>> another bump in the road. gm fails to gain traction. >> resident food and gives his state of union speech and he says that russia's unity must be defended. flight.uture of issuing the outlook for 2014. we are joined on "the pulse." good morning. welcome to "the pulse." i'm guy johnson.

>> i'm france in the quad. -- lam francine the quad qua >> let's begin with our top court story. -- let's begin with our top story. peugeot will have profits and cash flow. caroline hyde joins us now. talk to us about the events related to peugeot over the last six ivan 12 months. this assiduity events occurring in latin america and russia. 1.1 billion euros is where the hate is coming. -- the hate is coming. -- hit is coming. the fact is that the peso is going to three percent and the

russian ruble has weakened 12%. these nations are going to be significantly head. to weakness in the currency and the overall force of markets. that is where the challenges are stemming from. is the savings they're getting from general motors and the relationship. it is 40% less. they told us it would be to win dollars in 2016. now, that is downgraded to 1.2 billion by 2018. clearly that is a move that they're making to try to ease into the problems and the cash burden that the half. it is not paying off in the way that people want. >> dominated why no are buying the cars. that is the crux of the problem. it is relate to the european economy and that is very tough. what do you tell investors? into the are buying

story. it is more than doubled. what they're trying to tell us is that they will have a cash burden by next year and the cash burden will be half. he will try to ease these exchange rates. it is cyclical and they will try to offset that. they also commented that it will show up and the finances. that is not music to the investors years. thatreported yesterday they are issuing 3-4,000,000,000 euros. what is key for investors is the partnership. they will get less exposed to europe and asia. still no update. they say that they have talked to the chinese promotional company at the limoneira state. they have a potential -- at the pulmonary stage. -- preliminary stage.

they have to have a cover next year. >> thank you so much. they have doubled since the beginning of the year. >> in the last three or four weeks it dipped sharply. >> caroline hyde is there. >> this is what we're focusing on, as well. is at 20 boxes share and raising $2.5 billion. but manus cranny has more. are investors getting question >> a pretty good deal. -- getting? a pretty good deal. anyou are in investor, -- investor, what effect they took the waldorf alstom area --

waldorf -- what if they took the waldorf of story a -- astoria? of growth.l story chinare on the make in and a well run franchise. they will keep 76% of the company, fran. they will stick with that for many years. there is a beautiful acronym that they like to use. the revenue for the available room is rising. economically and from a real estate point of view, having this strategy layers the cake beautifully with interest rates. it saves them versus some of their rivals. >> they have taken considerable energy to make the deal work.

survived 2007 and we know what happened after that. credit collapse. >> hindsight is a wonderful thing. they get it at the top of the market and they have pedigree in this business. they have portfolios under their belts. what they did with this deal was smart, smart, restructuring. they bought back some of the debt and loans. they rebalance the portfolios. they have gone from a very myopic view to a very global view few stop -- view. , youu are an institution will have a portfolio. do you want hilton or do you

want marriott? where do you think you will get the buck? we will see -- where do you think you will get your best bang for the buck? >> that is the executive will be on bloomberg television later on today. it will be fascinating. the conversation comes about 3:00, london time. >> president putin is giving his annual speech to parliament as we speak. he is talking about the constitution and ryan chilcote joins us with the latest. what has he been saying so far and what to expect him to say that will radically change the way that the russian constitution is going forward? >> this is a big speech. what could wants is what prudent gets -- is what prudent

gets. -- putin gets. he wants to see them come back unsure and he says the companies that are registered outside of cyprus and russia will not get government support in the future and that their owners must a russian tax. they point out the deal. theaid, why is it that russian oligarchs who teamed up the bp and the buyer, russian state oil company, almost all the people involved are russian and the deal goes down in cyprus. he doesn't want to be involved in that. it is interesting to see if you put some action behind that. is a talkse things inut a big prison amnesty

russia in as many as 50,000 to 100,000 people being released from russian prisons. many of them are in them for economic crimes. investors say that they need to be released to liberalize the atmosphere. saysoking to see what he about the ukraine. the ukraine may find the russian customs union very appealing. he says they will not impose their will and the ukraine can , whether itit wants joins the eu free trade pact or the russian customs union. >> to stay with the subject of the ukraine, we have breaking news. saysu foreign-policy chief that she has signed the eu trade agreement. they have the association of the eu membership at the group loss

last meeting -- at the groupon/meeting -- at the group's last meeting. they'll be a little bit of a turnaround. we will see if mr. putin is aware of the news as he makes his comment. we will see if they can give us some comments and update is in the details. >> the bank of israel governor is set to take the number two spot. president obama has artie offered in the job. elliott gotkine has more. >> it is surprising in the sense that you'd expect the united states to appoint someone. fisher just finished working for the bank of israel. it is not surprising when you look at his credentials.

he was at the bank of israel during the financial crisis and help them whether their storm better than any other financial bank around the world. he is a trailblazer and cut rates of ahead of everyone else. busloads of foreign currency to insulate from the strengthening shackle. mentor to ben bernanke and taught larry summers. this is a man was serious good stuff on his cv. >> visit the grown-up of the central banking world. let's talk about him if he is approved. he is a decisive central banker. >> very decisive. janet yellen will be approved and she will be the top person there. he has crisis fighting experience. he is not a huge fan of forward guidance.

