>> the biggest criminal penalty in u.s. history. bnp paribas faces a $10 billion fine for breaking sanctions. siemens streamlines europe's largest engineering company, cutting nearly 12,000 positions. your privacy protected. to eu demands. the you have the right to be forgotten? good morning, everybody. you are watching "the pulse."

we are live from bloomberg's european headquarters in london. literally, elon musk unveiling his latest space age creation. we will talk about that a little bit later. speaking of big numbers, a slamdunk for steve ballmer, maybe. his $2 billion offer for the l.a. clippers. that is a basketball team if you didn't know. we begin with bnp paribas. shares sliding today. france's biggest bank facing the largest criminal fine in u.s. history. authorities are seeking more than $10 billion over sanctions violations. manus cranny is here with more. for $1.1 billion. this could be bigger than $10 billion further down the road. pay a finep paribas of $10 billion?

>> it sort of reaches into the realm of major adjustment and provisions. the bond market is already pricing in big moves. >> credit is reacting. you can understand why. >> pressure is going to mount. nine of the most active bonds trade in europe are. bob bonds. bonds.e paribas how are they going to earn $10 billion? they have only done it twice in their history. 2010 when they earned 10 point $4 billion and 2007 when they earned $10.7 billion. veterans tensbank of billions of dollars on a regular basis. jpmorgan has paid out the equivalent over the past number of years. someone like jpmorgan is

different. this is a bank that is going to struggle to earn that amount of money. >> this is a time when the eu is conducting stress tests. >> when they don't want to lend. they want to reduce their overall capital commitments. they are trying to build reserves. that is when you have got pressure. there is an article in the new york times. never too big to fail, too big to jail. nobody is too big to jail. discuss this level of fine that is potentially being lobbied? bloomberg, the reason why it is potentially $10 billion, misconduct more egregious and the bank did not fully cooperate. this is a master class. a master class in regulator saying, we have come to investigate you. not only have you not complied,

you have not cooperated. now you are going to pay the price. this is regulators on wall street demonstrating very clearly, they have the facts with them. there is a breach of sanctions over a number of different countries, now you're going to pay. >> it makes it very clear, the value of the u.s. banking license. you still have to operate within the dollar system. there is no choice. if you want to be a bank like bnp paribas, cough up. manus, thanks very much indeed. let's move onto our other big stories of the morning. europe's largest engineering company is removing more than 11,000 positions in an effort to cut costs. our international correspondent is here with more. talk to me about the subtlety of this. this is positions, not jobs. explain the difference to me. >> that means the 11,000 positions, some of those

employees could get absorbed elsewhere in the siemens company. reduction ofotal headcount which is what jobs would be. earlier in september when they cuts, some5,000 job of those people got absorbed again. this is another indication that siemens is serious about cost-cutting. they need to look around for inefficiencies which sometimes means redundancies. here is what he had to say in a conference call with investors. a certain amount of people do stuff for coordinating things, analyzing things. about 20% of those can be put to work elsewhere. they can be taken out of the system because the work goes away. about 7600 jobs will be streamlined for new divisional structures. another 4000 who are working in superfluous positions for those regional clustering companies -- a sickly they are re-organizing the company.

the initial plan was to have four sectors. now they have nine divisions. one question they have had throughout this, what they are going to do with health care. kaeser says he may sell it, may not. here is the quote -- is on to me like that offer. >> a company that is also pretty big in that sector is general electric. general electric bidding for alstom. is there a read across here? >> part of siemens' case to alstom is they will keep jobs in france. it is more difficult to make that case and convince the french public they are going to keep jobs there when they are trimming positions elsewhere. we expect a bid from siemens to come sometime later. they are interested in the energy business. that is going to come down to alstom's board and the french state. more difficult when you are cutting jobs elsewhere -- positions, excuse me.

>> got to get that one right. cons, always a pleasure. thank you very much indeed. hans nichols. now, the right to be forgotten, that is google's next big challenge after bowing to an eu resolution. giant hasech assembled a task force to respond to demands. here with more is caroline hyde. what is going on? >> from today, if you are european, you can block the evidence. you can block links to a damaging out of date information. links to that information on the european websites of google. google.co.ok, google.fr. this is after an eu ruling declaring that you have the right to be forgotten. this is a very difficult balancing act. google now has to decide, where does it block imaging private information?

so difficult is that balancing act that it brought in a killer task force. they have got jimmy wales, the cofounder of wikipedia. they have members of the u.n., law experts, academics, all to debate the ethical and legal challenges posted by the web. that allows me as a european to decide that i don't like the information out there. form,download an online give them what country i am from, give them the link i don't like, and give them the reason why i don't like it. then google ring together people , not algorithms, they debate whether or not it should be taken down. if they can't decide, it goes on to the protectors out there, the national data protection agencies. so worried are they that germany has set up a whole new raft of courts just to deal with the potential deluge of demand to

have links taken down off google european websites. >> they can't be happy about this. >> exactly. splash.s a front page it is larry page, the chief executive being interviewed. they said back in may when this decision was made that google was disappointed. today, he says this could damage future startups. google is huge. it has wads of cash to bring in that task force. they have the money to be able to work out how they navigate this very complex regulatory system. man if you are a 1, 2, 3 -woman band setting up a website? how do you navigate this regulatory system? you have got to really debate the concerns about how this governmentssive

cover up certain information. this has got to be key in the viewpoints of many i european out there. also he is humble to a certain extent. he does say we need to be more european. we didn't embrace the negotiations closely and not. they seem to be wanting to go out there and talk to the regulators of europe and get the sort of context. europeans feel differently about their privacy then google and the tech giants do. >> caroline, thank you very much indeed. talking of tech companies, the former microsoft ceo, steve ballmer, has won the bidding war for the u.s. basketball team, the l.a. clippers. pay $2 billion to buy the team from the starlings. robert franco joins us now. $2 billion is a lot of money. is he a basketball fan? >> the great thing about steve

