gamble. chris abe's critics blame your. former governor tells bloomberg the region is the biggest risk to growth. >> european banks. target rateut his here on the pulse. ♪ chris good morning. you are watching "the pulse." i am guy johnson. >> i am manus cranny.

-- i am francine lacqua. on what we can expect, let's bring in a bloomberg bloom reporter on a snap election. tell us about the feeling is like in japan right now. , a lot ofonfusi. the japanese are not sure why it is necessary for a couple of reasons. prime minister shinzo operate --eady has -- shinzo abe deregulating. also the reason to have this so off they can turn to the japanese people and get a delay that nobody wants. certainly, yesterday the gdp numbers are the economic conditions. there's a lot of confusion on why this election is even necessary.

to go toolitical stunt the people and get a fresh mandate so they can turn to the party and say we will make changes. alreadyhad two years and done very little on the third arrow. the question is with the new mandate, will he get to work? >> willie, that is the question really. is it a reflection of the reality of economic reform takes a lot longer than maybe he anticipated when he got into this and as a result of which, actually this is pragmatic reasons? >> yeah. he is focusing on low hanging fruit, getting the boj to do more. the reform which pumps a more money into the stock market. the very difficult things are loosening of labor markets and increasing immigration, making japan more competitive. has realized the problem is

not the japanese people, they stand with him. the problem is his party. a lot of vested interest. rural japanese markets that stand against him. he is being pragmatic. this is all inside of tokyo politics and the next four weeks will be focusing on votes, not to the economy. the big loser here is the reform drive and tokyo. >> what are the chances of him winning the election? what are the polls thing? >> certainly, he will win. for lack of a better phrase, there's no one else. opposition parties are very weak. there's no one with in his party that could be in the room placement. interesting, two years ago he had a mandate from the japanese voters. , it will be weaker. turnout will be weaker. there's a recession. he has raise taxes on the

japanese. and taken stances that are not popular. again, the question is, what are we doing here? just announce no election and i will roll up my sleeves and get to the third arrow am have not will getere, but now i serious and japan will be more vibrant. >> ok. we will see what we get to later on. willie, thank you. you can read his latest column on japan on bloomberg review.com. for more what is happening in japan in how that fits into the broader story around the world. abenomics is a big theme. everything wilson joins us, a chief global economist. you have listened to what will he had to say. maybe abe needs to get on with it. is there truth or will it take longer?

>> it takes a long time. that thing that stands out to me is of the two arrows, that only shot one, which is printing money. that done a little on the fiscal side. even really got started yet and he needs probably eight years. it is a long, bumpy road. >> we are getting breaking news. leaders he will dissolve the japanese parliament. she will call the elections. we are expecting snap elections. you are saying he probably needs more than 4 years. does it mean he is looking to push back that sales tax and why do you want to push back the sales tax increase? just get on with it. >> that is right. there's a big debate of whether you need tightening in the middle of it all. i do not think they do, personally.

to say that, you kind of need to go into this space that is now being debated in europe. can you run a deficit and have the central-bank print the money? never pay the interest on it christmas >> monetization we're talking about? >> simply just print the money area -- money. if you run a big deficit, you run a big deficit. >> we have laws in europe against that. such as -- it is difficult bridge to cross. when you think about it in. economic terms and forget about the laws and other stop, there lots of reasons why we have it, all of the others that it happened in the past, you could make an argument that japan, that is what japan needs to do. >> the reality -- you are saying

is about financial experiment. this is not what they can do. >> it is not what they can do now. you have a big deficit and they are buying bonds like this. one day, you get the message and they are not going to pay interest on it or never have to repay in q1 rolling and that is what will go through the back door. >> to end up we will have a bond that is zero, what is the market reaction to that? >> i do not know. if i put my traditional hat on, old, my god. what are we doing this year? the market says we need growth. marketout there in the who seems to worry about these old, traditional things. people are so concerned about growth. any kind of idea, people will like it. the market is a little too tough on japan and we

need to give it time and it is a failure and we do know if the financial experiment is working yet. moreu agree or do we need decisive, bolder action crest mark was with had so far is not working. -- bolder action? -- what we have had so far is not working. i do not think the market is hard on them. commentators are hard on them for sure. >> do you agree with that? >> he is not delivered on arrows one or two. i agree with that criticism for sure. ultimately, they need to restructure the economy. ands a very close economy we are talking about europe and that's nothing compared to what they have in japan. japan, you go to work and you are producing like 2/3 of what

an american or european is producing per hour. how is that possible? >> abe sank to the leadership he is going to delay the sales tax by 18 months. 18 months, 24 months. we will wait. see what happened. 18 is the number now. it is quite a long way away. [laughter] >> sounds like europe. >> kick the can. >> kicking for a while. >> we are back there now. erik will stay with us. this is what else is on our radar. a former bank of england governor is saying the euro is the weakest risk. he spoke to bloomberg at the global financial leadership conference. , a singleuble is monetary policy does not fit all countries.

be aacing up to that might first step to thinking through how to get through this problem. chris china slowdown is deepening area home prices locked in october. 67 cities contracting. beijing, rice is felt for the first time in almost two years. >> new car sales jumped. the first annual game since 2007 to boost. . >> tighten added the table. wilbur ross will be joining us. we will ask him about his acquisition target. that is later on. ♪

