>> ruling against russia, the company -- the country could forced -- could be forced to pay $50 million to the owners of yu kos oil. ryanair shares rally as it raises profit goals. international pressure mounts on israel. the un security council demands the end of the offensive in gaza. we will be live in tel aviv. good morning. you are watching " "the pulse."

what do we have coming up for you? italy with its first tour de france victory. we will break down the business of cycling. we sit down with the world's most expensive living artist, jeff koons. to find out what makes to make a modern-day masterpiece. payia could be forced to tens of billions of dollars to ex-owners of yukos. the former company was once russia's largest oil producer. the hague is expected to deliver a decision shortly. us with thee joins details. the company that effectively took control of the assets.

>> at the time, it was russia's largest oil producer. man.s russia's wealthiest he was arrested, accused of tax evasion and money laundering and the company was bankrupted. he went to jail. to -- whichent bought them in a series of transactions. shareholders has been suing russia in this arbitration court in the hague. they have been doing that since 2005 and we are supposed to get the judgment today. the expectation is that the court will rule in favor of those suing the russian

government. >> $50 billion. the ruling versus russia. >> this sets us up for the next phase. russia owns these -- we're the russian foreign minister saying russia will defend itself vigorously. they can appeal. afterthis goes is either the appeal, either russia pays the money or the former shareholders can try to seize russian state assets from the russian government. ,f you think about this clearly, it is rather

acrimonious. >> bp has a 20% stake. numberory reaches into a of major western oil companies. very difficult times. tomorrow.ts earnings we will hear from bob dudley. there will be some kind of conference call. look, this will have limited impact and they have a plan to further limit impact. if they've a 20% stake, they have exposure. it is getting very difficult for bp because the ceo has been

sanctioned by the united states. we get another blacklist out of europe today. transaction, that bp got 20%. bp got a pile of cash and also -- has been offered by exxon assets in the united states in the gulf of mexico. there ceo cannot even travel to the united states. me, he waitsold for the day he can make a decision without a room full of lawyers. one has to wonder if it is not any different with russia. this is something they will be looking at.

we have this judgment and we've been waiting for nine years. >> a lot to think about. ryan, t by very much indeed. -- thank you very much indeed. the united nations security council has called for an immediate and unconditional cease-fire in gaza. more than 1000 palestinians and 45 israelis have been killed. elliott gotkine joins us from tel aviv. have a cease-fire. he says we are not striking with aircraft or carrying out ground maneuvers beyond the search for tunnels, but he would not call it a cease-fire. we are not quite where they would like us to be. there was a rocket fired from

gaza which gathered north of the strip. israel retaliated to that particular bout of rocket fire. there've not been other siren sounding apart from that one incident. israel says it is not carrying out air strikes, but is staying there to continue with its search ad destruction of these tunnels. which hamas uses to try to get into israel. $.20 -- did the weekend conversation have an impact on president obama to go this way? i do not think anyone forgets the u.s. is israel's biggest ally and biggest backer.

the u.s. always as israel's back. israel's point is this. when it comes to this operation, the reason israel had to go in was because of these tunnels and the israeli army let journalists into one of these tunnels on friday. the iron dome has done a great job of knocking out these rockets. it has pushed hamas underground. israel was taken aback by the increased -- the intricacies. three dozen tunnels in more than 100 insurance shafts. -- entrance shafts. the main entrance was found

under a greenhouse is the southern tip of gaza. >> thank you very much. rallying.ares are the budget airline still remains cautious. the cfo howard miller spoke to bloomberg earlier this morning. >> last year, we had to proper warnings. this is the airline business and you cannot predict with certainty. you have to be cautious. let's bring in our aviation reporter. what are they concerned about? year,cond half of the they do not want people to get too excited about the second

half. they will be adding a lot of capacity in the winter. ryanair is notorious for keeping planes on the ground during winter. this is something that is weighing on prices. guidance,raised their so it is a little bit of a mixed picture. saying they will fly more people, but do not get too excited yet. >> it was described as a deep bench. >> their new see fo was in the office -- the new cfo was in the office this morning and he was keeping a nine on howard. -- and i on howard. they will have another press briefing later this morning.

the younger executive team will be there. the deputy announced he would be stepping down. michael consistently says he is there until he gets boring, but you have to wonder. >> is it boring at? those press conferences. >> the thing about over the last year, he has been rolling out this new initiative and it -- that has been a little bit hard for him. it is something that is necessary in the evolution of the airline. >> they were unveiling the new website and you got the sense that he was -- i do not do

customer service. easyjet is showing the way in many ways. >> to some extent, you are right. michael o'leary likes to make money. we will dive in and we will do it better and faster. we will have to see how customers react to what they are doing. that is something we will have to watch. >> thank you very much. . ruling against russia we will bring you more on that story. ♪

