>> nouriel roubini calls draghi's one trillion dollar stimulus plan a step in the right direction. an expert opinion. we speak with former ecb executive board member lorenzo bini smaghi/ . plus, nato leaders gather for the last day as the eu considers new sanctions against russia. obama and david cameron urged nato to confront the islamic state. we are live in south wales.

welcome to "the pulse." i am anna edwards. also coming up on this program, it counts your calories, measures how must you exercise and takes your selfie. can this smart fridge air your dirty laundry to? first, some news from south wales. the nato summit is beginning. let's get out the ryan chilcote on the scene. i take it that is what all those nato leaders are looking at. >> that is exactly right. of nato are all watching this flypast which has been underway for a little while now. we have the fourth group of aircraft coming through right now. bute, likely to the f-15s you will have to forgive me if i mess it up a little bit. there are several aircraft involved. i show of force from nato.

this is the first gathering in two years. the last one was in chicago. this one, perhaps the most important in a quarter decade with the crisis in europe and ukraine and the price is in syria and iraq. here comes a voyager, a massive aircraft as you can see. not just fighter jets, but a whole range of aircraft. finally, i don't know if you can see them just yet, but we have the red arrows coming through. aircraftthe u.k. stunt and they are flying red white and blue, as you can see. this is the last of the aircraft to come through for the nato flypast. pretty impressive. world leaders taking five minutes out of their schedule. that is it, anna.

we have already had a very busy summit here. yesterday, dominated by the issue of ukraine and the crisis. today they are talking about how they can counter the islamic state in syria and iraq. perhaps sending nato trainers to iraq. a lot of the discussions here, not so much about what the alliance can do together, but what separate countries can do. ofwill be talking about all that much later in the program and throughout the day. >> ryan, thank you. we will be back with you pretty shortly. let's get to our bloomberg exclusive interview this morning. mark barton spoke to economist nouriel roubini in cernobbio. when asked about mario draghi's move to call for almost $1 trillion of stimulus, roubini

said it was a step in the right direction. movement decided by the ecb yesterday goes in the right direction. i think the most significant part of it is not even the conventional part of it. but the fact that right now the ecb has gone into unconventional modes. what they decided yesterday is a form of quantitative easing if you believe that quantitative easing is increasing the balance sheet directly. it doesn't really matter whether you buy private assets or public assets like sovereign bonds. what they have decided to do is increase significantly the balance sheet from the current 2 trillion, closer to 3 trillion. that will have a significant impact over time together with other policies like fiscal

policy and structural reforms. >> what do you think we can expect on the asset-backed security front? how long will the program last? buy risky of versions of asset-backed securities? i know we will get the details next month, but what are you expecting? well, first of all, the most important part of the announcement is that they are going to buy existing asset-backed securities and bonds. loans is going to take a long time. changedlations have not so you are doing something like the fed did. abs,cb is going to buy existing ones, and existing covered bonds. thatcb has pointed out

they are going to concentrate in these abs securities. there is a question of whether go without ag to guarantee coming from the eu government. the ecb is going to take that credit risk and concentrate on the part that is safe. abs andg existing covered bonds, it can actually buy in large volume. if they are deciding to buy new loans, that flow would be very small in the first ways. >> do you think draghi is merely buying himself time? part of the reason for that could be this supposed spat with the bundesbank president. is he buying himself time before the ltro program to launch out right qe?

this is qe-light essentially. when do we get full-blown qe? ltro areof all, the not quantitative easing directly. they essentially depend on the demand for these new loans by the eurozone banks. it is demand-driven. increasing the balance sheet is going to come by the decision of the acb -- the ecb. it is already a form of quantitative easing. the liability side is increasing on the balance sheet. not directly: if it of using. -- are not directly quantitative easing. i would say at this point,

quantitative easing itself, given the objections of the bundesbank and others, we are not buying sovereign bonds. once you start buying abs and covered bonds, the next step might be buying aaa corporate bonds. what is the difference between aaa corporate bonds and sovereign bonds of similar risk type? therefore we are on a direction that eventually may lead to asset purchases of sovereign bonds. why, the amount of existing abs and covered bonds is limited. the ecb wants to increase the balance sheet. they are going to soon run out of abs and covered bonds to buy. to bext that is going either corporate bonds or sovereign bonds. effectively, quantitative easing has already started. >> that is the chairman of

roubini global economics, nouriel roubini speaking to bloomberg this morning. for more on the ecb surprise move this week, let's bring in our markets editor, manus cranny. good morning. expecting what't we got yesterday from the ecb. it is being described now as qe-mike. >> that is a bloomberg term. filled with tidings of not great joy he recently. that was kind of an upbeat take on it. >> i think he has had a rebrand. >> equity markets were triumphant. they always get the best stats before i get on the telly. two year bonds in negative territory. is that right? is that the correct way to add value eight european debt? as you heard, this is stage one

of expanding the balance sheet. taking more risk on the balance sheet. they only want clean, tidy stock at the moment. what is abs? it is banks. they lend money on cars, on buildings, on nice, clean things. there is a loan for a million , the and there it is interest rate payment. we will lend you some money again fast. that is what asset backed securities are. >> then you want the good stuff. heard mario have draghi suggest that it means he is not buying things that look like derivatives. >> you are very graceful, you are correct. shorter word of a with four letters. are prepared to get involved but not terribly involved.

germans don't want to join in. jens weidmann has dissented. we will have to wait and see. bondstwo-year government below zero for the first time ever. >> and the euro went below 1.30. peacereading el erian's and he was saying the ecb is ready for unconventional measures. >> the words that roubini used as well. >> suggesting the positions for full-scale qe. it showed that the ecb is not too worried about the multi track central-bank world that we have been talking about quite a bit. when central banks that have been on similar paths are now emerging from the financial crisis at very different speeds and in different directions, that raises the question of what role the euro plays.

