>> toyota slaps on the brakes. safety fears forces it to make one of the biggest recalls in history. meets hisnt putin government to discuss stopping the ukraine's gas supply. >> and angela merkel says europe's debt crisis is not over yet. ised on the fear that greece expected to announce his return to the bond market. ♪ >> good morning, everybody. you are watching "the pulse". we are live from bloomberg's headquarters right you're in london. top of thep at the

pile, we will discuss the uk's strengthening recovery with daniel alexander, the chief secretary to the treasury. flying cars have always been the stuff of science fiction -- until now. we will test out this real life chitty chitty bang bang. >> italy and france's new prime ministers are hoping to leave the -- lead the charge for europe's economic recovery. they have just announced tax and spending cuts to kickstart their economies. or more, let's bring on jonathan ferro. basically, they are trying to get more leeway from europe to try to grow. >> these guys are doing exactly what they have been brought in to do. for the socialist party in france. matteo renzi has cut the growth outlook for this year. his message to the people is that politicians are going to take the pain as well. will try to get you some

tax cuts in the process. when he auctioned off those shofar-driven cars, that is not going to raise much money, but it is symbolic of the direction italy is trying to go in. france, under their prime minister, has announced another 11 billion euros in extra tax cuts, which may help some people. it is the budget deficit that is coming after a lot of scrutiny in france. where are we now? 4.3% budget deficit. they need to get down to 3%. they got an extension last may to get there by may of 2016. it looks like they are behind. are they going to hit that target? >> one of the radio stations said that 3% is still the target. guys, we have given you a couple of extensions. get it together. >> the other thing you have got to look at, euro-dollar.

making tots we are cut our deficits must not be swept aside by a euro rate that is too high." how far into the crisis are we? we still have this classic playoff between the ecb and the southern reality. the ecb has tried to give these countries an incentive to reform. right now, they need -- >> you are putting france squarely in the periphery. [laughter] >> that is where they are. they might not come under pressure from the likes of -- >> france is even more dangerous because they have this -- it has the same problems, people seem to ignore it and france is much bigger. this is no italy or spain. this is france. >> if you do not push the euro problem down, you could have deflation down the road. what does that do to these targets?

it could be well out of their hands. if we fall into deflation, what happens -- >> it is still very exciting to leaders,airly young the new prime minister of france and matteo renzi, trying to get the act together for these countries. renzi is the youngest prime minister, fairly young, 38. >> 38 is fairly young. >> very diplomatic, jon ferro. >> going back to the bond market, this crisis is not over. >> it is not about the bond market anymore. >> the markets think it is over. 25-year-old, young, in any of these countries and you have been unemployed for a long time, that is the story. >> jamie dimon gave an interview and he is very worried about

france. he says it is the young entrepreneurs. >> this is the potential to move from an economic crisis to a social crisis and that could potentially be more dangerous for years to come. >> as we have just been mentioning, greece may return to the bond market today. and absurd -- this after absence of more than four years. david tweed is in berlin with the story. so what is the plan? >> we are still waiting to see this. yet. not in the market i am surprised about that. the people that we have been speaking to, they were planning to go ahead with the bond sale today. notes.ar i have just seen a note from commerzbank saying they might be able to yield below 5%, which

would be interesting. getother thing is, if they good demand, they could potentially increase beyond 2 billion euros. it is interesting what is going on though. .reece is cached up it has that bailout money. this would be a loss like putting -- this would be almost like putting something up there and saying, this is what we would do. the prime minister wants to tell the people of greece, look what we have managed to do. we have foreign investors buying our debt again. vote for the coalition in the year in -- in the european elections. >> angela merkel has just been speaking. she says that the euro crisis is not yet resolved. >> it is interesting. what guy was saying is what angela merkel was talking about. if you look at the terms of unemployment and youth unemployment, the european

crisis is not resolved and will not be resolved until we see those rates coming down. she did have a few words to say about the need to complete a banking union. wasalso mentioned that she impressed that a banking union has gotten so far, so fast since its inception. she had a few words to say about the situation in the ukraine. she is very concerned about. the eu needs to remain firm with its sanctions should russia violate the ukraine. she does not go much more into it than that. >> thank you so much. >> david mentioned the situation in ukraine. is meeting with his government to talk about the situation there. they may discuss potentially halting gas supplies to the , a serious development. ryan chilcote joins us for the latest. >> the ukrainians are not going to buy gas, at least in the

month of april. that is according to ukraine's energy minister, who made those comments about 20 minutes ago. very interesting. he says ukraine does not agree with the price that gazprom is offering. that price has gone up 80% for the month of april. they did not pay for march anyway and they do not agree with the price. they will get their gas from the europeans. the funny thing is, the russians were just about to meet in about three hours from now. one of the contingencies on the table was to turn off the cap. -- the tap. is this the ukrainians getting ahead of the russians here? before there are any supply disruptions, we do not want that gas anyway. we do not need it. >> it can turn nasty very quickly. this is not the first time we have seen a dispute with russia

and the ukraine over gas. how likely is it that they will go with europe? >> in 2006 and 2009, the so-called gas wars were important, not just because you had a disruption of supply between russia and ukraine, but a disruption of supply to western europe. is that going to happen this time? there is no reason ukraine would want to take any of the gas that is transiting from their country down for western europe. a think that there is enough that they can get reverse flow from places like slovakia if the slovakian's are invited -- if the slovakians provide it to them. there is less gas coming out of that pipe from russia, you have got to be a little concerned. >> we will wrap it up there. thank you very much. the latest from ukraine. apparently one of things behind the

chelsea goal last night. just putting it out there. >> toyota is recalling more than 6.5 million cars globally, adding to nearly 2 million prius models recalled in february. >> let's get to craig to break it down for us. this sounds like a big number. >> it is an awfully big number. is alsof -- it comprised of five different campaigns that have been lumped together. within those campaigns, there are some big numbers. more than one million each, in some cases. this is the second biggest recall for terry at a -- four toyota -- for toyota. in 2012, they had more than 7 million that they recalled, including camry and corolla, which happened to be some of the

