Morning. You are watching the pulse. We are here in london. It is 9 00 now. We have a packed show for you. The quest for content, will be live in can we will be live in cannes. Jump, but it ditches its bid for tmobile. We will talk about that story. Is what isry happening in ireland. Lands to end the controversial double irish tax break when he gives his budget speech a little bit later. Michael noonan has been under pressure from the eu to face out this tax loophole used by companies google, apple, you know the names. They have been using this to their slash their tax bills. Is this what everybody is talking about . Domestically, no. For people here, it is that end of austerity after seven years. Much more focused on the prospect of a cut on income taxes. The focus would be on the double irish tax loophole. Taxes,es can avoid perfectly legal. The government has decided to preempt what is coming down the tracks. We have people like bono weighing in on the issue. The Irish Government has been very clear that it is not going to bow under pressure. It will not change its tax codes as a result of the view from brussels and london. Is this a climb down . Thing, what are we going to see . The 12. 5 or per tax rate Corporate Tax rate. In terms of what will happen, we will not see an immediate the lamination. Elimination. There will be a fiveyear period of phasing out. What the government is trying to do is get ahead of the curve. Why wait around for our reputations to be tarnished . Will there be compensation . Other more attractive ways of treating intellectual property . Clearly, they want these Big Companies to remain. Aboutwill all be revealed 2 30 p. M. Today. Bush thereout are some scare stories around. Lets look at the reality. A comfy like google a comfortable a company like google has spent money. Are they really going to pull out of ireland because of this . A lot of the Companies Moving here recently, airbnb and twitter, they do not have massive profits. They say theyre here for the talent, the englishspeaking talent around. The worry would be for irish authorities trying to track the bigger companies. We do not expect to see any massive pull off. Well be watching with interest. We will see we will be speaking to the former irish finance minister. His first interview of the day. Arguments in a german challenge to the ecbs bond buying land. Plan. German debt judges german judges expressed concern about the legality of this game. European economist. We are talking about the Bond Buying Program that mario draghi used a while back. It all fades into memory. So many of these things. Walk us through why today is so import and in my markets are paying attention. We have moved to a new phase in which the key concern is deflation. The motivation would be different from the one in 2012. In that respect, investors are more focused on the next stage. N the qe program of the ecb the fact that we are still seeing this legal battle suggests that if the ecb were to go down the road of qe on Government Bonds, there could be further challenges from germany. Case with the a Constitutional Court against qe. This for of resistance or attrition between the two sides. For those who want to preserve the integrity of the hero, euro believing that the ecb should support the Government Bond market. The government few is that the ecb should stay out and let sovereign spreads play their role in the market. Concerns in terms of the significance of this, if we are going to go down the road of qe, what were seeing here is the seeing here is the ecb defending the program. There are similarities. The details are different. You can draw a line between one to the other to the other. The inability of the ecb to pursue that, that is not the expected outcome, how big of below would that be how big a blow with debbie . Wouldow big a blow that be . There is an element of conditionality. By buys the front end of the market. It is a cause isis go operation. Quasifiscal operation. Qe is justified officially by the idea that when you are zero bound, you need to, date accommodate markets further. You cannot go to negative in terms of rates. The ecb has cuts rate twice. Beyond that, if you need further accommodation, you need to find something else, which is to flood the market with liquidity. I think on pure Monetary Policy grounds, qe would be more defensible than the omt. I think it is very interesting. There is conditionality surrounding the omt. The last press conference from mario draghi and he was talking about the assetbacked securities program, he talked about no program, no purchases. In the case of greece. I extended that into a qe program, maybe the ecb might decide to go down the same road as well. There may be some conditionality attached to that as well. Maybe they should avoid that. Difficult to avoid it. In that case, because we would be buying bonds at very low ratings, we would want the reassurance that these programs these countries are still in the program. Would you have to do the same thing with Government Bonds . Would greece need to be in a program . It is conceivable that the ec by what ecb would require a minimum requirement or something. Ways, it is very difficult to avoid this. Most people remember that at the , it was laterp revealed that the National Bank governance wrote letters to the countries involved calling for a series of reforms. Betweenpast the border pure Monetary Policy and Economic Policy. When they told these countries you need to tighten Monetary Policy and so on and so forth. The ecb is part of the troika. It decides what should be done in terms of Economic Policy. It is a very difficult line to draw where does Monetary Policy and . Policy end . I think we will continue with the germans arguing that the ecb should stay out and let the market operates. It looks like we are in for an interesting time i had. Ahead. Today. Hares rallying it has abandoned plans to buy a stake in tmobile. Lets