>> caution. european stocks rebound. bond yields drop. borrowing costs will stay near zero for a considerable time. ebola escalates. u.s. air force steps up security. bringing one billion people online. facebook's mark zuckerberg is in india. e is set to speak shortly. good morning, everybody. welcome.

you're watching "the pulse" live from bloomberg's european headquarters. we're here in london. what have we got coming up for you? well, getting the money shot. meet the man behind some of hollywood's most daring aerial views. and tesla's big review. ll it unveil an electric car that reallies consumer's interest? -- really sparks consumers' interest? the fed's plan to keep rates low still seems to be intact. they are terrified. they don't know what to do. these are the guys we trust to run the monetary policy system. what do you make of it? >> scared of their own shadow.

>> scared to have markets. >> scared of the impact that we could have another tantrum are where treasury yields drop by 100 basis points or so. for me, it is that perverse reaction in the markets that grabs you. you have a u.s. central that is concerned about europe. what we see in europe is not just a move in equity markets. it is a big move in the equity markets. the 10-year yield could drop 10%, guy. no growth. no inflation. what can the e.c.b. do about it? the debate of how much they can do is getting bigger and bigger. it doesn't paint a pretty picture. i want to put this question to you, guy. f they are concerned about

europe -- >> i think all of those -- clearly all of that is relevant. there is some relevance some of the rules are having an impact on the housing market. wages are not that big a problem. you to look forward and work off your projections. there is also -- you don't know what's going to happen further down the road but there is a case to make for normalizing rates. to give yourself ammunition further down the road to do more. there are federal reserve looks so scared of their own shadow, what is the possibility we get another u.s. recession before get a rate hike? they have been talking about raising rates. two years out. it was always two years out. now they are talking about the middle of next year, when you see them so concerned about

those federal resurf minutes, and i have read every single page of them, genuine concern. >> you look at the trade and what's happening. you look at how people are pricing this one. what is changing here is the delta. i think we are going to get rate hikes from the bank of england and the fed. you have to think about what is going to happen here and what the market is pricing at the moment. the nozz repricing the possibility of rate hikes. i think they are going to happen. most assume in 2015. it is what happens beyond that they is rates at which are going to change. >> i think it has been accepted going to be are very, very low anyway. i asked the question this

morning. what matters more to the u.s.? a weak currency or strong eurozone. if it is a weak currency then europe has big problems. >> yeah, again, the central bank. one thing central banks hate is again, the rate to change argument. are things happening too fast? you can move the currency over a period of time but you don't want it happening in one shot causes all kinds of problems. they are both relatively closed economies. yes, it has an effect. the rate change probably has a bigger effect. you become less competitive very quickly. that is something you can deal with over time. if you're -- if it happens quickly, that is a problem. they are both relatively closed economies. >> it has less an effect than aybe we think it does.

it has an impact but not as big as you would hope it would be. >> draghi speaks later. that is the one to watch. >> yeah, it is. what does a guy do? what does he say? how does he communicate? my sense is he likes talking about big changes when he is not in the eurozone. because he doesn't have -- maybe he doesn't have the germans breathing down his neck quite so much. we'll talk about that later. thanks so much. we'll be joined by u.b.s.'s global economist, paul donovan. always got a view. always interesting. we'll talk to him shortly. let's talk about the ebola virus and the threat that we're facing. the race to stop it. it is gathering greater international importance. passengers arriving at j.f.k. airport from west africa will be screened for the infection. the effectiveness of that,

we'll talk about that in a few minutes. meanwhile, a person in australia is being tested for the virus a after coming down with a fever. let's start with the screenings. in all seriousness, given the kind of period in which people are asymptomatic but contagious, how effective is this? >> well, you know, it is the best that these guys can do today. it is one mechanism that you can use to try to limit the exposure of other countries to the disease. unfortunately, as you highlight, it is not that easy to catch this. it is a 2-21 day incubation period. you will have people that might slip through the net. i suspect this will halt some cases but i'm worried that we'll start seeing this kind of thing happening not just in australia and spain but some of these kind of things happening

in other countries too. >> in your mind as you watch this, is this about people being made to feel a little bit calmer that we're doing something? >> you to do it. you can't not do it. i wouldn't say it is just to calm people down. i think it is a necessary measure that has to be taken to limit the spread. as we have said all along in the past few weeks, this is all about containment. vacs nation is about containment. making sure that you look out for people who could be potentially infected. it is all about this. we did this with sars, if you remember. >> yes. people have really high temperatures andics the asymptomatic period may have been less. what do we know about this nurse in australia? >> not a lot. i'm not sure she has been confirmed as infected. i think she had been in contact with some people who had been

infected back in africa. he is being monitored. i haven't seen if there is a confirmation of an infection. >> out of curiosity, lounge does it take between being tested and i assume that is a blood test to being able to confirm or not whether somebody has it? are an average blood test can be turned around in 24 hours. >> right. but it is still 24 hours. i guess that is another thing you to build into the process. sam, thank you as ever. later, we're going to look at whether investors are underestimating the threat of ebola. marvin barth d by from barclays. it is not an issue for financial markets -- yeah, it is creeping into the bell curve. it is out there now.

it is something we need the talk about. we'll talk to him a little bit later. he has an interesting few lines on ebola. the european commission has suffed its first set-back. e former slovenian prime minister has been slated for her role in coordinating energy policy. her candidacy was thrown thrown out by two panels of lawmakers in the european parliament. jonathan hill has been approved for the next e.u. financial services chief. that is obviously not lord hill. we caught up with the co-founder of paypal and he disrupting ebay and the e-commerce business. we'll have more a little bit later. we'll hear what they are saying. with oing to be talking

a guest who was on our program a year or so ago. mark zuckerberg kicked off a trip to india. he will meet with the prime minister. he will talk about the importance of making the internet more accessible. we'll have more on this story later in the hour. what else have we got for you? the race to raise rates. the federal reserve signals it will keep rates low. possibly for a very long period of time. what does mark carney make of all of that? we have bank of england decision. we get the announcement at noon today. paul donovan is u.b.s.'s global economist. he is going to be joining us very, very shortly to give us his take on all of that. ♪

