>> a bloomberg exclusive. alstom n talks to buy for $15 billion. >> investors get set to grill anthony jenkins about bonuses and tax havens. >> obama's trip to asia. he says the u.s. has extra sanctions ready to use against russia. we're traveling with the president and we'll bring you he latest.

good morning, everybody. welcome. you're watching "the pulse". we're live from bloomberg's headquarters here in london. >> i'm francine lacqua. bernie ecclestone goes on trial. we'll see what the racing series would look like without its current c.e.o. > and shaqenomics. he's larger than life. shaq tells us how he built an empire after the nba. >> we're getting breaking news. german business confidence just breaking fow. >> the data coming through a little stronger than anticipated. expected of i.f.o. number was 110.4 so a stronger than expected read fitting in with some of the data that we have seen. the euro, well, up another leg his morning.

>> we know someone in frankfurt who would not be too pleased about that. mario draghi. >> g.e. in talks to buy france's alstomach for $13 billion. >> matt campbell and caroline hyde are here. matt, let's start off with you. why did this work for him? >> there is a macro maker here. g.e. is of course one of the largest american industrial companies. it has enormous amounts of cash held outside the u.s. when an american company holds cash outside the united states, it is very costly ever to actually bring that home. rather than effectively sitting in the bank somewhere, making foreign acquisitions is often a sensible thing to do. the micro and g.e. specific

jeffrey is that immelt's tenure ee with power turbines, very unsexy but steady business. buying alstom, which is a very significant industrial player would really be the biggest move imaginable. >> we'll get back to french protectionism as well. i love those angles. give us a sense. a lot of investors say this makes sense strategicically because of what matt was saying and alstom needs cash. >> exactly. it is basically a smaller rival that hasn't fared the current situation that well. it has an awful lot of debt on its plate at the moment. it had to cut jobs. selling assets.

they have not managed to maneuver themselves since the financial crisis. they are not riding the waves as well as g.e. wanting to invs. in infrastructure, do what alstom does best, get into locomotives. being absorbed by g.e. is more spiritise. it is interesting also as you were talking about similaritys with the pharmaceuticals at the moment. pfizer, we were talking about having an awful lot of cash offshore that they want to invest. companies want to focus in on what they are good at. >> then there is a french story. sarkozy, finance minister back n 2004, rescues this business. they love the fact that they have got the fastest trains in the world, but g.e. has a good

reputation in france. do you think they can get it past? >> someone was joking last night now gurt is strategic -- there is a slight wrinkle here with g.e., which is g.e. has a stellar reputation. about 11,000 employees. they are seen as a good corporate citizen. the c.e.o. is about as establishment as it is possible to be. they have really done their homework. if you think back to what seems ancient history now, g.e. was a candidate to buy a significant business from ariva years ago. if there is any american company that can pull this off, it is them. >> they have been in partnership for a long time. seen as one of the great industrial jewels of france and g.e. is involved in that.

>> they are seen as do-gooders by the french. maybe that is more for the advancement for the cause. >> it is a 100-plus-year-old company that makes things like power turbines. >> 29% holder in alstom. it has been said they said yeah, we would not mind this too much overall. they made a statement basically saying we don't own them. 29% stake, what are they going to do with that cash? to ll -- telecoms an area look at. >> there are so many 2013 messages out there saying why are the americans buying omething that works? >> matt and caroline will be back a little bit later.

more on this shortly. hsbc's chief economist stephen king is going to be talking to us, less so about what's happening with the equityside this story, but what it means for the french economy. what's happening here? we'll get his take on that. >> if we don't get such a pushback from the government, maybe france will finally be seen as business friendly. facebook, apple came in ahead of stements. both did. jon, is this enough to calm investor concerns about the tech sector? >> to some extent. the perennial question goes on. you have to say facebook is decent. a 72% pop in revenue with the company. a shift into advertising revenue on the mobile side of things. i see two very different companies. they are doing what they do well. apple selling iphones more than

many anticipate. those fears yesterday about flat revenue slapped aside. profit up 7%. it is not all rosy on the product side of things. ipad sales disappeared. the bottom line is this. the ipad is contributingless to overall growth of the company. the problem with that is it puts more emphasis on the iphone. a single project. tim cook said it means more to us to get it right than to come first. a bit of a slape slap to the competitors on that one. >> china is a big theme in all of this. as you say, the phone did well. one of the reasons why the phone did well was because of china. >> absolutely. i don't think it is just a matter of looking at what they sold. look at where they sold it. brazil, russia, india, china.

that is quite an achievement in itself. tim cook, though, starting to define himself away from steve jobs to the extent that he is bowing to investor pressure to give more money back to the investor. some of the moves, a boost of dividends by 7%. t is going to be a 7-1 stock split. what it means is if you have one share, you end up with seven. they will be equal to one share at the close of business on june 2. youbottom line is basically a stock worth $500 and bring it down to 75. does this drum up appetite? does it mean a higher share price? >> jon, thank you very much indeed. jon fer o on the latest out of the tech landscape. >> an event that has been a

media spectacle over the past few years but for all the wrong reasons. manus cranny is outside the hall where the event is taking place. you have some breaking news at barclays. >> yeah, we have. they just released there is going to be a small reduction in the adjusted pretax profit for the first quarter. and that really sums up the challenge. a shift in landscape. a change in landscape probably within investment banking. the backdrop to jenkins appearing here today, they did housekeeping, it is the challenge of remuneration. i'm going to be joined a little bit later by keeren quinn. to sum up, they say barclays epitomizes everything that is wrong with banking bonus culture. this is bank that is going to pay its staff three times the

amount it is paying out in dividends. this is a bank which asked its shareholders for 6 billion pounds and has received a communication from the business -- that sits up the road here saying that, you know what? high pay policy is a dereliction of duty. so there is three votes on pay. last year's pay and bonuses where the bonus went up 10%. profit is down by 30%. you can understand the ear of protesters. >> manus, how is the city reading this? how much time are they going to give jenkins? >> i think he has been caught short. when he set out the transform program, she want out a return on equity at 7%. prsage of remuneration, he said 35%. comes in over 40%. give him time, guy, they will

vote through these remuneration issues. was he joe ambitious in terms of the targets that he set or is he going to have to face the issues as u.b.s. and credit suisse did, which is structural change what's happening at the investment bank. the landscape of investment banking is changing due to regulation and investment capital. are you prepared to go deep into the muscle of the business? that is chris wheel every's point that i spoke to earlier this morning. >> --preparing for the barclays >> barack obama is in japan kick off a four-country tour of asia. e aims to show his commitment. >> phil mattingly is traveling with the president.