models they are recalling today. to add some context to another recall situation that is very much top of mind in the automotive industry, gm is under a lot of heat for its ignition switch recall. that is a little over 2.5 million. this is more than twice that size, obviously. >> does toyota have a problem with the quality of its vehicles or is it something else? well, it is never good to have to fix an issue and bring a car back. definitely, not all recalls are created equally. some of these recalls are for things like seeds -- seats, the lever for pushing the seat back and forth is maybe worn down a little bit. this is not a level of gm's recall, where they have an eight nation switch that is linked to 13 deaths. for is certainly worrisome

the president of the company. it is also may be reflective of a change at the company, which is to get out in front of issues that could blow up in their face rather than sweeping them under the rug and getting into the trouble that they did when they had all of those recalls related to sudden, unintended acceleration of their cars in 2009 and 2010. >> thank you so much. up, top of the pile. the imf says the u.k. will outpace the rest of the developed world in the year ahead. we will discuss britain's economic bounce with the chief secretary to the treasury. ♪

>> the focus of europe's debt problems is moving from the periphery to the core. -- pledging spending cuts to revive their economy. >> this the day greece is returning to the bond market. angela merkel this morning said that the euro crisis is far from over. would you agree with her? >> certainly. ahead.re still risks france is one of the big risks. the lack of competitiveness for the french economy. countries like italy and spain

-- in france, they are not. we have the low growth issue which is abundant. >> will that change with the new prime minister? he is a lot more centrist. he will unveil the new budget in the summer. he seems to be on top of the reforms that france needs. >> that is right. the land is still out of the story too. -- hollande is still out of the story too. markets will give him the benefit of the doubt. they seem to have the view that if there is a real problem, >> thewill fix it in market thinks this is all over. that is because draghi has convinced them that he will do whatever it takes. >> some magic dust that he has. government bond yields, junk rated.

obviously, the inflation story is different. something that needs to be addressed. think the issue is you have like 70 million people now living in deflation. tax is -- that material in -- that materially impact things. >> mario draghi will do whatever it takes. >> that is right. look at what he has done in two years. >> what did that look like? what do you have to deliver? >> he needs to deliver a quantitative easing scheme. be back to theot asset-backed market until later this year. i would love to see him do it, buying offshore bonds. oneou are not the only saying it. dimension thats

they agreed not to do. i am excited about italy because i am anatolian citizen and it is excited seeing a 38-year-old trying to shake things up. is he going to make it? is he going to be able to deliver the reforms that finally put italy on a real growth path? >> i do not know the answer to that. at least they are trying. they did not have the markets attack them like they attacked countries in spain and italy. it is going to make it tough. ot said that their most efficient plant is now in spain. when they are saying things like that, it is not good. >> talking about the fed, if we might, i was just looking through this morning, u.s. , inflationreakevens expectations.

belief that the u.s. economy is gaining traction and the fed will be changing doing, why are breakevens what they are doing? >> that could be the reason why, inappropriate policy. our view is that the recovery is not really gaining traction. lines thating bottom look good, but corporate are not investing. books,e tweaking the cost-cutting and so on. they cannot do that forever. is going to be an issue going forward. at the same time the fed is unwinding qe. u.s. stocks, i could see them spilling over the cliff and that will hit capital wealth and spending. that will be a new hit for the u.s. economy. >> you are worried about the recent data that we have in housing and manufacturing in the

u.s.? >> yes, i think. -- payrolls >> is that not the weather? >> the weather was very supportive of payrolls late last year. november numbers were very strong. i think we are getting some payback for that now. the economy never really accelerated much at the end of last year. based the beginning of tapering on that. in five years, are we going to have an inflation rate that % in the united states? >> i would think so, yes. >> that is a no-growth environment that we are talking about. it is falling. me trajectory is not telling that we are looking for stellar growth. spending,the core housing, energy, there is

inflation there. very low price gains or even negative prices -- >> are we going to see any wage growth? >> since 2007, if you take out what people spend on necessities, there is no growth at all in discretionary, disposable income. previous levels were running at 3% per year. >> when does the focus shift to the supply side of the economy? orders.at durable goods defense and aircraft down 2% annualized. annualized the previous six months. businesses are not investing. it was the point i was making before. it is just cost-cutting. >> thank you so much for that. senior economist at west bank. , the u.k. wille outpace much of the developed

road. we will discuss it with danny alexander. he is speaking down stairs as we speak. he will be up shortly. ♪

>> good morning, everybody. welcome back. you are watching "the pulse". forecastas raised its for the u.k. economy for the second time this year. recovery andng the

is it sustainable? let's talk to danny alexander, the u.k. chief secretary to the treasury. good morning. aboutlk this morning seeing the first ray of sunshine when it comes to the british economy. ae imf has had confrontational relationship with the u.k. over the last few years. you guys have got to be happy right now. please tell me there are guys doing little victory laps around the auditorium of the treasury. >> [laughter] i do not think diana has been confrontational. they have made their points along the way and been very supportive. of course, i am very pleased about the forecast that we saw yesterday. raising their growth forecast for the current year to 2.9%, doubling compared to the forecast that they had a year ago. that is in line with other forecasts and reflects that we are now seeing a strong recovery underway in the u.k. but i would be the first to say that we still have a long way to

go as a country. we have got to continue to stick to the plan that got us this far. we have got to take steps to encourage business investment, improve productivity in our economy. like havingchanges, a more advantageous corporate tax system for businesses to invest in the u.k., long-term plans for investing in infrastructure and skills, these are things that have to be sustained for long periods of time to change the game of our economy. i am encouraged. when wewe were right say that our huge financial problems require strong action and difficult decisions. frankly, we still have a long ways to go. a half this year compared to 2010. we are seeing unemployment growth, but we require further steps in the years to come to make sure that we continue to

become a country that can live within our means and balance our budgets. after that, that we get our debt down as a share of gdp. >> the sustainability question is critical. thatense at the moment is the u.k. recovery is being led by the demand side of the story. need to fix the supply side as well, raise productive growth potential of this economy. you have put certain measures in place. is that broad analysis true, that it has been demand driven? recovery overry the years has been initially driven by expense. , forwe have been doing example, in the budget a few weeks ago, is to say that we have that business investment. i think a lot of investors we have been taking have been designed to do that.

