i am an edwards. coke gets an energy boost. find out why it is spending $2 billion en masse to beverage. ferrari fever. we check out the most expensive cars sold at auction. we begin in brussels. eu foreign ministers are holding a special meeting today. two major geopolitical issues on the agenda. yours deteriorating relationship with russia and the crisis in iraq. hans nichols was on the ground in brussels. hans, a lot for politicians to cover in one day. all arriving now. they go in for this formal meeting. we expect ukraine to dominate the first session that starts in an hour. the question is, what do they know about the facts on the ground? yes, they will be taking stock about a new round of sanctions. tohough they are unlikely oppose additional sanctions. they want to know what is happening on the ground. putin was in crimea yesterday. there is uncertainty about what and where that convoy of supposedly humanitarian aid and where that is going. one thing that is clear is that sanctions, the ones out there, are having an effect. theerday, rosneft asked state of russia for another $42 billion. they clearly have a financing shortage. one thing that is clear on this is that it is very difficult to get access to international markets for a company like rosneft. taking measure and also assessing the impact of those food import bans. imposed by russia very busy day. anna? >> and what about the subject of iraq? buildingeaders in the behind you, are they going to be talking about what military assistance might be sent to the kurd? >> what kind of military assistance and who will be sending it. who will be joining and sending s asal weapons to the kurd they battle militants. the french and the british are. on board. it appears that the germans are inching that way what will be interesting coming out of the meeting is if there is a unified position on ds to act as a kur5 bulwark against the islamist threat. maliki has indicated his willingness to let the new government form. he will not be prime minister. that allows for a little breathing room for the political situation in in baghdad and potentially if they are arms headed to the kurds ecc the situation improving. it is very complicated and - -it is very confusing. >> let's take a closer look at the situation in ukraine. ukrainian and russian diplomat may sit down with their european counterparts this weekend according to ukraine's foreign minister who announced the news on bloomberg television. he would maurice ryan chilcote who was speaking to the ukrainian foreign minister. what is going on at the border? what could the foreign minister say? >> the russian convoy of humanitarian aid are still on the russian side of the border. they are in an area that is adjacent to a part of ukraine that is controlled by the rebels. nonetheless, it looks like ukrainian officials are going to get an opportunity to inspect that convoy. that convoy, according to the international community for the red cross, is not going to cross the border and head to the people until it gives the go-ahead. so there will not be any rogue convoys. that is one thing. the second thing is that we had two sightings late last night by a ukrainian and russian reporter that says they saw a few dozen russian armored personnel carriers move in to ukraine. it is worth pointing out -- we cannot verify that -- and the ukrainian foreign minister said this to me again today, this is been going on for months. so there is nothing necessarily information. that the other thing the russians are asking right now for is a cease-fire, before their convoy goes in. that is something i asked the ukrainian foreign minister about. >> we have been talking about bilateral cease-fire four weeks. and of course, -- >> it is a yes or no answer. are you ready for cease-fire? >> we are ready for the bilateral for cease-fire if all key conditions would be met. now we do not have any contact or any activity from the terrorists. we do not have the mission from the ground. we have a slight progress on hostages. we do not have any thought of effective control. critical conditions are met, of course there will be a bilateral cease-fire. >> it does. other thing the foreign ministers said he anticipates there will be a meeting between himself, his russian quarter part and the foreign ministers of france and germany. >> how significant could that be? that would be very significant over the last few months. >> that's right. to a certain extent, the germans and the french would be there to broker a deal, be guarantor's of a deal. at any time you have ukrainian and russian speaking directly. that is helpful. there are a lot of people that think if you look at the russian stock market over the last several days that the aid convoy is a good thing. we have seen the stock market down a tad today, but before that it was up for five days. that it will eventually harold andegotiations between kiev the separatists. maybe we do not have that, but at least we have the russians who the separatists are fighting and the ukrainian sitting down this weekend. that could be meaningful. of course, it is not in the ukrainians' interest to enter into a cease-fire. to a certain extent they got the separatists. they have got the upper hand, because the separatists are holed up in these two cities. ukrainians around the cities. now they can go in and clean them up, which is why the two not really want to agree to russia's idea of a cease-fire because that would prevent them from finishing off -- >> we will see what comes of any meetings over the weekend. now for our top corporate story. the battle for vivendi's resilient assets is heating up. ia is getting set for an industrial combination of its brazilian unit. caroline is here with more. >> the battle for brazil. it is between telefonica and t elecom italia. we will marry together, their gdp.in brazil with your not only can we come together and brazil, but we will also give you a wider market in i taly. vivendi has been doubling down on this content. it could disperse this content into italy, gaining more traction as well. they are offering quite a luring process to vivendi. the chief executive of telecom italia has been in talks with the chairman of vivendi for many months. for ages we have heard that telecom italia has been eyeing up the unit. what then of the sneaky dealings of telefonica? last week they came out with a 6.7 billion euro offer for the same brazilian unit of vivendi. apparently they did this already knowing that vivendi and telecom italia have been chatting away. they hope to still a thunder, steal the limelight and come in with a bigger and better