>> a downgrade for japan. moody's cuts japan's rating over controls -- concerns over its policies. telecoms takeover. bloomberg discovers that vodafone may bid for liberty global to create europe's largest telecom company. can oil take the pressure? oil tumbles to the lowest level since 2009 after opec maintains outputs. the oil companies survive slum? and, rubel route. can russia weather the storm?

welcome to "the pulse" live from bloomberg's european headquarters in london. a big day of news in the telecom space. up anothereing asset. here with more is caroline hyde. this could be the winning offer. >> they have upped it by 5%. it seems to be sitting that private equity companies have been involved as well. , thepatrick drahi billionaire behind altice is over offering. he says, overall, it is related to a 500 million euro extra bid in terms of future revenues. people like patrick drahi's

style. 20 years ago, he started altice, now france's biggest cable company. he bolted on and bolted on and now they are a huge player. they like the idea that he wants to get into portugal even more. he is looking at telephone assets to add to the cable assets he already has in portugal. iserally, this is a man who dealing, making it work. investors like it. >> this would be a better deal than oi had previously. >>o this is unraveling another m&a that happened last year. oi is brazil-based. the reason they want to unload their portuguese assets is that they want to do more consolidation in brazil. they want to build into that bigger area of growth. it was only last year that they bought the assets of portugal

telecom. do athought they could transatlantic juggernaut, make these things work. it seems that that dream has come to an end. they are trying to sell off those portuguese assets to pay down their debt and look at more areas of growth in brazil. at the moment, oi has been -- other areas of growth there. >> are they just spending too much money? >> this could be the question. i think of altice, people feel that 5% up isn't that much more. they are now considering a half a billion euro extra in terms of revenues. this may be people liking deal. >> thank you so much, caroline hyde with the latest on one of the telecoms deals we are following today. as patrick drahi pushes into

portugal, vodafone is considering a bid for liberty global. that is a bloomberg scoop. the telecom giant would be worth $130 billion. matt campbell is here. he broke the story. great job. how imminent is the deal? >> i think it is important not to think this is coming tomorrow. this is a medium-term process. is a lot going on in telecoms, particularly in the u.k. right now. bt is talking about buying a mobile player. if bt does so, that is a big competitor for vodafone. it offers what they call quadruple play. phone, tv, broadband, mobile. isre this gets interesting vodafone can't do that right now. it becomes more urgent to do something. liberty global is the big one. it owns virgin media.

it also has big operations in germany. you can see the logic behind the deal. that doesn't mean it is happening tomorrow. >> is this what is driving convergence? >> that is the big one. the u.k. has been behind the curve. in france, people have been buying quad play packages for years. that is the megatrend. the other thing that is going on forinvestors are looking what vodafone's next move is going to be. they sold their 45% of verizon wireless in the u.s. that is done now. you start to wonder, what is vodafone's big plan? is it going to be a global mobile player? is it going to be u.k. are western europe focused? >> so it may not happen tomorrow, but what are the obstacles to the deal? >> they are many and they are

varied. one big one is antitrust. we are focused on the u.k.. germany is where the biggest issues would be. vodafone owns kabel deutschland. liberty global also has a huge cable footprint in germany. you can imagine regulators looking for some disposal there. then there are the financial obstacles. liberty has a lot of debt on its balance sheet. has some concerns about taking all that debt onto the balance sheet of this combined company. >> any other deals that we should be watching out for? >> deals all the time. telecom never stops. thet now it is all about u.k. but that could change. italy has had speculation about consolidation in the mobile space for a long time. similarly, we could see consolidation in the nordics. then there is the question of, what do people like alt

ice do next? i is going toh want to do more as will his rival. he has put everyone on notice that he is planning to do big things. >> matt, thank you so much. bloomberg deals reporter matt campbell and caroline hyde. media telecom theme today. the freefall of oil continues. west tec tumbled below $65 per barrel. the drop comes amid speculation that prices have further to fall after opec's decision to maintain its production output and leave it to the market. slumping after swiss voters rejected a plan for their central bank to add to its global reserves. delivery fell as much as 2.1%.

ratings agency moody's has cut its credit rating for japan. o ay reduced it from a 1 ti 3. moody's pointed to heightened uncertainty. moody's called the outlook for japan stable. russian president vladimir putin arrived in ankara today for a state visit. turkey is russia's second largest trading partner. the countries are expected to increase cooperation in energy projects and discuss regional security issues including syria. turkish russian training has surged because neighboring states are unable to trade with russia. in brussels, the nato secretary-general has just the gun a news conference on policy towards russia. we will bring you all that news from that conference as it happens. coming up, putin meets erdogan.

russia and turkey look past their differences on syria and ukraine on focus on boosting trade. live in brussels with highlights from the nato secretary-general. that news conference going on right at the moment. we will have more on that after the break. ♪

." welcome back to "the pulse

we are live on bloomberg tv and radio. oil continues to fall. the commodity has slid to below $65 a barrel. ryan chilcote has the story. you were covering opec last week. now the concern is that oil could just slide continue sliding. >> oil is screaming for attention today. 15% sincen about tuesday of last week when i igor,with states -- with the ceo of rosneft. then we got that confirmed at the opec meeting. this chart we are showing you right now is the beauty i. is important because it resembles opec. it reflects the prices that they are getting on the market. ifis also important because

you subscribe to the view that the saudi's are interested in a price war, and taking out the shell producers in north dakota, that is the graph to look at. three prices to keep in mind, 2008 bottomnd of out at $44 a barrel. $42 a barrel is what the international energy agency says is the breakeven point for most. finally, $10 a barrel is the price we saw oil retreat to in the 1980's, the last time the saudi's had a big show off. the other thing i will mention is volumes. we saw massive volumes on friday. that is people coming back from thanksgiving holiday. there was very little trading on thursday itself. >> i was looking at some of the calls. some are saying $40 a barrel. the argument saying, the more the price of oil is under

pressure, the more emerging markets will start producing -- will start consuming. what kind of calls are we expecting? idea of oil going to $40 a barrel certainly grabs headlines. we have that comment from the it isying that economically feasible only at $42 a barrel. it need not go that low to start shaking out some of the producers. >> talk to me about the countries producing. russia, they are in trouble because they are so dependent on the price of oil and the ruble keeps sliding. >> the ruble has slid today its biggest slide since january 5, 1999. you have to go back to the beginning of january, 1999 -- oil is $15 a barrel. 52.5 rubles to the dollar. that is the low point we reached

today. it started the day below 50. it started the year below 33. it is down 38%. timothy ash said, i think the central bank of russia got the script wrong. instead of free float, they heard freefall. the problem is that the central bank appears to be prepared to stand by as the ruble depreciates. we heard president putin give an interview to a turkish news raisin see -- news agency. he said, look, as the ruble theeciates, that fall in oil price is compensated by the depreciation in the ruble and allows us to reach a balanced budget and support growth. what he didn't mention is the consequences for inflation. we heard the deputy head of the central banks say inflation is going to reach 10% next year. inflation is something to watch.