he says they should not try to influence people's decision by giving forward guidance. they should come forward and say what is going on. tapering the that bond buying program should be done sooner that rather than later. he reduced his own power and the bank of israel by allowing it to be decided by committee instead of one person. i'm sure his experience and be very much like this. thank you very much for the very latest from tel aviv. >> we have the shares today. they have confirmed that they are in talks with liberty global. a proposal that was called inadequate stop >> investors spent $400 million on sanction violations. the violated station programs.

rbs says that they will comply. pay to resolve investigations into whether the institution ignored signs of the bernie made off ponzi scheme. it includes a deferred prosecution agreement. ipo.ming up, the record we are expecting this hour and we are looking ahead. we have the guide. we are joined next.

>> welcome back. let's talk about travel. the largest operator set an industry record by pricing their business at three point $5 billion. the ipo is a major event. -- $3.5 billion. the ipo is a major event. this is coming from the increase in passengers. ahead to the coming year. we are joined by the ceo for europe. concierge.bers only

>> good morning and thank you very much. your painting a credit -- an incredibly positive take sure. it is to a point. i can see a lot of further progress. value travel. it can enhance their lifestyle >> it is chaos. >> it is chaotic. it is suspending kid's inheritance. >> right. i'm looking forward. >> when you look at the travel trends that you are saying, you look at the way people are spending inheritance money, how will they spend in 2014? >> they have the technology front that is similar to the

other market brands. there's a certain element that is online and off-line. people are looking between the two. it is immensely competitive and there's a huge variety. people love the variety. >> as the recovery occurs, will people travel more? we'll be looking spending? i'm wondering how the economic trends affect the way your business operates? >> the quintessential point of view is the upper trend of the market. they tend to value travel and exploring further around the world. >> what are the key things that people are looking for? o'leary says that we need to focus more on service. >> service is important and we need more competition. there is continual growth in the markets and there are new properties coming on at every

new resort. they're all face it -- chasing customers. it is extremely important to them. >> where do you see your business in 2014? new hubs anding making it easier for us to travel around the world. you are aware the key destination. >> there is a lot of accessibility. it is stronger and the caribbean and southeast asian areas. it is popular this time of year. a lot people are looking to have high-quality ski resorts. >> you are not going off the beaten track. >> these are people who are and ag for destination once in a lifetime episode. the second thing is that we are going to unusual destinations and where they want to be overwhelmed. they have places where people

want to be wowed? >> i'm not sure the environment is happy with that. will do that for another day. i to you. what is the wow factor hotel that we will look at? what you have the w hotel and that will be launched and recently opened. a private island in the maltese which be a six star property. it will appeal to people who want to get away. >> indeed. >> nice to see you. andquintessential lifestyle travel group. we will continue the conversation. that conversation comes up in the next hour. >> still to come, the bloomberg exclusive. we are joined in the studio to talk to dod transfer.

viacom paramount pictures has a picture of this month and we get ron burgundy. >> how are you? >> black. >> black. lack. job.ian lost his

>> welcome back. it is time for hot shots. we have a few nice things to show you from around the world. pretty cool pictures. >> the busted out the best move for the cut savoring what -- world finals. they beat out the two-time world champion. he got his first ever win. the east asian game began with a bang in myanmar. it included technical almonds. -- elements. oh yeah. >> some people cannot be happy with one guinness world record. a german daredevil aim for two. first, he got a record and then he got the record for the most arts caught in a hand. how did he think of this?

>> i think it is interesting. the fact that he and artie drank them. >> that is the way you do the darts. you have to drink another champagne. >> moving on? >> yes. yes. >> there is no way to follow that. in terms of equity, markets have declines. they have not seen a movement in equities. months -- close in two- in two months. there is only one word, i will bore you to death. taper. we go to jerod. 157.80. this comes through for the

european revenue. you see that you joe story today -- the two joe story today -- ot story today.e the equity number there is 2/10 of one percent. that show is green. it is flat at the moment. -- it is flat at the moment. let sherry the dollar dollar.s show you the lulu show you the headlines that have not been seen since 2000 -- we will show you the atlanta have not been seen since 2009. >> thank you very much indeed. >> up next, the company behind mtv.

viacom has big plans. johnson and francine is at t.

>> welcome back. we're live from bloomberg's european headquarters in london. vladimir putin has given his annual speech to parliament. called by domestic factors in the ukraine and president clinton says that he sees no contradiction in the participation in the union and europe. next year's stress test will be more than previous exercises.

the former president said that he will not hesitate. 130 lenders.ave of israel governor, stanley fischer is the top choice for the dead chairman. a person -- federal reserve chairman. a person who is familiar with they affair said the job was given to fischer and he accepted it. over to you. >> let's change gears. you may have noticed that ron burgundy has been everywhere. paramount pictures launched their pr blitz before anchorman releases this month. we look at whether anchorman o's gold campaign -- anchorman