on that, the funding currency, i had a conversation with valentin marinov and this is their top funding currency of choice. with francesco starace about 10 minutes ago. what i found interesting there, making the point that it is about structural reform. monetary policy itself will not be the absolute answer. you need structural reforms to come along. an italian ceo stated that we need structural reform. , perhaps telling the government. >> the funding currency of choice. bond yields, my proposition would be, there is something not right in the world. when you have eight major global

markets on two-year global bond yields in negative territory. maybe they are preparing for something much more -- >> we will get some further analysis of this. i am very excited to be speaking to lorenzo bini smaghi, former ecb executive board member. that is coming up in just a little while. thank you very much. now back to ryan chilcote in south wales where nato is meeting for the second and last day of their summit. hopeful apresident is cease-fire can be reached later today in belarus. the eu has been talking about new sanctions today. how likely is that? is it contingent on what comes out of belarus? >> it may be. and worldn minister leaders have been vague about timing of sanctions, other than saying they expect a decision today. they canituation where have their cake and eat it too. peace talks are supposed to begin in two hours time in minsk.

wait to see what happens. there seems to be a consensus among the leaders that i have heard from that the sanctions should go forward and they can always, if these talks are successful and the cease-fire is agreed, they can always be pulled back. have a listen to some of the foreign ministers. >> it is deeds, rather than words that matter. we have seen russia go into different commitments and violate them. that is why deeds matter. i don't think anyone has the appetite for sanctions but i hope that all countries have appetite to stop this conflict in ukraine. decidedpean council that european commission has to make concrete proposals to move forward with sanctions. it was a unanimous decision. >> to be fair, there are

sanctions and there are sanctions. the sense is that these are sanctions. we have heard from the german chancellor, suggesting that what we get out of the european union is something quite similar, along the same lines of what we already had. what that means for equities and bonds is really, perhaps more russian companies are finding their access to european capital markets restricted. so far we have had russian banks and defense companies. some banks and defense companies losing some of their access to european capital markets. the sense is that that could be extended to more defense companies and maybe some russian oil companies. a stepely would be forward in terms of the sanctions but not a huge one. >> we heard this week from president putin and he has presented a seven-step plan towards a cease-fire. it called for a number of

concessions from ukrainians. how ready is poroshenko to make concessions in order to reach a cease-fire? >> he sounds like he is rather ready to make concessions. perhaps that has something to do with the fact that over the last week and a half, things have changed on the ground in ukraine. the ukrainian army is on the retreat. they have given up a lot of the ground that they had as these -- more than 3000 russian troops have really been moving. other reasons for that, perhaps poroshenko is here at this summit realizing that he is not going to get the assistance that he perhaps was looking for or that could make a difference in the fight. he was looking for military aid, for weapons. that doesn't appear to be forthcoming. while the sanctions, most people agree, have affected the russian

leadership, the russian economy, they certainly haven't changed the russian president's behavior. perhaps these are some of the things that have been waiting on the ukrainian president's mind. yesterday he was talking about how ukraine is tired of war. what we don't know is, our understanding is, based on our conversations with people in the russian government, what the russian president wants is a buffer zone where they would effectively have enough autonomy that they could veto big federal decisions made by the government in kiev, like joining nato. that is something we don't know. is he prepared to go that far? fascinating.be thank you very much, ryan chilcote. still to come, a direct challenge from huawei.

find out how the telecom manufacturing giant plans to take a bite out of apple after the break. ♪

." welcome back to "the pulse we are live on bloomberg television. turning to technology now, huawei throws down the gauntlet. china's biggest phone network equipment maker has given itself a three-year window.

hans nichols is in berlin. they have some ambitions to overtake apple in terms of market share, do they? number two. to be apple is at 12% market share. to get through apple, you have to take a bite of samsung. to get a sense for how ambitious this is, right now they are at 7%. we talked to the head of the consumer projects. he said that yes, he is an ambitious man. he is not a humble man but the race is long. >> sticking with the apple theme, we also heard about some new security features from apple. this very topical. the celebrity photos that seemed to be hacked earlier this week. we are looking ahead to new releases from apple next week.

>> this is a big question here. sorry, thought we had some sound that we could play there. this is a big question. you had samsung frontload this. they came out with their 5.6 inch phone. from huawei, we got a sleek six inch phone. what does apple put out next week? we have been talking to a lot of analysts here about security concerns. what apple is saying is, they are going to have an additional layer of security. that notification, if someone may be accessing your icloud, you will get an e-mail. it will be similar to bank notifications. they want to assure customers that their photos are secure. it will be a big discussion going forward. we have to wait and see what apple comes up with. do they come out with a watch, a new iphone? we get all that next week. >> i will be waiting. we would try to find that sound

for you. hans, thank you very much. keep it right here. later this hour, hans will be speaking with the ceo of monster product in his first interview of the day. still ahead, draghi's surprise. the ecb cuts rates. the ecb strategy with a former board member at the central bank. that is later on "the pulse." ♪

>> welcome back to "the pulse." time for a quick check on the equity markets. markets are trying to digest what mario draghi did yesterday. qe-light. the beginning of unconventional measures. the size ofe near the balance sheet the federal reserve managed to do with quantitative easing. the ambition is $3 trillion. 2.7 billion euros. european equity markets taking a bit of a pause. the real impact is on the currency market. yesterday whenop we had that come through. i caught up with citi. this is the currency funding of choice. 1.25 is potentially achievable. you want to go into turkey, rand, high-yielding currencies. ready to bank of japan

do a little bit more action. that seems to be the message coming from the bank of japan. that is it for me. let's see what anna is up to in the next part of "the pulse." ♪

>> welcome back to "the pulse" live from bloomberg's european headquarters in london. here are the bloomberg top headlines. mario draghi has called for almost $2 trillion in stimulus. the ecb president said it would significantly steer the ecb balance sheet back to the higher levels seen in 2012 and revive inflation in the euro zone. >> the council decided to start pershing -- purchasing assets. euro system will purchase a

broad portfolio of simple and transparent asset-backed securities. >> economists are forecasting a today's230 thousand in u.s. jobs report. it would be the seventh consecutive month of growth above 200,000. nato leaders are starting their meeting now. yesterday, david cameron urged leaders to refrain from playing a british citizen remains hostage of the islamic state extremists. let's look at the latest technology news coming out of -- appliances that can talk to each other and air your dirty laundry. hans nichols reports. >> a camera inside your fridge. text your fridge and it sends you back a picture of what is inside. your smartart of home, onyx of products for sale