they seem to be happy to let the ruble fall because they want to focus on growth and making sure they don't have to cut social programs in the budget. >> because that would help the exporters. thank you so much, ryan chilcote. now, turkey, where russia's president is expected to arrive today to talk trade. he will meet with president putgan as both countries their differences over the situation in ukraine and syria a side. the globalnow is source partners country advisor for turkey. great to have you on the program. if you look at the two countries and leave the political differences aside, let's focus on the economics. between turkey and russia, who needs this agreement the most? >> could you repeat the question. russia whos, between

is dealing with a lower ruble, dealing with the oil price much lower, and turkey, that depends on gas so much, who needs this agreement the most? sides are both winning from the recent developments. to turkey isisit certainly historic. russia has lost a lot of allies in the west because of the crisis in ukraine and needs to reorient its economy towards china, asia and turkey, which means russia will buy more foodstuffs, perhaps more contracting from turkey. as well as more electronic goods. turkey will buy more energy and natural gas from russia. they would integrate their economies more towards each

other. of course there is a downside to this. the lower oil price hurts russian economy. there are two risks. if there is a financial crisis in terms of russian balance of payments, that will be contagious. investors may treat russia and turkey's financial assets as being in the same risk class. there could be a run in turkish lira, turkish bonds, and equities as well. extent thato the the incomes of russian families and businesses fall, their ability to purchase turkish assets would also fall. toi think there is one thing know, turkey's relationship with russia is based on the fact that 60% of turkeys natural gas comes from russia. as soon as you have that strong

link, it means that turkey can't thend to do anything else play nice with russia to get more gas. >> you are right. will beg about assad completely forgotten. to remind our audience, mr. erdogan is a deadly enemy of mr. assad in syria. he wants him to go immediately. mr. putin once assad to remain in syria. this controversy has been around for years. when it comes to economics, both mr. putin and mr. erdogan are pragmatic enough. given the economic integration for both leaders, -- to remind our audience once again, the russian economy is almost in a recession. the turkish economy has slowed down from a narrow growth rate

of 6% to 3%. turkey has been for many years not a full member of the eu. it doesn't get involved in sanctions. forhis going to be a limit the fact that it still wants to access the eu? would it not be better off on its own? limits thethe economic integration with russia the gas came only to a certain extent. turkey to develop gas resources in azerbaijan and northern iraq and further beyond the caspian. so turkey can become an alternative route.

turkey cannot really sell to many foodstuffs for russia russia sanctions eu food sources. it has limits. ofcould run to the walls turkey's membership in nato and 30's aspiration to become an eu an eu member. this is the beginning of a solid friendship between turkey and russia. i don't think it will the eu. eventually, if the relationship gets there, it could become a concern. >> thank you so much, atilla yesilda, turkey advisor at global source partners in istanbul. coming up, we take a look at what moody's ratings cut means for japan and for prime minister

s election campaign. ♪

>> welcome back to "the pulse."

back to the news this morning that moody's has cut japan's credit rating. they cut it by one level to a 1. this comes a day before shinzo abe begins campaigning for election. joining us from tokyo is andy sharp. what were the reasons moody's gave for the downgrade? >> basically, looking at the , they are citing the heightened uncertainty of the capability of japan's fiscal reduction goals. japan has the world's biggest debt to gdp ratio. the trigger for this may well have been mr. abe delaying a sales tax increase. again, heightening concerns among people at the ratings company about japan's commitment to achieving its fiscal goal. >> just give us a sense of the reaction in japan.

ratingsat an election, agencies always get lambasted as too late to the game. it seems like this may be a little bit of unfair timing. >> obviously i can't really comment on the timing of this. but it is unfortunate. indeed. just starting the election campaign. he just delayed the sales tax. he is election on. his decision to postpone this sales tax hike. it couldn't come at a worse time for mr. abe. >> thank you so much. glaxosmithkline could have a hard pill to swallow. the company could be axing hundreds of jobs. we will bring you the details after the break. just a reminder that you can follow me on twitter.

guy johnson is off today. he is still joining in the conversation. we have plenty to talk about. oilave japan and we have and the price of the ruble tumbling. more on that next. ♪

"> welcome back to "the pulse live from bloomberg's european headquarters in london. i'm francine lacqua and these are bloomberg's top headlines. vodafone is exploring a combination with liberty global. vodafone andn liberty would create a phone, internet and tv giant worth more than $130 billion. vodafone is holding internal deliberations about the linkup but there are no formal negotiations underway. swiss voters rejected all three

ballot proposals put forward in a referendum on sunday. they voted against a measure requiring their central bank to hold 20% of its assets in gold. another would have introduced strict immigration protocol and a third would have abolished the system allowing wealthy foreigners to duck income and wealth taxes. george osborne has given an indication of what his priorities will be when he presents his statement on wednesday. speaking on the bbc, osborne said that improving britain's export competitiveness would be a focus? >> we need to do more. we need to improve our productivity. we need to make sure we export more. inn our main export markets europe are week, we need to look further afield. we need to make sure that our kids have the right skills. you are going to see all these things undressed on wednesday as part of an ongoing plan to prepare this country for the global race and the challenges

we all face in the modern economy. bring you live coverage from the chancellor's statement this wednesday right here on bloomberg tv. is saying goodbye to fossil fuels and will spin off its conventional power generation unit. hans nichols joins us now from berlin with the story. if they sell these assets, what will be left of the company? >> they say the holding company will have about 40,000 employees and will focus on energy transmission and renewables. here is the challenge. a collapse inve wholesale electricity prices. so all the utilities in germany have been struggling. this is all in reaction to angela merkel's energy change. she wants 80% of germany's fuel sources the renewable by 2050. they are at 25% now.