>> welcome back. you're watching "the pulse." strocks rallying thanks to the fed's indication that they will eep rates low for a long time. all eyes turn to the bank of england as we wait for the policy decision at noon today. u.b.s.'s global economist paul donovan is sitting next to me.

good morning. let's start off with the fed. you are convinced that the fed is behind the curve. the market is behind the curve. if that is the case, why are we dithering with the communication strategy? >> you have to recognize, the argument is about where we are in the ikele. growth has been above trend three of the last four quarters. you're starting to see tightness in the labor market. no question here. the problem is there is genuine disagreement about how much damage has been done the economy over the last six years. you a split in the fed between fisher on one hand and williams on the other hand about how bad the structural damage is what happened the fed can do about it. there are mixed opinions. >> if that continues to persist, are we likely to end up in a decision with where the rate path is shall ower than it otherwise might be? i don't think so.

early next year, inflation is likely to stop surprising on the upside. we're seeing inflation at .1. by march, the market is starting to wonder. get that tipping point. i think you suddenly see a rush to the more hawkish opinions on the fed and you'll get a faster set of rate hikes than the market currently expects. >> the market has been deescalating its expectations for rates. the expect saying not that the rates are going to go up aggressively. they are going to go up but not aggressively. the rate is actually flattening houtout. if what you say comes to pass, there are a lot of people throughout on the wrong side of some very big trades. >> absolutely. the market has consistently underestimated how quick think fed raises rates. markets cannot be trusted when

it comes to policy interest rates. only economists can be trusted. >> the problem with that is that the fed is+++ market and so we're ending up in this kind of odd cycle circumstance that will the fed is worried about freaking the market out. but if what you say is true, the market is behind the curve and the fed is behind the curve, they are terrified of doing that. the fed doesn't care about equity markets. of course it doesn't. mom and pop stores is what it really cares about. that's where the job creation comes from. it is not ford or apple or g.m.. this is the reality i think. it doesn't want a crisis in markets. it doesn't want disruptions. i don't think it is actually

that concerned about the markets. it is concerned the about is credit getting through to small businesses? are they creating jobs? those are the focal points. >> who raises first? the fed or the bank of england? >> the bank of england, absolutely. possibly as soon as next month, frankly. i think carney is going to be carried kicking and screaming into this with canadian profanities. the thing of course in the u.k. is the impact of the bank of england's policy on house ishold cash flow is very important. we have a labor market which has got record levels of employment and we are starting to see the first time since the crisis an increase in household leverage in terms of debt-to-income ratios. credit card borrowing picking up really for the first time >> is there another way of dealing with that? >> other ways of dealing with that rather than raising rates?

>> well, the thing is we have already had of the three pillars of central bank policy, two have already been tightened. it has been tightening now for 18 months. the balance sheet has been falling. we had a tight overpbing credit conditions. the only monetary policy left to pull the trigger on. why go for that? he is trying to forward guidance. nobody pays any attention to carney. this is the problem. the than the street is convinced they have a fixed rate mortgage because the rate hasn't nufede six years. in fact, of course over 70% of the population are on variable rate mortgages. they need to be reminded that rates can go up as well as down. it is not going to be the ebbed end of -- >> the day after the rate hike, i get a letter from my bank, we're terribly sorry, which of course is a complete lie, but

we're raising your mortgage rate as of midnight last night and you immediately see an impact on your household cash low. i think this is theory behind it. if we act early now, we don't have to be nearly so aggressive in the future. we forstall a credit bubble being created. we make sure the savings rate doesn't drop too far. act early and the peak in rates this cycle could be lower than what otherwise would be the case. >> one quick question. the curves. how much flatter do you think the bunde curve gets? >> i think what we have had up until now, certainly for the last six months, is a situation where the focus of investors has been on the e.c.b.. all about easing.

the result is that the bunde has led the treasury, which is extraordinaryly unusual. now i think with the move to end q.e. in the states, i think a shift from the fed and the i think the d, anglo saxons start leading and the long end of the yield curve in europe is not going to be able to fall because the treasury will be leading it again. >> thank you very much. u.b.s.'s global economist paul donovan. we'll get more views on what's happening the central bank story. dan julius is a member of the monetary policy committee. that is coming up around 10:10. also come up, helicopters for hollywood. a bird's eye view on technologies creating ariel shots for the movie business. check it out later on the

program. ♪

>> good morning, everybody. welcome back.

you're watching pulse pulse live on bloomberg tv. >> bad news is good news again. it is a fed-induced rally. green across the board here in europe. the dax in frankfurt up. looks like the fed is scared of their own shadow and are confused about how to communicate when rates rise. what it means for inflation. what it means for the strength of the dollar. this is what it means for the bond market here in europe. lower rates in europe and the bond market. some remarkable moves.

the yield on spain just 2.05%. finland is doing 10-year money. at 1%. record lows in the yields and across much of the eurozone bonds this morning. i want to take a quick look at the dollar in the fx market. the dollar taking a slap this morning again. down by 1/3 of 1% on the dollar index which is basically like looking at euro/dollar because it is so heavily weighted to the euro. it is higher by .2%. at 1.6204. if the fed is concerned about growth in europe, what does this mean for the bank of england and what does it mean for the potential for this central bank to hike first? >> yep. the u.k. will be first. we'll see whether that comes to fruition. coming up, mark

zuckerberg wants to make one billion new facebook friends. he is making a speech in new dell hawaii. when ave a look at that woe we have come back. ♪