offer. now we have got two cases. whatever happens, it looks as though vivendi would gain a market hold on telecom italia. .it would gain a portion . gain theirwould unit and also offer it. andelecom italia would say, take a stake in us and we will marry together our brazilian unit and i will give you access to the italian markets. either way, it looks as though vivendi it's a stake in the italian company. who's got the better price and whether or not he really wants to disperse content into italy. it will come down to the price. it might also come down to regulation, particularly in brazil. for brazil, they want more competition. they do not want less. brazil is where it is at. it is an emerging market. lots of young people want to access video content, big data via mobile phones. that his wife the -- why the unit is such an alluring asset. wantl is saying i do not telefonica to come in. more players, not less. more competition, not less. so we will have to see whether the brazilian regulators like both offers. it does seem to be a tussle between the spanish and italian dominant telecoms for vivendi. >> thank you very much. coming up on the program, putin is next. emerging markets stocks gain as russia's leader helps to stop ukraine's -- what they are doing to emerging markets after the short break. ♪ >> welcome back. vladimir putin says russia will do all it can to end t he conflict in ukraine. eu ministers gathered for talks in brussels. our next guest says that markets are too over trusting of putin. peter, thank you very much for coming in. what you think his endgame is? you mentioned in the past that russia was some sort of unstable buffer state here that is what we have got at the moment. what does he gain from that kind of limbo situation? >> markets basically have been every word.utin's when he says that he does not want a destabilize situation, we saw stocks rally. we saw emerging-market currencies rally. he said the same thing before going into crimea. that is not the view around eastern ukraine. we think he does not want to win per se. a buffer state. foring of military conflict is the slow grinding situation for the markets. the short term is hard for them to digest. it seems like barring any major events, we might have a sharp poin coming upt with this convoy trying to enter the country, the market will keep it -- >>. market should not assume that all parties involved want to find a quick resolution thing. is the key take everything with a little bit more of a pinch of salt. there is a lot going on on both be thebut the key will eu meeting. a meaningful deterioration in the situation. an extra push by the rebels which may come after the delivery of the convoy, which apparently, according to newspaper reports includes some additional military escort as well. yeah, a meaningful their teary ration -- deterioration of the situation. >> we have seen sanctions imposed by russia, certainly on certain food products. ont impact has that had european countries, or is it too early to say? or will it have no material impact in any one country? >> exactly. i think you'd see underneath everything, particularly in the investment breakdown, that there was a lot of risk aversion coming and because of the russia-ukraine conflict at no real impact on the numbers. q3 numbers where we will see greater risk aversion coming into the key segments like investment. also, some of the trade bans that have been occurring on both sides. veg ban. and there is probably more sanctions from russia. >> we are very vulnerable -- in the banking system or in the autos? >> there is a lot of potential there. in terms of the ukraine stations, ukraine is now imposing sages against russia. that will have additional knocko on impacts. some time to wait. ukraine is not the only area of tension that markers have to digest right now. what is going on in iraq is another one printed prime minister maliki stepping aside. does that mean that we see a reduced level of tension in markets if we have seen a buildup in tension on the subject of iraq? how disturbed have markets been? in terms of the market reaction, we have not seen, oil markers are not reacting. >> that is helped by the fact that saudi arabia is allowing more supply into the market. i think the markets have largely ignored it. investors are thinking about inflation scenarios, how that feeds into the ecb. i think broadly, it has been a humanitarian issue. not a market impact. the market is largely ignoring a lot of the stuff that is going on a different countries. africa, the market did not get involved. everyone is waiting for jackson hole next week. >> it seems that for markets, they are just completely myopic now. only focused on central banks. even when we get bad data. even when the data disappoints, it seems the markets -- that markets are back in that mindset where they are looking for central banks to do more. layinge central banks sayin such a big part, it seems that geopolitics can be pushed to the sideline. >> we were thinking about more t policy, the so ago. then the ecb disappointed in terms of more dovish language coming through. the bank of england this week as further.ay push fed with more certainty is much closer to exiting policy. it is talking about the mechanisms they will do that through. that is really the focus. that is more dovish than expected. thank you very much for joining us. let's get some company news. chiquita said it will continue with his planned purpose of- -- its planned purchase of an irish company fyffes. it would relocate its headquarters to ireland. shares of china mobile rose to the highest by saying it would cut two dollars billion. this would raise prices for samsungd sen smartphones. coca-cola has agreed to buy a 17% stake in monster beverage for just over $2 billion. the move is a sign of coca-cola increasing at that in the energy drink market. we'll have more on this story later in the hour. also coming up on the program, pro gamers going for gold. we take a look at the big bucks on offer in the world of electronic sports. bringhad to break, let's you like pictures from south korea. pope francis is the first visit in more than two decades. "the pulse" will be back in two minutes. ♪ >> welcome back to "the pulse." shots.me for today's hot rampage is one of the most extreme event. pros battle it out across rocky mount terrain in utah. pulling off some incredible tricks. over in argentina, extreme sports fans are taking advantage of some impressive midwinter snowfall. skiers power through the powder. now let's check in on the markets. any tricks and moves taking place on the markets today? jonathan ferro