they have a bit of always to go. 35y want to get up to 30%, percent, 40%, all the way up to 80%. here is what the ceo of e.on had to say -- the--ieve this is announced impairment charge. you look at their last quarter. 90 million net loss on income. this is a company that is struggling. >> thank you so much. hans nichols. .he very latest on e.on glaxosmithkline could be axing hundreds of jobs from the u.s. it is a huge shakeup. >> it could be acknowledged, announced, as soon as wednesday. the president of the north

american unit is due to speak to the employees in the u.s. that day. put it into context, hundreds of jobs. there are 17,000 employees in the united states. it is not going to be a huge percentage, but what we are seeing is glaxosmithkline tackling a crucial area for them. the u.s. is about a third of all their sales and sales haven't been doing that well. they have competition in their asthma medication. we are seeing sales fall as much as 30%. new drugs are coming online. they are not doing as well. the growthve not got drivers, you start looking at your profitability by cutting costs. when you don't incentivize the salesforce is that they could perform less well. is this one of the main worries? >> this is what many analysts are pointing out. glaxosmithkline has to shake up

their u.s. unit because they are being investigated. there was all this concerned that they weren't selling drugs in the appropriate manner. $3 billion.ned now they have had to re-incentivize their sales target by saying, we are not going to pay you on bonuses based on how many drugs you sell. we are going to pay you a bonus based on your knowledge base. how do you incentivize a sales team to sell more if it is just based on your knowledge? many analysts are saying that is not driving revenue. you have to find another way of getting your sales force out there. those sorts of shakeups that were announced, 2010, it was quite foresighted to be trying to steer the company away from that. if you are seeing profits fall, investors want to see a shakeup. interesting that deirdre withiny herself has been

a management overhaul as well. just the other week, we see that she is no longer directly reporting to andrew witty, the chief executive of glaxosmithkline. she now goes by the head of global pharmaceuticals. changes for her, changes for her employees. >> huge overhaul, caroline, thank you. coming up, we talk the strength of the italian economy after they posted a contraction in third-quarter gdp. cb andtions should the matteo renzi take? ♪

"> welcome back to "the pulse live from bloomberg's london headquarters. lufthansa has canceled flights today as the pilots union strike hits europe's second-largest airline. 150,000 passengers will be affected. lufthansa has canceled thousands of flights this year. the lockout will affect short-haul flights today and short and long haul flights tomorrow. john bank is making nonbinding billion pound bid to about four brady for its private public partnership portfolio. said if an agreement is

reached it will finance the acquisition from an equity capital raise. balfour beatty is up sharply on the news this morning. cristiano ronaldo has another crown to add to his collection. the football star snatched the player of the year last year and now he is also the top player on facebook. one posed by ronaldo is worth an average $144,000 for a brand. sponsors include nike and emirates. he earned $22 million from endorsements last year. not bad. now, the ecb meets this week and while the threat of deflation in the euro zone and the tumbling oil prices will be front and center, how much should the attention be on europe's central bank and how much should the central bank devote to the deteriorating economic situation in italy? europe's fourth-largest economy just contracted in line with expectations.

the country is also dealing with record high unemployment. joining us is the founder and ceo of policy. thank you for coming in. give me a sense of what italy needs to do now. matteo renzi is considered one of the great reformers. it seems that reforms are a little bit late. they are lagging behind. what happens next year? renzi is devoting an increasing chunk of his time to interparty wars. there is too much of that and very little devoted to fix goal -- fiscal expenditure or cuts. package from q4 a greatther than seeing deal of expenditure cuts, we are seeing automatic tax increases kicking in if there are

financial shortcomings. this is a worrying signal because it shows us that this government has very little attention for doing the right and starving the beast. >> these things take time. when you look at the reforms, they take time. if we look at two or three years down the line, is italy going to be in a better place? thehere a danger that european central bank is putting too much pressure off the politicians to do more? >> it is hard to say. italy is a special case, not just because it has very little growth or because of its unprecedented unemployment. the elephant in the room is, the sovereign debt. service debt in the

world makes us a special case. amount ofcades, this sovereign debt has been largely underwritten by domestic investors. the italian banks. this was all part of a very close loop of architecture where you have the state issuing the debt, domestic banks underwriting, and the banks entities which in turn had very close ties to politics. which,d loop system in in some way, insulated italy from capital market hiccups but had huge downsides, including dramatic credit crunch. tenableld is no longer and we are seeing a paradigm shift. the question is, who will underwrite italy's sovereign

debt in the future? >> are you saying that banks are not safe? a lot of them past the aqr. it seems there is a shift. italian banks hold more sovereign debt than other countries. slowly shifting, is it not? >> it is. the question is whether the ecb has the willingness to underwrite italy's sovereign debt itself and whether draghi can push this through against german will. depending on the ecb's approach, capital markets will react and make their moves. >> at the moment, we know that it is less controversial for the ecb to buy corporate bonds. if they were to buy sovereign bonds, it would have to be some kind of bucket. situation, is the price a much bigger concern or is italy still the number one

worst student in the classroom? >> in terms of sovereign debt, italy is a far bigger case then france. because the paradigm shift is so difficult, i think that italy makes for a more interesting case then france. >> all right. >> if you are the italian prime minister, or the minister of finance, you had just one telephone number you would dial ahead of a debt auction. you would simply call the head of the umbrella organization and ask for help. that was it. in tomorrow's world, you may find yourself placing calls to pimco, blackrock, and a number of others. >> the world is changing. some would say, rightly so, it couldn't come soon enough. thank you so much, francesco.

let's stay with italy, specifically olives, the staple of the mediterranean diet. poor weather and pestilence are wreaking havoc on crops and that is pushing prices up. >> since i was a boy, i've never seen a season like this one. in 1985, we had a strong breeze but we didn't experience such a drop in production. sayrandfather and parents they have never seen anything like this. >> he labors away on his olive tree farm in central italy, a region famous for its extra-virgin oil production. in a good year, he sells olive oil to local customers. year, i've no oil to sell at all. the quantity i've managed to produce will be used up by me.

this season, i lost about 80% of my olive oil production. 25,000 toking about 30,000 euros of lost income. this time of year, you usually wouldn't be able to get in because of the crowd. now, as you can see, it is all dead. there is nobody around. >> olive oil production is worth 2 billion euros a year to italy's economy. an invasion of fruit flies spread a disease known as olive tree leprosy. this season, we expect a considerable drop in olive oil production nationally. here, the decrease will be beyond 70%, which is a significant figure in a region where olive oil has been produced for 2600 years. >> the price of extra-virgin olive oil has surged by almost

one third this year. it is expected to go even higher. a local restaurant tour uses oil in all her meals and her profit is being slowly eroded. >> cooking is costing more because we need to buy olive oil. we can't afford to raise the price of our meals. oilovers of italian olive might have to savor the taste he for prices rise further and before the market is invaded by cheaper european alternatives. >> as oil falls, not all of oil but the other oil, oil falls and gas becomes cheaper, what does the future hold for the growth of the electric car? we will hear from the ceo of one of the world's biggest car companies. we are just getting started. ♪

