>> growth slashed. the i.m.f. downgrades its outlook by the most in three years. china's challenge. the weakest growth in 24 years. what next for the country's policy makers? denmark's euro commitment. the country's central bank insists it won't follow switzerland in severing its ties to the single currency.

welcome to pulse pulse live from bloomberg's european headquarters in london. i'm manus cranny. let's check in on equity marks in europe here. we are gaining for the fourth day in a row. we are extending equity highs. the i.m.f. cut its global outlook by the most in three years. the world economy will grow by 3 bonnie 5% in 2015 down from 3.8% projected in october. london up 1/3 of 1%. 6606. growth expectations. have diminished everywhere except if ever the u.s. that will offset the boost from lower oil prices. >> the weakness, many emerging

market economies are revising their medium term prospects now. >> as the i.m.f. downgrades its forecast china's growth in 2014 beat estimates. g.d.p. expanded 7.4% in line with the government's growth target. it was, however, the slowest growth since 1990. we're joined by andrew davis in hong kong. i suppose if we want to sum this up, they avoided a hard landing. that was the market paranoia of 2014, wasn't it? >> yeah. i suspect that they haven't convinced everyone that they completely avoided the soft landing and we'll probably see some of that paranoia continue. they talked about a new normal,

slower growth but sustainable growth. it remains to be seen whether they can pull it off. it seems they have allayed some of the fears in the market. >> andrew the world gearing up for davos. what do you think the message will be? about the new normal? >> i think he will make a case for the new normal. talking about the fears of a hard landing and they literally wrote people need to get over it. i think that is going to be lee's message that we see in davos. their efforts to sustain the economy to a more service oriented, consumer oriented economy may be starting to pay off. the real estate market is soft. there is a lot of worry about the shadow banking industry. the rate cuts seem to have had

some effects. >> andrew davis in hong kong. thank you very much. let's see what he's message is tomorrow in davos. we are there. president obama delivers his sixth state of the union address today. the president is expected to focus on improving the economy, immigration and cybersecurity. you'll be able to see the speech live in full right here on bloomberg. now on our radar as the world leaders and the business leaders head to davos, we'll talk about the euro, the challenges in decision making in today's world. >> today such a new phenomenon. with a complex world we do not always know the unintended consequences of degrees making. look at the swiss national bank.

i think they didn't know all the consequences it will have. so i would say europe is at the forefront of concerns related to china. i'm optimistic about china. we should not just focus on one single issue. we are in a world of multiple challenges. >> we'll bring you more from that interview throughout the show. coming up, china g.d.p., well, more on that story. the lowest growth in 24 years. stay tuned for analysis. ♪

>> welcome back to pulse pulse. we're live on bloomberg testify, radio and streaming on bloomberg.com, your tablet and your phone. we are omnipresent. let's talk tech. hans nichols is on the ground for us. you have an exclusive interview. take it away. >> thank you man us in. -- manus. we just heard you talk about google and the need for a fair

level playingfield. tell us what that means? >> it is the main player in our economy. google has huge competence. we have few -- everybody, the european companies and the global companies have to accept our rules, means objectiveness, neutrality. we have some concerns a concrete case that should be decided have to come to a fair balance between google's business interest and our relations. i'm quite optimistic. >> quite optimistic that you'll come to a deal. will that include a new tax, maybe? a new tax on google? >> a taxation is not a concrete

point in the google case. we are developing a new -- and taxation may be one instrument. involved next week, coming out -- a proposal middle of the year. >> taxation may be involved. they there be a fee that google will have to pay to publishers for taking their content? >> a fair balance between all -- that publish us on the one hand and so we are inviting all stake holders to come to a fair solution.

and no doubt, as there are different interests, but at the end of the day, i think we can come to a fair compromise. >> do you expect there to be net neutrality from brussels a pan view rule in the coming year? >> yes. net neutrality is one point. it will be discussed next week. we can come to a decision, that is my expectation, before the middle of the year. we need clear obligations and a clear rule for everybody. >> when you talk about clear rules, clear obligations, when we think about streaming online should streaming online, should that be allow to be roaming pan

european-wise? one day will be able to watch a football match across borders on my mobile device? >> it is our ambition, yes. we want to complete. we want to finish our -- so it is a clear advantage for the investors and for users. >> that means one rule on roaming. one pan european rule. >> it means one rule for roaming. >> quick question for you on cars. the auto industry which germany clearly is a leader on. does it need some help in competing against the googles and the tech companies and silicon valley? >> they don't need help. we are co-financing some

research. i'm sure our european -- are smart enough, tough enough and strong enough to survive. long-term. 4.0 is one of our main challenges. >> commissioner oettinger, as some may be calling you in brussels, the new sheriff in town. we just talked about the need to have standardsized rules. i know you'll be looking forward to your favorite football game on your cell phone. manus? >> tax is on the table. great interview, hans.

thank you. let's return to one of our top stories. china's economic growth. it beat estimates. is that something that we should cheer about in the last quarter ending on a resilient note. they expanded 7.3% on the year in the fourth quarter of 2014 nair owely narrowly beating suspectations. -- expectations. is it a new normal for china? my guest is a deputy chief economist at asianomics group. great to have you with us. how should i look at the china data? the slowest in 24 years. a hard landing. do i breathe a sigh of relief? >> no is the short answer. the market has seen what it wants to see and is rebounding today. optimism is misplaced.