ballmer, everyone was wondering, what is this guy going to do now? he tried to buy the hockey team in l.a. and now he succeeded at this. $2 billion is a lot of money. this was a team that was bought many years ago for $12.5 billion. it is above the highest valued basketball team. one of the most valuable franchises in the world, which is kind of surprising. >> we have been trying to make that point in the newsroom. who? what? >> well everyone knows the lakers, the chicago bulls. the clippers have never been a championship team. >> what is he going to do? teams -- it is kind of like london real estate. they don't always have a market for it. you always have a market for people who are willing to pay very high. most sports teams are not that

profitable but they tend to bid up very aggressively because billionaires want to own certain things. holmes, sports teams and yachts. >> and space rockets. let's talk about elon musk. >> they are willing to pay apparently a lot more for basketball teams than space. it is interesting. you have three billionaires plus nasa and investors from the middle east toying with the space market. only put elon musk about $100 million into the space business so far. about 175 has put million dollars in his space exploration company. private space exploration is a real thing. >> these are pictures of elon musk last night. spacecraft,usable comes back down to earth on those little legs. rather you than me. [laughter] i would be quite nervous on that

one. he says apparently he is not going to go into space for a few more years. he wants to watch his children grow up. i don't know whether there is a read across into his views on oh. we believe that one alone. rob, always a pleasure. what else are we watching? what is on our radar? world cup tickets apparently are being listed for as little as $16. that is a 90% discount. construction delays could be affecting the resale market. inflation surged to a 23 year high. consumer prices rose 3.2%. that is due in part to a sales tax rise that is hitting consumers who have seen limited wage gains. it is still a fairly elevated figure.

the u.s. as ukrainian separatists are getting outside help. pro-russian rebels used shoulder fired missiles yesterday. bnp takes a beating. shares slide as the u.s. seeks a record price from france's biggest bank. how much will it have to pay up? that story up next. ♪

>> welcome back. you are watching "the pulse." shares of france's biggest bank under pressure today. reports are that the u.s. is seeking a $10 billion settlement from bnp over sanctions violations. let's talk about this now. figure out what happens next. we have a banking analyst. good morning to you. this number is larger than they provisioned for. they have $1.1 billion on the books for this. react tobnp paribas this? >> first of all we don't know for sure if this is what u.s. authorities are looking for. we know this from the u.s. press. this number is circulating. >> it might be higher. >> clearly what we have seen is that u.s. authorities wanted to wipe out the net profit for the year.

over time, the number we are talking about keeps going up. now the number is $10 billion. what can bnp do? they can take action by suppressing the dividend for this year. they can also take action on the bonus pool for the business. they can sell some business and they can raise capital. these are the measures they can take for example. that is the menu. >> what is the most appetizing thing on that menu? which would be the easiest way of doing it? economic to finance this in credit? is it more efficient to issue equity? what is the right way of doing this? how do you maintain the balance and keep this business at least on the rails? >> the business is not going to derail. i think the bank is well-managed

and they will take action and spread their action across a number of action points. first of all is the dividend. second of all, the bonus pool. and maybe sell some assets. the problem is, if you sell some assets it is going to take time -- >> that was my next question. this comes against the backdrop of european banks being stress tested. the ratios are being examined very carefully. the timing of this could not be worse from that point of view. >> it is two layers. the action the bank will take and what can happen in the stress test. if you look at the impact on the the impact of the fine without mitigating action is to drop to 9.6%. it is still viable.

the mitigating action would have a positive affect. it depends on the management decision. the more mitigating action they take on the business, the more the business will be affected. that is maybe more interesting to raise a little bit of capital than to affect or impact the day-to-day running of the business. >> read across to other institutions? is there one? should i be talking about socgen here? should i be talking about other european banks? will takeparticipants the 100 basis points impact on capital and apply it to other institutions. that is the first reaction. the np seems to be -- bnp seems to be the first in the file. they are larger. other banks are smaller players or have different circumstances or less aggravating circumstances. you can imagine that people start to take their calculator

and imagine what would happen if socgen had to pay a fine of $5 billion. on a price of just under 0.8. when does that number get back to 1? >> market be action today -- implicitly you can do docs from this that the market is pricing in roughly 4 billion. it is probably over exaggerated. we are going to see some stabilization once the numbers are coming out to the market. what remains is whether bnp will be excluded temporarily from the system of payment. that is an additional uncertainty. >> that banking lights comes at a very high cost. we believe that there. nice to see you.

lambert,re . time for today's pulse number. 10 billion pounds. that is how much drugs and prostitution are said to add to british gdp. nice to talk about these things. the u.k. says it will include the figures in its official calculations for the first time. not the only country changing how it measures the economy. last week italy and us similar plans. we are back in two minutes. ♪

>> good morning. welcome back. you are watching "the pulse." shelby talk about markets? manus cranny is standing by. >> what you need to know is you have got the longest winning streak on the stoxx 600 since summer of 2012. stocks are up by 0.8%. borrowing costs are a record low. , all the hallmarks of what mario draghi does not want to hear. cpi numbers coming in less than the market anticipated. that is one of the biggest threats to the map underneath us. house prices, up for the 15th straight month in the u.k. we have a confidence poll from gf k. for the first time, turning positive. the underlying tenor is rising. ant you have got is

inflation story and japan but the wrong kind of inflation. it is not what they want. you saw headline inflation rising. money coming out of the dollar and into the yen on the back of those numbers. what the bank of japan do more? reality begins to set in. dollar rising, yen falling. there are still people out there calling 105, 110, 120. hours, first couple of when you have not quite had your cornflakes, money was coming out of the yen. the dominant equity story of the day is undoubtedly bnp paribas. you have the story with socgen, saying that their business in russia was under pressure. . by off by 5%. guy, i leave that with you. options on the plate for.

not --for paribas. >> thank you very much indeed. still to come, the man with the plan. modi maps out a new blueprint for india. ♪