>> we're going to give free premium seats, fast-track to security where it's available. it will improve the business experience. we think it is very attractive and it will be cheaper than our competitors. >> the cfo of ryanair speaking

to us earlier. they have raised its profit goal, that is sending shares higher. joining us is douglas o'neill. >> a strong set of numbers. their yields were down by about four percent. they turned up the screws on the competition. lufthansa. ryanair has failed to the trouble. -- sailed through the trouble. unusual, they're pretty cautious when they give forward guidance. they are right to be cautious about this winter, though.

almost unprecedented. they would ground 70 planes overwinter this year. they're trying to appeal to the business travel market. they're trying to offer schedules that do not change much. >> how difficult will it be to make that culture change? simple matter of is your bank to break -- is your bag too big to get onto the airplane? there is this attitude. they were pennypinching. there was quite a strict attitude toward all of that. >> it takes time, i think. in the end, it is not all that

difficult to do in the end, but it is difficult to do quickly. ryanair devoted an entire slide to hr matters. that is a big change. we have never seen anything like that before from ryanair. this change is happening. -- with thenk amount of extra cash, it it will be limited. is a friendly ryanair compatible with the michael o'leary? >> he has been there since 1994. there are those that think maybe it is time for somebody else to take it forward. >> the challenge is to stick

around to double the market capitalization, as he has achieved several times in the past. who is doing it better? that really paid dividends. do we have a lead? how hard is it going to be to narrow the gap in certain key markets? advantage has the when it comes to business marketing in particular. >> more regular airports? >> exactly. gatwick in london. it is quite hard to get these slots. ryanair will not be able to

reproduce that quickly. in that sense, it is playing catch-up. in every other sense -- >> in terms of the share price -- >> ryanair has momentum. easyjet has had a fantastic ride. ryanair, the changes still sinking in. shares are relatively small. a huge amount of market share that can seek to capture. >> douglas o'neill joining us from charles stanley. the two companies are negotiating a potential deal.

the chief executive of glasgow -- glaxosmithkline. company has no such plans in the near term. suppliern automotive is said to be working with citigroup on an ipo later this month -- later this year. they could be the largest ipo in germany this year. a nine-month strategic review comes to a close. what does it reveal? find out. ♪

good morning, everybody. welcome back. we are live on bloomberg television, streaming on your tablet, your phone, it and bloomberg.com. raceop of the red bull air in poland.

spectators. check this out. blood, the fairmount of -- a fair amount of blood rushing to your feet and that kind of a situation. it really is exactly like the disney films laying -- playing. ferro, take me away. >> a busy week. the fed decision on wednesday. losses friday, a mixed session in europe right now. daxtaxes that flat -- the is dead flat. asian equities saying mrh.

.- meh it youu.s. and europe, will need some strong earnings. reportedmpanies that have beat. in europe, ryanair is the shining life -- the shining light. it is about the dollar. the dollar is just off of a month high. inflation, that comes friday. that would be six months above 200,000. you would have to go back to the 1990's to see numbers like that. >> thank you very much. break, $58.4e a

million, that is how much jeff koon's balloon dog sold last year. it makes him the most expensive living artist. we will hear from him when we come back. ♪

>> good morning. welcome back. you're watching "the pulse." these are the top headlines. the un security council has called for a cease-fire in gaza. than 1000 palestinians and 45 israelis have been killed. israel said they will continue to respond to missile launches. people have been killed in libya after an upsurge in fighting. there been significant battles

at the main airport. of alld the u.k. evacuated staff and issued travel of visor is. billion.st pay $50 rushes largest oil producer. let's get more on that story. >> this story goes way back into the past. whenl started in 2003 russia's richest man which was the largest oil company was jailed and charged and convicted andjailed for tax evasion various things that he says were politically trumped up charges. the company as a result of all

the back taxes that the government that it owed was bankrupted. its assets were sold. the largest oil company got many of those assets. we have a live feed of the press conference. this is what is happening. this is the reaction to the ruling. >> these are representatives of the minority shareholders. we are starting to pay. we have the financial value. market forry arbitrary awards. value ofption of the

the time it would take to enforce. the effort you would have to put forward. i say that ford, those who have approached us already. we are not in the mood of selling. we are in the move in forcing this award. market -- people have the financial value. the moral value is extremely important for all of us. >> that is fascinating. forhere is a market everything. those gentlemen will be delighted. they been pushing this case since 2005. this is a suit against the russian government. they have just ruled in their favor. they awarded them a $50 billion. russia as a state is supposed to now pay the former shareholders