has her markets update. >> no tricks for me. a quick snapshot of equities. the ftse 100 up by .5%> tjhhe dax up. the cac 40 up. how happy are the equity bulls? look at the stoxx 600. up by 2.23% on the week. this week is the best week since february. six months. six months. why? maybe a little bit of payback from the selloff we have seen. a lot of talk about stimulus money ecb. german bund yields, record lows of 1%. the italian 10-year at a record low of 2.6%. the yield is down by 20 basis points. that has been a terrific move lower. you can price and low growth and low inflation, but everybody is talking about the prospect of ecb stimulus. etesmed el-erian said mark are making a sucker's bet on europe. even if you believe stimulus is going to come, it's not a panacea for what is happening in europe. goldman sachs told me 1% now, 2% by 2015 year end. everybody says never sell bunds. fx. euro-dollar one euro buys me 1.3334. the french out with some terrible gdp figures this week. the finance minister, guess what? he wants a weaker euro. >> thank you. some numbers for you. $31.8pulse number, million. that is how much a red ferrari just sold for at auction in california. it is one of only 36 ever made and has set the record for the most expense of car ever sold at auction. later, we check out the car. coming up, cola cola gets a monster boost of energy. matt campbell explains. ♪ ." welcome back to "the pulse i'm anna edwards. may miss itsapan forecast for the fourth time this year. exports have failed to boost the economy after it was weakened by the april sales tax increase. russia proposes cease-fire for humanitarian aid delivery to southeastern ukraine. the truth is at odds with several reports of military vehicles entering ukraine. kiev has been saying for months the rebels are receiving reinforcements from russian territory while russia denies involvement. iraq's prime minister maliki has agreed to leave office. the move ends a political impasse and may enable the prime minister designate to pull together a more inclusive government. the new administration faces militants advancing in the country's north. let's stay in the middle east. the conflict between israel and the gaza devastated strip and damaged the israeli economy, but the country's defense industry, including its drones manufacturers, it is far from a disaster. spent threeroops weeks on the ground in gaza, but most of the damage came from the air. in the form of rockets fired by hamas militants and airstrikes from the israeli military. and intelligence required for the strikes came from unmanned aerial vehicles known as uav's or drones. >> these drones can see ballistic launches. >> they can see everything. t froman see from 6000 fee a soldier to a rifle to a vehicle. iel is the deputy ceo of aeronautics a firm that focuses exclusively on drones. >> we are selling more uav's, numbers of platforms, more than anybody else. >> the company's share of the domestic drones market is less than 10%. but marketing for the military forces guarantee success elsewhere. >> this local market, unfortunate, is a battlefield. when you are combat proven in israel, you have the stamp of quality and it is easy to convince international customers this is a locally proven solution. revenues the company's comes from customers on five continents. thanks to firms like aeronautics, israel has taken -- overtaken the u.s. in drones exports. >> i tell my students that israel used to be known once for exporting oranges. now it is exporting military technology. in the israeli men serve country's military. this means the defense and technology sectors and the entire economy benefits from a massive workforce of x military personnel. >> a lot of build up of skillsge, known hohow and comes from people serving in the defense forces. that has been an excellent school for many workers. close link between the military and defense companies have been crucial to developing new weapons systems and growing these businesses. how often is it in conversations with the israeli military that these ideas come up? >> a daily basis. >> you are talking every day? >> every day. we are meeting them. it is a small community. >> aeronautics may have on directly profited from israel's conflict, but the company says it would rather see all of its technology used for peaceful civilian purposes. >> let's get to breaking news. gdp numbers coming through from hong kong. coming through worse than expected. the economy contracting by 0.1% in the second quarter against the first quarter. .4%nst an estimate of. growth. substantially below estimates. as a result the government is revising its gdp growth forecast to 3%.a and cutting the growth forecast and cutting their headline 4.4%.ion forecast to weakness on the age of growth story. let's turn our attention to one of the company news stories we have been following. coca-cola is getting a major boost of energy. he has agreed to buy a 70% stake in monster beverage. matt campbell joins us. good morning. coke is increasing its bets on energy drinks. >> this is an interesting transaction. in addition to a purchase of a state by coca-cola, there is a brand swap going on. energy drinkoke's site going to monster and some of monster's juices and less soda and energy products, the things that would be perceived as healthy are going to coke. >> they are getting into energy drinks and getting out of them at the same time. they are giving them to somebody else. >> this is turning into a broader alliance. coke is going to increase the amount of distribution it does for monster. they have the option to go up to 25%. these two companies will have a broad partnership. it tells us a bit about where coca-cola is going. they're trying to get it to anything but the product we all know them best for as regulars look at cracking down on sugary, unhealthy drinks. >> there is a lot of money in energy drinks. there is a great deal of money in it. it's a boat coke has missed. the big one is red bull. by a company in austria. coke hasn't been a player. that is what the deal is about. getting affordable but not taking too much of a risk. foothol but not taking too much of a risk. >> what we know about monster? the founders bought another business decade ago. -- decades ago. >> this is a long evolution. these are drinks that have existed for a long time. however, they have become much more popular in the last few years but that they face some regulatory problems as well. in the u.s. there have been suggestions that government health agencies are going to look into the amount of caffeine in some of these beverages, which is truly astonishing. that