and some futuristic concepts. this bathroom mirror from toshiba syncs with your watch and monitors your health. >> this has the vital signs or the calories, things like that. you can see that as well as a schedule and the weather. lean lunche a little today. >> if my bathroom mirror told me i needed to have a leaner meal, this monitor above my stove would show me how to cook it. comeam struggling, i can down here, call my mom, and she is going to walk me through it. there are two reasons why a fully connected home may stay only in showrooms like this. one, a common language, a common protocol for all these machines to talk to each other. security. how do you ensure the home stays private? on the other hand, who really

cares about my dirty laundry? be interested in hacking into domestic appliances? who should be interested in reading what you have in the washing machine? doubt somebody is interested in that. >> it may not be that interesting, but i don't necessarily want people to know how little i exercise and how much i ate. techns nichols at the fia fair. let's bring you in here. am i going to have to learn to speak german to talk to my fridge? no, it won't require that sort of precision. you can just texted something. the interface was in english. there are a lot of exciting gadgets here. the question really is, when does this become mass-market and for the consumers. we are joined by a guest, noel lee, the ceo of monster, the

head monster. he has brought products to the mass-market. you do a lot in the wireless space. what is the next thing to come that we will be wearing on our years? >> we are in the wireless era but it is not just about wireless. it is about quality. monster has always been a connectivity, sound and music quality is the utmost importance. we are doing new things with the 24 ks like introduced here in germany for the first time. the incredible sound and look, it is all a part of fashion and everything else. >> what does the 24 k retail at? >> 300 euros. >> you mentioned beats. you did the hardware for beats. you lost out on the payday. >> i did.

you can't win them all. the $2.6 billion buyout by apple. >> we are regretful that we didn't participate in that. we were five years in beats. we were beats. we designed all the products. did all the concepts and then brought them to market. now it is a multibillion dollar industry. i think all the headphone manufacturers here at ifa thank us for that, but innovation has always been our hallmark. now we are on to our new thing. the monster headphones, pure monster sound. it is available in our bluetooth speakers that we are showing here for the first time. over innovation. especially small, portable products. >> so now beats is a competitor. >> i created my own frankenstein.

>> i don't know how dr. dre would feel about that but you look like a tough guy. >> he is good. jimmy and dr. dre have been really close allies. i learned a lot from them. i wouldn't give it up for anything in the world. >> you have the new bluetooth technology. digital-analog, analog-digital. how is this different? >> this whole conversion on high rise files -- [cheers] yeah! i was supporting high resolution digital files. everything is going to go to higher and higher quality. that means the higher-quality reproduction. that is what we do. we own the end of the value chain. handsets, carriers, delivery, what is the last step? that is the way we monetize it

here? >> you are in europe, the economy isn't exactly booming. when you look at the macro ,icture for products like yours are you optimistic? >> extremely. when i look at the stats for the amount of premium headphones over $100 and the amount of smartphones, 2%. 2% of the owners of smartphones and tablets have a premium headphone. 98% are deprived of that incredible experience. when you have high rise files and streaming, you don't have to store it on your phone, incredible growth segment for consumer electronics in terms of the accessories. for all your viewers, accessories are the most profitable art. not the hardware, not the content. >> your margins are higher. i our margins are higher --

don't know, we don't make handsets. we don't have that kind of commitment. our unique technology and audio and ability to deliver an incredible user experience is legendary. >> so i am not going to need a liar -- a wire. are doing, what we we are breaking new ground on a brand-new product. it is called soundstage. ,he wireless home speakers everybody is trying to jump into it now. but nobody has got the code on high quality sound, extreme aesthetic looks, especially for females. they don't want a box and ours is not a box. that will be released here at ifa. yesterday at the press conference we had a small --they weree whoa

blown away. >> anna we are going back and forth on your christmas present. we may get you some speakers instead of that rice cooker. >> i am pretty excited about some extreme aesthetic looks. thank you very much, hans nichols. 9:39 in london. coming up, draghi fires on both barrels, or maybe just one. the ecb cuts rates and unveils a new stimulus plan. we will speak to a former board member at the central bank. he will be with us on "the pulse ." ♪

>> welcome back to "the pulse" live from bloomberg's london headquarters. here is what is on our radar. standup comedian, writer and tv personality joan rivers has died at the age of 81. rivers was admitted to mount sinai hospital on august 28 after going into cardiac arrest. the new york state department of health is looking into her death. has ruled that bp acted with gross negligence in the biggest offshore oil spill in american history. the decision may force bp to pay billions of dollars more for the 2010 gulf of mexico disaster as the judge rejected the peapod argument that others were equally responsible.

add new security features to its icloud after a hack attack on celebrity accounts leaked nude photos of some of hollywood's biggest stars. apple says users will get alerts on their iphone and ipad if an attempt is made to log in from a new device. let's now get back to one of our top stories. we are back at the forum in cernobbio. earlier we spoke with jacob frenkel. >> the purpose now is to make sure that the economy gets -- that is the aim. europe isre now in that inflation is significantly below the objective of the ecb.

economic growth is significantly below the trajectory that europe needs and wishes. we are going to play our part. we are going to inject liquidity. they are also careful to announce, the solution is not just in the ecb. the purpose now is to provide government with greater time, longer time to do what is needed. there are a lot of structural issues that need to be addressed. k unemployment in europe is so high and in some places, very, very high. the reasons are structural. competitiveness in some places has been eroded. printing money will not solve that issue. however, in order to endow those companies and investors to carry out their plans, we do need the

liquidity and that is where the ecb comes in. i think it is a significant and positive mode. we need to recall that at the same time, the united states is accessing from its quantitative easing. what it means is the direction of monetary policy, the directions are going to diverge now. why the the reason currencies are responding, the reason why the euro isn't appreciating relative to the u.s. dollar. it is a number positive move to will.s. economy because it boost their competitiveness in international markets. thatearly, we understand the germans aren't quite so keen on this move. it seems as though jens weidmann voted against it. they are very cautious about

quantitative easing. will we see full-blown quantitative easing? will we see the purchase of government bonds in europe going forward? withermany get on board where mario draghi wants to take the ecb? >> the issue is not just political. the issue is economic. it has been the tradition that the ecb does not purchase out right government bonds because the ecb is not supposed to land directly the government. however, that is the reason why germany is having reservations. the key issue is to inject liquidity into the market. the question of which assets are being purchased, that is the issue of debate. mario draghi is perfectly aware of the divergences of views in his own governing world. still, there are some more