2 bold campaign is paying off. sequelorman may spawn a that will be the comedy head of the holiday season. how did this happen? let's get the obvious out of the way. became acked funny and cold classic on dvd and netflix. i do not know if it is any good. i have not seen it yet. already, it is a marketing juggernaut. in the year and a half it was announced, there has been a game, a book, a mobile they even rename the college. -- renamed a college. >> this is ron burgundy reporting for years pn or -- espn.spn -- for

artie makes --e -- already makes. will ferrell is genetically engineered to play ron burgundy. >> i love scotch. >> you put in the world and beloved. we love that there is an ice cream flavor about him. i guess anchorman to could tank. it probably won't. because of that, there will be lots of other movies. a strategy does not work unless you have the goods. hide up with this, but i am a big deal. push this know how to , but i'm a big deal. behinde is a media giant paramount.

joining us now to discuss the the ceo and president of international media network. i'm looking forward to seeing the film. the point that was made about the package was that this epitomizes the digital story that is developing and they are good at understanding the digital environment. the digital story is disrupting our business. what happens next year and how are you positioned for the revolution we are enjoying? day, ite end of the starts and ends with great content. what you see with anchorman is great content. is an incredibly engaging character. great buzz about the film.

and have been confidently aggressively marketing it. saw, thisthe clip you is something they are managing and have done a fantastic marketing. this would be the most consumed ema ever. that is an important statement. we live in a multi-platform world. if you are a 21st-century content company. use whaty, you need to platforms. they focused tremendous resource on that. overcooked -- the ron burgundy character only comes along once every decade and is larger-than-life. we consume content every day. how is that content as good as

ron burgundy on digital? >> we look at it and we think we are in a world where there is seeingmedia and television on multiple platforms through the wide ramp -- web and mobile. you talk of additional and the social networks, that is where people gather to talk about certainly, entertainment content is at the top of that. find the ema show at the top of it when we are running in amsterdam and you find anchorman heavily ranked as a twitter topic. that is part of the entertainment consumption cycle. used on to be

integrated basis and that is what we focus on. a tv studioto build expensive.ution is there are cables and you look it up to the internet. argue that you can create a great piece of content and we have seen some things that are going viral and getting viewed around the world. on a day and, day out basis, we thebearish and we look at cable network portfolio and the multichannel for folio. and there my glitches is a semblance of the economy. a portfolio like that is an undertaking and we will continue to oversaturated. there is execution and it comes down to integrating multiple pieces.

with the produce a film and market the television show and news studios. they do things on the web. that is about execution. but if you can get him in the studio, i would be very happy. >> i'm sure you could. with fivere a lot comp. we talk about destructors and what do we had to get right for 2014? is it more integration on twitter? there are more competitors out there than you thought two years ago. what do you want to not miss the boat on? >> everyone in the consumer- oriented businesses wants time howit is the one game of you get more of their time and attention. whether it is movies or in front of a device. we are focused on research.

think, as a media network company, we do more research than anyone in the world and we research our key demographics. ourave a demographic around nickelodeon brand and a young adult demographic around our comedy central. we asked them what they want and how they want. that is right to maintaining your shares with them. >> you look at websites all the time and young companies that come up quickly. still, are there two or three at the top of your list that are of worthy? your business model i'm interested to know what companies you look at when you judge a get a sense of where you are going. >> we have people around the world looking at this and i think it is not about any one particular company and saying,

all yeah, there's the odd additional thing of the moment. you see, you see companies coming up and you see them lighting. the more important thing is that you watch what is going on and use the word fast follower and you use the same techniques. weather is interacting with or using -- twitter products on advertising basis, you have to do all these things and it is not about the one hot thing. twice when you strategize and about the stuff, the stuff gets built-in pretty fast. >> you worry about if you are moving quickly enough. not something where time is your friend. if you move quickly, you have tremendous opportunity. but thank you so much for now. bob stays with us and will ask

about what we're watching as we take on the mnj sector. >> will bring you the chief executive and talk about the travel trends and the future of flight.

>> welcome back.

>> i'm guy johnson. of media.d president bob sticks around. let's talk more about business. where do you see your opportunities next year? we're talking about the opportunities in the emerging markets. you told us that russia was moving and brazil was critically important. how are you developing those markets and maintaining and developing those markets in europe? >> sure, we have brands and countries. on bothnue to expand fronts and we talk about countries. 18 months back, certainly come will look at some of the issues in europe and we can talk about those. we knew we had to dedicate more resources on the countries that

were going more quickly. take a look at russia for us, even three years ago, the relatively small business had a couple of brands important -- we launched and owned and operated network on october 1. nickelodeon is now the number network inhannel russia. they launched a channel in russia and are about to launch another brand in russia. that is a market where multi- channel penetration is still relatively low to the netherlands or the united kingdom. it is going very quickly and we see consumers loving access to product in that way and advertisers are falling. a market like russia is a great growth market. bouquet ofory is the businesses that continues to

grow and we do the same thing with mtv in russia and brazil. we have licensing and we launched a operating network. you will see more brands coming up and this is high-yield growth and that is important. it is a great success story. >> what about china? you are significantly going to be there? >> china is a difficult market. there is a fair degree of regulation, shall we say? day, it is a the huge potential market and it is easier to operate than others. worksnsumer product pretty well in china and we distribute spongebob not on our own network and we launch it -- license it to cctv. it is the most-watched animated franchise and we introduced the teenage mutant ninja turtles. and is doing spectacularly

there'll be a paramount film on turtles, as well. >> i'm are watching it years ago. >> the nickelodeon guys some newd and created ninja turtles. we put some real's -- a ninja turtle fans in there. the traditional media business is tougher and we aren't licensing our project to over- the-top layers there. -- players there. market thata requires work and patience. >> what you learn from networks with high speed access? you talked in the last conversation about the time. talk to me about what you see in countries like the netherlands and how that changes your dynamics?