the growth numbers are always questionable. i think the more reliable number to look at is the nominal g.d.p. numbers. growth slowed further in the fourth quarter to 7.6 from 8.2. that is down from 20% one year ago. so the economy is definitely slowing. we're seeing the nominal g.d.p. numbers much more in line from macro indicator numbers whether it is hsbc pim, etc.. sorry. >> i think that paints a much gloomier picture than what markets are reflecting this morning. i'm going to go on your journey which is slightly more pessimistic. what does lee need to do then to effect a nominal growth? >> i don't think there is a whole heap he can do. if you look at the slowdown, it is very much led by the

investment sector and in particular the property market and every indicator you look at across the country, the property market is on a downturn and worsening. that is understandable. the huge credit bump, most of that investment has gone into the property market and that's where the debt overhang and the investment bubble is. >> is this about managing a the avoidance of a property crash? >> yeah. i think they want to see -- they are very much aware they have a debt overhang problem. they want to manage it. no government wants a crash. so what are they going to do? i do think that they will continue to cut interest rates. they could cut as much as 200 basis points. whether that will be acceptable is another question. our answer will be no. >> all it has done, this is of course is the people's bank of china. all it has done is fed a mal

investment bubble that resulted in a greater debt and overcapacity. call me old fashioned. 200 basis points off the top line of rates is that not going to continue to deliver a greater debt overhang? >> yeah. you're right, manus. absolutely. the 200 basis point cut is -- it is not going to lead to a resurgence of credit. banks are in consolidation modes. if interest rates are cut, interest rates for margins are going to get squeezed. that is putting money directly back into the system. i don't think they are going to that because they know that they are not going to pump more credit into the system.

we don't think they will go for a big stimulus package but we think the prospects of a deevaluation are growing. >> that is where we want to talk about, a yaun evaluation. -- yuan evaluation. manipulator currency. but the currency, a deevaluation. what level of deevaluation could we see and give me the time frames because everybody is playing the currency game. currency wars? >> yes, absolutely. i think the prospect is growing. the question before that is what are the circumstances under which they would go for a deevaluation rather than a 3% to 5% -- to answer the first question, which brings me back

to the g.d.p. numbers. the one good thing is that it is booming and it is very different from 2008. even though china's business cycle indicator is now back at the level of 2008 when they introduced the big stimulus package. labor markets are relatively calm. what that means is there isn't the need for big fiscal stimulus from there. they could go for the deevaluation option. if the service sector fails to absorb the manufacturing job losses. then we would see them relying more and more on it. you can see why. you sf you look at the chinese exchange rate, it depreciate bid 7% in the first half of the year.

it is now 8% stronger. >> we're going to leave it there. that is a big call. 10% to 10%. great to have you with me this morning. coming up, we sit with union lever's c.e.o. this morning. the company -- yni lever's c.e.o. this morning. the company released numbers. stay tuned for that. ♪

>> you're welcome back to pulse pulse live on bloomberg television radio streaming on your phone. unilever has posted the slowest growth in a decade with weak growth in merging markets, europe in decline and only the u.s. posting a pickup in growth. almost sounds like the i.m.f. report. despite the slowdown, it is very much focused on emerging markets. this was the big play for unilever. ben & jerry's ice cream. >> they got it all. it has always been about the emerging marks. about 60% of all of their sales come from thailand russia, china.

it is slowing down. they serve 2 billion customers. no wonder they reflect what the i.m.f. is seeing. they painted a beautiful birds eye perspective of what is going on in the world. in united states there is a bright spot, we're starting to see consumer demands. in europe, we saw a decline down 2%. 3% in the fourth quarter and we're also seeing a real slowdown in china. 20% drop in sales because they are destocking. are you as resolute in remaining there? are you as determined? yes, is the answer. he said you can look at the news headlines. sure it doesn't sound all that great. 5% margin, europe would kill for that. we aim to have 3/4 of sales in emerging markets.

>> the c.e.o. -- the headline after headline after headline, we're all concerned about emerging markets. they are running a business on a much longer term scale. >> precisely. >> it was great interview. a c.e.o. that manages to -- but you were talking to him about oil prices. because it is so topical. what does it mean for their business? >> he said a really interesting take. again it was a longer term perspective. bigger than just unilever. he said it gives us a unique opportunity to actually start to price -- trying to scale back from oil. it is all about climate change for unilever. oil is not going to affect the business that much in to tality. have a listen. >> the lower oil price at the time that we need to get climate change agreements is an ideal

opportunity to put the price on carbon finally and to -- it is about 700 billion of subsidies. not helping us. so this is a unique opportunity. in that sense it is a very positive thing that we see the oil price going down. there is a perception that we might see a little bit of that in some places. but many countries import oil and they have seen a weakening of their currencies at the same time. so we need to work our way through this. and then when prices go down, we also see prices in the market more deflationry and we have to adjust to that as well. the overall effect for a business like ours, might -- a little bit. >> overall it doesn't affect them. it is not really helping the consumer. he is a great man to speak to about things over and above his

own company. he can't wait to get to davos. he is very passionate. >> thank you very much. caroline hyde. coming up barclays. let's talk about that after the break. ♪

