is very successful in business as the chocolate minister of ukraine. ukrainians think that he would be good. out of the 12 candidates, the best guy at the moment. >> rob, this guy has been a front runner in politics for quite a while. significantly, he was also one of the few oligarchs that stood up as the protest kicked off. talk to us about his history and how he has made his money and where he fits into your billionaires league. >> he is pretty low on the billionaires ranking. he is in the $12 billion category. his company is in distress now. russia has seized a number of assets. the company is somewhere between $2 billion and $3 billion. you have to discount a lot before -- because of the risk he is tasting now. he is every strategic thinker. his business is very much geared towards the west. time thatven through he knows how to align himself with the factors that are in power. there is no reason to suggest he is not doing that now. >> two of his factories, one in crimea and one outside of moscow -- he doesn't just make chocolate for ukraine but really for the entire former soviet union. two of his factories have been seized by the russians. what these it is in russians consider russia and the other police say they are investigating criminal activity. this crisis has affected him and his business. >> on the business, is it chocolates that get sold internationally? >> it is a confectionery company. i don't know exactly what its geographic distribution is. it does have an operation in germany, has offices in new york and canada. >> they make an extraordinary sucker that they sell within ukraine. i have been to the store. it is somewhat telling. i don't want to plug them here. he made a smart promotion for his company there with that video. the store is really shiny, it has got hip music playing. everybody is smiling. it is different from the feeling you get when you walk around kiev nowadays. economic stagnation is probably the nicest thing you could call the state of the economy. >> how will he play with russia? he talks about the pragmatism. given the fact that he was so establishment, how is he going to play the russian relationship? >> what i would say there is that certainly in terms of the rhetoric, very anti-russian, there should be shanked and against russia, -- there should be sanctions against russia, you would think there would be even more of a crisis in russian-ukrainian relations. i think that even yulia shema tango -- tymoshenko seems to be much more pragmatic than people give them credit for. president putin is probably more pragmatic than people think. that is a bit indicative of someone who knows how to be realistic in situations. when i asked about gas prices, he pointed out that if the russians shoot gas prices through the roof, that means we have to be more energy-efficient. a wayght that was kind of of looking at that. >> ryan chilcote and rob lafranco. >> let's move on. two years ago, michael coors was little known in europe. with stores popping up in high-profile locations, exceeding market share from its bigger european rivals. here with more is caroline hyde. what sort of growth are we talking about? >> 60% increase in sales in the last quarter. doubled up pace of burberry and far ahead of its rivals in the luxury industry. europe is taking a bigger portion of michael kors's sales. now it is about 1/10 of all sales. two years ago it was just 5%. it is getting a bigger piece of the pie. this is from a low base. if you look at compared to lvmh, it only has sales about 1/10 of lvmh. -- the chief executive is saying, i am taking market share from these giants. it is making him confident. the chief executive is now planning on unrolling 200 stores for europe. before he only aimed at 100 stores. >> why the growth? what makes the label so attractive compared to some of the older fashion houses here in europe? >> what michael kors is managing to do is give luxury but with affordability. they are managing to walk that fine line rather well. they are having a very upscale catwalk shows, very high-end addresses, about 900 pounds, but with that you have the much more affordable watches and accessories. older,taken out of the bigger lines of louis vuitton gucci, taken a line out of their books. watches cost about 200 pounds. he is filling that gap that has been left by the higher-end and going for the aspirational buyer. ateuropeans, you look burberry or someone like that, they wanted to go upscale to make more money. or lvmh?loser to zara >> it is right in the middle. that is what is making it so traffic -- so attractive. shoppers have become savvier. also there is that tactic they are deploying apart from the likes of barbary, we can't. those are going for a much higher price point. they want to claim back the exclusivity that many chinese buyers feel these names have lost. they are going for 1000, 2000 euro bags. michael kors is going for 300 euro bags are it still leather, still snakeskin but managing to make them at a cheaper price point. our alarm bells going to ring? remember back in the late 1990's, early 2000's, burberry was beset with people wearing the fake page check. it became too popular for its own good. we are seeing similar things happen to gucci and louis vuitton. they have to rein back. >> thank you very much indeed. caroline hyde on the latest in the luxury sector. let's bring you some more news from mercedes. >> we had some breaking news in the last couple of minutes. it is close to the highest monthly sales ever with a 13% gain in march. >> let's turn