tv The Pulse Bloomberg January 9, 2014 4:00am-6:01am EST
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>> the retail casualties of christmas. investors punish tesco and morrison's. holiday sales slide. >> mario draghi and mark carney take center stage for their challenge -- but there challenges are very different. the ecb battling inflation. >> samsung eyes new security features. be newest phone could equipped with iris scanning technology as soon as this april. >> good morning. you are watching "the pulse" live from bloomberg's european headquarters in london. i am guy johnson.
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quicktime francine lacqua. >> coming up, rolls-royce matches sales records. you are looking at live pictures of the new race model. we will take you inside the car dealers luxury model and show you how to avoid paying a $400,000 price tag. when ryan drives the car, must watch television. >> we are going to get ryan to drive it again. this is a must-see moment here on "the pulse." speaking a pricey product, would you pay $300 for a hoodie? a pair of entrepreneurs are betting you will. one of them doesn't run facebook. we will talk about that story this hour. manus might even wear it. tesco, morrison and marks & spencer all reported reduced holiday sales as consumers cut back on everything from food to clothing. >> for a roundup on this retail story, let's bring in caroline hyde. ouch. >> let's look at the grocers
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first. tesco, morrison's, morrison's was the worst in the whole of europe. falling the most in what five years? slashing more than 300 pounds of its market capitalization. the reason, profit warning. sales down more than five percent over the christmas trading period. off by 5.6%. similar story for tesco. sales disappointing, down 2.4%. blaming largely a weaker grocery let up in europe or asia either. it is worth noting tesco is still huge. one billion pounds taken in five days. that is more than 2000 pounds per second. tens of millions of customers. billion investing one in refreshing their stores. they are still not seeing the reforms from this. the new stars are starting to pay off -- new stores are starting to pay off. but still, disappointment for
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tesco, disappointment for morrison's. marks & spencer's, if we are looking away from the grocers at retail in clothing retail, marks & spencer's, 10 straight quarters of clothing on the downside. 2% fall in january. many thought that they would just stagnate but far worse. they're blaming the weather in october. pricesdn't have to/those in the run-up to christmas. the actually knocked them off by 50%. that meant that we have seen not as much profit and it failed to get us into the shop anyway. salesubt 0.5% growth in just in the week before christmas but that failed to live up to next, john lewis and others coming out a far better results. where is that big turnaround? where is the new dream team>?
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--dream came? disappointment on the high street for the u.k. >> disappointment and christmas all around it seems for the moment. thank you very much indeed. is cutting its supply contract with the world's biggest dairy exporter, a new zealand company called fonterra. contaminationing for last year's product recall over a contamination related to baby formula. catherine is standing by in our paris bureau. >> good morning, francine. it is a fairly big deal for danone because baby products represent about 20% of their annual revenue. this all started about six months ago in august when fonterra warned about using this baby formula that could cause botulism. it can cause pallor oocysts or even death. the damage seemed pretty limited because fonterra only bought a
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$12 million provision for that. danone really started to measure the impact. they say they had to cut their they had thest and slowest sales in 16 quarters. they started really being concerned. that is when also they decided they would seek compensation. now they are suing fonterra and this may have caused 300 million euros in lost free cash flow. mostly it is about brand reputation for danone that has been damaged. that is why danone does not want its consumers to be scared or uncertain about their products, especially in asia where most of
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the products have been recalled and where danone makes about 20% of their revenue. warned that 2014 will be a very unbalanced year for dan on -- danone and this problem could actually cause a three percentage point impact on growth in the last quarter of 2013. back to you. >> thank you so much. we talked about margins, profit, but if you don't have the then it is a very difficult gamble. >> ok, let's move on. it is snap chat for professionals, the new app confides launched yesterday and it promises the corporate world a self-destructing message to ensure communications stay off the record. sounds very even hunts. our very own ethan hunt is here. hans nichols is here to explain. >> this is a challenge we
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probably all have. you want to send something confidentially but you are concerned about leaving a digital footprint. confide has come up with a way to target businesses. they want this to be snap chat for the c-suite. we are going to give you a demonstration here. i have received a message. click this on. there is a message. see how this is covered. you run your thumb across and you see the message and it says sell all your bitcoins. china's central bank is about to ban it. you have three minutes. #insidertrading. obviously we are not insider trading here. [laughter] >> but you can reread it? >> for two or three minutes. you cruise across. it would be very hard to take a picture of this and it does it now when you want to reply. >> you can screen grab it, all
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those things? >> the technology is always one step ahead of the guys in the i.t. department. this is whether the regulators are going to be concerned. this is why we used the insider trading example. a $3.75 is paying million fine for not saving electronic medications. special companies that are regulated, what are the required to archive? what is required by the law to archive? will this lead to illicit activity or will the very resumption that you're using this lead to the resumption? >> this could just be gossip. >> all the stupid things we message about throughout the day. forgettable.re 80% are fighting. scanning,, iris security is a big deal now. they willr april likely have their new phone. they will have iris technology
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and your communications will be secure. >> thank you so much. fascinating story. all about that data security, protection. >> mission impossible. >> i be obviously don't have anything bad to say about anyone or insider trading. >> believe that, you'll believe anything. andbank of england european central bank will release their first decision of 2014 today. let's talk about the differing decisions they are going to make. manus cranny joins us for a briefing. let's start in frankfurt. >> mario draghi of course has the wholek over banking system, cause and effect. what he does in terms of getting lending, we have bank credit dropping for the 19th month in a row. he is going to oversee the banks. the banks have to hold more capital therefore they are less likely to lend. that is his challenge in terms of looking at what to do with financingadditional
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for the european economy. could be the possibility of long-term loans with contingencies. negative deposit rates, both those kites have very little flight in their sales. i think what you get is a fragile growth, no bank lending and disinflation. that is his economy. side, mark other carney looking at the best growth since 2010. unemployment, the big trigger 7%. mark carney could face that trigger as early as june of this year when he would look at rates again. it wouldn't provoke a rate hike is the rhetoric they are telling us. carney has the alter ego of economies as i say in the u.k. he has storming growth and the climbing unemployment. -- declining unemployment. a statement would undo the word that we look for which is confidence and robust forward guidance.