$50 billion in compensation. they look for 100 billion and they got 50 billion. >> they have jumped quite significantly. that is quite interesting on the back of that. theoretically does not benefit from this. >> he was the largest when it wasin yukos bankrupted and its assets taken away. in 2005, any interest he had in yukos, he disavowed them. he passed them to his fellow show hurlers -- shareholders.

as to who would pay the money, this is an award against the russian state. russia itself would have to pay the money. he is the beneficiary. off from thes not market cap. this is far from over. >> bp has a 20% stake. >> we have heard the russian foreign minister even before this was announced. it was based on leaks that we were going to get this today. russia will defend itself vigorously. they do have the right to appeal. we will assume they're going to do that. as if there was not enough dirty laundry between russia and the russiaow you can have paying them the $50 billion

which seems unlikely or them a making moves to try to seize russian state assets as compensation for the $50 million that they are due. >> this is interesting. let's turn some other company news. the pharmaceutical unit is spinning off. the earnings were in line with estimates. let's get some details from caroline hyde. >> let's look at the numbers first and foremost. think to your self-cleaning and health. this is a company that brings you all of these products. sales fell about 6%. the strength of the british pound have something with that. they brought home some other foreign sales. they ship. they are a big player in america and trying to get into africa.

there is left to bang for your pound. half it is down 4%. these numbers are reassuring. since february. we are seeing the biggest jump. the health business is particularly strong. home wares are weaker. russia is doing quite well. the north african and turkey unit, grew 5%. >> it is interesting to see how quickly they are bringing money back. talk to me about the details of this pharma unit spinoff. how would it work? >> timing is in the next 12 months. since october they had been trying to work out to do what with the with the

pharmaceuticals. treatmente drug that for those who are addicted to opiates or things such as heroin. it helps wean you off. it is a big seller. it has got a lot of market share. the chief executive have been looking for what to do with this unit. they wanted to find a buyer. it doesn't look like they found that for the right rice point. they're going to go to the capital markets. we did see a cell share within the next 12 months. so says the statement. look out. look for where they are planning to expand in the future. look at other countries are looking to sell off units. be spinning off their consumer health care unit. so says the chief executive. it is an area that had more value on a standalone basis. the consumer health care unit is about 19% of their overall

revenue. there is no small part. they could potentially do it if they see it as having more value on a standalone basis. they might be looking to sell off its medical nutritional unit in the united states. caroline, thank you very much. to the world of art. the world's most expensive living artist. he is known for his blue dog sculptures. about theo him business behind his artwork. my name is jeff koons. -- an artist. i live and work in new york. artworkmy better known

is michael jackson. my balloon dogs. i try to be open to everything. i don't make any judgments about anything. to findventually start meaning in certain objects and certain images. will realize that i want to make a gesture with that. be twoole process could years of just following my interests. once i decide to make things, then another two years in the protection and realization of the object. sometimes i have to work with other people. i have a studio and i have about 130 people. i have a 3-d department. i have a 2-d area. i have painting and sculpture. i am the captain of the ship. i am responsible for everything. artwork, youd have to take in the cost of

manufacturing something. that can be quite high. in the past i have lost money on some of my works. i lost money dogs, because i thought the production will be less than an end up to be. polarity youmore can have in your work the more i enjoy the smooth surface. it defines a location. when you have a gazing ball that itreflecting in 360 degrees, affirms that your participation is necessary. when you move than the reflection changes. to haveeople to be able a greater sense of their own potential. >> the world's most expensive living artist. they celebrate their

tour de france victory. we will talk about the business of biking. with a former nike executive. we will see you in a moment.

>> there it is. the man of the moment. the firstibali is

italian to win the tour de france. his victory ended a two-year run for team sky. those recent victories for the u.k. have increased the business of our next guest. -- join us is the chief marketing officer for rafer racing. it definitely hurts. it is better when we win. the fans are behind him even though they didn't. >> that is the point i am trying to make. that momentum must continue. it is not going to happen every year. the aggregate story gets bigger and bigger. >> it continues to boom in the u.k.. i think living cavendish was a big hit for rish fans.