>> welcome back. you are watching "the pulse." we are on your phone. let's talk about what is happening in economics, global economics. former bank of england governor has a unique insight and a handle of the challenges they think that eurozone and global economy has been talking to olivia sterns at the global financial leadership conference in florida. area is thehe euro biggest risk. i do not think that the leaders in the euro area have a true vision of how to cope with the problem. cracks -- >> germany needs to

step up and the bank needs to change their tone. what would you say to your counterpart at the bank? speak andfor me to get them to change their tune despite decreasing sovereign bond. the side effect was probably to push up the euro and that has done damage to france and italy. the challenge for the ecb now is to find a monetary policy that would allow the euro to weaken sufficiently to give france and italy a chance to start seeing a recovery in growth. i must say, the challenges are truly enormous and i do not believe that the optimism that always comes out door ministerial meetings in europe is at all well-founded. they need to be concerned about where they are. >> what you think the next step should be?

>> the big challenge is a condition and different member states are very different from each other. they are not meant under a single monetary policy. >> do you think europe should be trying to change the arrangement and become the united states of europe? >> there's no support around europe. as you can see from european elections, the big step forward is within your and a very clear recognition on the part of the leaders of europe. looking ahead, there will be two different categories of the european union. those in the euro and those not in the euro area. those in the euro will require a degree of coordination that is not explicit. which is wholly inappropriate for those countries not in the euro area that is to be recognized. the euro area is the european union is a dangerous mistake. it will lead only to bigger

troubles down the road. king there. we are back with erik nielsen. when you look at europe, you're probably one of the most automated -- optimistic economists out there. it is not as rosy as you thought it would be. be conducting our forecast. what we underestimated, they'll lack of emerging markets. we thought it would go back to 4% at its flatlining at 1%. big exporters like germany is having trouble now. the only thing we did not expect was the ratio and france is going up probably because of politics. we were a bit too optimistic on italy because of the export side. you cannot sell ferraris to china anymore.

we will be taking it down a little bit. and is worth remembering, -- europe -- in the eurozone on average is higher than the u.k. the u.k. took a much deeper hit. --far, they have not quite they come through the 2008 the levels which france came through three years ago. you have had a big hit and that is made clear. it is still nicer to grow than not to grow. [laughter] >> a political point of view. by december, how much will the projections of the downgraded? >> i do not know but it's amazing to see them being more optimistic. my guess is they are taking it down maybe 1.2%. then, what is that going to do to inflation?

gap, it will be more flattish and more prices taking the online down further. all of the lights will flash again and what we do about it? you would not see the inflation target. >> what are they going to do about it? >> great. -- pray. >> that does no word very often. >> the point is that they would have a hard time getting the balance sheet without using sovereign bonds. sovereign bond have to big issues. it is far from clear what the to thession mechanism is real economy. secondly, is politically very complicated. they have a real problem. if it could weaken the euro significantly, it is not clear. euros add one choice in

to the -- one trillion euros correlated with your dollar and more or less what he said it's, you get my 32. the market has priced more. -- you get 132. >> let's listen to what mario draghi said yesterday. >> unconventional measures might and tell assets, one of which is sovereign bonds. >> you were just talking about that. is there any chance he will go all guns blazing the by december? >> not december. what they do, they are still deliver somel balance sheet increases in december. in canada purchase programs. my gut feeling is once you get through and get disappointed, they will buy corporate bonds. next year, we do not see the economy left the

fed, which we think it will -- and lift the fed, which we think qewill, i think the art of increases from 1/ two over3 eight 1/2. >> reform takes a long time. it would take at least a decade. all of these reforms, they take getng time to get in and serious traction. europe does not have that direction at the moment. is net trade the only thing in the short term that is going to lift your customer >> and that is exactly right. it hurts upfront. the reforms, it does not take a decade. it usually takes about three years. you see the effect of employment after 2.5 years. it takes about that time.

and other rick stockstill which is the financial sector. you are closing down. -- and the other stocks which are the financial sector. if they were to become demand for credit, banks were installed. we saw one yesterday that said they are looking at 6% margin. that's not the european average. >> this was a strong political leader. i is a bit different. when you look at italy, not really delivering. -- spain is a bit different. not what the markets were hoping for. unreasonable is when it comes to renzi. what he has done it is impressive. you are right. misse strong- political leaderships. merkel?a

>> i have a lot of respect for her. she did a lot during the crisis but now we need a vision. it has been three months in berlin and she just came back. the key problem is you cannot realistically a reasonably say the germans are not the europeans. what you can ask is, do they have the right vision for what it takes for a currency unit to work? do they understand -- many of them do, do they understand it is not enough that everybody suites their front doors? do they appreciate what type of framework? many of them do not in my opinion. lay out theone to land of what is the minimum requirement for a union to work. one person wrote a similar story talking about the political believe that exist in italy. that in europe's

biggest economy, it is going to be incredibly hard. have -- they do not exist in germany. how'd you get that kind of attitude? think, he wasl, i a bit unfair or not quite accurate. i do not think it is as simple as he put it. thatid germans believe government policy is all about setting the rules and enforcing the rules and never intervening. the germans have done this. they have participated and the lehman brothers crisis question to me. and imported cars for the european producers. i do not think he is right about this. >> we have to leave it there. stays with us. we are back. ♪