>> good morning, everybody. welcome back. you're watching "the pulse" live from bloomberg's european headquarters. i'm guy johnson. these are the top headlines. the u.s. is stepping up screenings for ebola. passengers arriving at j.f.k. from west africa will have their temperatures taken. screenings again this weekend at j.f.k. and exfind four other major airports next week. a nurse in australia is being tested for the virus after coming down with a fever. sierra ed patients in

leone. >> italy's biggest labor union called for a demonstration in rome later this month to protest against plan. facebook's c.e.o. mark zuckerberg has kicked off a two-day trip toy and. he will be speaking shortly on the importance of making the internet more accessible. about a billion people in the country don't have access to the web. we have pictures coming from this event in new delhi. it is in a darkened room. they are playing some groovey music. when he arrives, caroline will talk to him. in the meantime, set the scene for us. >> this is an initiative sparked by zuckerberg. he has onboard samsung and

eriksson as players. it is about bringing the internet to the 4 billion people in the world that don't have it. india has the biggest population of those offline. more than a billion are not connected in india. they have about 15% penetration so far. what is interesting about india, not only does it have more that are not online compared to china, russia, brazil, they are actually growing and are willing to get online. they are the third biggest user in the world. it is by the fact that there are so many rural communities and the amount of ill literacy that there is, these are the barriers that are highlights. facebook and samsung and eriksson wantsing to tackle this.

facebook wants to help bring connections. >> it is going to be a mobile story, isn't it? this is not about plugging in your ether net cable. >> this is why there are drones being thought of being able to circulate over and above providing that connection to these rural communities. what is interesting is it is not philanthropic here. hundred million users of facebook in india. they are very popular. indians are saffy about the way they use phones -- savvy about the way they use phones and the internet. what's an. e to

-- whatsapp. the prime minister is tech savvy. he uses facebook and 2013. since he has been elected, the c.e.o. of facebook has been there. talk abouting tourism. amazon has been there. microsoft has been out there. most interesting of allings google has been out there. a product guy, he has been focused on a messaging app. a rival the what thesapp. guest on the phone from

bang lower. good morning to you. the numbers, the potential and the opportunity that exists to get more people online in india. how do we do it, though? >> india is an incredible -- for the next, you know 10 years. we as an early stage investors we are starting to see it. india will be mobile. fast country on the internet. everything will be mobile. early investors in india, one of the largest e-commerce commence. called flip cart. they had a great holiday run. if you look at what's happening in india, the rate at comm mobile is being penetrated, the first set of action is all in internet plus english-speaking mart phone users which will be

200 million to 250 million users. it will get to that very fast. then comes the indian language users. >> and in terms of how that process is working, how quickly it happens, what are the key barriers that are going to stop those key people getting online? i read in your notes this morning, for every $10, the cost of a smart phone comes down. 200 million more people are likely to access those device. >> right now, if you look at the pace at which smart phones are penetrating. for $100 you are getting a base -- android-based smart phone. if that $100 becomes $80, $70, $60, you are going to start bringing a massive number of smart phone users into the

ystem as an access device. band width. do they have internet connectivity? that is why it is pricey. people are choosy. they are switching on and off their connection multiple times a day. that goes away once the cost of access comes down on the internet payments. once that is there, the rest is on commerce, content, entertainment, education, healthcare, everything being accessed out of your mobile device. and we are starting to see elements of that in many of the startups that are happening in india, which are disrupting many of the existing services and going directly into mobile as a primary access device. >> what difference does it make to see guys like mark zuckerberg show up. when amazon arrives, what

difference does it make? you're talking about indigenous companies. are those guys going to be the ones to succeed or is it going to be a similar story we see in the west? facebook takes over? amazon takes over? >> it all depends on how indianized the western companies think about india. you're taking products and trying to do it maybe you get away with whatsapp and facebook. when it comes to commerce and entertainment and movies and you know, your ticketing, payments, they are all local varients. if people are open and try to adapt to the indian conditions, there is a great set of opportunities for everybody. >> what about the issue of financing? if i want to buy something online. if i want to use many online

products, i use paypal or a similar product or a my visa card or a similar product. whatever it is. what kind of constraint is the financing story in india on the growth of all of these mers opportunity? >> right now india is a very, very cash economy. the cash is still a dominant way eople transact online. they pay with cash. there are several sperms going -- specials going on. several are attempting with linking to the rupee. it is an alternative to mastercard and visa in india. they are still early. until payment problems are solved, it will be always to some extent free for consumers. businesses paying. hat's happening in facebook.

what thesapp. if you want the true commerce to happen, it will take some effort in terms of solving the payment problem. >> ok. that's something else to watch out for. maybe another opportunity. hank you very much indeed. we'll continue the monitor the events that are taking place in new delhi. the shots seem to freeze a little bit. wait and see when zuckerberg is going to show up. it is going to be great to see what he has to say maybe about the opportunity that exists iny and. he is not your average pilot. he captures footage from hollywood blockbusters. we met him and tried to find out how he gets those great money

shots. >> i love everything about my job. sometimes i literally have to pinch myself to make sure this is not a dream. >> alan kerwin runs a $40 million company, but he is not your average c.e.o.. kerwin flies helicopters for hollywood. >> we operate a fleet in l.a. a big portion of our business is for the motion picture industry. >> he flies cameras for six to 10 films a year. >> i try to put that camera in a sweet spot 100% of the time so the camera operator sitting next to me can always have the shot he wants. >> the director of photography flies with kerwin capturing shots using onboard controls. >> in the case of transformers where you're dealing with robots that don't exist. we go up and go well, let's just

make this movement because it would seem to me that's what a robot would do in that shot. >> we become that and with that point of view flying through and around and in between buildings. >> he these fly as if it is really there. i have to compose the shot as if it is there and they will animate the robot into the shot to match what it is we did for them. >> they could not do it without the right gear. they have a camera mount that holds and steadies any digital camera and lens. >> we built the most advanced high-performance camera platforms on the planet in my opinion. >> the stabilization that has really, really gotten good. that's what this system does. there is a little bit of vibration going on all the time. that's what this is all about. it takes that bounce and makes it perfectly stable. the lens mounts in here, it is all braced and everything so that nothing can vibe rates.

