>> office politics. microsoft adds eriksson's boss to its list of c.e.o. candidates. melissa myer fires her top lieutenant. >> happy birthday, kate. why this super model is still on top of her game and why some of the world's biggest brands still think she is the face. good thursday morning to everybody out there. welcome to "the pulse" live from

bloomberg's european headquarters right here in london. i'm guy johnson. >> i'm francine lacqua. also coming up, ever wonder what it is like to be a high roller in vegas? we look at the incredible perks and give you access to the most exclusive casinos. >> we begin with the latest twist in microsoft's search for a new c.e.o. eriksson's vestberg is said to be a candidate. >> another one added to the mix. vestberg is still his 40's and driven. i'm told he is motivated. he is young and p.r. savvy as well. he gave the keynote speech at the conference back in 2012, the consumer electronics show. he is a scotsman. a handball player.

. hers are elop of nokia also going to need body contact and fast hands to be able to move and direct microsoft into growth. >> the company is in the middle of this huge organization. whoever takes his job is going to have some very tough challenges ahead. >> maybe this makes vestberg adept to it. he has experience. not only experience, kind of with microsoft in terms of its overall culture. he took over microsoft's media unit, a software maker recently. he has acquired a part of microsoft giving him experience,

but also he is a man who knows how to make tough decisions. remember eriksson coming under stiff competition. he knows how the deal with competition and he knows how the exit businesses when he needs to. ismant it will joint ventures. he managed to drive share prices higher for eriksson since his tenure. sales have gone himplet the stock has gone higher and this is a man with a lot of experience in technology companies. he has been there for 25 years. he has had positions in china, brazil, mexico, the united states. he has made the role of c.f.o. and chief executive. he is an outsider. is that a con overall rather than a pro? remember, you're going to have bill gates and steve boll mer

board of microsoft. those two figures still playing a very active role. he also doesn't know the company that well. >> thanks very much. caroline hyde there with the latest on the microsoft search. the search continues. >> ok. let's stay with tech and talk about yahoo!. its chief operating officer is out. marissa myer is said to have fired him. she was disappointed with his efforts to boost growth. get this. he was in the role for 14 months. >> not bad at all. >> european auto sales raced ahead with 13% surge in december. let's get over to berlin where our autos reporter chad thomas

has more. what is behind the surge and what are the markets surging particularly well? >> hi, francine. good morning. not only was this the bigs gain in four years, it wases there fourth consecutive monthly gain. you could say we're starting to see a friend here. many markets did well. half of the markets in europe post a gain of 10% or more with . e u.k. up a whopping 25% spain being held by a cash for clunkers program in that country's government incentives essentially and in the netherlands sales more than doubled in december and that is because taxes on cars are going up in january and so people rushed out to buy a car before that tax increase came into place. when we look at the automakers that did best, it was volkswagen and renault and volkswagen done well because of their discount brand. it has a couple of new models.

renault, it was their budget brand doing well. while sales are up, people are definitely still looking at the price when they decide what car that they are going to buy. >> let's talk about pricing. i guess probably the comparisons, the comps probably make a difference year-on-year. we have come off some very low levels. is it pricing that is making the difference? is it the fact that all of our cars are getting older and older and we need new ones? what is making the difference? what impact is it going to have on the bottom line of these automakers. >> it is a little bit of both. the incentives did creep up in december in germany. germany being the largest car market in europe. however, autoroast about seven to eight years old on average in europe. that is pretty old so people are going out and buying cars. one thing that is interesting is analysts are telling us used car

prices are starting to increase. as used car prices go up and they get closer to price of the new car, it helps to get people buy a new vehicle and that helps automakers boost their prices on new vehicles. however, we're still seeing at this point, very high incentives on new cars, so that is what is helping to boost this market. >> we'll leave through it. thanks very much indeed. chad thomas joining us from berlin. >> christmas trading helped offset a drop in sugar sales over the last quarter. is sugar facing a long-term challenge? >> jon ferro joins us now with more. salt obviously was a big battle a few years ago. tobacco. is sugar now joining this list? >> it seems that way. if you were watching questions in the u.k. parliament yesterday, one politician stood up and declared a war on sugar.

it is going to be a big political hot potato in this country. one side talking about look, it is ok. if someone wants to get fat, let they want. much as and then healthcare is funded by the taxpayer which makes this very, very political. you're looking at 600 billion dollars on the obesity epidemic. that is a lot. that is why it is an issue in the u.k.. it is also an issue in the u.s. where the average consumption of sugar is 40 teaspoons a day. >> that is the average? > that is average. most absorbed by the beverage industry. >> carbonated drinks. the problem is i'm a big lover of sugar. >> 40 a day. >> that is a concern.