obama said he is ready to use more sanctions against russia. >> that's right. any optimism that was coming out of the agreement reached by the u.s. and western allies seems to be disappearing pretty quickly. he said at a joint press conference with prime minister abe not only were sanctions ready to go , they were teed up and they need to work on things on the technical side and make sure their allies are ok with them too. there is no exact date when these sanctions could be imposed. obviously the u.s. is still leaving the door open for russia. the president says we're talking days, not weeks, guys. >> what about the dispute with china? >> i think that was the big takeaway from the press conference. senior u.s. officials made the statement about the u.s. and japanese defense treaty from a couple of decades ago that would come into play should china take

aggressive action on these disputed islands. the u.s. president has never made that statement. today the president came out and reiterated that statement and said this was no change in policy but in this region, with china now and what is going on, which the president saying it is a big step forward and you guys mentioned that the u.s. needs to come out and make sure their allies are comfortable, the security arrangement. i think that was a big step taken today. >> phil mattingly, our white house correspondent. thank you very much indeed. > coming up, shares surge in alstom as g.e. eyes the firm. what will the deal mean for the french economy? we'll have that next with tephen king. ♪

>> good morning, everybody. welcome back. you are of course watching "the pulse" here on bloomberg. we have an exclusive from bloomberg this morning. g.e. is in talks to buy france's alstom. it would be g.e.'s biggest acquisition ever. what does this mean for the french economy? >> yeah, what does it mean for french business? would the french government even let the deal happen? we have stephen king of hsbc. great to have you on the program. there may be a political hurdle. is this going to be like a crux

moment where we understand france is open for business or whether it is the same old socialist france? >> it is a big question. not so much whether it is the same old socialist france but whether it is resistant to the idea of businesses from elsewhere in the world buying its key makers. the case where the yogurt maker was not able to be bought because of strategic concerns. the u.k. model is very much in favor of basically all comers coming in and buying assets. the french model much more resistant to that particular idea. we'll see what happens over the course of the next few days. >> the french need to be more open, though. the economic numbers are probably not as bad as people thought they would be but there is clearly a deficit problem and need for structural reform. one of the ways you can do that is by globalizing your companies.

if you can start to have an impact through companies like g.e., coming further into the fold. >> a consequence of foreign companies coming into a country, changing business practices that may have gotten stale and uncompetitive over a period of time. those things are helpful. in the u.k., markets have become much more flexible as a consequence of foreign companies coming in from the 1980's onward. we mentioned structural reform. it is a unique code phrase for creating win rs and losers. you often get significant resistance to it because there are a group of uncertain losers who in the near term did well but in france that sort of resistance is -- >> does that change? how crucial is that for france to start seeing real growth figures? we're talking about soft economics but it plays into the minds of people and companies trying to set up there.

>> that is certainly true. france's growth rate is not as disastrous as people thought a year or two years ago. there is some growth coming through. some inside of stability at least. the bigger problem is if france wants to live beyond its means, one way of doing it is sell off the family silver to invest no, sir the world. you benefit the current general refrigeration. possibly at the expense of future generals. -- future generations. >> the french government probablyless involved in this particular transaction. sarkozy rescued alstom. they are now rescuing p.s.a. they had to put 14% into that company as well. >> different models of how capitalism is supposed to work. a brutal process.

sometimes short-term. you try nurture companies. the problem with trying to nurture companies is you're locking in a lower growth rate for a longer period of time. >> -- the strength of the u.k. economy, people are much more optimistic. you also have previous governments that have been trying to track foreign direct investment. that leads to buoyancy to a lot of people coming and saying i can find a job in london and where else because the flexible labor market and there are opportunities. >> it is clearly the case that the u.k. has become an attractive place for capital and labor to come to. london is the 129 or 13th biggest french city. there is a huge french population in london. them again, we should not forget the fact that the u.k. has had problems. it has had a goodyear over the

past 12 months but dispipets for a number of years. -- disappointing for a number of years. you have capital coming in and out of the country. it could lead to political strength but also instability. >> stephen king stays with us. we'll be back in just a couple of minutes. ♪

>> good morning, everybody. welcome back. it is time for today's hot shots. australia's nick claims his third title after cruising in victory. racking up an almost pacific northwest score. >> the climber known as the french spider-man scaled the macau tower. >> and volcanos in peru have been erupting. some of the most active in central and south america. wow. look at that. >> humble, almost. let's see how the markets are trading. >> thanks. the ftse up. the dax. similar the cac as well. yesterday the stocks did something that surprised

everyone. facebook, apple. the s&p 500 so far 75% of companies have beaten earnings stims. one question, are they bad estimate or good numbers? ooking at euro/dollar. 1.3839. german business confidence better than anticipated. draghi speaks later on. any time this pushes up to near $1.40, e.c.b. officials try to slap it back down. look at the key week. the best performing major currency this year. the central bank there keeps on hiking. back to you. >> jon, thank you so much. jonathan ferro with your asset check. >> coming up, warren buffett weighs in on coca-cola. why he is against the company's pay plan. >> just a reminder, you can follow us on twitter.

guy is at guy johnson tv and i'm at flacqua. when we come back, we're going to be talking about the strength of the euro with stephen king of hsbc. ♪