many cases, people talk about a triple play and operator operates in linear television and telephony. have beenlands undated been side of things and people talk about tv everywhere. that is when you license products to a multi-channel distributor and have access to show it on a linear streams and in ipad. you can tune into a channel and have tv everywhere. you can take it outside her house. the netherlands was on the first-mover side of that. how --curious to know how what he is seeing and now the ones is the cutting-edge of the stuff. >> i am interested.

liberty global and upc is on a multivalue distribution. youave it in terms of what can do with that. we have been active in consolidating and we will continue to be. people, at the end of the day, want content and they love to get home after a hard day of work and turn on their big- screen tv to watch it in hd. many services have record ratings and they interact with the content. >> are you working out anything in europe? ? you don't talk about what you haven't done. , yes to findalist

out. >> we're working on a lot of things and we're not in the business of doing acquisitions. the liberty global guys have been clear that they are looking at opportunities to consolidate the distribution industry and they have diverged in the u.k. earlier this year. a great long-standing client of ours and will continue to be. creating great entertainment content. we have key demographics and we will continue to do that. there is an acquisition doeshere in the world and not the thrust of what we're doing. the thrust of what we're doing is entertaining and spending everygainst our contact year. >> lets you to want to see with 2014 does. >> and you can bring ron burgundy --

>> the president of media companies. man -- the woman is on a mission. we will have the will of finance next.

>> we're discussing incorporating environmental

data. i'm joined by the ceo of cornerstone capital and thank you for joining us. youtart this out, what made have this initial idea of having the community embrace this? >> when you are the director of research you start to figure out how you can go down different and interesting avenues of how do you get than to enhance what they are using. up with a systematic analysis of environmental and social factors. in particular, corporate performance. it is essential and i went further and further down that area of inquiry. i came to cornerstone. >> maybe it is more on the governance part. it is all incorporated and it is heavily incorporated. >> if you get the governance

right and the consciousness of these huge global macroeconomic imperatives, you will work towards progress in the environmental and social realms. you must start with the government in the culture, frankly. >> what surprised you the most when you look at the companies and countries. we are looking at the sector or this industry? iswhat is most disconcerting the lack of standards for disclosure. what is not clarity on companies could and should talk about and what language they should speak of it in. there's a lack of a standard for disclosure and that conclude that concerns me. it does not surprise me. i think we can make progress on this. >> this would have to be through shareholder activity or regulation. >> and has to be through a number of things. complex problems.

finally change and infrastructure. income inequality. conflux problems cannot be solved sequentially and we need multiple initiatives. we need shareholder activism. is a lot of things that we need to do. ceo ofs the founder and cornerstone. >> what we have for you, the first word is next on the radio. for you, is the second hour of the polls. what do we have for you? we'll talk with the future of the aviation in industry. we'll find out the a man who knows a lot about this. he'll talk to us. join the conversation. we would be delighted to have you along. found.e can be

we'll take a short break. we'll see you shortly.

>> liberty global is making a bid before the end of the year. >> another bump in the road. the bottom line takes a hit and gm fails to gain traction. currency moves take their toll. >> the future of flight. the issued the 2014. tony joins us on bloomberg. >> good morning. welcome.

you are watching the polls and we're live from bloomberg costs european headquarters here in london. >> good morning to everyone. this is guy johnson. i am francine. i have a cold. >> a warm welcome to everybody. we have a show for you. what are we talking about? well, our main story -- are inking news, they talks for liberty global. this is another takeover. liberty global already owns 30% of the company. >> let's go to manus cranny. manus, -- >> this is a tale that you have to get your hand at an as much pipe.-- hand on as much this is the dutch cable operator and they rejected it over a month and a half ago. this is the inquisitive company in the world. what you have there is liberty

going after synergies and monetizing assets. really being quite difficult. it was a land grab by liberty media and they got 30% of the company. and picked up virgin media they lost out on kabul bushland. this is about germany and the netherlands. this is about getting control of assets and that allows you .ccess to growing your business there are a couple of outstanding factors. and theyt off a chat said that they played their markets. they have been long on kabul and virgin. consolidationnder and that is a critical point.