"> welcome back to "the pulse live on bloomberg tv and radio. in today's new energy, we are taking a look at electric cars and a man who will have a big influence on their development. thes chairman and ceo of run arty fund alliance.

his company is responsible for 10% of worldwide car sales. he sat down recently with aboute rose and talked his current electric car lineup and his vision for the future. already 200,000 electric cars. it is a small quantity compared to 84 million cars sold every year, but this is a first step. it is a very important step because we see a big future. >> is it profitable? the leaf is a profitable car for you? >> the leaf starts to be profitable. with the quantity we are now producing and after all the cost reduction for the last few years, we start to be profitable. think it is time to push. when you start to be profitable, you are very motivated. it willong do you think take for them to be a wide

acceptance? isi think the development going to be steady, but not very quick. regulation is going to help a lot. putting veryre now strict regulations on emissions. they are moving towards emissions standards which are very strict, nearly as strict as the united states. this is going to force car manufacturers to transform part of their offer into electric cars. today in china, you can't expand your plant because everything has to be authorized, without proposing a new technology. new energy car is electric car or hybrid. from clean energy cars to the impact of climate change, we are used to seeing images of icecaps melting. one other consequence could be a change to the food we eat. reached,rgets can be there are four foods likely to

go missing from store shelves. tom gibson reports. >> globalization, wealth and supermarkets. these three ingredients are why most of us can eat whatever we want whenever we want. as the temperature of planet earth cranks up, some of our favorite dishes might soon be off the menu. the world is running out of chocolate. because of disease, drought and new markets, demand for cocoa beans is expected to outstrip supply by one million tons every decade for the first he above future. in six years, the price of cocoa increased by 87%. higher temperatures and bad weather brought coffee fungus to plantations. combined with a severe drought this year in brazil, prices have skyrocketed. in africa, the number of regions suitable for growing coffee is predicted to fall from 65% to 100% as the climate warms.

warmer temperatures will likely reduce crop yields. heat increases the rate of growth but this can reduce the time people have to grow and mature. throw in the demands of a growing population and food prices could rise by up to 84% by 2050. our oceans won't escape either. catches in some areas of the tropics are projected to fall between 40% and 60% according to the u.n. rising co2 leads to ocean acidification. many of us may be forced to change our diets in our lifetimes. this is due to the increased cost of the goods we buy. climate change experts say food shortages will likely cause political instability and war. tom gibson, bloomberg. food security, one of the biggest concerns going forward. just a reminder, you can follow me on twitter. one of the biggest stories that

we are following today is yen. moody's cutting japan's credit rating. this is probably a very big load to the prime minister shinzo abe just before that snap election. that takes place on december 4. ,oody's basically saying that first of all, it reduced the rating to a 1. that is the same level as bermuda, israel and the czech republic. they say they are increasing risks of a rising bond yields. that could make it harder for japan to manage its debt. moody's of the levels, is at a similar level to fitch. we did see a big fall in yen. it has recovered, so watch out for yen. watch out for japan as we head into a second hour of "the pulse ." we will be watching the telecom sector. we are seeing a host of consolidation. makers of the portuguese

. we will have matt campbell and caroline hyde covering not only what we see on portugal but also the fact that vodafone may make a bid for liberty global in the future. we will have the lowdown, next. ♪

>> a downgrade for japan. moody's cuts japan's ratings on concerns over its growth policies. telecom's takeover as they move forward with a $9.2 billion bid oi portuguese after bloomberg discovers vodafone may create europe's largest telecom company. can oil take the pressure? oil tumbles to the lowest level since 2009 after opec maintains output. will oil companies be able to survive the slump? ruebel rout as putin heads to turkey. can russia weather the storm?

>> good morning to our viewers in europe. good evening to those in asia. welcome to those just waking up in the united states. i'm francine lacqua. this is "the pulse" live from bloomberg's european headquarters in london. a big day in the telecom space. a billionaire is eyeing another european asset, upping his offer for oi portuguese. here with more is caroline hyde. we'll also get more from matt campbell on the vodafone-liberty global story. caroline, let's kick it off with you. is this the winning offer? >> we think it coulding. once again, patrick willing to splash the cash, and he's upped his offer by 5%, so 7.4 billion euros is the amount he's offering for the portuguese assets of oi. interestingly, that is going to be bigger than the offers from other private equities, but it seems as though he's gone exclusive, manage to woo them in that respect. and he upped the amount by

saying, look, it includes half a billion euros in revenues related to the future of portugal telecom. this is what's so fascinating. now it allows oi to focus more in south america. it's going to be focused on potentially even more consolidation, even more deals in brazil, which is what the biggest countries or telecoms in that terms of that particular market. getting out of portugal, they're hopefully getting a wad of debt to pay down debt. this basically changes the game for oi, because they've been acquisitive or working on deals, and so if this deal with altice goes through, it focuses on the rest. >> it allows it to focus on home. oi is brazilian-based, and they've been eyeing up other assets over there, a local player. they want to up their beef and become more of a beast over in brazil. but interestingly, this time last year, they want to become transatlantic. they wanted to do a deal with portugal telecom, buy their assets in portugal, become a

global player in just one player. that deal is unraveling. they're selling off the assets. the c.e.o. had driven that deal with portugal telecom, and he stepped down in october. interesting that once he's gone, suddenly the company is able to perhaps undo some of the work that he had previously put in place. it was all renegotiated on the fact there was defaulted debt thrown in there. but i think it is a real turnaround of events. this last year, they had 100 million customers. they wanted to be in portugal, south america. now they're retrenching, going back to their home territory of brazil and selling off the portuguese assets. meanwhile, patrick is able to increase his deal. obviously a big player in mobile and france, 20 billion in excess will be paid for earlier this year, now splashing cash again, this time in telephone assets in portugal. as we were talking with matt, it's all about trying to be all things to all men.