ammunitions in the reserve. he thinks about that instrument of buying government bonds. i hope very much that what has been announced today will not require crossing that rubicon. after all, a consensus in the governing body of the ecb is also a very important matter. germany is a major country. >> jacob frenkel there. let's widen the conversation, bring in another important voice on this subject. we are now joined by former ecb board member lorenzo bini smaghi . thank you very much for joining us. can you give me your reaction to what we heard from the ecb yesterday? you have been calling for some time for quantitative easing from the ecb. does qe-light satisfy you at all? not q yet because

we don't know the quantities. we don't know how many assets will be bought, what time frame. inflation is below the target. the issue is what needs to be done to bring inflation up to match price stability. i think these are still question marks. ultimately, the main transmission channel is the exchange rate. you have to see whether the exchange rate will fall, the euro compared to the dollar and currencies sees -- to transmit this to the rest of the economy. >> do you think that mario draghi is buying time before launching full-scale quantitative easing? do you see that as something the ecb will do? >> it is a step-by-step approach. i think this is the last shot before the bazooka. if this shot doesn't work, the

mandate of the ecb is very clear. the germans may like it or not. this was imported from the bund is bank statutes. without price stability, we don't have the necessary conditions for growth. this is a clear mandate for the central bank. they have to use all the .nstruments the ecb is the only central bank not to have implemented this. this could have been explained because in the past, inflation was not that low. now it is low. the only instrument left, all the others will not work. >> we were just speaking to jacob frenkel earlier this morning. he said that getting agreement on the board of the ecb was also very important.

dissent do you think there is at the ecb? is jens weidmann on his own or are others on his page too? think some people are opposed for ideological reasons and some people are opposed because they want to try other things. that was the compromise. at's try another shot instruments which allow to inject liquidity without buying government bonds. let's see if the instrument works. by the way, all the other central banks in the world have crossed that rubicon. that doesn't mean this will be monetary financing. it will be just buying assets in the secondary markets, which is allowed. it all depends on the

effectiveness of these intra-mints. we will know within one or two months. if the exchange rate doesn't fall around 1.22 the dollar, i think other instruments will be needed. >> so that is the key test of what the ecb has announced so far, the euro needs to fall to 1.20. >> i think they are trying to talk the dollar down, rightly so. -- the euro down. not only to the dollar, but the other major currencies. down, ihe euro comes don't see how the inflation rate in europe can increase. that was the case in japan and the u.k. that is the key test of the effectiveness of the measures which were announced yesterday. i think we have two or three months. quickly,change happens they will have to think about the next step. wait't think they can just

to have consensus. >> lorenzo, how do you convince the germans? if the germans at the bund is bank are convinced that quantitative easing is monetary financing of government, is that how they see it, what is the counter to that? >> the ecb has a clear mandate of price stability. it has to do what ever it takes to achieve these objectives. the independence of the central bank depends on that. beenately, this has imported directly from the bund is bank. undesbank has purchased government bonds in the secondary market. i think it is a question of exhausting all the other instruments.

the argument that there is no other alternative may be the argument that ultimately will convince them. statute, theis a ecb governing council has to vote. there is no need to wait for the last vote. >> we will see if they are convinced. what about problems with different central banks around the world adopting different paths to monetary policy? are you worried that this creates volatility or upsets markets in some way? what are you worried about in that area? think what is more concerning for the world is that the euro area is stalling. monetary policy has to be first and foremost in europe. concentrated on getting europe out of deflation. this was the case in japan, this was also the case in the u.s.

monetary policy first has to look at domestic conditions. if the euro area starts picking up, this will be the best scenario for the world as a whole. i don't fear too much volatility to the extent that this is compensated by more balanced growth in the world. a little bitk about structural reform in italy? the italian government has been calling for more flexibility around european fiscal rules. do you think that should be allowed? i think it is already in the cards. on that point, i think mario draghi yesterday clearly said, first structural reforms and then flexibility. you need to prove that the

structural reforms that have been implemented will allow a rate of growth of the economy so this will justify borrowing and having a more gradual fiscal adapting. the phasing of various actions, i think, is very clear. >> lorenzo, you are involved in europe's gas industry. do you see more sanctions coming towards russia? is that something the italian business community will put up with? >> this is a political decision. putn't think one has to forward its own interest. you have to look at it globally. europe is dependent on energy in the short term. the gas supply from russia is important. is fillinginstance,

up its stocks of gas. we have some time over the winter. we could go through the winter with the supply falling. europe to has caused build a more integrated energy close the gap that we have now, to have really a single market for energy in europe, which really has europe address the issue of how to deal with russia. >> lorenzo, thank you so much for joining us. lorenzo bini smaghi. u.k. prime minister david cameron has been speaking at the nato summit. he says russia is ripping up the rulebook in ukraine and nato must be able to act more swiftly. he said the u.k. is ready to provide 3500 troops. for those listening on bloomberg

radio, the first word is up next. for our viewers, a second hour of "the pulse" is coming up. we have an interview with peter sutherland, the chairman of goldman sachs international. we also have a bloomberg exclusive. the lenovo india president. ♪

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>> a bloomberg exclues i. roubini called the economic plan successful. new trade sanctions against russia. meanwhile obama and david cameron urge nato to confront the islamic state. we're live in south wales.

>> good morning to our viewers in europe. good evening to those in asia and good morning to those just waking up in the united states. i'm anna edwards. also coming up in the program. counts your call rees and measures how much you -- calories and measures how much you exercise. let's start with breaking news. euro-zone second quarter g.d.p. data is coming through. we already had the expectation of zero percent. we have got exactly what we expected to get. zero% growth for the second quarter in the euro-zone. looking at the year-on-year, .7% against the same time last year. euro/dollar dropping below the

1.30 level. yesterday it was below that at 1.2953 because of what we heard from mario draghi yesterday in his press conference. a bloomberg exclusive. rlier mark barton spoke with nouriel roubini. he called it a step in the right direction. >> they go in the right direction. i think the most significant part of it is not the conventional part of it. reduction in the rate. the e.c.b. has gone into unconventional monetary policy. what he decided yesterday is a form of quantitative easing if you believe that quantitative easing is increasing the balance sheet directly.