>> absolutely. manus, thank you very much indeed. manus cranny talking to us about the labor news him liberty on liberty global. moving onto travel trends. in the past couple of minutes, the international airline transport association has raised its global airline profit forecast for this year and next year. they always do. ceo and caroline hyde joins us now with more breaking news. >> quite a lot left for next year. a 40% increase in profits for the airlines. noticeably, it is not the increase in the passengers numbers that would drive it forward. it is the efficiency of these companies that are coming in. sales are not really changing the much, according to representative of 240 airlines.

passengers are going to be increased and cargo and trade are still very slow. rounds in thede 2014, you'llr 2013 likely see cargo decreasing. sales will be stagnant. profitability will be improved. that is because of jet fuel prices. jet fuel prices are coming down and there's consolidation in the market. you are seeing companies with capacity aircraft and is far more efficient. all of this boost profitability. united states is where we will see some improvements. also, europe is set to do pretty well. latin america in and other regions.

the area of weakness is asia and africa. we will see slower growth in the coming year. >> you named the regions that will be doing well. not so well, do you talk about the subsectors? if we have to cleat -- we have to keep a close eye on the transfer china. there is a forecast for passenger growth and it was going to be rising. there is going to be profits and it is helping the overall feeling of growth in certain regions. and thatee passengers chinaing from china southern and i is china's biggest airlines and they will be doing pretty well. the domestic movement is where we will see passenger growth fuel itself and the emerging markets and china will become the single largest driver of growth. they'll become the second

biggest market for the message flight. they will do well and that is where we will see international growth. we will see middle eastern passengers flying out to the middle east and the asian pacific. they want the largest international carrier to do well. of 31%ers had a big jump in the next four years. it is not going to be doing that much help. .ack to you >> thank you very much indeed. we're getting details and the joining us for his first interview of the day. that is coming up. vladimir putin gave his annual state of the union speech this morning. ryan chilcote joins us with his latest. what does he have to say about that? >> there is no rush and that

this is the topic du jour. russia's neighbor to the west and it was part of the former soviet union. the president is on record for saying that one of the biggest mistakes was laying them fall. they have been in a geopolitical and whatbetween the eu start that was when the ukraine president said that they would not sign a trade pact agreement that struck a political crisis that is still underway. the russians are addressing the parliament and saying that the ukraine might find it appealing to join the customs union. they also said that they did not see how the two are mutually .xclusive

they want to be part of the free trade back and the customs union. he said that russia had no intention of imposing its will on the ukraine. this is all very interesting. they said that they heard from the ukrainian president. they said they intend to shine pact.ee trade not as clearly as people were anticipating. >> you're talking to a company and the growth markets with media. >> this is interesting. the russianut president and how this is slowing to 1.5% this year. they're building a new economy and that is a big priority. video-on-demand fit so perfectly and that. one of the oldest and biggest video demand products. russia would like to grow a tiny industry and is predicted to come in at $75 million.

versus $4 billion in the united states. it is 50 times smaller and half the population of the united states. yet the ceo saying that the sky is limited and that we can really grow. let's not forget that russia is the biggest internet market and it is growing by 15% a year. >> thank you so much. ryan chilcote has the very latest. governornk of israel looks at the number two spot in the federal reserve. that is a according to people familiar with the selection process. president obama offered him the job and he excepted it. we have more. is he a surprising choice? >> surprising in the sense that you would expect the united states to appoint someone to israelin they hold

citizenship and may serve a foreign government. hisainly, if you look at resume, he is a close thing you have two error and although. -- runn although enaldo.h -- r there is something that not other countries since i. -- can say. they have the strengthening shekel and it is year-by-year. is his previous career at m.i.t. and he was a mentor to number 90 and taught mario draghi and larry summers. at the imf, yes crisis fighting experience in israel. , there are few who

can match fisher's qualifications. but you talked a number of times over the years. give me a sense of what he is like? -- like. he is someone who likes to have consensus and has reduced his powers to the bank of israel by spreading them to committee. he has patience and wake its questions from people like myself, he is self-deprecating and witty. he is humble. he gave a speech at a farewell dinner for stanley fischer and he said that they led the imf together. stanley fischer remembered him from his time at the imf. he wanted to catch up. does the type of person who lee is an is hard to find a person

tries anything bad to say about stanley fischer. but thank you very much, indeed. -- >> thank you very much indeed. >> that is as a carmaker takes a 1.1 billion euro. the care sitting from partnership with gm. pay $2 million into the bernie made off ponzi scheme. aey are close to a deal with prosecution agreement. they'll have to pay $100 million to settle a sanction violation. programsate sanction they willhat strengthening controls. asked aboutad, i

the first. we'll ask him about the strength of the airline industry. >> good and gives him a state of the union address this morning. -- vladimir putin gives a state of the union address this morning.