and you don't realize ns the sauces we buy and in the carbonated drinks. >> you look at a distribution curve on that. there are going to be some people who are going to be eating a lot of sugar. >> if you cut the children out of this equation, the number goes up. >> i find it fascinating. n ferro with the very latest there. guy is in shock. >> i am slightly surprised by that. ok. let's move pofpblet we probably shouldn't. >> renzi will present his 15-point italian labor plan. we were talking about it with mario monti when he was here last week. dan, first of all, does renzi

have full support within his party? >> full support? probably not. there are still some remnants of the old guard left within this party that renzi has totally revamped. with his campaign over the last year or two essentially, remove the old guard. bring in sort of new management with his team. so he has still got a lot of skeptics within the party. nevertheless, i think he has got enough support, to, you know, try and get this package at the forefront to have government's agenda. i think as mr. monti himself said the other day when you interviewed him, what is remarkable here is that this program of labor market reform revamping the market, making it more flexible is coming from a leftist party, the biggest party in italy now. it is not coming from the conservative side. this time it probably has a chance to be a bit more

far-reaching and get adopted by this government. >> let's -- i'm sure there is some sort of ultimate political objective here and clearly renzi has ambitions. what is the objective here for him? he is still in his 30's. he has been very ambitious in terms over the political lie of the land, that he would like to have a leftist party push. what does he want to do with this? what is the ambition here? >> there is no doubt that renzi wants to be prime minister of italy. that is his game plan. what he is doing is adopting a program, if you will, right now, based on two pillars. one is the labor market reform, because it is a big issue. look. italy's unemployment rate is still high. this economy is struggling to get out of recession. it is mot generating jobs. this is a theme that resonates with voters obviously. the other pillar is changing way

the country elects its parliament, its politicians. elect really a reform. if he can get those two things moving and perhaps done this year, then there is a very good chance that he will be able to get elected with a clear majority. perhaps next year. i don't think he wants to force elections this year with the system the way it is, with the ground rules the way they are now. you know, it is too chaotic. italy's electoral law has been struck down by their highest court. they need to change the rules. until that is done, it doesn't make sense for him to play his cards and force early elections. otherwise there is a very strong chance that we would have an outcome like a year ago and another transitional government and another odd coalition, if you will. >> thank you very much indeed. joining us on the italian

political story. we're going carry on that conversation in a few minutes being joined by a political science professor in rome to get his taken to political story in rome that is changing pretty quickly. >> here is what else is on our radar. richemont shares are taking a hit. they saw weak demand in china. >> the man behind the popular dyson vacuum clearance says the process of innovation unpredictable. he shares his insights on innovation with charlie rose. an it is process of the most wonderful journey. it is agony. >> a great guy to listen to. you can hear him at 10:00 p.m. u.k. time. >> amazon employees will be

forming the company's first u.s. labor union. they voted 21-6 to reject the initiative. >> we're going to head back to italy for more on the democratic party'sing star, renzi. that story coming up in ex-. -- next. ♪

>> now, there is nothing very

original in the ideas of mr. renzi for labor market reform, but the big new thing is that these ideas, which are pretty classical, come from the head of the democratic party. it was precisely because the then head of the democratic party wasn't able to move the majority of the party in that direction that we couldn't deliver as much as we would have liked. >> there was a compliment in there somewhere, i think. >> yeah, a little bit. a little bit. of course the factions -- it is quite hot. that was mario monti this week n "the pulse." renzi takes the spotlight today at the democratic meeting. >> pleptsing his 15-point plan on labor reform. are his policies hype or are

they going to take italy somewhere? >> let's discuss all of this with a political science professor in rome. first of all, does he have the right policies to actually push it through or is he just striking to stir the boat? >> i think what he said, he certainly has a right. they are not very original for that matter. the problem is certainly there is a novelty in that he has managed to take the leadership of the democratic party. that is a novelty. that is the real novelty. is he going to be able to carry on such reforms? that is a problem. i am slightly more pessimistic in this connection. because i think that the italian economy, the italian bureaucracy, especially, quhschs

closely intertwined with the economy is such a jungle that it is very daunting to even think of trying to simplify it and carry on such plain reforms. that is my point. if i may mention a metaphor. it is like a highway or a street full of roadblocks. unnecessary road blocks and then such roadblocks stop cars unnecessarily because the people who form those roadblocks are employees. they were hired at some point in past and need to justify to some extent their existence. this is what is going on in italy is he going to be able to reduce those roadblocks? is he going to be able to streamline the italian bureaucracy so that his reforms can take effect? that is where i'm more skeptical, honestly. >> here is a young guy

representing a new political generation. working inside a left-leaning party. if he can't deliver this it would seem that nobody else can. that is a pretty bleak outlook for the italian economy. >> yes. i agree with you. unfortunately, i completely agree with you. but this doesn't make me more optimistic. i'm, let's say, i look at his endeavor with a certain amount of skepticism. no related to the ideas or the genuine enthusiasm that animates hip. this is not -- him. question. a he is followed by the majority of the people his party because they have realized what you just said that this is almost the last chance for italy to get out of the dire situation in which

it is. ut i still remain a little skeptical as to him being able to carry out such reforms. there are road blocks in the way of electoral reform. the trade union, which hasn't been mentioned to the best of my knowledge, which is one of the roadblocks. it has been turned into a roadblock by time. >> and i understand your skepticism. but do we need to be a little bit more optimistic? after all, it is optimism that actually elected barack obama. >> i agree. let's be a little bit more optimistic. without forgetting the reality. >> all right. that's fair enough. i'll take that. thank you so much. we'll have to invite you back on when we know more about mr.

renzi's policies. >> all right. we're going to take a break. still to come on "the pulse," ever wonder what it is like to e a vegas whale? we'll give you the perks of that lifestyle. looks great, doesn't it? ♪

>> welcome back. it is time for hot shots.