>> welcome back. you are watching "the pulse." equities higher in europe. what stoxx 600 is doing. between 0.3%-zero .8%. what we are waiting for is japanese press conference. will abe call an early election? >> the what will he say about

stimulus chris mark and we are -- and what will he say about stimulus? and we are expecting a snap election. a busy half an hour. ♪

>>. ."lcome back to "the pulse japanese prime minister shinzo abe hotel the leaders of his party he will dissolve parliament and call in early election according to hk. he said he will delay a sales tax hike for 18 months. he will hold a news conference in the next hour. >> it ukraine's president said his country is ready for total war against russia.

eu foreign ministers agreed to blacklist more pro-russian separatists. russia's foreign minister called for a new truce. it has been broken almost a daily basis. >> mario draghi said government of bond buying could use to stimulate the european economy if the outlook worsened. he told parliament that buying sovereign bonds might be among the unconventional measures that they could use. the forecast are likely to show a weaker outlook. i want to bring some data coming out of the u.k. and show you have the pound is reacting. 3%flation coming through as 1. versus a market forecast of 1.2%. rallying on the back of does spike to the upside.

on the back with us fight to the upside. beat the pound is sending it to the upside. >> one doctors look into your eyes, they can get a wealth of information. an israeli startup is working on an app and elliott gotkine has more. >> thank you. i am joined by the ceo and founder of you move. glad to have you with us. tell me how does your technology work. >> basically, we do face and eye tracking. nothing but the front facing camera of any mobile device. hardware, just the camera that is every single device. we use it to track your movements. was a gamest product that came out earlier this year.

the health-care sector you believe represents the best opportunity for you. a very powerful technology and can affect a lot of areas like gaming. and the health care space, basically looking into your eyes which they say is the window to your soul is the window to your brain. brain activity can be seen through the eyes. concussions, alzheimer's and on and on. it can be seen through the eyes. you could take a regular mobile device and turn your device into the most advanced medical device with no extra hardware. >> you have your first health care related app coming out by the end of the year. people are working on these types of diagnostics to tell people if you have a concussion or if you are over the alcohol limit for driving. >> a lot a research teams are using our technology for different areas. a lot of different spaces.

we are focused on the agency -- 80 hd space. have you ever talk to someone distracted a you go look in his eyes and tell he is distracted. we are looking at an apt to help you improve -- app to help you improve. we are turning your mobile into a too. raise $3.5 to million so far. what kind of money are you looking for? very have graded a powerful technology and filed a many patents. we have a lot research is doing -- being done. we are launching our real health care products. we want to grow this and grow this space. a lot of fascinating things going on a. it will be in touch and we are raising several million. >> in a few seconds, how is your

technology better than others out there? >> they're all types of technology using hardware and special cameras and infrared and we're the only technology using only the hardware that's out there. you download and that is it. and we wish you the best. we will keep our eyes out. back to you. >> i do not know if the world can handle it. >> don't you worry. >> elliott gotkine and the umoove ceo. profit jumped by 22% area it said it will expand capacity this year as it tries to add passengers. we spoke to the ceo earlier. we have increased our passenger numbers and more of them are flying with us more frequently. we have increased quite

significantly. 57%. 52% business. real keyas been a factor and retaining our customers have been important. we have done long-term deals. operation and cost efficiency has gone very well. and that has been a really strong performance. passenger numbers have been driving the revenue and the revenue is up 6%. that is a very strong performance. that's because of our low fares and friendly service. there's a lot of doom and doom about the euro economy. this is a resilient business and a true recession, which we have experienced over the past three or four years, easyjet has done well. the reason is greater value. it is easier for us to get more people trying to the jet when things are a bit tougher.

idealk that is the complex for us going forward. >> carolyn, you say you have opened up clear skies between you and your competitors. i wanted to talk about one of those and that is ryan air. into atamorphose sized business that wants to hug passengers and the business passengers. differenteing a very competitor in your closest competitor in the shape of this new reinvented ryanair? >> not really to be honest. also because we focus on what we do and we do what we do very well. as i have said, we have really focus on loyalty and running a trial that has been well received among the highest frequency passengers. would have a plus card for the people who fly three or four times a year for us and we like that.

they can get through the airport incredibly fast. are we are doing is, we very focused on our customers journey and making it as easy and affordable for all of our passengers. by doing that, we will continue to keep the gap between us and anybody else and i mean all of the legacy carriers. if you have used easyjet recently, our service is better than a legacy carriers. that is what our customers tell us. our focus is very clear, very customer centric. we are doing well as a result. >> here with more on easyjet's results. when you look at the results, -- these stellar results -- vibrant. you see the offices and she's is right there among the rest of the offices. easily accessible to everyone. she has done an incredible job.