our attention now to a bit of m&a. shopping of a different kind. the bidding war for sfr could be coming to an end. >> there than the is holding a board meeting -- vivendi is holding a board meeting today. matt campbell joins us with the latest. the facterestimate that this may not be over. >> the likeliest outcome is that vivendi does choose to proceed with an offer from the cable holding company controlled by patrick draghi, the french billionaire. they have entered exclusive talks but this competing bid from bouygues has been trying to derail this deal. will vivendi allow itself to get the route and say, we are going to either open back up or enter negotiations with bouygues or will they proceed? that seems to be the likeliest option but we don't know yet. y, the latest name to be talked about. >> remy cointreau is being discussed as a target. what seems to be driving this is remy has has a bit of a stumble. cognac, itke fancy is quite a big deal. remy has had a bit of a wobble. what is being speculated about is that brown-forman are going to try to take advantage of that. there is a controlling family who will have a lot to say. >> we will watch out for vivendi and remy cointreau today. thank you so much, matt campbell. >> coming up, we will head back to the shores of lake,. you will hear from the chairman of j.p. morgan chase. we will be back soon. ♪ >> all day we have been live on the shores of lake como. we have been talking to some of the biggest pains in economics. we heard from a former member of the executive board of the ecb. this is what he had to say about what that central-bank should do next. inflation. inflation is really negative. we are not seeing that and probably we won't see that. goodow inflation is not because the leveraging process is more complicated. combatd to come back -- low inflation. price stability is around 2%. requires some further action to avoid that the inflation rate stays too low compared to 2%. >> what is your take on what we heard from the ecb yesterday, lorenzo? is qe really going to go ahead? what kind of qe may we see in europe? i think these are the right questions. yesterday, mario draghi prepare the markets for qe to happen. he needs some time to create the full consensus in the board, and the council. it may take maybe another meeting or two. a decision by consensus is much more effective on the market. his thoughts, probably it is worth the wait to have full consensus to be sure that the data are showing the need for qe. the markets are prepared. i think we may have had a small glitch with that piece of tape. we don't use tape anymore of course. we are much more digitally focused. nevertheless, that was lorenzo smaghi. >> let's get some more reaction. marco, give me a sense of what you made of mario draghi's comment yesterday. the investors were a little disappointed that maybe this was the right time to act. the other saying, this is buried significant. >> it is significant. we expect strong verbal intervention and no action. we got what we expected. we were disappointed back in february-march. going back to what he said about qe, the key sentence of all that he extracted from the government council, unanimous commitment to act. if we got too low inflation. that is important. he didn't tell us exactly what they could do. he gave us a long list. >> the sense i got from listening to lorenzo was, he thinks that qe is now not only on the table but increasingly likely and it will take two or three meetings to get there but that is where we are going. >> we got a bit of a framework to think about when and if they are going to do qe. that is inflation projection. >> we need another projection. >> what i think is we don't have to look only at the center projection. you have bands around this projection. if those bands are below the target, it will be difficult for hawks to say that there is a statistical error in the forecast. that, then they will act. there is a bit of confusion about qe. it could be government bonds, private assets. this is more likely than the former. this isy was saying, priced in on the markets. mario draghi gave a list of what he could do to shore up qe back in davos and still hasn't done anything. when are we going to see some solid action? >> there is a credibility issue. if you keep promising something, you may lose credibility. hand, they told us it was there and never used it. probably they are hoping for that in terms of pricing the market before we say that some people were disappointed and some people were not disappointed. so it cannot be fully priced in. however expectations are increasing. they need to deliver if inflation disappoints. >> so we get a 250 read on tables today. we get 300 next month. is that going to get draghi out of jail? that is not going to change what the ecb does. the real point, if we see the fed change of it there forward guidance, telling us that we will get a hike in the first half of next year, maybe even before that, a few months before the meeting next year, the differential between europe and united states will increase and that could help to have a lower extreme drape pushing up inflation. that would be a big help. >> will they really though? we have been expecting a lower euro for quite some time. all right, thank you so much. still to come, we are going to head back to lake,. we are going to be joined by jacob frenkel. we will talk u.s. jobs and the threat of deflation here in europe. plus, maybe a few china concerns as well. ♪ >> good morning. welcome back. you are watching "the