history made at the european central bank. we will have complete coverage include in a conversation with christine lagarde of the imf. distracted by the european central bank, deflation, negative interest rate, all of that in europe. first, let's go back to our world headquarters in new york and brendan greeley and olivia sterns. >> time for our top headlines. we have to start with the ecb. european central bank on the verge of taking its boldest step yet to fight deflation. ecb president mario draghi may announce massive bond buying program that could exceed $1.2 trillion. it is in that boosting consumer prices that are now falling on an annual basis. not everybody is on board. the plan is been criticized as too little, too late. the head of germany's central bank said it is not needed. in eastern ukraine, the balance is getting worse.

artillery killing at least 13 people. ukrainian forces have pulled back from airport terminals in donetsk. violence has stepped up since to negotiation's between ukraine and pro-russian rebels broke down last week. germany's foreign minister said there were tangible progress in new peace talks. a new twist in the wireless wars. google is preparing to sell wireless service directly to consumers. a move that lead rivals to improve speeds and cut prices. google has reached deals use the networks t-mobile and sprint. no word whether google service might start or what it would cost. box is pricing its ipo after the market closes today. shares will be offered at a discount to the latest round of financing. it is a signal box faces stiff competition in the cloud field industry. box revenue soared 70% in the most recent quarter, but not showing a profit. uber has raised 1.6 plea dollars

in convertible debt -- $1.6 billion in convertible debt. they will continue rolling out in more cities overseas. about 15 companies will be first-time advertisers on this year's super bowl broadcast. that is the most we've ever seen since the dot com boom. super bowl ads cost about $4.5 million for just 30 seconds. that means spending more on one ad than it normally spends on average rising for the whole year. -- advertising for the whole year. let's head back to davos. >> another beautiful day. the bells ringing in the background from their ancient church, just spectacular weather for spectacular conversation. in davos that also means people in forward when michael porter speaks. he is at harvard business school . to say he is a leading authority

on too much to do with making a business in this linkage of economics to finance the business and good governance and good leadership, goes without saying. professor porter, wonderful to see you. what a strange davos. all of this going on with ecb, negative interest rates. what i call the great distortion. through it all, it is america divergent. we seem to be doing a better. let's go back to harvard. is it because we do creative destruction better? >> i think we're doing better now a little bit by default. i think it is more other people are doing poorly rather than we're doing better. that said, there is a resilience in america, a set of phenomenal strengths, a kind of believe in technology willingness to be dynamic and cut cost and do it is necessary that really is still quite unique. our growth is not fast. we have a tremendous challenge

for the middle class. we have any number of economic issues we are not addressing. high corporate taxes, high cost of doing business, high cost of health care. that said, there is a dynamism and the rest of the world is kind of stalled out on all of the usual barriers. >> within that resilience, the question i get constantly is when do we get to participate? as you know so much of the gain has gone to the corporate world. when does the rest of the world participate? i hate to use this word, but when is there a labor paradigm for america that allows for a labor prosperity? >> i have been leading this multi-effort to look at the u.s. economy and the trajectory in the narrative of the u.s. economy right now that we believe is the most fundamental is what you just said, that is it is the to virgins. it is the inability of people that are not elite entrained and world-class talents and computer

scientists to ask a prosperous economy. it is the middle, lower middle and that divergence is unsustainable. first of all, the massive population are the consumers that drive the economy. if they're not doing well, they cannot drive it. the political process is completely screwed up. if we have some people -- a lot of people not able to prosper. this is the defining issue. what do we do about it? there are some threads starting to percolate. i don't know if you saw the big insurance company aetna. >> raised wages. >> the rationale was we have too much turnover and spinning our wheels and this is going to make us -- >> is this a change in the american business ethos even

before ben franklin, that we're going to be locking in structure? >> i think there's a growing awareness that we are in a bad equilibrium, that business is prospering, but it is doing it in a way that is very inefficient and it is not giving living wages and incomes to the average citizen. they don't see themselves going anywhere. if business is going to have a legitimacy to continue to lead in america, i think they're starting to figure this out. >> i think of john taft working in the financial services industry at rbc capital markets. it is a question of american stewardship of those fortunate, whether they were at harvard or whatever school. to borrow a phrase, rachel, i don't know where i got this phrase. the idea of americans feeling they have a barrier to entry. they have a barrier into the game. how does michael porter

responded that? >> tom, i think they do feel that. i think we have to respond to that on multiple levels. and some of the things we have to do our rather obvious. and we can't get them done from public policy. >> how do brief the president on his response with committed to colleges? -- committed to colleges? that is original, people who have good skills, not great skills. how does michael porter responded that? >> the biggest gap we have in america in what are called middle skills. is that your high end for your degree, but the important roles in the economy that can be productive and support high wage. we haven't -- we have a broken strategy for developing those middle skills. i think the president focusing on committed he colleges, -- community colleges are

important. the idea of making a free, a lot of people would say that is in the problem, the problem is childcare and not how much it cost beginning people to complete. there's a more complicated set of issues that really are holding back people from taking that path. i personally believe ultimately, the business community itself has to change its mindset. >> what about the political community? we have a conservative ethos, everybody for themselves. >> i think that particular conservative ethos good things about conservative thinkings, but i think particular ethos, we have to reach a new synthesis in america. the business community itself is starting -- more and more effort in the business community to do things like aetna did. we at the school, we talk about this idea of commons. any business depends on the

comments in its community, a set of joint assets, people -- >> the commonwealth. >> this is a classic issue philosophical issue that goes back forever. the globalization and the accelerated markets really drew the attention of american companies away from the commons. i think what we see now is it is important. if that isn't working, then you have this divide. if you have this divide, we will tear ourselves apart as a society. >> michael porter, thank you so much. he is with harvard business school. we look at business and the ecb coming up later. a lot of coverage earlier. coming up, we look at manufacturing of america and the challenges for general motors. stay with us from davos switzerland, this is "bloomberg surveillance." ♪