you have seen with the shares. in terms of today's numbers, very good year. they guided very clearly. not too much unsurprised. analysts and most of the markets looking at the outlook and that are guiding for revenue that will be flat, a little bit up and that is cautious. it makes a lot of sense and they it makes us to be cautious about how and what it will mean for the winter. >> compare contrast what is happening between easyjet and ryanair. she is not focus on ryanair, to a certain extent she has to be. focus is on what other carriers are doing. is a very big game in europe and she could take business away from them easily than from ryanair. >> her focus on the legacy carriers. you have seen how successful they were this year when air france had strikes.

they pulled 3000 seats and they took advantage of that situation. she was talking about some of the city they focus on. amsterdam, geneva. they are really focusing on these this is/city connections. business passengers often want to go to the main airport and they still feel compared to ryanair, they have a bit of an edge their ryanair is still known for going to the secondary airports. increasingly as ryanair gets more interested in being relevant for the business passengers, some of that is going to get eroded away. it is something she is focused on. >> what is easyjet doing to get to the legacy? >> is very much fighting for the business passenger a focus on new connectors. they will open a based in amsterdam next year which is expanding the role. aboutalked today encouraging loyalty for the third -- a loyalty product.

not a are in the traditional -- she was very defensive. that was a question i asked, she got asked issues defensive. no, has not going to great weight in extra cost, it is passenger driven. -- it is not something that is going to create wait and extra costss, it is passenger driven. >> thank you. a little bit more from caroline. >> british membership of the eu. staythink, are we want to in the eu because it is good for business. we have access to 500 million consumers in europe because of the eu. it is easier to do business and that framework. we believe you need to get rid of the bureaucracy which everyone says, what we believe a reformed europe is better business for us to react -- but

we believe a reformed europe is a better business for us. ♪

>> welcome back to "the pulse." just before the break with her easyjet ceo saying she hopes the u.k. does not exit the european union. david cameron is standing by his promise of a referendum.

he wrote in the eurozone is teetering on the brink of the third recession. former bank of land melvyn king tells us he shares the same concern about the european union. >> she's certainly right to be cautious and we all should be. deep downturn as we did in 2008-2009, what you might expect is a sharp rebound and we have not seen that. what is more worrying as clear signs of recovery in the united states and united kingdom, bit parts of the world economy where there is no sign of that. back with us to talk about the overall story in your. you have been telling us about berlin. what is the view from berlin about the bracket -- brexit? how do they feel it and how big of a problem would it be. chris they would hate -- >> they

what hate to see britain a leave. it's a good balance within europe and britain is a very important part of that. they are very concerned about of cameronhink playing domestic politics more than taking a bigger view of things. to give willing something to britain but as we have seen when i left, they are clear redline they will not cross. >> those red lines are here to stay? if you decide for them to leave and you see the situation here, how far would angela merkel go? the $2od example of billion that has to be paid. money here and there the germans would do what they have done before and throw money at it. that is ok. on the principles of europe, free movement, people, capital, goods and services, it is a no

go. germans would not change. fits in their domestic situation because they like immigration. they needed them. there is more of them than britain has a europeans that britain. a share of population and so, not that they do not have immigrants or a different situation, they appreciate them more, if you will permit -- if you will. i do not mean that. [laughter] >> politics. let's move on. politics is about presentation. how do the germans -- throwing money is not going to solve the problem. how do they figure out a way of making it work out for cameron? -- what in terms of they are lining up, what possibilities they could enact to make it easier for david cameron? it is too early, but further down the road when push comes to

the bottom is in drawer? what could they pull out? >> i do not really know. do notson is they really want to talk about this now. you do not want to open up the box. you saw it with the germany court rolling, there are things you can do that would make it for cameron that he has something in terms of being tough on it. the germans will come along. as long as it's fairness of the that. and you have then, the germans would go along . and lots to be done on the commission side in terms of stop worrying about the shape of bananas. there is too much symbolism of this type of stuff. but ultimately, it is about money. , i have not had a clear

answer. what does the u.k. have to lose from leaving the eu? we know is the end of a project and not being at the table for negotiations. do you have the figures of productivity lost? would businesses go elsewhere? >> right. no, the answers i do not know because we do not know what the situation would be like. would britain just like switzerland? meaning that all of the european rules and laws and committed him without being at the table. in that case, it would be very minimal -- the loss would be very minimal a negative if you do not do things that are bad overall. i am not sure that is the case. >> we have breaking news. back to japan. abe is orderly ministers to get a stimulus package. we hope worth hearing more in

tournament third >> no details. he is telling ministers to prepare a stimulus package. administration -- you would probably want to say, we have a new economic plan. [laughter] >> it does not matter. we are working on it. >> it is politics as well. this is play -- this is him playing tough or i am in charge christmas i am calling elections. stay with me. >> for sure. there can be no doubt, a platform for election. [laughter] >> what? problems? none of those. >> looks to your. erik nielsen. >> coming up, we would take toyota's new was models for a

spin. a catchy title. we will talk about it when we come back. ♪

>> welcome back. you are watching "the pulse." about the we told you fuel-cell car. we take you inside the new model called the mirai, which means future in japanese. editorrg asia managing took the hydrogen fuel tank for a spin. , toyotass the mirai fuel-cell car. it means future in japanese and the car certainly has a futuristic vibe. it looks like they came off of the set of "blade runner peeping -- blade runner." it is very quiet. it takes time to get used to. one advantage is the fueling time. it only takes five minutes to fuel the vehicle and you have a range of 300 miles.