>> you are welcome to pulse pulse live from bloomberg's headquarters in london. i'm manus cranny. bloomberg's top headlines. chinese growth figures out today show that the fourth quarter g.d.p. rose slightly ahead of forecast. china's full-year growth figures were close to the government's target for the year. they show that 2014 was the country's slowest year of expansion since 1990. chinese stocks rose on the news rebounding from their biggest loss in six years yesterday.

denmark's economy minister said his country will not follow switzerland in severing its ties with the euro. he said any comparison between the two countries is "impossible." his comments follow yesterday's surprise move to cut by 15 basis points to .2%. they are expecting the central bank to lower interest rates today. the country's deputy prime minister made the comments at a news conference after a cabinet meeting headed by the president. the turkish central bank is due to publish its decision at 11:00 a.m. london time. greece and one of the most important elections in the nation's modern cyst could mean the end of greece's membership in the your zone. that is one potential outcome. what sort of impact is it having

on the tourism sector? joining us now on the phone from a resort there is a resort chairman. great to have you with me this morning. it is one of the bright spots in the greek story in the past couple of years. are you seeing any impact thus far in the bookings for the business? >> first of all, thank you for inviting me. no. i believe that greek tourism will perform as well as it has performed this -- two last years. don't forget that the year 2014 was the best year ever for greek tourism. 21.5 million. total income for the greek tourism, more than 13 billion

euros. i think this will continue this year as well. >> power in some form, as the polls would indicate, what worries you most that they would gain power in greece? >> i believe -- i don't know what the result to have election will be. but any government -- greek tourism is very important for the economy. but also for people living in remote areas in our beautiful but very isolated small islands. and so i think so -- i think every government will look after it. >> i must put it to you obviously that the polls that we

see 70% of greeks want to remain within the e.u. that means possibly holding on to the curnspifment a return of the drachma some say could decline. it would bring tourists in by the droves. is that a poisoned chalice to your industry? >> the vast majority of the greeks want to remain in the e.u. what we really expect is giving us a possibility of growth of development so that we can see our economy recovering and this is where we believe the only way to start being in position to pay back what we own. -- owe.

we really believe a new negotiation will be very important. but we are optimistic. these are difficult times, of course. but what i have to say is that in my business, i'm in tourist business for many, many years i see young people. i see people that want to make -- and i have the optimistic feeling that we are going to have a better future in the next years. >> stavros, we wish you well with the season. the resort chairman. now the market shock caused is still being felt and still being felt in denmark. offshore investors ensure they are not about to copy

switzerland and drop the deposit rate to a record low. they say the necessary tools to defend the euro peg joining us is mark gilbert. what was? it walks like a duck and quacks like a duck and there is a danger there we're sticking to our peg. we're not moving at all. >> central banks have to say that until the day it is no longer true. no one thinks it is going to go. when there is a consensus like that, that makes me more nervous than more. there might be a fantastic profit reason. very small economy. if you don't see the action on players that everyone expects, you're looking at turmoil. in chaotic situations, bad things happen and unexpected things happen. i'm pretty sure the swiss

central bank didn't expect to be trading in parity to euro this week. probably 110 closer to 120. yet, that's what happened. >> yet currencies, you can end up in the eye of a storm, unbeknownst to yourself. you get swept up in this chaos. when you hear of the central bank being so vossive rouse about their defense, you have to say this is not -- as deep as the fed. there are moment where is central banks fall over and capitulate, aren't there? >> 1992. the british pound pegged against the doc: mark. -- doc: mark. a billion pound profit. the then prime minister john major called it the softest

option. a day later, the pounds are out and it is all over. any chance of britain joining the euro was gone. these things are set in stone until the minute they are not. i think the danes have to be very careful of almost not inviting the hedge fund community to come and have a go. >> do you think -- this is -- these are the unintended -- the consequences of trying to see if -- inflate the eurozone. >> draghi has a policy which helps exports, which is one of the few policies he has managed to sustain for the past couple of years. and so the consequences of a currency war, because it is a very quiet currency war. japan wants a weaker yen. the euro wants a weaker euro. the u.s. willing to put up with

a stronger dollar. >> talk to me about the s.m.e. we were talking about swiss national bank expected to be at parity where we might end up. the new equilibrium. the new cadence. what do you think? >> it looks really happy about parity. swiss watch makers not so happy. the market though, pretty happy there. there is another thing. if you have been bitten once, are you really going to start trying to speculate and gamble on where the swiss franc goes next? i'm not going there again. that hurt too much. >> everybody literally -- i'm not saying that in a joking way but carried out. they washed the system out of a

speculative risk against them, didn't they? >> you're not supposed to to see whiplash like that. it just should not happen. it is unprecedented to see a move of that size so quickly. once bitten, twice shy. i think going into the meeting thursday, i would not want to make any big bets on what happens to the yearo either if they bring -- euro whether if they bring shock and awe. if you gave me the answer in advance, i'm not sure i would make a bet on the trade after that. >> always great to have you with us. mark gilbert there on the challenge for the danes. now it has been a busy january for amazon. it won big at the golden globes. it announced a new tv series with woody allen seasoned is now heading to the big screen. details after the break.