>> welcome back. you are watching "the pulse." i am guy johnson and these are the bloomberg top headlines. u.s. as ukrainian separatists are getting outside help and the forward -- in the form of advanced weapons. rebels yesterday killed 14 soldiers. next week ukraine faces a russian gas bill that will reach $5 billion. there is also a potential supply cut off. wider european a

problem. bei think we should all worried about gas supplies in general. not only ukrainian. it is a question of whose turn it is this year but this is something that needs to be addressed. this situation year after year. this is the ukrainians' turn. it is not different then other times. the issue is a more general one. security of supply in europe is a problem and should be addressed. italy, the ceo of unicredit expects the ecb to begin an asset purchase program soon. spoke to us about the benefits of expected rate cuts next week. rates may help on the

euro-$. not for us i think but for all economies in europe. and for banks, i think a program for medium-sized and small banks. japan's inflation accelerated in april to a 23 year high. three .2%.ices rose industrial output fell after a sales tax increase. tax out of that inflation number, still the numbers fairly elevated. election ismental over and prime minister modi faces the extraordinary task of turning around india's economy. in his second cabinet meeting, the leader set out priorities for his first 100 days in office. none of them are easy.

bloomberg tv india has the details from him by. what is top of the agenda? growth i guess. >> that is the big worry across the region. the in india we are seeing worst growth in two decades and the highest inflation. sentiment is very high for the equity markets. the economic reality is far from euphoric. making india a very business unfriendly. that is high on the prime minister's to do list. the new the appointed prime minister has asked for all ministers to fix a 100 day agenda listing priorities for various ministries. growth is up 5% for over a quarters. reports are indicating that the prime minister wants to ensure consistent policy and that is a big one given the fact that the

big-ticket investments have really shied away from india. of the tax flip-flop as well as a big legal drama. we understand there is a meeting next week of global brokerages with the finance ministry officials to try to gauge expectations. on the other side we have a huge industrial activity here as well. prime minister modi is likely to -- revival onvile the infrastructure space. all in all, it is a large burden of expectation and a lot of to do on this government's list. >> we are going to get clarity on how serious the problem is later with a gdp figure out. what are we expecting on that number? expectationt is the from the january to march quarter. that is good news for the economy. we will be sub 5% making it the

worst growth in 25 years. activities are almost at nil. agriculture output also not looking very encouraging which hide,-- on the other services are doing not well. no good news coming in from the economy side at all. a lot of work to be done. >> thank you very much indeed. going to get much more of what is next for india. we are going to be talking to the founder and chairman of cobra beer, karan bilimoria is going to be joining us very shortly. let's shift gears. let's talk about how to turn your passion into a business and do it well. it is from the school of creative startups.

they will be launching new businesses this weekend. joining us is the director. good morning to you. >> good morning. >> the creative economy in britain is huge. financialng about the sector on this channel but the creative sector is massive. if it is turning creativity into business? >> it could be better. we are on our way to learning how to do that. as a culture, the creative sector hasn't really had financing at the forefront of their minds. there is a stigma around selling versus selling out. i think that is changing. there is a lot of support in this country toward helping people realize how to make a living from what they have been making and doing. so times are changing. >> if i went to this festival, what am i going to learn?

what i'm i going to see? >> you have 200 businesses who have been training and are now ready to launch their businesses and put everything they have learned into practice. their pitch, their brand, their product, they are getting feedback from their audiences. >> do we need something like that for the creative industry? or are the two kind of meshing together? >> i have a personal gripe with the fact that the tech community has abused the word creative a little bit. i think they do touch one another but there is definitely a lot more in the creative sector than just technology. we work with people from snail farmers to chocolate makers. a wide range of creative sectors beyond tech. i think we need to shift attention to what we really do well as a country. there is nowhere else in the world like the u.k. for a

creative sector. if we shift our attention and pay more than lip service to the creative sector, it will go a long way toward ensuring our legacy. that means we can wear more than one hat. despiteing thing is, all of what you have been telling me, the u.k. is really good at that. is that just a london phenomenon or is that a u.k. phenomenon? >> i think it is a u.k. phenomenon. i think because of the internet and because of the ability that we can now have a global business from anywhere, you are seeing pockets in other places. bristol is creative. kent is upping their creative sector. newcastle, there is really great hot pockets around. you are always going to have that influx to london because that is where the money is. but i think the whole country is incredibly talented and creative. >> what do we need to do better when it comes to education? starting at the beginning.

that entrepreneurial education should be on par with something like sex education. not in the same class necessarily but with the same kind of embedding. from an early age, you know what it is. can makerepared, you smart decisions and know how you want to move forward. ,here has been a real sort of this isn't for you, business isn't for you, in education. we have to offer them a wide breadth of opportunities. >> what you said at the beginning was interesting. you talk about the creative sector having this antipathy for commerce. that almost seems to be the top from the bottom. i guess the people coming in don't have that as ingrained as the people at the top. there seems to be this institutionalized desire not to sell out. peopleo need to educate across the democratic spectrum. >> i think people are incredibly

entrepreneurial. why aren't they being taught from the beginning how to do that? art school the sector in this country and i watch as commercialism has been a real dirty word. something that people didn't talk about. we have to change that. creative people don't live on red wine and nicotine alone. >> there is coffee as well. >> but they need more than that and we have to help them achieve that. otherwise, they are dropping out. they are making creative things as their dirty secret in stead of their primary income stream. >> do other people do this better than we do? i am talking about the ability to commercialize. >> it is a balancing act. americans do commercialism incredibly well. we are go-getters and driven from the beginning. lot more they have a integrity and focus on staying through to what they have set out to do. somewhere in the middle, people

must have integrity and commercialism. >> i look forward to seeing more of it. thank you very much indeed. now we are going to take a short break. still to come, the man with the plan. modi maps out the blueprint for a new india. can he live up to economic expectations? we speak to the founder and chairman of cobra beer. ♪