>> good morning. welcome back.

you're watching the polls from bloomberg's european headquarters here in london. what start with the foreign exchange market and we have seen today. what we have seen in the last few hours is the eurozone coming through with not exactly a great number and not painting any positive picture. also had mario draghi talking this morning. we have had a high earlier on. we saw a handover that went recently well. we had a bit of a selloff. we also had this overnight. is he making the point that what we will see move forward from to makethe ecb moving it harder for banks to hold sovereign debts on a risk-free basis? that would change the dynamics of the whole story. pay attention.

this is worth listening to. trading asre we are we speak. francine, back over to you. >> the rest of the day. bloomberg had its normal state of the nation address. both houses of parliament have the crackssful and are beginning to appear. we have the founder and director. thank you so much for joining us. talk to us a little bit about this speech. it was an interesting speech and it was not of massive importance. >> is a symbolic location every year. there is an emphasis on the need andevitalize the economy that is clearly the headline takeaway from the speech and name news -- and the news, more generally. it goes down to and.

to the idea that the russian oneomy is not a very novel and is one that capitalizes on big and dominant state- controlled companies. it does not really promote entrepreneurship in the medium and smaller level. this happens with industrial economies. >> there is a point that mr. putin made. that deniedmpanies russian state aid. >> it is a trend of greater suspicion and foreign influence in russian economies and russian societies. it is a term. it can be stressed again. foraps to respond to a need intimidation and economic vitality in the country. they need to find an alternative way to consolidate the state and

the society. there is a suspicion of foreign influence the plays well with many russians. >> you have putin arriving in front of the assembly and the questions last four or five hours. will be on the ukraine or the economy? >> there'll be certain elements of reactions to the government that are troubling and there has been a surge in inter-ethnic conflicts in russia and this is something that came out and thee is a perception that local authorities and governments, the regional governments, need to be improved and made more responsive to the population. there are regional conditions that are huge in russia and

there are very stagnant and dynamic regions. , again, be an emphasis on russia possible in the world and the achievements in the middle east. you can see them and you consume with the serious conflict. this will be the ukraine situation coming up was up but thank you so much. the founder and director. coming up on the program, the future of flight. shortly and wes discussed the first tv interview of the day.

>> 23 minutes past the hour. welcome back. households,nd wereed nsa practices revealed. joining us to discuss the year in cyber threats is the president of the second largest security form -- firm. andas founded in tel aviv is now a nasdaq favorite. good morning and nice to see you. 2013 was quite a year in your business. the magnitude of what has changed is how significant? >> it accelerates dramatically and i.t. protects all of our lives. our company relies on i.t.

see -- we power, we see people losing power and more people lose their power through hackers in basements and internet connections. to governments and nations. we see everybody for dissipating in a game of gaining knowledge -- we see everybody participating in a game of gaining knowledge. >> what does this mean, in regards to the nsa. >> it depends on who you are, probably. one thing i can say about the industry of packing is that it matured. you do not to be very sophisticated. it's a have enough money and evil. >> the more money you have, the better you're going to be. the nsa is pretty well funded. let's i do not want to comment on specific governments. i think all countries are

involved. we have cyber armies in syria. >> that was a bit of a surprise. >> thing about the idea of no electricity or no water. it is a big issue. but is it possible that google and apple -- >> is it possible that google and apple will want to sound virtuous and like they are victims. is it possible that they collected data and at the end of the day, somebody works their way through the encryption question mark >> i would say -- encryption? that you get 80% protection. get -- open everything that you get to make your own password. change your passwords all the time. these are the basic things that

will help you. localize their life. tothis is only you can do protect yourself. nevertheless, data is not encrypted in the way it should be and all of these things that are talked about are achieved. can we protect ourselves from the government? is it possible? >> it is all the technology and every encryption comes at the end of the day. could be years. it is a matter of competing powers. as i said before, there are competing deals and let's talk about enterprises. enterprises need to look at two things. protections of data and you need to do both. there's a mix of two things. there is data you create and that block things from happening and there -- they are

intelligent to understand the bad guy. this combination of fast- changing protection -- >> we have to stop and leave it there. we'll be back in a couple of minutes. .

welcome back to "the pulse." let's talk about the bloomberg top headlines. antigovernment protesters have retaken independent square of key of f -- kiev. catherine ash and says they still intend to sign a new trade pact. more than 90% of economists surveyed by bloomberg say next year's stress test by the ecb

will be more credible than previous exercises. ecb president mario draghi said he won't hesitate to fail banks if needed. details of the exams of the 130 lenders are due to be released at the end of january. former bank of israel governor stanley fischer is barack obama's top choice for fed vice chairman. this president has already offered the job to fischer close.ng to someone >> let's talk about one of our main issues. the latest forecast for the next two years. the airline groups as profits will jump to record in 2014. joining us for more on the from geneva, his first interview of the day. good morning to you, tony. the probability numbers look like they are improving.

what really struck me was the margin. a margin improvement of some significant magnitude. nevertheless, are these margins enough for this business? no dumb a there not. the margin is improving -- no, they are not. the margin is improving. it is still not enough to give the adequate returns to shareholders. >> what is your take on the european recovery? how will that affect demand from europe? and then we will get onto the u.s. megamerger. recoveryl, we see throughout the industry, it europe included, and it is one of the drivers behind the improved performance we see for next year. -- talking of europe, we have a series of airlines in europe, i think we know which ones were talking

about, that are really continuing to act as a drag on european sector. how do you see this problem in your been resolved? do we need to take these airlines out? do we need to merge them into bigger groups? what needs to happen to pick europe on a more solid footing so the margins you're talking about improved again the year after next? we look at the industry as a whole, the structure of the industry, if we look at the example set in north america, in the united states, consolidation has proved to be a major help to the industry while also providing better connectivity for passengers with no reduction in the level of competition in the marketplace. the problems of europe has to line the direction of more consolidation. we've currently got three big aviation groups in europe. i think the way forward will be to see more consolidation into these major groups.