getting our corporate tax rate the, the most attractive in g-7, that is an important tool for investment into this country. want to invest in plant and machinery over the next few years, we are bringing forward investment and have plans just for the oil and gas sector, the renewable sector, to get our infrastructure going. these are always we have invested into our economy. recent figures have been more positive. there is a long way to go. as have the recent figures on productivity. we need to see sustained improvement. >> when do you think the balance shifts from one to the other? how much more demand are we going to need to sustain the recovery before that starts to kick in? >> it is starting to kick in now. if you look at the forecast published by the office of fiscal responsibility, they see inonger growth investment

this year and the years to come. exports are also important. when he new markets. inning new markets. >> how much more of a demand push are we going to have to see before that happens? forecast is that we will see stronger elements of business investment driving our recovery forward this year, next year, and beyond. what i am saying to you is, as a government, we are not risk -- resting on our laurels. they're making decisions to make the u.k. more attractive to investment. the u.k. is now one of the most attractive places to invest in the whole world. air has never been a better time to invest in the u.k. than right now. we are continuing to do whatever we can to make it more attractive. >> do you think a growth of the top-rated tax would make it more attractive?

>> i do not. from 50p tong down 45p, we put ourselves in the middle of the pack in terms of higher also have to make sure tt our tech system is fair. we have to make sure that as we are going through this, that the burden of that is shared across society. in particular, the wealthiest are making the largest contribution. i don't support that. i wouldn't support it in this parliament. i think it is better for us to focus on further tax cuts for working people. really working to make sure the tax environment for businesses to invest is as attractive as possible. >> one quick question before i let you go. -- doe supporting those you think that will deter investment into the u.k.?

if you regard u.k. housing as an asset, people are investing into britain. maybe the mansion tax would discourage that. >> i don't think it would discourage proper investment into the u.k. many other jurisdictions in new york, hong kong, frankfurt and paris have property taxes that apply to higher valued properties. what i'm suggesting is there should be additional bans on the system. at the moment a house worth 700,000 pounds pay the same tax as a house worth 70 million pounds. that is an anomaly that has to be corrected. what we do is put in additional bans above the 2 million pound value mark to make sure there is a proper contribution coming to central government for people in those properties. that is a fair reform, one that is in keeping with what you see in other parts of the world. >> danny alexander, thank you very much indeed.

francine, over to you. >> it is time for bloomberg's top headlines. toyota is recalling more than 6 million vehicles worldwide. the recall includes 27 toyota models. the company's president is trying to improve this process after being punished for delaying recalls in 2009 and 2010. the european union is moving to give shareholders veto over the pay packages for executives in publicly traded companies. financial services chief introduces the plans today. it will require a shareholder for companypolicies directors at least every three years. european luxury earnings take off as lvmh reports numbers later today. the world's biggest luxury company is set to post a gain in sales at the company tries to strip away logos and earn back its exclusive reputation. more on this company

with our european business correspondent, caroline hyde. they are trying to be a little bit more low-key. luxurious, less logos. is this paying off? >> it is giving them consistency. seven percent is what we are expecting in sales growth, the same as the first quarter in 2013. half of what we saw in 2011 and 2012. they are remaining consistent. they are trying to regain that a luxury byllure of pulling off these tactics. is less logos, fewer stores. but pushing up the price point. taking it with more luxurious .aterials, trying to earn back it had a bit of a burberry affect, particularly in china. the reason we are seeing sales only at seven percent is, what is not hot with lvmh is china. still very tough trading

conditions. the clampdown on giftgiving has heard watch sales and jewelry. they want more well-made goods rather than brandishing your logo on your handbag. concernshave potentially with ukraine and russia as well. hermes is kind of the beacon of what people want and luxury. lvmh is also considered a bellwether for the industry. cci was beset by the same problem, too much splashing its name and logos all over the place, now trying to raise the price point, scale back in the number of shops. .ascinating research this is what everyone is trying to work out. have chinese tastes changed or is it the clampdown on giftgiving? royalty in china want

craftsmanship. they don't care so much about status. means they might actually diverge away from the u.s. brands, the european brands and start buying homegrown trainees -- chinese luxury. >> that is a trend we have to follow very closely if what is happening in the tech world is anything to go by. tara line, thank you very much. staying with luxury, let's take a step back and get burberry -- bucking the trend by naming christopher bailey as its new ceo placing both creative and commercial control in one pair of hands. andrew robert strives us from paris. resistedompanies have combining creative and business roles for years. can burberry make it work? >> we will find out soon enough. i think the market initially was concerned about the dual role, but those concerns have begun to

ease a bit. they have understood a little bit more the breadth of work that bailey has been doing since he joined the company. he started out as creative director of burberry, the runway collection. in angela ahrendts joined in what he isy i think most famous for is leading burberry into the digital age. he is the one who came up in 2009 with the idea of having the art of the trench, a forum for posting you and your friends in burberry trench coats. that is a year before instagram existed. it shows his forethought. people are beginning to be manident now that he is the that can lead this company forward. i think that in terms of the way that they are structuring the teams around him, he is not going to be isolated at the top

with a sketchbook in one hand and a calculator in the other. he is going to have a team of people to support him. you mentioned a little bit of it there. is christopher bailey equipped to fulfill the role of chief executive officer? if he does do it properly, will it be a precedent for other companies in the luxury world? at what isok happening at other luxury companies, broadly speaking, creative directors in general terms have been having more influence on commercial decision-making. in 2012, he dropped the name uyves --yves from the name. he has a ceo sitting behind him. that is the general pattern to have creative director and ceo as a pair of consuls working together to guide the business.