>> welcome back to "the pulse" live from bloomberg's european headquarters in london. i am francine lacqua. >> i'm guy johnson. >> formula one president bernie ecclestone is on trial today. judges have found that ecclestone made illegal pames to a german bank officer. ecclestone has run formula one since 1995. el-erian explains why he left

pimco. >> when your daughter come to you with a list of 22 things you missed as a parent, you realize there are special moments in your children's lives and every parent knows it and i was missing too many of those special moments. the it is that simple. >> i was very taken by that. the international monetary fund has endorsed a $17 million loan for you crane to help them pay help them crane to pay down their debt. >> let's stay with that story. ryan chilcote has more detells a. ryan? -- the russian state-backed use organization said there is a fire fight

underway. in one of the 10 cities where separatists in ukraine have control. this is a news agency saying there is a fire fight underway the people they have been talking to at the local hospital say there are dead and wounded. some of the reports we have gotten out of the ukraine have not proven true. it is definitely something, however, to take of. we have the russian foreign minister reiterating a threat saying russia will respond if russian citizens are directly attacked in the east of the country. then russia will see that as an attack on the russian federation. there are russian citizens in you crained ukrainians that have russian citizenship.

very fluid situation. we just had president obama a couple of hours ago in japan at a press conference with abe repeating that sanctions were on the way saying they are all teed days, not come in weeks. it doesn't look like anyone is doing anything on that geneva accord. >> we haven't talked about sanctions in a while. since we understand that g.e. is possibly making a bid for alstom. alstom has a lot of interest in russia. >> certainly g.e. would be increasing its exposure to the russian market with an acquisition of alstom. they have a sizable business, not unlike renault and other french companies in russia that have been building up over a long period of time. it has a 25% stake in russia's

largest train maker. it definitely has its eyes on what may be as many as $140 billion, russian railways. that's how much they plan to spend on high-speed trains over the next five years. siemens is the big player there. last time i saw the c.e.o., he was in russia and that was on his mind. russian railways, itself, is not sanctioned. only two companies at this point that have been sanctioned by the u.s. government. there are no indications that rail companies would be sanctioned. the c.e.o. of russian railways is personally on the sanctions list. obviously g.e. would be doing business with him as c.e.o. shouldn't be a problem. something presumably an american company would be thinking about

as it does this deal and we're learning they are looking at. so this would be something on their mind. >> thank you so much. ryan chilcote there with the latest on ukraine and these russian sanctions. >> won approval with a plan to award employees with stock. one investor opposed to it was warren buffett. >> i abstained, which is a vote of sorts. the first time that i have abstained that i can remember. i voted enthusiastically for the directors. i'm ecstatic about the c.e.o. i thought the plan was excessive. using 500 million shares up over four years. i abstained. i could never vote against coca-cola, but i couldn't vote

for the plan either. >> you're a shareholder. >> that's just the way i feel. >> did you let your views be known if >> yes. >> that you were going to abstain? did you tell him you also opposed this? abstained, i obviously was not for the action. we are good friends. he can own any company that we own stock in. >> does that change your view on coca-cola? >> no. no. i love the company. i just think the plan is accessive. i think it is a -- excessive. i think it is great company be a reat future. >> why didn't you speak about it? >> i was not interested in taking up that campaign. i don't disagree with him in doing it. it is his right. he is a shareholder.

he has been a shareholder a long time. he is leak me. he feels that -- he is like me. plan that is a excessive. >> he said -- he thought there was a conflict there because you have criticized over companies there that have rewarded employees with stock options. you were not vocal about it here, coca-cola. >> i have written about compensation generally, extensively over 30 or so years that i've written about it. i've never said i'm against options, absolutely. i just thought -- and i voted for coca-cola plans in the past, but i thought it was excessive here. >> warren buffett speaking to our colleague betty liu on the issue of coca-cola. >> he is a bit of a fan of coca-cola. >> cherry coke is his big thing.

stephen king, we won't be asking you your favorite soft drink. >> they are disgusting. >> when we talked about france, we talked about the need for a lot of these countries to get more reforms, more labor reforms through. what is your biggest concern? >> they are related but both really big concerns. the problem with the high euro s it is likely to lead to more disinflation pressure. it is becoming worriesome. these rates are remarkably low compared with the forecast the e.c.b. had a year or two years ago. remarkably low compared with the consensus. there is a complacency in terms offense forecast for the future. it will flies a year or two years. get back close to target. my question is what if it

remains at these low level? how does that change the dynamic of the european recovery? we can't cut interest rates any further. worried abouting unconventional policies. the more inflation falls, the higher our debt levels and the big r problems might be with nonperforming loans. we have weak credit demand and supply. a japanese experience during the 1990's. >> the japanese are saying aren't the europeans lucky that they had our experience to fall back on? bonds have gone from 1,400 basis points to 20 basis points over. walk me through the mix and the logic and the various factors.

>> i think what is going on in a year and a half, two years seeing that the euro-zone fight fall apart. actually the bond market has turned into quasi bond markets. they were afraid portugal or spain left the euro, then -- when newly introduced would devalue significantly. the bond market -- doing whatever it takes. europe is not going to fall apart. banks incentivized to lend to governments because of basel 3. you end up with relatively easy money. much of which finds its way into the government's coffers which drives down yields. we're seeing a narrowing of yield spreads, which is good news in terms of the sovereign

risk, it is not fully consistent with the activity. inflation continues to fall. >> the e.c.b. hasn't really done anything. they talked it down. we don't know if q.e. is legal or what they can do at this point. even if they were to address the high euro are there any guaranteed tools to work? >> the problem with the high euro is we have a high yen and high sterling. each time the central bank tries to get the currency down. i would argue japan's policy over the last couple of years have helped to raise japanese inflation. there is a consequence of the weak yen. o countries, particularly, the euro-zone with lower than expected inflation. underneath all of that this is a fundamental problem. you need to have a banking union which really has significant money behindette and by

significant money, you will have a fiscal union. until those things come into play, i think there is a sense that the euro-zone may not be in a crisis phase. you end up with this -- from the euro-zone. with very low growth and very low yields. >> draghi is talking later on today about a long-term time period. central banking over the next few decades. how long will this low inflation be tolerated? you sort of laid out to risks that could be generated as a result of disinflation becoming part of the landscape. japan -- for an awful long period of time before it took action. >> they did take action from time to time but it didn't really work very well. we often forget there was a period of q.e. in japan from 2001, for a decade. it appeared to be revolutionary

at the time. they were minuscule. we have seen more coming through over the last 12 months. japan has done q.e. the excheaning rate is falling. wages haven't followed through. >> you would expect a little bit of a lag? >> the consequence of real incomes are beinged. the recovery is not as strong as people had hoped. >> stephen, thank you very much for your time today. stephen king of hsbc. >> coming up, is it the start of the final lap of ecclestone running formula one? we will examine the corruption scandal next.