pulse." the factory that once belonged to oscar schindler is on the property market. the check-german industrialist who sheltered about 1200 jews there in the final months of the second world war. despite this history, it is going to be a tough sell. david tweed reports. >> a-train pulls into the town. another -- by oscar schindler, a story commemorated in the movie "schindler's list." brought 1200 jewish workers here, saving many from the knotty death camps -- nazi death camps. schindlerwas given to thanks to his ties with the secret police. originally a textile factory, the workers incarcerated inside these walls made components for germany's war machine. after the war, the communist took over czechoslovakia and this factory was nationalized. these new additions were added and it went back to making textiles. car seat covers. 2004, after the collapse of communism, the factory went bankrupt. >> the factory is now for sale. vision to mayor has a honor those who labored here. this house, where schindler loose to live with his wife will be part of the future exhibition commemorating the suffering of jews in this concentration camp during world war ii. there is only a small part of the entire factory complex, which we both like to clean up in order to restore production and create jobs for the people in this region. reviving this factory may seem like an insurmountable task but the mayor is hopeful investors will show interest. and that jewish groups may help fund the museum and keep this history from being forgotten. bloomberg, czech republic. >> incredible piece of history. we will update you when we get more news on what is going to happen to that site. >> for those listening on bloomberg radio, the first word is up next area of for our viewers, a second hour of "the pulse" is coming up. >> it is jobs day. >> we are also going back to italy live on the shores of lake como. we are talking to jacob frenkel. he was counted and pulled out at the next central-bank governor as israel. he is also the jpmorgan chase chairman. ♪ . . >> warming up. pace is expected to pick up as the harsh winter weather fades. payrolls are due at 1:30 london time. >> michael kors conquers europe. bloomberg exclusive. nuri allred been he tells us europe is one or two shocks away from -- deflation. >> a warm welcome to those waking up in the united states. i'm guy johnson. >> i'm francine lacqua. this is "the pulse," in london. >> what if we got coming up? we are going to take you to the shores of lake como. that is where we find jake frankel. you'd will not want to miss that interview with the chairman of j.p. morgan chase international. >> first, it is job day in the u.s.. they are watching for signs the economy is recovering. with cranny joins us now a look ahead to the data. some of the data going into this has been quite supportive, but they are playing catchup to the winter weather. >> a little bit of that, yeah, but the market has presumed you will get nice strong innings and the lowest unemployment rate since 2009. there are another smorgasbord of things that the fed look at. 200,000 is the consensus estimate. we at bloomberg, we rank our polls. i'm personally at 250,000. the jobless claims yesterday, they bumped a little bit higher. if you look at the past four weeks, firings are ebbing away. bmw putting money into the system. there.y some redundancy overall adp was nice. the services number jumped off a four year low. people are buying autos. we could be at the beginnings of a substantive -- a more substantial recovery. >> you talk about a smorgasbord of moments ago. let's talk about the dashboard. we're getting away from the swedes into the united states. >> the dashboard. the new vogue word for central bankers is -- >> slack. >> quickly. >> some of the things that economists love to talk about but cannot measure. >> you cannot put a parameter on it. weyou say nothing, who are to argue against you? the rest yellen and of the federal reserve, there are five elements that will help her. two are back to precrisis levels -- payroll growth and jobs. dashboard are not anywhere near pre-recession levels. she talks about slack and accommodation. a commitment is needed for some time. that is verbal intervention. that is verbal support in terms of where you are with rates. this dashboard is up for debate, and at the moment the doves are winning. it would have to be a blinder above 200,000. >> i think people are talking about next month. >> thank you. our markets editor. it is time for a bloomberg exclusive. we have spent speaking with chuck hagel about the crisis in ukraine. >> our washington correspondent peter cook asked him if he thinks russia will back down and with draw tube some the ukrainian border. >> did the obama obama administration misjudge putin and the challenge posed by russia going forward? >> i do not think anyone misjudged vladimir putin. let's go back to 2008 when president putin invaded georgia. so this is not a particularly new approach that he's taken. what you always have to do is you have to always be prepared for any contingencies, any possibilities but i do not think was a matter of misjudging putin. what his intentions were, why he did what he did we still do not understand fully, but the point of responsible governance is to have strong options and capabilities and be prepared for any contingency. it is a dangerous world out there, and a very unpredictable world. >> you are having to negotiate environment of dwindling defense dollars and top budgets. ukraine, theion in crisis there, led