however, burberry and christopher bailey, he is not the first luxury company or designer to have the dual role. expanded its creative director last year. he is now ceo too. if we look outside the luxury industry, mark parker, the current ceo of nike started out as a footwear designer. terms, i don't think experts are anticipating to many of these dual roles going forward. it does show the importance of creative leadership within the luxury industry. >> andrew, thank you so much for all of that. guy, now you have your luxury fakes. >> before we move on, just get a quick comment on what is happening here surrounding greece. david tweed has been following the story for us. greece is according to our colleagues said to plan the

opening of a book for 5-year note. that will take place tomorrow. it is announcing the sale at 11:00 a.m. london time tomorrow. we will see what that throws up. watch this space. let's turn our attention to what is happening in india. complicated process of electing india's next prime minister continues. although it is difficult for foreigners to set up shop in india, the company -- country boasts that he homegrown billionaires. rob lafranco is here with the breakdown. london is familiar with a few of these guys. talk us through the senior guys in your bloomberg billionaires list. >> the richest indian right now is actually the world's wealthiest energy billionaire. billionaire by.

about $4 billion. is namedt is -- who after the hindu goddess of wealth and prosperity. billionaire who would be the second richest but he gave $4 billion away. gates/warrenill buffett school of billionaire. >> how do these guys come by this? >> all interesting stories. routes one of the most mji whoseng is pre father started a cooking oil business. he died when he was studying at stanford and was called back to run the business. when the indian government closed off the economy to foster domestic growth to foreign companies, he saw that he could create a software business, a competitor to lotus. it became a very successful company. the doors opened again in the 90's and he realized he didn't

have the ability to compete against microsoft. he quickly shifted gears and became a support to outside software vendors. he grew to become india's third largest software importer. >> how do these guys compare globally? >> if you compare them to brazil , they are about equal. compare them to china, they have less billionaires who have more money among the brick nations. russia has the largest. they are about six percent of our top 300. the u.s. is over 30%. they represent about three percent of the top. to see you.ce thank you very much indeed. now here is something for people who have several hundred thousand dollars in spare cash. or as rob has been saying, maybe a few billion. a dutch company has created the world's first legal flying car.

of course, we had to check this out. >> the basic breakthrough of this vehicle is the way it drives. it tilts and that is why we can make an airplane stable on the road. my name is robert. i am the ceo of the company. we developed the first flying car in the world. the idea came from frustration. we started flying and flying is cumbersome. you take off at a place where you don't want to leave. you and up at a place where you don't want to be. the vehicle is built within existing regulations. sold in any european country. for driving, you need your driving license for a car. for flying, you need a recreational pilot license for a

gyro copter. starting price will be 300,000 euros for the general version. there is a limited collector's edition for half a million. we have interest from police and military organizations. future, newn the technology gives new possibilities. >> looks a little bit like a motorcycle. it costs a lot of money but how cool would it be? >> i am constantly stunned by the fact that the rich are these risks.ake gyro copter, the technology is not new. >> a lot of people say that is how you get rich, by taking risks in the first place. it is maybe in the dna of rich people. up next, turning all caps. president putin meets his -- to discussstop stopping ukraine's gas supplies.

♪

"> welcome back to "the pulse live from bloomberg's london headquarters. >> president putin is meeting with his government to talk about the situation in ukraine. the government may discuss halting gas supplies to the country. will putin turn off the taps? at find out. >> ray to have you on the program. they do so much for coming on. we see the standoff between

russia and ukraine in the past. there was a lot of concern about gas prices here in europe. >> it wouldn't be the first time that russia has cut off gas to ukraine. it happened in 2006, 2009. there have been regular tensions between russia and ukraine. has notpoint, ukraine paid what was due on monday, about $2 billion. the cut of gas supplies to ukraine would perhaps look like the next step for russia. that is probably something that will be discussed today. there are other measures that russia could use to cause force the wayhelp for some of the aims that russia has in ukraine. >> what are those aims? of status some sort for the regions in the east.

whatat is why we have got effectively look like provocateurs in these key cities taking government buildings. we have thousands of troops stationed on the border. it is about the elections and forcing the ukrainian government to go down that road. likelihood of success in achieving that? destabilization essentially putting the government into a difficult spot. whether that is through increasing gas prices and putting pressure on the budget or contributing to the already pre-existing tensions in eastern ukraine. chances of success, we will see next week how much of the pressure does the kia government feel?--kiev government governmentnt, kiev seems quite defiant especially on terms of federalization of the country or granting referendums. >> what are the chances these

economic sanctions will he ratcheted up? we were in the more stable position last week. these things can flare up very quickly. we don't know what the endgame is of everyone. >> most likely would be an expansion of the already existing list of targeted sanctions that include asset freezes and travel abns -- bans. these would be to be coordinated. see widelikely to economic sanctions targeting or certainor oil economic activities in russia unless we see a movement of troops on the ground. thehen you weigh out probability of a military incursion into eastern ukraine, what is the upside for putin in achieving that? facingia would be international backlash if it was to annex eastern regions.

they would also be fairly difficult to take over. their economic benefits are perhaps large if we measure them in terms of ukraine. unreasonableeems to be trading 5 billion u.s. dollars of gdp for wide economic sanctions from all around the world. seeing awe are possibility for opportunistic action or accidents or a development on the ground without actually getting out of hand. the situation would be unpredictable. overall i would say one in three. >> one in three is quite high. thank you so much for all of that. next, the viral sensation that is taking the internet by storm. we check out youtube's freewheeling favorite, the rhino. also, tiny robots inspired by

termites. we look at how nature's best builder has helped create robots that don't need humans to function. ♪

>> welcome back. you're watching "the pulse."