-- british fans. more italy going to see able cycling this year? >> i do think britain will see less people cycling. italy will see more. there were so many italian flags. there will be great growth. for the first time in 30 years, two frenchmen were on the podium. and that is a big story. industry that has been blighted by all kinds of scandals. every year we don't get those kinds of scandals. it how big of a difference does this make the reputation? >> it is one day at a time. it always helps. a lot of this comes from my part of the world with lance armstrong. are verye team sky outspoken about how these guys are doing it differently.

i think you will see in the cycling press there are people looking that they will maybe uncover something. sky are changing that and hoping to eradicate that over the next decade. >> the problem is it's hard to get reputations back. any kind of scandal would be devastating. >> i have not seen the numbers yet. if you look at it, i have heard nothing about anything. >> i have heard very little this year. >> one of the things that we have heard through team sky is they found themselves much more beloved by the french crowds. in the last couple of years they were taking it on the front with regards to doping and winning and all of that. this year they won the crowd at much bigger way just by performing the way they did in

the face of adversity. if they continued to push and make the race. was a big thing for the team and the sport. that any fanhing of the sport love to see. >> what happens next? does the tv license get bigger? the are the dynamics that big picture has it work? we talk about premier league football and august 4 and how much money football tv rights bring in. how is it? working >> they're trying to figure out right now and have been for a while how this is going to work. there are the haves and have-nots. see is they're working toward that to have some kind of revenue share. >> how would it work?

that provide an opportunity? >> one of the things we have seen in california is to her trekkers eared people are buying services online to have greater access to the sport than what you see on television. if you want to watch seven hours of coverage, you can see growth. we had on by cameras. this is fantastic. you could actually watch what was happening. it is amazing. >> you want that kind of stuff. you want the conversation between the writers and the guys that are calling it. >> to the layman looks like a boring sport. a number of friends of mine make a joke about it being boring.

it is good humor. what people do not know is that everything that goes inside. there are some guys who are notorious for being hell areas. you see the dynamics happening within the race. there is a race within a race. and goes back to the team cars and all that. it has been long time since we've seen some of that great footage come to life. >> we will leave it there. thank you for stopping by. we are going to take a break and be back in a couple of minutes.

>> the u.k. government has announced its funding for renewables. it has investors worried. the government is not going to change its mind. it is limiting the subsidies available for renewables. is simple. the industry is got to respond. >> it is going to focus on cost reduction. that is important to consumers. it has to focus on how the money will be spent in the best possible way. i think the first point is we

are going to do solar and wind over the next four or five years. intenseing to be an competition. it is not great when you .onsider that 16 gigawatts moneyis a small amount of for projects. solar for away is being competitive without subsidies versus fossil fuels? >> two or three years and that depends on the certainty of trying to trade with the competition between developers around the world. it depends and when the costs come down. two or three years is probably a reasonable timeframe. the question is will the government allow large-scale renewables in that sort of way.

>> in terms of looking at it from a subsidy point of view that is a portion of this industry that is getting very close to parity. what i am hearing is it does not need the subsidies we are talking about. >> in the short-term it still needs that kickstart. it needs something that is going to get industrialized scale so we can get those cost reductions coming through to the u.k.. >> it is offshore wind is going to feel the pain. that does not go very far at all. we have 20 or 30 projects that are fighting over that. if we're going to find -- fund one of those, that is huge. >> do these things get shelled? >> is well-intentioned. what they have ended up doing is giving a little bit of money to

everybody but not giving enough to anybody to make a difference. i think that pick and mix approach is that -- great for emerging technology but not for established technologies that can make a difference. >> one final question. how many of those projects survive? >> we think for the offshore sites only the best wills are five. that means five or six projects out of 20 or 30. they will hope for cost reductions. without that support they might not be able to achieve that. >> thank you very much for chemical see us. it we're going to take a break. for our viewers we have a second hour of "the pulse" coming up. we are going to get his take on the ruling this morning. international pressure is

mounting on israel. the bank has a direct stake in the story. ♪

>> yukos oil has won a $50 billion lawsuit against russia. we are live with shareholders this hour. are raised. you hear from the cfo. mounts onnal pressure israel. good morning to all of you. a warm welcome to all of those waking up in the united states.

we are going to be bringing you a number of stories. we are live from europe. there is a lot happening on our side of the pond. we are going to be talking about the most expensive artist on earth. we are going to hear from jeff koons about his creative ross is in the business behind balloon and art. oil has won a lawsuit against russia. the ruling has significant consequences for russia. >> the russian government can appeal. government owns the x owners $50 billion. they can pay that out or they can try to collected by seizing state assets. they were the beneficiaries of the bankruptcy. is possible they could go

after them. they see no threats to any of their assets. >> we shall see. do people think this $50 billion is going to be paid? >> it is highly unlikely that the russian government will voluntarily pay this money. they have the legal route of appealing first and then we would get a judgment based on the appeal. i think what is more likely is this becomes part of the larger acrimonious conversation between the west and russia whereby you have efforts i the former owners of yukos to freeze state assets outside of russia. as opposed to the russian government handing over some kind of compensation. that seems almost unfathomable. they have been built on the backs of what took place in