everything is tied down as tight as possible. >> that stability allows the camera to capture footage from miles away. >> it is something i'm so proud of. we have such a long lens. we can be three miles away from an animal event so the animal cowl n't hear us. >> he also sees opportunities in adapting their unique camera systems for unmanned aerial vehicles. >> i see drones an integral part of our growth plan. almost every single one needs optics. they need to be stabilized. we have a lot of ideas for drones in the future. >> i could watch those pictures all day. stunning. the ones of the bears. amazing. right. we should move on from that. mark zucker entering speaking.

the quality of this is not that great. the video quality coming out of new delhi is not fantastic. let's listen to what he has to say. >> when the benefits of this technology are shared across the whole society, that's when we can start to make a really big leap forward. that's what we're excited about. throughout history, india has always been really good in showing an ability to make things -- because of the green revolution, you lifted hundreds of millions of people out of poverty and showed that this country with concede itself. because of how you have embraced the computer revolution. you have a vabe rant computer industry. just last month, india became one of the only countries in the world to send a probe to mars. it is a huge technical achievement. because you have embraced science and research and education, now the next

generation here has the opportunity to define the future and bring india to the world and he world to india. a key to this next big opportunity is going to be embracing the internet. if you embrace the internet, you can transform lots of people's lives. you can touch and improve on people's lives and these communities even more in the next generation than you were able to this the last. we have a long way to go to get there. because today, only about 1/3 of people in the world have access to the internet at all. more than 2/3 of people or about 2/3 of people don't. only 2.7 billion people have any access. here in india, it is a bit better. you have 243 million people are connected to the internet. more than 100 million are on facebook already. that's a big achievement. ut

>> as i said, the quality is a little bit iffy. interesting to hear what mark zuckerberg has to say. his is a country that is iterate as he pointed out. it is going to be interesting to see how this journey progresses and maybe you need people like mark zuckerberg to act as catalysts. india has a great deal of potential as well. we'll take a break. back in a couple of minutes. see you then. ♪

>> welcome back. the fed worries about a strong dollar. should we be dusting off our concern about currency wars? lots of meetings. big international meetings about this. you attended some, g-20, etc. we talked about currency wars. >> this was a big topic in february last year. the bad guy at that meeting was -- japanese,s noo, of course, prime minister abe. they were concerned that they were intentionally pushing down the yen to boost exports. during the two-day meeting, even though that is the story that all of us wanted to get, no one

criticized the japanese. they came out with this formula, a pledge that everyone agreed to that no, i won't devalue to get a one-off gain in terms of exports but it left those countries, in particularly in that case, the ability to boost their own economy. in this case, the yen. it is going to be draghi, the bad man. >> it has been appreciating for last couple of days. even still, you know, i think the scenes probably not. because -- answer is probably not. i don't think right now, in the u.s., they are all that concerned about the devaluation over the euro. >> no. they are more worried about the economy and the fact that that is not having a great time at the moment. >> on the one hand you have two member turnovers fed saying look, the strength of the dollar is concerned when it comes to

our efforts to light a fire under inflation and you have david bloom, i don't know if you saw that hsbc currency strategist saying we are in a currency war but the goal is to steel inflation. on the other hand, they are much more concerned about growth. right now. and the weak state of european economies. the national association for manufacturers. always the first to raise their hand and complain about a strong dollar. they are saying they are around about it but concerned about the market -- >> if the euro gets below onings i think we can probably talk about. i thanks very indeed. we're going to take a break m back in a couple of minutes. see you then. ♪

>> welcome back, everyone. in today's new energy, we're going to talk about coal. the market hasn't worked out to the fact that coal is what it nce was. bogey in many ways the man of the energy industry. yet there is an awful lot of coal capacity out there still. square that for me. >> there is. from a financial perspective

coal is a risky bet at the moment. the carbon tracker analysis is the first time anyone has got their arms around it. no one has done this before. what we see is sbover capacity. a lot of -- overcapacity. a lot of investments just don't make financial sense. there are really strong signs that we're going to see a peak in demand from china. it is china that really matters here, as early as 2016. for a whole range of reasons. would you invest in a coal site now as an investor? i think you would have to be very braver to do that. > what is the gap? >> we look at a break-even price of about $75. if you have got coal gements below that, then you can --

investments below that, and you can supply below that, you're probably ok. if you have investments where the break even is 75 -- >> how much of the industry is north of that and how much is south of that? >> a particular amount. particularly the exporters. australia, indonesia. they are really exposed to this slowdown in demand from china. i would be really concerned if i were them at the moment. >> there are some interesting developments in terms of the way the big mining companies are working at the moment. is it the more independent producers that are more exposed? where is the real risk? >> it is a tale of two cities. if you look at them they know what is going on and they have options. they are pulling back. think a many of them are reasonably well positioned. the coal players, they have no choice. they are the ones that have to

dig their heels in or decide that they are going to have to wind their businesses down or at least shrink their businesses. >> we'll take a break and see you in a minute. ♪