you don't want to be a cable player anymore, you want to be mobile as well, and this is going to be that. >> you have the quad play. the quad play that we've been talking about. and matt, you broke the story. matt campbell, our deals reporter, basically broke the story that vodafone may be looking at liberty global. how close are we to a deal? >> well, it's not something that is imminent. it's not something that involves normal investigations f. it did, we would have heard about it now in a take overpanel statement. this is more an aspiration on vodafone's part, something they're looking at in the medium term. these discussions have been accelerated, because b.t., as we learned in the last week, is looking to enter the mobile market in a big way. b.t. is the historic telephone monopoly in the u.k., a big beast of a company, and looking to make a big splash. that puts a big splash and makes the vodafone chief exec think about big things he can do to counter b.t. >> how essential is it that if

i want to have something on mobile, i can also bundle it up with my tv, do people now want this? i want to be able to buy everything for one provider. >> well, that's an interesting question, and one of the things i wonder beside quad play is whose interest is it in. is it interested in the provider? i've never had any burning desire to buy my mobile service and broadband from the same company, but if i did, the thinking goes on the part of the operators that you're less likely to churn. you think i don't want to go through the rigmarole of changing out my home broadband, so i'll just stick with whoever it is because they do everything for me. a big part of it is preventing customers from defecting to the competition. that's been driving this evolution of the u.k. toward quad play, which has been in countries like france for years and years. >> what about the obstacles to a possible deal? >> there's a huge regulatory

problem in germany specifically. vodafone last year made a big move into fixed line for vodafone. at the same time, liberty is also a household name in germany because it owns a big part of the german broadband and cable market. so regulators are going to look very hard at the combination in germany. the u.k., much less of a problem, virgin media, which is liberty's main operation here, doesn't do what vodafone does. it's not a mobile operator. and then you have countries like the netherlands, like belgium, where there's less of an issue. germany is the big regulatory obstacle, in addition to financing and everything else. >> talking about consolidation. we've been talking about it for over a year. this is the play in terms of m&a, in terms of rationale of costing and everything like that. how many more of these mega deals are we going to get? >> well, it's the story that never dies. we talk about it constantly here. there's always something new that's driven by technology. it's driven by regulation.

the economics of this industry change all the time. the flavor of the month a little while ago was mobile consolidation, going in most countries n. europe, four frirets three. now we're talking about fixed mobile convergence, and companies tend to converge very quickly. the u.k. seems to be in that process now. it has already happened in spain. we could see things like that happening in scandinavia, for example. there's talk of mobile consolidation, a little bit old-fashioned, but still does happen, in italy. if you look at the map of europe, there's a huge amount of deals that could happen over the next 12 or 24 months. >> our deals reporter, matt, and caroline hyde on the latest from oi. i love the name oi. genius, oi. hear what else is on our radar. the free-fall of oil continues. it tumbled below $65 a barrel to the lowest level since july 2009. the drop comes amid speculation that prices have further to fall after opec's decision to maintain its production output

and leave it to the market to reduce a global glut. now gold is also slumping after swiss voters rejected a plan for their central bank to add to its gold reserves. the delivery fell as much as 2.1% to its lowest level since november. and ratings agency moody's has cut its credit rating for japan. they reduced it to a one from aa-3. they point to heightened uncertainty over the ascheeveability of japan's deficit reduction goals, as well as the timing and effectiveness of japan's growth policies. moody's called the outlook for japan stable. now we're learning more about what will be george osborne's statement on wednesday. infrastructure will be a centerpiece of the piece. osborne will announce a strategy that will include 100 new road plans and 1,300 new miles of additional motorway lanes. 1.5 billion pounds will be used to create smart lanes.

the plan are all part of a 15 billion-pound frain structure package that was first announced in august. we'll, of course, bring you live coverage from the chancellor's statement this wednesday right here on bloomberg. still ahead -- a mega merger in the making. vodafone mulls a marriage with liberty global that can make them a power couple worth more than $130 billion. we'll discuss the likelihood and implications of a potential deal next.

>> welcome back live from europe's headquarters here in london. let's check in on some of the currency markets. i want to bring two currencies. the yen is a big one we've been watching all day. you can see 118 points. this is after moody's actually cut their rating on japan. this is a big blow to the prime minister abe, just a day before he starts campaigning. that snap election called for december 14. moody's reducing the rating to one level to a one, basically saying they're not sure about the growth policies. that will have an implication on elections because of the election is on the economy front. check out dollar-yen. you can see current 118.37. this is the other big story of the day, the ruble. we've been showing you, of course, the oil slide. russia's ruble hitting a new all-time low today at 52.13.

overall, this is as declining oil prices, but also the conflict in eastern ukraine weighing on the country's economy. the russian trading, and overall lost 42% of value this year, battered by the oil price, but also by the implicate in eastern ukraine. we had our russian correspondent saying the ruble decline is a concern. however, you all feel the exporters, and so further evidence seems that central bank is willing to let that go on. let's get back to one of our top stories, and vodafone takes aim at the broadband and tv sectors. a merger could be on the horizon. it creates a european phone, telephone, and internet juggernaut worth more than $130 billion. joining us now is our analyst and head of european tell telecommunications research. great to have you on the

program. this is something that's going to be longer down the road, right? vodafone is looking at the potential acquisition of liberty global. are we sure that they want it? >> we're sure they like cable. clearly they've got an interest in it. liberty does fit, but clearly there are issues. they've almost got a very fine strategic first, because what they've done in germany and spain is relatively new, and we're still uncertain as to whether this is a long-term thing in all these european markets. >> so basically, you know, listening or trying to understand whether you as a consumer want content and your mobile phone service from the same company, how long are we giving this? do we find out in six months, in a year? consumer trends change so quickly. >> what we have seen, trends in the mobile. it's from the same provider. adding mobile --

>> why? >> predominantly savings. we're talking about bundles, where it becomes cheap for her he consumer. adding mobile is slightly different. not everybody in the household will have the same mobile solutions. some people have corporate solutions, so it's a hard one, but it comes down to two things. firstly, do the consumers save money, and therefore, there's a saving. secondly, are we going to move to a convergence side of technology, where actually the consumer goes, i don't really know what technology i'm using, be it a mobile or fixed line solution, but i'm happy to watch that tv product or do that broadband solution at the same time, almost technologically neutral. >> the quad play is something that's proven in france. but in the u.k., and you were talking about the trend, about bundling, it's not certain that this will play out in the u.k., right? >> it's still quite early, and one of the problems with the u.k. is we haven't had the

integrated operator, whereby definition, because near fixed, they're going to do t. that's the reason why this was an interesting catalyst, because they would become almost integrated, comparable with every other large european interoperated operator, and that is -- that has been a catalyst for these types of discussions, but again, this is the early stages in the u.k. there are products you can get out there with virgin, where you can buy a mobile bundle. they're growing, but from literally a small basis. >> we knew that liberty global was always wanting to be not the target, but the person that ctually did the acquiring. are they going to overpay? vodafone wants liberty global, and they had always seen themselves as the acquirer. does it mean the price will be much more expensive? >> well, the problem you have got from the vodafone perspective is they're recovering in mobile. they have been more discounted valuation to cable assets, which has been premium.