is where the energy does come from. it seems that even in trying to get away from sugary sodas, coca-cola is because for exposing his help again to even more regulatory problems. >> so much to think about their. thank you. deals reporter. coming up, it is game on at games com, the world's largest videogame event. we are live with the ceo -- with a look at the state of the gaming industry. ♪ world's largest videogame convention is taking place in cologne, germany. people are expected to attend. amongst the fans are some of the world's top professional gamers fighting it out for thousands in prize money. how vain games can make you a millionaire. -- p laying games can make you a millionaire. beach. is turtle they are named after their sponsor. a hardware company which pays these guys to play halo, x-box's blockbuster. the boys are here at games com in cologne, germany, where 350,000 gamers are expected to stream through the doors. they are playing for 10,000 euro s in prize money, but that is the tip of the iceberg. >> during my career, there was hundreds of thousands of dollars our team could win. you can actually become a millionaire playing these games now. 9 >> andy is an ex-professional gamer. he works for microsoft. you might not recognize him, but around here he is a celebrity. one fan cannot help but ask for an autograph. big business. 10,000 people packed into seattle's key arena to watch the games tournament in july. the winner went home with five dollars million. -- $5 million. beach dream of that winning that kind of money. most players never see the big bucks. only a handful of gamers will: over 100,000 a year. but without eases meshing traditional sports, and the sponsors are taking notice. team turtle beach does well, they will hope that the next sponsor and name will be a big brand. hywe are joined by caroline de. a record attendance expected at games com. >> so popular is this event they had to set up an entire tent village. people are camping across the street because they cannot get a hold of hotel rooms. desperate to get in. when you look at the numbers, it is staggering, because they're selling consoles. the key rivalry is sony with playstation and microsoft with the x-box. .both the been winners say station has killed it. 10 million consoles sold since they came to the market. microsoft with half that at 5 million. the lust for these consoles is making everyone a winner. it is making the games maker winner as well. we have got these two likes of sony showing off their new console with metal gears. this is a new action adventure in a series. a stealth game. they've got new aspects. microscopic has, with quantum break. it is all about time travel. but the amount of sales we are seeing is driving this market ever larger. it's expected by pwc that the market will gain 7% this year, $27 billion. it could get even bigger. the good news is the industry is continuing to grow strongly. some analysts predicting $100 billion in annual sales within the next two or three years across all formats. what that means is that it is creating a great ecosystem for developers. means a vibrant market for gamers. experiences.agical and that will keep the industry growing. >> phil harrison is driving for the x-box. it could be a $10 billion market per year. maker ofto the assassins creed. 2 billiioon people are playing games around the world. that is a phenomenal pasttime. this is a huge market. no wonder you are seeing all of these games maker is defending -- descending on cologne, trying to pimp their wares. christmas. we have the machines selling like wildfire. the playstation 4 and x-box have sold double the amount of the previous generation. now you have all of these hot new games. what is going to be interesting is the new business models. you buy one game. hand over the cash for the cd you played. now we're going into the netflix generation. you can buy monthly subscriptions. e.a. offering is a description -- offering a subscription. sony itself has set up a whole new streaming subscription service called playstation now. this is a new way of trying to make them free to play competitors. smaller games publishers are not charging you for anything. the way they make money is making you buy while playing, up animal.rmor or a new this is the way companies are trying to maneuver on what many say could be a $10 billion market. >> let's continue the conversation. richard wilson joins us. thanks for coming. let's start with some of those numbers caroline was talking about in terms of games and consoles. the last two years, many people talked about how consoles could be in danger because of the number of games people play on the internet. that does not seem to be the case. >> this is a prophecy that has not come to pass. before talking about the death of the console. in fact, these prophecies have been blown away. 10have seen wosony shift million units. microsoft has not done as well. a major success for console manufacturers. >> what strategy has paid off long-term? is it a strategy going after the gamer or a broad appeal to the whole family? >> i think the figures speak for themselves. sony's strategy has paid dividends. i think focusing clearly on hard-core gamers has really pr oven good dividends. microsoft has upped their game. >> what are the big games? in germany, that you are excited about? people are buying for the holiday season already? team 17, a company based in yorkshire is creating a prison break game. u.k.y to see some games. >> let's talk about the innovation we are seeing. what about quantum break? this is half-game, have tv show. is the tv show really a tv show? or is it an extended marketing video? >> it is more than that. it goes back to microsoft's strategy. the family entertainment device. it is trying to take advantage of the blurring between tv and video games. it is like having an interactive storybook. there are multiple choices. there are different types of television you see in the program. >> your gaming can influence the outcome of the series. >> that's right. when you watch the tv series, it will give you hints on how to play the game. it is very innovative. it'll be interesting to see how many more of these types of games are in the future. >> caroline was talking about the changes bit -- the changing business models in gaming. what is going to be the way of the future? >> it is fantastic having the gaming industry producing different business models. one of the recent trend has been the adoption of free games. >> you buy extra tools. >> animals, guns, characters. that is how the games companies make money. thousands of consumers play for free. 