2003. changing that -- toyukos was a clear message the oligarchs. stay out of politics. now thatto wonder there is blowback if that message is diluted in some shape or form. he cannot confiscate assets. there is a consequence to those actions. >> to be fair, they would say that what happened to him was not a mess is to stay out of politics. say that it is an example of the russian state saying to business you have to play fair and clean. what he was doing was tax evasion. -- there is aat calculus in russia itself.

the point was made and made very forcefully and understood by everybody. if you politically challenge the president then what happened to him could happen to you. that is not lost on anyone in russia. >> the court is saying that that action was illegal. does that limit the options in the future? >> what people who watch russia will tell you it is a one-off. if you look at the last 10 years there have been very little of the same dimension that is happened in the business space. >> the oligarchs have been quiet . i have been told we need to stop talking about it. the security council has called for a cease-fire in gaza. more than 1000 palestinians and 45 israelis have been killed. but get the latest. >> we have got a lull.

not a cease-fire, but a lull. thee are the words used by israeli defense minister. they are searching for tunnels. he would not call the cease-fire. fired run -- one rocket and did not cause any damage or injury in israel. retaliated against that. is tos the only reason carry on with the search a discussion of these tunnels which hamas has built-in uses to get inside of israel. the army took journalists into one of those tunnels on friday. they allow you to stand up straight while carrying a weapon. they are quite tall. they are increased -- enforced with hungry. existed, these tunnels they were surprised by the web

of tunnels they discovered. they have discovered three dozen so far. they would have cost $30 million and 600 thousand tons of cement and other materials. imposedwhy it has restrictions on imports of certain materials into gaza. that is the reason that they are remaining in their. the security council and barack obama and world leaders are calling for an unconditional cease-fire. elliott, thank you very much. he is joining us from tel aviv. shares are rallying today. the budget airline still remains cautious about what is a difficult economic environment. howard miller spoke to us earlier. >> we had to profit warnings and a difficult. you can't predict with

certainty. you must be cautious. >> let's bring in kerry london. abouttalk a little bit the next tier. the have learned some lessons. sustainablevery through the rest of the year? >> he is talking about how the need to be cautious. part of the reason that they are looking at second quarter teen trick here is their adding a ton of capacity. they are talking about competition being there and that also weighs on prices. this isextent, self-created. it will be interesting to see. they have new planes come in. they have 11 planes coming in. they will keep your planes on the ground. they traditionally keep them on the ground during the winter. it is very much a part of their on key add frequencies

routes and key business roots. they want to expand the network. >> if you are running air france, would you be nervous about what you heard this morning? >> that is a very good question. the legacy carriers still have a lot of work to do. we have seen both air france talk about they are revamping and trying to figure out how to get their low-cost divisions to work. competent -- confident that they have figured out what they do very well. they are willing to learn about what they are not as good at. they want to change accordingly. >> the new websites and a new attitude, they are going after the market that these legacy carriers have. they are following what easyjet has done. they are stepping into territory

that is quite significant to these locals. justu saw easyjet announced they are opening in amsterdam. this is significant. that is the hub for air france. they are looking at france. to expand.a place they want to be in italy. ryanair is doing the same thing. primary not in many airports. if they are conscious of that. they are looking to angle into those markets. >> the competition becomes fiercer. let's talk a little bit about staffing. the guy we just heard from his leaving. there are questions about events taking place with a are showcasing the depth of their

management team. there are questions about their leadership going forward. we had a guest on from charles stanley. there are rumors. cfo.ey will be losing a they have a new cfo in the office today. he is getting a lesson on how to do things. they will have the management team rollout and speak to the press later today. the thing about michael is he is invested in ryanair. he is a shareholder. you have to wonder if when the going get tough he gets more invested and when it is easy he gets even more excited. he never seems to step back. >> he is only 53. >> right now he sees this trajectory of change and moves that they are making to improve

customer service and changing as attitude, he sees that new challenge and he wants to be part of that. >> thank you very much. she is joining us on the aviation sector. we are going to go back to what is going on in russia. we will dig into the russian leaders mounting troubles here on "the pulse." ♪