>> it is davos switzerland. that is the view of the gmc in davos. not much use for a big greg to get you through the snow. some years it is five feet deep. less so this year. there is davos, switzerland. we will give you full coverage on "bloomberg surveillance." on television and radio of this important day for mr. draghi and the ecb. right now manufacturing america and global manufacturing america, daniel ammann is president of general motors. there's all the distractions of rebate this in rebate that. let's talk of manufacturing

discussion. dan, why are you in davos? >> we are a big global company, operating in every major market of the world. there's a lot going on in the world right now and also also volatility. we want to understand what is going on so we can adjust our business as needed. >> we talked to general electric the other day. there are many major players. it is a cutthroat business. what is the gm process distinction in asia, europe, or frontier markets? >> where we are taking the company now is reorienting our whole mindset around the customer. starting with the customer and having a deep and profound understanding market by market what does each customer need what does each segment of the market need, then working backup the china make sure we're delivering vehicles and services that meet those requirements. >> you listened to your customers. and i believe your dealers. on repressing or new cadillac. tell me about that process. that would not have happened 20

years ago. you put out the cadillac, then you listened. >> we listen. cadillac is a very important part of general motors. the luxury space is growing very profitable. we have in a conic brennan cadillac they gives us a great foundation to build a business back to the real pinnacle of the automotive space which is where it belongs. as we go down the journey, we're engineering tremendously excellent products. we are rebuilding the brand getting the customer expense -- >> how did you price it? you said, this was a mistake, we have to change it. did you make that decision? >> we said what is the market telling us and how do we repackage to make sure we're delivering exactly what the customers want and not delivering what they don't need. >> i look at the super bowl wars and the television wars. what is the jim distinction is you sell quality, branding manufacturing -- you have the gm distinction you sell quality

brenda, manufacturing. how are you going to position yourself? the company in dearborn, what are they called? is it ford? it is ford. how do you compete against those guys or chrysler? >> it is highly competitive globally. it is our fundamental belief the more and better we understand our customers, the better we will be able to deliver exactly what they need, the service they need come in the sales experience they need. >> and aluminum truck? >> we will see. the customers will tell us. we feel very good about our truck strategy. we have a three-truck strategy. we just launched the chevy colorado, really re-creating the midsized pickup truck segment. that is going to be a home run. >> tell me quickly about labor in america. the autoworker used to be aboxe middle class, the benefits, big salary.

there is been a repricing of american labor. is that process over? >> our business depends, a huge part is the middle class and huge part of our employee base is the middle class. it is our job and believe we need to be up to continue to grow that middle class by offering the right employment, the right wages. keeping our business competitive so we can grow and create a win/win for everyone. >> travis from uber calls you up and says, we're talking to toyota. if he wants to do an exclusive deal with gm, how to talk to something like uber all their drivers are buying cars, how do you deal with a problem like that? >> i don't think it is a problem. it is an opportunity. the engagement with the customer, how consumers want to consume transportation in the urban environment is changing on a milley. we're at the forefront of working through that. understanding the customer how they want to get from a to b. how we can help them to do that whether it is in a driver assisted scenario new urban

mobility car sharing ridesharing is a whole new world of opportunity. >> over the rebate stuff? not just gm, but other auto companies. when did this start? when is everything recalled? >> there is been a lot of activity across the industry. our focus is making sure we ultimately get to zero defect. the company now is producing a zero defect vehicle. until we get to that point, we will do the right thing for the customer. if we see any sign of an issue we will go out and address it. >> what is the new technology and paint? i look at the pain. my grandfather had a catalog and he said he looked at the paint job and then there was the first 80's paint job. >> the paint continues to evolve to be one of the most advanced part of the whole silly process. -- a similar process.

new colors, new way of getting there, and opportunities for the customers. >> what are you going to do about china? >> china will continue to grow. it will remain the biggest market in the world so far as we consider the future. it will grow at a slower rate. we're still in a leadership position in that market. >> general motors, here in davos , switzerland. coming up, vice chairman of lazard. global wall street and particularly his thoughts on europe. it is a europe focus and frank for, germany. gary parr. from the world economic forum davos in davos it is "bloomberg surveillance." ♪

>> good morning, this is "bloomberg surveillance." our guest host for the hour. time for the morning must-read. >> by morning must-read is from an economist but also keeps a blog marginal revolution, an amazing reader. he reads a tremendous volume of everything, actually. he wrote a piece on how to read fast. so lisa, i was struck by this, an amazing rule. i have all of these half finished, have started talks by my bedside. i'm inspired by this to just start dumping them.

>> i'm glad he gave you the liberty. there are different kinds of reading. there's reading for pleasure and reading to sort of get deeply entrenched in the story and empathize with the characters and then reading for information from a much more practical sort of tool. close i only read for information. i miss that deep dive that you talk about. >> if you're just reading for information, why not read articles? >> shameless plug. >> why not read really sharp blurbs? >> he talks about how he misses having the time to really spend three months working through the "iliad" with footnotes and multiple translations to understand it. i kind of miss that. >> if that was your goal to get up just speed read and not interested chuck it, would you

read "the iliad"? would you read any of these books that take actual work to look up every single word? >> the trouble for me, because the books are so long, i start reading more slowly. i went through two big books recently. it took a couple of months because it was 800 pages. i also read "fountainhead." but it was so long. >> the first book i ever decided consciously i don't have to finish this. i got about four chapters in decided there was not enough time in the world for me to finish that book. >> i wonder how much people feel compelled to finish a book and try to make themselves like it. the classics have that ability. people feel like they should like it or they are philistines, they really should get into it. would tyler cowen have focused on -- >> i buy aspirational books, big

biographies. history of central banking because i want to know more things. you get a chapter into them -- actually somebody who was a reader for the pulitzer prize committee decided nobody ever read these books and he wrote a great essay six years ago were he said, i give up, i can't finish your books, you win, just take the pulitzer. >> i like the books written by columnists because they're pretty episodic. you are a writer. by the way, brendan is a staff writer for business week. how many paragraphs of a bloomberg story you expect readers to read? >> every single word that i write. to be honest, one of the things i do i try to write short. i don't like to write long. if my idea cannot be encapsulated -- >> just jump to the fourth paragraph. >> it is true.