a big win for australia and chinese. pulled off some perilous flips in difficult conditions. >> day 10 in one of the toughest offroad races. that looks like hard work. >> that does look like quite hard work. that is a very big sand dune. let's find out how the markets are trading. i'm trying for a segue. >> we can do it twice in a row. >> manus. over to you. >> i can't wait for friday's introduction. what i can tell you about these markets is that volume y50u7s are rising. there is a bit of a split. volumes are about 60% higher

than they have been for the past 30 days. autos are rising. the beige book in america found it pretty hopeful. for me, it is all about london. not the bridge. it is about the miners. rio tinto is doing what it promised investors. cutting expenses. beating targets. record output for the last quarter. takes bit on the back of that. the chinese, get this, the chinese hit a record import in terms of iron ore. it is actually a lot. back to you. manus, thank you so much. manus cranny with the latest on the markets. >> as we head to break, it is time for today's "the pulse"

number. $58.7 million, that is how much kate moss, who turned 40 today, made last year. see why she is still a super model and on top of her game when we come back. ♪ .

>> welcome back to "the poles." i am francine lacqua. european car sales surged, the biggest monthly gain in almost four years. from lagarde the imf has urged policy makers to fight deflation that may hurt what she called a feeble global recovery.

deflation must be fought decisively. >> the ecb is set to toughen the requirements for they cap up. the central bank has recommended a six percent buffer. manas has more details on the stress test. the ecb is lifting it. >> you had that conversation with him. you need to raise the benchmark. what is an a grade to get from school to university? it is higher than the american. when thent would be americans did there stress testing they had slightly keener balance sheet.

they had raised capital. we are in a very different paradigm. they had tarp. they had all those nasty things, and they get better. we don't have the proclivity for but we have to agree to benchmarks. be seen as more credible. maybe a bank has said these are manageable. perhaps even less than you might thought. have thought it would be more onerous than this. the one thing that catches my 2011ith a scenario from that equities were dropped by

15%. i think you should have spoken to people in ireland. i think the credibility of a stress test is going to be important as well. >> how do you price them? >> that's what they're not doing. government bonds will be no risk waiting. we stress test them. i leave you with this. bad debt. is goodou decide what and what is bad? ask a spanish banker, and asked the swedish banker. between the two you will begin to understand about the lack of harmony in terms of how you recognize a bad debt, when you recognize a bad debt and how bad

the balance sheets really are. there is a long way to go. >> thank you so much for the latest on financials. let's go from frankfurt to vegas. ever wonder what it is like to be a highroller in vegas? johnson reveals the incredible perks of the lifestyle, and the mgm ceo explains why casino managers are happy to pay for it. >> 40 million gamblers flock to the vegas strip each year, while most people only get a peek at the spectacle. to see it all you need to be a highroller, willing to spend 100 houston dollars.

-- $100,000. you live the life of a rockstar. he shows off his initials. the scene is all engineered by casinos. whatever you want. >> they are going to customize a package. >> what it takes to dazzle timesody today is 100 more ambitious, complex, and challenging than ever before. >> steve wynn is always inventing new temptations to lower gamblers. from nightclubs to celebrity chefs. >> we have raised their expectations. a good ring. get thislayers like on

treatment. >> the catering to high-end players starts before they even think of coming here. you bring a player from the east coast to las vegas. >> you get to stay for free? >> nothing is free. in all factors in the game. >> jim is the ceo of mgm. he owns 10 vegas casinos. >> let's say you are going to spend about $1000. win $200.ing to i can comp you. i will give you about $80 worth of stuff. >> the more money spent, the more money casinos make. >> move the math up to a whale. a whale is going to theoretically lose $200,000. i should be willing to give him $80,000 worth of stuff, but you

cash.eat that much the margin on the high-end is higher. >> which is why casinos will do just about anything to keep the whales playing. >> is there a threshold, a size and scope for the biggest whale? >> i don't know. how big can they get? i just inc. they need to change one thing. the first name. then they are going to sink that problem. >> i don't disagree at all. miss that. >> we are going to find out why with las vegas. sales are a little slower for the company behind cartier.

our european business correspondent caroline hyde is here. it is home to cartier. >> they are seeing far more jewelry in the americas that the moment. they are also seeing the online retailer getting more shares. america is a bright spot, may be helped by las vegas. it is all about china. china sales to climbing. china gigantic the region far less than we anticipated. sales .p nine percent factor in the strength of the euro, and sales only went up three percent. the reason we are seeing a of lack of because giftgiving. we have been told about this. we are not allowed to drive the

politicians. -- to bribe the politicians. jewelry that is suffering the most. , theseier, mont blanc are the things they own. this is why we are seeing such of slowdown. also, watches as well. we are seeing a big fall in the strength of growth. we knew the exports from switzerland into china were decreasing. we knew they were following about eight percent. the stats are amazing. hong kong.o to how are they going to keep up that growth if we are seeing such a fall down in china at the moment? it is coming off its lows, but it is still down two percent. when you have swatch adding to

it, none of it did that well. >> thank you very much indeed. sugar the new tobacco? some people think so. we will ask the scientists if and changed the ingredient solved this company's problems. we will be right back.

