>> the volcker rule has passed. reaching a deal, u.s. lawmakers announce a two-year budget plan to avoid a fresh government shut down. , thernings are breaking latest billionaire to top list.s

welcome to countdown. >> it is 6:00 in london and we have some big interviews coming up. we will be speaking to the ceo and founder. biggest telecom company . >> the secretary of state for pulse." will join "the warm welcome to the program. it is wednesday morning. bloomberg reporters are standing by to deliver the stories. into ditex earnings have just

been released. >> david tweed is standing by in berlin. european business correspondent has the latest. barclays african unit is revamping its operation. >> let's get to the breaking news. the spanish retailing giant is telling us. >> it is a very slight miss. for 12.mate was if you looking at profitability, that is promising. they in the quarter with 6200 49 stores. the majority of those are in spain. when we talk about inditex , we are talking about the likes

of zara, you get the designs off the paper and onto the manikin into the shopping bag in a matter of weeks while the competitors take a matter of months. way john looks at me. talk every morning about fast fashion. >> for decades, they have been studied. it will be interesting to see what happens when they push into china. hub, the secret has been about centralized distribution. everything goes back to spain, doesn't it? ask china is doing pretty well -- >> china is doing pretty well.

u.s.barely feature on streets. , it is veryo zara small. it is going to be a big challenge for them. a post of above 10%. upsome big years, profits 22%. >> we will talk about this later. >> congressional budget negotiators announced a deal tuesday evening that takes the threat of the shutdown off the table. u.s. budget conference committee chairs paul ryan and patty murray announced their answer to avoiding the government shut down with a two- year budget deal.

it sets the annual spending cap at a trillion dollars a year higher than the $967 billion under current law. be eased byts would about $40 billion in the first year, 20 billion in the second year. increased pension premiums for federal workers. no major changes to taxes or entitlement oh grams. programs-- entitlement . the deal should be enough. it will take some convincing of rank-and-file members. ryan called it-- a step in the right direction. reduces the deficit by $23 billion and it does not raise taxes and a cut spending in a smarter way. we knew if we forced each other to compromise, we would get

nowhere. that is why we decided to focus on where the common ground is. >> there is still plenty of room for disagreement. >> we need to acknowledge that long-term has serious fiscal and economic challenges this deal does not entrust and are budget -- does not address. >> budget negotiators have made a deal with a few days to spare. a nice change of pace. resident obama praised it as a good first step. u.s. federal agency signed off on what they are calling a strict volker rule. it was a ban on proprietary trading.

our markets editor joins us with more. a victory for the banks? they do an extension, not have to execute this rule 2015. their main concern was liquidity. betweenmpact what we do trading and providing services, you would cause illiquidity. incrediblyture is perfect. the ceos will have to attach in writing the procedures are there to establish and force a review. when it comes down to this debate about market making, a lot of the banks have dispensed with their prop trading desks. these exemptions are broad for market making. you cannot pay the traders like you used to pay them.

you have toonger -- be very clear about what it is. if you think about the amount of money involved, the exemptions are key to maintaining what they called a market making role. you have to meet reasonableness. dimon has been ever present in this debate. ever more so president after the -- evermore present after the london whale scandal. >> it came to define the very essence of what hedging would be seen within this. jamie dimon, three months after thedisclosure, said if volker rule had been enacted, it

would have stopped parts of the morphing of the portfolio. the jpmorgan incident is something which help to find the volcker rule. that it was in the past 2.5 weeks, he felt they had moved to a robust piece of legislation. trade, but it is a mitigated risk. you have to do it on an ongoing basis. >> it is complicated to be robust, isn't it? they took one paragraph volker rule and they turned it into 100 pages. we still do not have all of the details. >> 700 meetings, 850 pages of