honestly, i think more journalism is trying to write to the reader who doesn't have a lot of time. >> it is good to have an editor that is an advocate for the reader. my problem was, i wrote too much, too slow. still coming up that we will take a look at the big money of soccer sponsorships. this is "bloomberg surveillance." ♪

>> good morning, this is "bloomberg surveillance." we will get back to tom keene in davos in a moment. >> american express is reducing its workforce by more than 4000 jobs, making companywide cuts this year. it's the profits beat estimates cloning 11% from a year earlier to $1.39 a share. sticking with job cuts, ebay will cut 2400 positions and buy back shares.

it is entering an agreement with activist investor are like on as the prepared to split its marketplace and payment services. shares don't almost 5% after climbing 2.3% in 2014. -- shares down almost 5% after calming 2.3% in 2014. nationals introduced a new pitcher yesterday. $210 million for seven years. it makes the 2013 cy young winner the most expensive right-handed hurler and major league baseball. he had been with the detroit tigers for the previous five seasons. those are your top headlines. sitting on a rooftop in switzerland is tom keene in davos. >> thank you so much. truly historic day as the ecb jonathan faro fired up about the kind of reaction we get sick on a particularly, within the press conference we will see for mario draghi. some here all year, gary parr

vice chairman of lagarde. wonderful to have you here. the usual wall street should check, let's get right to the moment. in a you talk to mario draghi three times this morning to get the proper perspective. there is a stereotype that all banks are the same. european banks aren't like fortress diamond, fortress moynahan, are they? >> you are right. europe is a much better shape today than it was, say, three or's ago, but it is highly fragmented. for example, just in the last two months with the swiss franc move in even six mins earlier the russian ruble deterioration has caused all sorts of damage in a number of banks. we're looking at banks that are still recovering from the recession.

obviously, the economy is weak. just to take currency movements create these issues that u.s. bank stone face. >> you and i know, and this is a terrible bias within the industry, every time you mention european banks, we turn to the austrian banks. what is it about the oxygen in vienna that makes you and i always look to austria to see a challenge? >> it does happen that austria has particular exposures what of the riskier markets. today, their exposures are pretty straightforward. ukraine and russia. austria is doing just fine. but it is those banks that have exposure into russia or ukraine, and it happens austria has a disproportionate move -- for that matter, hungary has issues. austria is fine, but those banks and a few others in europe that have those exposures. >> i get a huge response to your comments to me on the future of

global wall street. we are through that process right now. morgan stanley talking about expense reduction, chris whalen talks about asset shedding, the kind of things you do and i don't want to get into the lazard business relationships, but in 2015, to receipt expense reduction or do we see -- do we see a expense reduction or making to downsize? >> yes. uni when we have spoken in the past few years ago, i use the term, a darwinian exercise. what is fascinating is how slowly it is going. it seems obvious with the regulators increasing the capital requirements, with the burden of regulation, with the charges particularly for systemic important institutions, a lot of these banks ought to cut back lines of business -- number of executives say to me well, i'm in better shape than others are, they will leave the business first. and when they leave there will be a concentration of power and we will get our profitability back.

that is why i use darwinian. >> the executive pushing the board aside and saying, we're comfortable with the present state. where is carl icahn to tell us to do something? >> somewhere along the way, or even some of the global investment, those who have also investment banking, and some have been making more noise about break up the big banks and over two years ago i mention this with you, actually, as a possibility, but it would be three or four years away. today, you can find another independent investment bank. someone says split retail wholesale, you can't find that fully properly. there will be in alignment with the markets will accept it in the regulators are clearly in favor. i will still say 18 months to 36 months, a much more intense pressure on some number of banks to actually break up. >> the interest rate

environment, nominal rate inflation, a real great. -- a real great. it is like below zero. does that set your industry up for trap? does humility just away because money is cheap? >> someone say humility never drifts away in banking. the decline in interest rates has one very negative affect on the banking industry and that is, they live for net interest margin. they would like to be able to borrow at x and lend at y. when you get down to zero in the marketplace, you cannot charge that much to the client base. they're getting compressed. the low level of interest rates ne on profitabilityt net is a negative monopolist of for banks. it does not help them raise capital through profitability. it raises another problem. >> and a challenge in 2015. in the time i've got left,

you're ending our stewardship with one of america's great institutions, and orchestra. >> new york. monica, to be precise -- new york philharmonic a to be precise. >> sitting down in front of the black and white tv, you will listen to rachmaninoff. we're desperately losing that, i would suggest, across the nation of america. how do we sustain an interest in classical music? >> it is a conundrum that we all face, and we don't have a ready answer. but i will tell you, just yesterday, the philharmonic announced his season for yesterday. a fundamental theme running through is education. we're doing education with academies in china. in the u.s. and michigan and california. education has to be an important part. but we are also slicing -- segmenting the audience. there are different audiences for different types.