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

prime minister modi faces a massive task. the new leader laid out his priorities for his first 100 days in office yesterday. our next guest of the country is open for business. karan bilimoria is the founder and chairman of cobra beer. look, expectations are enormous. he has executed extremely well at a regional level. he laid out his priorities. is, should we be thinking as aggressively as we are about what he can achieve at a national level? what do you make of the priorities? >> this is wonderful news all around. i don't know how many people in this country saw the swearing-in ceremony of not only the prime minister but the old cabinet by the president of india in front of the viceroy's house. it was the most dignified event. saw this handover of power

and everything was fantastic. democracy in action. the biggest election the world has ever known. narendra modi has made it clear, he wants action straightaway. how much clearer could he make that? having his first meeting when he became prime minister with the leader of pakistan to send out a message that he wants to have peace and broker relations between the two countries. economically, that has been the pillar of his whole manifesto. to drive through change and to get rid of the policy that was there for so many years. his 10 point plan is all about execution and action, particularly to do with the economy. >> this is a country that had years of institutionalization. redtape upon red tape. slashing through that sounds great. let's liberate the economy. free ourselves from the

shackles. it demand going. delivering upon these things when you have got mountains of red tape, it is harder than it looks. >> very challenging in a country like india. redtape is rice. not only at the central level of the state. his biggest challenge is -- he has been chief minister for over a decade of a state the size of the united kingdom. now he is running a country of 1.20 5 billion people. centers ofy to get the lower powers in india, each state is allowed to implement a lot of their own taxes. own state can have its import and export duties and change their levels of tax. it is not a level playing field. the general sales tax that modi says he is going to implement needs the agreement of all the

different states. if that can be put in place, that alone can add 2% to india's gdp. he wants to put that through. >> you are an entrepreneur. you look for opportunities. if you are looking from the outside into india, looking at the 10 point plan he is proposing, where are the biggest opportunities for business within that? you talk about the fact that the sales tax is going to come through. where are the big gaps going to open up? >> everything in that 10 point plan is music to my ears. the fact that he wants bureaucracy to the unshackled, the fact that he wants transparency. the fact that he is going for infrastructure. there is talk of inward investment in any area going up to 49%. everybody is worried about retail. tesco is going to be the first retailer going into india. now there is hope that they may not withdraw but you can still

go ahead with it. for is brilliant news anyone looking into india, wanting to invest. >> is it going to have a huge advantage? huge amount of waste in terms of food transportation in india. >> that is why you need multi brand retail coming in. not only would it be great for everyone is worried about the corner shops, that they will be displaced, i don't think so. it is too big a country for that to happen. we have six cash and carry branches in india. over here we have been doing really well. companies are still continuing to succeed. >> are you actively saying, let's look for business opportunities? where do we take over? >> where cobra is concerned, our plans for india are very positive. we always had a long-term strategy. we knew that a government like

this, when you have got the 10 years agoter -- when the bjp were in power, he was a minister. i used to deal with them. he was a very capable person. he is now also the defense minister. there is talk about opening up defense in india. >> how the european governments -- let's talk about government. appalling track record here in the u.k. of taking advantage of the opening markets. india, china, etc. could do so much better, could do so much more. here is an opportunity to do much more. doing?d they need to be how did they need to be interacting with the modi administration? >> yesterday we had david coors brewery.g they were seeing british manufacturing at its best. what about the next trip to india? what we need to do is take

another delegation -- >> what did he say? >> we will have another trip. if he has another trip to india, it will be brilliant. it will be the first time a delegation has been out three times. the last was the biggest one ever. they are very effective. they send out a great message to india. we are competing. competing for india. we need to barter with india. we have a great relationship with india and we need to get narendra modi here to the u.k.. in 2006.time was that is how long ago it was. >> you think that could happen? >> absolutely. they would be very keen for him to come over here to the u.k. >> we believe that there. thank you very much indeed. karan bilimoria, chairman of

cobra beer. we will continue our conversation on india later on. what else have we got coming up? protecting paradise. richard branson creating a carbon war to save the caribbean. much more about that when we come back. ♪

>> welcome back. in today's new energy, the caribbean islands lacked renewable energy infrastructure despite ample access to the sun and wind. billionaire richard branson is -- , goodg us for more morning. the caribbean is famous for sailing. there is a lot of wind. there is a lot of sunshine. this strikes me as being the first place to build a wind farm . yet they rely extensively on fossil fuels. >> nearly all the islands rely mostly on importing fuel oil. do thatry expensive to and they have high electricity bills as a result. jamaica, the average customer there paid about $.41 per kilowatt hour in 2012. that is high when you look at the u.k. which is around $.23 per kilowatt hour.

what is branson going to do? gotten countries like aruba signed up. a sickly the idea is to fast-track the sustainability projects in the area. you have got the largest independent power producer in the u.s. to go in and agree to develop a renewable micro-grid on his home as a demo. >> this is going to be a carbon free island? >> it is going to be heavily reliant on wind and solar. whether or not it is zero carbon, i can't say for sure. is there a viral mental aspect to this? these are incredibly pretty islands. is there resistance to sticking a wind farm there? protestshave been around the development of a wind

farm in aruba. the same sort of argument you hear around the world. not in my back yard. ways to makeing at it aesthetically pleasing. they have even talked about painting the wind turbines light blue. it is all in the eyes of the beholder. would you rather look at a wind turbine or a diesel powerplant? >> a diesel generator in the background. we will leave it there. thank you very much indeed. >> eye of the beholder. listening on bloomberg radio, the first word is up next. for our viewers it is a second hour of "the pulse." we are talking about bnp. by. it faces a fine of $10 billion from u.s. regulators. is india really open for business? a former ceo is going to join us.

turkey taking to the streets. we are going to istanbul to get a take on what is happening later on today. ♪

>> the biggest criminal penalty in u.s. history. bnp paribas faces a $10 million fine for breaking sanctions. siemens streamlines europe's largest engineering company cuts 12,000 positions. your privacy, protected. google bows to eu demands that you have the right to be forgotten online. 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, this is "the

pulse." live from bloomberg's european headquarters here in london. what have we got for you in the next hour? out of this world. elon musk unveils his latest space age creation. that? what to ride on a slam for steve ballmer, his $2 billion offer it with the bidding war for the l.a. clippers. another story from the other side of the atlantic that affects france's biggest bank. sharese -- bnp paribas on the move. facing the largest criminal fine in u.s. history. authorities seeking more than $10 billion over sanctions violations. manus cranny is here with more. how does bnp paribas pay such a large fine? how does it work? >> there are a number of different options. bonus -- dividend --

you, me, dividend. near cache items. the dividend is the nearest cache item that would draw the ear of shareholders. employees' bonuses could be withdrawn. -- issuing rights. a scripthey call dividend. here's aps of paper saying i will pay you. we are ok, we got paid once. that crystallizes it for you. dividends, capital, equity, credit. credit spreads are widening. the market is penalizing bnp paribas' bonds. the ascension that if you get slapped with $10 million or less -- the assumption that if you get slapped with $10 billion or less, that is there. that is the teat of regulation moving into a jaw like action.