rhino motors has never sent out a single press release or spend a penny on marketing but it doesn't need to. more than 13 million people have viewed videos of the one wheeled motorized bike on youtube that it makes. rachel kramer into the company's headquarters to find out why the bike is getting so much attention. >> what is this thing? is it a motorcycle, a segway? it is actually called a rino. >> have you ever seen anything like this? >> i think on youtube. >> how do you define the rhino? it is an electric unicycle? the formerffman is auto engineer behind the rhino. he says it is something between an electric bike and an electric motorcycle. the ryno accelerates when the

driver leans forward and slows when they lean back. it stays upright thanks to software that knows where the sender of the earth is, keeping the bike and rider balanced. relies on your own sense of balance and gives you enough stability so you can pilot the bike. wheel and detailing, the ryno is track and road ready in appearance only. >> how fast does this go? >> we're going to keep it at 10 miles per hour. >> hoffman got the idea for that ryno seven years ago when his daughter asked him to build a one wheeled motorcycle she saw in a videogame. the ryno almost didn't make it out of their garage. >> it was all personally funded at the beginning. >> it was out of pocket ended up selling my house. i was down to my last thousand dollars before we got our first investor. >> a $1.3 million injection allowed hoffman to start

production. the first rynos will start shipping later this year and cost $5,300 each. at that price it will take 3.5 years for the company to be profitable. just a novelty item? >> we don't know. that is what we are trying to find out this year. >> i like the fact that a kind of looks like a harley davidson. ducatiooks more like a to me. it is a little bit blade runner a little bit tron. >> i think it is more of a harley. we will agree to disagree. mine theoing to call ryno. for those listening on bloomberg radio, the first word is up next. for our viewers, it is a second hour of "the pulse." >> we will be talking about european luxury and earnings. lvmh and also burberry. >> we are going to be talking central banks.

comments from angela merkel saying that the euro crisis ain't over yet. we will talk about the ecb and the bank of england meeting tomorrow. busy on central banks. more when we come back. ♪

>> toyota. one of the biggest recalls in history. >> president putin meets his government to discuss stopping ukraine's gas supply. >> greece is expected to announce its return tho the bull market this morning. good morning to our viewers in europe. good evening to those in asia. it warm welcome to those waking

up in the united states. " live from"the pulse london. >> tiny robots inspired by termites. these are a few of the tasks the nano bots might be able to accomplish. >> toyota is recalling more than 6.5 million cars globally. 2,000,000ded to the previously recalled. put some context around how big of a recall this actually is. >> this ranks as one of the in one felllls swoop that any automaker has ever done. for toyota, it is the second biggest. in 2012, it had one that was a little over one million one million vehicles.

curiously, this recall involves five different issues, which are not really related. it was almost by choice for toyota or by circumstance that this number is so big. typically what you will see his companies announcing recalls separately. thatially when the issues are of concern are very different. fromis kind of a break what the rest of the industry tends to do. >> read between the lines. tommy what is going on. is this a quality story? is this about changing the way they do business? this is absolutely a policy story. it is one of so much scrutiny right now on the automotive industry and its safety practices. general motors is very much in the headlines for its handling of a faulty ignition switch that

the company has linked to 13 deaths. toyota had major problems two years ago. they were not as forthcoming as they should have been and swept problems under the rug, much like gm is being accused of now. of the companyr trying to stay in front of problems before they become bigger issues. the company did say today that it is not aware of deaths or injuries related to the problems on the vehicles it is recalling today. >> thank you very much indeed. the lead in the global luxury sales race. the largest maker of luxury cars has reported a 17% surge in march sales. that is on-demand for its suvs. it delivered 15,000 more vehicles in the first month since -- than audi.

let's move to economies. italy and france are hoping to lead the charge to europe posse can number recovery. --your apostle recovery europe's recovery. what they are turned to do is take the burden off the people and deliver tax cuts. in italy, you have to deliver spending cuts. they have said they will have 4.5 billion euros of spending cuts. the problem italy and france have got is they have also got budget deficit targets. their debt load is going to climb to a postwar era record of just under one had to 35% this year. -- 135% this year.

frannot many people think francs going to hit the gdp number by 2015. you can have the willingness to implement tax cuts. but you do not necessarily have the ability to do so. >> there are rumors that the ecb is eyeing more qe. this comes down to the fact that central banks find it hard to fix the unemployment problem. this is what we have to deal with. we have got a serious unemployment problem in europe. we have structural reforms that need to be conducted. they are not being conducted at the pace that we need. the problems you were talking about are only going to get worse. >> is that a central bank's job to help unemployment? is it their job to fix any labor issues? maybe not. they can't take some of the burden off these guys.

take some of the burden by looking at the euro. there is no point of doing all this if the rate is too high. what is mario draghi doing about this? >> a year-and-a-half ago, we were saying that we have to keep the pressure on the politicians. you take off too much pressure and the politicians will focus on tax cuts and not actually deliver growth by structural reform, which is what people do not want. >> it is the play between the ecb and italy and spain, where they are trying to get them incentive to introduce reforms. france's problem has not been read -- reflected in the bond market. >> what is the point of doing all this if the euro is still high? germany had a pretty strong deutsche mark pre-euro. they had the competitiveness problems.

schroeder try to fix those. they cannot point the blame for all of this at the euro, which is what they are trying to do now. >> the other thing is that in germany they produce high-value added goods. they can be competitive to the extent that they do that. they are not producing things that are going to increase exports. those who will benefit from the weaker euro are the likes of italy, the likes of spain, not necessarily the likes of germany even if they are big exporters. what they are exporting is not going to hurt demand anyway if the euro goes up. >> italy devalued the euro for 20 years. >> i agree. we will have to leave it there. we will get back to it. we have to talk about grace. -- greece,

. >> we learned that the book will open tomorrow. we're are waiting for confirmation for all of this. ce has not been in the bond market for four years. this is a country that nearly left the eurozone. >> i'm europe editor david tweed joins us with the latest. why the rush? >> it is because the prime minister in greece wants to be able to tell a really good story. may 25, it is the european elections. one of the key risks for his coalition government is that they get trounced by the opposition party in those elections and then it will be very difficult for them to say, i can see that all of the voters are voting for the prime minister, but we have the absolute mandate to govern your. -- here.