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>> manus, thank you very much indeed. the bank ofreaking england rate decisions for you by here on bloomberg television. that happens at noon london time. frankfurt time, we have the ecb decision coming up. we were bring you many rio draghi's press conference live and in full. about 1:30.ng >> here is what else is on our radar. vigodman as its new ceo. >> some other big c-suite changes today. management shakeups at standard chartered. asy have named mike rees deputy chief executive. u.k. eurotunnel passengers will soon be able to use their mobile phones at any point in the undersea journey. this is also true for french eurotunnel users.
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ryan chilcote joins us now from inside one of the brand's hottest models. ryan. >> eat your heart out, guy johnson. i know you wanted this gig. this is the wraith, one of the reasons rolls-royce did so well in 2013. a record year for them. it is rolls-royce' first two- door. we are to give it a whirl here. this nice wood covered ashtray here. i didn't know that people still smoke in rolls-royce's. it is a keyless car so you just press the start button here. we go down. it is important to get this right because the only thing worse than crashing this rolls would be crashing it into the roles that it is parked in front of. we're off. this gentleman passed us. car atve introduced this the geneva car show back in march area they started producing it in october.
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the last few weeks of 2013, they delivered a couple hundred of them. they are already sold out through may. it is a really hot car. it is their first two-door. the whole idea is to get a different target audience. people like me except for obviously i can't afford the 230,000 pound starting price tag. almost everybody wants to customize their roles. don't they? it is done very well. it has got a of the 12 engine, 624 horsepower. as soon as the light goes green, we will test it out. geographically, they were very happy that germany came back online this year. good growth in germany. the biggest markets of course are china and the united states. real good growth in the middle east. sales up. let's test this engine out.
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pedestrians, stay out of my way. we are to leave it there for now. i will be back in the 10:00 hour and hopefully i won't run into anything. >> yeah. thank you very much indeed. i think i have just found my new chauffeur. ryan chilcote, man for the job. of rolls-royce's figures, let's take a look at what is happening in the luxury car market. who is buying what? joining us to discuss this is the man selling these high-end vehicles, the founder of one of the u.k.'s reading luxury car dealerships. rolls-royce's sales figures this morning are showing that there is still incredibly strong demand for very expensive cars. not here in the u.k. where ryan is driving around the block, it is in places he says like the united states, china and the middle east. >> there will always be a demand for rolls-royce, particularly the new cars. there are actually more demand
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for secondhand rolls-royce in the u.k. than there are for new cars. >> what does that tell us about the nature of how this market is going to evolve? these things depreciate quickly. is it smart for people to go, you know what, i will wait for a year? >> what is the warranty on rolls-royce? >> five years. buy one a year later, still four years left on the warranty. that strikes me as telling you something about the nature of how this market is evolving. >> there is a demand even for secondhand rolls-royce is to be exported in the middle east and china. demand is so high there. the u.k. market, you can buy a good rolls-royce for as little as 100,000. >> if you are running rolls- royce, if you need to worry about the cars depreciating so quickly, do you think that could cause a concern?
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>> it is not just rolls-royce. that is a lot of the luxury performance brands. there are exceptions to the rule. ari -- ferrari are about to launch a new model this year. ferrari, get new one of these things, you will buy off may -- >> i will pay $250,000 more than what you paid for it. it veryri have made clear that they will limit manufacturing to try and maintain that exclusivity. what you are telling me is that kind of story might pay off. >> it always does. it is all about supply and demand. if you look at the sister companies of rolls-royce, surplus cars because production is so high. rolls-royce is trying to control production by making less cars. that will strengthen the price.
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>> do you think the customers care about depreciation? >> some do and some don't. this is a story of one man's meat, another man's poison. that customer wants to customize the card to his color, his specification. it was a lot stronger many years ago than it was today. -- if iere better value am buying a rolls-royce, do i need to be a lover? you want to drive a rolls-royce but an average high-end consumer, do you think they will be happy with a bentley? is bentley offering better value? is that something i should look at as well? is there a series of alternatives that i could think about here or is rolls-royce still holding that cachet? >> everybody is different. purpose.ey fits its makes you, any car feel more proud to drive. i have sold them for four decades. nothing compares to a rolls-
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royce for luxury and quality. >> how many of the people that buy rolls-royces from you drive them themselves? >> that is a good point. probably 50%. like the others get somebody else to drive them around. >> that is right. >> i am just coming back to ryan chilcote being my new chauffeur. great to see you, thank you bring much indeed for stopping by. if you happen to have one of those ferraris, maybe tom is your man. francine, over to you. >> now you are talking. money, morere problems for kanye west. the new virtual currency named after the singer has launched early after his lawyers filed a cease-and-desist against its creators. as a concession, they have coinyed the name from west. ♪
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markets editor, manus cranny at the touch screen your asset check. >> equity markets ahead of the central bank and the bank of england, just trying to eat out some gains. the question is, will they last? come over here. one man's challenge -- they are both challenges, this is euro against the pound. you have got a strong pound, that is the difficulty for mark carney. this is the euro falling against the pound. lookake that and then you at what the challenge is for mario draghi, and ever resilient euro. this is the euro against the dollar. draghi wants to put a cap on the euro-dollar. carney wants to put some pressure on sterling as well. the currency is the key in some ways to both these economies. those rate decisions will come later in the day. i will cover them live here you -- here for you.