90% of players are playing for free. >> is that the big way of the future? or are we talking about subscription models? >> there is space within the gaming industry -- free models have become dominant. premium game where you pay money upfront remains popular. se, there is subscription models. world of warcraft is an example of that. >> i was amazed to find a you could become a millionaire being a professional gamer. i'm behind the curve. i find it hard to imagine you would find career adviser suggesting this is a study career for the future. look how many people there are making a living. >> in the uk, there are 26,000 people working in the games industry. they are encouraging people to get into the sector. byy games for a living becoming assessors and develop and create games. it is a great industry to get involved in. uks a great industry for the and for europe. the former we meet city trader who is getting a kick out of playing a career field. ♪ >> welcome back to "the pulse," live on bloomberg television and streaming on your tablet and phone and bloomberg.com. let's focus on football. as the english premier league kicks off this weekend, some of the best players in the game. ewest managers ditch the highrolling world of finance to try to have his biggest passion, the beautiful game. ♪ >> i always knew i was going to get back into football in some respect. you look at the teamwork side of it. the communication. being a manager is a huge part, because you have very professional animals who want to do well and succeed. if you can transfer those types here, if with the guys you are honest with them, they know where they stand. it is a case of incentivizing the players. a really competitive environment. poor decision-making is very expensive. the business side of things is new to many of them. they have worked hard. in the trading room, you are good enough, you are old enough. we have 18 year old boys, you have trained well. every player has to do well. wife and say, we are about to take a pay cut was not an easy conversation. was trying to achieve something in football. it was hard to convince her at the start, but she knew i was passionate about it. so. e, heite passionat says. the understatement of the year. for our viewers, a second hour of "the pulse" is coming up. in exclusive interview with argentina's former bank chief mario blejer. we're going to be talking to him about the current economic policy. debt strategy. if there is a chance of a deal with holdout creditors to argentina. we will get his thoughts on the industry as a whole. with pick up that theme emily. that is coming up in the second hour of "the pulse. ♪ >> mixed message from moscow. russia seeks a cease-fire. maliki moves aside. he clears the way for his successor. emergency talks on iraq and ukraine. a bloomberg exclusive. we are live with argentina's former central bank chief. good morning to our viewers in europe, good evening to those in asia and welcome to those waking up in the united dates. i am an edwards. this is "the pulse." getsg up, coax get -- coke an energy boost. a billion dollar bill with monster beverage. we check out the most expensive car ever sold at auction. we begin with the crisis in ukraine. the foreign minister announced a news on bloomberg tv. here with more is ryan chilcote. take us through what is happening at the border. the quakes we have movement. andkrainian border guards customs officials working with .he icrc presumably, it will take them a long while. they are inspecting the trucks. --n they are dealt with the when they are done with the inspection, they will be free to cross into the ukraine. the russians have said they would like to see a cease-fire to protect the drivers of the convoy from getting caught in the crossfire. yesterday, we had those co-eyewitness reports saying they saw a few dozen russian-armored personnel carriers pass into ukraine. that is worrying. i walk -- i asked the foreign minister about it, he seemed to -- he did not want to make a big deal about it. this has been happening for a few months and pointed out they are not in control of all parts of the border. stopped short of confirming these three dozen armored personnel carriers had moved in and at the same time, seem to suggest it was not that big of a deal. to respond toim the russian request for the cease-fire. >> we have been talking about it for weeks. of course, -- >> are you ready for a cease-fire? >> we are ready if all of the conditions would be met. contactdo not have any or any activity from the terrorists. -- for theave ground. have any sort of effective control as the russian ukrainian border. it does not sound like a bilateral cease-fire is imminent. going toold us he is meet his russian counterparts as well as his german and french counterparts who will he there to broker a deal. >> that will be significant. -- reportedly asking the russian government for some money. >> they have asked that the russian government for a loan guarantee for $42 billion, which is a staggering amount of money. the government is going to think twout it, will take thos weeks to get back to him. a result of the sanctions, he has been locked out of the european debt market. it is the cost of raising funds and it has risen. this is a company that pre-sells a lot of its oil. not really need the money, but that money would be cheaper than the money they might be able to get elsewhere. it sparked a larger conversation in russia, even in the wake of sanctions, is it right to take rainy day money, the fund, and use that in this way. i am not sure everyone is convinced. there are different views on this matter. we will have to see. it will be interesting if they said yes. 42 billion bucks is a lot. >> thank you very much. are holding aters meeting in brussels on this crisis in ukraine. they are discussing the crisis in iraq. hans nichols is in brussels. what are we expecting to hear? we are expecting a gathering of intelligence. we are watching the ministers come in. they have two agenda items. there's a sense they want to find out what is actually happening in ukraine, especially with, perhaps, the aid convoy. of --is not a great deal .our official eu sanctions what will be discussed is what the eu says it is russia's illegal imposition of a food and on products coming from countries that forced sanctions on russia and the first place. there will be an assessment of that, on the situation on the ground. all of the foreign ministers will have a say. no firm sense they will take action out of this. with the rock, they are leaning towards taking some action. , they areiraq leaning towards taking some