>> will come back. let's show you what has been happening with the ruble. we have had these results coming out. you can see what has happened. we have the rate hike at the end of last week. it that caused -- took people by surprise. sanctions happening tomorrow. there is a lot going on. how much it costs to ensure their debts has jumped significantly as well. there's a market reaction to the stories that we are seeing. it is a multipronged story. we to cover all the angles. what's talk a little bit about all of this. we have the sanctions expected tomorrow. they are much tougher than we have seen before. the energyg to see sector and financial sector

targeted. it is going to have a meaningful impact. we will see. good morning to you. about the sanctions tomorrow. let's talk with the impact they're likely to have. it strikes me that even before we get the sanctions, that they ae a possibility means that technology company is going to be more cautious. if you are a bank you're going to be more cautious. the effect is already in the market. >> those sanctions that took on the individuals had a negative effect on the russian economy. we saw the market was losing value. nuven investment projects were losing. companies are very cautious.

for the first time tomorrow we are expecting something that is a big move forward to more restriction on a geo technology and entertain the two. we will see. evenssia does not change, after the crash we have seen that on the ground. the fight is going on. >> how painful will this be? the russian energy sector needs this technology. new oilneed to develop fields. it is quite expensive. russia does not have the technology on the ground available. the sanctions are working long term. it is not going to change vladimir putin's policy tomorrow. pressure will mount internally on some of the groups around him. are they ready to pay the price for this? aey are trying to destabilize

country. story play the yukos into this? >> whether it is international rules or international commercial rules by taking over the assets. the message is the international courts will be after you even after 10 years of misbehavior. >> this is change the behavior between the oligarchs and the kremlin? silentgarchs have been a after this crisis surrounding ukraine. their businesses are the ones being affected. >> most of them have been silent. some of been working undercover financing public and private partnerships of the annexation of crimea. we did see some of the oligarchs in russia financing mercenaries on the ground and taking over buildings in crimea. they moved to the east of

ukraine. they're working undercover. >> do you think the 80 plus approval rating that couldn't has is in jeopardy? >> i think since it is so high up it is in jeopardy. it can go down. there was when conflict he was popular. a dynamicsustain such between the russian and ukraine for long time. >> who has the upper hand? >> it is probably the ministry of defense. current minister of defense is number two in russia. opportunity is there for other voices to be heard? >> i think it is difficult. the nationalization of a lot of

oligarchs who understand that they either have to be in a tight circle of agreement or they are out of the game. >> given the picture you are painting, i struggle to see how there is going to be a significant course change. >> this will not happen soon. we need to plan for a midterm game. in a midterm there could be change. this can besed, aging game a game changer in the midterm. >> is there a duration mismatch? there is the possibility that sanctions may become more severe because the west is not seen the change in the west's timeline. >> european union is taking small steps.

the united states are taking cautious and small steps. they are looking at parts of the economy. germany supplies automobile. there's so much interdependence. as the european union moves toward more independent energy policies, there could be an impact. >> if you were running a you bes, how would factoring this into your thinking? you have big businesses in russia. how would you view them over the next 18 months to two years. >> there is big risk exposure. i would be looking at emerging markets. is no threat and expanding what is possible in russia. the negotiations and

relationship between the west and russia is deteriorating. >> this is going to be an ongoing story. your -- geto take your take on what is going on. the technology is being lined up as we speak. is that money ever going to get repaid? what is the next big step in this story? we will do all that when we come back. see you in a few minutes time. ♪

>> good morning. welcome back. jeff koons is the artist known for his large and shiny balloon dog sculptures. there is an tire team that helps bring his vision to life. we spoke to him about the business of his art. my name is jeff koons and i am an artist. i live and work in new york. some of my better known artworks would be michael jackson and bubbles, my stainless steel rabbit, the balloon dog. try to be open to everything. i don't make any judgments about anything.

eventually, i will find meaning in certain objects and images. i will realize i'm going to make a gesture without. that process could be two years of just following my interests. something,de to make another two years in the realization of the object. i have to work with other people. i have a studio and 130 people. i have a 3-d department. i have a 2-d area. i have a painter and a sculpture. i am the captain of the ship and i am responsible for everything. in pricing an artwork you have to take into account the cost of manufacturing something. that can be quite high. in the past i have lost money on some of my works. i lost money dogs,

because of that the production would be less of mud they ended up to be. hilarity you have in a imitates life.it i like the reflective surface. it defines a location. if when you have a gazing ball that is reflecting 360 degrees, your participation is necessary because when you move the abstraction and reflection changes. i want people to be able to have a greater sense of their own potential through interacting with my work. fascinating stuff and amazing images. some amazing artwork. we're going to take a break. we will bring the focus back to russia. we will have a former investor in yukos. where does this leave putin?

how much of this money is actually going to come back? we are going to take a break. ♪