-- this is the teeth of regulation moving into action.actiawlike this is egregious, why you are looking down the barrel of a $10 billion fine. >> how did management not put this one off and get in front of the regulators? how do they not, when they got there, find a way of doing the deal? >> they did. one went to his key envoys to the regulators. new yorkators bought times, the fact that this management walked in and said give me this. this is not the game you play with these regulators.

-- youn lasky remember standard chartered. he said i will have your banking license, sir. that is mostulator feared. looking after foreign exchange investigations. taking the banking license away from standard chartered. >> you've got to have that banking license and be part of the dollar system. you have to wonder, you look back at jpmorgan and you look at what happened with standard charter. ceos do not go over these things. , and anytly stunned other industry if you got fit with a $10 billion fine. if you ran ge or any other company, you have got to wonder how these guys standard jobs. >> there is a great bit of

speculation over the fine on credit suisse two weeks ago. and would brady dougan survive that? if other industries raise capital at the level, rates, and size banking raise capital there would be questions. let me leave you with this. people will write about capital being eaten away with a $10 billion fine. it would bring tier one capital down to 9.7%. >> that is still acceptable to eu regulators. areegulators in the u.s. sending a clear message and delivering. you break the rules in banking now and we find you have broken the rules. we are not only going to penalize you, we will hang you out to dry. >> interesting, we will talk about siemens next. a company that when it broke the rules, management left sale. >> i will leave that whole argument. i will interview a few ceos.

>> we will leave it there, thank you, manus cranny. >> siemens streamlining its business. europe's largest engineering company moving 11,000 editions -- europe's largest engineering company removing 12,000 positions to cut costs. positions, not jobs. >> there will not be 11,000 600 job losses. there might be a chance for employees working in those to be absorbed elsewhere. a quick point on your siemens scandal. a few years back on when the entire management or resign, it is not systematically important. that is what is interesting about bnp paribas. consequences whatever happens outside of its own. let's go back to siemens and talk about some of these changes. remember in september when joe took over, he stuck with the reorganization plan. and they announced 15,000 posts would be cut.

here's what he said in a conference call announcing these last night. a certain amount of people do stuff for coordinating things, 20% can be put at work elsewhere. they can be taken out of the system because the work goes away. this is part of the restructuring plan. you are going to nine divisions as opposed to the old for sectors. a different structure. a question on health care division. do they want to put up for sale yes right here is what kaeser said. we are flexible and being prepared for anything that comes along. as we have talked about, that is an indication that if the price is right, siemens might be willing to part with its health care division. >> the french think that engineering is pretty systemic and pretty important. let's talk about oust him. the relationship between siemens and alstom. walk me through the connections. >> the french think industrial

jobs are systemic. whatever siemens ends up doing , it will affect their attempt if they do make a formal bid for alstom's energy business. ge has made a bid. siemens has made in there and themr -- siemens has made in their informal offer, not to have job losses for three years. it is how credible a promise like that is if they are cutting elsewhere. kaeser and time, siemens are interested in alstom's energy business. the decision will be made by alstom's board and the french government, which will be attuned to the french people. especially after the disastrous poll results. does hollande want to show he can do something to revitalize france? is it a bit from an outside

where american company? we are going to be talking about this. fascinating. >> great angles. thank you so much, hans nichols joining us from berlin. of the rightthink to be forgotten. google's next big challenge after bowing to an eu roluling about personal information online. there's a task force that will respond to the policies. our european correspondent caroline hyde is back. ais is europe saying if citizen decides it wants information it thinks is incorrect removed it has the right to do it. is a phenomenal challenge for google and other web giants. they are going to have to pick through the details as to what they think is the individual's rights and what is >> in the public interest. > they aggregate a huge amount of data. >> they are not using algorithms

, they are using people. you and i can go online, find the link we do not like on or .de andk or .fr say this is why i do not like it. the group will say is this in the public interest? if it is not, they can remove that link. they cannot remove the website but they can remove that link published on their european websites, their european portals. what is google cannot decide. they pass it on to the privacy regulators have a data protection agencies in germany and france. then they have to decide whether we have a case or not. they could be delusional. germany is thinking about setting up a whole new realm of courts just to be able to deal with this demand to strip things

from the internet. >> the internet does not make everything efficient. employees, hundreds of thousands of people, going to bring in a super task force to deal with this. >> phenomenal. >> if i am in berlin running a startup and i have got two or three people, do the same rules apply to me? >> they do. how do you fit that bill and negotiate this complexity? this was on the front page of "ft." larry page saying this could kill off a lot of innovation in new startups that cannot afford to navigate around this complexity. he says we have got the money to spend, they are getting onboard board. the cofounder of wikipedia, they have members of the u.n. coming on board and legal experts. members of the university of oxford, academics with the most top ranked viewpoints on what is really the ethical and legal challenges around the web. to debate with the law means for google. what if you are a startup?