♪

>> time for today's company news from selling movies to making them. amazon will begin producing feature length movies for theaters this year pushing further into hollywood's territory. the e commerce giant, which recently won its first major television award at the golden globes will offer the films on its amazon prime online

streaming service. net flicks has a new collaborator. hotel chain mariot. they will access sup scription streaming service through tv sets inside rooms with the possibility of a further expansion. it is one of several hotel chains that have considered offering that to guests. space could be the final prison tear for google. p elon musk's company wants to use satellited to spread online services around the world. let's get back to munich. it is the 11th digital design conference. hans nichols is there. you just had a conversation with the european commissioner for the digital economy.

of course this is about setting up his tenure, moving on. it is about his outlook for the digital economy? >> that is a great way to put it. he is a new sheriff in town. google has been warned that it may need to play by the laws. he was very clear that he wants to have fair playing fields between american tech companies and the european ones and also the auto industry. listen to what he had to say about google and the potential of them paying a tax. >> a main player in our digital economy. and google has huge competence. the european and everybody has to accept our rules. means objectiveness. means neutrality.

we have some concerns. a concrete case that should be decided before the middle of the year. >> manus, he did not rule out a fee on google. he talked about net neutrality and wants to have it which is what the u.s. is moving towards, have one standard in europe and the goal he set there is to have that done by the middle of the year. all the tech companies all the tell kos are playing a -- telcos. he meets with 28 ministers in brussels talking about how to move forward. europe is going to have to write a lot of new rules in the coming months. he will be core to that. it looks like google is on notice that they may have more regulation coming out of

brussels. >> thank you. great interview. hans nichols for us. coming up we speak with the director of the new film mort chi. -- mortdecai. ♪

>> you are welcome back to pulse pulse live on bloomberg television, radio, streaming on your tablet and phone. a great film usually starts off with a brilliant script and david catt is at the top of that game. he is behind script of "indiana jones" "mission impossible" and "spider-man." his latest project put him in the directors chair. it is called "mortdecai". david, fantastic to see you in london. thanks for coming in. we know you a blockbuster dollar producer in your screenplay role. this is directorship. was it the draw of deputy and paltrow -- of depp and paltrow, the cast? >> it is a seed of comfort, not just because i've had some

things go well as a writer but the writing life is something that is just absolutely appealing. there is a quiet to it. you're in a room all by yourself all day. six hours a day is a long day. and i really love it. but you are really in screen writing, it is not like writing a novel. you're working on something that is unfinished. in order to get it finished and become the fully realized work of art, you need a lot of collaborators and you need to ask someone for ten s of millions of dollars, please. if you want to see it through all the way and be more or less the way you saw it in your vision, that's something you need to do. >> tell me your style. are you spielberg? kubric?

? >> i think i've been lucky to work with a lot of brilliant directors. spielberg a number of times. brian depalma. you can admire them while you're watching them work. you can't imitatin's style. you have to develop your own. i think you learn more in a day of shooting on your own than you would in a year of watching anybody else shoot. if you have to shoot one scene in one day and go home and edit that is the way to learn. >> we don't make mistakes. we just evolve. the biggest story out of hollywood has been sony. the hack. the politics. president obama. the accusations. did sony just fall over and get this so wrong in terms of yielding to the threats? >> i think the problem they faced was the problem of going relatively first in any new

crisis. and i think so that it was -- certainly there had been hacks. never at this level. never on this scale. never that revealed so much juicy salacious personal detail because it involved movie stars and famous names. so there was a tremendous interest in reading these people's personal emails. i think not knowing exactly how to handle that. there wasn't a playbook. that was brand new. the national response at first was it is a small i.t. matter. it will go away. i think that would have been the same for any company. now we know what the consequences can be and that a much more aggressive approach is required when you that sort of breach. also i think there will be much greater public sympathy to the next company that gets hacked. >> jennifer lawrence is on a project that you worked on. she has demanded equal pay.

skis me, i got the name wrong charlize theron. she demanded equal pay. there was a disparity. we perhaps thought about them. something good has come out of the sony attack? >> i guess so. >> is that subjective? >> i feel like revealing confidential business practices is not necessarily good. whether or not the end result is a bit more equality. i don't know if it is more equality or more leverage for the next negotiation for an agent to refer to somebody, to be able to refer to somebody else's salary and seek that for their own client. if that is the net good that came out of it i think we're still poorer off. >> you have grown up and seen hollywood evolve and seen netflix. how good or how much of a

challenge is it that you have netflix. hbo with "game of thrones." does it shake hollywood up? >> i've been getting paid to work as a writer/director for 27 years now. from as long back as i can remember. it has always theatrical movie going is doomed. it goes much further back. when sound came, it was going to ruin pictures. when television came, absolutely the movies were dead. why on earth would anyone go to the movies anymore if they could watch it on a little tv at home? >> this brings greater competition for capital. >> absolutely. i look at it solely from the point of view of opportunities for artists. there are a number of other players, very well funded players who want to make stories. we're just looking for a job. we're all freelance

storytellers. to have other places that want to make more stories, who wouldn't be more interested if there were not more eyeballs interested in watching those stories? >> school. this creates greater opportunity. it brings other younger screenwriters and directors in. this is good news. >> it is fantastic news particularly since that niche of movies, the $5 million to $25 million movies which tend to be the most interesting movies of the year always. that has been largely abandoned by the major studios. >> we're going to have to go, but obviously we have the oskars. eddie redmayne. benedict culp ber batch. -- cumberbatch. who is your pick?