>> will come back. let's get back to the top story. oil has won a lawsuit against russia. they were once the largest oil company in russia. director andcutive was a former majority stakeholder in yukos. you must be happy with the decision. you have a chance of getting your money back. this $50 billion award. where are you going to get it?

the russian foreign minister says they will defend themselves vigorously using all legal means. they are not going to fork over the $50 billion to you. you are giving me news that i didn't have. tribunal decision of a . this is a court of arbitration. it is a final award in terms of damages. they still have certain technical rights. laid a full pardon the arbitration. there is no reason why they shouldn't pay the damages. go afterhe right to assets of the russian federation. assets indiplomatic many countries. most countries are sick and jurors -- signatures.

we will go to local courts and getting attachments. it will take a long while to collect $50 billion. we did not go into this litigation for anything other than compensation for our shareholders. what kind of assets are you talking about? are you going to seek compensation from them? think it is premature. we have not made any final decisions on those matters. the award by the tribunal made it very clear that they do not view them as an independent company.

they are majority owned by the russian federation. it is an instrument of the russian federation. their assets would be government assets. there will be a lot of litigation to prove that. that they can be 100% confident that all of their assets in the west are secure. tp -- bp? that put >> we can't sue bp. then collect against them that will affect the share price. we haven't made any final decision about attacking them. wording of the award that was handed down would seem to point in that direction. the tribunal saw them as nothing more than a reincarnation of

yukos. they are an instrument of the state. been sanctioned by the netted states as part of the blacklist for events in ukraine. was in jail. are you going to hold him personally responsible and try to receive some of his assets? >> no. i don't think that is within our ability under the convention. the individuals would not be targets. it would be pearl he assets of the russian federation. about one of you the billionaires discussed a lot in london. depending on who you listen to, he owed yukos $3 billion.

would he be someone that you would approach as you seek compensation? no. i don't think he is on our radar. we are looking purely at the assets of the russian federation. and used by them for commercial purposes. not individuals. i think he would say that that $3 billion was paid to the russian federation and part of a tax bill. you would have to ask him about that. he is not on a list of targets for us. i have one more question. he was the majority stakeholder in yukos when it collapsed. interestsrred his when he was in jail back in

2005. he is not a party to this award. would some asking, of this money go to him? he is now a free man after a decade in jail. he is in switzerland. will he see any of this money? that is my understanding his gift was absolute and that he has no entitlement or right to any damages that we collect. i am not aware of any arrangement where he would receive anything there in i am sure we will speak to you more in the future. thank you very much. >> thank you very much. a number of headlines coming out of that conversation. we are going after the assets. thatcannot be 100% sure

assets in the west will be secure. mr. dudley at bp is paying a great deal of attention to the story. let's move on to the markets and jonathan ferro. minutes intoand 30 the market session in london. we are off session lows. the dax is dead flat. we are looking to sell a medical unit. the index is outperforming the rest of the indexes around europe. it is a big week for your and the u.s.. let me show you an area of the market that speaks to the week it is coming. german yields at just over 1%. you see the u.s. yield over double that. wet is the biggest frame him have seen since the late 1990's. don't just take this on face value.

the ecb is talking about doing more. you have the federal reserve that takes things month by month. will that be in the statement from the federal reserve this wednesday? that is when they are looking to hike rates? look at low in placement in europe. i'm am expecting to get that on thursday. inflation is taking higher in the united states. comes out on friday. have a look for that. maybe janet yellen can't ignore that. you are seeing payrolls on friday. dollar is at a five-month high. >> let's go to corporate news. the u.k. company will spinoff

its pharmaceutical unit. salesave second-quarter growth in line with expectations. we thought about it and now we are going to do it. >> it is a big decision. them and worth about 7.7% of sales. is that a huge part of the business. it is an interesting part of the business. it is based on a particular drug that helps you wean yourself off opiates or heroine. of what therge part pharmaceutical company does. company has been wondering if they can find a buyer for it or sell it off. the decision is they are going to use capital markets. in the next 12 months they will be issuing shares and maybe keep

hold of part of it. they been looking to spinoff in general. the cfo said if a buyer came our way, we would be and tested. the general consensus is there going to spin this unit off and look at the capital markets. this is an area they don't want to be in for the longer-term. it is seeing significant competition. it is a drug that helps you get off addiction. see somestarting to generics coming to the market. >> you have a consumer giant spinning off a pharmaceutical unit. we also have a pharmaceutical giant spinning off a commercial unit. >> the chief executive has said if ith them to shove, could stand the load as a business by itself and do better on its own maybe we should spinoff.