action. clearly, arming the kurds is what everyone is talking about. it seems like they are heading in that direction. the germans are talking more about giving lethal weapons, lethal support to kurdish forces .ighting isil the french have done so. the british are in that direction. there is a greater degree of interest in having consensus on the iraq situation. some sort ofwith certainty they can expect support from the eu. 28 foreign ministers on the same page. >> thank you. let's get to our top corporate stories. the battle for vivendi is heating up. caroline hyde is here with more. the battle for this asset, what is going on? a loves look at it like story. it is hot to trot. as many people, would say. italia, telefonica -- they are trying to propose to her. she has been chatting away with the chief executive of telecom italia. can make a great team. can team up and make a wonderful marriage. meanwhile, telefonica has come crashing in with a 6.7 billion euro diamond. here is the rock. vivendi, the dad, deciding what he is going to do. he is saying my daughter, she is not up for marriage right now. she is not on the shelf. i will have a little assessment and a couple of weeks time. i will talk with the grandparents and grandparents, i am going to get with the board. it is sneaky from telefonica coming out there with this big rock. >> is she going to basically going to the highest better? potentially. telecom italia is offering a little bit more. you asaying i will offer room into the italian market, content is king with vivendi. they have been selling off. they are looking at where can they expand the content they are making. telecom italia is saying i am offering you italy. cozyps that is making them and a little bit more attractive. brazil wants more competitors, not less. >> the regulatory question comes up. >> we have telefonica and telecom italia saying we are married together the net makes less competition rather than more. perhaps it will be a bitter pill for brazil to swallow. 6.7 billion euros being offered by telefonica. we want to see what kind of engagement ring telecom italia comes up with. >> putin's pipedream. the plan to go they new pipeline that bypasses ukraine. after the break. ♪ >> welcome back to "the pulse." typically something of a haven in times of trouble. it is heading for a decline against the dollar. damped investor demand. that is playing into they call you have to make in the markets. boj officials are considering cutting the growth forecast. that is the other story playing out. ukraine, while trouble brews, vladimir putin is dreaming of a new gas pipeline. the project is at risk. for more, we are joined by emily. analyst global energy at eurasia group. thank you for coming in. tell us about this pipeline. >> south stream has been a priority for both the russian government and for gazprom. given that the numerous rounds of gas conflicts that have occurred provides an opportunity to find a new route. >> one of our guests was talking about how he thought russia wanted an unstable buffer space. one reason they might want that is to get the alternative pipeline up and running. question of the larger geopolitical motives. theirtainly, it is to advantage to find a compromise agreement. we're expecting them to come back to the negotiating table. for -- south stream has been a source of leverage. the fact they have taken that off the table and removed negotiations on construction on the pipeline, removed that from the docket has made it such that russia wants to bring that issue back to the table. a pointan use that as of leverage. perhaps that is one of the things that they can offer so russia will find a way to reach a compromise. >> they might come into it on the backs of europe because of their reliance on russian gas. on the other hand, they have a card to play. >> it is a question of energy security. it is a win-win situation for both parties. this is not the first time we have seen tensions in ukraine over the gas pipeline. it has not ended in this. as has not proved to be damaging for east-west relations. been rounds of disruptions, we have seen previous gas wars. russia has not disrupted supplies to europe. over dead. debate is generally, it is not in their interest -- it is in their longer-term interest to find ways to maintain european market share. interest to their push back against any scenario that might lead to that. >> as long as energy trade believes that, it does not really affect the price. we have seen the price move what we saw suggestions that the ukraine might block russia from allowing gas to flow through the country. that did put some pressure on gas prices. >> in that particular case, ukraine -- what was considered some options, they allow that to be an option. that being said, i do not see any real likelihood of a disruption. there has been volatility and we will continue to see volatility. i think that will create enough uncertainty that we will see price reactions. we see someatic if kind of resolution to the gas supply. >> we speak to an energy and it is a pipe dream to suggest that there is a -- two russian gas. you need to have at least 10 years to see a viable alternative. is this something europe is going to work on and in 10 years, will the relationship look different? are they going to say we have no alternative, we stick with this? >> we stick with the moment and do some stress test in the market and find out the vulnerable states in the european union. come up with a solution that helps better interconnectivity in the european market. it is also looking at sources of energy and the pipeline. these are much longer-term options. they will require substantial investments. for europe, it is a matter of making the decision to commit to those products. russia has substantial pipeline access to the market. i think they will maintain the their price, given advantage. >> remind us of the timing of the negotiations. the gassjority of talks will occur later this month, probably in early september. we will see reworking of the frame on -- framework for the current gass talks. i think this is the time to lay new groundwork in and find a new way to approach the situation. >> thank you. let's get some company news. chiquita says it will continue with its planned purchase of its competitor. they rejected a takeover offer from two brazilian companies. shares of china mobile rose to the highest in six years after saying it will cut $2 billion from phone companies. this would potentially raise prices for phones by apple and samsung. coca-cola has agreed to buy a 17% stake in monster beverage for just over $2 billion. it is a