>> caution at the said. -- the fed. the fomc hands darling costs -- hints borrowing costs will stay near zero. a woman in australia tested for ebola. bringing one billion people online. live pictures from new delhi. facebook's mark zuckerberg is there. he is talking and saying interesting things. a vested interest, but nevertheless, a massive opportunity in that country.

good morning to our viewers in europe. good evening those in asia. and a very warm welcome to those just waking up in the u.s. i'm guy johnson. this is "the pulse." live from bloomberg's european headquarters in london. meet the man behind some of hollywood's most daring aerial shots. this package is unbelievable. wait until you see the pictures we will show you later. tesla's revealed. it unveil electric cars that will spark consumer interest. what is happening with the bank of england. european stocks rallying after the fed's commitment to keep rates low for a long time. what is going on beneath the surface?

>> the markets are the big story. more than the fed. the fed looks worried. one of these stories the "financial times" is carrying in london. they look terrified at changing their communication. >> they are worried about the reaction of the market. >> are worried about a move of 100 basis points. analyst from ubs talking about maybe that is not the case . janet yellen was there, conditioned by their experience of that tweak in communication and how markets withipsawed. dax up. >> you have had some down days. we need to put this in context. markets do not go down forever, sometimes they bounce. >> the bond market, yields have

been moving south forever. the 10 year in spain a little over 2%. finland borrowing 10 year money at 1%. the eurozone don story speaking to what is going on -- a growth, low inflation, low rates. you wonder what is going to happen next in terms of the rate cycle we are going to say. we are going to get the announcement from the bank of england later on. paul donovan was here talking about how next month we could get a rate hike. >> the evidence from the last couple of months has been more signs of reasons not to hike rates. the housing market has houseened, learne london prices are falling. the housing market is tightening up. -- want to hike

rates. concerned about a slowdown in the eurozone. interesting to see what comes in these minutes, until the 22nd, to see how concerned the bank of england has. >> i wonder whether the bank of england is concerned about domestic credit growth. maybe credit is getting out of hand. go early and you will not have to stamp on it as long later. onwill talk about that later with one of the founding members of the bank of england's mpc. her take on all these arguments. ebola.wing threats of passengers arriving at new york's jfk airport from west africa will be screened. joining us now is santa's elliott -- joining us now is sam fazeli.

let's talk about how this works. we had a screening companies that are going to be figure out how to deal with this. from a corporate point of view, there's a lot of hype and a lot of concern. what is the story from companies right now? >> there are quite a few companies in the u.s., glaxo in and fujifilm, which he do not normally see associated named ass, have been people developing drugs. the human cost of this is something we cannot measure. and we cannot ignore. there have to be drugs being developed. is potentially bringing out the human face of the drug industry. if you want to look at the other aspect, how much money could you get out of this current situation. one parallel would be what happened with the smallpox risk

the u.s. was worrying about from a bioterrorism perspective. $800 million contract out for smallpox vaccines. aat is being shared between variety of companies. that is the magnitude, from a monetary perspective, we could reward to at for a some of these companies taking the risks to develop these drugs. >> in terms of the governments spending my, now that it is starting to ripple around the world, we have a nurse being tested in australia. has got to spend money? which companies and governments are going to be spending money on making sure their populations are protected? toagain i take you back smallpox. a much riskier threat, smallpox is, compared to ebola.

,uring the post-9/11 atrocities we had most countries trying to build a stockpile of products their citizen. i can see the same thing happen here. it would be waiting for a vaccine to be produced and keeping it on hand for containment procedures. >> thanks very much indeed. the industry angle on this important story. santm fazeli. the impact business needs to think about. the damage from ebola could be worse than sars in 2003. market needs to be paying more attention to. we talk about that later on in the program. why else? facebook's mark zuckerberg has been speaking in india. he is meeting prime minister modi.

he just finished speaking. he spoke about the importance of making the internet more accessible. one billion people -- country do not have access. c technology in india as relatively high. -- technology literacy in india as relatively high. snapchat will start seeing ads, according to the ceo. it will help the start of generate revenue for the first time. the app rejected a $3 billion takeover from facebook last year. summit is in its second day. we caught up with eco-cofounder of paypal. we spoke about ebay. >> ebay has a good business. $30 billion worth of market cap. e-commerce is changing. offline coming to online, off-line is well north of 95% of retail sales in america. a lot of people are saying i

ought to open an online store. ebay should be a platform. there are tons of renovations and innovations making e-commerce retail a better and easier thing to do online. >> we will hear more from the summit later on from the ceo of nest. tony fadel. a really interesting guy. still ahead, a bloomberg exclusive. the banking member of of england's monetary policy committee. ulius thinks about what is happening in the u.k. ♪

>> good morning. you are watching "the pulse. for live from bloomberg's european headquarters in london. only show you what's been happening with the pound. the cable rate. the fomces from meeting seem to indicate the sad is invalid bit more cautious. isseems to indicate the fed more cautious. after the minutes, we are trading back above 1.62. in percentage terms, not a huge move. was thedid not see

minutes green gauge that dollar rally. the bank of england will be revealing its decision later. the big question is which essential bank goes first when it comes to hiking? the bank of england are the fed. tony fadell -- exclusive interview with deanne julius. paul donovan was convinced we get a rate hike from the boe next month. >> it could happen. one expects that is when they would reverse the previous the most likely outcome. i think it will be the early part of next year. >> we are looking at a rate hike from the bank of england in the near term. is that because if we get an early rate hike, we need fewer