this is so difficult. that is how larry page is coming. what about governments out there that are trying to hide information? should they have the right to do that? they could throw out so many arguments as to why you should be taking out links. this is going to be really complex stuff. larry page has come back a little bit with his tail between his legs saying we should have been there to negotiate in a better dialogue with europe. >> with the european authorities, take them seriously. plenty u.s. companies have fallen foul of that. thank you, caroline hyde. another technology angle. steve ballmer has won the bidding war for the u.s. basketball team the los angeles clippers. steve ballmer will pay $2 billion to buy the team from shelley and donald sterling. he outbid for other suitors, setting a record for the price of an nba team. japan's inflation surge to a 23

year high, consumer prices rose from a year earlier due in part to a sales tax rise. have got to back that sales tax rise out of the inflation number. even if you do, the number is still elevated. the u.s. as ukrainian separatists are getting outside help. pro-russian rebels used shoulder fired missiles to shoot down a ukrainian helicopter. there has been an uptick in fighting around the russian border. still ahead, a year since the antigovernment protests in the in istanbul. live in turkey as police prep for the demonstrations. see you in the moment. ♪

morning, welcome back. you are watching "the pulse." let's talk about the currency markets and show you what is going on. i want to talk about this for the simple reason that it is rising. some would say disappointing data out in sweden. swedish q1 gdp was below expectations. says the data tells you that we have a clear sign the swedish economy is recovering. yes, the number of missed but investments and exports, if you dig into the figures, were

better than expected. household consumption is considering to "steam ahead." looking into the details you get a better figure. higher than affected -- higher than expected imports as a sign of good mastic demand. getting a negative number this morning and maybe that is the reaction you are seeing on the norwegian krone. read between the lines and maybe that is not the reaction you should be having. the turkish lira, one year on from the protests and this is the story. a game of two halves. we did see a significant rise in the dollar following that. in the last couple months, starting to recover. currency markets have turned a little bit more positive. the turkish lira has been recovering. the next 12 months are going to be interesting. let's talk about them. one year on from the gezi protests. joining us now is a turkey country advisor at global force

istanbul.rom one year on, we have a significant police presence on the streets. expecting demonstrations tonight. it is the one-year anniversary, is the one year anniversary, isn't a significant flashpoint cu? >> it is significant. they have become completely paranoid and cracked down on all sorts of thi dissidents. while the streets have not been too unruly in the interim, social media called the gezi people has been very exciting. signs that turkey's minorities might be joining hands. changed turkey. it is such a glacial change and we will only notice over time. perhaps in a timeframe of five years. think primeu minister erdogan is going to be feeling today?

you cap about the changes that , how will he be viewing the last 12 months and how will he be feeling about his future? sure he is very concerned. even though the western press has talked about the victory in local elections. his support among the local population has dropped by seven points. he will throw his hat into the ring for the presidential race in august. unless he cuts a deal with the kurds, he is facing a very feisty opposition. he cannot guarantee a victory. approach will not be reconciliation and dialogue with people and other sources of opposition. to keep doing what he does best, to crack down on any demonstrations tomorrow and next week with the full force of the

police. to hope that his constituency can be made to believe that gezi is the work of shadowy international organizations andng to undermine turkey him personally. if that story cells, -- if that he will probably have enough to ensure the presidential race. i assure you between now and august, all hell will break loose. >> can you be more specific on what you mean? clearly he's going to use the power of the militias and the ited forces to make sure does not break loose. give us a historical scale. >> first of all, the constitutional court has islared that the youtube ban unconstitutional. i expect the government to update the verdict -- i expect the government to ok the verdict. -- i expect to be government to

obey the verdict. ogan's rival will release a torrent of information. one thing that has gone unnoticed in the gezi demonstrations as all the people awites,e died are al turkey's religious minority. in erdogan's turkey, they suspect there is no future. they are taking an active and i am afraid a radical part in these demonstrations. there is a generalized anger in coalabor groups about the mine disaster. the turkish families are up in arms because pkk is kidnapping their children. all of these factors, as well as external forces such as assad and possibly iran, who do not mr. erdogan.

they will use of venues of provocation and destabilization to make sure they put enough doubt into constituents' minds rdogan might not be a good choice. between now and august, we will see a lot of propaganda in turkey. >> as we showed at the beginning of this interview, the currency has recovered of the last couple months. the bond markets are stabilized. you are talking about all hell breaking loose. how bad will the reaction be on international markets as a result? >> the market and economic reaction should be separated. the universe on -- at large is largely conditional on what janet yellen and mario draghi do. it has little to do with turkey's fundamentals or politics. the economy is suffering.

very slow and long term damage. some of your colleagues might remember two years ago turkey was the mena darling of startups rnet media protests. most young people have been arrested in the gezi protests and have been discouraged from the public life. in terms of megaprojects or infrastructure, there is a massive resource dislocation. two years ago, turkey was heralded as the china europe, growing 10% per annum. since then, turkish growth has not reached 4%. these charts are not killing the turkish economy but there is a visible and very gradual slowdown in the turkish economy. if that continues, i do not see the turkish economy growing more 3.5% within the next two years or three years. >> thank you very much indeed, joining us from the sample --

joining us from global source partners. ♪

>> welcome back. that is how much drugs and prostitution attitude british gdp. the uk's says it will include them in official constellations for the first time. not the only country changing how it measures its economy. announced and really

similar plans as well. we will take a break and after mission.i's india's new prime minister's ambitious economic plan. we look at the challenges and solutions with the founder of ebookers.com. ♪

>> good morning, welcome back. you're watching "the pulse," live from london. i am guy johnson and these are our top headlines. japan's inflation surged to a 23 year high. consumer prices rose 3.2% from a year earlier due in part to a sales tax rise post. if you back that number out of the 23 year high inflation number, you get to a real number which is also fairly elevated. u.s. says ukrainian separatists are getting outside help in the form of advanced weapons.

progression rebels used a shoulder fired missile to shoot down a ukrainian helicopter yesterday, killing 14 soldiers. there has been an upsurge in fighting near the border of russia. the former microsoft ceo steve ballmer has won the bidding war for the u.s. basketball team the los angeles clippers. he will pay $2 billion to buy the team from shelly and donald sterling come up eating for other suitors -- beating four other suitors. rob lafranco joins us. boy from seattle buying a basketball team and outlay? >> looking for something to do. he is microsoft's largest shareholder. he has stepped out of microsoft and he has got to find things to do. and hashuge sports fan been involved in sports in college. detroit tigers, a baseball fan. he is from detroit. he tried to buy a hockey team last year in los angeles.