>> michael keaton. he is going to get my vote. >> david koepp. hollywood director and screenwriter. from "mortdecai." get to the movies. ♪

>> global growth slashed by the most in three years. china's biggest challenge in 24 years. denmark's euro commitment. the country's central bank it insists that will not follow switzerland in severing ties to the currency. you are very welcome to the

pulse. i manus cranny. -- i'm manus cranny. the imf has cut its growth outlook for the most in three years. the lender said that diminished growth expectations everywhere except the u.s. will offset the boost from lower oil prices. >> this underlying weakness in many economies. that is decreasing investment. we think that this effect is stronger than the price of oil. >> he said, financial markets already priced in the expectation that the central bank would start buying

sovereign bonds. >> the markets have been anticipating qe. the euro has depreciated. in a way, the effective qe is already happening. we want to make sure it is as large as the market is expecting. >> james nexen joins us now. it is all priced in. tell me this. what would a giant leap look like? >> and open-ended commitment. to keep going until they get inflation back to target. in many ways, the challenge for the ecb is to do enough that will fulfill what the market has already priced in. >> if you are going to put a

number -- everybody loves a number -- perhaps a little bit more substantial than 50 billion -- 800 billion. do you think the possibility opens up to bigger numbers after listening to angela merkel? >> we have seen this huge division on the governing council. also in the wider press. the key thing is really two numbers here. how much qe they do. we are expecting a number around 500 billion. that will not increase the target for the ecb. all of this, to a certain extent, is saying that we are going to open the floodgates and buy everything. >> are they likely to buy everything?

>> i think it would be extraordinarily surprising particularly with the election coming up. the reality is that the condition will be -- the greek central bank was allowed to buy greek central bonds if greece was in the program. >> german zew. german investor confidence jumps to the highest investor confidence in january. things are fine in germany. you have record unemployment in italy. 50% youth unemployment in greece. we caught up with the unilever ceo this morning. qe is not a panacea. it is not going to bring growth alone. >> not completely. >> forum i being too skeptical?

>> -- or am i being too skeptical? >> it already has worked. we have seen the euro depreciate strongly. the ecb is winning the depreciation game. bond yields are at bargain basement level. in some sense, that is a stimulus. in the wider picture, europe needs more structural reforms, more competitiveness. this is the start of an adjustment process that will take a decade. the ecb has had to stand behind that. >> angela merkel last night said that she only has one plea. in the current debate over the monetary policy that it does not reduce euro area competitiveness.

financial markets want qe in bold and brash style. does that dilute the possibility of qe if that is one of the scenarios? >> if central banks insist on being seniors of the purchases they are making -- you kind of have a situation where the more the central banks by, bond yields start to go up because they are pricing more risk into the market. the important thing is going to be some of the nuances and the detail. >> the difficult issue is this. if you are a bank and you sell bonds to the ecb, where are you going to get you? >> there are many ironies to this. to insist that banks load up on sovereign bonds and increase liquidity and you are going to take that off them, the banks

must be wondering where they are going to turn next. >> the ecb -- we don't know if they would turn to the banks or turn to the secondary market, the secondary bond market. ultimately, you would be transferring risk from bank balance sheets into the primary central bank. >> that is the intention. going back to zew there are signs that this is working. there is a sense of domestic healing slowly beginning to work its way through. >> i like that phrase. domestic healing. the broad money supply is rising. stay with me, james. we have a lot more to get through. here is what else is on our radar. the new digital commissioner for europe weighed in on the future of google in europe. >> it is a main player in our

digital economy. google has huge competence and perfect services. [indiscernible] european companies and global companies have to accept our objective nests neutrality -- objective ness neutrality. ♪>> president obama delivers his sixth state of the union address today. he is expected to focus on improving economy, immigration and cyber security. you will be able to see the speech live right here on bloomberg. still ahead, james nixon stays with us. we will discuss the imf and the future for global growth.

oil is the top of that agenda. stay with us for that. ♪

>> welcome back to "the pulse." still with me, it is james nixon. the imf downgrades tony 15 -- 20 15 expectations for a couple of years -- the deepest in a

couple of years. you are taking a little bit of umbrage with the imf. >> this dosmestic healing in the face of a global slowdown. some of these markets are slowing. after a long run of qe fueled credit boom. the imf have underestimated the impact of oil. what has happened in the oil market is a seachange. this will not be a blip that will be quickly reversed. looking at the excess we now have in production and looking at what is happening with light oil across the world, shale oil across the world. low oil prices will be with us for a generation. >> you say there is a structural

change. we had neil atkins with us this morning. he said, if you run some of the models, you could see $28 on oil. is it that quantum of a shift in oil for you guys? >> that may not be -- >> he said it is a possibility. he did not say was the level shift. >> absolutely. the reality is that we have an excess supply. u.s. production is just continuing to increase. u.s. production may go to 7 billion barrels per day. -- 7 million barrels per day. >> if we did not have this dump

in oil prices, we would be in a pretty rough old place. a declining euro, a drop in oil prices -- we are off to the races in terms of what is going to be in our pockets in london, paris, and frankfurt. >> absolutely. it is going to be fascinating with the ecb this thursday. if europe looks to grow in qe4 -- the fourth quarter it would be absolutely unprecedented to poor qe into that economy. -- pour to he into that economy. >> you have record unemployment in italy. you have record youth unemployment in greece. you are not exactly rocking in ireland and spain. >> unemployment, that is the