so there is a big gap, and that's one of the challenges vodafone got. cable tends to fade around 10 times. vodafone is trading, even with the recent rally, up to seven times. that is a big gap when you're starting to talk about relative valuations. i'm sure that is causing headaches through the vodafone, looking at this type of transaction. >> and then there's regulation. >> there's regulation. in germany there's regulation. most of the hurdles are relatively limited. a cable operator by mobile or a mobile operator buying cable is not a new concept. we have seen that in portugal, france already. in fact, vodafone has done it in two markets. we have a regulatory issue in germany where the german regulator bodies have historically been the consolidation. >> so if you look at these three hurdles, strategic, regulatory, but also financial, what about the chances -- char the chances of this deal being put to bed? is it two, three years from

now, and would you say the chances are 50-50 or even smaller? >> i think vodafone will continue to look at this transaction. the key thing is probably financial, because the quantity of the deal is so big. the diverse knit multiples between the vodafone and liberty are so extreme, that we're talking about vast amounts of money. the question is, do those multiples narrow over time, and that will give them more confidence to do it. the other side is since vodafone shows success with what it brought in germany and spain, it gives it more confidence, and it can deliver an integrated solution, and it's actually good at it, actually good at integrating mobile and fixed line cable assets. >> is there anything else that vodafone can go after if it does get liberty global or decides not to bid? >> liberty global is the only asset that provides infrastructure in germany and the u.k., which are two key -- there's nothing else that gives quite that scale. >> any other big deals that we're watching out for? matt campbell was one of the guys that broke this scoop, but

just give a size and scope of how many big deals we can see. this is the space for mega deesms >> as your correspondent said, there's a big theme going around of operators buying technology, so mobile operators buy fixed technology and vice versa, and in mature markets such as europe, that is going to be a big theme in many markets, and that is where you're going see asset trading. there are clearly other deals that are being talked about globally, but a lot of those are mobile-mobile, and mobile fixed. but that is the theme. we're also talking about deals in brazil, things like that. but then they're controlled by european operators with the same mindset, convergence matters. that's the reason why you're seeing the theme there. it is definitely an issue for telcos over the course of the next 12 to 24 months. we're going to hear to hear stories like this. >> thank you so much, head of european tell telecommunications research. coming up, we look at what

moody's rating cut means for the country and for prime minister abe's election campaign. ♪

>> we're bringing you lives pictures from brussels. there's a new president of the european counts simple he's overtaking van room poy. he's served two consecutive

terms since the position was established in 2009. you can see that's going on live at the european council, the main building in brussels where all these sum its take place, and we'll bring you any breaking news from that as we follow that live event. the downgrade of japan's credit rating by moody's. the agency cut it to a one. this comes a day before shm abe begins campaigning for an election in which the economy will be in central focus. joining us from tokyo is andy sharp. thanks for coming on. what were the main reasons that moody's gave for the downgrade? > basically, i mean, after shinzo abe last month decided to delay the sales tax increase, i think moody's was showing their concern about whether japan was truly committed to its fiscal consolidation.

it just seems as if it could be directly related to that. of course, that's what we're hearing and seeing from economists too. one economist said this is a warning to japan's commitment to improve its fiscal health, so i think it can be read that way. >> all right. andy, thank you so much. andy sharp from bloomberg news, tokyo. the former french president has taken a big step on the road to a political comeback. sarkozy was elected president on saturday with 64% of the vote. we get more from paris. this victory was actually a little bit narrower than expected. >> that's right. sarkozy is back, about the his victory was much smaller than expected. his supporters were expecting closer to 80% of the vote of the u.n.p. party members, so that puts him in a tricky

position, because that could create other right-wing leaders to stand against him in the 2016 primary. these election doesn't entirely mean that nicolas sarkozy will be the candidate to run in the next presidential election. there are other really strong candidates on the right wing, especially the mayor and former prime minister who is still considered as the most popular politician in france with 57%, and many voters think that he would be a better candidate to run against him in the next election. >> what's next for sarkozy, caroline? >> so, of course, francine, his first task will be to rebuild the u.n.p. party from the inside. the party has been very damaged by divisions, political infighting since he quit

politics back in 2012. then the biggest threat of all is matching the leader who was also re-elected yesterday as the president of the national front with 100% of the vote. there were clashes in the streets along and next to the place where the election was taking place, and he might be the real threat to whoever runs in 2017. then, of course, nicolas sarkozy still has to fight corruption allegations and influence peddling is still under investigation for peddling. and finally, francine, he's not that popular anymore, he wanted to scrap hollande's law allowing gay marriage. back to you. >> all right, caroline, thank you so much. coming up, playing the

advantage. putin bets on turkey as russia reels from economic sanctions. that's the story we're covering next. ♪

>> welcome back to "the pulse" live from blorg's european headquarters here in london. i'm francine lacqua, and these are bloomberg's top headlines. vodafone is exploring a combination with liberty global, prompting predictions of a wave of dealer making in europe's telecom sector. a link between vodafone and liberty would create a phone, internet and tv giant worth more than $130 billion. vodafone is holding internal deliberations about the link up, but there are no formal negotiations underway. that's according to people familiar with the matter. swiss voters rejected all three ballot proposals put forward in a referendum on sunday.

they voted against a measure acquiring their central bank to hold 20% of its assets and goals. another that would have introduced strict quotas and a third that would have blished a system allowing reporters to duck taxes. and the u.k. chancellor george osborne has given an indication what his priorities will be when he presents his statement on wednesday. speaking on the b2b's andrew show, george osborne said there should be further savings on welfare payments in order to spend more elsewhere. the government will announce an extra 15 billion pounds plan on road building in england over the next six years. we'll bring you live coverage from the chancellor's statement this wednesday on bloomberg. now let's check in on the markets, and jonathan has the latest. john? >> thank you so much. we're shaking up for a day of losses, losses on the dax here in frankfurt. on the ftse and london, down.

if you look at the broader index, oil, gas, the energy companies really weighing on their index once again. and francine, that is the only story in town over the last month. it has been the fall, the continued fall. bring up brent, south of $70 a barrel, $69. 3, down almost 40% year to date. a lot of discussion about the supply side of this particular conundrum, a big discussion about demand this morning. manufacturing in china, eight-month low. manufacturing over in germany in contraction on the p.m.i., an 18-month low. concerns about growth once again. but when i look at manufacturing, there was a little bit this morning, and it was here in the u.k. manufacturing data, p.m.e. comes in at 53.5. expansion driven by domestic demand, concerns about demand over in europe, but sterling oes a little bit higher. you see this move lower right now.