a little longer than the current. one of the big issues for consumers is the safety of the hydrogen fuel cars. toyota went to great lengths to test it surrounding the hydrogen tanks. if there's any sign of trouble, sensors will deplete the hydrogen in some cases and the carbon and variety and they've fired -- intuit to make sure it does not explode. one of the biggest challenges generally is the power station. it requires a big infrastructure development to get the hydrogen up and running on a mass scale to support the fuel-cell vehicles. japan has helped subsidize and efforts are underway in california in the u.s. to build these as well. one of the advantages of the zerocell is that there are co2 emissions. the only thing going in this is water and will come out of the

tailpipe. the fuel-cell cars have been controversial. tesla and volkswagen have been trash talking and marketing material. there is a commercial. ofy are trying to cast a lot doubt about the viability of this product. >> very interesting. cannot figure out if i like it or not. it grows on you. what is next for some >> is not a good start when you are buying a car. it grows on you. grows on you and you like after a while. birthomberg radio, first -- first word is next. we will be speaking to -- be with us.ss will his take on japan, china, what is happening here in europe. plenty of subjects and that man

will be stronger. abe's press conference. it looks like we have an election coming up. call are expecting him to it for december 14. follow us on twitter. ♪

-- dissolvehe will parliament. we will bring you the conference this hour. stress test. european banks and oil. wilbur ross talks about his acquisition targets. >> and good morning to our viewers in europe. a warm welcome to those waking up in the united states.

i am guy johnson. this is "the pulse." let's take a look at euro-dollar. the investor expectations number is out. worth paying attention to. 11.5. i think the market was looking for a number of 0.5. argue this is something of a beast. you are seeing that reflected in the euro-dollar pair right now. 1.2529. german economy stabilizing according to institutes. 0.8.ar yield now a the economic environment as fragile, but stabilizing. -dollar popping on this. maybe not a massive pickup. give it a couple of minutes, you never know.

1.2523 is where we are trading now. >> shinzo abe they has told members he will dissolve parliament and call an early election. he will delay a sales tax hike for 18 months. he ordered ministers to prepare economic stimulus. this is him saying we are calling for snap elections and vote for me because i want to retain seats in parliament and i have everything under control, i am working on the stimulus and i am delaying this tax increase 18 months. >> there are clearly a number of problems to deal with and i suspect this is behind what abe is doing here. i wonder if there is something more substantial behind it. in many ways, failed to deliver on economic promises made to the japanese people. the ldpple would hold

responsible for that. they need to get changes pushed through policy before they can deliver to the economy. that is taking a long time. >> they have 60% of seats in parliament. the problem is, he is going to lose some. he is going to win the election, but if he loses too many seats, they could call an election in september of next year. are a big gamble. you need to make sure he is going to win them, but with a strong majority. this is what we are waiting to hear. the press conference will start around five minutes time. we will get some pictures coming through from tokyo. let me see if i can bring them up to you. you can see the podium. we anticipate he will step up to it shortly. the press conference is scheduled to start at 10 past.

we have around 6.5 minutes before it starts. we are expecting elections to be called for december 14. as a former bank of england governor, mervyn king has an insight into how to handle the challenges of the global economy. there are other people who have done similar jobs and have similar or different views. he has been speaking to bloomberg. that was in florida. take a listen. euro area is the biggest risk. i do not think the leaders in the euro area actually have a true vision of how to cope with the problem. >> the feeling is that germany needs to set up to drum up demand and that the bundesbank needs to change their tune. what would you say to year former counterpart at the bundesbank? >> it is not for me to change

their tune. despite the success in reducing sovereign bond yields, the side effect of that was probably to push up the euro. that has done damage to france and italy. the challenge of the ecb is to allow policy that would the euro to weaken to give france and italy a chance to see a recovery and growth. trulyallenges are enormous. i do not believe the optimism that always comes out in the euro area is at all well-founded. they ought to be concerned about where they are. stepat using the next should be for the ecb? >> conditions in different member states are different from each other. aey are meant to be setting single monetary policy. that is the heart of the problem. >> should europe try to change

the arrangement and become a united states of europe? >> no. there is no support for that around europe. you can see that from the elections this year. the big step forward is there needs to be a clear recognition on the part of the leaders of europe, that looking ahead, there will be different categories of members in the european union. those in the euro area will require a degree of coordination , if not union, which is wholly inappropriate for those not in the euro area. that needs to be recognized. the euro area is the european union. it will lead to bigger troubles down the road. >> mervyn king, talking to us in florida. up next, a titan at the table. wilbur ross joins us.

one of the biggest names in private equity. we will talk about his acquisition targets when we come back. ♪

>> welcome back. you are watching "the pulse." we are live from the european headquarters, here in london. me minister abe's press conference is scheduled soon.