weak link here to a certain extent. it is going to take the best part of the next decade to bring those unemployment levels down and we need continued, sustained growth sustained by reforms. that is a long period of time to expect an unbroken run of growth. >> a lost decade? >> not necessarily, but certainly a lot of hard work to do. >> average weekly earnings sales mark tomorrow would grow by 2%. i am going to pay less gas to keep myself warm and less interest, but apparently i am going to get my pay rise. again, the u.k. is looking at a more sustained period of wage inflation. >> there are a number of aspects

to that. inflation for the next year in the u.k. is going to be close to near zero. >> no inflation, getting a pay rise, paying less for gas. >> carney is still going to be very constrained. it is impossible to imagine the central bank moving ahead of the fed. they are just going to get their exchange rate through the roof. we are going to look at carney sitting there until the first quarter of 2016. >> first quarter 2016 for carney. the fed would have to hold back until the first quarter of 2016 as well. would you concur? >> we are edging that way. the ecb is winning this competitive depreciation game. the further the dollar rises, that will begin to slow the u.s. economy. at the moment, given the boost that the imf has given to the

u.s. and oil prices have, we think the fed is still find to move earlier than that. -- fine to move earlier than that. >> the whole currency wars. that is where we are, isn't it? the u.s. tolerating a slightly higher dollar. who wins the currency wars? mario draghi must be laughing all the way to thursday. >> it goes back to the paradigm of secular stagnation. it does seem as if we are fighting over a cake that is not growing quickly.

who can win that currency depreciation? the ecb presided over a shrinking balance sheet for years. somewhat late in the day, they have quietly managed to turn up and are getting ahead in the race. >> thank you so much for joining us. that is the chief european economist from oxford economics. coming up, some oil and a day activity. -- m&a activity. a surprise move to russia. we will tell you about it after the break. ♪

>> welcome back to "the pulse." live from london. we are streaming. we are truly present. 24 hours away from the start of the world economic forum in doubles -- davos. 40 heads of state and business leaders travel to switzerland. erik schatzker set down with the head of the world economic forum. >> the fast change imposed by technology. people cannot cope with it

anymore. they adopt skepticism. they say, that they don't want to hear anymore about what is happening outside. that is what i am most afraid of. >> 2009 were dark days. where are we today? >> i think we are at a crossroads. we can go down the road which is where we see certain signs. everybody tries to get out, get the best sell for himself. -- out of himself. or we can get back to a reasonable degree of global cooperation where we see common and interrelated issues sometimes even being forced to make compromises for the common

good of the world. >> if you say we are at a crossroads today, du see the possibility of returning to a crisis as bad as we saw in 2008-2009? >> i would not exclude it. >> some m&a in the oil industry. one $7 billion -- one $7 billion >>-- $1.7 billion for a stake in russia's eurasia drilling. a brave move. >> you could say that. drilling is one part of the russian economy that is directly sanctioned by the europeans and united states. this is clearly a case when they

are saying though sanctions are going to end and i want to take advantage of how those sanctions have affected companies oil prices. eurasia drilling is down a lot more because of the sanctions, in addition to the fact that there is a lot of concern that the $50 per barrel of oil prices is going to be bad for russian production. this is a great opportunity to get in on the cheap. >> these are the share prices. >> slumber j -- schlumberger's down a tad. but eurasia drilling is down much more. you see this 81% premium from yesterday's close. great for minority investors in eurasia drilling. what they are going to have to do is the major shareholders are

going to have to take the company private. they are going to have to share the money with those minority shareholders. maybe they won't think it is so fantastic after all. the share price that they are effectively giving them for the shares, it is still only half of where the company was one year ago, pre-annexation of crimea. >> we have gone through the shock and awe. people are trying to find an equilibrium. will more deals get done now if oil prices fluctuate around this $50 level? >> there are two things here. you have the general backdrop of consolidation within the oil industry. there is not as much demand for riggs anymore -- rigs anymore. they are getting contracted at lower prices. you have the shark here.

you have the minot, that is eurasia drilling. -- minnow, that is eurasia drilling. this is the backdrop of the general situation, plus the added stress russian companies are under because of sanctions and the ukraine conflict. they think this is going to pay out for them in the end. >> we have had a bloomberg poll on oil. what does it tell us? >> many people think that the declining oil prices boosting the global economy. they think the reason why prices are falling is because there is an oversupply problem. they don't think that the problem -- that there is declining demand which would be indicative of a bad global economy. they think things are going to happen. that is potentially a plus for

the markets. >> we will leave it there. coming up, lying in the lap of luxury -- flying in the lap of luxury. air france tries to put their troubles behind them. it is about swanky luxury. ♪

>> you are welcome to "the pulse." i'm manus cranny. chinese growth figures show that the fourth quarter gdp rose 7.3%. china's europe growth figures were close to target, they show that it was the country's slowest growth of expansion since 1990.