>> bernie ecclestone has steered formula one for decades. he is on trial facing bribery charges that could spend the end of his career. >> what is he accused of? >> it all centers over a $44 million payment made by bernie ecclestone to an executive at a bank. that executive is gerard gribkowsky. he said this payment was made to smooth the sale to an investment

bank, c.b.c.. he was convicted by a german court. the same court trying ecclestone. ecclestone said no, this wasn't a bribery payment. payment to is was a get gribkowsky to be quiet about the ecclestone family trust. the trial starts today. he is going to be there for two days. he is facing up to 10 years in jail. >> and he is in his 80's. thank you very much indeed. dade tweed joining us. -- david tweed joining us. kinson.op bern ji in his 80's. has been around forever how

will potential sponsors, how will the sport be viewing what's going on in germany today? >> tds a side issue to a certain extent. the major thing that happened that bernie railed against was the new technology that has come in this season. it has been a fantastic technical shift with turbo ngines and 1.6 charged engines with all the energy recovery systems. that has been the catalyst driving fmp 1 forward. bernie was against all of that. >> not noisy enough. >> he said it wasn't noisy enough. it could be slightly noiser but noise is an impedestrianment. >> is this noise, is this court case the kind of noise fmp 1 doesn't really need? >> it has been going on for a long time. the machinations of bernie trying to sell has been going on

for years. bernie bought the rights off the f.i.a. because the e.u. were investigating what they had been doing. it has been going on for years. people have been aware of the ownership and the commercial rights of formula one. it has been a gray area for many years. the way that the teams are paid is governed by an agreement between the teams, the commercial rights holder, bernie and partners and f.i.a.. that has always been a murky issue. it is not public lissized. sponsors are used to that kind of thing going on in the background. this is really, hopefully an end point to one era and going forward to a new one. >> sponsors may be used to this kind of thing but at the same time if you wanted to unlock the full potential of sponsorship, you need to put scandals behind

you. >> absolutely. hopefully this will mark the end of it. apart from the trial of gribkowsky that you mentioned, they have the trial in london where he said yes, he did agree that bernie ecclestone had bribed gribkowsky, but not to undervalue it. the previous lawsuit was because he thought that gribkowsky has deliberately set the price low so that bernie could buy it cheap. he said he knew it was because bernie wanted to take control. that is typical of bernie's whole regime in f-1. he has been the master at keeping control. >> give us some names of who could be taken over for mr. bernie ecclestone. >> lots of people have been mentioned in the past. when he turned 80, people thought he'll probably arrange for some kind of succession.

zac brown was mentioned. the hottest name is justin king. he is stiping down from sainsburies in july. that would be perfect timing for that kind of move. whether the f-1 hard core establishment would welcome that, i'm not sure. there is this thing. enzo ferrari used to call them the -- because they were mechanics first. they were not engineers. there was that sort of snobbery. it may be seen this because justin king doesn't have that background, his son, jordan king is a racer and is very good. because he doesn't have that background, it might be seen that he is not the right candidate. actually finding the right candidate who can put the fear of god into so many arguing team principles is very difficult. that's why bernie has been so

super at what he has done but it is now time to move on. >> the fear of god. that is exactly what we need. we're back in just a couple of minutes. ♪

>> welcome back. bomb, over yeager fireball has gone from obscure. what is responsible for this underdog success?

>> it went from absolutely nowhere and became something behind every bar. >> i had never heard of it and within a month i didn't know a person who didn't drink it. it was that quick. >> there was an explosion. >> very, very smooth, easy shot. i think it works for women. it is on the sweeter side. for guys, it still qualifies as a whiskey. >> it is very syruppy. very high in sugar. >> you take a shot. the first thing you get is a ittle bit of heat and then the sweetness happens and it feels like you have gum in your mouth. it is one of those liquors that you don't see in your face. some of the other major brands

that they put in front of us. we're not seeing it on every billboard. >> the only place i have seen a fireball ad is on facebook. they are hitting more people quickly and most likely cheaper than they would with any of those large marketing campaigns. >> every couple of years something else comes along. i don't think necessarily that fireball will have that longevity. >> they don't pretend to be the next great whiskey. >> at the end of the day, i want to rone successful bar. if it is something that my guests want and people enjoy and i know is going to sell and ove, i have no qualms with it. >> even the thought makes me sick. >> i have no idea what you're talking about. for our viewers, the second hour

of "the pulse." the chairman of barclays bond forum is going to be joining manus cranny. >> and then we'll be talking about g.e. ♪

>> a bloomberg exclusive. forn talks to buy alstom $13 billion. shares in the french firm are soaring. >> apple decides -- apple defies skeptics, surging sales fuel confidence. ukraine overshadows obama's trip to asia. we are traveling with the president. good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u.s. i am guy johnson. lacqua, this is