3.e dollar yen trading 116.9 basing this on that we will see the second sales tax delayed by 18 months. who knows on that. have an early election call. that is probably scheduled for december 14. some live pictures out of japan is the news conference is scheduled to start any moment. our next guest, wilbur ross, the , one of thewl ross leading turnaround groups. great to have you on the program. thezo abe a has arrived on podium and is about to address the nation on the election. this seems like a gamble. are there opportunities in japan? >> there are. most of the big companies derive

a high percentage of their earnings from less developed countries. in a sense, the japanese market -- the developing country market. willa believer that abe pull it off. if he can get out from under spiral,lationary somehow launching his third aero , if he can pull that off -- henching his third arrow, if can pull that off, it would be good for japan. era was probably going ahead with the sales tax increase on the first of april. i feel the economy was fragile for that. jolt, going from 5%

to 8% is a meaningful thing. you saw the run-up in retail sales prior to it as people made major purchases in march and february and a real collapse in retail sales, which seems to have lingered beyond the second calendar quarter, right through the third quarter, producing this recessionary -- >> when you look at japan, or their assets you would like to own? for each japanese worker, there are two thirds less productive than even a french worker. >> i do not know about those statistics. becauserd to measure the mix of economies is very different. that is trued if because the japanese have done a lot with robotics. much more than the french have.

i would be surprised if that were the case. >> do you see assets you would like to own in japan? always assets. we have to see how the market reacts to abe's speech. one result of what he has done has been a declining yen. what is the opportunity you see in that declining yen? >> export type companies would be benefited by that. so much japanese production has been moved offshore already. that that is going to be that dynamic. -- where he is creating the problem is on the import side. japan has to import all of its raw materials. natural gas, ironwork, everything. raw materials,

the price has come down. >> in has been fairly well offset by the yen's change. all of the commodities are dollar denominator qualities. -- commodities. asia is expensive. it will take a longer-term, a longer time to get to where we needed to be. thehe fundamental health of u.s. economy is probably better than most other places. it is also the most liquid of the markets. >> can the united states continue to grow? a largely closed economy. lumber comes from up north and gas comes from the south. it is a closed economy. can it avoid what is happening

elsewhere? if you look at the statistics, it has been avoiding european problems pretty well. the exports are not that huge a component of the american economy. trade deficits with most of our trading partners, --.uding >> you like investing in the u.s., distressed assets are still here. into euro why we are bank a little bit earlier. most recenteen our distressed investments. >> abe confirming the sales tax delay by 18 months. japan goes, that could be two prime ministers. >> we will wait and see.

you talk about distressed assets in europe. the land ite lay of like? interest rates are low. opportunities are there compared with the low interest rates and what kind of rates are you going to be able to get out of the assets you see in front of you at the moment? mix lookingbusiness like? >> european interest rates are normal. you have the irish credits, lower credits trading yields than u.s. treasuries and that makes no sense. it has been happening. sets an on benchmark. but, we have been going farther out into the referee with our bank investments. - father out into the

periphery with our bank investments. we have been focusing this week on cyprus. the bank of cyprus has a general meeting on thursday. that is what i am going down for. would you be interested in something smaller on ireland? mezzanine fund together to invest in irish real estate. is the ves ening devesting of a lot of properties. we have created the first mezzanine lending in ireland. 10 to 20ridge the gap

points to what the bank will lend it to leverage of the equity more. >> ireland has small banks. is it something you would like to invest in? the dance withto bank of ireland and we had a good waltz, i think we will be thankful for it. >> what kind of returns are you targeting right now? being thebout irr's girlfriend, let's talk about the girlfriend. >> i have gotten trapped. >> what do think is possible in the market at the moment? >> i think it can sell if you are fortunate in the equities. you can get double-digit returns. you can do that without inordinate risk. >> thank you.

wilbur ross stays with us. still ahead, his views on the european economy. we will bring you the results of a poll on whether investors trust the ecb. ♪

>> welcome back. you are watching "the pulse." confirmation from abe that he

with japan on february 1. let's get back with wilbur ross. we probably should talk about europe. we talked about japan already. we had a poll out, which we conducted post stress test on the financial sector. testseople thought those were hard. it turns out, according to the poll that 51% of those that responded said the stress test did not provide an accurate indicator as to the financial health of the european banking sector. i do not agree with that at all. unlike the old stress tests, this one was severe. i watched our institutions that we are invested in go through it. they really questioned every single assumption that was made. they put some draconian

assumptions as part of it. i do not think this was a once read at all. the poll results tell you more about a general lack of confidence in institutions and , much more than it does anything specific about the stress test. i would bet that if you ask any of those people who decried the stress tests, what the assumptions were, they could not tell you. i do not think it is a very reasoned response. a sense of whether there are banking assets in europe that you would be buying and in which countries. cyprus veryent into recently. i think that economy and the country are very interesting. we like the idea of being in a big bank in a small country.