denmark's economy minister says his country will not follow switzerland in separating its ties with the euro. he said the comparison between the two countries is impossible. his comments follow yesterday's move to cut the rate by 15 basis points to -0.2%. turkish government ministers are expected in the central bank to lower interest rates today. the deputy prime minister made the comments at a news conference after a cabinet meeting headed by the president. the turkish central bank is due to announce its decision at 11:00 a.m. top business and political leaders are heading to davos this week and most will be traveling in style. they may want to put a flight in on air france's new first class

cabin. it is one way the french carrier is trying to resist fierce competition on long-haul flights. we should get on board. ♪ >> if time is money, air france thinks this is the answer. the first-class experience starts with a chauffeur taking you to the jets. >> we are here in one of our private jets. it is very quick to go from point a to point b very quickly. >> they are collaborating to minimize the connection time. the extra service. a few minutes later, we arrive at the airport. the luggage is transferred directly from the jet to the plan. -- plane.

there are seats convertible into your own private bedroom. >> you can choose to be speaking to your neighbor or to be alone. it is a suite. it is a new system for the bed. it is chic, hip, french. >> air france is investing 50 million euros in this new first class product. that is 500,000 euros per seat. they are looking to regain market share after facing strong competition from middle eastern and asian airlines. >> the same service, the champagne. it is really complicated to maintain in an aircraft. >> it is a menu prepared by a french chef.

bloomberg, paris. >> i think you have got to really admit, french food, french champagne -- that might trump a shower on an airline. let's get company news. schlumberger will pay &1.7 billion for a stake in eurasia drilling. eurasia drilling shares are up on the news this morning. fap has lowered its profit target. that comes as the largest maker of business management software shifts more sales of the clients to the cloud computing. we spoke to the ceo earlier this morning. here is what he had to say. >> we are totally in control of

our destiny and that is why we are putting out a mid-and longer-term guidance. our cloud business is growing and we just announced our full-year results at 72% in the fourth quarter. which means, as the cloud grows faster and faster, in the short term it puts pressure on the margin rate because you recognize that revenue radically -- ratibally. >> roger federer has said that the shock in valuation of the swiss franc has had an impact on him. up ahead, 2015 could be the year of cyberattacks gone mainstream. these days, it seems nothing and no one is off-limits.

we will discuss the latest trends in protesting -- protecting your personal information with one of london's leading ladies of tech. it is ida burbage. ♪

>> you are welcome back to a lively edition of "the pulse." let's talk tech.

some executives offer unique advice. turn off your phone. let's check in with on's nichols in munich. -- hans nichols in munich. i love tech in a really consumer of all -- consumable trashy, low price point kind of way. >> i would never say trashy and low price point with you in the same sentence. arianna huffington said that tech makes us unwise because we are not spending enough time away from our devices. she advises that you should unplug every once in a while. >> we are going to be unplugging and re-plugging. we are going to recognize the importance of unplugging from technology reconnecting with ourselves our own inner wisdom, and then going back to all of

the amazing ways in which technology enriches our lives. >> this is called taking a digital timeout. the ceo of deutsche telekom, the provider of so much joy and sometimes heartbreak for me, he is doing this entire conference without his mobile phone. here is the concern. we are so plugged in that you don't spend that much time sleeping. we asked arianna huffington to give us her wind down routine. >> i put all my smartphones and i have multiple -- away one hour before i go to sleep. having a very hot bath. then making sure that when i am in my home my bedroom is a device free zone. i read real books in bed and i read books that have nothing to do with work. >> oh to make your bedroom a

device free zone. i spend way too much time with my phone. strong words on google, warning of attacks. with that, i will send it back to you. >> on a slightly more serious note, i will find my inner zen, but it will not be without my serious mobile devices. improving cyber security. that is a serious issue. >> we have everyone waiting for president obama's speech tonight. what do you do with cyber security and without compromising value? it is a difficult debate. we want to have a free and fair

access we want then neutrality but europe is at the beginning of the debate area -- debate. how did the attacks on charlie hebdo change the debate? our privacy demands going to stay the same? a lot of sideline conversations about that. it is a topic that people are discussing. >> thanks for that. great work over the past days. some fantastic interviews. as i just said, cyber security is on the agenda at the conference. barack obama has an address to make -- the state of the union is later today. joining us now to discuss this as well as london's growing role as a tech had, is fashion capital partner ida burbage. you help me make tech understandable.

we just heard from hans. obama has been trying to make cyber security the top of the agenda for years. why does business not want cyber up there as being one of the most important things? >> i think different parts of business do want cyber up there. the big investment banks want cyber security at the top of the agenda because they want to protect their assets. the tech community who is responsible for producing these securities is a little bit worried about what we mean when we talk about cyber security and whether it is going to clip their wings in terms of innovation and development. last week, a lot of people reacted to david cameron's comments about what we might need to do and they immediately assumed that the logical conclusion might be a ban on encryption or some technology

and he actually never said that. president obama has been trying to push through some sort of package or ability for the government to do its job for the last three years. we have been trying to do it here for five years and stew thousand nine. -- since 2009. technology is concerned about what they can do for themselves. they are trying to make sure that you can protect everybody all the time. >> i read your notes in prep for this. i looked at obama -- the trip last week. i know that two of your companies were on the trip. jpmorgan in 2014, data got stolen. sony it went mainstream, didn't it?

it was about the pay package, it was about angelina jolie, it came into the consciousness. >> i think you are right. i think your point is that certain breaches, not everyone can relate to. when there was a credit card information breach at target, a lot of people shop at target but a lot of people do not. i think a lot of people throughout the year thought that some of these things were natural consequences of what we had to do. when the sony breach happened there was gossip, people were mystified and really into what was happening. then sony said, you are not going to release the film.