it doesn't really matter whether you buy private assets as the e.c.b. has decided or public assets like bonds, they have decided to increase significantly the balance sheet to closer to 3 trillion. that increase will have a significant impact over time together with other policies like fiscal policy and structural reforms. >> what do you think we can expect on the asset-backed security front? how long will the program last? will the e.c.b. be tempted over time to buy riskier versions of asset-backed securities? i know we'll get the details next month, but what are you expecting? >> well, first of all, the most important part of the announcement is they are going to buy asset-backed securities and corporate bonds.

it is going to take a long time. the regulations have not changed. you're essentially doing something like to fed did. the fed was buying treasury. instead the e.c.b. is going to buy e.b.s.'s. secondly they pointed out they don't want to take the credit risk so they are going to concentrate in the senior tranches. there is a question whether they are going by -- the level that is more risky without the guarantee coming from either e.u. governments or e.a.b. the e.c.b. is not going to take that credit risk so they are going to concentrate in the buying this -- by existing corporate bonds they can actually buy in large volumes if they were deciding

to buy only new -- the flow will be very, very small in the first place. >> do you think draghi is merely buying himself time? part of the reason for that could be this supposed -- with the bundes bank president. is he buying himself time before the program to launch outright q.e. as you intoneated? when do we get full blown q.e. ? > i mean, first of all the tltro are not quantitative easing directly because essentially they depend on the demand by the euro-zone banks. while increasing the balance sheet is going to come by a decision, it is already a form of quantitative easing if you

believe that quantitative easing is -- with asset purchases on the asset side increasing on the liability side. they are not directly quantitative easing. they depend on the banks. a form of credit easing, the same way in which security purchases -- but i would say at this point quantitative easing has started given the objections of the bundes bank and others who are not buying yet bonds and then you start buying corporate bonds the next step might be buying triple-a corporate bonds. what is the difference between triple-a corporate bonds and sovereign bonds? therefore we are on the direction that eventually mainly to our purchases of sovereign bonds why the amounts

are existing in the corporate bonds that are limited. if they want to increase as a signal the balance sheet by a trillion they are going to soon run out of a.b.s. and corporate bonds to buy and therefore the next step will be corporate bonds or sovereign bonds. the quantitative easing has already started. >> nouriel roubini speaking exclusively to bloomberg. u.k. prime minister david cameron has been speaking at the nato summit saying russia is ripping up the rule book in ukraine. >> we must extend our partnerships and build a more security network that fosters stability right around the world. >> for more, let's go to ryan chill code, who is in south wales. we just heard from the u.k.

prime minister. bring us up to date. >> yeah. the british prime minister speaking a short while ago talking about how the u.k. is prepared to pony up about 100,000 troops to a rapid reaction force that could be deployed anywhere in world between two and six days. as you heard there, particularly focused on eastern europe saying that nato and in general the european union needs to do more to defend eastern europe from potential russian aggression. he also, of course, has been talking about the islamic state and the need to counter the threat from the islamic state of course. but to one is actually talking about sending troops to iraq or syria. this is just the u.k. i guess trying to take the leadership in the fight, if you will, to kind of make nato into a more meaningful coalition

particularly here on the continent. anna? >> the e.u. has been talking about introducing new sanctions today on russia. how likely is that? is it didn't on what kind of negotiations we see coming out of minsk perhaps? >> it might be. those negotiations that are meant to begin in just under an hour. it is possible that the e.u. will wait until after those negotiations have had a chance to produce results. there does seem to be however a sense irrespective of what happened there is need for more sanctions despite the russian president producing a new peace plan. have a listen. >> we have seen russia going into different places and different commitments several times and then violating them. that's why -- >> i don't think that anyone has an appetite for sanctions but i hope that all countries

have appetite to stop this conflict in ukraine. it was a unanimous decision. >> what we are hearing is that if there are sanctions and then we do have a peace deal or cease-fire and that cease-fire holds, we could see these new sanctions rolled back. that seems to be the consensus here. however, don't forget that the european union is about 28 members in it. many of them are here at the summit discussing this very issue right now. as for the sanctions themselves, it is easier for them to introduce sanctions light than to do nothing, i think angela merkel a couple of days ago tipped us off to if there are more sanctions, they are likely more of what we have

already seen. anna? >> how ready is poroshenko to make concessions in order to reach a cease-fire? we heard from president putin. he has a seven-step plan the reaching a cease-fire. is that going to get agreement from the parties involved? he appears very ready to cut a deal even if it is not on the same terms he would have gotten a couple of weeks ago. take into account the situation on the ground in ukraine itself is not great. the ukrainian military has been giving up ground. the city is under threat now. there is fighting outside of it. if ukraine loses that as well o the pro russian separate ists, it will be in a real bind and could be facing one of the land -- between russia proper and crimea effectively losing a good chunk of the country.

i think he is looking at that and also probably looking at the fact that while there might be more sanctions, they really haven't done much thus far to change the russian president's behavior in ukraine and what should happen in you crained finally this idea that they might get assistance from nato that of weapons, well, doesn't appear to have yielded much either. no countries are really being forth coming if providing ukraine with weapons so i think he thinks perhaps it is best to get down to the negotiations table as quickly as possible. what we don't know is he ready exactly resident putin as much as what he wants. what they want is to have the ability to veto the federal government's decision to join nato. that could be a pretty crucial point that the ukrainian . esident may not agree with

>> ryan, thank you. ryan chilcote joining us from south wales. you're watching "the pulse" live from bloomberg's london headquarters. we will take a short break. see you on the other side. ♪

>> welcome to "the pulse" live from bloomberg's european headquarters in london. we're joined now by peter sutherland, chairman of goldman sachs international and also u.n. special representative for migration which is the topic of conversation for us now. peter, thank you very much for joining us. in your role as u.n. special

representative for migration, you have a message for the european commission. what is your message, peter? >> the problem that europe faces in regard to migration is multifaceted. one significant and immediate and urgent area of this is the mediterranean crisis where perhaps 200,000 people have drowned over the last decade in trying to reach europe. europe needs to organize collect i everly to work together on the migration issue in a new way. it would be highly desirable that the commission president, when he announces his new commission in the next couple of days, should nominate an individual as commissioner for migration. this subject requires holistic thinking, free movement in europe is already creating political issues within europe and the migrant flow from

africa is something which is part of not a current crisis but a continuing fact that will be with us for as far as the eye can see. so we need to do something to address it and wwe need to stop the suffering that is taking place. -- if we get a commission portfolio dedicating to pressing immigration issues, what should the priority be then, peter? to drag down immigration? increase it? enable it or indeed to get a handle on the numbers. what is going to be the priority? >> the priority i think is to increase legal migration and reduce illegal migration and to create a proper dialogue with the countries of transit in north africa, those of which have a stable government. obviously in some cases like libya, which is virtually a failed state at the moment, it is much more difficult to have that dialogue.

