>> and insurgency in iraq. oil continues to climb in price. >> medtronic buys covidien. >> logging on to london, it is tech week. we bring you an exclusive conversation between oris johnson and michael bloomberg. good morning. welcome. you are watching "the pulse."

write to our top story, we begin with the escalating violence in iraq. the military has stepped up attacks on the insurgents who captured large chunks of territory north of baghdad. those militants have posted graphic images online that appeared to show them executing iraqi soldiers. the country is on the brink of civil war. >> the iraqi government is trying to fight back, reporting they have killed up to 300 militants, mostly using air power. the insurgents still control the second biggest city in the country with a population of 2 million people. they still control an important city from a strategic perspective. the former hometown of the late saddam hussein.

the insurgents control part of the pipeline that goes from the oil fields in the north up to the mediterranean port in turkey. an interesting picture. no real change to the physical supply of iraqi oil since the end of last week. old remains -- oil remains volatile. when you talk about the oil price in the last six or seven months would wti over 107 and brent over $113. >> thank you. we have been seeing these disturbing images purporting to show a massacre on tv. we have been hearing terrifying things about this group, isis. what is the threat that this could become a pan regional

conflict? >> this could become a very sectarian affair. at the moment, we have an al ,aeda offshoot which is sunni but does not represent all sunnis. fighting what is mostly a shia .ed government in iraq the danger of these photos, this could enrage shiites around the world to fight against sunnis and this could become a larger conflict. these pictures were posted by a group that says they killed 17 iraqi soldiers, most of them , after they took an iraqi military base. these men presumably surrendered. that is the most disturbing image right there, before they .ere allegedly executed we can not verify the pictures

ourselves, but we know the group that took the pictures has a history of doctoring their photos and exaggerating the brutality their group demonstrates. an iraqi military official has said that it does look like those are their troops and this took place last week after this forces gave up the base. they are very disturbing images. they look pretty conclusive. the one thing we do not know, if this allegation that they massacred 1700 iraqi troops drew? wouldis true, it represent the single biggest massacre since the conflict in iraq began in 2003. you.an chilcote, thank we will talk more about the wider impact of the violence. we will ask the former bank of england policymaker what higher oil prices will mean for the

world economy. m&ance again, it it is monday. medtronic agreed to by covidien in a deal worth 43 billion dollars. is it enough to take the number one player johnson & johnson? ofh, is this another case tax and version or is there a strategic rationale? >> it does not seem like there are so many synergies between the two companies, so yes, it is more of a case of them looking at not having to pay taxes on the 14 billion they hold outside the u.s. this is something that the ceo has advocated that he has spoken to congress about this and about them changing the laws. >> a lot of people on capitol the getting hot under

collar about this one. >> we are not sure whether it will be all cash or shares. given the size of the deal, it will probably be a mixture of the two. covidien headquarters in dublin. 21% would be paying the u.k. corporate tax rate. >> what is at stake for covidien? talking -- there are lesser synergies, so i do not think we will see a repeat of pfizer-astrazeneca. done,ht be easier to get but for medtronic, this is something they have denied in the past, we will not do a deal just for tax purposes. premium ise, a 30% that along the lines of what we

have seen in other deals? >> that does not seem to be unusual so far. there is huge demand. we know that medical device makers are banding together. >> thank you so much. details asmay unveil early as today. the board was scheduled to meet last night to approve the plan. caroline, what do we know so far and what will we hear later? >> good morning. it is a rather complex deal. let me explain the main points. on one side you would have siemens, who would get alstom's gas turbines. on the other side, you would have the japanese companies mitsubishi and hitachi combining

with alstom. as part of this process, mitsubishi could take 10% stake in alstom and the french government could also take a stake in alstom. in the second phase, siemens and alstom could combine their business. in someld result antitrust issues, but the question is whether this would make sense for alstom. alstom says the siemens deal at the moment is too complex and they were not planning to separate the gas and turbine business. >> the ceo of general electric has done so much, he personally went to the french national assembly to make the case for the merger. $17 billion seems to be enough money. will they have to sweeten the deal?