>> how much of european airline sector do you think at this point in time covers its cost of capital? well, you will have to go to each individual airline to have a look at that. but as a whole, of course the sector does not cover the cost of capital, if you look at the global level. >> talk about the u.s. we had is megamerger -- we have this megamerger. what happens after that? >> i think we've seen the consolidation of the u.s. market into the three big, if you like, major international carriers. that is -- don't forget, southwest is a huge carrier and huge player in a major competitor in the domestic u.s. scene.

that looks to me to be a reasonably stable structure going forward. smaller, still some independent carriers. i think the heat will be turned up on them. compete withlt to these three huge carriers. those three are all busy knocking pieces out of each other in the competitive marketplace. it is going to remain extremely competitive market. extremely attractive market for the u.s. consumer, but it should be a market structure where we should be able to see, providing world economic conditions remain recently positive, we should be able to see some returns starting to come back in that market. americairlines in latin are made to do well. kenny was carriers take advantage of that by adding, for example, more routes to south america? we will see that.

i think we will see the u.s. carriers, generally, now that they have the domestic act together, with their own businesses, i think we will now see them spreading their wings internationally to all the growing markets. i think asia is another area they will spread to. i think we will see asia being a focus for these carriers. if you look act over the last 10 years or more, the u.s. carriers have been preoccupied with sorting out their domestic problems. and they have lost a lot of market share internationally. now they're coming off a much stronger domestic base. i would see them now starting to give you more aggressively in international markets. we might see them increasing their presence in international markets. i think, generally being a much stronger player in those areas. like to how would iata

see the u.k. solve its airport capacity problem? it is a huge problem. what we would like to see happen is for the air force commission to publish its recommendations and see if a cross party consensus on the way forward. there are possible salute -- various possible solutions. to mission is very well-qualified, smart people doing some great research and great work on that. i'm sure they will come up with sensitive -- sensible alternatives. the problem is, it is all too slow. it is being delayed so much. we would like to see a much faster arrival at a political consensus because any new project to solve this problem is going to cross across time terms of several different administrations. let us move forward instead of

simply talking as we have for the last 30 years or so. >> i think we will hear not more news about that next week -- we will hear a lot more news about that next week. thank you for taking the time to join us. in 20 minutes from now, "surveillance" with tom keene. he joins us with a preview. we mount a -- we may have the name of the fed vice chairman. >> what a lovely surprise. his name has been bandied about. michael mckee and i will have a conversation with another vice with her perspective on her good friend and colleague stanley fischer. this is huge global news. very big news in washington. we will try to give you the perspective in the 8:00 hour. also, evercore partners. we will talk about the volcker rule but maybe it's constructive impact. we have a number of things we will look at including apple and

facebook. sam grobart will join us with what i thought was one of the most important articles on apple in 2013. absolutely nailed apple inability to not go forward -- not go downscale forward. ,> are you going to see it "anchorman"? >> if you would like me to see ron burgundy, i will go. i promise you. >> let's all go together. tom, they do so much. -- tom, thank you so much. >> manus cranny. >> we are trading on a two-month low. i'm trying to choose the word for industrial production and i'm torn for active additives. it dropped by 1.1% and the

market was looking for growth. to reassure itself as we would to the end of 2013 there was some kind of uplifting industry. volumes are down by about eight percent to nine percent on normal days trading activity. in london, yet the minors on the downside in the london market off by less than 1%. as you go to the u.s. opening, you're looking at a softer opening. jobless claims are coming out in retail sales. that is what the market wants to know. you've got this little bit of a dip as we go to the u.s. opening. unchanged, but tipped to the downside. let's go back. , john malone is on the hunt. he owns 30% of ziggo.

what will he pay? the deal is fully priced at this level over 33 euros. unlikely they will up the bid. if that is the price they're talking about, ziggo confirms tomlinson talks officially with them. back to. >> thank you for that roundup. as we had to break, follow us on twitter. >> we will be back in a couple of minutes. 20 more to come on "the pulse."

>> welcome back to "the pulse." let's talk about the company news we are focusing on this morning. apple is sending a medical team to a chinese factory operated by run -- pegatron. to haveworkers are said passed away in a short time without saying how many, the group said they make apple iphone 5c's. thee antitrust settlement, obvious offered to settle in the

key pencil requires minor changes to win the galatians approval. the regulations approval. on clear has prices -- montclair has prices exceeded 20 billion euros shares. back to you. >> we are talking cars. falling this morning as the carmaker takes 1.1 billion euros charge that will had to -- hit profit and. >> they did warn is back in the third quarter's were published the foreign exchange rate, weakness in the russian ruble and argentine peso was going to eat up the prophet but it is eating into it by 1.1 billion euros. in the peso, 12%

in the russian ruble. everyone bank percent move -- every one percent move. it is down to worsening market. it is not just this charge hitting the shares. it is also the cooperation with general motors. it is not bearing fruit. they promised us synergies of $2 billion by 2016. they've lowered by 40%. >> the message to investors is stick with us, we have this under control. >> the offset to the charge fluctuations but crucially saying, we're going to shore up our finances. but they will have to share more -- sell more shares. not music to investors years. they promised to stick by fund.ng their cash when will they sign a deal, if they sign a deal, with china and expand into asia? --y say potential orders

partners, they need to get out of europe before moving into asia. >> any department. thank you so much with the latest on peugot. >> let's talk about what is happening with blackstone. taking hilton public. the ipo price of $20 a share. $2.35ectively raised billion. let's talk about what to get as part of this ipo in the way blackstone has worked it. >> hindsight is a great thing. they let lehman go bust. >> there were a few signs, but ok. >> but no one thought the fed would let lehman go bust. i think it franchised is will run.