you to reassess the budget you just submitted? would you do things differently now? >> let's not forget the number i presented in the president's budget was not my number. not the president's number. that was a number that was already agreed to by congress in a bipartisan budget agreement in december. so the $496 billion budget -- >> you would love to have a bigger? >> we already presented a bigger number. in the budget i presented, president obama's budget was a bigger number. $116e've asked for billion more than what the numbers are right now based on sequestration for the next two years and for this year $26 billion increase in the budget as well. so president obama made that very clear, as i have. >> does this crisis in some strange way make your case for you, that these numbers need to be higher? could the ukraine crisis help chuck hagel get the kind of budget you want? >> i think the way you look at it is not just one episode, but what is it going to take to fulfill the the obligations of our defense department budget in order to assure the security of the united states of america? we have lay that out in our testimony. we have weeks of continued testimony. we have senior members today up on capitol hill explaining to the congress what we need in the way of resources in order to fulfill those missions to assure the united states, the people of the united states that we can do the job they want us to do to assure their security. so we believe it is going to take increased resources. we have lay that out. we have given the numbers and given -- >> now, saying on the ukraine. it is the last day to register if you want to run in the first round of ukraine's presidential elections. set for may 25. >> ryan chilcote joins us for a breakdown of the candidates. >> that man's name is peryshenka. he is the front runner in the two horse race. the second candidate with 11% of the polls is to mush bingo. -- tymoshenko. she is better known in the west. she's also very well known in ukraine itself for her fierce opposition to the former president. in fact, she was in jail until the very day that the last president of ukraine was ousted. her supporters, the eu says, because he was politically, basically led a politically lead trial against her. so she has got the street cred, but for some reason the voters think they need somebody else. she is only got about 11% of the vote. >> when you look at this front runners, when you look at poroshenko anything about what he could do, what do we need to know about him? what of the critical things we need to take away? >> this is a self-made man. ukraine's chocolate billionaire, hasy wonka of ukraine, who personally suffered as a result of this crisis along with ukrainians. one of his factories is in crimea. so he does not have control of that factory anymore. another factor he says outside of moscow, that one has been seized by russian police. he said he would give up his chocolate company. he does not think all the guards should be president. he was the first ukrainian billionaire relalally to throw their support behind the protesters before it became clear that they would win out. worth pointingis out is that it really is about personality. neither candidate are .articularly pro-russian a lot of it has to do with who people think would be the best leader with the notable exception, there are 12 candidates. darth vader is one of them. he is the official candidate for the internet party. he is promising to take ukraine to the dark side. >> actually, it sounds like a joke but unfortunately we have seen the video. >> i am not really sure how to follow up on that. >> ryan, tahnhank you. >> there is dark valley at a political rally. just when you think things cannot get any stranger. let's move on from the wookie. vivendi holding a board meeting today that is expected to decide the fate of the french company. >> matt, what exactly are we expecting from them today? >> darth vader is not involved. what we are expecting is some kind of word from vivendi about which way is going to go in this bidding war. two suitors for its mobile phone unit. bidders willing to pay big bucks. vivdenendi is expected to go wih numerica. that would be certainly the thing that people are anticipating. there could be a twist which is vivendi saying, we rather like this punchy offer from wiig, and we would like to open back up to that. >> we watch with anticipation. let's talk about the fact that the french are in focus from another direction. intreau, the maker of was a story on a blog which does get some solid mna toops to the effect tha brown form is lining up a bid for remy. officials in china tend to drink a lot of cognac. the question is whether this gets anywhere and that is a big question mark. >> we will continue to follow the story closely. matt campbell. >> i wonder if remy we'll be at the drinks cabinet at the u.s. embassy in london. a quick aside. our exclusive interview with roubini. hear his take on the threat of deflation in europe. it is u.s. jobs they. >> as we had to break, we are looking at live pictures from the shores of lake como. we will be back there to speak with jake frankel, the chairman of j.p. morgan chase international. ♪ i think the euro is one or two shocks away from outright deflation. there is a whole range of things the ecb can do. rate cuts, credit easing. try to weaken the value of the euro. the euro is 10% overvalued. this should be quantitative easing, but i doubt not think that will happen anytime soon. >> nouriel roubini, the chairman of rge, speaking