sign of coca-cola increasing it's that on the expanding drink market. we will have more on the story later in the hour. ferrari fever. the most expensive car ever sold at auction. redook at the iconic vehicle firing up a frenzy in the vintage car world. also coming up, a bloomberg exclusive. we are live with argentina's former central bank chief. stay tuned. ♪ >> welcome back to "the pulse." it is time for today's pulse number. $38.1 million. that is how much a red ferrari sold for an auction -- four at auction. -- for at auction. we went to check it out. the 250 gto is the most charismatic of the models. it is the holy grail of all the motorcars. ♪ they rarely come to market because they are so rare. own eight 250 gto are reluctant to sell them. they do not want to sell a car. they are that good. when one comes to market, they are traded quite quickly and privately. is a record-breaking car because it was a car that was dominant. it is not a trailer queen. it will not win the --, but it is in great, road going condition. you see the aspects of the car and you have the royal flush. there is a pyramid of ferraris are at the top of the pyramid. interested traded commodity. these are the living masterpieces, these motorcars. beautiful. very nice. from cars to motorbikes, time for today's hotshot. the red bull rampage is one of competition for slope style writers. the-- riders. in argentina, extreme sports fans are taking advantage of midwinter snowfall. a bigvil skier scored edge as they powered through this beautiful looking powder. am next, an exclusive. we are live with a former central bank governor. we will discuss the controversial debt and a default strategy. you can follow me on twitter. annaedwardsnews. see you in a couple of minutes. ♪ >> welcome back to "the pulse." i am and that -- i am an edwards. muriel on knowledge he has agreed to -- grated and say -- aliki has agreed to leave office. a truce plan is at odds for vehicles entering ukraine. they have been saying for months that the rebels are receiving reinforcements. the bank of japan may count its growth forecast for this fiscal .ear for the fourth time it is likely to be lower than the 1% median forecast of boj board members. jonathan ferro has his eye on the markets. >> this is what it looks like. .7%.on highs up by we have had some horrific data this week. -- this is the yield. -- point a lot of talk about ecb stimulus. the bad news means good news because the ecb is going to do more. you trade in the potential of that happening, is that the reality? the euro dollar is lower. sterling is lower. take away from this week's inflation report, no rate hike, a weaker pound. you have stellar geopolitical analysis. us.ideon rose will join it is one of my few must reads. interesting --. we will talk about the news from brussels. i know you're speaking with the central bank in moments. we will look at the brazil elections. stephen whiting will join us from citigroup and will talk to stephen whiting about the surprise of better than good earnings late in our new york day. he ponied up.ed also, he bought further shares in afro. -- in apple. will talk about the appetite for equities. clicks the central banks are in a strong place. many people asking when the factors are going to start amassing more. at jackson hall, michael mckee labors me we will see a focus. slack is the word do sure. jour.d du back by the interest rate environment that you see in europe. and equities are doing well, but .he other markets >> they will be back at the top of the hour. thank you for coming to talk to us. the president of argentina saying last night that she is still seeking a solution for all creditors in this most recent debt default. is this still possible? it is still a live issue. >> argentina has deposited the money, the payment to the bondholder, which is showing a willingness to pay. it is a peculiar issue. >> many people thought this was going to be settled and there was going to be no default. you seemed convinced that a deal would be done. what was missed? >> i was wrong. .he reason is very clear pe united states refuse to deal with the issue. that created the situation in which the government could not negotiate in the way it was prepared. this is very important. these are closing bonds that claimed that if the government pays to any group of bondholder, more than what was paid in the restructure bond, we will have to pay to all the 92% who accepted the exchange in the same amount. that would make it impossible. the expiration is the end of this year. in january, the situation will be different. >> some people have described it as almost painless. bonds have held up fairly well since the default. does that continue to be the case? >> there is a erosion in the value of assets. a solutionpe that would have to be found. if not now, in january. it will have to be found. it is not the same as a common default. here, it is a problem. it has to do with judicial order. it will have to be reviewed. >> as you described this as a doesrent kind of default, that mean you will not have the same effects on the argentinian economy as the default of the past? what will not happen is the argentinian government will not be able to go back to the international capital markets. the interest rates are very low. it is an opportunity to borrow. it is serious because at the same time, the economy is suffering between deficits. >> will the peso hold up? some suggest they are being treated harshly by their suppliers. they are not going to be paid. is that where the impact on the economy is going to come from? some 85% of imports into argentina are raw materials that supply industries. >> it will have an impact on employment. this is impacting the level of investment. investment has gone down in argentina. the most serious problem of all. it is a background issue. it has happened in the last two years. the investment is down. investment has to go back to levels that will guarantee growth and the default is creating uncertainty. uncertainty is the big enemy of investment. >> and let me get your thoughts on some other issues. we were talking about the role of central banks, generally in global markets. we had some weak data from the eurozone and in the u.s. this week. geopolitical tensions. in the face of this market, they don't seem to be as negatively impacted as they would have been in the past. some people have suggested there is so much the quiddity -- liquidity. central banks were instrumental in avoiding a deeper crisis. is missing is a clear exit policy. how do you go back to more balanced -- more >> are you talking about the fed, the bank of