we don't have one audience. this is where you find growth. you audiences that are interested in film music, for example. >> remember when you held your first album? is itunes or friend in classical music? >> we were the first orchestra to put our entire life season on itunes. we had an exclusive agreement maybe three years ago. the bad news is, it is not a big market. people are buying in selecting by pieces. there's something technologically,, the recordings of beethoven him or five do you really need -- a tovarbeethoven 5 do you need? but thank you for asking. >> the drama, the classical music today will be up and frank for, germany. ecb thursday here in davos.

coming up, we look at the markets. from davos switzerland, this is "bloomberg surveillance." stay with us. ♪

>> good morning, this is

"bloomberg surveillance." we will get back to tom keene in davos in a moment. today's single best chart. here is brennan greeley. >> tom keene does not care about the european soccer links, but the rest of the world does. a new set of sponsors. they just released a report that put numbers behind what soccer fans have known anecdotally for a while, the middle east is paying for the game. in the last year, the uae has emerged as the largest sponsor of soccer, replacing germany. for may, this is fascinating. you sort of see the sponsorships on shirts. what we're really seeing is -- it is hard is it is hard to see what the motivation is. i don't know that the airlines that are owned by countries in the middle east necessarily need that marketing. there is qatar airlines on the barcelona jersey there. i don't know if the motivation is. is it ego play? >> hugely global marketing and

surprising for americans to see jerseys that they fly and the saudi arabian airline. how strange would it be if we saw the seahawks and the pats at the super bowl with a mecca and airlines and united all across their chest? >> i think it is a bit by middle eastern nations to get more international acceptance. part of qatar's bid for the middle east saying they have never hosted the world cup but we need some sort of instream acceptance so we're not just the stepchild. >> if you're going to buy the world cup, -- mi going to get hate mail for that? it makes a lot of sense to have the world cup in 120 degree heat in the desert in summer. so. >> this money has change the ways, not just the shirt sponsorship, but also buying clubs. man city is owned by the uae.

they change the club. >> the arsenal gunners are owned by iran. >> how compatible is soccer and being a fan of soccer with more of the extremist, you know religion strain? there has been tension between the two groups. it should be interesting as the middle east nations both in the corporate and national side start to really sponsor football or soccer, how much there will be that tension rising. >> from a marketing perspective, it is smart. they're targeting a demographic that is growing rapidly. i spoke to uae and why they're getting behind rugby, and they said it was growing in the biggest part of the world. time for our top photos. we start back in davos with number three, ukraine and president, the chocolate tycoon.

there he is holding a fragment of a bus hit by russian missiles. the incident killed 13 people last week in donetsk. he said the pair to the attack as she compared it to the early hebdo massacre and blamed russia for the loss of 5000 lives. portion goes stated that more than 9000 russian soldiers currently in ukraine. >> yesterday, saying why is poroshenko in davos? is he not the commander in chief of ukraine? >> he clearly is meeting with people begging for help. if you're going to back for help, all of the people you need to beg for help are in davos right now. he is the beggar in chief, and away. >> he said ukraine needs more money. >> they up and working so hard with the rest of the world was reluctantly to say openly, these are russian troops, this is a russian incursion. >> if they stop taking russian

gas, they're going to need to find another supply. number two photo mta has been dumping old subway cars into the atlantic ocean to build new reefs. the mta steam cleaned the trains and strips them of any hazardous materials before disposing of them. they have recycled 2500 cars since 2001. that is amazing. >> shouldn't they be steam cleaning the trains regularly anyway? >> i want to know what happens in 30 years or 40 years when divers come upon one. i found a shipwreck! >> offshore oil platforms are actually also -- they are amazing places to study marine life because they attract coral and barnacles and like little colonies of efficient -- of fish feeding on them. >> number one photo comes from noaa.

they have just released a time lapse video of arctic ice from 1987 to november 2014. 27-year span. white represents -- this is 1987. white represents ice older than nine years. if you don't believe in climate change, take a close look. in 19 a seven, the oldest ice comprised choice of percent and fast-forward to 2014, it is down to just 10%. regardless of what you think the causes of climate change, it is pretty hard to look at these pictures and deny it is happening. >> one of the things you have seen from different agencies, we're past the point of where they try to prove things with data and charts and trying to make the changes much more visible and tangible. i think we're past data and into politics. this is politics by other means.

still to come, and whose of interview with bill gates just hours after his foundation released its annual letter. this is "bloomberg surveillance." ♪

>> good morning, this is "bloomberg surveillance." >> kinder morgan agrees to pay about $3 billion to buy a pipeline network from oil billionaire harold hamm. the deal includes debt and gets canned or morgan foothold in the bakken shale. latest move to dominate shipping of north american oil and natural gas. microsoft reveals the latest incarnation of windows operating system and starts over on the web browser. the copies windows 10 unveiled in washington will include spartan, the heir apparent to internet explorer. built to be faster than the predecessor. north korean leader kim jong-un off his controversial for trail in "interview" could return to the big screen in a new document three -- documentary. the film chronicled the x nba player premieres at sundance the

rent concurrently with the sundance film festival. those are your top headlines. let's get back to tom inv. >> thank you. there are panels in davos in real panels hedge fund manager lawrence summers can always controversial in davos facility named lagarde. she had the panel this morning. let's start with madame lagarde. >> europe versus u.s.. talking about banks. christine lagarde stuck up for europe. i know she is done so in the past, but i asked her, who does she think she pulled a most weight politicians, central bankers, is it the experts that we have seen or is it regulators because of the banks? she said, they all have to come together. she is very diplomatic. let's have a listen. >> they all need to pull their weight. 2015 is a critical year for all