"the pulse." live from bloomberg's european headquarters in london. -o-nomics, he makes more money in retirement than he did on court. what has made his business a slamdunk. corporate story, it is a bloomberg exclusive, ge in talks to buy france's alstom forasmuch as 13 billion dollars, that would make it ge's largest acquisition ever. >> here with more details as matt campbell. our european business correspondent caroline hyde. a few guys waking up on capitol hill concerned u.s. companies are keeping money offshore. this is a classic case and point. ge has cash overseas and will be spending it. >> we have seen a few of these deals over the years. it has been at the top of the

wish list of corporate america for a long time, a change in the tax treatment. bringing cash you hold a brought back to the u.s. where it can be put to other uses. has ge seems to be done, ge $57 billion in cash offshore, which is the great majority of its cash balance. it is trying to put money to work abroad. we do expect to see more deals like that in the future with these cash balances for u.s. companies. >> caroline, why does this make sense? purchasing ae is smaller rival. economies are turning around. we are seeing governments wanting to invest in infrastructure. they are engineering powerhouses. alstom makes the fastest train in the world but has struggled of late, 8% decrease in market value this year because they have a huge debt load. they're having to fire people,

about 300 so far this year. they're having to cut costs and sell assets. they're not able to get hold of this wave of investment in infrastructure. they need a bigger partner. ge is eyeing alstom as the market violation of alstom has tear rated. >> interesting question as to whether jeff immelt actually wants to do this. he wants to bounce ge away from finance. we were member what happened during the 2007 and 2008 period. d moneyaving to spelnt he could use to get his share price up. since he took over, the share price has gone down. >> this is the problem with tax treatment of offshore cash. you cannot put that money to work in buybacks, the thing ge might want to do. you have to use it for m&a or let it sit in the bank. the caselt could make

that this is a way to get a titanic industrial company on the cheap. alstom is one of the giants of the french corporate world. it has had a very rough few years and that is why it is available for as little as $13 billion. that is actually a small amount of money when you think of the kind of profile alstom has. jeff immelt would rather have the option of doing whatever he pleased with this cache. this is not such a bad use. theac, you were one of reporters who broke this story. since alstom said they didn't receive a tender offer, some press interpreting that as them saying we have not been approached. >> i have been doing this long enough to know you have to parse these corporate statements, particularly in continental europe, very carefully. alstom said they are not aware offer fortial tender their shares. that is a very specific thing to say. the roles and most stock markets are if you have an offer for your shares you have to inform the market. what alstom did not say is we are not in talks.

essentially they are not denying anything and are only denying things that have not been reported. we are standing by our story confidently. >> the statement alstom has put out. another big french company, it has got telecom,for m&a at the moment, it has a big stake in alstom. alstom.take in tentatively, they have given it a thumbs up. if someone wanted them to purchase alstom i don't think they would have a problem. what an amazing year we are having in terms of m&a. to thisease compared time last year. earlier this week it was pharmaceuticals. it is companies wanting to be the top tier. they want to be in the top 2, 3, or four companies. alstom is the best at one small

area, turbines and dams. not quite among the top layers in other areas. a bigger unit.th also wanting to see the focusing in on what they do well. ge one to stand away from finance and play to its strengths. companies wanting to employ their money and use cheap financing. dealsseems like the m&a seem a little bit less like the eco-trips we saw five or 10 years ago. there is french protectionism, this is something we talked about. do we know a thing about how the french government is going to react to this? thee don't know if government's reaction will be. it is fair to assume that the french government will have been extensively consulted ahead of time. interestingat is about ge in particular is that it has a very good reputation in france.

it has about 11,000 staff in france and significant revenues there. it has been seen as a good corporate citizen. runs ge in, who france, is very connected. she has a rolodex as good as anyone's in paris. if there is anyone who can make this happen, it is her. >> she was married to one of the ministers. >> part of the establishment. interesting that nicolas sarkozy rescued alstom, $8.4 billion in 2004. outs move on and figure what else is going on. let's talk tech, earnings from facebook and apple came in ahead of estimates. whether this will be enough to calm investor concerns about the tech sector, jon ferro joins us. bar was really low yesterday. these companies did not trip, they beat.

revenue at facebook up 72%, that is a big beat. they generated more advertising revenue and are doing it on mobile. they are doing well and keep doing better. the likes of apple are doing the same. selling more iphones than many people anticipated, 43.7 million of them on the quarter. this quarter for apple, the best corner outside holiday season ever. there are the bright spots. also the bright spots, ipad sales are down 16%. dependentcoming more on the iphone. that could create problems down the line. the question is underlined, when does the next big blockbuster product come from? when will they actually deliver that product? you have tim cook talking about we're not about being first or the past. is that enough? and investors were pleased from news elsewhere as well. of news from apple beyond earnings, give us a

breakdown. dividends and stuff like that. >> they boosted the dividend by 8%. they have topped off their share repurchase program by $30 billion. of 12the equivalent months sales of mcdonald's and nike. they are doing a 71 stock split. it does not delete your holdings or change the market cap. you have one to share an end up with seven. those will be equal to the share price on the close of business. this is to bring the share price making it more accessible to people without big paychecks who want to buy apple. $75, i can buy a share. drum up some appetite. when you put that together, you have the appetite. shares up after hours. much indeed,very jonathan ferro covering tech news overnight. obama in japan,

kicking off a tour of asia. he aims to reaffirm his commitment to the region. even as the crisis in ukraine demands his attention. humbert's phil mattingly is traveling with the president. he joins us on the phone from tokyo. president obama says he is ready to use more sanctions against russia. a matter oft is now days, not necessarily weeks. much all that remains right now with the sanctions regime, if it is to be expanded, is a few technical details. important thing to remember -- the consultations with allies is not a pro forma issue. level, --on a centaur these are on a sectoral level, energy or banking. they will impact u.s. allies. the president made clear that the pact is falling through and there is no expectation russia will back down. >> let's talk about what the

-- as long been said they want a stronger commitment from the u.s. vis-à-vis china is that with a got? let's go they did. the president and prime minister abe had a press conference. we have heard officials underlined the fact that a security pact between the two nations means that the u.s., should there be any invasion of sovereignty in a group of disputed islands in the east china state, if there is any type of move on china's side, the u.s. would be forced to defend japan. the president said that today. he put it into words. becoming the first president to do so. that was a big move forward and exactly what the japanese were looking for as the president moved into this two day stop in tokyo. >> what kind of progress can we expect on trade talks?