down the road? >> it is a good argument. there seems to be agreement that even when there is a rate hike, .he movement will be gradual it is easier to go on a gradual slope if you start sooner. that is a good argument. gettingevidence we are financial bubbles in this economy, not just this one, this is the one they are looking at. the longer it rates stay and naturally low, the more the distortions buildup. leadingank seems to be on macro prudential powers. some evidence that is powers are having an effect on the housing market. concerned about credit bubbles, why not use those? >> it is using those and it will use those. at the end of the day, interest rates are important in a housing market. especially for the people who theirinked mortgages,

interest rate is linked to the bank rate. if they are worried about housing, i'm not sure they are, frankly. without cause them to raise rates. i don't think that will be the trigger. trigger?ould be the >> i think the trigger will be a shifting of the center of gravity on the committee to persuade a couple more members that this economy is strong enough to begin a route towards normality. >> any names you would focus on? >> i'm afraid i do not have names. time isome of the all better than the newcomers. >> fair enough. for going earlier. it is not one and done. when theet a shock letter arrives saying your rates are going up. people start to rethink their attitudes towards their mortgages. they've been on the floor for some time.

in terms of the effect of the first rate hike, what these think they will be hoping for or looking for? what he think the effect will be >> i think the effect will be bigger in the financial markets than the consumer economy. in the consumer economy, you have people with mortgages they can barely afford. you also had a lot of savers and people who been getting no interest on their savings. in the consumer market, it will be an effect, probably a net negative. with employment doing well and other things happening in a positive way, i don't get will be so big. the worry is in the financial market where all of us tend to extrapolate as soon as there is a move. people are immediately looking at the two-year or five-year rate. that can be an overreaction.'>> >> where would you think the think thee would you

would -- if we see tools, we canse assume the rate is lower. >> if we see inflation start to pick up, is very low at the moment. if we see inflation pickup, that is what will shoot rates up in the market. imply the bank would be more aggressive in the pace of rate increases. >> inflation is going in the opposite direction. we have some strong evidence we are not going to see a massive pickup. are we overdoing the inflation argument? "here was a piece in the "ft

talking about those of us born in the 70's have a fear of inflation that is innate but not necessarily relevant to the living.n which we are >> it is dangerous if we forget what happened in earlier times. i do not expect the 1970's to be repeated. the thing about inflation, it tends to be a liking indicator. by the time you really see inflation, it is a little late to step on the brakes. employment and wages also tend to lag the cycle. the difficulty is that the bank of england seems to be focusing heavily on the labor market and especially wage growth. that usually happens after the is growing strongly. i think they may be behind the curve because of that focus on wages, which will put them behind the curve on the inflation side. although you say inflation is going down, it was up at 1.9% in june.

energy prices, food prices, these are quite small. like as going to feel worry further down the road. who do you think will hike first? .ark carney or janet yellen >> if i had to put money on it, i would put the money on the bank of england. not necessarily mark carney. heref the reasons the bank is likely to go first, if we assume they are equivalent pressures, which is not the right assumption, the structure here is more independent. mark carney could be uploaded. -- could be outvoted. it would be unusual in the states for the committee to move with the chairman voting and the other direction. >> the bank of england and the fed face different problems than

in frankfurt. we have political factors and elections coming up. we have an export area that is our nearest neighbor that is really suffering. what kind of a break you think that will put on the desire to hike rates in the u.k.? >> it is certainly a factor that will hold down our growth rate. and hold down our inflation rate. i'm not sure it is a new factor. this has been going on for a long. >> we are talking about putting a brake on the economy. if we were to see a deterioration of me eurozone, d -- if we wereld to see a deterioration in the eurozone.

>> what would be the trigger it would be if there is a real crack in the eurozone. if we get back to one of the key countries looking like they may have to leave or a political thate in france or italy indicates we are back into a euro crisis territory. we are not there now and the markets seem to be confident that we are not going there. the underlying fundamentals are pretty weak in the eurozone. >> we are heading into an election with political parties all over when it comes to the economic formulations. >> yeah. is a huge uncertainty. on the other hand, we did a the --ttish referendum problem on the other hand, we did escape the scottish referendum problem. in the trial uncertainty. i do not think either party is

an extreme party. we are not in that territory, think goodness, in this country. >> we will talk about that more. we have got to pay bills with an advertising break. mark zuckerberg in india pushing to get one billion people online. speaking in new delhi. more on that story later on the program. ♪

>> good morning. you are watching "the pulse." deanne julius still with us from the bank of england. having a chat about peak rates. you told me you are not convinced that this argument about this cycle is different and rates are lower from the previous cycle holds water. why not? a lot of people are hanging their hats on that. >> fundamentally, if we are in a more normal environment, we had inflation around 2%, we had a sustainable growth rate. that implies 4% as a neutral level of interest rates. if we grow faster, we are talking about interest rates -- >> the upside. >> the risk is to the upside if where weve the 3% is are heading. not next year, this will take a while. >> how long is the cycle?

or four years, probably. it depends on sustaining a good rate of economic growth and growing faster than 3% at the moment. the imf thinks we will slow down next year. 3% is a pretty hefty clift. -- clip. >> what do you think potential growth is? closer to 2%. there is a bit of catch-up to do. >> and a lot of catch-up. when the politicians open the books next year after the election, how big a risk is that? >> it is interesting. if we keep growing well, which is my base case. we are going to go around 3% for the next couple years, tax revenues go up. if they can hold the lid on expenditures, the fiscal deficit as a share of gdp continues to come down. be the best scenario.

it is feasible but not necessarily the one that will happen. >> ok. thank you very much indeed, deanne julius. former member of the monetary policy committee at the bank of england. we will take a break. talking about helicopters when we come back. ♪