to us earlier from the shores of lake como. he says europe needs to get involved with q.e. this at the same time that we are getting out of q.e. in the u.s. we will talk about the data in a moment. i want to update you on on what is happening in the currency markets right now. i want to bring in the turkish lira. the reason why --extraordinaire comments earlier this morning from mr. erdogan. he thinks the bank in turkey should hold an extraordinary meeting and at that meeting we should see a rate cut. he is pleased with himself. thisollar surged on announcement. since then, we have come back to where we were before he spoke. >> all eyes are on the release of the u.s. jobs figure later today. we will see the fastest jobs growth in four months. our next is optimistic. let's welcome paul dales. thank you so much for coming on the program. will there be reason to be optimistic? if we get a number at this point, will be pushed back to next month? >> the last few months, payrolls have increased at 200,000 a month. and that is because of the poor weather. some people did not get to work. they were not counted as employed. we will move to a situation where those people would suddenly be counted again. so we see payrolls rise above the trend of 200,000 a month. i do not think that is going to happen this month because there was still a bit of dodgy weather in the middle of march, but i'm expecting the forecast of 200,000 this month. and april or may could be edging up to 300,000. 300, perhaps.0 to >> will that accelerate the taper? >> not really. the fed did not slow the taper when they saw weaker figures. that was a temporary distortion. but the bigger point is that the u.s. economy remains reasonably healthy and the fed will continue to taper its asset purchases and perhaps start to about raising interest rates. >> we think mitt next -- mid ne xt year. >> when we talk about economies the stay, we need to talk about the output gap. that is what central bankers keep telling us. the participation rate in the u.s. is below that of the uk's. nevertheless, there is slack in the u.s. economy. when we look at the other metrics, is that the story? >> that is a huge issue. the fed believes the on employment rate is not a good measure of the amount of slack in the economy. we have done a lot of work and we think it might not be too bad. as the unemployment rate declines, we we think that will be a sign that slack is being used up and that should trigger faster wage growth which should generate inflation. we think we might get some wage and price pressures earlier than the fed seems to believe and that is why we think it just rates might rise faster than most people expect. >> that is not priced in? >> not quite yet. everyone seems to believe the fed. we have done lots of work on this and we think that the on a blended rate is a pretty good measure of the speed at which capacity is being used up. >> is they're going to, moment -- everybody has been stunned about how strong the euro has been. what effect will that halfback into the inflation story? a the u.s. economy is reasonably closed economy. it does not export that much. to notgs in a dollar have a huge impact on the inflation picture. what is crucial is what happened in the labor market. if wage growth starts to exaggerate to four percent and productivity growth remains low, which we think it will, then you will see price pressure start to develop regardless of what happens to the dollar. >> thank you so much. paul dale. we are back in a couple of minutes. ♪ >> welcome back. you are watching "the pulse." all morning we have been taking you to the shores of lake como. let's bring you live pictures from there. i am told by italians. it's foggy and damp, but it looks pretty nice to me. >> we spoke to nouriel roubini earlier on. he is the chairman of roubini global economics. that's take a listen to what he had to say about the u.s. jobs report. >> the month-to-month job data can be volatile. i do not have an exact forecast for today. there is an improvement in the job market, it is obvious. but it is still the case that the unemployment rate is high, especially few include partially employed workers. some of the falling labor force participation rate is due to cyclical factors. so there is still plenty of slack in the labor market. wages are growing barely about productivity. unit level costs are barely rising. inflation will remain quite low. >> you mentioned the weather. how much can we actually blame on the winter weather? >> well, there was an impact of the winter weather on the soft economy in the first quarter. there may be some time back for the secondd up in half of the year, but certainly there are some elements of the u.s. economy that suggest that - - the gas and oil revolution. there's some improvement in the labor market. there is also a recovery of other avast economies. gradually into the second half of the year, the u.s. economy will be improving, but i am not among those that believe that growth in the u.s. will be 3%. i do not see in the data yet that type of a strong recovery. >> given what you are saying, when you expect rates to rise in the u.s.? >> i do expect the fed is going to finish tapering by around october. when janet yellen said six months, that was not ceiling. it was the floor. i spent it be more than six months. it could be they could start raising rates in june of next year or july. it does not matter. the most important thing is once they start raising rates, even mceir own median fom projections, suggest it will not