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we have talked a lot about retail through the morning. look at this, marks and spencer now turning around. this was down 3.5%. they had a terrible christmas time but he is on the conference call doing a pretty good job. yes, we went for fashion -- slashing prices before christmas but other when earlier. i was cold. i was standing outside one morning. marks and spencer's turned it around. that is one company we are watching. overall, you are going to get jobless claims in the states today. the adp number was pretty darn strong. tighteak was also fairly but futures indicated a little higher in the last 24 hours. >> manus, thank you very much indeed. you are called, you can wear your $300 footie. when you will pay $300 for a hoodie? a parent entrepreneurs is that
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>> welcome back to "the pulse" live from bloomberg's european headquarters. i wanted to stress the live. we are live. >> and a life. i am guy johnson. these are the bloomberg top headlines. >> christmas has failed to deliver for some of riddance -- britain's favorite supermarkets. all poor reported reduced holiday sales. consumers cut back spending on everything from food to clothing. there are reports that at least five people have been killed in a chemical plant blast in japan. the blast happened at a
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mitsubishi materials plant. local police say at least 16 people were hospitalized. there has been some c-suite check out this morning. teva and others have announced boardroom changes. standard chartered named mike rees as deputy chief executive officer. named erez vigodman as president and ceo. >> let's get more from elliott gotkine. areare anticipating this you have been trimming this for the last couple of days. the change now confirmed. >> that is right. he is due to take up the role of ceo and president on february 11. vigodman is currently a board member and chief executive of and agrochemicals maker which he turned around during his four years at the helm. he is going to step down as eeo
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at that company and take up that role as ceo and president of teva on february 11. at the same time, acting ceo is going to go back to being the chief finance officer of teva. huge challenges for the new incoming chief executive. the last one left following a spat with the board over restructuring changes. they are looking to lay off 10% of the workforce to cut cost in anticipation of generic competition for its blockbuster drug for multiple sclerosis. it brings in $4 billion a year for teva. shares are hovering around a six-year low. .hey are down a smidgen today a lot of challenges to be faced by the new chief executive when he takes up that position. >> teva has also -- tell us about that. >> this is yesterday afternoon.
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there was an announcement that teva had raised -- was trying to this. another offer for as a treatment for migraines and the like in the united states. teva trying to trump endo's earlier bid by making that bid. as yet to decide which of the two is more compelling. levin adopted a strategy at teva to go for companies that are offering new forms of treatment for ailments that already have treatments on the market, but new ways of treating them. after years of blockbuster acquisitions, teva just can't afford to buy big anymore. it has one of the biggest debt loads in the pharmaceutical industry. that tevaon or so
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should be able to digest. >> thank you bring much indeed. elliott gotkine joining us from tel aviv on teva. >> casual menswear. change and it will cost you a pretty penny. cracks it certainly will. it will be interesting to see whether mark zuckerberg is interested. mark -- manus cranny certainly is. let's let him introduce the 300 other hoodie. >> theseese guys -- guys have gone -- in other year. the question is, is this style or substance? what do you get for $300? >> it is materials. we use the finest quality cotton on the inside and it is cut like a suit later on the inside. cracks talk to me about the hardware. this is what caught my eye.
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>> these are made in italy. they add a touch of luxury. when you pull that up, you can feel the quality. >> they are university buddies the luxury where hoodie brand was born. social media has been key from the off. the block came before they had a finished product. the question for any new entrepreneur, where do i get the biggest bang for my buck in the digital space? >> we wanted people to be part of the journey from day one. facebook is really important to us. we are all about -- the blog was really great because we had loads of images. >> when it comes to building a young audrey brand, the boys say bricks and mortar is just as important. london men's fashion week, watch out. >> it does look pretty good. humblee on how the
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hoodie made it big, manus cranny joins us. very chic. it has a lining but it also has -- we call it a napkin pocket. >> it is the packaging as well. they have really thought about the whole thing from runway to packaging. it is about this. this is a collaboration piece. i liked this so much i bought one. look at that. it is all about the quality of the product. and the fit, the fit is really important in this product. i never thought that i would dish out 300 bucks for a hoodie but when you see it -- >> i bet it looks good on women as well. >> it is for both. it is a really nice product. these boys are very sharp, very smart. they went for social media before they went for the product. the product is king for them, it is where they go next. there were some pretty big buyers when i hopped in. >> zuckerberg?
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>> i can't say who the buyers were. let's put it this way, they were from shops near the bloomberg office in new york. >> enough said. if we look at menswear, it is may need -- it is amazing how it is picking up. more men are spending a lot of big box. >> this is something that came through yesterday. i went over to the burberry fashion show yesterday afternoon and the product they were presenting was pretty phenomenal. these boys are all spending large on fashion. london as aabout capital for fashion. have so many amazing heritage brands like burberry, alexander mcqueen, brands that have been around for a long time. the history is there and there are so many young amazing up- and-coming designers. we have to continue to focus on them and give them the attention they deserve. this should be the capital. absolutely.
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>> that is the essence of what the fashion guys do here. i caught up with others. they were very conservative. he says he buys pieces and a couple other pieces -- people say they buy investment pieces. investing. >> it is that mix. high street and high luxury has always worked. manus cranny thank you so much. staying with fashion, prada has pulled out all the stops with the launch of a store in florence. to mark the occasion, they cosponsor the restoration of a florentine painting of the last supper. hasseveral years, prada restored local artwork whenever it opens a new shop. the company plans to open about 80 more stores a year through 2015. , our veryon to fed
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fashionable guy johnson. >> my next guest is very interested in that hoodie. minutes for the u.s. central bank show that officials saw declining gains from qe and began to voice concerns. joining us now to discuss this is bill. slightly the margins more dovish than some were anticipating. >> that is how i look at it. it still tells you that someone who was expecting from the state and early rate hike -- it reiterated, tapering is not tightening it you were confused about that. >> i think everybody has got that message. we kind of need to wait and see what is going to happen. that is mario draghi which is not the fed. let's talk about the language that they use. they did make very clear in the minutes that there is no read determined course. >> we are not committing to anything. we are saying probably we are going to withdraw stimulus at a rate of around 10 every meeting.