what you have is a warrant on the economy. marketf cyprus as a 30% share in cyprus. for all practical purposes, it's s f and the fate of the government are linked. fate and the fate of the government are linked. we think that will make it a natural hub on a continuing basis for tourism. very interesting historic sites to see. the weather is better than in ireland, though i will probably get some grief for that from the

irish. >> they have a tremendous amount of natural gas offshore. populationke a small and have billions and billions of barrels of oil equivalent, you have the potential for something very dramatic. one of the things somewhat europe needs to reaffirm -- reform how long assets take to get sorted out. what kind of difference would it if we were to see a real focus on that? >> it would make a huge difference. the whole concept of bankruptcy and convertingg

debt into equity and resuscitating the country. in europe, it is mostly administration. there is not much in the way of restructuring. debt refinancing is commonplace in the u.s. you provide the company with the liquidity it needs to operate while it is in bankruptcy. that is a very hard thing to do in many european jurisdictions. the whole structure, the whole concept of bankruptcy is different here. similarly, foreclosures, it had been that it could take you 10 years to foreclose on a simple individual property and there is a new regime at the request of the -- and it looks like it will be about a year duration. that is a tremendous change. much.nk you so

of next, we will ask him about china. we will find out what he thinks has been the best managed economy in the world. >> do you agree with that? let us know. @guyjohnsontv. @flacqua.is at we will be back in a moment. ♪

>> welcome back to "the pulse." --are live from european from the european headquarters here in london. shin so all they -- shinzo abe holding a conference to hold an early election. he will delay an unpopular sales tax hike for 18 months. eu governments held off sanctioning vladimir putin for

fear of a separatist rebellion. russian foreign minister sir guy -- sergeyls for a lavrov calls for a new set of talks. bond buyingghi says could stimulate euro zone economy if the outlook --. bonds might ben among the unconventional measures that the bank could use. next set of forecasts will show a weaker growth in the euro area. >> to the markets now with jonathan ferro. >> this is the equity market here in europe. it is all green across the board. the dax up by over 1% in frankfurt. the ftse up. in japan, a lot of happy talk. abenomics has not failed.

outside of japan, the real news, out of the u.k. 1.5659.,1.5639 incomes higher than the estimate. i will take you back to yesterday. barclays pushing back the forecast for the first time from the bank of england. now fearsf england unintentionally slowing economic growth more than inflation. % i am sure they are not concerned. back to you. >> thank you. i am like -- i like the way he pointed, just in case.

about 25 minutes from now, it is "surveillance" with tom keene. scheduled,ly ambassador haas has returned from japan. we will speak with richard ha ass, looking for improvement on abenomics. joining us as well, hell lean -- helene. looking forward to speaking with her as well. >> surveillance starts in 25 minutes from now. let's talk about china.

>> cross are dramatic. i am impressed with the trading a link up. big,nk it has some very long-term implications for the liberalization of the currency there. a diminution in the status of hong kong. for some time now, the chinese have been building up shanghai as a free trade area, as all kinds of economic development activity. particularly focusing on financial markets. it is another step towards that. longer-term, as the

currency. >> what does that mean for your investments. is it too soon to look for opportunity? >> one should get going there. i think the chinese have done the best job of managing their economy. thewhole asian crisis of late 1990's, they avoided it. blowup, at least for the time being, they avoided it. they created that. they wanted to cool down the property market. in the western world, we had a property bubble burst inadvertently. the chinese burst it deliberately because they felt it was getting out of hand. the kind of forward thinking policies i wish we would have a little more in the west. the chinese have been good at

anticipating what is going to happen. dealovernments tend to with solving last year's problem, not trying to figure out what will be next year's. elections go a little more easily in china. bigou have made some investments the last few years. it is a based on economies like china coming through? is it just an assessment of an industry that has overcapacity and can be restructured and a broader, or is it global trade play as well? >> global gdp grows at a moderate rate and global trade it grows at a faster rate. international trade drives the global economy. it is a direct play on global

growth, not just one market or another. more specifically, there was a lateoom in shipping in the to thousands. -- late 2000's. rates were out of lack. -- out of whack. 40% of all of the vessels in the world were on order. grows, but it does not grow geometrically. a grows a few centage points. a big oversupply came in that collapsed the rates. we are just now starting to work our way. >> how big a part of your investment is this? >> we have probably put a billion and a half to work in it so far through a combination of things. one company is public, listed in

new york, called navigator. that is the model of what we are trying to do in shipping. shipping, while it is a capital and thee business, total value of the fleets on the water, probably 400 billion u.s. dollars, but it is highly fragmented. >> is it a roll up trade? >> yes. , in late 2011, there were 80 vessels. we brought it into a company of them.four we bought a couple of new builds, a couple of old ones, acquired the largest one and now of about 84 vessels. we have about a third of all of

the vessels in this class. wonderful thing for you. when you have that much of a percentage of market, you get shipmentscall on what are going to move. that gives use of. her intelligence about what trade is going and what you do with the triangulation. -- that gives you a better intelligence about what trade is going and what you can do with the triangulation. a vessel has to go empty all the way back to the gulf because you do not get paid anything, so if you know enough about what trade is moving, you will figure out what sequencing of cargoes you want. navigator has been able to achieve way over 90% effective utilization of its vessels.

that is a good thing for your earning power. >> if we look at the big picture, you're confident on china. they have done a fantastic job with the economy. these are your favorite investments. you do not look worried about europe. overall, what is your biggest concern? is there a big unknown you fret at night over? my biggest concerns are geopolitical. i do not know of a period where there have been as many stress points in as many parts of the world as there are right now. event,e is a black swan i am more inclined to think it will be in the geopolitical area rather than in the purely economic area. you were to see that type of event take place, these

are industries that can have big swings. do you worry about the volatility? to volatility. we deal in cyclical things. our concept is if your price point of entry is an appropriate one, and if you are not overly leveraged, then you can survive through the bad period. generally speaking, the bad periods do not last forever. if you can make it through a couple of years, you are probably ok. not see the world coming to an end. >> let's hope not. >> yes, let's hope not. ross, you will have to come back the next time you're in london. >> the world is not coming to an end. pay by phone. snapchat gets into the mobile payment phase.