there are no plans in the near term. if there was a strong case to keep it. many companies are analyzing units of the business and if it would be beneficial to spin them off or sell them. getting close to finding a buyer for the medical nutrition unit. >> thank you very much. that. going to stay on we are going from one airline it to another airline. we are staying with the same story. tax inversion. >> that is right. the u.s. company has been in talks with several weeks.

the discussions are still ongoing. the cash and stock components of the deal. we do not know if this will come through. their are some divestment to get some cash. the price of milk has increased 18% in the first half. that is affecting revenue and the prices and their margins. this medical nutrition unit could bring in more than 3 billion euros. >> the big question is how do they invest the money. that is right. if you look at earnings from missed estimates and the volume is down. sales have declined by 20%. of course they do need the cash. acquisitions. they need to make acquisitions in order to boost revenue and boost growth.

maybe some acquisition in the baby food business. they need to compete with the big rival which is nestle. did you decide to divest this unit? it was not doing that badly. year, they made 1.3 billion euros. >> we have all the angles covered. we are taking a break. we're going to tel aviv to find out how business and israel is coping with the conflict in ♪

>> welcome back. it the security council has called for a cease-fire in gaza. let's talk about the economic impact on all of this. she joins us now. good morning to you. i want to focus on the israeli economy. the israeli economy was already slowing into the fighting that we are seeing currently. consumption was down. we've seen an economic impact coming through. fightingxtent has the

affected that trend? >> thank you for hosting me. generally speaking i would say it affected the fourth quarter of israel. i will explain why. i would say that on the financial side we did not see any damage to the financial position of israel. local and this is and global and this is we did see some rise in. about financial position. the different

military action will affect the third quarter. i would like to focus on three main issues. about consumption. private consumption constitutes 55% of the gdp. iselieve private consumption not just in the south. the rockets footprints extended to the center of israel. decline in a sharp public consumption. we will also see some weakening in the beginning of the third quarter. >> the you think that there is going to be a central bank

response to this witness? will we see rate cuts coming through or a policy response to this? >> i think eventually we will see a rate cut. it will not be today. see theto wait and consequences. this with a weakening second-quarter. we need to wait and see the gdp estimates which will be in the middle of august. i do believe that there is a high chance of another rate cut in the coming months. >> talk to me about the government. on the fiscalent it depends how much we've

lost. compensate the business. the government will deliver. >> a very quick final question, we saw the faa in the united .tates there is a tourist affect whiter than that. how much of a slowdown have we seen in terms of people not wanting to come to israel from a business point of view and a tourist point of view? >> that will decline sharply in the third quarter. this is opposed to the private consumption.

it will be much more gradual. it will take time until it levels off and come back to the current level. isput it in context, tourism 5% of our exports. that it will hurt the sales quarter. >> we are going to wrap it up there. thank you so much for your time from tel aviv. we are going to take a break. we will see you then. ♪

>> this is the russian ruble. is weakening. the dollar is strengthening. it is jumping significantly. we have a rate hike on friday. thead a bigger blow with yukos story turning against putin. tomorrow he gets sanctions. let's put that in political context. he is a former shareholder.

he had some strident things to its assetsussia and and the west. >> they have just been awarded $50 billion by an arbitration court. the award is supposed to come from russia itself. russia can appeal. the foreign minister said they would appeal. they will legally defend themselves to the up most. osborne say they may have to pay some of that bill. they see this as part of the russian state. the share price did not really move all that much. it, $50hink about billion is the amount of the award. bp has a 20% stake. >> this is occupying a lot of your attention. they have their earnings out at 7:00 in the morning.

it will be very interesting. they are becoming a headache for bp. the company has been locked out of capital markets in the united states. i am sure he is talking to a lot of lawyers. we just heard from the germans. once those sanctions to be introduced tomorrow. she is happy to go to brussels if she has to. >> this is from the country that has the most risk here potentially. >> they have the biggest voice in the european union. unanimously. the biggest country is saying this needs to happen. if countries and companies are hit, we are discussing compensation.

much more to come. the pulse.it for surveillance is up next from new york. we will see you tomorrow. ♪

thannday is quieter sunday. the threat continues in gaza. the united nations and the united state to an immediate truce.

corporations merge and acquire. and the new kids on the mainstream media blogs. can buzzfeed actually turn a profit? good morning everyone. we're live from new york. it is monday, july 28. i am toting olivia sterns and adam johnson. scarlet fu is off today. here is adam johnson with the morning brief. >> chinese stocks are up 6% in two weeks. that been quite a rally there. here in the u.s., the purchasing index comes out at 9:2 to five. listing home sales at 10:00. . we saw a 6% decline last month. we had a little bit of slowing as rates have come up. at 10