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but we are going to be pulled and pushed by the data. >> what i am looking at as a member of the old school -- thank you very much. is, maybe question this is janet yellen coming through and saying the federal reserve will react. i remember alan greenspan in his speech saying, you people tell us where the right levels are. the central bank just acts or reacts. that is what we are seeing now. we will react when the unknown planet rate is x, y or z. i think they are also looking at -- maybe it is the polar vortex effect. we are going to have two very strange unemployment numbers week on week. nobody will have been able to get to their office. be, iestion is going to
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think this is what they told us and this is what we already knew. i think the dichotomy is going to be, here's you have got to wait and see attitude. >> [indiscernible] >> it is utterly ridiculous. you have a situation with the bank of england -- i don't expect a statement today but mark carney has to get better levels. you are starting to see here in the u k, interest rate expectations at the end of this year -- they have gone back to about the middle of 2015. who knows what the european central bank is going to do? >> we are going to find out a little bit later. nice to see you. up next, we continue the central bank conversation. we have the ecb's upcoming decision with the head of pimco's management team. also coming up a set of wheels worth around $400,000. this is the rolls-royce wraith,
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watch today as the bank of england and european central bank announced their first policy decisions of the new year. well changes aren't expected from either bank, the market will be listening closely to the news conference this afternoon. theing us now for analysis, head of pimco's portfolio management in germany. great to have you on the program. precisely because nothing is expected, is this not the right time for the ecb to do something? >> good morning. happy new year. i don't think today is the right time to do something because nothing is expected. things, i scheme of think small rate cuts like the one you just said tested -- suggested are probably irrelevant. the big thing the ecb is going to be focusing on is whether the inflation risks are large enough
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to warrant bigger things such as quantitative easing. term refinancing operations or another small rate , maybe taking the deposit rate facility into negative territory , those might be things that the ecb has to do in order to go on to bigger steps such as qe. they are going to be pretty minimal in terms of the objective, which is getting inflation back up close to 2%. >> do you think they will do qe this year? >> at this stage, right now, i don't think so. we are forecasting that inflation will be just above 1%. probably not low enough to warrant doing qe. it is a very evenly divided line here. there are substantial deflation
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risks in some parts of the eurozone. at the same time, money is cheap. there is lots of liquidity. all the ingredients for a misallocation of resources. there is sort of a yen and yang situation in the eurozone. if we were to have an unexpected negative shock which leads to growth coming out on the weaker side or inflation failing to pick up, then i think yes, we are looking at the ecb having to just quantitative easing as it is going out of fashion in the u.s. of the do you make movement and peripheral bond yields? they improved quite a lot. is it the latest proof of draghi's success in deflating the crisis? >> it is certainly a tailwind coming as we start this year from the success of 2013. 2012 -- air is
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real improvement taking place in these economies as well. i think what we have seen in the early days of 2014 is partly on the basis of, hey, it is a new year. where do you find yields that are attractive weston mark you find some of them here in southern europe. of flows.mbination it is also a combination of gradual slow long-term healing in these economies. it is a good thing. a country like ireland can regain access to markets to finance itself. >> is france going to be the biggest headache for mario draghi in 2014? france has got some issues.
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in terms of headaches, i would look for the south, at his own country, italy. i think that is the key economy to watch in terms of what would tip the scales between doing nothing or doing qe. if we see the same sort of deflationary pressures in the labor market in italy as we have seen in other countries such as are probablye going to be seeing inflation in the aggregate eurozone at the aggregate level continuing. changeuld prompt a major in policy from the ecb. is also probably more important than france in the sense of political stability or instability as far as its potential impact on markets. >> andrew, thank you so much for that. guy, over to you. >> some of the company news you
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need to know about. samsung whirly sits galaxy by april and it is -- will release by april. s5 it will be paired with another ice, an update of the galaxy gear. what is in a name? is ane, the answer airfare to berlin, a rent-free apartment for a year and the mystic flights to explore germany. last autumn, michael eric anderson legally added clouse heidi to his name to win a marketing contest by lufthansa. audi is going mainstream. they are rolling out cheaper models in the united states. we have more on that story a little later. up next, there is more to waste management than tossing your leftovers in the bin.
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we to have you on the program. how muca sense of scope this new energy can be in the next 5-10 years? >> it is an important addition to general capability for energy production. anaerobic digestion is an organic treatment, a treatment of organic waste. little bugs munch the organic material and produce a gas which is about 60% natural gas. result, we can take the gas and turn it into electricity or clean it by removing the carbon dioxide and other gases and put the natural gas into the gas grid. >> is it going to be individual houses having this? how much percentage can they produce? >> i would guess that we can produce about 2% of our
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electricity from anaerobic digestion. it is widespread in germany but there, they have been in the orller plants using maize other crops which they have grown for the purpose. there are some of those plants in the u.k. but our focus is on using waste, particularly food waste and so we are doing a number of good things. we are dealing with waste which might otherwise go into landfills. we are producing renewable energy. what is left is a natural fertilizer which can go back on the land. >> these plants, are they small enough to have next to a semi detached house or does it have to be elsewhere and then dished out? >> the ones that we are doing our on an industrial scale. 2.5 megawatts on average per ton. enough for 5000
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houses. they are on small-town scale in the u.k. ultimately we would like to produce smaller ones which could be used internationally may be in development come -- countries where they can do a good job for local communities. >> thank you so much. guy come over to you. >> thank you so much. for those of us -- you listen in on bloomberg radio, the first word is up next. for our viewers it is a second hour of "the pulse." we are going to be talking about what happens over the next few hours. bank of england, ecb, a senior economist will be joining us. the rise of menswear. this is big business now. we are speaking to the business of fashion founder. that is coming up in the next hour right here on "the pulse." you can follow us both here on twitter. forget.