be more than 1% by the end of 2015. it will take another two years from 2008 until they normalize it to 4%. that is a slow pace of rate normalization. it will take them three years and i have to go from zero to a neutral 4%. last time it took them two years between 2004 to 2006. either way, the fed will exit slowly. >> the anticipation of rate increases will help the u.s. economy because we will see more capital expenditure spending and m&a rising ahead of it. theell, i would say if economy is recovering, that will lead to some improvement in capital spending it has been extremely sluggish. in terms of trillions of dollars of profit and cash that has not been spending. as the economy is recovering, then the fed is going to gradually normalize rates. but it is not an expectation of more capitales to spending in the private sector, is that the recovery of the economy uses the fed to gradually exit this could accommodate of monetary policy. >> nouriel roubini talking to francine about what the state of play is in the united states. up next -- >> live with jacob frenkel. we will talk about u.s. jobs and china's credit concerns. back in lake como. ♪ . >> welcome back. bit of breaking news from story.surrounding thesfr it is increased the offer to 15 billion euros. we are waiting for the board meeting which i think started half an hour ago. we are waiting to find out what the net result of that, which way the business will go. >> we were expecting this to be over by today because we got the .umeric cap was higher we will be talking about this for some weeks. hagel says stationing permanent u.s. army brigade in europe is amongst the options to beef up security on the continent as russian troops ukraine's of along border. you spoke exclusively to bloomberg. >> yard troops that are moving around -- there are troops that are moving around. we know that. no indication of any significant movement of those large troop diplomas along the border away from the border. christine clinton and lagarde he were speaking at the women of the world conference. both are regarded as potential presidential candidates. lagarde he for france, clinton for the u.s.. >> is there any other job you would be interested in? [laughter] [applause] comptroller of the state of illinois or something, you know? you know what i mean. >> not right now. >> "not right now." tensions between ukraine and russia heating up as russia says it has detained 25 ukrainian citizens and raised gas prices for the second time this week in ukraine. it is the last day to register as a candidate for presidential elections in ukraine which are made 25th. >> we have been like in the isres of lake como and that where jacob frenkel joins us. you.od morning to thank you for taking the time to talk to us. i guess we will start with jobs there in the united states. we are u.s. economy to shake off the bad weather, to start the pick up pace. how do you think the fed will react to an improving sign of growth in the united states? well, to begin with, there is more and more information and data saying and showing the u.s. is recovering. second, unemployment has indeed declined pretty rapidly. however, we need to remember part of the decline in the unemployment rate is due to decline in label force -- labor force dissipation. one needs to look at the numbers in great detail. the federal reserve is not influenced by a single number, but a trend. the federal reserve has arty indicated clearly that when the economy is gaining steam it will allow itself to remove some of the crutches that have supported u.s., and this has been the story of the tapering. in my book half of the tapering has started. i believe the tapering will continue, and i believe it is good news because it reflects an assessment the u.s. is recovering. >> jacob frenkel, is the u.s. really recovering at its full strength? we heard from janet yellen saying, look, she highlighted inconsistencies in the labor market. will we see a choppy recovery or do you blame it on the weather? >> i don't think one should run a policy based on the weather. there are a lot of important structures -- structural issues in the u.s., in particular, in the labor market. about 37% of those who are unemployed in the u.s. have already been unemployed for more than half a year. it means that is going to be pretty difficult for them to ,oin an effective, useful productive employment because some of their skills have been lost, etc. there are a lot of structural issues in unemployment rather than cyclical. the federal reserve and monetary policy in general is not designed to deal with structural issues in the labor market. this is really the preview of other policy instruments. the federal reserve is supporting the recovery, the actions are belonging to different parts. similar story in europe, even with a greater weight. frenkel, if you're looking at the european economy, if you are in charge of policy at the european central bank cut the would you be taking a firm a line when it comes to deflation concerns that exist here in the eurozone? draghi, the mario head of the ecb, said it right and for a while, namely, the ecb will ensure there is enough liquidity in the system and it will not be the lack of liquidity that will prevent the recovery. yet he also emphasized, and correctly, europe and the u.s. are very different when it comes to the mechanism by which monetary policy operates. in the u.s., most of the funding of the torpor sector -- corporate sector comes from the capital market. in europe, most of it comes from the