but it is possible to have a dialogue and to organize in a far more effective way the whole migration issue by increasing legal migration and massively reducing illegal migration, which leads to abuses of terrible kinds. >> right wing politics clearly on the rise in some parts of europe, peter. where do you think that is going to head? do you think it is a trend that we're going to see more of? is it going to result in the u.k. coming out of the european union? ? at are your thoughts >> well, i believe it would be extremely damaging to the united kingdom to leave the european union. undoubtedly the migration issue in a whole range of countries from france to denmarking right across europe, migration plays a part because people

automatically link migration, free movement in europe, to the european union itself. in fact, a lot of that antagonism is misplaced and misinformation is behind many of the approaches that are taken to the migration issue. for example, in one recent ll, the average brit concluded that 30% of the british population currently was born outside the united kingdom. the total is exaggerated. it is three times greater than it actually is. this subject of migration has of myths ubject exaggeration. that needs to be addressed. on the broader issue of britain and europe, i hope there is no eal prospect at the end of the

day that britain could leave, but at the moment the polls are very dangerous and it is interesting to note that the polls are very different in scotland to those in britain. in england, there is a clear majority in polls that would wish to leave europe and scotland there is a clear majority that would wish to remain in europe, which is a relevant factor in the context over the referendum which will be taking place in scotland. >> yes. how are you looking at that referendum in scotland, peter, on september 18? clearly in your view, it could have implications for the very presence of the u.k. within the e.u. just looking at the u.k. implications, how serious a situation do you think it is if scotland were to vote to leave the union? >> well, first of all, i know the outcome no more than anybody else. clearly the polls have been contracting between a no-vote which was a significant majority of, has declined

considerably. i think it is up to scottish make their ke the decisions on this. much of the speculation as to what would happen afterwards is nothing more than speculation because if there were a yes vote, there would probably be three or four yorse of negotiation as to how precisely that would be implemented. so i think it is very difficult o make evaluations of impact in one way or another and certainly i don't feel i am competent to do so. i haven't investigated the issues in the way that many in scotland are doing at this moment. suffice t to say, that it is very important. it is more important in the broader european atmosphere s cause there are similar move in terms of separatism within states and other countries in europe who are no doubt looking

at the scottish case as an example. i think that what binds us together and whaten continues to bind us together irrespective of the outcomes is the european union itself, which is intended to be an umbrella which keeps people integrated. >> peter, thank you very much for joining us. thank you for your time. peter sutherland chairman at goldman sachs international and u.n. special representative for migration. we'll take a short break on "the pulse". see you in a couple of minutes. ♪

>> welcome back. in today's new energy, construction has begun in northwest fister. they aim to help the environment. joining us is the project director. thanks very much for coming . how do you go about creating it? >> it is a big challenge. it is new to the u.k.. this is the first in the u.k.. the first resident rble development built true zero carbon. what we mean is we look at the energy that buildings use and the people within the buildings. so it is starting to create a true zero community at northwest bicester. >> where is the energy coming from this town? how sunny does it have to be for this to week? >> it helps when it is sunny

because then our solar tv will work it will have a gas energy turbine inside it. inside that it will generate electricity and the part that -- the heat will be kept in a thermal store and pumped to all the homes to give them hot water and heating. at the same time we will generate electricity that will go to the grid. in addition to that, we have the solar p.v. on each of the roofs. we're a net provider of energy. we actually generate more energy than we actually use. >> this will actually give energy back to the grid? >> yes. >> so does that mean instead of having energy bills the residents will receive money from grid? >> they will receive some money from the grid. they will still have energy bills, but yes, we are a net provider. that is that has caused us a few problems on the way. we had to upgrade the network

to take the energy to the network, rather than being a user of energy, we're having to do upgrade work to take the energy. >> this is also about building communities and building communities that use cars is part of that. tell us about the design and how you designed it so it is lower energy use? >> public transport. lots of public transport. cycling. lots of education. it is all about really giving people opportunities. it is no to say no you can't have a car. it is about giving people opportunities and alternatives to the car. there is a network there of -- there will be a car club. we're looking to electric vehicles and how we can promode moat those. >> a charging point. >> yeah. we're putting a charging point in every home where a person has an electric vehicle.

there is opportunity there. it is about education and people having opportunities. >> tell me about the technology you're putting in here. i understand each of the houses is going to have a lot of information about the energy they are using. >> we're looking at a product which is basically a tablet computer that goes into the home and that will provide realtime energy. not just the electrical usage. it will also tell them how much water they are using. how much energy they are generating. how much heat they are using and how much hot water they are using so they can understand how much energy they are using. then we can do educational work around that to educate people. also realtime traffic physician. it will tell you when the bus is coming past the home. it will allow you to book a car club on there. it becomes an information portal within the home. we also want the use it for

community events. so residents communicated between themselves. one of our key goals is to create community. the community pogget. >> how different has the mind-set been the whole of the construction industry, has had to adopt in this project compared to other projects? like to think it has been making efforts to move in a greener fashion for sometime. how marketly different has the mind-set been around this project? >> it is different because it is taking it to another level? we're around 30% to 40% above anybody else in the u.k. we have not been able to go anywhere and say how did you build your eek -- it is a first. we're actually leading the way so we're building the first. it is difficult. we have been able to go to various small schemes and.