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carneyo draghi and mark take center stage. there challenges are very different. with the ecb battling deflation and the bank of england's forward guidance under strain. >> teva announces big boardroom changes. >> samson security features -- scanning technology. good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u.s. i am guy johnson. lacqua, this is
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"the pulse." live from london. world's biggest generic drugmaker has chosen a new chief executive. teva has chosen board member erez vigodman to lead the company after the previous ceo left after a dispute. elliott gotkine means -- joins us with more. >> not completely unexpected given that we had a story on bloomberg news the other day saying it looks like vigodman would be named chief executive and that investors were encouraging shareholders to support that. vigodman will take the helm of tough on february 11, he is currently a board member and chief executive of the world's largest agrochemicals maker. he will step down there. that company will be looking for a new boss.
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at teva, the acting chief go back tos going to being chief finance officer of teva. a lot of challenges facing vigodman. a six year low, we have got the potential for generic competition for its $4 billion blockbuster multiple sclerosis treatment as early as this year. he needs to regain confidence of investors, real challenges facing him. they have he's amounts of debt -- they have huge amounts of debt. yesterday trying to make a bid for a u.s. company around $150 million, that company has treatments for migraines. >> elliott gotkine from tel aviv. talk abouthave to novartis later, it is also doing a share swap with merck.
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we will cover that. rolls-royce talked sales record for the fourth straight year in 2013. >> ryan chilcote spoke to the ceo and joins us now with more. pedal to the metal. >> this is one of the reasons why they had that record year, this is rolls-royce's first t ever.r, coupe, you just press the button, pretty straightforward. the whole idea of this car -- make sure we don't roll into anybody. open up a new market, pretty successfully. going after younger people, not unlike myself. except i do not have 230,000 at,ds that this car starts
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$330,000 in the states. the idea of this car is -- this is for people that want to drive their own car. they do not want to be chauffeured, like in the phantom at over $500,000. they introduced it at march in geneva, they started working on it in october. the first deliveries were right at the beginning of last year, it is already sold out through may. if you are looking to get one on secondary markets, it is going to be a little while before you can do that. we are stuck at a red light, i cannot wait to show you how this engine works. one of the first things i have to say is that -- unlike the phantom, it does not operate like a really big car. it has got the b12 12, 624 v12, 624r -- the
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horsepower engine. one of the other things that power rolls-royce in their fourth year in a row for record i can show you. andly strong sales in china the u.s. those are the two biggest markets, they did pretty well in germany. welcome news for them. that was really good. you have got to realize, this is different from a lot of other parts of the luxury market. this car cost so much money, the people buying it were not affected by the recession. have four years of records. rolls-royce owners took a hit maybe in the depths of the financial crisis. they were pretty quick to recover. by about 60 cars, they , if you arer 3600 a luxury carmaker, that means something. this is an experiment that has
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gone pretty well, looking at making an suv. i was talking to the ceo earlier, he said they are not sure. they don't want to damage the brand value. you mentioned that range rovers are pretty popular, he thinks they are nice. many people who would all this would also own a range rover. they want to expand sales while maintaining exclusivity. lls, it is supposed to be so exclusive that you don't see any other rolls. any questions? >> i want to know how it is to drive? >> park it. >> it feels like driving miss daisy from here. >> brands going to make an excellent show for -- ryan is going to make an excellent show driver. >> this is for those who have a lot of cash to drive themselves.
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it competes with high-performance bentleys, this is not old school where you get chauffeured. this is for a 21st-century guy who is on twitter and all that stuff. [laughter] >> hopefully not at the same time he is driving the car. two hands on the wheel. >> i am a little bit scared. he is doing a good job. the tv boundaries on "the pulse." ryan chilcote outside doing laps. >> while talking to a camera live. >> impressive. next up, we will try this in the studio when it comes to mobile phones. snapchat for professionals is here. >> the new app launched
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yesterday and promises the corporate world a self-destructing message to ensure communications stay off the record. very "mission impossible." >> hans nichols is here as well. >> we should have combined the two pieces, having ryan operate a app while driving. uld.ou know he wo >> he's a pretty good driver. snapchat, massive valuation, only two years old, this is the corporate version. the goal is to be able to send messages that disappear. a quick demonstration. we have a message, you slide your thumb over. you slide your thumb over and then you see the message. i cannot read it. you only live once. our last message was on insider
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trading. this one on ryan. a it appears and you have message for three minutes, then it disappears. >> it cannot be recoverable. >> really? >> who knows. this is an issue about the angela merkel smartphone, can you make a smart that the nsa cannot hack? if someone really wants to get into something, they can. it is a question of how difficult you make it. not that you need to be faster than that there, you need to be faster than your body.-- your buddy. it is just the one additional layer of security. given the financial scandals we have lived through over the last few years, libor, etc. the regulators are going to be taking a hard look at this. >> you saw that with barclays,
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they paid $3.75 million for not storing electronic data. their real enemy is going to be historians. historians have such an easy time writing history. everyone leaves a trail. the trail people leave with their daily e-mails. it is like 19th-century letters. >> which you read frequently. i guess the problem is you may you wanting to gossip. necessarily to do insider trading or something illegal. people see it as you have something to hide. >> when you whisper is there a presumption you are doing something that? ye-- you are doing something bad? yes. they are fighting the perception of illegality because you don't want it to be stored forever. their strategy -- they are not
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hiring a sales force. their strategy is for this to go viral. they want companies to adopt it. maybe having a parallel conversation in addition to e-mail. a parallel conversation on confide. no fingerprints. >> when banks are banning people from chat rooms, an interesting evolution. >> great for coups. >> all kinds of useful ways. >> this is a window into francine, we won't talk about her snapchat. this is a family program. >> this could really take off. >> look what snapchat date, meteoric. if they want more privacy, this is it. this is fora coup, you. >> hans nichols, international man of mystery. >> what else is on our radar,
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more money, more problems for kanye west. coinyeal currency called launch untiled to acs and desist -- a cease and desist was filed. >> reports that five people have been killed in a chemical explosion in japan at a mitsubishi plant in yokkaichi city. 16 people were hospitalized. >> novartis in court with merck about a unit swap, they could trade their animal health business for merck's over-the-counter unit. >> would you pay $300 for a hoodie? a pair of entrepreneurs are betting you will. you might see manus modeling it.