-- i think it's franchise is well-run. look at some of the prime real estate in this. you've got landmark iconic sites like the waldorf. there is a lot of prime property assets in their that could be monetized. that is the first thing. the second thing as recovery. people are moving. 60% of the business is in the states. unemployment is falling. they're growing in china. it is a very well constructed play on a cyclical recovery globally. >> when general partners look at a deal in the first place, they're always thinking, how do i get out of this one? why now? why are they getting out of this transaction? >> they are great people in terms of calng time -- not bail, because they're not bailing on the deal. wasn't great,oint so why would we assume the exit point is going to be great? >> the view of growth in the

states and unemployment. say it is better and that is why they're going to take the updraft. >> ok. thank you very much. >> you are skeptical. >> i always am. >> i like that story. >> it is a great story. later today, more on this hilton ipo. the con men behind this turnaround that manus has been talking about, coming up -- the man behind this turnabout and manus has been talking about, coming up. can ron burgundy still win an audience? >> how are you my friend? >> this is linda. >> black. black. >> are you the guy who lost his job to his wife? >> wow, right on the lens.

is 0.2.rest rate that is pretty cheap money for any economy i think.

>> like japan, south korea is also investing in an infrastructure. >> welcome back to "the pulse." trading lower. the industrial production data for october was not pretty, to say the least. look at this from another point of view, back in october, we got through one .38. we're not actually that far away from the year highs. we're not that far away from

multiyear highs on euro/dollar despite the disappointment on industrial production, despite what is happening the eurozone and that is the number we are faced with. >> you may have noticed ron burgundy has been everywhere lately. paramount pictures launched its pr blitz long before the movie releases next week. sam grobart looks at whether their bold campaign is looking -- working and if we will soon see copycats. >> love to get the straight, movie that came out nine years ago and earned respectable, but not extraordinary, $95 million, is about to spawn a sequel that may well be the comedy hit of the holiday season? >> that is without a doubt the dumbest thing i've ever heard. >> let's get the obvious out of the way. anchorman became a cult classic thanks to cable tv and dvd a netflix. >> i did. we all did. >> i don't know if anchorman 2 is good because i've seen it, but it is already a marketing juggernaut.

in the analysis the movie was announced, there's been a museum exhibit, a book, tv commercials game,dge suvs, a mobile tv cameos, even renamed a college. anchorman is taking things to hold a level. >> this is ron burgundy reporting for espn or espin as it is done in the biz. there are no stranger to digital media. funny or die already makes more than $30 million a year. the other reason is that ron burgundy is a character that comes along once a decade and will ferrell is genetically engineered to play him. >> i love scotch. scotch, scotch, scotch. go down into my belly. >> you can put him in the real world and we would love it. we love you selling dodge terrain goes, there's an ice cream flavor named after him, and there's a reason why we are it could tank,

but it probably won't. because of that, you can be sure to see this kind of marketing push for lots of other movies. the strategy doesn't work unless you've got the goods. well, i don't know how to put this, but -- >> i'm kind of a big deal. >> ron burgundy is kind of a big deal. >> we can't wait to see it. european business correspondent can also -- can't also what is it, caroline hyde. >> i have been looking at the trailers. lunch ofnt to be the the 24 hour news channel. he brought back out of retirement. ate a whole pill of cheese in the first one. -- a whole wheel of cheese in the first one. >> i would like to do that.

>> let's move on. golden globes him in a in. >> the 71st golden globes. we are to have a hint of who is likely to be nominated. dern andnd -- b ruce jennifer lawrence. >> let's stay with the media theme. we can draw pretty easy line on liberty global. billion thrown on him in a. itia was the key asset purchased back in february. still on the m&a spree. the share price higher. seems to be about consolidation in the cable field. >> and we'll see a lot more about it. this is going to be a big story. what is vodafone do? still plenty of things to talk about. >> that is it for "the pulse."

cupid right here for "surveillance" from new york with tom keene -- keep it right here for "surveillance" from new york with tom keene and his team.

>> kn your customer. customer. your 's economist.nomist

slated to be the next chairman, vice chairman chairman, rather, of the fed. i promise, i will not fall asleep and start snoring with asse plush new seats at amc they reinvent the movie experience. good morning, this is "bloomberg surveillance." it is thursday, december 12, i am tom keene with scarlet fu and alix steel. it is a busy front page. >> it is a busy day. retail sales for november as we get a check on the black friday sales, also in his -- initial jobless claims. as well as business inventories for october. lulu lemon reporting before the bell. after the bell, adobe