>> good morning. you are watching "the pulse p or code live from bloomberg's european headquarters in london. these are the top headlines. u.s. stepping up screenings for arriving passengers from west africa. passengers at jfk will have temperatures taken and asked if they had contact with people infected with the virus. screenings begin this weekend at jfk. guangzhou other airports will begin next week. turkey's president lashing out

at protesters. nn a written statement, erdoga said he will not tolerate vandalism. demonstrations are going to derail peace with the kurds. kurds are angry with what they say is failure to stop the islamic state from attacking a kurdish count across -- kurdish town across the border. the spirit of santa filing for santoptcy-- espirito files for bankruptcy. jon ferro. >> a green map. up across, equities the euro zone. session highs in london, up 0.6%. in frankfurt on the dax, up over 1%.

one day stocks are down and everybody is terrified. high on thecord s&p. the next day we are talking about bubbles. is concerned about growth. bad news is good news, low rates for longer. equity markets go up. equity markets might be happy, 99% of people on the planet outside of this market will be looking at is concerns about growth and saying bad news is bad news. if you look at the bond market, bit this -- big news in europe. is the yield on the 10 year in spain. when i pricing in? inflation.and low the battle over inflation seems to be what is going on. the federal fighting concerns about a strong dollar. and the feedback from europe into the u.s. and what it means

for inflation. this is a battle for inflation. the only way you get it for central banks is to push down the currency. who has a battle? mario draghi, the king of the euro. euro up, 1.2757. mario draghi speaks in d.c. today. that is going to be a big one. >> certainly is. jon ferro giving us a view of the markets. limited you a few of hollywood. let's meet a man who is not your average pilot. alan flies with a camera mounted to his helicopter to capture aerial footage. of it.seen a lot we went to l.a. to find out how he gets the money shots. >> i love everything about my job. sometimes i literally have to pinch myself to make sure this is not a dream. runs a $40 million

company, he's not your average ceo. flies helicopters for hollywood. fleet ofrate a helicopters in l.a. come a big portion is for the motion picture industry. >> he flies for six films to 10 films a year. >> i try to put the camera in the sweet spot so the camera operator sitting next to me can have the shot he wants. >> director of photography dave flies with perwin, he captured shots using onboard controls. >> in the case of "transformers," you are dealing with robots. we say let's make this movement because it would seem that that is what a robot would do. >> we become optimist prime or bumblebee in that point of view around and between buildings. >> he has to fly as if it is

there and i have to compose the shot as if it is there. they will animate the robot into the shot to match what we did. >> they could not do it without the right gear. the team developed a $6,000 camera mount that holds and studies any digital camera and lens. aerialmost advanced camera platform on the planet. has -- theization stabilization has really gotten good. ofre is a little bit vibration going on all the time. that is what this is about. it takes the bounce and makes it stable. the lens mounts here. so nothingtraight can vibrate. everything is tied down as tight as possible. >> that stability allows cameras to capture footage from miles away. earth" is something i am proud of. we had a great ability.

we could be three miles away from an animal event so the animal could not hear us. opportunities in adapting camera systems for unmanned aerial systems. optics, doesd optics need to be stabilized. we had ideas for drones. >> i like my job. that guy's job is amazing. back to the u.s. 25 minutes until "surveillance." tom keene, what are we looking at? lots to look about -- what the talk about. a terrific market turnaround yesterday when the fed cut refilled the punch bowl.

gina will join us on the gyrations of the last 48 hours. says that will do better than small caps. london for thein bank of england discussion. very low rates in germany. we willll join us and talk about entrepreneurship and good and best practices. the market is standing on the german yield curve. amazing to see how much it has flattened. as, once the u.s. , is that goingup to force german yields higher? how does the ecb deal with that? an interesting question. looking forward to the conversation. thank you very much indeed. jon ferro will be appearing.

from the u.s. to india, mark zuckerberg speaking in new delhi. on eight to day trip to -- on a two day trip. he'll meet prime minister modi. talked about the importance of internet access. education. embraced the next generation has the the future and bring india to the world. the key to this will be embraced the internet. >> mark zuckerberg in new delhi. caroline hyde's talking about the story. there is a huge story here for india. a big story for facebook. >> a big story for the world. a report facebook it with mckinsey ahead of the internet.org summit. 4.4 billion people are not online, 2/3 of the world's

population. india has the biggest, more than one billion of indians are not on the internet. they had the most out of the entire world. more off-line than in china. is the so interesting desire to get on the internet. the pace of growth, 30% uptick in users in india and the last five years. they feel this opportunity is gargantuan. they have a new prime minister who is front and center pushing social media. he embraced it for his own election. interesting that mark zuckerberg took internet.org to new delhi and unveiled announcements like apps. they were handing out prizes. making it more relevant. the reason india has so few people online is because it's very rural. many people are illiterate. if you are going to tackle the rural nature, you need to have

drones. internet get an access in planes. incentivize people to get online, put it in their own language. in india to enhance and push the scale of growth. >> we were talking to a guest from india. one of the problems is the fact that it is largely a cash economy. everything online tends to involve a credit card, paypal. you have to figure that out. >> the great "on the markets. indians are sadly in the way in which they use their smartphones . they don't want to pay for data packages. whatsapp's biggest market is india.

ecommerce has not kept pace. interesting that jeff bezos of amazon was recently in india trying to extol the virtues of pushing a payments. we want to create our own ecosystem. work within companies that already exist in the indian ecosystem. bezos does not want to do that. facebook has 100 million users in india. their second-biggest market outside the u.s.. bit of moneyttle orientation as to how they can make this work. >> he wants to make friends but he wants it on a financial basis. coming up, u.s. air force ramped screenings. the business impact. our next guest says the damage could be worse than 2003 when we

were worried about sars. stay with us for that story. ♪

morning. welcome back. we are live from london. we are on bloomberg television. .et's talk about ebola the threat of the virus spreading in west africa to spain and the u.s., australia.