of the reasons we discussed, but also because there are big trade-ins on the table that need to be wrapped up. there is a big climb until that was certainly fueled an offer opportunities. there are development objectives. those are three key agenda items. the role of policymakers, business, bankers, all have to really rally around those jobs and growth objectives in the context of those big deals. >> we are expecting european qe today. the problem is, will the central bank to enough to kickstart growth? we looked at the space and said, first of all has qe worked? >> there's a phenomenal difference. you have lived europe. it is not the united states of europe, is it? >> that is the point larry summers was making. until we have the united states of europe, all of this central-bank action is not going

to work. we also spoke about the fed. whatever we do here in europe is going to be impacted by what the fed decides. on this, madame lagarde was saying, she still believes the fed will raise interest rates this year. >> the fed is probably going to raise rates this year. our expectations at the imf, it is more likely to happen in midyear than the end of 2015, contrary to what the markets expect in a certain way. the fact the fed is going to do that is good news in and of itself. >> i know you watch this closely, but the global point, if we look at the world, if the fed starts raising rates this year, does it mean all this good qe, if you call it that, -- that is the problem. >> in the parlor game, of when the fed is going to raise rates, is sort of bores me to

death. with all of your travels, is this a europe and recession? is it a growth that is some booming, simply good and a lot of it lousy or escrow one book suggests, is it a depression? >> there's germany and the rest of europe. that is very, very clear. they're going to benefit from a weaker euro. a lot of economists say the rest of europe will benefit because it will be up to boost up the exports. but when you look at italy and spain, they are not manufacturing enough, so how can you grow in a country like that? >> at davos them a european leaders have down to a science, the entourage. tony blair had a way to go through the crowd. sarkozy was the best. an entourage of about 40 people. give us an update on the to do list for france given the horror we saw in paris. >> the security concern is something that davos will

address with some very high profile panels, with mi six also joining on saturday. francois hollande arrives later today. we also have the french finance minister. where are they going to take the money from? does it mean raising taxes? if you spend somewhere, yet to take somewhere else. >> is your on the same page? >> not on the same page. extreme politics is the most dangerous. you cannot do too much austerity because the population swings. but at the same time, it is the one that best fragile economically. >> we have a big hour ahead. >> ecb historic. >> jonathan ferro would join me in the next hour, michael mckee on bloomberg radio as well. coming up, truly, one of the most historic hours and the history of bloomberg television and radio and "bloomberg surveillance."

we go to frankfurt, germany. we will look at the announcement and the press conference of the european central bank. from the world economic forum in davos switzerland, stay with us. ♪

>> good morning, everyone

appeared the 44th annual meeting in davos switzerland. 333 miles north to frankfurt germany. history made at the european central bank. we will have complete coverage across television and radio, including a number of conversations. davos distracted by all. first, we go to our world headquarters in new york. >> we start with the european central bank on the verge of taking its boldest step yet to fight deflation. at 8:30 mario draghi may announce a massive bond buying program that could exceed $1.2 trillion. the quantitative easing is aimed to boost consumer prices. not everyone is on board.

the plan is already being criticized by some as too little, too late. the european central bank -- the violence in eastern ukraine is getting worse. artillery fire hit a transport stop, killing 13 people. ukrainian forces have killed back that pulled back from airport terminals. germany's foreign says there was tangible progress in new peace talks. a new twist in the wireless world. google will sell wireless service directly to you. google has reached deals to use the networks of t-mobile and sprint. no word when google might start this service. the cloud storage company boxes pricing its ipo after the market closes today.

that is a signal that box faces stiff competition in the cloud field. it is still not showing a profit. uber has raised $1.6 billion from goldman sachs clients. they will use the money to keep rolling out the service in more cities overseas. 15 companies will be first-time advertisers this year on the super bowl. the most we have seen since the dot com bubble. adds cost $2.4 million for 30 seconds. loctite will spend more on one added than it normally spends on advertising for the whole year. >> michael mckee and i will have

a conversation with jacob frankel of jpmorgan as we digest the 7:45 announcement. the critical press conference, history made today in frankfurt germany. everything in davos ends up a transaction within the markets. let's talk to the nasdaq chief executive officer. great to see you again. it is better now. we have the ipo market two years ago in the last year was pretty good. can continue this year? >> last year was beyond pretty good. the highest year for po -- for ipos since 2000. the pipeline is good. we understand the pipeline can shut down in the window can shut quickly but as we stand here today we are looking forward to a good to 2015. >> with all the negative rates,

this and that, larry summers the markets continue to do well. why is your world well when everything around you seems to be a struggle? >> if you look at the gdp numbers, the earnings numbers they are doing relatively well. you look at u.s. corporate earnings in 2014, relatively strong. that is a driver. i want to highlight that the occupant or the spirit -- entrepreneurial spirit is at a higher level than i've ever seen. in europe, you see people want to start new enterprises and innovate. >> would is your concern with the facebook debacle? the stock did what you wanted. three years out, it's a success.

it was a painful six months. >> very painful. we are still trying to ensure that we continue to get better. you have to take experience like that as a learning opportunity. >> what is the best practice out of that? >> in terms of having our business people worked closely aligned with the development people to make sure they are specifying what they need in the system. we had technology people developing things that was not needed by the business folks. >> i will talk about something complex like net neutrality. dark pools. what is a dark pool? >> somebody trading away from a lit market like an exchange. you see it after the trade is done. dark pools are very valid and necessary when you're dealing with size. you come to the market and pay a penalty.