these, they can tell a good story to outside investors about how they are interested in coming back to greece once again. i was also just thinking about it. there was a lot of outrage about how can greece be going back to the markets? t it iswer is is tha looking at five years. >> a lot of the debt of greece is now held by other european governments. talking about the fact that the crisis is not over. for the guys that are in greece today, it really not is yet. they are still living on the bread line. there is massive unemployment for many countries in europe. >> i can see that they are out

in the streets protesting once again in greece. angela merkel was talking about the unemployment rate, the youth unemployment rate -- she is extremely worried about it. she is going to greece on friday. it will be interesting to see what she has to say. last time she was there, there were huge protests against it. i wonder what the welcome will be like this time. >> yes. david, we will leave it there. thank you very much indeed. david tweed joining us from berlin. >> president putin is meeting with his government today to talk about the situation in ukraine. they may discuss halting gas supply to ukraine. ryan, how difficult is this going to be if they actually start this course of stopping for gas flow to ukraine? >> it could be very difficult. the interesting thing is that ukraine is not going to buy any russian gas, they say, at least not in april because they do not gas isith the price that

being offered at. it is being offered at 80% higher than a couple of months ago. the russians have removed the discount. that is what we heard from the energy minister from ukraine and comments just two hours ago. they are going to try to get the gas from the european union. the funny thing is is that -- i called the deputy ceo and ask what they will decide there. it is pretty clear that there are two options on the table. one is to turn off the tap. the other is to demand that the ukrainians pay upfront for their because they maintain that the ukrainians oh them $2.2 million. -- owe them $2.2 million. it looks like there will be less gas in the pipe, which is

generally worrisome for western europe. >> we have seen this a few times before. it is not as if there is not some history here. we have seen the russians cutting off gas. europe has fairly full tanks at the moment. it is quite warm outside. demand is not particularly high. walk us through the impact that this would have on the european energy story. >> all of that is true. it is possible that slovakia, for example, which is a little bit of extra russian gas could pump that gas the other way, east into ukraine, if the slovaks agreed to do that. so far, they have said that they are happy to do it as long as they have said it is not at their expense. they were not happy with the price that the european union suggested they sell it to the ukrainian that. this should not be too much of an issue in the short term. in the past come ukraine has been isolated from western europe, so when there were those gas disruptions from russia, the

ukrainians probably felt a little more comfortable taking some of the western european gas out of the pipe. now that western europe is on board and bailing them out, i think they are less likely to do that. >> they do so much. still ahead, tiny robots inspired by termites. a studying nature's best builder has upped create robots that do not need humans to function. ♪

good morning.

welcome back to "the pulse." let's find out what is going on with euro-dollar this morning. the greeks will be returning to the bond markets. that should be interesting. anglo merkel talked about the euro crisis not being over. it does not feel like it is over elsewhere besides the euro markets. that is causing tension throughout the rest of the year. we spiked through 1.38 earlier. being given as little more room to maneuver by the guys in brussels -- that is not the case. we are back below 1.38. daniel examined nder. take a listen. >> i am very pleased but forecast we saw yesterday. they are raising the growth forecast to 2.9%.

forecast -- that is double the forecast from two years ago. we are seeing a strong recovery underway in the u.k. >> let's talk about the british economy. let's talk about the fiscal side , but also what is happening at the banks, down the road him as well. -- road, as well. let's talk about what is happening. good morning. daniel alexander, pretty positive there. denied victory laps in the atrium. nevertheless, the bank of england looks like it is not going to do much this month. the economic story looks like it is on track this month. it feels very demand driven. the imf is saying, we need to talk about raising potential growth rates in many economies

to avoid the slow growth story going forward. to what extent is the u.k. fall into that trap as well? other so much as economies. they have a much more flexible labor market. that is one of the impediments which is hurting some of the southern european economies right now. we are always talking in the u.k. about reducing red tape and making it easier for businesses to start -- staff and trade. we are also talking about impediments to building houses as well, with planning restrictions. those are the sorts of supply-side reforms that would help the median rate of growth. >> the million-dollar question is -- and this is a problem that a lot of southern european countries have -- is the currency. they still have to do with it -- deal with a very high pound here in the u.k. that is going to be a headache in the future. >> the pound has rallied strongly over the past year. sterling camest

down back in 2007, 2008. it is arguably slightly overvalued against the dollar. ournst the euro, fundamental analysis says that it is a good value. even if it is still undervalued, it is not good for exports. >> let's talk about the euro. angela merkel says the crisis is not over in the eurozone. do you agree with her? the second question relates, is it from where you are coming from? the financial market is being put to sleep. there are more demonstrations in greece today. are we just in a completely different phase now with the financial markets? >> financial market crisis is nearly over. it is too early to sound the earth -- all clear.

the economic crisis is not over. even though you have some growth in southern european economies, such as spain and italy, perhaps even greece, you have masses of unused spare capacity -- unemployment is extremely high with very little prospect of that coming down. the economic crisis and the financial crisis are part of the same thing, but one has to distinguish between them. >> they are dealing with possible deflation. that would be disastrous. we are dealing with a high euro at the same time. >> on the deflation point, certainly in terms of the central bank, if it faces a risk of deflation, then it has to take steps to counter that. >> if it acts quickly enough. could he get caught out like the bank of japan did 15 years ago? >> that is true. the financial background to japan was much more serious, i would argue. inflation ist why

only 0.5% in the eurozone it is because energy prices are lower and food prices have flattened out. if you are a household, that is helpful. it is not unhelpful. the initial impact of that's would've disinflation can boost spending. i want to ask you a quick question about the u.s. arekeven's in the states following this month. we have gone from around 2% down to 1.8%. the trajectory is falling further. what does that tell you about what the market thinks about the growth story in the states and whether or not the fed will be able to be as aggressive as some say? >> it is not just the growth story. arguably, you can say that that is part of it. we are in a disinflation very --se -- this inflationary disinflationary phase. less worriedfed is

about low inflation expectations than europe. terms ofave seen in the market measures of inflation expectations have not changed the pace of tapering. so long as the economic outlook remains decent for this year, we expect -- >> will they hike with breakevens falling? >> there are lots of market things that enter into these things. we are someway a way of discussing a serious interest rate hike. perhaps 15-18 months away. and that space, quite a lot can happen. >> thank you so much. we are back in a couple of minutes. ♪