>> there are ideas that you have come up with that can be translated to the older stock, the u.k. is full of old houses. many are very porous. >> yes. we are doing research work about how building projects go together. we're making sure the homes are airtight. we're doing work around climate homes are ell so the warm in the winter and cool in the summer. it is all about taking the big picture and drilling down the details. we'll be able to do so. we look at how we can -- out to the industry with our website. >> thank you very much. very interesting project. hanks for coming . let's move on for you. mario draghi has called for almost a trillion dollars of

timulus. >> the council a decided to start purchasing private sector assets. the euro system will purchase a portfolio of simple and transparent asset-backed securities. >> economists are forecasting a rise of 230,000 in today's u.s. jobs report. it would be the seventh consecutive month of growth above 200,000. the jobless rate is forecast to fall to 6.1% in august. nato leaders started their meeting in south wales. de cameron said they must be able to -- in eastern ukraine. >> nato must become not just an organization that has capability but an organization

that exports capability. >> now let's check in on where all leaves the market. caroline? >> the euphoria was yesterday. today a pause in the market. a lot coming from draghi. a surprise rate cut. is it basically quantitative easing? that is what nouriel roubini was telling us earlier. that it is basically the way the trajectory that we are now going. markets -- the jobs data, 230,000 expected to be added in august. clearly the the united states economy in a very dimplet place than europe and that's where we're getting dwergeant policy. everyone talking about an end to stimulus in the u.s. having fect on the dollar and on stocks this morning which is waiting to hear about ukraine and russia talks. the dax clinging on to gains in germany at the moment. check out this for some euphoria.

euro down 1 poifer 6% yesterday. still below that 1.30 mark. we are clearly at a 14-month low for the euro. the environment from germany, clearly doesn't like the move toward quantitative easing to buy asset-backed securities. he probably likes the weakening in the euro. let's check in on what's happening to bond market. phenomenal moves there. we saw eight european government bond markets posting negative yields. basically investors are paying for the privilege of holding german debt. germany is getting money to sell debt on a negative yield down almost .1%. similarly france similarly austria, we even have ireland. that company that led in terms of structural reforms, it too has seen a yield basically flat now, but it was in negative territory yesterday. keep a close eye on the

markets. i'll point out london's stock exchange is seeing its shares down as its biggest shareholder just sold a little bit of its stake. back to you. >> thank you very much. in 25 minutes, tom keion and the team who bring you "surveillance" will be here. he joins us now from new york. >> never a dull moment. we have the jobs report at 8:30 this morning. we'll go beneath the data at that time. we'll speak with abbey coleman d -- cohen and it is a big deal. teal talk about this value of investing against the backdrop of central banks. never can get enough. it was amazing to see what draghi did yesterday and will continue to talk about the fallout from that e.c.b. decision. we'll look as well at the fashion industry.

it is fashion week in new york. robert burke will join us. associates. urke and we'll talk about the changes in fashion and about what you need to wear as we go into the fall season. >> well, that will be interesting. i'll be tuning in indeed. we spoke with smaghi earlier, an ex-e.c.b. board member. he had been calling for more quantitative easing or for quantitative easing from the e.c.b. for sometime. i asked him how are they going to convince the germans on the e.c.b. to go along with q.e. ? he was saying the persuasive argument is to tell them they have no choice if they want to bring up inflation they have been holding up on this one for sometime. >> it is a raging debate. interesting seeing you having jacob frankel on in the last hour.

to see the euro weaker in the recent days. you wonder where will the euro be in three mons? >> yes, indeed. smaghi said we have two to three months to bring that euro down. that to shim the key test. tom, thank you. et's turn to technology now. huawei is releasing a six-inch screen. hans nichols played with their new screen. talk to me about the market shares. while we have some ambitious goals. it is not like apple is the biggest player in the sector. >> well, they want to surpass that. apple is at 12% in terms of market share. samsung about 20%. to get past that, they will have to eat into samsung's

share especially in asia and europe. it is an ambitious goal. now it is 7%. we spoke to the sharor consumer projects, he said yes, it is ambitious but they have a long-term plan. we are bly will be -- many years ago. so we can catch up. >> that means smart phones will be down to apple, samsung, huawei, maybe others. it is not great news for the sonies of the world. clearly the market is going to heat up. what they did yesterday is go

after samsung. they want to go after that space. this is a six-inch screen. quite big. samsung had a 5.6 inch screen. they have not announced when they will go into the states but when i asked him that question, he said they will bring the fight to america. have a listen. > maybe later. >> that phone will retail for 500 euros. here is perhaps my favorite feature. two days of battery power. you go on an overnight trip, you don't have to buy yet another charger at the airport. anna? >> let's talk about security though. it is very topical after the

celebrity naked photos that were hacked at the beginning of this week. apple announced some new security features. >> what they will be doing is something i get all the time how much i travel for my banks. if you use your card outside of something funky that looks like it is going on, they will call you. they will say your account looks like it was accessed from some place else. there will be some verification. they want to secure the cloud. this is ahead of their launch, september 9. he new iphone, the iphone six. we'll have to wait and see. anna? >> thank you very much. hans joining us there from the conference in germany. after the break, hans will be ive with lenovo's president. that will be a bloomberg

exclusive. also coming up, it counts your call rees and even takes that breakfast selfy.

>> now let's get back to the latest tech news. appliances that can talk to each other and may air your dirty laundry. hans nichols reports.

>> a camera inside your fridge if you leave for the store without checking what you need. text your fridge and it sends you back a picture what's inside. it is all part of your smart home. a mix of products for sale and some futuristic concepts. this bathroom mirror from toshiba syncs with your watch and monitors your health. -- t monitors car reese and calories and things like that. you can see the schedule or the weather. you can have a lean lunch today. >> if my bathroom mirror told in i needed to have a leaner meal, this monitor would show me how to cook it. if i'm struggling with my meal, i can come down here and call my mom and she is going to walk me through it. but there are two reasons why a fully connected home may stay

only in showrooms like this instead of your own house. one a common language. a common protocol for all of these machines to talk to each other and two, security, how do you ensure the home stays private, on the other hand, who really cares about my dirty laundry? who should be interested in hacking in your domestic appliance? who should be interested in reading what you have in your washing machine? who should be interested about your dishwasher? i doubt somebody is interested in that. >> in the morning i don't want people to know how little i exercise and how much i ate. >> hans nichols in berlin. hans, i don't know how worried i need to be about malicious starting of my dish washer. >> nonsense. we would never start your dishwasher because you always do it there would be no way i

would interfere. we're talking tech events. that includes m.c.'s. thank you very much for joining us. >> thank you. >> we're talking gadgets here. you're the world's biggest p.c. manufacturer. talk about the global economy, the global market for sales. what does it look like? >> first of all, it is not just about p.c.'s. we ship more non-p.c. devices than we ship p.c.'s. the p.c. market is healthy. some have said over time that maybe this is the death of the p.c. well, the news of the death of the p.c. was greatly exaggerated. it is a robust market. we see growth in it. it is a market we're happy to be the leader of. >> growth in all regions. >> this is really the story of the last couple of quarters, all the regions performed.