>> the guy with a pad of paper in his hand, the specialist. >> that would be the upstairs trading desk back in the day where they arrange the bilateral deals are size. our issue has been that the average size is 180 shares. that should be in a lit market environment. we are focused on meeting the needs of our customers. one thing we are contemplating is the ability to run our dark pools for our customers, limiting that eliminating them from the regulatory burden. >> what is the push back? >> it's a process. >> this is an age-old thing. between america and global wall street and american wall street. the idea of linkage of any -- i buy 142 shares of ge and the

scary derivatives market. you are in the thick of this. is it healthy to have derivatives markets overlaying into traditional equity markets or do they need to stay separate? >> they overlay completely when you look at it from outside the exchange perspective. clearly a trading strategy has an underlying strategy and a derivative strategy associated with it. that will be here for a wild. the proper concern you have is when the derivative market is larger than the underlying market. >> a valid concern. is it there right now? we see excesses -- the shock of the swiss franc. >> we don't worry about it. you see an isolated situation. derivatives markets function the way they are and they are reducing risk in the system. >> you have a terrific branding.

the branding of nasdaq and what you've done in times square and all that. how did you get the love affair for equity markets back into the american public? it is not there like when we were younger. >> you are three months late with your comments. fourth quarter 2-d 2014, they were record -- record inflows into mutual funds. always a great thing to see. one of our concerns is these investors have been waiting 10 years to get the confidence. they are in now and we are advocating to the fed that they delay in interest rate heist because that will have a negative impact on the marketplace and investor confidence. we see investor confidence back and record inflows. >> what is your advice to

corporate offices? you sit down at facebook about how to convey a message around the for accounting statements the annual report to convey a message to shareholders even if through an institutional conduit. it seems to have broken in the last five years. >> you have a known disclosure exchange. i push back on saying it's broken. you have to understand your investors. it is our job as corporate ceos and management to make sure we communicate to them in the manner in which they want to hear it. >> i see some annual reports that are beautiful in the first 10 pages explaining free cash flow and revenue growth. others look more dry than warren buffett's report for berkshire hathaway. >> you listen to investors, you

will be directed the right way. most companies try to do that on a regular basis. there needs of all the overtime. -- they are needs you've all of all the time -- their needs evolve all the time. >> coming up, my conversation with jim young kim. we speak about ebola. the decision by the european central bank this hour. we will have it in davos. ♪

>> good morning. i'm olivia sterns. we will get back to tom keene in a moment. it is time for my morning must read. this comes from gail collins writing in the new york times. where the road meets the walrus . -- it is true. the public highway system is basically about to implode. the roads are falling apart. we have not raised the gas tax

in nearly 20 years. everybody likes to talk about ronald reagan and taxes. the gas tax doubled under reagan. he called it a user fee. josh wright is an in-house bloomberg economist. doesn't a gas tax make economic sense? >> it makes economic sense from the perspective of having the people who use the good paper that good. it is not that different from a mechanism of using prices to allocate resources. this is a problem you see over and over again. not controlling for what the actual usage of the public good would bp. we see that the social security administration. >> i'm wondering why we don't do that. i'm somewhat more cynical. we don't do that so we can have these fights again and again and again. these fights are useful for political parties. this fight on minimum wage is one both parties want to have because they are reaffirming

their basic principles. >> a lot of conservatives say the money is not well spent. they say a lot of it goes to mass transit. >> this is a global problem. a great bloomberg news article on this talking about how would a lot of countries, the highways are reported out of the general budget. even germany has a problem with the autobahn in the west because there is not a lot of money. >> people like the political fight. it's also a question of the funds. people like to take this money and use it for other purposes. it's about paying for the short term because then you can claim the benefit. it is not helping the consumers and voters. >> very unlikely to happen if congress did not let obama pass an increase on tobacco taxes to fund education. he cannot even bring it up in the state of the union. >> i love having josh wright on.

this is great. >> we have to get back to davos. we will get you back to davos with tom keene. we have an exclusive interview with bill gates a few hours after his foundation released their annual letter. we are happen hour away from the european central bank decision. -- half an hour away. ♪

>> good morning. this is "bloomberg surveillance ." time for our top headlines. >> we begin with earnings news. verizon's or quarter eps has come in a petty short. discounted phones squeezed margins. sales rose to $33.2 billion.

american express is reducing its workforce by more than 4000 jobs. it also said profits beat estimates. big-box and big expectations for the latest member of the washington nationals. the team officially introduced the picture may sign for seven years and $210 million. the deal makes the cy young winner the most expensive right-handed hurler in major league baseball. those are your top headlines. tom keene has been tromping around in the snow of davos switch on. >> it has been very interesting. a lot of different people. this is the most interesting davos i have been out at in a decade.

i ran into the former president of dartmouth college. he took on response abilities at the world bank. you have to begin and start with ebola. i talked to him about the definition of evil a right now. -- ebola right now. is it a pandemic or epidemic? >> it is still an epidemic because it has not gone global. things are looking better. in each of the three countries the epidemic started with a single case. until we get to zero, we are not out of the woods. we are trying to force the world to not forget as we have every single time in the past. an epidemic comes up and we say we have to get financing and preparedness and we don't do it. we need to bring in the private sector. >> it was really interesting to see dr. kim leap between what the world thinks a new

initiative is based on his part -- we need the private sector and each and every issue. he said bring in the reinsurers. i'm not sure the reinsurers change what happens on the ground. it's much more about the institutional structure that allows the medical system to be developed and built in those three troubled countries. >> we are 25 minutes away from the historic decision from the ecb. mario draghi about to bring the project across the rubicon. what is the president of the world bank have to say about the ecb? >> he talked less about the ecb. he was very clear that this is about structural reform. this is an opportunity, cheap oil, low interest rates, let's go. here's jim young jim young kim on

structural reform. >> i just got back from a medevac -- in a few months, he has put through a goods and services tax. the big headaches in india is every state has its own tax system. he put that in, something that had not been done or talked about in decades. he put that in within seven months. with low oil prices, there are upside and downside. what india is doing is they will move forward and try to get rid of fuel subsidies which help the rich six times more than the poor. it is time to get rid of those. not only will it get rid of a fuel subsidy that puts more carbon in the air and helps the rich but will create fiscal space for the future. >> jim young kim of the world bank.