>> welcome back to "the pulse." life on bloomberg tv and streaming on the ipad and bloomberg.com. >> toyota is recalling more than 6.5 million vehicles worldwide. that is over safety issues. infusion gives

a chance to pay bills and stave off the risk of deep all -- default. pay $2's will jones. for david it will create the third-largest department store chain in the southern hemisphere. coming up on the program, luxury look ahead. christopher bailey gets attitude -- ready to take the reins at burberry. a battle of the designer brands heats up. >> get ready for the rise of the

robots. the latest design is based on termites. ♪

>> welcome back to "the pulse." live from london. >> these are the bloomberg top headlines. >> and australian ship as required underwater signals consistent with those emitted by airplanes black boxes. that has allowed teams to narrow the search area for the missing malaysia airliner. no debris has been found in the area of the southern indian ocean. >> the european union is moving to give shareholders a veto over the pay packages for executives of publicly traded companies.

financial services chief introduces the plants today. it will require a shareholder vote on pay policies to company directors at least every three years. >> u.s. regulators have approved tougher regulations for america's biggest banks. capitall need to hold equal to at least 5% of their total assets. that is higher than their overseas competitors who must hold at least 3%. >> let's go from banks to bikes. or unicycles. rhino motors has never sent out a single press release. it has never sent a penny on marketing. it does not need to. more than 13 million people have viewed videos of this one wheeled motorized bike on youtube. rachel krahn went to the company's headquarters to find out why this getting so much attention. >> what is this thing?

is it a motorcycle? is it a segway? it is actually called a rino? . >>?had he seen anything like this ? >> youtube. > >> is it an electric unicycle? chris hoffman is the auto engineer behind the rhino. it is something between an electric bike and motorcycle. ryno accelerates when the driver leans forward and slows when they lean back. thanks topright software that knows where the center of the earth is. >> this relies on your own sense of balance and gives you just enough stability so that you can pilot the bike. andith its fat real detailing, it is track and road ready. an appearance only. >> how fast does this go? >> we will keep at it 10 miles

per hour. we want to be pedestrian friendly. >> he got the idea seven years ago when his daughter asked him to build a one wheeled motorcycle. ryno almost did not make them out of garage -- out of their garage. on my lastwn thousand dollars before we got our first investment. >> a one point $3 million injection allowed him to start production. the first -- $1.3 million injection allowed him to start production. i am feeling great. is it just a novelty item? >> we don't know. that is what we are trying to find out this year. >> it looks better than a segway. >> that i would agree with you. doesn't look as good as a scooter?

i love it. i think it looks futuristic. it is slow. it is only 10 miles per hour. you probably do not want to go any faster. >> dangerous. in 25 minutes, it is "bloomberg surveillance." tom keene joins us from new york with a preview. >> we have some wonderful guests. muckle holland will join us. -- michael holland will join us. liz and saunders, as well. some of the highfliers are coming back to earth and the blue-chip stocks doing better than good. we will also look at the medicare debate. senator grassley will join us, the senator from iowa. we will join us -- talk about any number of things going on in washington. the percolation about how doctors are being compensated on medicare. >> i brushed up on the movements

of baby george, the royal baby george. i know you like to know his whereabouts. thiswas briefed on this morning. do you see the distance that she is holding a be george so as not to get baby george on the missoni, whatever the beautiful dress is? she has the baby of a strategic distance. >> she has nailed it. maybe george looks quite regal. he is checking them out. this is a king in the making. think they will sell a few of those outfits this morning, no question about that. really, really cool. i don't know how new zealand likes it, but it is wonderful to see them out and about. >> i think new zealand is loving it. tom keene with "bloomberg surveillance" about 25 minutes from now. >> let's take a look at the

markets. a lot of concern about what is happening in france. what we continue to see is a link between the french 10 year yield and the german 10 year yield. if you want a measure of stress in the financial system, you would expect these spreads to start to widen. we are not saying that at the moment. mario draghi is still sprinkling that magic dust on the bond market. let's talk about the united states. we have fed minutes coming up later in the day. this is the u.s. 10 year yield. they continue to do nothing. we are not doing anything right now. again, look at what is happening with breakevens. the inflation rates going forward have dropped.

we are in a global deflationary story right now. is the fed more concern about what is happening with the unemployment story? we all know we need to be thinking about the output gap and the slack that exists in many of these economies. see somearting to value stocks coming back a little bit. the tech stocks are coming back a little bit. if you want to take a look at stocks, looktech at this one. look at it over a year and compare it with the five-year chances as well. tech stocks are coming back a little bit today. the european markets reacted yesterday afternoon. a small gap up first thing this morning, running over the top and little but this morning -- a little bit this morning, but this is what we're looking at -- still down by around 0.5%.

we moved to the upper end of the luxury scale. we will be talking about the luxury story a little but later. the shopper still wants luigi tom -- lou would be told -- louis vuitton and backs. ♪

"> welcome back to "the pulse live from london on bloomberg tv.

>> let's talk luxury. outline hyde is checking what the company can do to win back its exclusive reputation. a broader look at the luxury sector. andrew roberts joins us to look at how burberry is bucking the trend with its new ceo. vmh trying to be more low-key, more high end, less logos. are these tactics working so far? >> they are certainly stabilizing sales. we are expecting a seven percent increase in sales. the consistency is fewer logos, fewer stores, and increasing prices. they are trying to grab back that a lower of exclusivity that has been watered down

particularly in china. there continue to be concerns, notably foreign-exchange ongoing, but also the slowdown in china, potentially from the reduction in giftgiving and concerns about russia and ukraine. is a bit of a bellwether for the rest of the industry. to theextrapolate out rest of the sector? >> certainly, when you look at rivals such as gucci. problems inmilar china. too successful for your own good, too many logos everywhere. is that a change in taste? subtlehat they want more

types of luxury? isis it the giftgiving that clamping down on the spend over in china? i leave you with one interesting fact. 71% of the most wealthy in china now feel that it is craftsmanship that it is the most important, not status. this could be turning to chinese, homegrown luxury goods, turning oil from the likes of the u.s. and european conglomerates. an interesting want to debate. >> what an introduction. we are joined by the founder and capital.director of you still want to bring to be recognizable. is there going to be a resurgence of the logo? doinghink what lvmh are is that the traditional logo has

become boring to a lot of consumers. they do need to reinvent that piece. they have tried to significantly upscale the letter offering. they are trying to bring in high price points. they are tried to bring in highly, newly crafted bags. somewhere big gap around the thousand euro price range were nobody is really paying particularly. -- playing particularly. everyone else is trying to sell these 2000 euro plus bags. i would love to see lvmh, louis vuitton do something in the 1000 euro range, potentially with a reinvented logo. >> if you look at some of burberry, the check was very boring for a while. but then it was reinvented to make it cool and chic again. ofis vuitton has a lot heritage.