arehe trade talks interesting. the administration was hoping that that would be a primary deliverable from this trip, particularly negotiations with japan. these are the two lead countries when it comes to this 12 nation negotiation that is going on. the president and the prime minister said that there has been progress moving forward. however, they are not there yet. the hurdles are the same they since february -- automobiles, agriculture. however, officials told me this morning that the associations are going and the u.s. negotiators are in tokyo. they negotiated through the night last night. the hope is that the bilateral meeting today and the ongoing negotiations behind the scenes with this trip will actually spark negotiators and perhaps start to break down those hurdles standing in the way. >> it might get congress off its back.

thank you very much indeed, phil mattingly joining us. he is traveling with the president. is on our what else radar. former pimco ceo mohamed el-erian says bill gross is one of the world's best investors. in his first tv interview since the surprise split with pimco, he explained why he left. >> when your daughter comes to you, as my daughter did, almost a year ago, with a list of 22 things that you have missed as a parent, you realize that there are special moments in your children's life. every parent knows it. i was missing too many of these. it is that simple. formula one president bernie ecclestone's trial underway, facing allegations he paid a bribe. he denies the charges. since run formula one 1995. >> shares of sodastream

international on a report that starbucks will buy a stake in the company. local media says starbucks is trying to buy a 10% stake, valuing soda stream at $1.1 billion. is bracing fors a rough ride. investors getting set to grill anthony jenkins about bonuses and tax. we will be live at that showdown. see you in a few minutes. ♪

>> good morning. you're watching "the pulse," live from bloomberg's european had corners in london. let's talk about the foreign exchange story. inio draghi talking amsterdam right now. making a few interesting comments about inflation. he says the situation gets worse. the lack of inflation, there might be an asset purchase program required. the rise of the euro is down to a recovery in confidence. talking about asset purchases, it is becoming increasingly part of the vocabulary of the ecb. he does say that unconventional policy might have unintended consequences. you have always got to think about the lore of unintended consequences when you are a central banker. it nearly always seems to apply. another central-bank at the moment that is really on the move, the kiwis.

we see another rate rise coming through. this is one of the major central banks out of there raising rates, head of the curve on the story. maybe a surprise this time. some were suggesting we might get a's, trading verses of the u.s. dollar at 1.1642. the dollar has started to climb back. the story now is whether the well.aussies go aas yesterday's inflation data taking steam out of that story. we will follow mario draghi, talking about qe shortly. what else are we talking about? -o-nomics. shaq tells us how he has built an empire after the nba. see you in a couple minutes. ♪

>> welcome back to "the pulse." live on bloomberg television and streaming on the ipad and bloomberg.com. >> let's talk about how the markets are trading. an interesting morning, assets on the move.

>> equities have a push higher in europe. news from the u.s., better than expected earnings from facebook and apple driving us high here. 0.6%.00 uyp, dax up are little more exciting, the euro-dollar, the euro at 1.3829. that is called by the draghi dip. he defines verbal intervention. the exchange rate increasingly could impact our policy. could they cut rates? i think they could be just as insightful as they could be entertaining. will the ecb do anything initially? we talked about asset purchases, 1.382 nine right now. mario draghi -- is he losing the ability to talk this he euro down? there is a question for you. >> thank you, jon ferro is on

the markets. equities boring today -- no! >> alstom getting 15%, the biggest takeover deal ge has ever done. we can argue later. barclaysg of equities, is becoming a media spe ctacle. for all the wrong reasons. let's figure out what's going down. let's head to london where we find manus cranny. we are about to have the agm for barclays. of institutional shareholders and advisers to the institutional shareholders are rejecting the renumeration anthony jenkins wants to pass through. quinn. me is karen quiiearan

the topline of what you have been saying is that barclays epitomizes everything wrong with bank culture. there is aboutn, to be a rising bonuses. it epitomizeshat everything that is wrong with bank bonuses? shareholders think the organizations need to listen to us. have been raising this over many years. profits are down by 32%, that is a fact. at the same time, they are increasing the bonuses by 10%. we think that is wrong. there is a culture of excessive pay. we need to tackle that. you can still recruit talent. other banks are recruiting amazing talent and putting together financial packages that shareholders are happy with. we believe barclays should listen to us to say that the

days when excessive pay, pay for failure or pay for success together -- it is failure. failure first. >> i get those arguments, but jenkins is saying i have a lot of people in america walking out where they can earn more money and produce more revenue. i have got to keep those people to produce the revenue. you do not buy that? you say that does not wash with us and not a good argument. bank shouldy, the tackle the fundamentals. a is one of the fun mouse. we -- pay is one of the fundamentals. the renumeration package is for their investment bankers do pay well. it is the wrong time to increase bonuses and pay. especially when there is a problem of reduced profits.

that goes back to the issue around governments. there are changes that need to take place. we have come here for the last they have told us we were wrong -- >> we have a short time before break. what do you want to see in remuneration from barclays? do you want them to be paid in stock? you cannot drive talent out of the city of london? is related to the long-term profitability of the company. tois time that we started plan for long-term future, not a short-term moment. >> to be fair, vince cable is talking about dereliction. what is your question to jenkins? >> why should johnson choose a new chair when he has already accepted he is not remuneration chair. >> thank you for your side of

the argument. that is it from the south bank. waiting for the agm at barclays. join us after the break. ♪

>> welcome back to "the pulse." live from bloomberg's european headquarters in london. i am francine lacqua. >> i am guy johnson. let's focus on food. 's company has seen sales growth's 420 years in a row. growth for 20 years in a row. regulations are slowing things down. >> i have the property chairman the company with us now.