what i thought was absolutely fascinating was how he linked bringing in knowledge to solve a problem. going out to india to help them at the central bank. >> there is so much criticism of the world bank and imf for being instruments of catering to western interests. did he talk about reforming the world bank at all? >> we talked a bit about that. i would point you to a few days ago, that of the guard -- medela we have to finally bring in voting rights for the developing world. christine lagarde is pushing that forward as kim looks at a restructuring and a new world bank. >> great interview. thank you so much. we are 25 minutes away from the historic ecb rate decision. a little over an hour away from

the press conference with mario draghi. let's get back to our guest host for the hour, josh wright. all eyes on the ecb today. what does qe in europe mean for the u.s. economy? >> we are already starting to two see the impact. in the first week of january, we saw mortgage applications surge by 49%. that is off a low base. we now have the lowest mortgage rates in this country that we have seen since about june of 2013. that is quite surprising. the ecb and the bank of japan are doing the feds work for it. when we said bad news is good news, we have bad news in europe being good news for the u.s. >> fascinating. interesting to see what happens to that u.s. treasury markets

and currency markets. bill gates just released his annual letter. erik schatzker visited him in washington. this is "bloomberg surveillance" on bloomberg tv and radio. ♪

>> good morning. this is "bloomberg surveillance ." i'm olivia sterns. we are 15 minutes away from the ecb rate decision. traveler says fourth-quarter profit increased just over 5% as policy sales increased. those results were above analyst estimates. $3 billion to buy a pipeline network from oil billionaire harold hamm. the deal marks his latest move to dominate shipping of north

american oil and natural gas. microsoft revealed at the latest incarnation of its windows operating system. it starts on its web browser. windows 10 unveiled at an event will include project spartan. the air to internet explorer and will be built as a pastor predecessor -- as faster than its predecessor. >> the imf downgraded its forecast. one spot remains, the united states. what is keeping the united states buoyant as everybody else sings. we have good numbers on single-family housing. the american dream. >> single-family finally looks ready to return. it is important not to get ahead of ourselves. it was definitely an encouraging sign. it has been the single-family segment the american dream, the

sluggish portion of the sector. the data was driven bible tight family or apartment buildings. the fact that we see strength in the home base was a good sign. -- driven by multiple family or apartment buildings. >> are we going to see another cyclical upswing or real changes? >> that is the topic of serious debate right now. a lot of questions about what the attitudes of younger people will be towards housing. whether they want to live in stand-alone houses or cities. if they are interested in buying or want to continue renting. we will only find that out over time. >> full disclosure i'm a millennial who rents an apartment. it is manhattan. it is very expensive. >> i am a gen xer and i own a

house. >> the one bright spot for the story overall in the global economy, divergence. how close are we to the tipping point? >> keep your eyes glued to the fed next week. they will put out there next statement and talk about their risks. what we saw in december is they had these minutes come out from their meeting and they saw the risks being balance from headwinds from abroad and domestically. they have started to tighten -- that is not what the fed wants to see. they want to see things going steady and have a simple and clean takeoff in the mid-third quarter of this year. >> christine lagarde said that she still expects to see a rate

hike this year. >> from the fed, the signal flare that you wrote about where they are considering getting some mortgage backed securities up their balance sheets. >> they're not try to do that in an active way. they need to test this stuff. it is one thing to throw up operations -- they have to get ahead of this story. they doing these sales but it's an operational testing. the ecb will be a paying attention to that. how do we get rid of this stuff if the time comes? >> so many operational things. >> central banking is supposed to be boring. >> we will be back in the moment. let's take a quick check on the markets. u.s. futures pointing to a higher open.

the 10 year yield up by a basis point. the euro is strengthening slightly against the dollar this morning. we are 15 minutes away from the ecb rate decision. nymex crude traded just below $49 and barrel. this is "bloomberg surveillance ." tom keene is in davos. it is that time of year again. bill and melinda gates released their annual letter in which they share their thoughts on global issues. erik schatzker spoke to bill gates and chaired the topic of this year's letter -- shared the topic of this year's letter. >> there is a lot in the pipeline. whether its medicines or the way people bank or get educated. we are seeing that people care about these issues and our ability to communicate is better than ever before.

our bet is this next 15 years will be fundamental for the basics. kids at surviving, people having a bank account. this will be incredible improvement for a country to do well, you have to get the nutrition to its citizens the education level of its citizens the financial empowerment up to a certain level. by having these tools, some of which are vaccines or mobile phone based delivery, the lives they lead will be self-sufficient. >> what specifically has changed in the 15 years since you and melinda started the foundation to create breakthrough opportunities and next 15 years? >> the childhood death is one where there happened to be a lot of work done.

since 1990, that has been cut in half. we have those vaccines, some of which are still in the lab, that given the full 15 years we will be able to get those to all of the world's children. scientific understanding keeps advancing. understanding hiv, malaria, all these different diseases. understanding nutrition what kind of seeds are productive what kind of diet to you have to have, how you teach farmers to grow more than one crop year and use bridie to maximize their output -- use a variety to maximize their output. >> what is more important? technological innovation awareness and support for what you're doing or the sheer amount of money that is being invested in the kinds of programs you support? >> all of those are important.

you have to multiply them together. without the science what we could not make the better seeds or vaccines. without the donor generosity getting these things out to those who need them the most, it would not happen. there is no market mechanism. the vaccines would be going to the kids at the least risk of getting sick and not those who have a high risk of getting sick. you have governments come up with that money, you need this broad awareness. even though these people are far away and not often seen in these deaths are one in a time, it is this ongoing set of diarrhea deaths or pneumonia deaths that if you see that, you might give

some money or volunteer time. you make sure the government takes some of its resources even 1% would be generous, and gives that to poor countries. >> you have actually work in developing economics. this issue of medical literacy. that is crucial here. >> one of the things that is easy for us to forget about in this country is all the things we take for granted in terms of understanding how hygiene works. that is not the same baseline in other countries. when bill gates talks about these institutions built and improvements in medicine, important part of that is people become empowered with information to make more wise decisions in the way they live their lives. >> thank you so much. you can see the full interview with eric and bill gates on our website, bloomberg.com. we are less than 10 minutes away

from the ecb rate decision. one hour away from the press conference. we will have live coverage. will it give any hints about what mario draghi will say? this is "bloomberg surveillance ." ♪

>> good morning everyone.