>> how risky is that? >> i would defer to the branding gurus on that. i think it is risky, but it is a risk worth taking for louis vuitton in this stage. they lost quite a bit of the logo business. the deliberately stepped away from it and they have had to win away. a lot of people are saying, i do want to be seen with that. there is room for something to be reinterpreted. >> the trick is that you want a logo -- you do not want to be a logo. you wanted to be recognizable. you still want people to see, but in a kind of low-key way. >> absolutely. very much a low-key way. very high-end leather can only get you so far. you are often trapped in by specifically what you have, that specific look. how do gross -- grow

significantly beyond that? louis vuitton has this big range from logo to high-end leather. i think focusing purely on high-end leather is not enough. >> we are bored of the lvmh logo. that is where we stand with this. >> yes. >> we are bored of it, the chinese are bored of it. >> a lot of people are bored. it is not the logo, it is basically the backs that easy. see.g that useyou >> there are is still consumers in newer countries to which that would be aspirational. a lot of people on social media are saying this stuff is boring. west and to people in china, it is boring. to a lot of people elsewhere it is still aspirational, but less

so. >> you want the cachet -- i am told. does not let on he knows a lot about this, but i am sure he does. >> ok. we will leave that there. [laughter] >> thank you so much. let's stay with luxury. let's look at burberry. it is bucking the trend. christopher bailey will be the new ceo. enter roberts joins us from paris. -- andrew roberts joins us from paris. >> fashion companies every tested combining these two jobs. you have to wonder whether burberry can make it work. >> burberry faces some challenges going forward. they are building and a beauty business. in house a beauty business.

this is a short-term challenge for burberry in the next 18 months to 24 months. having said that, bailey himself has been in charge of helping set the strategy. inn the outgoing ceo joined 2006, she invited him to be part of those discussions. i think there is a feeling among investors that he does have the longevity with the brand itself, the business itself, he has that understanding. he is surrounded by a team that will help them balance both his creative responsibilities and the commercial ones. >> is this a one-off case for burberry? is this a one-off case? or is this a starting point of the fashion world changing. the money comes from the creative director, so that he should be the ceo? >> when you look at what has happened over the last few

years, certainly there has been a shift to give more power to the creatives. that is really in the context of companies maturing and processes standardizing a bit. the differentiation is coming from the creativity. as was touched on before, with digital outlooks and digital media being such a forum to impose your brand and set expectations and influence position, heiley's has had a lot to say on that. he has helped drive that a burberry. that is true at other luxury companies. whether we have seen more designer ceos, if you like, it is something we will have to wait and see. if we look outside of luxury, we can look at nike, and their current ceo is the former

footwear designer. there are precedents for it. whether this will become a strong trend in the luxury industry, we will have to wait and see. >> thank you so much for all of that. into roberts, our luxury reporter. >> designer ceo's, i love that. int is a whole step forward the c suite race we have been talking about. coming up, get ready for the rise of the robots. the latest designs are based on termites. the nano bots are more self-sufficient than ever. ♪

>> welcome back. let's talk about the currency markets. i want to show you euro-dollar. we are now trading at 1.3795. i think we have leveled. levels that make finance ministers in france get upset. angela merkel said today that the euro crisis is not over. if you are unemployed, 25, and living in greece, that is probably true. greece is coming back to the bond market. let's completely change gears. i am going to go from foreign exchange to hard-core science. scientists at harvard are developing a robot that is self directed and does not need humans to tell it how to build a structure. does that sound familiar?

this bot is programmed with an algorithm and is inspired by nature's best builder, the termite. ♪

>> who controls these robots? futurist.y prudent to look at what we are watching for the rest of the day, we are joined by our correspondence. >> let's start with the fed. >> fed minutes. we should cuddle the noise. let's look at the summary of economic projections. they listed their forecast for were interest rates will be for the next year and the year after. there are some significant numbers above that. some are looking for both 4%. it will be the conversation around rate hikes that will paint the picture this afternoon. >> ryan, you are watching ukraine. pressure has 63 minutes to

make up their mind. they control one third of europe's gas. do they control -- turn off the tap? ukraine is preempting them a bit. they say, they are not going to buy any gas anyway from the russians in april. beginning this is a 3.0.gas were 3.0 -- war >> let's turn to greece. more protests today. don't worry, the financial crisis is over. greece is getting back in the bond market. >> some people think that of greece gets back to the bond market, that is the end of the financial crisis. not according to angela merkel. she is concerned about inflation. it looks like books will open tomorrow morning at 9:00 a.m. london time. who was going to buy? what are they going to pay? >> a couple of minutes away from

that, thank you. it is it for "the pulse." " isbloomberg surveillance coming up. it live from new york. tom keene will take you ♪ through the rest of the morning. ♪

>> this is "bloomberg surveillance." >> toyota joins general motors and a massive recall -- in a massive recall. it is a market in search of

direction. we speak to an optimist. forget twitter, you should on quality stocks. hotels and motels, they enjoy an ipo frienzy. good morning, everyone. we are live from our world headquarters in new york. scarlet fu and erik schatzker. >> this is the stuff that happened overnight that you need to know now. the british trade deficit narrowed on a slide in aircraft imports. sweden raised its gdp outlook, predicting a balanced budget by 2016. economic data and the united states here at 7:00 a.m. this morning. wholesale inventories and sales. the fed releases its meeting