>> associated british foods said sugar sales fell last quarter. the decline stems from rising import outside the eu but also the long-term challenge for the market as consumer awareness rises about the health risks of high sugar consumption. is sugar heading the way of tobacco? our next guest thinks so. great to have you on the program. there has been a little bit of a , but you say it is not really the same thing. >> i don't think it is the same thing. there has been a lot of studies released showing sugar makes you yourweight, is bad for dental health. it puts your heart under strain. is quite a lot of evidence, but it is early on. there are a lot of hidden sugars in foods.

we are overeating, but i don't think sugar is toxic. we can be aware of the amount of sugar we are eating. >> if i am a producer of food and there was a little push with , theull -- with nestlé margin is weaker. ,f you go organic you pay extra so is that where we are going to see the real strength? >> definitely consumers to follow a healthier diet it is often more expensive. if do see consumers struggle their income isn't as high. they struggle to follow a healthier diet land. the use of

sweeteners growing. they are a cheaper option. >> like agave. >> we are seeing more natural ingredients across the board and things like agave and molasses have become more popular. steve be a has been a big one to watch. it contributes no calories -- stevia has been a big one to watch. has an association with the plant consumers are more comfortable with. >> is it more healthy, or is it something else? >> i don't think it is the effect of sugar being more healthy. it is the early days. i think there is always going to be a demand for sugar.

and cuisine and cooking. >> and it is delicious. >> everyone has a sweet tooth. there is going to be a demand for sugar. watch ourings to sweeteners and low calorie sugars and also the blending of sugar with low-calorie sweeteners as well because there are a lot of consumers that don't like the taste. they say, i want to cut out sugar. blend in sugar with low- calorie sweetener. >> thank you so much for coming in. very much indeed. let's talk about some of the company news you need to know about. world's second- biggest mining company cut costs by more than $2 billion.

it have exploration spending. a record on increased chinese demand. and welcoming larger aircraft at heathrow. paris, frankfurt, and amsterdam's of themselves challenged by rapid growth of istanbul. francis selling a stake in airbus. the stake account for one percent. france is reducing its ownership of airbus is part of an agreement to cut the direct influence of french, german, and spanish government over the company. cryogenically freezing waste to store renewable way energy and generate electricity. find out what we are talking about when we speak to the ceo of a company who invested in what they are calling the holy

grail of the renewable sector, coming up next.

>> welcome back. ulse."e watching "the p

one of the biggest problems we face with renewables is storage. production and consumption when it comes to electricity is pretty much instantaneous, so how do we deal with very able quantities of electricity being produced? apparently the freezer is the answer. cryogenic technology may offer a solution. they are using cryogenics to create, store, and transport electricity. the ceo to tell us more. essentially the problem with you need to have production and consumption aligned. >> that has always been an issue. we solved that with hydro stations. bring it down to compensate. you are doing the same thing but

a step further. explain. >> that's right. we don't need arise or four. we can build on the edge of town , but what we are doing is we take a giant industrial refrigerator powered i/o like .he city the refrigerator cleaned up a little bit. it refrigerate until it gets condensed. then we use condensed liquid air. that is acquired genic. atmospheric at pressure so the tanks don't have to be strong. insulated, and that keeps the environmental heat away from of operating. -- from evaporating. you can keep that in the tank.

electricityt the back you take the liquid air, pump it to high-pressure, and the environmental heat that we obstructed. that makes the air expand. is 700 times more volume than in liquid form. we use that to drive a turbine and make electricity. >> it sounds incredibly simple and incredibly useful. kind of on demand power. is it sustainable? is it something we could have next to every industrial plant using extra heat? what is the potential? big.e potential is pretty

it is definitely scalable. we have a pilot land. withis about 300 kilowatts 200 megawatt hours of electricity. -- inssible terms that is accessible terms that is 300 houses. we have to make something that small. it is much easier to build something 10 times that. our commercial scale unit is going to be about five megawatts. so for four hours. >> this becomes more important as we switch to a renewable base because the wind blows at different times. the sun shines, etc.. >> that is right. the generation we have we can program when we get it to run to

match demand. the thing about renewable energy is we need to harvest that power when natural conditions dictate. when the s is ou and the clouds have cleared the wind is owing. that can be problematic to factor in that level of reduction into that level of demand, which consumers drive. difference, it is produced by natural conditions. meeting that gap between that demand and the variable could be done with a storage device. been like getting investors into this? who are your investors, and how much more do you need? have raised about 17 million pounds from our investor base. we started pulling in investments in 2006.

that sounds like a disappointingly long time. the thing your viewers need to know is the utility business is a conservative time business. it takes a long time. we are mainly backed by angel investors, many of which are long-suffering and extremely patient. we have done the hard work. we have improved the process. we are now ready to do this business to scale. start raising capital to producing commercial scale projects. >> i look forward to hearing more about it. thank you. >> thank you so much. next, the second hour is coming up, and this is what we will be talking about. microsoft takes another look at

a possible person to become the next ceo. we will look at microsoft story, and we also talk about moneymaking models.