50 nine quarters of operating profit growth tom is that going to continue and at what pace? look forward, i hope it goes on like this for the time being. we are going from strength to strength. consecutivethe 59 quarters of rising profits will continue. your sales come from israel, which is a relatively small market. what percentage of sales would you like to see coming from years's in five or 10 time? >> we are selling about $1.2 billion total volume. arehis country, where we king of many categories with market shares exceeding 50% and

some of them, it does not offer us in the long term much growth. there will be growth, organic growth. and therefore, our aim is to utilize some growth engines that are based on our know-how in the u.s. and in europe. >> it is not just a small market encouraging you to look abroad, you have a very strong she kel, the israeli currency. regulations against food following the protests of a couple years ago. which for you is the main thing encouraging you to look abroad? >> mainly the size of the country. and the majority of sales and quite a few categories. restrictions the government is putting on the food industry and the retailers, it is temporary. they will find out that this does not but the price of food down.

shekelve that the strong cannot live forever. this is temporary. abroadforward to markets , they are very lucrative. do not mean when there is a problem and in europe and american growth is still slow. i look forward into times when these markets will flourish better and we will be able to utilize our engine of growth and those two comments -- in those two continents. inin terms of food prices this country, accusations that is really food companies charge too much and the government' clampdown is unwarranted and not true? either butnot cheap we have to look at the reason. the major reason is that 27% of average food product to this country goes into taxation. or any other levies,

custom duty, even the oil price, prices, which are levied. if you take these levies off, we are very competitive worldwide. >> a question about thomas, you are the number 200 maker in the u.s. -- a question about hummus. you are the number one hummus maker in the u.s., number two in israel. how likely do you see osem becoming the number one hummus maker? >> we are manufacturing hummus outside of boston and are selling in the u.s.. that gives us this advantage being number two in the market. we will strengthen ourselves to be a prophet. be number onell

in five years' time is a risk. >> we look forward to seeing how the hummus battle plays out. dan propper, chairman of osem. tasting.ind hummus is the tallest chairman i have come across in israel. >> thank you. hummus, it makes you grow big and strong. >> it would be great if you could send some over. 25 minutes from now, it is "surveillance." tom, what are we looking at today? tech on the back of apple earnings. >> looking at my hummus from the food court. i feel so healthy. >> hummus at six in the morning. my skines something for

after i choose clients. boy was that corporate history last night. we talk about this yesterday morning on "surveillance," the idea of a surprise on use of cash. in spades last evening. apple computer making corporate history. we will talk to david kirkpatrick and gene munster about the increased dividends, the share buyback. the massive use of cash of apple and if you forward for apple and facebook. >> thank you so much, looking forward to that conversation on apple. it is amazing to see how many more iphones they sold compared to the ipad. >> the big surprise was the iphone continues to do well. mr. cook was very forceful about the inventory dynamics of the ipad. he was very up beat, even though there were some people signaling caution in the tech space. it was a stunning announcement. 20 years ago with the split-adjusted apple of about 74

or 75, 20 years ago it was $1.06 per share. >> thank you so much, apple getting 7.2%. the luck with the juicing detox. you learn something new everyday about tom keene. >> right. let's get into our headlines, president obama in japan meeting with shinzo abe. the four nation tour will place an emphasis on china. all four countries have territorial disputes with beijing. >> bernie ecclestone faces bribery allegations. he denies the charges. he has run formula one since 1995. >> general electric in talks to buy the french train maker alstom for as much as $13 billion. that is a bloomberg exclusive. sending shares of alstom

soaring. it would be the biggest purchase ever for general electric. ryan chilcote joins us with more on this story. if the deal goes through -- we have talked about the fact that ge is a well loved company in france. if anyone can do this stuff, ge can. with is an implication russian sanctions. alstom has big deals with an americans company. it needs to comply by sanctions. this would not necessarily put ge in trouble in the sanctions front. ge'sll clearly increase exposure to russia. alstom has a sizable business there. 25% of rush's largest train builder. they are very excited about selling russia high-speed trains. alstom is very good at that, it did the euro store. russia's the world's largest country by land mass and need them. russian railways wants to spend

building an on high-speed rail network. that plan is frozen but not dead because they don't have the money at the moment. that's the kind of thing alstom is interested in. if alstom is acquired by ge, you get the exposure. no sanctions risk per se immediately. but the ceo of russian railways is on that individual sanctions list. whether it would have an impact on siemens or other companies. >> they are the big brother in the realm when it comes to trains and power equipment in russia. they outperform alstom. this could affect the relationship. >> change the landscape. to keep we have watching very closely. no one is really saying it will stop the deal. it is interesting. ryan chilcote over the ukraine story and russian sanctions. genore on the deal between alstom.

the restructuring of the french economy is a subject we will be talking with jim rickards about. what this deal could say about france's attitude. they are becoming a little bit more flexible at entire of economic stagnation. back in a few minutes. ♪

>> well-connected "the pulse," live from london.

>> breaking news from mario draghi. he has said the governing council should publish minutes. he has also said the ecb could cut rates this disinflation continues to be a problem. >> we are joined by jim rickards, offe author of "the death of money." of look at the impacts globalization on different countries. what do you make of what europe is going through? we just heard mario draghi saying they have the situation under control. disinflation is here, deflation is not far off. >> i have been bullish on europe and the euro for a long time. i think mario draghi actually knows what he is doing. mindset.e right there are cyclical problems and structural problems. the world today is in a depression, which is a structural problem. the u.s., china, and japan have

not made structural changes -- you're a. mario draghi has provided accommodation to allow structural changes but he has not made monetary easing an end in itself. the bank of china has printed more money than the federal reserve. letting politicians off the hook and doing enough to keep they grow together -- keep the euro together. >> you have a stagnation of lending in europe to the people who want to be productive. we need to figure out a way to get the productive rid of the economy up. credit growth is negative. draghi has a problem. >> this points to structural problems. europe has problems but are moving in the right directions. they have made strides in unified banking relations.