barring of course the occasional countries where there is. >> conflict. when we see what's happening in the ukraine and russia affecting the entire business. ? u're not seeing that >> for sure we see a decrease in the market in ukraine and a little bit in russia but not spilling over to the rest of europe yet. >> you see it healthy in france, germany, the periphery. >> i don't know if i would characterize the economy. i'm more focused on our business. keep in mind we're outperforming the competition largely. when the market grows at 10%, we grow at 50%. in a way, we're doing very well. we see that the p.c. market is rebounding. we're happy with the performance. >> talk to me about new products that you're coming up with. >> so we -- the number three

market share b -- also nearing number three pending the quisition of mort ole -- motorola and the smart phone business. we have a 60-40 split. 60% p.c. and 40% tablets and smart phones. and we have the acquisition of the i.b.m. server as well. >> we spoke with the chairman ff huawei yesterday and they said the world will come down to three, four, smart phone providers. do you agree? >> it is logical that eventually you have a consolidation of the industry, yes. >> who are the four going to be? >> we would like to be one of them. f it is you, samsung, huawei and apple? >> i don't know. i don't have a crystal ball. we're number three in tablets. once we close the acquisition of motorola when it is done,

we'll be number three in smart phones. we are there. for servers, the same. we'll be number three in market share in that segment. >> underlying a lot of the conversations here, security. what steps -- what concerns do you have about securing not just the cloud but personal devices? >> we comply of course with all the different technologies that exist for security. our customers don't rate that as a particular concern now for the products we sell. >> you obviously have your special teams in pro electronics. washing machines that are going to be talking to your toaster. is this a reality or is it all hype? >> will it be a reality? yes, i believe it will be a reality. when does it book the market that is big enough that it justifies people like us entering it. we do a lot of r & d. we do our own r & d,

fundamental and applied. we follow very closely with what's going on. when the timing will be right, you can be sure we will be in it. >> you said you don't have a crystal ball, but dust it off. are we five years away? two years? christmas? >> i think it will be staggered. it depends. some segments or products will kick off sooner than others. >> these are big ticket items. all of these takeover's are expensive. don't you need a healthy, vibrant economy to make this transition? >> it is a question of what value do you derive from it? what share of the wallet will it capture? the smart phone industry, at the level of the consumer, there has been a significant disposable he income that has gone into the segment. >> when will you be starting

your washington machine when you're on the road? you travel a lot. >> i don't use a washing machine. >> everything goes to dry cleaning. i can tell. it is a sharp suit. know numbers -- you see a strong rebound there too? >> well, i'm a bit out of my depth now to talking detail about the u.s., which as you said is not a market i follow day in and day out but our performance in the u.s. is very satisfactory. we see signs of encouragement that it is rebounding and doing well. >> germany, we had soft numbers. >> last quarter they deprue in the p.c. business. >> we're going to take your optimism. we'll end it there. wish you a successful summit. my that takeaway from that is if p.c.'s are a barometer, it is quite an optimistic outlook. we'll see whether or not that translates when we get more

government data in the weeks to come. anna? >> thank you. very illuminating. thank you very much for that interview. coming up, it is u.s. jobs day of course. economists are expecting a strong report, but will it be enough to impress investors? more on that next. ♪

>> welcome back to "the pulse" live from bloomberg television and streaming on the ipad and

bloomberg.com. let's get a check on the currency markets right now. his is where euro $dollar is currently trading. the euro weakened as a result of what we heard from the european central bank. they cut key interest rates and announced buying asset-backed securities. is that a step towards quantitative easing? that is something many are wrestling with today. we had growth figures for the second quarter in the euro-zone confirmed as entirely flat for the second quarter. we saw zero growth in the euro-zone in the second quarter. that is the number that we got about an hour ago this morning. look at what we're watching it is a day progresses, we are joined by our u.s. economics editor, michael mckee in new york. experts are forecasting a strong u.s. jobs report today. 230,000. is that the number to watch? >> that is the headline number

to watch. the interesting question is what kind of number is it going to take to impress wall street as we have gotten used to numbers like that. yet we're still seeing bond yields at 2% and maybe.5% or less in u.s. why is that after a week like we had when we see new orders for manufactured goods at a 10-year high. automobiles are flying off the shelves here. the trade deficit comes in lower than expected. looks we'll have more than 12% growth for second quarter and possibly the third quarter. even the a.d.p. report that was disappointing yesterday, the ifth month in a row over 200,000 jobs. the fed is on track to continue trimming its q.e. purchases until sometime next year. the question becomes when does that happen? 230,000, you probably want to watch for wages. americans are not getting raises. if we see a big number there, then we might see something m

>> what would it take to surprise on the wages front? >> well, we want to see something north of a .% gain on the month pushing them up towards 2.5% on the year. right now it is 2.1%. if you have something that moved in that direction then you might see yields go up and a negative reaction in the stock market because then that brings the fed into play. do they or don't they move in the early part of the year? >> thank you. michael mckee joining us from the u.s. we'll see more from him no doubt as we continue coverage of the job situation in the u.s. those jobs figures due out later on in the day. if you're in london, of course early afternoon. keep it here on bloomberg television. "surveillance" is up next. they of course will be keeping you informed on that jobs conversation. what will it take to impress the markets then? expectation is pretty high already according to michael mckee. you can follow me on 2013. i'm at anna edwards news.

if you haven't got long to go for the weekend, have a good time. i will see you again on monday. ♪ . .

>> this is "bloomberg surveillance." willraine and separatists meet in belarus. it is jobs day, and central

bankers will do whatever it takes to keep the punch bowl full. and in new york, it is fashion week. it is fashion week in new york. we talked to an icon who believes in made in america. good morning, everyone. this is "bloomberg surveillance." we are live from our world headquarters in new york. it is friday, job say, september 5. i am tom keene. joining me scarlet fu and adam johnson. let's get to our morning brief. here is adam. next tom, i want to start with europe where bond yields are falling once again, below zero on that ecb stimulus. ireland of all places where manufacturing numbers are the highest in the world. >> so bono is staying the irish government money. >> i think bono has has money somewhere else. u2 -- >> that