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decisions today, the bank of england at noon in london time, then the ecb following that. the draghi press conference following. there is the potential for a few interesting things to happen. bank of england could lower its threshold, they could talk about the threshold only being a threshold and not automatic rate cuts through the 7% number on employment. you do not know. when you think about this carefully, we need to watch what could happen, covering not for you live. let's talk to our next guest, he joins us from rbc to give us his will bewhere things going next. senior european economist at the bank. good morning. the consensus seems to be that we get no change from either of these institutions. threats definitely a
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that we do. with bank of england, what are you plan -- are the plan a, b, and c. >> it is more likely that it will happen with bank of england. statementknown change , business as usual. the next option would be signaling some kind of change to the forward guidance policy without giving specifics. the third option, they come out and say this is the change to forward guidance. if theytation is that make changes it will be next month. we have to wait a month for that. there is a risk that they could come out and get ahead of the curve and say the unemployment rate is already down to 7.4%, by we have the report, it could be down as 7.2%, let's make a statement today. >> with that be an admission they cannot forecast anything accurately, that is a seriously
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concerned. debasing the forward guidance idea. that theirue forecasts have been inaccurate. they would be the first to admit that their inflation forecasts have not been accurate. you could take the counter view and say the reason why the unemployment rate has come down so much is because in august, the bank of england came out with forward guidance. that convinced businesses they could afford to start hiring people. the unemployment rate comes down and you have a really successful policy. you could say it has been a success. i think that is pushing it a little bit. the reality is a moffett -- it positivemoderately impact. they might be regretting the 7% threshold. the original forecast in august had the unemployment rate hitting 7% in 2016. we will hit early this year. admit it ishe bank wrong and say we need to rethink the right path -- why doesn't
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the bank admit it is wrong? say we need to rethink the right path. -- the rate path. we have credit there yesterday showing a clear strengthening of the credit story, unemployment is falling, why don't you just say we were wrong. two points. the variables have been looking strong -- growth variables. we are seeing a pickup and credit flows, output, labor market. but it is from a very low base, there is a lot of slack. i emphasizelement is that i think there is an argument for saying we should simplify the forward guidance. we should not have an intermediate variable with a key threshold. the bank should come out and say our best guess is that rates are on hold for however long. they could be wrong. would signifyhat the message. i don't think they will do that,
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that would make it so much more clear. >> the ecb. there is an inflation conservatory disinflation concern within the central bank. a lot of people watching economies around europe for more evidence. what we have seen since the beating of the year is --nificant >> the ecb sits on the sidelines, they have a bias towards easy policy. they have inflation down as much as 0.7%. negative interest rates and qualitative easing are the options available. the threshold for action is still pretty high. we need to see a real risk of deflation before the ecb engages anything like this kind of measures. we are looking at low inflation for a prolonged period. ast is nowhere near as ugly deflation, if you move into that, the ecb comes out.
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>> where do they go? elliott gotkine is going to tell us. in my pocket, i am going to try to squeeze the answer out of ceo and cofounder of a company that looks into this. shifts that have transmitters to tell everyone where they are to avoid accidents. what happens when they turn off those transmitters, how do you work out where they are. >> when someone switches off a transmitter, when you look at patterns of people who turn on and off, it tells you something about him. we have other ways of using active satellites to look at all the ships in the sea. >> you look at where they would come from and you work out using algorithms where they are likely to be. >> will use algorithms to look at maritime big data and use insight.
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we look at patterns of areas. when someone does something suspicious. we have a good example of something that happened last week. when they got just invisible, when they are physical and doing something you would not expect. visible and doing something you would not expect. >> something that happened in libya last week. this is a crude oil tanker trying to load oil from a close point. the libyan navy goes out and fires at this vessel. it is changing its course. a great example of how a closing of a port influences oil prices, which shot up to $107 a barrel last week. >> you are looking to get more into the oil and gas industry. you have customers, you will not tell me who they are. right now,re doing
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bringing the same smart analytics we have developed and deployed for intelligence customers globally to the oil and gas industry. the oil and gas industry is very complex, they have multiple cross-border and cross-country assets. if you were an oil executive, you would like clarity and transparency on the oil value chain, that is what we bring. >> cofounder and ceo of windward. you recently raised $5 million. no doubt they will be able to tell you where your ships have gone. >> thank you come elliott gotkine from tel aviv. i want to know why you would turn off your transponder, a question for another day. >> no idea. coming up, the founder and editor of the website the business of fashion. we asked him why men are forking out money on clothing as much as women. >> i -- >> yeah.