>> office politics. offer.ft fax ericsson's marissa mayer's -- microsoft backs eriksson's offer. >> happy birthday, kate. why this supermodel is still on the top of her game, and while some of the biggest rant still think she is the face. good morning to our viewers in europe. good evening to those in asia, and good morning to those just

waking up in the states. >> this is the pulse. >> we begin with the latest in microsoft's search for a new chief executive. they seem to be considering the ericsson ceo. hyde towards us with the details. amsteve balmer has said, i annexed chief executive by august. they keep adding people to the mix. the ceo could be considered. he is young. he is driven. he is motivated. he is a sports man. he plays handball very well. he is the chairman of the swedish foundation.

playerse so many running for the job of ceo who are internal. as is the man brought over from nokia, stephen elop. still plenty of people in the running. stberg could doe a good job. it is interesting because names drop out, and names drop in. if they are going to overhaul, it is the least easy job and he ceo has. it has good caliber. he has been at the chief eventive role since 2010. though he has seen the chinese get in on ericsson's space for

a cheapert, it is landscape for him. he has managed to be a winner, and he knows when to exit and unprofitable unit. he dismantled the handset venture with sony. he knows when to cut losses. that is going to be key with microsoft. they are trying to navigate a whole new world. they are trying to make their own hardware. they are trying to drive software sales. >> it is all about the tablets. latest on the race to replace the microsoft ceo. >> yahoo!'s chief operating officer is apparently out. marissa mayer was a little disappointed with his efforts. $109rned an estimated

million in that role. how long did he have that role for? 14 months. >> that is under 10 million a month. not dad. ahead withles raced a 13% surge in september. thomas has more. what is behind the surge, and what markets are doing well? francine. the surge was 13%. that was the biggest gain in four years. it was also the fourth couldutive month, so you say we are starting to see a bit of a trend. it was really across the board with the gains. about half of them posted gains of 10% or more. where you are in the u.k. the increase was a whopping 25% as

people rush to buy new cars, but essentially we are seeing there are a lot of incentives in the market. those are helping to bring people in, but those incentives also mean it is not necessarily adding to the bottom line for automakers. >> the top line is moving nicely. , how much is it going to take away from the bottom line as margins start to get squeezed, and how much future demand are we enjoying now? at the autook sales, the automakers who post the biggest decreases, it was .olkswagen they had those big increases because of the brands.

are buying the budget vehicles. that doesn't help with the bottom line. we did certainly see incentives in germany creep up last month, so while the sales are rising, that is good news automakers will cheer. we are a long way from the point where automakers will be profitable with their european operations. >> take you so much. on thesehe latest carmakers. >> it has been a big week for u.s. banks. bank of america quadrupled its quarterly profits as it quelled mortgage claims. will it be hit or miss for goldman sachs? our markets editor manus cranny joins us with a preview. >> i think when we talk about what is going on in wall street,

i want to put it in context. then of the largest institutions you begin to see revenues of 73 billion for the whole of 2013. that is 50% less than it was in 2009. they are holding onto their's red that is going to drive the numbers for goldman. it is interesting you saw bank of america up by 11%. jpmorgan revenue dropped by 21%. revenue nearly 50%. a couple of things are going to be on my radar. the compensation radio up -- ratio of 38%. i suppose investment banking fees because they are number one when it comes to equity sales

and rights issues. what would be the focus for citibank ceo? to behink it is going about compensation. we know he has been aggressive in terms of numbers. we are going to keep an eye on the business. a big rates business. litigious activity against city is not anywhere near the peer group. number,an eye on that but that is very much going to be the focus at citi. compensation, and the investment banking side as well. we know they're remortgaging business in the u.s. is coming to an end. we are moving into higher rates. higher interest rates could be an issue on the fixed income side.

back to you. >> things for the latest on one of the top stories we are covering. that aill be covering great deal. we will break it down and analyze what it means. what else is on our radar? amazon employees will not be forming labor union. they voted to reject the initiative. unhappy amazon engineers petition to form a union with the labor relations board. the company behind cartier saw weak demand in china. >> and the man behind the vacuum cleaners is often unpredictable and sometimes agonizing. that is innovation with charlie rose. >> it is something that could be

devised i one skilled in the arts. accidentiscovery of and happenstance. it is the most wonderful journey. it is agony. >> that airs at 10 p.m. u.k. time. >> it has earned the name startup nation. they just saw initial public offerings. >> could israel be losing its shine when it speaks to investors? we speak on that subject.

>> good morning. let's take a look at how markets are performing. the turkish lira is part of the process as we see continuing around political developments but also what is happening and what is that going to mean for emerging markets. we are in record territory. four is where we are. record territory now. let me show you a three-year chart as well. this is the australian dollar with the u.s. greenback data out

overnight. thantle weaker anticipated. unlikely to have a major impact. we are seeing some fairly good chinese numbers, but the ozzy dollar continues to remain under pressure. unemployment among the top concerns at the world economic forum. this year is income disparity. >> jennifer joins us. in terms of income disparity, is it men versus women, or is it social classes? >> it is social classes. that is the global risk that is most likely. japan continues to get worse over the last 10 years. it is highly linked to other

risks we are looking at. crisis,ike the fiscal the community crisis as well as unemployment and underemployment. >> do you think the income disparity is being seen as strongly as it should be by leaders? beenicians in europe have belatedly aware of the risk. >> i think since it came out on top of our list and the survey is actually carried out among leaders. i think so, because if you look around the world at the emerging markets such as brazil, south africa, china, but you also look at europe, spain, you see a lot of social unrest. this is due to the fact that young people don't have opportunities. there is huge unemployment. in many countries it is above