banking system. therefore, the policies of buying assets in the capital market as was done in the u.s. and is recommended by some in europe, is operating through very different ways. in europe, it will be somewhat less effective because the capital market is so much narrower than in the u.s.. when it comes to deflation, i think deflation means different things to different people. for me, it means, basically, shortcuts to saying, what is the fate of the economy? are we on the path of resuming sustainable economic growth? europe still has some way to go. is the problem lack of liquidity? i believe not. i don't think the issue of flooding the market with bold the quiddity -- liquidity will solve the problem. much of it is structural issues. the qe isse the way very different, but the fed and the rest doesn't have to do with the germans. will they finally be on board with qe? well, this looks like you're somewhat critical of the german governors position. i would be more careful about it. but me say, whenever you have a make jointople who there's, it is very -- a large just appreciative you so that the reality eventually reflect a broad range of issues. if the entire choir was singing in a single voice, you might have harmony, but you will not have the richness of a good choir. with a quickp up question on china. when you look at the risks that exist around the world, clearly, the eurozone is one of them. the u.s. labor market remains a concern. nevertheless, we are hearing voices that are worried about what is happening in china. the credit story in china has the potential to do significant damage to the global economy, it seems to be the view. do you share that? extent,re it to some but i will also say that -- i just came back from china and my impression of talking to the authorities is that the commitment to continue with the financial reform is still in place. the commitment to continue with the organization problem is still in place. therefore, they must produce enough jobs is very good statement over there. the question is, do they really need to have the rapid growth of 7%-7.5%? i think they can absorb them even with a somewhat smaller growth rate of gdp. and the reason is, we have seen in china and are seeing a dramatic shift from a manufacturing base growth to services. services, by their nature, arms were being more labor. labor-intensive. therefore, you can absorb the influx of labor into the cities. but if you go to the service sector, but even having a slower growth rate. i think 6.5% will solve their employment issues. will it be good for the world? probably less good in the sense that any growth in china and india, asia in general, would help the world engine. >> jacob frenkel, thank you for your time, jpmorgan chase international chairman. we will be joined by italy's former finance minister. ♪ are going to be talking fashion. we will be talking michael kors taken on europe's fashion house. apparently, it is winning. details when we come back. ♪ the polls.back to > more on the brands growth, we go to the european correspondent. wasn't it pays are we talking about? >> up 60% in terms of sales. like for like sales doubled the pace of rival burberry, a company that is storming ahead from, albeit from a low base. remember, it is 1/10 the size of the juggernaut of lou vuitton here in europe. but it says it is stealing share -- market share from this european juggernauts from the gucciof lou vuitton and and getting some of the prime real estate. londontores in the regent street. it is offering that middle ground. luxury meets affordability. but the 1000, 2000 euro bytes from gucci, but the 300 euro bags. keeping that aura of luxury overall. it seems to be having a winning formula, but the curses, could be marketing too much? could we have a burberry affect? could we see get too big to quickly? it has to keep that in mind, i'm sure. >> questions for michael kors. likefeels a little bit dkny at the beginning. is this a brand that is here to stay? doesn't have longevity? >> we have to see. what they've done well, and it is not just michael kors, they're capitalizing on the fact that traditional luxury has increased its price point tremendously over the last three or four years. it is cut out the aspirational she can't afford it anymore. she can go in and buy the new fashion. they do lots of colors, younger fashion. lots of social media behind it. as a result, they're flocking to backroom because they want to be part of the jet set. they can't afford to be part of the jet set, but michael kors gives him that dream, the opportunity. >> are the europeans responding? >> they are. it does it age overtime? you do have to risk easy some risks of overexposure because what you're seeing is this brand isn't necessarily aspirational at this stage, anyway, and this is where the marketing message needs to evolve in terms of lasting. the key issue, season after season, they have to start moving from purely being jets set to something that is high-quality and yet affordably priced. >> is this a moment for american designers? they seem to be in fashion. it is something a little different than what we see in europe. >> is interesting because even your aboutbag space, michael kors, kate spade. what the americans are good at is social media. that has helped them get awareness much faster. >> are the margins as good at this level? >> they are good. kors makes very good money on his handbags. they don't play the same -- they can make it work. >> thank you so much. we will have a lot more of u.s. retailers