>> that is right, olivia. to the national assembly in front of french lawmakers. he has already done a lot of lobbying. analysts,l -- many their common opinion is that ge could improve its offer on alstom following the siemens bid. the french finance minister said yesterday, we are still waiting for improvements on both sides. the main concern of the french is jobs.t ge ceo has promised that he would create 1000 french jobs. will he do more than that? we will know in the next few days. townve ge executives in this weekend. plantis hollande has

another alstom meeting. >> thank you very much. but the resurgence of the u.k. economy has taken many economists by surprise, including mark carney. london's thriving tech hub has helped to propel this turnaround . the u.k. is taking on silicon valley. some surprising findings in this report. i could not believe the job creation. all of the growth we are seeing in london does seem to be propelled by technology. 30%, almost a third of the new jobs have come purely from technology. we are looking at the southeast.

almost three quarters of a million people. the pace of growth is about 11%. outstripping the pace of growth in california, the likes of silicon valley and san francisco. this is why we are getting google blushing a billion pounds on an office. it to techtracted city is that we are close to universities, and you have the pool of talent, you have media companies, government that want to use the data, the analytics. the compliment tree services we have in london. -- we'llis is helping be hearing the interview between boards johnson and -- boards johnson and mike bloomberg.

interview, mike bloomberg talks about the fact that we are too easily fall into the trap of thinking about tech software, hardware. what we should not do is that because tech is biotech, all kinds of different things. we are talking about google and facebook, but we should be thinking about the big biotech companies. that is why london is doing so well. >> exactly. you have cambridge thriving. all of these other pockets of growth. technology is in hospitality, retail, within every single industry group. everything.ting the areas we are showing some growth is here, big data, 54,000

people employed in big data. financial technology, this is where london dominates. really shaking of foreign exchange. all getting online and using cloud computing to provide if these sorts of services. it is a fascinating thing to analyze. how do we start getting venture capital firms? london,seed funding in how do we get the venture capital setting up offices in london? how do we get better broadband? their pockets where it is very slow. how can london have mobile dead spots? >> we will carry on talking about this.

she is the partner of passion capital. we'll be getting her take on what it takes to get london to be a world tech hub. ♪

>> good morning. you are watching "the pulse."

it is a massive week for tech right here in london. today marks the start of london's first-ever technology week. a report shows the capital is a booming digital city. good morning. bloomberg was on the set a few minutes ago and he was talking about london is a place that people want to go to. how do we get more people in? how did he get the talent? -- how do we get the talent? ofi think the activities this week are an example of what you can do to attract more talent and people. highlight and showcase all of the great things that are happening, all of the great companies being built, all of the finance and access to investment that you can get.

is mike was speaking to bor johnson. what are your thoughts? what are the key reforms need to be put in place? asked the government has done a lot -- >> the government has done a lot in encouraging entrepreneurship, government matching fund. we have government investment in our fund. the government has done a lot. tax relief for angel investments as well. we need the organic community and ecosystem to start producing . >> how far we from that? >> in terms of number of companies, compare it to the last two years, we have multiplied 3, 4, 5 times. >> that is over a much higher base as well.

>> we are trending in the right direction. you could not ask for too much more pace because you start to lose the quality. >> you mentioned government funding for some of the businesses you are working with. there are some people out there that say governments are killing .he scene with silence multifamilyre not -- the two are not mutually exclusive. will be ae time, that good example to other venture capitalists outside the u.k. in terms of seeing what is being supported and what things can grow from here. we are seeing top-tier invest in the u.k. -- most the focus

is on london. >> i will try to know this down. -- nail this down. why does tech gets so much of the spotlight? are we missing a trick? are we not talking about biotech enough? you do not hear about them, but they are doing well. >> i think you are right that we when we think about it from an investment point of view, we think of anything the internet or digital technology can facilitate or make more efficient. if there is a great founding team and entrepreneur who wants to do something with them one of those fields with enabling technology, that is what we are excited about.