50%. a gap between the haves and have-nots that is getting larger. when does it need to be addressed? >> it is more on the agenda. what i believe leaders are leadingnding is this is to social unrest. it is the road in the social fabric. we are getting to a huge viral. linkagesat the inter- between these things. it is affecting the bottom line. >> tell me how good these leaders are at predicting the problems we are going to face. in 2006, what was at the top of the list? >> i don't know about 2006, but 2007 we were looking at a lot of things that didn't pan out. 2008 we were talking about fiscal crisis leading to liquidity crisis. at the same time we're not trying to look at a crystal ball. i think it's not surprising we

are finding big things. i think it's more about aching holistically and stepping back and all of the leaders working together to do these things. >> there is one thing that caught my eye. of global conflict caused by technological change. this new technology for social changes. >> if you look at young people they are very linked in. it's not that they are not aware of what is happening. it is one reason this proliferates so quickly. if you look at the technologies they are allowing them to communicate about their disgruntlement very quickly. another of the things we are looking at is if you think about the internet and how important it is for all of us. it is hugely important, yet there is a lack of trust even in the internet, so what happens when we lose this great tool we have become so dependent on? >> when you look at the

potential for conflict, one of the things you draw attention to is what is happening in the asia story with china, japan, and the u.s. potentially getting sucked in. are at at a sense we point where we have been previously in history -- 1914 is a number being thrown around, where we are getting back to that kind of point, where these tensions between large global powers are reaching a boiling point? >> we are all thinking about this, but the truth of the matter is i think we have learned from past experiences. hopefully now we have that are structures in place to avoid those sorts of huge district if actions and not get into these sorts of wars, but at the same time i don't think it should be taken for granted. have had these without these large conflicts. one worry is that global

government failure is one of the risks. it is true a lot of our systems were built for yesterday, built for just after the war, and i think we need to think about whether the structures in place are still fit for the purpose. >> jennifer, thanks for that. but let's move on. thomas she is more successful than ever. we are going to ask the founder of the luxury brand agency why the biggest rant still thinks she is the face. biggest brand still thinks she is the face. ♪

>> welcome back. a bit of breaking news surrounding formula one. munich is saying it will allow a case against the head of formula one to proceed. at the endwill start of april. ecclestone is accused of effectively trying to bribe a when it came to a state of formula one to the private equity firm. thesen obviously resist charges strongly and says they are groundless. nevertheless, the court case is going to happen and will start

at the end of april. >> something we will keep a close eye on. 2013 was a strong year for israel. is everything like it seems. elliott gotkine is standing by with more. >> politicians revis about this. my guest is not a big fan. president. thanks for joining me. here with a guy talking about what a wonderful year 2014 was. are people celebrating as much as others? >> first of all, it is excellent. the end ofking at

the process. the important thing is to look at the process. i can show around, you some stuff. >> your concerns range from fewer people studying science at university, less government invest and in research and development. how do we resolve some of these issues? >> if you look at israel, it is true globally. especially in israel, if you look around. in china there are more people doing productive stuff. there is wonderful tax incentive.

it comes from culture. it also comes from high education. 75% of students in science and technology increasing, it means we have to do something about that. if i look around and see is 2.4,nt investment that is interesting. >> they have more per capita than any other country in the world. does it matter that most of that money is coming from a foreign company like yours? >> it is like everything. watereople say a glass of is half empty. some say it is half full. the fact that we have a bottle is a great thing. i think it's great that many people are investing in israel. of investors in israel are foreign.

is they wantof it a celebration. for the people celebrating they are foreign people, which is wonderful globally, but what does it mean for israel? >> your company brought calm, how is strong currency impact the it? >> at the end of the year we are ouring at how much employees get by the end of the year. raise salaries? >> i am going to have to stop you there. >> it is just the strong shackle

-- shekel. if you go further it would be very bad. >> i'm going to have to hand it back. thank you very much indeed. >> we will talk about marissa mayer and who she has fired. .

>> welcome back to "the pulse." these are the bloomberg top headlines. sales surged to 13% in december, the biggest monthly gain in a must for years. tries cuts by carmakers helped generate recovery. a warning from christine lagarde, urging policy makers to fight the threat of deflation.

>> if inflation is the genie, then o defray shannon is thegre -- deflation is the orgre. sets upcapital as it the rules for the stress test. the central bank has recommended a 6% capital buffer. let's talk about what is happening in the markets. come down here and have a look at spain. remember when we used to talk about options? about how much it cost europe to fund themselves? you have good news drifting all around europe and still these markets are just pausing. christine lagarde said recovery will come.

futures virtually unchanged. down at the moment. it will all be down to the jobless claims. number we are looking for. you can call this virtually flat. you are at record highs on the s&p 500. whether you think valuations are stretched, profitability will catch up, and whether recovery with paper will remained. those are the big themes. when it comes to charts, i like this one. the aussie dollar. the jobless numbers in australia overnight. this is what really began to drive the market. three-year low for the aussie dollar. traders are raising their bets the reserve bank of australia will have to cut their rates by july.