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back,od morning, welcome you are watching "the pulse," live from london. i am guy johnson. >> i am francine lacqua, a little bit of breaking news. france,is coming out of there is an extradition case that has been underway for some time involving the ukraine and the next senior -- an ex-senior bta banker. accused of things that involve lots of money.
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he is not going to be extradited from france, this is the ex-bta zov, he is going to appeal this case, that is the sense we have had. he is likely to appeal the case, he will remain in france for some time. case and this the will continue to rumble on. that is the decision being made, has comehe court through in the last few minutes. two european central banks releasing statements today, bank of england and european central bank. ms. kearney joins us with a preview. let's start off -- manus cranny joins us with a preview. hi has aag disinflation challenge and positive news like tightening for ireland and portugal. >> at the core of the issue is
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this, the ecb are going to review banks balance sheets. that is the blockbuster event. you are going to review the banks, you want the banks to lend. they need to build capital, what do you do? ofhas got credit, the amount money the banks are lending has fallen for 19 months. if you say i want you to lend more, it is a tough one. he has got disinflation. inflation is bloat 2% and has been for 11 months. theaid and "or spiegel" memo to act is not yet -- he spiegel," the moment to act is not yet. the lowest five-year bond -- >> there is a more positive spin
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argument. >> the chatter i am seeing is wait until the americans stop buying peripheral government bonds. they could go for loans with contingent plans attached as well. he has got one type of economy to deal with. >> we will talk about the bank of england later. we will be breaking the bank of england rate decision at noon london time on bloomberg. also watching the european central bank at 12:45 london time. mario draghi's press conference live. >> let's focus on fashion. men's fashion. london's men's fashion week is underway. every displayed its menswear collection yesterday when we -- displayed its menswear condition yesterday and we caught up with musician tinie t empah. >> we have so many brands that have been around for a long
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time. the history is there, now that so many young, amazing designers -- we have to continue to focus on them and give them the attention they deserve. this should be the capital. whoe also spoke with david, shared his take on how london fares on the international fashion stage. >> on a global level we have finally got a platform. the rest of the world is taking notice. >> let's continue the focus on men's fashion, it is a booming market in the u.k.. menswear sales projected to overtake womenswear in two years. joining us to discuss growth and trends from fashion week is imran amed, founder and editor of the website "the business of fashion." thank you for coming. let's talk about the statistics. london is a very well known for men's fashion where.
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they have the paul smith. in terms of sales, lead and and the u.k. is producing more sales in menswear then womenswear. >> if you go back hundreds of years, menswear -- the suit -- was born in london. thats not until recently the british fashion council and the menswear industry decided to bring all of that together and create a real platform to communicate about men's fashion from britain. it goes back hundreds of years. >> imran, if we look at the way we spend much more. brits, in general, they have is interested is, they like fashion. general butmore in it is picking up and that are becoming fashion conscious. ago when i was
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doing this circuit of the menswear shows, the kind of slogan on everyone's lip, men are the new women. they are taking a greater interest in fashion. that is being driven by a number of forces. primarily, one of the largest forces is the internet. find out mucho more easily about what is going on. the rise of blogs and street style and fashion websites. there are hundreds of thousands of men discussing what to wear. it has become more accessible for men to talk about fashion. if you rewound even 10 years or 15 years, it was a little taboo. becomes more ubiquitous and more accessible, men are more interested. >> unless you are italian. 20 years ago -- you sell to mend differently than two women. we were talking about the $300 hoodie.
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they went for social media instead of marketing. you read magazines less if you are a man. you discover more fashion through blogs and social media? >> potentially. if you look at the way digital technology and the internet has transformed the way we live, everyone reads more online than in print. if it shows up in your twitter feed or on your facebook feed, it is everywhere you look. >> what is the hottest trend for men's fashion. >> in the past couple of years, there has been the rise of tailoring. everything that really relax for a long time, everything was about casual friday. following the economic crisis, everyone started dressing up. even young people were wearing and celebrating the idea of tailored suits. that has partly been what played a role in the resurface of menswear in britain. this is a country known for tailoring.
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we are starting to see a shift again towards more casual clothing. things are always changing, that is another element to keep in mind. the other thing happening in menswear, there was not a lot of movement in terms of trend. things did not change that much. you are seeing more dynamism and creativity. all you have to do is look on the catwalks in london, you had everything from a really edgy lend and designer from east london -- edgy london designer from east london. then you had a really classic in a beautiful menswear. something for everyone. >> gray to speak to you, imran amed, founder and editor of "the business of fashion." tom keene knows a thing or two about fashion and joins us from new york. >> do i look edgy today? i want an edgy look for when i walk the bloomberg quote surveillance" -- the "bloomberg
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surveillance" catwalk. >> pink tie. >> stripes and all that. we have the ecb and the bank of england announcement. boredom expected but never boring, perspective from vincent reinhart of morgan stanley. a great thinker about central banks and monetary policy. those important european decisions. and then he will take us forward to tomorrow's american jobs report. a big surprise yesterday, better than good adp report. everybody shifted up on that aen goldman sachs with cautious outlook, ramping up their view for nonfarm pay rolls. is still out in las vegas at ces, we will go there and look at t-mobile, samsung, other stories. -- a lot more centered
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around a bridge too far. it up or in the u.s. -- an u.s. about the george washington bridge. this bridge spans the hudson river from northern manhattan over to new jersey. i will guess it is 2 miles. i will have to look that up. a big uproar about the bridge and the governor of new jersey. >> looking forward to hearing more about that. "surveillance" with tom keene, 20 minutes from now. >> i am edgy. >> you need a pocket square. >> i have got this. >> you are british eccentric for me. >> i got this. >> ura star. -- you are a star. >> i am getting excited about davos. >> me, too. what will you wear at davos?