preamble. when it comes down to it, identified. >> finance ministers in brussels inch towards a deal on how to set up a banking union. our europe editor is in berlin. where are we in these negotiations? similar, we have the contours on how the union is going to work, but we do not have the details. there will be another meeting of european finance leaders in brussels next week before a summit of european leaders. we do have the contours. this is a single mechanism. the european commission will be the last decider when they decide who is going to be

resolving. we still do not have the details of how the common resolution fund is going to be funded or the details of exactly when banks can access the money. tableare proposals on the , nothing will be decided until the whole package is decided. it will allow the european central bank to get on with its job of becoming the single supervisor and that means getting on with looking at the stress tests. forhere has been progress choosing ahead to the supervisor of the ecb. he has been the top supervisor in france since 2003. she has never given a newspaper an interview. she will become the head of the

board of supervisors. she will be responsible for explaining the decisions the single banking supervisor has to take. she has a lot of experience, cheering the basel supervisory committee. she has been at the bank of france since 1974. her father was at the bank of france. >> david tweed in berlin. >> at stake a look at some of the latest news from the british -- let's take a look at some of the latest news from the british banking sector. rbs isu.k., the cfo of stepping down after only two months on the job. gone --eeks and he is 10 weeks and he has gone back to his old home. he is a nether executive to bite

the dust at rbs. a difficult time for the new ceo , of course. he is trying to outline his new strategy. they have been fined by the eu. not to mention does dyer allegations. ire allegations. >> barclays african unit has been deciding to move it strategy. it is falling behind and has been very uncompetitive in the african market. operations ide its introducing more mobile apps.

it is considering a quick think the branches on the ground with ipads city can offer customers a better surface. it has been very conservative. it tends to be prudent going forward, but it will be increasing lending in the mortgage space. as we head into 2014, our next guest says dollar yen is his favorite trade. from the web with the ceo and founder of the conference. stay with us this wednesday morning. ♪

>> time for today's company news. that price marks the top end of the range. tompkins is said to be working with golden -- goldman sachs on a public offering next year. help it to find a buyer starting in february or

leave the ipo. the south korean automaker said 2013 was the year of transition for the company. welcome back to countdown. >> our next guest says it is likely the fed will taper by the spring of 2014. is idea of global director of research. thank you for joining us. dollar-yen, favorite trade of 2014. down 15%. what is going to continually drive? >> the start of said tapering is important, the big event for next year.

it will be done by the march meeting. the big debate is if it could drive -- could arrive by january. , the fed will try to disconnect, the market will be uneasy that some later date tightening will come through. the dollar is quite depressed and is one of the big stories for next year. on the other side of the equation, the bank of japan is likely to accelerate its personages -- purchases of assets. we are not quite at the point where it is succeeding perfectly, and they will have to top it up. the combination of the two by the middle of next year. >> when do you think tapering is going to happen?

is it around the unemployment threshold? would argue that it is the unemployment threshold. the market reaction is showing you the market really feels the pace of asset purchases and tapering are the critical issue. you have to respect the markets. we expect tapering to start in january or march. once we get the initial tapering, the market is going to be uncomfortable on the defensive once again. we can see 10 year u.s. yields going up to 3.25%. the fed will lower the threshold and cut the excess deposit rate, but that will not be quite enough to comfort the market. that will be the key for all

global markets next year. >> michael, stay with us. his thoughts on the pound and the euro and on bond markets. ♪

michael, director of research.

for up for me the outlook fixed income markets within the eurozone and the euro in 2014. >> fixed income markets are a tale of two. they will not rise as much as treasury yields. small looking for a increase, two percent. bond yields are the ultimate safe haven. if you think that anything could go wrong in europe -- >> could we see a blowout and yields? the periphery bond markets? >> in the first couple of months, it will be driven by european specific events. a widening of yields driven by the feds and driven by the global fame.