that is what i think about when . think of tech in london it could be in financial services, fashion. five years from now, we will not be talking abouttech. >> what about the ipo process? you do have the successful startups. what are they going to take to get the successful startups to go public in europe? n> it is a chicken and a egg. need more analysts covering tech here in london and more of that is happening in new york that it is in london. >> one thing i read about, one

response to their being so much public money is that people sell too early and they do not wait the way a company in california might hold out. >> i do not think the two are correlated. i think everyone has their own personal reasons for when they decide the journey is over for them. is in california, there are lots of small acquisitions. the proportion of your -- massive billion-dollar exit compared to the smaller is the same. >> a fun filled week and we're looking forward to covering it. >> i wish we could have you on longer. thank you very much.

>> we will keep talking tech and bring you an exclusive conversation between the london mayor and mike bloomberg. you do not want to miss this. ♪

>> welcome back. bitty markets taking little of an assessment on political risk in iraq. energy prices are rising. this is one of the

most underperforming equity markets in europe. valuations not seen since 2003. overall, the proclivity for risk is dropping. in terms of the money. we saw a bigger move in dollar-yen this morning. oil, brent at $112. the target is $116. in the syrian crisis, $126. that is the state of play in some of the risk assets. trade of the day. in?of the good news priced we're at the highest level since

2009. getting and above that level will be a tough one. that is it on your market check. stay with us. ♪ .

>> good morning. you are watching "the pulse." we are in london. i am guy johnson. >> i am olivia sterns. headlines. the sunni extremist group taking the territory is posting graphic photos online. they appear to show executing soldiers. they have not been independently confirmed. earlier, we spoke to the ceo of the oldest oil and gas company in the middle east. >> is not just the immediate

production is going to be affected. much of the main production comes from the south and not directly impacted. northern areas have been under control. the fact that iraq has been seen as a major potential going forward with requirements for world markets. square, the ukrainian ing the victims of a military plane shot down by pro-russian separatists. 49 people have been killed. >> staying with the ukraine. they want to get gas from what they have paid for upfront. the russian energy company i announced it after talks overnight that ended without a deal. the companyowes nearly $4 billion. >> time for a bloomberg

exclusive of. the pound strengthened for the first time since august 2009. the bank of england governor indicated the u.k. economy is returning to normal. let's talk to a former u.k. policymaker, adam posen. is currently the president often institute for international economics and is giving some his time. of the debateake taking place in the u.k. at the moment? the governor speech given missing surf change the game. interpreting?ver cracks i think the marks are overreacting. it is clear that governor carney is a pro. he knows what he is doing for the most part. that this could me something about whether committee is going came as a

surprise to me. you have to take it seriously. my understanding is looking at the charts. i think it's a vast overreaction. and the various things they can use on housing. you are about to get at least two members of the committee. we do not know how they will vote. would calm down a little. >> you mentioned the macro. talk about those. how effective they will be. >> a fair question. nobody knows. we know if you look at hong kong or china or australia, once you going, young boom have to use a multiplicity of schools. there are reports from bloomberg that some people think they heat is tapering off her right now in london. heat is of the london coming from cash buyers.

>> exactly. tools mayat macro not matter and there is real demand. and so, i think given where the bank of england is, the government is still in place. the housing market is overheating than the economy as a whole, they have to try macro tool's. ok. let's circle back. the governor is a pro. he knows what he is doing. what was he doing? >> i admit, i was quite surprised by his statement. my assumption is either they have a masterly upgraded their forecast based on new internal discussion which we will not know yet. minutes are due out shortly. or even though he is a pro, he did not quite calibrated and

which happens to all great central bankers. to say, ok, do not get too carried away on the other side. we will raise rates as some part. highly toward the second. he got in the calibration wrong and did not fully priced in how big it would be. >> england -- >> i am. i am stunned he could make -- it was such a strongly worded statement. >> i know. i know. that is why people are saying, this committee has already moved. somebody on the committee has voted for a rate hike. >> i the the minutes may be. ande were plenty of times in the past including under carney and king where the minutes were under 172 and that was in equilibrium for some time. >> the governor was on the wrong