we're talking about the statement on wednesday. that is the buildup to next year's election, and this morning, morgan stanley slashing their forecast for sterling next year, now looking for 145 in the third quarter, driven by, guess what, political uncertainty. >> as always. in 25 minutes, it's "surveillance" with tom keene. he joins us from new york with a preview. tom, what are we looking at today? i know you have one of my favorite guests on. >> we'll talk to the professor, and we'll talk about the correlated and linked way that these markets are moving this morning. it's a little bit better than t's been the last three years. now the chief economist at citi group without question the research note debate of november, we will talk about gold, we will talk about gold

as a bubble, but far more importantly, we'll talk to professor buiter about europe, america, and the linkage to oil in the ruble and in gold. we look at retail monday in america. there's black friday. thursday is thanksgiving. black friday is friday. and they had to make zpwup for monday. did you know it's signer and monday, and tomorrow is bo tie tuesday. it's a worldwide event. bow tie tuesday is tomorrow, and we'll work on that. the former force behind saks fifth avenue will join us, now with the national retail federation. we'll talk to him as well. a lot going on, but really, markets, front and center. >> i'm not sheer tomorrow, so tom keene with "surveillance" n 25 minutes from now. russia's vladimir putin will

visit turkey today. russia is reeling from crippling sanctions imposed by the u.s. and the e.u. and is looking to put their difference as side to build a stronger economic and political alliance. joining us now to break down putin's latest move is a senior partner with macro advisory. chris, great to have you on the program, as always. >> political difference as side, turkey and russia really eed this deal, because russia, turkey, just needs gas. >> for sure we've seen russia looking to establish partnerships to improve companies that are not part of the sanctions regime, so we saw last year russia one of the main promoters of the so-called brick development bank, and now it's logical that president putin would target turkey, and in particular, with turkey, because russia has something to barter. as you mentioned, turkey is looking for cheap energy.

russia has a direct pipe line into turkey, and the president has already said they'd like see greater volume, and there's a negotiation price. possibly also the pipe because, of course, this is also a big priority for russia, it's running into problems because of objections from the european union. it's supposed to reach a landfall in bulgaria, now there's a question mark as to hether that moves south. if you look at turkey, they already are depend nent terms of the energy they buy from abroad. 60% is from russia energy, so they're extremely dependent. is there a kind of day -- first of all, how desperate is russia? we're looking at the economy, and recession is doing extremely badly. it doesn't look like there's going to get any respite in the near future. are we going to see much more deals like this? i mean, after turkey, what omes next?

>> but remember, the ruble, even though that's kind of a negative headline, it does get a great deal of protection, so the budget is in surplus. >> certainly from a perspective, they see themself a long way from being desperate, but clearly are in a tough situation. for sure, because of the sanctions, president putin is definitely on a mission to build a relationship with other countries. turkey is the logical partner. turkey is already a big investor into russia. there's been a lot of investment by turkish companies. turkey is now also a place where russia is looking to substitute, for example, meat or other food products, which s the sanction against europe. >> there's a couple of political issues that need to be calm, as it were.

>> ironed out or just forgotten about? are the two leaders going to put their differences to one side to make sure they get down to this? >> well, i think there's certainly an element of yeah, they both need each other to some extent. turkey has been trying to apply for membership to improve, and that's now becoming even more difficult. of course, in europe, the criticism or concern about turkey becoming more of an islamic kind of influence is pushing it further away. to some extent, i don't expect these differences will just be forgotten about and put aside, but i think that we'll see a lot of pragmatism in this discussion. both leaders to some extent need to improve relations with each other, both for economic energy and political reasons, and i think it's that sort of pragmatism we expect to see. >> and you were very clear that russia is maybe is in no way desperate because of the weakness. ruble, which means there's a surplus. however, if oil is to fall further, and this is what a lot of analysts are expecting, we're at 65, if we go to 40, is

there a level in your mind where you say it's going to be very difficult for russia to revive this? >> well, this is a tough time for russia for sure. in terms of the balance sheet and financial position, the weak ruble has compensated for he weak oil. >> we're probably very close to that level. that combination no longer ruble is weak pushing up inflation. t's causing a loss of economy. this is a fairly short period of time. if you like the financial meltdown, but it's pretty firmly now stuck in a rut, and the longer that lasts, then i think the more difficult both the social and political situation will be, as well as economics.

it's got a timeline. we can say that the weak ruble is protected, which is factually correct, but really, the ruble crisis leads to the economic crisis when one follows the other. >> thank you so much for all of that. coming up -- change or fold. web traffic is crushing foot traffic. can brick and mortars take back the markt share? we'll discuss remedies and options for department stores looking to reclaim retail. ♪

>> welcome back to "the pulse" live from london on bloomberg tv. let's talk shop. black friday gave retailers their best sales performance of the year, but the ongoing decline in foot traffic could indicate that brick and mortars are fighting a losing battle, as they have the easy convenience of shopping online. the solution, according to the founder, it's more digital customer engagement. daniel wagner joins to us explain why. great to have out program. i just want to remind everyone, because we've been talking about technology, and just to educate people that are watching us that may have missed the story, you invented the technology that will show you if retailers sign up what, for example, you're wearing, right? it's like the shazam of the retail world. >> you can listen to a tv ad and then engage with that, or you can walk into a physical

retail store and communicate with the store via your mobile phone. the store takes over your phone and starts talking to you. there's promotions off these shirts or there's a special offer on suits or whatever it happens to be that's very relevant to me as a consumer, rather than me walking in, which is what happens today, and taking my phone out and buying something from amazon because it's cheap when her i'm stand negotiate store of another retailer. >> is it price comparison? no? >> i think that's what happens is consumers are going into physical retail stores and checking prices of online players much the online players have better margins. they can always be more effective in cost cutting. the consumer then buys from that retailer, and the retailer who's providing the infrastructure, showing the product, loses out on the sale. what we're trying to do is say, when a consumer walks into your store, you need to engage with that consumer through their mobile phone, and that's what makes the difference. it changes the dynamic in store. it's a better experience for the consumer, balls the consumer then learns more about

the products and engage with that brand. >> it's one of the things that burper a really focusing on. this puts it into context, the conversations we're about to have, because basically you look at it from a very important point of view because it impacts your business, and say physical stores are just really lagging behind, and they still haven't got continue. you can see this on black riday. they've seen growth 30% in the case of amazon and 27% in the case of ebay. that's in the last few years. that's astonishing, so it's quite clear what's happening. consumers are saying we want to buy with the convenience of online. now if the physical retailers don't get their act together and start to change the user experience in physical retail stores, they're not going regain their market advantage, and, you know, britain has been known as a nation of