beenas he has said, he has quoted in the press -- he needs work. he needs something to do. does not matter where he is. if you have ever seen videos of him chanting at the microsoft conference. >> he gets pretty amped up. >> it will be entertaining to watch him do that courtside. >> why this team? is up for sale, it is fairly high profile. why is he paying so much for it? it is a big step up for previous, better known names that are being bought. and in l.a., y l.a.? >> the dodgers were sold last year for more than this, two .1 billion dollars. in the u.s. it has always been the u.s.,ankees -- in it has always been the new york yankees as the most valuable sports franchise. perhaps l.a. has been overlooked entertains have been undervalued? maybe the sale of the dodgers made people realize that tv

revenue from l.a. on this stuff, and the revenue from the stadiums is much greater. it could be that he likes the west coast. opportunity here or is he going you know what, i like sitting courtside and sharing? >> sports teams for billionaires are a fantastic investment. this guy has $6 billion in cash within the next couple months. he will have $4 billion on a basketball team -- he will have $4 billion, a basketball team, and something to do on the weekends. he will probably hold it for 20 years and sell for $4 billion. i think he is just -- these guys like to have these things. like they like to have yachts warplanes and homes in london and miami. this is a trophy. >> and space rockets. elon musk unveiled his latest space rocket. he is not that this much money in. >> at least three billionaires

are involved, musk, bezos, branson, together they put in less than $5 million of their investments. branson has gotten funding from the middle east and musk from nasa. it is a growing business but the investments have been small. >> thank you very much indeed. wrapup, as wees' are going to call it. let's move on. the five minutes until "surveillance." tom keene is in new york. his heart is always in boston. $2 billion for a basketball team out of l.a.? go's report was outstanding. they captured what basketball means to america. steve ballmer wants to sit courtside in los angeles. people are not surprised that he larry ellison and others. the $2 billion statistics has everybody's attention.

greatht speak to the distortion of these times, seven years on in a financial crisis where the upper 1% is doing well. we will talk to paul in our second hour of "bloomberg surveillance." back with pimco, michael mckee will help me with this interview. paul macauley on the great distortion and what it means for the federal reserve and the bond market. how prewar it will link this to the equity market as we get ready for the weekend. bond yields as we go to next thursday and the ecb meeting. howard ward on what it means for the equity markets. >> i know l.a. is called lalaland, and we should call wall street lalaland. these numbers are getting extreme. >> it is interesting how we moved in bonds, the differences between europe and the u.s. also the correlations to other markets. gold struggling this week. all in all, it is getting ready

for the weekend. what is it me for the equity markets? by the way, the new york rangers won, scarlet fu is beyond happy. >> glad to hear it. that is what you need going into the weekend, a happy scarlet fu. " upkeene and "surveillance shortly. let's look at how the european markets are trading. ministering is here with more. >> nothing seems to stop euro/dollar, even the fact that inflation is declining in italy it is under par in spain. we will get a little bit of american data later in the day. equity markets are striking ahead, seven straight weeks of gain. paris is under pressure -- i was going to say because of the socgen story. bnp paribas and socgen driving the market. iron ore, longest losing streak of prices in iron ore in the history of recording. goldman sachs has a big concern.

volume are about 28% below par or below normal. in the u.s., we will finish off. tom keene is there, this will be the data suite. personal income, personal spending. what is going to be the purchasing managers out of chicago and the university of michigan? these are sentiment indicators, survey data that are perhaps all that important. looking through the first quarter gdp growth, slightly disappointing. equity futures lower for those futures lower,y s&p at 1915. money coming out of the dollar and going into yen, was that tell you about the proclivity for risk as we go into the weekend? it is friday. what you are seeing is money going into yarn and coming out of the dollar. a progressive trade over the past five days. the five day chart doesn't and injustice. percentage, down.

.ollar down, yen up how much more easing will come? what should the bank of japan actually do? those are the questions. bigger questions that i can answer. guy johnson? >> thank you very much indeed. what is coming up? what is next for india? be prime ministers sets his economic goals. to do listd modi's with the former ceo of e-books. ♪

>> good morning, welcome back. you are watching "the pulse." live from bloomberg's european headquarters in london. the election is over. it was massive and now we have to get on with the problem of fixing the indian economy. the extraordinary task of turning around this economy will be difficult. in his second cabinet meeting, the new leader, mr. modi laid out 10 top policies for his first 100 days. 's reporter joins us from mumbai. what is at the top the agenda? >> it has to be growth. growth will be the top priority for prime minister modi. forgside the fight

inflation, we heard the bang governor speaking in tokyo talking about how it is going to be a fight with the government alongside the government to try to get prices. has is a campaign the modi far. now's the time to walk the dog. priority, have a consistent policy. big-ticket investment has shied away from india in the last three years because of legal makingue to the crisis foreign investment go away from india. as we understand, officials trying to work out the best possible settlement between the two. that will set out a strong the investment community. industrial production has been extremely weak. prime minister modi is likely to focus a big part of the infrastructure plan to do with -- to ensure it is taken out.

a big burden of expectation on the government and a lot to do for the new government that comes in the power now. >> let's look back in history. gdp numbers later. they will lay bare the expense of the problem and how much needs to be done. >> a lot of work and the gdp numbers are going to reassure that. 4.7% for the january to march quarter, one of the weakest quarters we have seen for a while. quarters are sub 5% growth. bad news for the economy. it is going to be led by the industrial production, which has been extremely weak. year lownment at 822 because comfort investment has come to a standstill in india. the agricultural side of it is going to seat pickup going into the current year because of el niño. the monsoon outlook not looking bright, farms might take a hit.