once somebody said that it was not going to be released it was hang on, this is affecting my personal liberties and the options i have for entertainment. what is going on here? there was speculation about who was responsible and then it brings in diplomacy and foreign policy. >> that is the context. take that into the venture capital world. you have a whole host of companies that you invest in. to these events open up to sortable challenges -- do these events open up discernible challenges? >> i think it is validation. it is validation that you need to make financial services more accessible and more secure and easy to maintain and repair.

similarly with cyber security there are companies that are focused on helping companies monitor what is happening with their networks, with their data, if there is data leakage. every other tech play whether messaging, social networking they have to be very mindful of this new environment. i think the sony hack and other hacks from last year validate the fact that this is moving very quickly. technology moves quickly. all of your actors are at the forefront. including bad actors. we have to try to stay ahead. >> looking at valuations. i'm curious. $600 billion has been on the sidelines. is it a prime moment for you to cash out or is this when you begin to go for long-term investments? >> the $600 billion we are

talking about, a few people did a study about how much is sitting on the balance sheets. that came out to roughly $600 billion -- 70% of that is offshore come outside of the u.s. that is likely to not be repatriated to the u.s. for tax reasons. we think that is available for m &a opportunities for our customers. we invest long-term focus. -- focused. i am thinking about the companies we invest in. we are very early investors. we invest in the first round of investment. we are thinking about a 7-10-year horizon and companies that could be globally dominant in that timeframe. >> i want to hone it down.

what is the other area that you are going, this is going to begin to look a little bit more sexy? tie them together. >> there are three sectors. i think london has a unique advantage with three specific sectors. zeitgeist. we are coming to the cusp of all of the sectors kicking off as a result of what technology is enabling. we talked about intelligence services. we talked about fintech. all the talent from the big banks and financial services are coming into innovation and that

is exciting. i think these present a very unique opportunity. even the other large english-speaking market, america, they do not have a centralized database or system good or bad -- efficient or otherwise -- through which to offer services, look at data, look at records, try innovative things. >> we probably need a bit of freethinking. we already have -- whatever way you turn eileen, always good to have you with me. you are the one person that does make tech very understandable. eileen burbage from passion capital. stay with us. we are going to be going behind the scenes of president obama's state of the union speech, the writing that is. that is after the break. ♪

>> you are welcome back to "the pulse." we are on bloomberg.com, we are on your ipad. president obama delivers his sixth state of the union address today. he will focus on the approving economy, immigration cyber security. how does the craft the message to the world? how does he get people to tune in and listen? ryan chilcote is with me now. the craft, art, science, what is it? >> there was a fantastic "new

york times" article that just came out. i encourage everyone to read it. i just tweeted it out. it all comes down to one guy, a speechwriter for the president who has been working on this, 15 days holed up in a hotel in honolulu will the president was there -- and then seven days in the basement of the west wing and an office without any windows -- 22 days and then he submits it to president obama and the word is that president obama liked it because apparently it goes one of two ways. either he likes it or he does not like it and busted out with a legal pad. this is the second year that cody keenan has written the speech for him and the second year that the president has given it a light markup job. >> wouldn't it be lovely if

every time you handed in your homework at school you got a lightly written report? >> basically, this guy after 22 days, he was really going nuts. just after midnight on the final day, he was losing it. he went over to his buddy, ben rhodes's the deputy national security adviser, and he said what do i do? the guy was reading "to kill a mockingbird" to his four-year-old child. >> the child will get it by osmosis. >> i guess so. they put themselves some single malt scotch is an five hours later, they had a much more sustained traffic off to the president at 5:00 in the morning for his consumption. >> the world is a lot better after a little bit of scotch. talking about youtube. a 19-year-old youtube celebrity

who doesn't interview. -- does an interview. people watch less television. it is about getting people to engage. this is about engagement. >> the obama administration has embraced this idea of delivering the message in a digital way. the president got 33 million dollars. that is not small potatoes. that is a huge chunk of americans sitting down at the same time. the youtube stuff, the fact that you can watch it on the enhanced version -- you will be able to see the speech, but also get all kinds of slides backing up his points -- the fact that you can do that and also have an interview with the president by one of the youtube stars. this is all about making it more accessible and getting it out there to more people. >> the digital evolution revolution. >> this is our opportunity to

find youtube stars. >> ryan and manus together youtube forever! the state of the union will be carried live on bloomberg. "surveillance" is up next with olivia and tom. ♪ .

' e imf cuts its forecast for global growth in the most in

three years. outlining the boldest of policy proposals in tonight's state of the union address. staying alive. mtv comments entertainment with a deadly serious message. good morning, this is "bloomberg surveillance." tuesday, january 20, i am olivia sterns with brendan greeley and tom keene is in the swiss outs -- alps existing on bread and water, as he cannot afford anything else. >> china recorded this week's economic growth in almost one quarter century but it could have been worse. chinese efforts kicked in late last year. that boost a production and consumer spending and helped spur growth closer to the government target. gdp rose 4.7%. the government is expected to add more stimulus this year. the imf has made its biggest cut in three years. according to the new forecast the world economy will grow 3.5% this year,