side. kirksey was on the losing side. carney does not want to give the losing side. -- >> he was on the losing side. people not want to contradict carney. they are not doing the macro. >> the yeah, yeah. , i find ai view it hard to believe that the committees want to like that. carney, another strong comment out of a central banker. mario draghi. his message, we are not finished yet. what should be next? got to speak on the program. i was calling for a long with us on the other ecb people who were there, ramping up the purchases. the bank of england and ecb put up a practical -- about two weeks ago. there is no reason that cannot start a on that in the next couple of months. the plumbing, the supply is in

place and the plumbing is largely in place. draghi mentioned about wanting to make a difference between simple derivatives and complex. it is constructed anyway. a lot of the plumbing is in place but they have to draw up supply. that would not drum it up until they turn it on. that is the next thing. all this back-and-forth about if they would do qe. i think the answer is, they are not going to. when some people listen to this discussion, they wonder why we are moving back to the areas that are too complex and too opec. nobody understands. , that willrnment distort the market. why would we want to move back? >> i think there are two reasons. first, security does not have to be complex. there was a long. in the u.s. --

in theynote -- period u.s. where fannie and freddie were doing good. you can see what was in these. a few restricted, most economist would tell you, securitization helps credit and diffuse risk and a good way. you have to be willing to say, the complicated slice and dice, triple square, whatever is a problem. olivia, there is a role for central banks to great markets. art of what happened is in emerging markets and bank of england is by their wilderness -- a willingness, the credit markets. that is the case now. it has not come back. it probably should some. >> all right. thank you to adam posen.

to take a break. an exclusive conversation between boris johnson and michael bloomberg. that is up next. ♪

>> good morning. welcome back.

study commissioned by bloomberg shows the uk's south east region has more tech jobs than california. ans was the topic of exclusive conversation when michael bloomberg and mayor of london, boris johnson johnson sat down with the bloomberg businessweek editor. so, we are here at the bloomberg technology summit. why are cities so focus on be doingy? wiggle manufacturing or higher technology. why technology? >> the owner of the tv chain. thate you crave the jobs people can start businesses in and get to work when they are young. we all have the problem of creating jobs. it does not require a big space which big cities do not have. if you want heavy steel mill, you do not do it in the city.

if you want people to work together, you go to london or new york. those are the two major cities. these are the two that are predominant at the moment. >> exactly right. the other day, you may have a nose angela merkel said something about a broadband connections. it was very striking. very -- you know, swath. she does not go out of a way to bash people. i wonder why she said it best. -- why she said this. germany has reason to be competitive. you look at the industries in which london and a u.k. are leading in the tech sector. , actually we are coming back with manufacturing.

it will be the second biggest manufacturing country in europe. you see that whole area suddenly being able to concern. this is something that london, the u.k. is a leading and europe. we have the biggest tech sector here in europe. >> not only does london me the tackle but where tech wants to go. the diversity of the two cities. -- not only does london in need -- technology but where technology wants to go. they live here and in new york more so than any other cities. >> you raise the issue of national concern of technology. what specifically does it make for such a good issue for local government to attack? theocal government provides

conditions to attract. to live here, the crime rate is very low. not any comparisons with new york. >> we are doing ok. >> are you moved out and the crime rate went down. -- you moved on the crime rate went down. [laughter] so, i -- there is a mass transportation. lots of things you can do in the city. and the competition. vine is what people, four. for -- comeeople, for. they are cultural

centers is important. when you go to places that are quiet with a less, you'd be they will be more. that is not how -- you with if they would be more. -- you wouldn't inc. they would -- you would think they would be more. that is not how it works. .other industries jus --fother industries. just had is not enough. tech is not enough. there are other cities. but not to the extent. big chunks of the world. they will were read about being -- they were worried.