coming to europe. >> i know from personal experience about this. my wife. fashion from at different angle. the italians will have a few things to say. that's good and italian take from a different point of view. we're going back to the shores of lake como. >> we are pleased to say we're joined by the former director general of the bank of china and italy's former finance minister. great to have you on the program. give us a sense of where you see the ecb going. this is the second time -- thank you for coming on. the second time mario draghi delivered a list of what qe could possibly look like. this is noncommittal. are the markets over interpreting his commitment to qe? >> no, i don't think so. what the president of ecb said was a very cautious and qualified statement. and we will have to be sort of confronted with developments in the real economy, financial markets over the coming days and weeks. statement from the president was quite clear about the intention, the timing is going to be left to the assessment of the governing council and on the basis of the data that will be i said, inlable, as the coming weeks and days. >> good morning. can ask your question about the deficits? how would you rate the chances of france and italy being given extra flexibility when it comes to the rules set by brussels? well, there are two different situations. italy is not under the excessive deficit procedure. not thelem of italy is problem with the deficit, but a problem with the debt. the debt to gdp ratio in italy and greece over the last few years, essentially because the gdp decline very sharply and also because the italian privately managed to repay debts accumulated by local authorities which had built up. so i think italy is a country that has a primary surplus over tubing percent of gdp, so it is of gdp,onditions -- 2% so it is the conditions from the european union, somewhat more moderate provide for the commitment to reduce the debt to gdp ratio. government, and also understand from what the minister has been saying, there is doing tension of going back to sort of a situation that would bring the deficit above three percent which would trigger the initiation of an excessive debt procedure again. as far as france is concerned, i honestly have no comment. >> test a quick question on the banks. we have and it's was of interview -- just a quick question on the banks. we had an exclusive interview. do you see investor appetite growing and is it rightly so? banks,, with italian i've always been convinced that they were unjustly sort of undervalued by the stock markets. i think the situation of and eventual banks in italy is stronger -- individual banks in italy is stronger than probably believed by investors. there's been a lot of cleaning up of the balance sheet -- sorry? >> i don't think that was speaking. i think we have a slight technical issue. >> you can see from mr. fabrizio saccomanni, pretty positive about italian banks. we will get that fixed and be back from lake como shortly. that is it for now. we will be back in a couple of minutes. ♪ >> welcome back to "the pulse." it is jobs day. first friday of the ninth. the investors and economists worldwide looking to see the winter impact on hiring is finally starting to and. >> michael mckee is our weather vane. what are we expecting? >> i used to say god created economists make weatherman, but they got their revenge this winter. payrolls have been increasing by more than 200,000 a month last fall and that trend decidedly changed with the temperature. the resent data does suggest american employers may have picked up the pace of hiring -- the recent data does suggest an arc employers may have picked up the pace of hiring. it was still quite cold in mid-march when he a role survey was taken, but we saw better-than-expected improvement in service industries in his last month and the auto industry reported the strongest sales rate since may 2007. that should not only be reflected in rising payrolls, but a longer workweek. or 34.5age either 34.4 for 27 straight months through november. it plunged in december, january, and february. a rebound all but guaranteed a big move higher with signal shortages and labor that might mean stronger hiring again, guys. >> michael, this will be the first meeting a long while without the forward guidance of a 6.5% unemployment threshold. given that, what else will the fed officials be looking for in the data? >> janet yellen gave us a list the other day, looking at how many people want jobs, how many part-time workers are converted, how much voluntary turnover there is. and we do still care about the unemployment rate, of course, and hourly pay. are we getting more money. ask thank you, i, key. -- >> thank you, michael mckee. have a great weekend. we will see you monday. ♪ america faces two job markets. the good and the bad. when will your wage rise? foreigners are key part of the job economy. a send millions back home. tom keene school of procrastination, my children waited to sign up for obama care until the last moment. good morning, this is "bloomberg surveillance." it is job stay. i am tom keene joined with scarlet fu and adam johnson. a busy morning. positive signals in europe. german factory orders rose. mercedes just had it's best month ever. tom, by notice three mercedes for the kids. dobbs day. economist predict unemployment will fall to the lowest level since october 2008. earnings, carmax and captain hit theatersl today. i never saw the first one, but i'm told i need to get caught up. numade some crazy