get more on this. Investors initially liking the news. Lets walk through the reaction. Investors are liking the news. Shares are gaining 12 since the opening of the market. Investors are reassured that through, did not go tmobile was too big of a fish for the small french company. When they made the offer back in july for 33 a share, many investors were very surprised. It was the small guy trying to buy the big guy. One analyst said the offer sounded like a joke. The first offer was rejected and. Hen iliad decided to raise it again, that offer was rejected. The investors like the news. Shares, the biggest gainer on the euros stoxx 600. Next . T does he do clearly, the billionaire who owns iliad is very ambitious. And he kind of wanted to have a footprint in the u. S. Especially after he failed to grow in his home market of france. Earlier this year, he tried to get his hands on a telecom. Maybe some talks again about telecom on the table. Thank you very much indeed. Interesting times. Bloombergome, a lusive with the South African finance minister. Looking forward to that conversation. Welcome back. We will be speaking live with the South African finance minister. You do not want to miss that exclusive interview. Nhlanhla nene will be joining us. Everybody is paying attention to parliament next week. Lets get some details. Him tof pressure on deliver. The South African economy is in real trouble at the moment. Can you hold the line . The fiscal line is something everybody is worried about. It will be a tough budget. First debuted a first a few months ago he said tough times call for tough solutions. Act. Alancing we are dealing with very low economic growth, 1. 4 is what we are expecting. Most heart ofe the budget. Part of the budget. 1 abovef it is 7 wagen, around increases, there will be job losses. That is on the top of the list of mindful investors. It has been pummeled. It is really difficult. If the currency gap gets any bigger, people will start really getting concerned. Could it step up even further . Down 24 yesterday, dramatic as the market can get. The companys exposed to the currency, theyre experiencing volatility. A lot of companies are starting to move there had office to other countries. Ead office to other countries. Ebola, you say you have been traveling a lot. What is going on . Ive been to nigeria a few times. When i went in late september, gloves, Hand Sanitizer everywhere. They ask you all sorts of questions. Taken immense precautions to ensure they have contained it. They are doing screening at the airport and at the borders. More on that later. Live with the african south. Frican finance minister looking forward to that conversation. We back in a few minutes. I am francine lacqua. Welcome back to the pulse. Talk about audience and how you monetize. I am pleased to say we have a special guest. The president of the discovery networks. Billion nearly 3 customers. Great to have you on the program. We are in a slightly surreal surrounding. Nes, after all. People are pushing content. What is the game changer . Consumer behavior is changing. Consumers want access to more content on more screens. We are a content supplier. ,e distribute our channels where the number one paytv programmer in the world we are the number one paytv programmer in the world. More demand for video than ever before. That is an opportunity for us to meet the demand and find ways to deliver experiences that are audiences really want. The industry is going through immense change. Is there anything out there for you . Our growth has been built by our organic base. Our International Growth story is about 25 years old. Biggergrowing faster and outside the United States than ever before. , itus, the organic growth is still the bedrock of how we continue to grow. Selectively complemented with acquisitions if they make sense. Our growth is an organic growth story. You do not feel like you are in a race to get bigger . We are in the business of delivering experiences that satiate the audience desire. We want to grow audience share in all of these markets where we operate. If there are other companies that can complement that, we will look at them. We are also launching new programs and new channels. Investigation discovery was a brand that did not exist in the United States five years ago. It is a number four network for women in the United States. We will be in 100 million homes by the end of the year. Taking channels, developing them internally and then taking them around the world with content that we own. Ask great to have you on the Program Great to have you on the program. That was the president of discovery international. Discovery international has more views and viewers than discovery u. S. And that is a real game changer. The u. S. Will take the second place to china in five to six years. Welcome back. The u. K. Inflation numbers are out. Are we going to get a rate hike anytime soon . The number for the u. K. September inflation rate, 1. 2 . The median estimate was for a figure of 1. 4. The pound was already selling off. We are tracking even further down. You have seen not only the prospects of a fed rate hike at the beginning of next year being taken off by the markets. Take a look at what is happening in sterling. Rate, down. 63 . That is good news if the wage story is what you are concerned about. It is not good news if you are concerned about the broader deflationary story. I will press a couple of other buttons and take you to another story. The jpmorgan numbers seem to be out. Earlier than we expected, two or three hours earlier. We will try to check to make sure these numbers are real. Check the veracity of what we are getting. They represent on an adjusted eps basis a significant mess. Significant miss. Already at the backend of the range. Iss. A share is a m linenificant legal expense. That is a one billion item on the expense line. These banks increasingly faced significant litigation