they have geographical areas. small areas that are growing. they will be well positioned just like new york and just like a. big, diverse cities with lots of going on. >> that is absolutely right. , they are like nuclear reactors. massive talent. one thing that we want to see in emergence the sudden of big tex. -- big tech. happening in america. it is not yet happened in the u.k. >> new york city has been a big tech center for a long time. josh talks about taking things tech we haveand

had for a long time is biotech. what has happened is the research people wanted to move into new jersey where the big factories are. now they are moving back into the city to be where the hospitals and the research is being done. that's one the big strengths. if you have big hospitals, your biotech. if you have biotech, you have other technology. >> biotech in london, the biggest sector besides boston. i were read that there it -- i that ifad that -- worry they made break through, the horizon. will --t [indiscernible] reserve. natural

>> what do you do about that? >> a more positive attitude. it is one factor. to, it will come. the venture capital people need to do the risk-taking. >> i get to explain this would history. new york's history is 250 years a decade on how you measure it. london is 2000-3000 years. -- depending on how you measure it. it is not that much different. -- is builtis not on philanthropy and business and london is starting to go that way. you see philip our -- you see philanthropic people. with is nothing wrong

having great tradition. one of the great strengths of the u.k.. that is where it comes from. we are trying to get it. they are sure to get what we have. it's a natural evolution. the rate of change as such they u.k. will catch up quickly with the new ethic. >> i am very encouraged by what mike said. leeurally and philanthropic -- philanthropic lee -- philanthropically, the place where people want to go. develop an idea. amassing wealth. purposes.pic that is right around the corner for us. in happening. >> take a look at london 40

years ago, we do not have a big immigrant community and today you do. that's a great strengths strength. that came later than ours did. >> demographically, we have even more languages spoken. >> [indiscernible] >> the original. i do remember. [laughter] we are grateful. speaker gives a latin speech every year in a latin. i have no idea what he said. it left me. >> but absolutely right what you said. it is more of the same.

>> what you do about the problem of space? to create an want ecosystem, especially in america, people in the garage -- in a your serenity's garage. -- a year cities, where garage can be expensive. huge shortage area east towarde olympic park. up.s starting to grow expensive that nobody can afford to live there. lottruth of the matter is a a people can afford to live here. that is why they are coming in. they want to be here and they award hard. they say i want to more than the

other guy and that is what capitalism is all about. have too fewo seats. you have to do something about the problem. i will show you cities where it is reversed. london is the most geographically extended city in europe. it is a massive was that it has loads. massive.a -- it has loads. that is very interesting. completelyaid, right. dependstry that does not on having huge amounts of land. seems fashionable to be an old building without services. yet the tape a creaky elevators. they love it.

>> absolutely. last question. mike, do you have a place in london? we support is solely with our building. >> just be careful about that. >> you are a native new yorker. i'm going to give each of you the opportunity to steal one day from your perspective city and take it back. >> he has supported us. concept of the mayor's fund for london, teen london. -- team london. >> we gave you the underground tube system and elevator lifts. steal bankers and

mash. guy.a hamburger and fries i like the diversity. 10:00 in the morning and 2:00 in the afternoon. i do not limit myself. >> and gentlemen, thank you very much. bicycle ridersde yesterday. >> [indiscernible] obesity. the most has become obese country in the world. they are trying to do something. that cannot afford it. [laughter] >> thank you very much. >> a wide ranging conversation. that was mike bloomberg.

the mayor of london, boris johnson speaking with blue further news with -- with bloomberg news was editor. and mash. i cannot believe that is one thing mike would want to bring over. what i found interesting was the comment about the cultural differences between new york and london. of london, the mayor saying he hopes london whale but, more like the united states. -- saying he hoped london would more like the united states. there is still a cultural resistance to accumulating. that needs to change. >> a tough about it. >> you are against it? >> a different way of looking at things. >> talking obesity.

for those listed on bloomberg radio. that is next. we'll be talking about your at iraq.- a rock -- a big subject ♪

>> and insurgency in iraq. this is oil prices continued to climb. >> megamerger monday. top of the two medical device makers join forces. >> logging on to london as tackle week kicks off. exclusive conversation between boris johnson and michael bloomberg. >> just technology is not enough and tech people see that. of fashion and education. and medicine. you have to have the whole picture to be successful as london does and so doene