we have seen spain and italy perform extremely well. inple of had a very good run the 17 months or so since august of 2012. not too much of a spread against treasuries. i think we can see a bit of a spillover effect. >> do you see there is a possibility that all of the attention will be focused on the cene?ean banking s put the european banking crisis back on the front pages? will likely be 50 billion euros across the eurozone. that will be paid for through so thed cuts, etc., amount that falls on national ares or european backstops

likely to be pretty small in sovereign debt terms. the may european elections will be sort of an issue, likely to be a euro backlash that occurs. that can impact sentiment. that is not a big enough trigger. the big issue is what will the recovery look like and will there be more disinflation forces. the market is going to be disappointed and the recovery will be extremely bumpy. the ecb will have to capitulate. >> haeckel, we have to leave it there -- michael, we have to leave it there. turns 10. expanding into the next decade and what tech ventures he has his eye on.

♪

>> both wall street and regulators are claiming victory after the adoption of the strict nubile girl role. rule. strict new volker own were able to push the start date to july of 2015. this uses the automatic spending cuts and reduces the deficit. would end a three- year cycle of partisan showdown. the world bank of scotland is losing its chief financial

officer. his departure comes six months after rbs ceo announced his own resignation. welcome back to countdown. the web began 10 years ago in paris. tech startupsfor to plot the future. are on thetions horizon? founder.ined by le web thank you for joining us. >> bonjour. >> when you started this

conference 10 years ago, the jew ever trained you would still be -- did you ever dream you would still be here 10 years later? >> i had no idea of. i was just trying to help the ecosystem. -- it is aeneurs place for raising funding. we have an amazing story. uber got thef idea here.

>> what are the other great ideas that have emerged from le web over the last decade? >> if you look at the last decade, we moved from the internet being on your screen to your top -- to your pocket. -- the bigmoving , jack dorsey launched square here on stage. it was there on stage, he did not know that twitter was important. company, and amazing sound service where you can discover new music and djs.

competitionartup with 700 startups that present here. wazy was sold to google for a billion dollars. >> an amazing story. tell us about the next 10 years. what is going to happen and technology in the next decade? it out your crystal ball. -- get out your crystal ball. >> there is one that we debated all day yesterday. bitcoin, we have been wondering -- in the music industry, you had napster. it disappeared. and then itunes.

now the entire industry has changed. now we are wondering if bitcoin will do the same with currency. we have been debating about that trend. connected objects, like wearable computing, google glass, of course. to go where it is small enough, people will wear them. movement, welf have a t-shirt that will measure -- if you getbody

sick, i did not feel very well. why is that? the creators of the ipod talking if you ring your doorbell, you will see the person ringing through your doorbell wherever you are. impressive. the big trend is hardware. every hardware piece has some software and connection in it and that is fascinating. >> bloomberg businessweek named

you one of the 25 most influential people on the web. who actually influences you on the internet? that is a very easy answer. my absolute reference is elon musk, founder of tesla and spacex. he was here in paris a few days ago. we had dinner. i think he is so inspiring. it is amazing what he is doing. him, what is the next business i should start? he says, you should do electric planes. someone should do electric lanes. -- electric planes.

take $1 billion in investment and 15 years. you should do it because it is fun. he thinks always outside the box . >> it has been great talking to you. do not miss our big interview later. the ceo of orange will be on the podium. >> the world second oldest bank more than doubled its workforce by using the financial crisis to its advantage. we what -- we met with one of the managing partners. without risk, there can be no reward. i am one of the three managing partners.

the partners have full liability for the five years after they are retired. of illiquidity or effect bank goes -- or if the bank goes bankrupt, we are liable with our personal fortune. in mortgage-sted backed securities. we saw the financial crisis has an opportunity because we were not affect did. -- affect it. it gave us a chance to attract the best talent with larger competitors have these problems. we want to have the best research teams. we diversify art.

we give excellent advice. when we look at all of the policy, howonetary can we take this money out of the market again? >> barclays africa unit is gearing up for an investment. we will go inside their new strategy. ♪

foxconn is launching an investment fund to finance wearable technology startups. they want to expand beyond manufacturing. competition for real estate in asia has receded so it's poised for even more deals in the region after investing a billion dollars already this year.