's on the way.0 we are already at the low 80's. >> thank you. let's continue to talk about jobs. take jobs. potential hirings and firings. iker soft word is said to have added another name to the list of possible successors to the ceo. is saideo marissa mayer to have fired her chief operating officer after little more than a year with him in the job. our european business respondent is here to make heads or tails of what we are seeing. let's start off with microsoft. lolly is not when it's take a is not going to take the job, staying at ford. >> a number of internal candidates are on the short list. looking basically at the top with the head of cloud

computing at the top. name because vestberg is a little younger, still in his 40's, driven and motivated. you need that to reinvigorate microsoft. they're trying to tackle this whole new era where we are not using our pc so much. we're looking at tablets, smartphones, not using the windows software so much. desperately trying to become modern. good view on that. yes continue to increase sales over ericsson, even though he had difficult competition from the chinese. also, he knows when to get out of areas that aren't performing so well. the joint ventures he had, a chip venture, the handset venture with sony, unwinding by the does, remaining operable -- profitable.

maybe he can do the same for microsoft. >> across town, cross-country, let's talk about yahoo! people have different definitions of success, but marissa mayer has not been impressed with what castro has been doing in terms of reinvigorating the appetite of the side of yahoo!, but he is pocketing an awful lot of money off the 14 months of this job. >> more than $100 million is his reward of being hired and then fired by marissa mayer. she pitched him or so. he is originally from google. four months into her tenure, she brought him on board to be chief operating officer. basically, her top lieutenants. he has been ousted. we understand from the company itself, people from earlier, she was disappointed with his efforts to turn around. she is trying to turn around yahoo! she is a new e-mail platform, buying smart start up (, and

center. $100 million, maybe he can take it on the chin. >> i would quite happily take that gipper for for two months. thank you. the homebrew computer club kicked off an entire industry. for one night only, a group of original members gathered to drink and reminisce. jon erlichman caught up with some of the original crew. >> before the iphone, the imac, or even a windows pc, evers of the homebrew computer club gathered every other week, first in a garage or later on the campus of stanford university. >> it was social media of its day. >> one of the organizers. >> we were witnesses to a lot. not all of us have the same impact and duration as apple. >> you can't get far to the history without running into the meteor risee of --

of apple. steve wozniak is getting the rockstar treatment at its first reunion in years. >> everybody in the club that talk to me and had ideas, those are what inspired me. what should go into a computer of the useful for people? i wanted to be a part of this so bad. >> a homebrew regular, paul owned a computer store. after seeing jobs and wozniak demonstrate the first apple at homebrew meeting, he invited jobs to his store the next day. >> when he came into the store, i told him if he would assemble and test the apple one computer that they had, i would buy 50 of them. $500 apiece. it was jobs and wozniak's first inl that landed them $25,000 1976. >> that was basically their seed capital to get the company off the ground. >> while apple often gets the credit brushing in the pc euro, wozniak has high praise for the entire club. >> i was just a decoy is very

skilled at having an idea that i could turn it into a working device -- i was just a geek that was very skilled at having an idea that could turn it into a working device. homebrew computer club. we are going to connect that to another start making headlines today, you might not see coming. >> you will see the connection and to let the end. the financial times as chuck e cheese has been sold to the private equity firm apollo. the deal values the restaurant chain a close to $1 billion. the report says it will be announced later today. >> chuck e cheese was started in who was also the founder of atari. >> and he helped steve jobs get his start in business when jobs and wozniak worked on the atari game breakout. later, bush no turn down jobs'

start of called apple. >> oh, the regrets. keeneillance" with tom just 20 minutes. no regrets here. >> it will be an interesting stroke. we're going to -- it will be an interesting show. are going to talk about something in north america. train explosions. michael ward will join us, ceo. really removed from this. they're not involved in this, but it has captured the imagination of the good part of north america and in particular, moving oil on trains. then something bad happens and there is an explosion. that is one theme we will talk to him about. inc. earnings, -- the bank earnings derby continues. we have three earnings reports today. like rock reports, citigroup

reports, and goldman sachs reports. us.s chris onto will join >> a very diverse show. it is time for today's number. $5.7 million. what is that? that is how much kate moss, who turns 40 today, by the way, made last year. which models are in the most cash for the company that hired them and why? we will discuss that with the founder of the luxury brand agency coming up next. ♪

>> welcome back. one of the world's most influential supermodels is 40 today. she's celebrating in style. she is more successful than ever. kate moss's rise from teenage cover girl to 21st century fashion icon. the story contains flash photography. >> kate moss is one of fashion's biggest names. she is an exception to the models that come and go. she has appeared on the covers of the most important fashion

magazines and stroll the catalog -- cap walk. filings from 2012 show she may nearly $20 million that year, but since then she is launched makes essar collection, published your own book, & numerous endorsements. moss was discovered at jfk airport at the tender age of 14. two years later, she was on the cover of magazines. 2005, she was pictured allegedly snorting cocaine. labels and contracts fled, but it did hurt her popularity. a year later, she was voted tradition model of the year and the offers came streaming back. moss is now turning 40. how do you celebrate when you're a multimillionaire model? well, you go to richard branson's personal island, of course. if you wanted to do the same, it was set you back $16,000 a

night. it is reported she's getting the british virgin islands for free because it helps when you are friends with the boss. in an industry dominated by teenagers, moss continues to grace the cover of magazines and redefine the idea and image of a supermodel. bad, an island for your 40th. i have a couple of years to save up. what is it about her face that is worth millions in the fashion industry? >> what is it that makes her such a big star? our guest is joining us to choosing a model. you have a woman here who has dominated the cap walk for a long time, from 14 to 40 she has been incredibly successful. what is it about kate moss that sells? what is it about her that means