that is a worry for the government. food inflation in india has been averaging at over 11% for the last two years and that is a big problem. >> thank you for the run through. joining us from bloomberg tv india. ,nother voice, dinesh dhamija former ceo and founder of ebookers, one of europe's most successful online travel agencies. he is now chairman of the copper each group. some early aggressive policies talked about. he has an awful lot of work to do. cosi formulation and execution are going to be -- the formulation is easy and the execution is difficult. can he deliver? >> she mentioned a single window policy of people coming in, this is great. the past -- there are two or three things that have happened in the past. in the public-private partnerships, 15 billion pounds .s owed

the government is not paying tom and taking the court. 15 billion is a lot. they did a land acquisition bill . to put up an industry, you need land. this bill delays the acquisition of that by three years to five years. it increases the cost by 46 times. what is the point? and that is why investment is so low. industrial production, which she mentioned, is only 1.1%. that is a growth in the last two years. that is bringing down everything else. >> ftdi? >> fdi, they are talking about fdi and defense to be 100%. >> other industries are not going to get the same treatment. >> they're going through the paces of looking at the other industries. ai and multibrand retail is

problem. i think because a lot of shopkeepers voted for modi. i think we will get through. the coal train technology. 45% of food in india is wasted because there >> is no coal train. >> that is a logical way of investing in that technology. if you are a european business looking at this, there is a seismic shift in the opportunity india presents as a business environment. how should euro be looking at this? how should extra businesses, if you are a ceo watching this right now and you are thinking of having a footprint in india, what would be the advice and the message that should be communicated? >> india is open for business. there's going to be able market for the next five years. ?

-- market orstock everything? >> technology, the stock markets going to go up, is going to be fantastic. it will take a couple years. >> this is a supertanker, you cannot turn it on a dime. >> 8 quarters, i think. >> the market will discount in advance of that. >> right. >> where are the biggest opportunities? you talk about defense. you have a business head on you, you are looking at a range of opportunities here. where the biggest gaps? and see for wait three months, give them 100 days .et them come out with policies the first session of parliament is on june 4 and last eight days. they can put out the store at that time and we will see what happens. >> how significant is the pakistani connection? >> there are 200 million people

in pakistan. that is 200 million of a new market. it is a porous border at the moment. the police,money, the army and everyone else. if this opens up, it will be amazing. >> give me a sense of the scale? goods aref indian going via dubai to pakistan. transport costs, there are marked up. i think it is great. >> a big regional market opening up. >> huge. and the chinese have spoken to mr. modi yesterday or the day before, they want to bolster up the tires on trade a lot. cameron, were david would you be going out there again this side of the election? i would go out soon, weight 100 days and then go out. you need to fix the meetings down.

very nice to see you. dinesh dhamija, chairman of copper beech. as we head into break, world cup tickets are being sold for as little as $15. nearly 90% below face value. fans in brazil snub games outside the southern cities. the world cup kicks off in two weeks. coming up, we look ahead to the gdp data that will be out a little later today. we will take a break and be back shortly. ♪

>> good morning and welcome back. you're watching "the pulse," live on bloomberg television. streaming on your tablet and bloomberg.com. let's talk about the currency markets. we saw what some would say disappointing data out of the swedish economy. the norwegian krone has risen. youou dig into the numbers, can find a slightly more optimistic story. break out the numbers, imports are rising. that is a good sign. the consumer spending is roaring . disappointing, a number but if you dig and it is a story of a swedish economy getting back on track.

what other stores are we focusing on for the rest of the day? we are joined by manus cranny, caroline hyde, and hans nichols. it will be interesting to see american reaction will be to bnp paribas. a massive story and a massive fine. >> be afraid, the regulators are coming and they want your money. they went 3.3 billion euros of a -- benjamin lasky has one thing on his mind. if you do not cooperate with regulators in the u.s. in regards to breach of sanctions. regulators will come after you and slap you. to bring and hans nichols. we were debating earlier on. in any other industry, you have been talking about siemens. if you're hit with a fine mike this and you had to raise capital again and again and

again, the job as ceo would not be secure. by the banks bigger than their boards or is that not the case. >> you have a jurisdictional issue. who is their master? do they need to answer to the department of justice or their shareholders or regulators in paris, frankfurt, whatever it will be. i have not looked at their to see a $10 billion is the final number. they will have to raise the number. are these new rules, is going after banks and letting everyone know they're too big to fail, is that going to make them fail? and then you have the systemic problem because you had non-regulators. the doj is not a regular, their prosecutors.

they are not concerned with the overall health of the banking industry but with a perceived to be the rule of law. know what u.s. official regulators would say. asy might be just as upset bnp paribas. >> ukraine, let's talk about the rule of law. a day on the ground yesterday. the helicopter has been down, lots of accusations flying. what can we expect today? what european officials in berlin hope is you will have a deal on what you're going to pay for the price of gas. both the gas that has been delivered, $5 billion in outstanding payment. and a future price. hot language from ukraine saying it is hard to deal with someone who is an enemy. the russians can always cut off the gas. europeans are saying you need to have a deal and a down payment of $2 billion, then you can

renegotiate price and have it be a market price and high political price. who is going to decide that? is unclear. >> let's go to caroline, data on deck. >> from the brics. b an i were engines of growth, not so much now. 1:00 p.m.,ng out at hoping they get some kind of footfall from the football tournament. 2% quarter on quarter, that is the growth we are getting in europe. india, same time, china's 5%, 4.7% year on year growth. >> phenomenal. phenomenally weak. that is it for "the pulse." keep it right here on bloomberg television. "surveillance" is next live from new york with tom keene. pimco will berom

on the show. the latest data out of the u.s. is not rosy, either. how will that affect the fed's trajectory? the pimco take. follow me on twitter, @guyjohnsontv. ♪

plunge.aribas shares steve ballmer go search of

long-term value as he crushes the competition, $2 billion large for the los angeles clippers. mr. undergraduate, your table manners are a disgrace. good morning, everyone, this is what bloomberg surveillance." it is friday, may 30. john amy as always is scarlet fu and adam johnson -- joining me as always is scarlet fu and adam johnson. every interview begins with the new york rangers. >> that's all you need to know. they won. >onto the stanley cup. -- kings. get the u.k. --d news in the consumer confidence rising to a 16 month high on improving economy. home prices are