after thelk snapcash break. ♪

>> welcome back. let's talk tech. snapchat unveiling a new product called snapchat -- snapcash.

what has the photo messaging app unveiled? ,> it has teamed up with square which has helped starbucks, whole foods get into mobile payments. intohey are getting consumer to consumer. this is how snapchat is getting involved. it is called snapcash and they have a hilarious advert going across the website. instead of writing a message, you type in a $ in the amount. you can transfer cash in between the two of you. it is really easy. it is only in the u.s. >> there has to be some sort of bank account.

at the moment, square only links to a debit card. versatility starts to build up. >> they take transaction fee, how does it actually work? >> this is the future. will it be linked to e-commerce. >> and advert could come onto your stream, you're able to buy the product immediately. or, they start being more revenue making by directing adverts specifically. they can work out which pub you have been going to, which car company you use. the companies will pay snapchat more. >> it has been a race. it is genius when you think about it.

>> so many companies have been wanting to do this. it is a direct threat to the likes of paypal. used in theady united states for sharing. you also have business apps, you go to a coffee house, already they are building in functionality that you can split your bills. what is so interesting as rumored to doeen payments in the messenger app, exactly the same as snapchat has unveiled with square. square is leap frog being -- leapfrogging everyone. that is how they are overtaking paypal. will this really hit mark zuckerberg where it hurts?

>> the big question is -- can it work out? thereare some people out who need starters. >> if you split the bill, you have to have cash, you have to go to the cash machine. it is so much easier if you pay for everything and i pay back. already, you can use google s payments.tact-les >> no credit cards. caroline, thank you. let's get more company news. largest furniture retailer is buying a 100 55 megawatt wind farm in texas.

also planning to invest nearly $2 billion in the wind solar pallor -- solar power. >> a company is hoping to drive revenue growth during the next three years. the ceo is looking to link the prop you layer the of tv and video game content. >> the second-biggest airline in europe will try to expand capacity. carolyn mccall spoke to us today. let's listen. -- becausedriven our we have increased our passenger numbers. more of them fly with us more frequently. we increased loyalty. loyalty has been a key factor in

retaining our customers. it has been really important. we have done a big engine deal. part of the equation has worked well. numbers have been driving the revenue. the revenue is up 6%. that is a strong performance for easyjet. sector, there the is a lot of gloom and doom about the euro economy. this is a resilient business. easyjet has done really well. us to get morer people to try easyjet when things are tougher. that is the overall context for us. all forward bookings are nearly half sold.

>> you say you have opened up clear skies between you and your competitors. i want to talk about one of those, ryanair. they metamorphosis sized -- they ed.amorphosiz are you seeing a different competitor in the shape of this newly reinvented ryanair? not really. the reason for that is our overlap with them is low. also, we focus on what we do. we focus on loyalty. we run a trial that is very well received. we have easyjet pass card for all the people that fly through. they really like it. they can go through the airport fast. what we are doing is we're very focused on our customer journey and our customers and making it

easy and affordable for all of our passengers. we would continue to keep the gap between us and anybody else. by that, i mean all of the legacy carriers. used easyjet recently, our service better than legacy carriers. that is what our customers tell us. our focus is very clear. >> orange is the new black. that was carolyn mccall. we are back after this break. ♪

>> a look at what we are watching the rest of the day. it is all about -- on trial today. we thought he was gone, but he keeps coming back. he finds a way to stay in the news. -- onene of these most of the most spectacular billionaire crashes. >> how low can they go? >> i do not think he is in negative territory yet. he has this grandiose personality that refuses to subside. he has said publicly it is a blow to be back in the middle class, which is causing an outrage. on twitter ands

was active back in the day. he has not tweeted since 2013 and suddenly starts tweeting in september. >> the events have not changed him. >> apparently not. he is wearing blue jeans where he used to be dressed elegantly and designer suits. his personality is the same. his fortune has fallen. >> should we bet against him? to a billion in market cap in canada. he created this interlocking structure which has taken him down. he has gone through many ups and downs before. i am not completely out on batista yet. >> do not bet against him. thanks again.

that is it for "the pulse." bloomberg on television. "surveillance" is up next. we will see you tomorrow. ♪ .

>> japan is in recession. abe looks for a mandate from the nation. year ino the end of the

mergers and acquisitions. is it dinosaurs mating? areenly, the classrooms half full. colleges need to fill seats. good morning, this is "bloomberg surveillance." we're live from new york. it is tuesday, november 18, i am tom keene with brendan greeley and scarlet fu is frozen. she is at the frozen castle in orlando. julie hyman has decided to come in today and let it go. she is here right now with our top headlines. aben japan, prime minister is attacking that unexpected recession fiscally and politically. in a popular tax hike supper next october. hike set for next october. japan's nhk network says elections will be held december 14. abe is betting his party will retain control of japan's parliament. that would allow him to proceed with his