charges. The numbers appear to be out. They are out early. We want to caveat it a little bit because when he to double check. Because we need to double check. The other thing i want to bring you is what is happening in germany. And ebola patient in east of the country, this clinic confirming the death of and ebola patient ebola patient. Hans nichols has been tracking the story. Hopefully, we will be speaking with the South African finance minister shortly. Storytalk about another we are tracking. The u. S. And europe continuing sanctions on russia as a result of what is happening in ukraine. Putinactly what president would like to have seen. The chinese premier in russia to meet with president vladimir putin. Ryan chilcote has the details. This is not what he wanted. What the russians want as a result of the sanctions as funding and trade. What the chinese want our weapons and russias commodities. The chinese are at an advantage because their desires dont have the urgency. Russia is isolated by the sanctions in the last. This relationship between russia and china has become personal for the russian president. He has met him nine times since he became president of china. This meeting at a rate with the Prime Minister is a way of bolstering that. It is a protocol meeting. We wont get a very good read out from it. They are talking about big geopolitical issues. Russias antimissile system that they are ready, in principle, to sell to the chinese. It gives the chinese control over all of taiwanese airspace. It would be within their reach with a range of the s400. Plus the new russian fighter jet. Haveind of reluctance they , they would be worried about the chinese reverse engineering these. Technology. E it is amazing. The only way you can fight the problem of her thirst reverse engineering is to make sure you sell a lot of the planes upfront so that if they do reverse engineer it, you have the lions share in your cell. Another way is to have strong ip agreements. They have been strengthening their intellectual property agreements. Yesterday, they had this part where they tell the journalists 38 deals and all. Including one in the highspeed rail space. Agreeing to work on highspeed rail, which i found interesting. What about the currency story . Yesterday, they announced uanruble swap deal. Get rid of the middle man, simplify things and to bolster the importance of their own currencies. For the chinese, they have been doing this with a lot of different countries. They have done it with the ecb, brazil, the swiss. They have done this with the russians. It is a smaller deal than what they did with the ecb last week. The russian ruble has been depreciating in a dramatic way. Something in chinese are not too enthusiastic about it. The moscow exchange, they changed the youan. To 367in comparison billion of ruble dollar swaps. This is a marriage of convenience. These are not two parties necessarily really in love with one another. For the moment, they are finding it quite convenient to do business together. Irish,ing the double with the finance minister cave into pressure to close the tax loophole . Welcome back. You are watching the pulse. We think we have the jpmorgan numbers. A were out three hours earlier than we were anticipating. For Immediate Release and appears to be the jpmorgan details. We can only hope and pray that these are the real details. Lets assume they are. It looks like on an adjusted eps line, we have a slight mess. A slight miss. Fairly substantial hit on the legal line, around the billion in terms of the surrounding the heads on the legal line. Tangible common equity. It looks like we have the jpmorgan numbers. Theyre out early. Irelands finance minister outlines lance to end the controversial outlined plans to end the controversial tax break. Michael noonan has been under pressure to phase out the tax. The double irish has come to symbolize flaws in the International Tax system. How does this loophole work . U. S. Companies licenses its intellectual property to an irish company. Legally based offshore. Like in the sun kissed bahamas. They license the rights to the second irish company. Blarney corp. Receives income and it pays next june no taxes because they are offset by royalties and fees. Uncle sam pays no federal taxes on the income from his irish subsidiaries because the earnings were not made in the u. S. And it all adds up. That was up 12 from the year earlier. That equates to annual revenue loss to the u. S. Of over 90 billion. U. S. , the u. K. Chancellor, george osborne, mentioning this in his Tory Party Conference speech. Is a multifronted war and eric schmidt is back in berlin trying to soften googles image. What google does is if youre going to buy an ad in france, you buy the ad in france and populate on a french webpage. The annual payment is to a Google Company based in ireland. Google Ireland Limited pay royalties to something called google netherlands holdings. They returned the royalty is and they pay us some over to a Google Ireland holdings. In that company is located in ireland, but it is registered in bermuda, where there is zero income tax. Ar google, this means Corporate Tax rate of about 2. 4 . They have saved close to 3 billion during this. It is not just the double irish. It is also the dutch sandwich. Smart creative accountants and this is the challenge for google going forward. It is not just the eu cracking down on this. Theres a greater smart creative accountants and this is the push towards tax harmony. It is going to be a challenge. For google, they are on defense. They are on defense over privacy, the right to forget. A lot of different fronts for googles to battle on. It looks like they have some push towards tough times ahead. With the story there will be a debate later on. Eric schmidt will be in permit. Last night, he gave a speech in talked about innovations. When he comes to germany, he is keen to promote and talk about the start