england? >> they think your team up very weak. did last quarter and nato was very strong. there are differences. i think they are talking general about the role of central banks which have been overwhelming. in general, about how liquidity will be reabsorbed. policy is missing and it is confusing. you have had a role in advising the bank of england. i understand you have been doing that. what would you be advising the bank of england now if you were to do so? anyou think there is argument for getting on with a rate rise? exitur point about an strategy, maybe there is an argument for getting on with it and taking things slow or in terms of incremental rate rises. i think it is time to start england to bank of start tightening policy. they are going, in the opposite direction, but as a whole, i think the bank of england has done well. --.s time to >> thank you for joining us. chief of argentina's central bank. let's go from south america to central america. exit the state owned oil country is preparing for the end of its seven-year monopoly. olivia sterns asked the ceo of the reforms. >> i would not -- >> name a few. >> there are dozens, if not hundreds of companies we have met and we look forward to landing some business opportunities that are profitable for mexico, our partners, and for pemex in the next years. withw are the talks chevron going? with the majors international oil companies and obviously, -- >> bp, exxon as well? >> absolutely. ing to invest in the deep waters off the gulf of mexico. pemex has been efficient with our wells. we do not necessarily have the expertise to develop those projects and bring them into production in a relatively quick punto of time. those companies have done so on the northern tides of the gulf of mexico. suitable for us to work with on these opportunities. pemext was the ceo of speaking to olivia sterns. coca-cola gets an energy boost. that is coming up next. ♪ >> welcome back. coca-cola has shelled out more than $2 billion to buy a stake in monster beverage. it has turned the owners of the company into billionaires. what do we know about these billionaires who bought this business? they backed into this business and purchased a publicly traded company that was indebted. it was a juice company. they added monster beverage to the mix after they saw the success of red bull. they eventually change the name to monster because they had seen the product was doing so much better. >> there is an argument that they are not billionaires. tracking down their fortune as challenging. >> they are a publicly traded company. wealthy people have elaborated holding structures. , approximately 9 million shares, it is under dispute. you have to do your research well. do control the shares. how many of the shares they control -- you have to do your investigation. they claim if they sold the shares, they would be taxed, so they are not really worth a billion dollars. that is not quite how one tracks wealthy people. their value in the company is worth over a billion dollars. >> they are not the only billionaires the energy drink world has created. who are the others? you aboutng to tell an austrian and a family in thailand. the marketing genius behind red bull. it is the big daddy in the business. it was created in thailand. the family, he passed away last year. he has about 10 family members. we have not figured out who owns what. it is about a $10 billion fortune. we discover russell wiener, he is an american. he discovered rock star energy. it has turned his fortune into about $1.2 billion. >> red bull is so prominent. own, whicha has its are somewhat forgotten. rockstar is a minor player. red bull is known for its marketing stunts. >> thank you. no help from energy drinks this morning, other than coffee. coming up, emergency talks. tacking geopolitical risk. hans nichols is their bank. they will be talking about their eastern neighborhood, ukraine and the southern neighborhood, iraq. it starts in about 10 minutes. we will try to get a readout of what is happening. ♪ >> welcome back to "the pulse." this is the dollar yen. how it performed over the past week. one of 2.61 is where we are in the dollar yen. it is poised for a weekly loss. 102 .61 is where we are in the dollar yen. geopolitical tensions are applying downward pressure on the japanese currency. boj, so see it with the officials said to cut the forecast for 2014. area look at what we watching for the rest of the day, we are joined by hans nichols. foreign ministers are gathering to tackle the crisis in ukraine and iraq. ministers have arrived. they are set to meet shortly. >> they will go into the first round of meetings. they will move to ukraine. it is a different foreign minister -- they have given us different indications on that. a lot are talking to their own press, giving comments in their native languages. the senses we are moving towards and militarykurds assistance for the kurdish people. the french have been there for some time. the british as well. the germans are inching in that direction. gaza, they also expect to come to conclusion. that will happen at about six hours. behind me, about six hours of diplomacy. wrangling to see how strong the statements and the language will be. >> we could see some developments around who is going iraqpply the kurds on the situation. what about ukraine? we are not talking about new sanctions are we? no. they have been clear in signaling they are not going to initiate a new round of sanctions. to bee do expect is there an assessment. an assessment about what is going on on the ground and the impact that russia's sanctions, or the import ban from any country that imposed sanctions on russia, what the effect of that will be. it is more of taking stock and taking temperature on ukraine. >> thank you. hans nichols joining us from brussels. that will do it for "the pulse." bloombergre on television. "bloomberg surveillance" is up next. you can follow me. annaedwardsnews. see you again on monday. ♪ . maliki steps aside. iraq and the world asked can haider al-abadi find common ground in baghdad? carl icahn, should you love the stock market? ferguson is about more than race. it is about the economic divides of america. good morning, this is "bloomberg surveillance." it is friday, august 15. i am tom keene with scarlet fu and adam johnson. mr. johnson gets us started. grewernight, u.k. economy a 10th of a percent. 8% . >> this is front and center. when that sounds good -- in asia, the bank of japan may cut its growth forecast for the fiscal year for fourth time. that sales tax went up and is now 8%

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