european wide bank deposit insurance. i expect we are a few years away from a true euro bond backed by the full faith and credit of all the members. the european sovereign debt market as a whole is comparable to the u.s. treasury market. if you could have true euro bonds, that would rival the u.s. treasury market. >> tell the germans. what the germans are doing is saying they want to see banking reform and structural reform. when we get it, we will back this euro bond. is trulyoint, the euro a rival for the dollar. the chinese are dying to put capital into europe. the unemployment problem is a problem and an opportunity. no one likes 30% use on employment. on the other hand you have a well educated labor pool with low expectations about how much they should be making. they can come in and drive growth above. >> except they all moved to

london. we have been having fun with this. awesome and the -- alstom and the french protectionism. there is a lot of soft economics where people are depressed. when you are unemployed and young, it is more difficult to get back to work. is this something that investors should think about? anfor investors it is opportunity. we are seeing a large investments in auto assembly plants in spain, for example. the labor pool is there. a is one thing if you are 60-year-old greek bureaucrat you do not want to take a pay cut and would rather throw a smoke bomb at something. if you are a 25-year-old spaniard and you have a college degree and you are offered an entry-level position with training and advancement, you will take that job. that is the opportunity. mary chinese and other capital and anucated youth labor

improved business environment, this is a recipe for investment and exports. >> what is the growth rate for the euro zone and the u.s.? >> the long-term growth rate is about 3%. >> europe? >> europe and the u.s., it is the combination of population growth and productivity. is the two together and that the growth rate. in the short run, europe could grow above trend because you can bring all the labor. >> it has not. >> it could end it is leading in that direction. the u.s. is not making structural reforms. we're moving in the opposite direction and adding taxes and burdens and regulatory costs to the economy. europe is trying to remove them. it is a slow process. of the four major zones -- europe, u.s., japan, china, europe is the only one that has stepped up to the plate. they have suffered in the short run but they are well-positioned

for the long run. china and the u.s. are trying to solve it with liquidity solutions but you cannot solve a structural problem with liquidity. >> "the death of money" argues it is a number of things that come together and we could have financial warfare and market collapse. the markets are merrily going along for are we in a fictitious world? with somereakfast ceos this morning. privately, they will say bank covenants are gone, cost of funds is very close to zero. they have more leverage than they have ever had. the new york stock exchange has greater leverage. this is a bubble that is being supported by zero interest rates and high leverage. stocks should be higher by the end of the year based on the federal -- in the long run, this is a bubble. it ends very badly. it is being floated by zero interest rates and leverage.

>> you buy bubbles, that is what soros and everybody else says. give us a sense of the duration of the bubble. yellen sounds dovish. >> i expect a positive and the paper later this year. this could run into 2015. the problem is the scale of it. in 2008 all we heard about was too big to fail. the five biggest banks in the u.s. today are bigger than 2008 and have a larger percentage of assets. their derivatives books are bigger. hole thing is bigger. nisk is an exponential thing. this is what we are up against. it could start anywhere. >> we had not even touched on china. a house of cards? >> i have a whole chapter in the book on china. the wealth management projects are a ponzi.

the chairman of the bank of china said they are a ponzi. the money is going into real estate. if you are a state owned steelrise and you produce or glass or any components for construction, you just want to build buildings. i have seen the ghost cities. completely empty. people say they will fill up in the years ahead, no they will not. the migration from the countryside is largely over. town of obsolescence. you have to occupy and maintain a building. this is wasted investment. if you adjusted china's gdp for what is wasted, it would be lower. >> these ghost towns we have reported on on bloomberg. great to have you on the program, author of "the death of money." ♪

>> you are watching "the pulse." since his retirement, this guy, she kilo o'neill, has become the most financially successful former nba player. he makes more money off court than he did play in. we spent a day with shaq to get an insight into what makes him so successful. we call it shaq-o-nomics. that is a youngster, the only diverse revenue stream.

what keeps me successful, not always have monetary ambitions. you cannot mess with perfection, but you can moisturize it. i am 41 years old. i have traveled. if i am not familiar with a product i will not become partners. i started drinking arizona and college. for $.99 you can get a lot of liquid. arizona.e deal with we are off to a macy's appearance. affordableline is an suit line. ok, we only have a couple places to go. i want to be able to go in there and buy something off the rack.

this is every day. this is every time i go to the mall. everyone right here, you win a pair of shoes. >> you have got to have a shaq pack, baby. you have to hire people smarter. the greatest leaders are the ones smart enough to hire people smarter than them. they are great! >> i love frosted flakes, i would love to be on the cover of that serial. i never really eat wheaties. when you have money, a lot of people say invest in this box, it is going to be the next big box.

you have to be educated enough to do your due diligence. are boxes in or are we going green? a lot of guys look at the monetary aspect and it messes them up. i always tell guys to stay in school and get their education. >> you cannot improve on n perfection, you can moisturize it. >> what a legend. >> draghi is saying everything is on the table, there is going to be a problem. if there is a problem, we are going to fix it. cuts or asset purchases. more on that story later. some news relating to ukraine. an anti-terror operation underway, clearing roadblocks. five separatists have been killed according to authorities there. >> ryan chilcote is covering the story. that is it for "the pulse,"

qubit razor on bloomberg tv. "surveillance" is up next come alive from new york with tom keene. >> follow us on twitter, i am at @guyjohnsontv, francine is at @flacqua. ♪ . .

>> this is "bloomberg surveillance." >> the adult one of apple announces a historic announce of shares to shareholders. facebook is not google.

facebook wins with mobile. and wall street, well they bought american housing. the housing recovery levels out. good morning, everyone. it is "bloomberg surveillance." we are live from our world headquarters in new york. it is thursday, april 20 fourth. i am tom keene. joining me scarlet fu and adam johnson, who bought apple shares at $1.06 20 years ago. he has our morning review. mom bought you apple shares? >> don't own them anymore. >> what a day. in the years of my career come i've never seen this. absolutely amazing. >> you, tom keene, maybe the best comment i have heard about apple. what is in call -- context for us again. billion in 19 months, they delivered a ford motor company back to shareholders. >> incredible. they