the brands want to be associated with her? >> at the beginning, maybe it was the looks, but it has grown into a lot more than that. it is the personality and her attitude. she has a very attractive personality and the way she behaves. and that is what makes her last. the looks can fade, partly, but the personality makes her have great value for brands. >> is this something that appeals to women, the edginess, the coolness? when i look at her, i think, i would love to hang out with her, so maybe i will buy something that she is endorsing or selling. women are spending more. women have better positions, better jobs. you're targeting women buying for themselves, then you need that edginess, mu which maybe 15 to 20 years he did not need that so much. justu need something than looks, then just a very male

attitude to endorsements, which is, she looks pretty, let's take her for the brand. you have to go beyond that. she is selling with her edginess or rebellious attitude, or being naughty at times. guy that wants to go out there and so my brand. i'm a woman that wants to sell my brand. why do i pick a model? doesn't work for all brands across from the low into the high-end? where is the sweet spot for a kate moss? how do i make that work? >> the way you don't select it is having the executive thinking who they would like to sleep with, which happens a lot. >> is a very good point. >> that is the wrong way to go about it. look at, listen, who are my aients and we see a bit of

the lower end people are more receptive to celebrities endorsements because they want to have part of their lifestyle. >> it would be a fun party. >> of the topic of the markets, people were very, very wealthy, they're not interested -- at the top into the market, people who are wealthy i'm not interested. the first question to ask myself as a brand is, who am i selling my products or services to? if i'm going to the very high end of the markets, maybe it will not be effective and can be counterproductive. lower end of the market, accessory type of product, it is great and will work as long as you've got the personality to match. that is the key thing. it is not just the looks. does the personality of that model, if i look at case moss, she is the edginess, or billions

this -- we're bilious does. is that right for my brand? is my brand anti-hero like kate moss? like hilda bit swenson. she's more attractive to women than men. a little quirky. we've had this conversation off a air. about key thing to go choosing a model is, do we have a personality match? other than, she looks pretty. >> is this market going to get bigger? >> it is because the accessories market is growing fast and this is driven across all lifestyles by celebrity endorsement. >> thank you for that fascinating conversation that we don't often think about. founder of the luxury brand agency. >> of next, the oscar goes to -- drumroll. we will have the nominations in just a few hours. "american hustle low score is

seen as a front runner for a golden statue. we will tell you who else could make the cut. ♪

>> welcome back to "the pulse."

let's talk about the currency markets. the hits keep on coming. let's take a look at the turkish lira versus the u.s. greenback. the pressure continues to pile on a country facing political and economic problems. 2.2. another record, three-year record, three-your chart, the aussie dollar under pressure. economic data overnight showing unemployment a little stronger than anticipated. that is going to be a problem moving forward from here. we will keep the focus on this one. we will see what happens. now a look at what you didn't know for the rest of the trading day. mike, we are looking at u.s. banks reporting. >> two banks, two different business models and expectations. goldman sachs at 1:00 london time, forecast for earnings of

$4.18 a share. that would be a quiet quarter for them. lester fourth quarter they made over five dollars. how much of the revenue is derived from trading and how much from investment banking? trading under pressure here as it is around the world. the volcker rule coming into effect. citigroup at 12:30 or 1:00 london time with oldman at 12:30. $.95 a share. they made $.80 a year ago. the revenues are much bigger, much bigger bank, 18.3 billion dollars. the question for both of them, what will they say about their forward-looking legal expenses resulting from cases coming out of the financial crisis? tippie morgan settled a lot of that. -- jpmorgan settled a lot of that. chris christie into says

investors are havi a hard time putting money into banks -- santi singh investors are having hard time putting money into banks. you, mike mckee, joining us a little later to continue those conversations surrounding those two key banks. let's talk about a couple of key performances coming up a little bit later on. -- bernanke and the drumroll film buff, butg for my nomination i would give to and for lawrence and oscar for "american hustle." the acting in the movie is brilliant. she is so, so good in this. the on-screen romance -- she is brilliant. >> i love the film. they were all very good. >> i'm going to see this one this weekend, "wolf of wall street." i love the guy. i think he is awesome.

i haven't even seen the film. you heard it here first. what about bernanke? >> this could be the last time we hear from ben bernanke is his capacity as federal reserve chair. he is going to deliver a speech from yesterday, today, tomorrow. i think tomorrow will be the interesting part of it. we are building up to the exit. how do they exit? i think that will be the story of the next possible five to 10 years. >> let's hope we find out a solution of how they exit before 10 years. but you never know. we will know shortly we think, any year, whether it is smoother or not. >> worrying about deflation. maybe that is the problem we will be facing? >> they do so much, jonathan ferro and mike mckee. next.illance" is

you can follow us on twitter. we will see you tomorrow. ♪

>> a hat trick of bank earnings as blackrock, citigroup, and goldman sachs report. a theme emerges. angst still shaking off the aftereffects of the financial crisis. -- thanks still shaking off the

aftereffects of the financial rises. end or a a sign of the new beginning for the troubled retailer? fat, and your employer knows who you are. companies demand a cut and chiseled workforce. scarlet fu, why are you looking at me? this is "bloomberg surveillance." this is serious stuff. >> time for crunches. eurozone. they're worried about disinflation. european new car sales, we have some good news in europe. up 13% in december, the biggest monthly gain in almost four y