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>> stripes, edgy. >> let's look at how european markets are trading, manus cranny has more. >> how do you follow that? confidence is rising, european confidence is rising. spain. see borrowing rates for five-year money at the lowest on record. that blows my mind. i think that says it all about what mario draghi has got to deal with today, confidence rising, low yield in spain. he has cut the portuguese still in bailout. yields are dropping. the u.s., the biggest issue is the george washington bridge. indicating a slightly better opening. thanh mentioned the adp report came in way ahead of the what the market is looking for. up on the s&p 500, 1838.
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diminishing returns from quantities using. -- from quantitative easing. some other things we are watching. have us -- havas has lost their ceo, marks & spencer has turned it around. in currencies, there is a great piece on bloomberg.com, euro is going to be setting for a 6% drawdown in the next quarter. citi talking about the euro/dollar trade. 1.2755. nickel is the target from cdk. >> we will look for that later as we look at ray decisions. still to come on "the pulse," a is a pricey
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eidi in hopes of winning a contest by lufthansa. the winner has won an apartment in berlin for a year. has canceled a contract with fronterra and is suing the company over a baby food gear. christmas has delivered for some of britain's biggest supermarkets. spencer'smarks & reported reduced holiday sales while consumers cut back. >> in the world of casual has nevera hoodie
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rated hi, mark zuckerberg might disagree. cost you a pretty penny. manus cranny introduces now the $300 hoodie. these guys have gone from drawing board to dotcom to pop up shop in under a year. the question is, is this style? what do you get for $300? >> materials, we use the finest quality cotton. it is cut like a suit blazer on the inside. >> this is the bit that caught my eye. high shine zipper from italy. they add a touch of luxury, you can really feel the quality. >> that is the key. university tom our buddies, that is where the brand was born.
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social media has been key, the blog came before the finished product. the question for any new entrepreneurs, where do i get the biggest bang for my buck in the visual space? -- in the digital space? >> facebook is important to us, a few of what we are about. the blog has loads of images and descriptions about the journey. >> when it comes to building a young luxury van, the boys say bricks and mortar is just as important. london men's fashion week, watch out. >> mark zuckerberg, your heart out. your heart out. manus cranny has one of these new hoodies. is it a one trick pony? they make nice hoodies. this, this isth the finest cotton, you have got these zippers from italy.
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a little bit of luxury. what is the dynamic? couplealking through a days before christmas, what am i going to get my brother? i got me one. it is about the fit and the feel. where does this all go from here? they said we had a business idea and a product idea and we went with design. it is about the cut and quality. time talking about tech startups. this is a startup, a company with a great idea. they said we can evolve this and turn this into a more high-end brand. wes is the kind of business should be encouraging. how hard was it to get going? to make the evolution from idea to product? >> from the end of 2010 they talk about it at university. it took them about a year, they got their first rough cut, they
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were devastated. they started a blog before they ended up with a product. >> technology is part of the story. >> it is an online proposition with a pop-up shop, allowing them to engage with a customer. it is about packaging and servicing. they did not try and sell me this. building on strengths, you look at other startups in london. the financial industry is ch startups.-te london has a strong menswear story. this is a small piece. it is a start element of a bigger picture. portion ofa tiny that story. i went to the burglary -- i went show yesterday. the x factor judge was there. it is about how you by close. >> you have a lovely store in
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london. designers that very well with new people coming through. buysvery prudent man, he on a month to month basis, men are changing how they are spending and what they are spending on. >> a very well-dressed manus cranny. >> i am so jealous of that hoodie. today's pulse number. $90 for a shot of sean "diddy" combs tequila. he is teaming up with diageo to buy the brand deleon. they also work together to develop the vodka brand ciroq.
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>> welcome back, you are watching "the pulse." a quick look at the currency markets, euro/sterling. today, we get two central-bank decisions. you may get some change from the bank of england. we are going to be covering all of this. the pound looking very strong against the euro, recent record broken, will it continue after survey? that is the story we will cover
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now. wefor a look at what else will be watching, we are joined by hans nichols and manus cranny. central banks and possibly more central banks. different dilemmas. europe faces disinflation, sts on banks,te lending to the economy is falling. here in the u k, mario draghi says it is not the time to act, that was late december in "der spiegel," mark carney is working with forward guidance. he said unemployment is not going to fall below 7%. it is going to make that possibly by june this year. rates are say 1% by march of next year. it is a conundrum, whether they make a statement that would undo forward guidance in terms of credibility. >> you will be doing the press conference later from the ecb.
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>> we are watching the fanatics that that does not appear to be going away between india and the u.s., india has retaliated, an arrested inmat was the u.s., the indians are closing down diplomatic facilities where you can buy burgers and go bowling. >> if you are an ex pat. level -- this is a serious fight when you look at potential allies, everything , obama's with china's asia pivot. he stopped in new delhi first. >> the tv critics association? >> we do not listen to them. only when they give you awards. >> i wish. that is it for "the pulse," bank of england at 12:00 and the ecb press conference. goingthe meantime, we are
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today atfirst glimpse the holiday spirit of december. did the grinch steal christmas? it is one big asterisk. not my teenage years. that is cooperstown. should roger clemens be in the hall of fame? they put him in a yankees uniform. he will be in a gang -- red sox uniform. this is "bloomberg surveillance, " it is january 9. joining me is scarlet fu. we also have erik schatzker, making an early-morning appearance. >> it is time for the morning brief. we will start with chinese producer prices. they are showing signs of weakness. demand on the industrial side. consumer inflation is also slowing in china. these are two extremely important and -- economic indicators.
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