becoming more real of her the last few days. a nurse who treated patients in sierra leone has been tested in australia. u.s. airports are going to step up screenings of flights coming in from west africa. they will talk about whether or not people have been in contact with anybody who has had ebola. this story is becoming increasingly real. how should financial markets be treating it? barclays managing director and head of fx research for emea. beingas gone from something that is affecting west africa to being something that is increasingly global. it is not really registering yet with financial markets. do you expect that to change? is important to emphasize that it is still a tail risk. is a humannt, it

tragedy in west africa. it has not had brought economic effects. we do not expect that to change, give me more robust economic or -- given the more robust economic question response. you've seen the slowdown in the expansion of the disease. it is still out of control. is the slowdown does not in terms ofce containment, there's a potential for it to become a more serious issue across west africa. 7000 to 8000 with cases, it is starting to spill into the rest of the world. that is the concern of the market that we are not there yet. >> d.c. get is a sentiment story rather than a disease-virus -- you think it is a sentiment story rather than a disease vir us story? i'm in an airport, it stops me and thinking about whether or

not i should get on a plane. how do we think about the effects of whether this is economy?in the real >> multiple ways. the sars example is a useful one. that was very much the sentiment. this going to is mean for me. it drove people away from restaurants, travel, hotels. you saw a demand affect on sars. immediately bounced back as soon as people saw the disease was going to the contained. that is potentially one of the differences with ebola. at this point, we have not even gotten to the sars stage where you have broad concern or pullback from entertainment. if you did have ebola continue to expand through west africa, become epidemic or even -- hopefully not -- endemic to the

region. you would have this persistent set of potential explosions out of africa of the disease. which would have a more persistent effects on the demand related industries outside africa and could impact markets. endemic,becomes embedded into the population and a permanent feature of the global economy, we need to think about it a different way. it's relatively hard to get compared with something like feverr malaria or dengue with a mosquito vector. it is relatively hard to get, ebola. in terms of what that means for the way we should think about it, it is different. if that was to change and if it became communicable via the air. if it changed the way it was

transmitted, how big an effect without half? -- would that have? >> you have to think about the ability. we've never seen any fluid borne virus become airborne. is an extreme possibility. what i think is a greater risk is that it becomes less virulent. like hivut a disease that has become globally pandemic. that is a much less communicable disease than ebola. why was able to spread globally? -- it took a longer time for people to manifest symptoms. it was able to spread before killing off its host. ironically, this thing you need to worry about or look out for in terms of changes in ebola is that it becomes less mortal. and perhaps, as a result, more

morbid. to thinkreat we need about, the one that the financial markets need to think about is that this becomes less virulent but themes endemic in population of west africa. that is not the essential scenario. if you think about the distribution curve of outcomes, how far out is ebola in terms of the threats we face? is a difficult question in terms of putting a numeric value on that. prior would say is that to this outbreak, you would say this with a fringe rest. -- fringe risk. in did not need to account your thinking in your financial markets. at this point, it has moved out of the fringes and is a serious tail risk that needs to be

considered. three things you need to watch. what happens to the expansion? asve seen the expansion slow the international community has become more involved. do we see that curtailment in the disease? if not, that will increase the probability it expands out of africa more often. the second thing is the issue we discussed about how does the disease evolve. carewill take a lot more in terms of looking at. it is not likely to show up quickly. the third thing is looking at how countries that aren't new recipients of these cases -- t hat are new recipients of these cases like dallas or madrid, how do they handle this? in countries like senegal and nigeria that they were able to effectively contain

this outbreak. >> on that note, on those things to think about, marvin barth from barclays. we will take a break. we speak to the billionaire investor carl icahn. he took to twitter saying he will send a letter to apple. you do not want to miss that conversation, coming up later on bloomberg television. ♪

>> welcome back. you are watching "the pulse." a look at the currency markets. te this isr the ra announcement from the bank of england. the pound on the front foot, fed cup more cautious on the rate hike story than many anticipated. a bit more dovish. the data it will be determining what happens next. we do not know what the data are. , 1.6209. a little bit more traction. in terms of the rest of the day, washington, d.c.-focused. the rate decision from the bank of england. everyone is in d.c. talking, 5 p.m.

eastern and tenneco p.m. london time, 11 p.m. from for time. look forward to hearing what he has to say. a guest coming up, carl icahn later on. talking to the nest ceo, tony fadell. great guests and great stories up.ng the other thing, these pictures that have been brought to us. london, boris johnson unveiling driverless trains for the london underground. the whole thing is a long tube. 2020, they will be put into service. it will be going on piccadilly line first. a point ofe contention. we will see these being staff initially. the unions are very concerned

about this. there will be staff. piccadilly line first. the other lines are going to get them after. colt pictures. that is it for "the pulse." "surveillance" is coming up next. ♪

>> this is bloomberg "surveillance." seeks a new way to say at low rates forever. u.s. air strikes against the

islamic state proving effective. turkey will not engage in battle against the islamic state. mark zuckerberg like jeff bezos and satya nadella makes a pilgrimage to india. good morning, this is bloomberg "surveillance." live from new york. thursday, october 9. i'm tom keene. joining me, olivia sterns and adam johnson. top stories. to paylays has agreed $29 to settle a u.s. lawsuit over breaking benchmark interest rates. libor.e to rate also agreed to swap rate traders between other banks-- barclays has agreed to cooperate with traders between other banks. the imf warning the ebola couldic