shopkeepers, but very much we're at risk of becoming a nation of shop losers. what's happening here is the online players are eating them up. they've been doing it for 15 years, and now it's getting much more painful. >> i have a lot of c.e.o.'s coming on, and they say, sure, sales are important online, but are never going to make huge margins, because i still have to get my head around about how we shop. i look at it, i think about it, but i still go online. but i still go to the physical stores to try stuff on and have a look. >> and that's the problem, because when you go into the physical store, you're like the light, heat, power, and engagement that have retail store, and then you buy it online from somewhere cheaper, and that's the problem, or somewhere more convenient. what we're doing with power stag we're providing those physical retailers with the ability to engage better in physical stores, but also to take a step up and engage while you're watching tv or engage while i'm sitting through a maggett the hair dresser, and i can buy, with my mobile phone,

direct off the page. >> it's basically like buying a ar, that you have. >> they've not been engaging their skirmse in the way consumers want to be engaged. consumers walk in with texting, emailing and surfing, and even though they're in the retail store, they're not really engaged. but that needs to change. retailers need to understand that the experience online is very different, much more personal, and they need to change the experience. technology can help them do that. >> again, it's crazy for me to speak to a big c.e.o. and the way that he sees online is so different to the consumer sometimes. it's different in positions, craze maybe because they're a little bit older, because they're not used to using the technology, but one of the things i get told, for example, is that it's a very london perspective when we talk about people always being on their mobile phone. is this wrong, or is it right,

or will it change? >> no, it's completely wrong. first of all, it's wrong in the u.k. drastically massive shifts towards use of mobile phones the last year and a half, but i think also what's true is it's quite clear, it is a trend. it's not something -- same thing happened 10, 15 years ago when retailers were saying, oh, our creative vision has floated off. it's something to do with my business, it's an opportunity to make some more money. they've got it all wrong. it is part of an engagement with consumers, and consumers are moving more into this sort of engagement with brands across multiple channels, mail order, press, tv, radio, online, in store, and if retailers don't grasp that channel environment, then they're going to lose. >> amazon and ebay are building inowe vagse, so i'm thinking of the parcel collection apt the post office, getting to it -- to you much quicker.

if i'm struggling to beline, how much will it cost? >> i think these guys have a major advantage. the stock market allows them to invest heavily nonstop. amazon has always made a lot for 20 years and continues to invest billions in their r&d. you take that against the physical retailer, and they're trading at the normal multiples of retail. they don't have the opportunity to be measured every quarter against their profitability. they can never compete with the v. that's being made in the online players just because the market doesn't break them the same way. they have to use professional froirs take them to the next level. they can't do it themselves. >> you speak to c.e.o.'s on a regular basis. what is the most common mistake that a c.e.o. is doing at the moment? >> they still see online as a division, an e-commerce division. they don't get the fact this is now a duel their business much the only illustration is the recent appointment in the

yealts ofer rc to the c.e.o. of the gap. that's a very smart move. i think you'll see that more with progressive retailers. they need to put digital at the heart of their strategy. >> the mistake is why, because they're insulated from the real world? >> because the consumer lives in an online world. they live it through their mobile phone and through their desktop p.c. they're constantly online, and you need as a retailer to engage with all of those environments. >> dan, thank you so much for the very interesting conversation. a strike starts in the next couple of minutes. more than 1,300 flights have been cancelled. 150,000 passengers will be affected. that's next on "what to watch." ♪

>> welcome back to "the pulse" live on bloomberg tv, the ipad, and bloomberg.com. some of the world's most expensive cigars go under the hammer in london later today. investors from europe, the u.s. and china are expected to spend tens of thousands of dollars on vintage tobacco. >> one needs to take the opportunity to have some time-out and fill those moments beautifully with the relaxation accompanied and assisted by a fine havana cigar. the managing director of cigars limited has them at auction.

if one knows a bundle of zpwarks he should get a pun jant tobacco smell. ere should be no mustiness smell, almost a sweet, perfumed tobacco smell. the most important thing is the cigars should have been stored correctly at the right temperature and the right relative humidity throughout their lives so there's no imperfections in the conditions they've been kept in, and that would ensure they've been stored correctly. if it's something in the last 20 years, you've got to pick the right vintages, because a bad vintage that is aged is still a bad cigar. a good vintage that is bad is a good cigar. the tobacco in 1492 huh midor, that's 5 5/8 inches in length and a 46 ring gauge. many consider them to be one of

the finest havanas of all time. not unusual for a good box of ntage cigars at 25 cigars to sell for between five and 10,000 pounds. it's not unusual to sell for between 20,000 and 40,000 pounds. we have quite an interesting stock of cuban cigars, which, of course, discontinued in 1991 in cuba, and there's about 35 lots in this auction, which is probably the largest amount we've ever seen in a single auction. a cabinet this is 50 beautiful cigars, one of robably 125 romeo and juliet deluxe, which is pre-embargo. coronas from the 1950's, pristine condition. that's a cabinet of 50 cigars.

the feel of the cigar, the look of the cigar, and the taste of the smoke only in the mouth, the slower one exhales, the more the flavor will be experienced. >> all right, for a look at what we're watching the rest of the day, we're joined by hans nichols in berlin. i'm sure hans is a cigar smoker and will try to get his hands on some of those vintage pieces. but hans, how is lufthansa going on strike again? >> this is going to be a massive strike, 36 hours, it starts at noon, francine. it starts with short and medium haul. then tomorrow it goes into long haul. some 150,000 passengers could be affected. more than 2,000 flights may be affected. it wouldn't affect either you or me because we always fly german wing. that's the-cost subsidiary, save the company some money. i know you either fly low cost for the company or private on your own.

francine? >> yeah, right. yeah, i do the office stuff. all right, hans, thank you so much. hans nichols with the very latest. that's it for "the pulse." keep it right here. ♪

>> oil and gold continue to collapse. will united states stocks the next? for the entire hour, our guest from citigroup. black friday sizzled.

cyber monday and bowtied tuesday will not bailout american retail. , and protests in hong kong turned violent. police restraint is not weakness. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. december 1. i'm tom keene, and joining me is scarlet fu. rendon really is back from a four-week vacation. oil just passed another milestone on the way down third west texas intermediate fell below $65 a battle for the first time in 5.5 years. oil dropped 18% in november. there is speculation prices will decline more. oil prices are no guarantee that shell oil producers will produce the output. a bloated shinto