blackstone is expected to price its hotels ipo later today. it is hoping to raise $2.4 billion. welcome back to countdown. director has to step down six months after the u.k. bank lost its chief executive. with more on the move is carolyn hyde -- caroline hyde. >> it slightly does ring alarm bells. he had only been made chief financial officer.

we understand that he is going to be remaining in his position to oversee an orderly handover. could be anywhere up to 12 months. second time this year losing a top executive. this is a difficult time for rbs. last week, they had technology problems. fined by the eu for rigging interest rates. headlines.oor around.ying to turn it he is unveiling his new strategy just to get some reassurance

from the other senior executives. will they stick by him? shrinks, they warned us of a substantial fall after they assets.n toxic nathan bought stock is returning to his old employer. he was the chief financial officer there. cfo, this is where the speculation. hsbc, a potential ip a -- ipo?

the markets picked up so much, so it is out on the cards. will this be a promise that he will take the reins of power? rbs. small compared to step dish -- did threaten to leave two years ago. they promised him the role of cfo. >> thank you very much. barclays africa and unit plans to spend millions upgrading its operations, but will it be enough to win over lost market share? barclays africa has lost market share in south africa.

they bought a 55% stake in the south african unit. 160 millionspend dollars on upgrading its branches. just like what we have seen in the u.k. and the u.s. they have fallen behind the curve, these to be top in the mortgage lending space in south africa. it has not been a very aggressive lending space. 4.9% relativeat to total lending. it has been embarking on cleaning up. how is it shaping up? the unsecured lending rate is very exciting.

it is sitting at five percent, which is pretty high when you compare it to develop nations. the prime lending rate is sitting at a .5%. -- 8.5%. they have targeted the low income earners. barclays has been pushing that prudence. they are going to ensure they do not take too much risk on their books, but they want to add insurance. 2015, theyof 2/5 -- hope to be the biggest banking stock in africa. >> there was a time when consumers have little choice. >> across the board, there was very little competition, you would not get competitive rates. banking fees were so exorbitant in the country.

you started to see a lot of competition coming through. when you compare share prices, everyone else has done badly. it is indicative of what investors are looking for. >> one barclays did this deal in south africa -- when barclays did this deal in south africa, not the focus for very many --opean banks >> barclays has a strong presence. it bought a 55% stake, but then it sold its africa operations. it is complex.

a is focused on africa as whole as opposed to one territory. >> a famous cuban ballet dancer noworried that he has successor. ♪

>> we are just over an hour from the start of most european

trading. caroline hyde is here. heart, it is a bit of a chicken and egg situation. this is in the daily telegraph. trying to convince the u.k. , they ship most of theirs to european -- eastern europe. not livereason we do the wonky fruit, it is sent back to the farmers. the quality is still there, but it looks a bit weird. >> they have fabulous tomatoes. but they are a bit knob lee around the edges. who cares?

>> why was it so empty? >> it was raining. it was quite cold. public transport and getting into the stadium was very difficult. >> you are ridiculing me for fie.ng taken a sel >> the other person who received criticism was jacob zuma. he was booed every time he was

on the screen. he asked the crowd to be disciplined. dancerrld-famous ballet lamenting the fact that he believes he has no successor. the computer generation lacks the will to succeed and leads to a lack of passion and commitment. this man is something of a miracle, the youngest of 11 children. he said even his daughter is not interested. >> i did see him once, to be fair. n.e of the teams i love wo the team you have never heard of, the ukrainian team. they are in the knockout stages.

we are not winning much. >> you are in a good mood, that is nice. ♪

rex the following is a paid program. the views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> the following is a paid advertisement. >> welcome to our show, living without back pain. do you suffer with back pain? hip pain, or shooting pain that runs down your leg? stay tuned and discover how others just like you have found the new way to relieve their back pain. >> i put the belt on and i have had it on for a minute and already there is a reduction in pain that i had in that spot in my back. it is weird.