"bloomberg surveillance" from davos switzerland. this is truly a historic day. i would suggest going back to world war ii and the development and agony that was taking of the european union. they confront a greater united states of europe today. coming off your interview with christine lagarde, you have another panel coming up on ukraine. you have lived the advent of the european union. what is different now from the time of -- >> people are more concerned about the political ramifications. people realize the european project is flawed. europe has now decided to move on. what that means for countries that are not growing as huge which is why the kiwi decision

is so important. qe decision is so important. >> there is a whole group of economists saying this is not the way to do it. state the i'm upset at the ecb piece. >> you compare that to win qe started in the united states the price effect of qe, how much is already priced in. the effectiveness of qualitative easing. >> the risk on rally right now. gold down $10. a bit of elevation and oil. price is not happening normally. >> goldman sachs and larry summers saying why is europe not getting it right but europe is

so different from japan and the u.s. >> the stores are never open. what is it about switzerland where the stores open at 11:00 and close at 2:00 and that's it? >> i know there's a huge debate about french stores not opening on sunday. >> come on, guys. >> it is a different -- it is different from america. >> should mario draghi forced them to open on sunday? this is europe. it is politically competent. which is why we have had to wait for so long for this possible qe. >> the political extremes that are growing, that's why we have these pressures fueled by economic weakness. >> i have my bloomberg terminal app on my iphone. she has a terminal. let's go to olivia sterns in new york. >> much harder to get your

shopping done in europe on the weekend. we are moments away from this ecb decision on this historic day for the european union and. what we are looking out for is the press conference in half and hour. the ecb leaves the benchmark interest rate unchanged. no change here. it is a press conference at acorn 30 a.m. that we will be looking to for more reaction. -- at 8:30 a.m. >> the fact that there was not a rate decision change, no big surprise there. we are waiting for the news of quantitative easing. we know the plan proposed to the governing council last night. it $1.1 trillion plan.

you put it over two years through the end of 2016, you get potentially -- where is the money going to go? potentially 90 billion for the first year coming out of germany. a remarkable number. it is here. further measures will be announced later. a very good indication that there is going to be quantitative easing. we will get the details and 45 minutes. tom, i toss it to you for reaction in davos. >> the set of headlines, most of them applicable. -- unpredictable. a bit of a risk on trade. qe in america is a process.

it takes months to evolve. a lot of analysis of its clumsy in america. >> this is the beginning of a long discussion of quantity of using in europe. -- quantitative easing in europe. how long before we start talking about ecb tapering? 4-5 years? >> i like further measures. that is the new word for qe. this is priced in. the market is pricing this in. they are late to the game. you have to put the whole file power -- firepower soon because qe works at the start and the rest is to keep it there. >> they push off against a real economy that is radically different than anything we saw

within the united states. you look at the deflation and the in place where gdp and unemployment is -- "bloomberg surveillance" in davos. this announcement from the european central bank. good morning, everyone. this is after the ecb announcement. >> you have to let this one brief. that's let this one -- you have to to let this one brief. -- breathe. >> i hear the door opened behind me as i'm leaving the panel, 60 people in the room and in behind me walks the former head of the swiss national bank. i bet you don't want to speak to

me. the backdrop of this is a currency war. >> that for me is the key. you have a europe that is not growing apart from germany. the risk of deflation. what do you do? you make the euro deep value as much as you cancel your exports are in less trouble. >> you have lived this. how does it change european lives? >> they just start exporting more. italy has fiat, spain has loads of industries that could benefit. how you get people back into employment is by starting to actually sell things. >> the big issue is the euro weakness -- we talk about

reforms in spain and italy and france. they are the most competitive in the world. the problems internally -- >> we get the binocular's out. give us a shot of what's behind us. somewhere out there is italy. how does brussels fit into what europe needs to do after this historic day in frankfurt? >> they have to try to keep it together. we have this -- the ecb needs to do this because otherwise there is no one else. brussels is great in theory. firepower, close to zero.

>> i don't think it's going to be happy. >> vocal organ quite always? -- vocal or in quiet hallways? >> this was heavily leaked. >> let's go back to olivia sterns in our world headquarters in new york. >> we still have josh wright on set with us. no surprise here. ecb leaving interest rates unchanged at record low rates. all eyes on this news conference from mario draghi. what does it buying government bonds come push if yields are already so low -- what does

buying government bonds accomplished? >> it's already priced in. for central banks, it's about followthrough. all of those bond yields start rising. that will have a deal at serious effect on growth -- deleterious effect on growth. >> the ecb has been working germany so hard for the last month or so letting them know this is what's coming. it's where all their attention is focused and then this leak of the plan beforehand, not standard stuff. >> that's right. it looks like someone in europe is trying to influence the outcome. i'm not somebody who can imply what the internal mass nations are. they're trying to get information out to the market in measured steps and get to where they are going to step-by-step. >> a lot like what the fed is

trying to do. how to start selling these mortgage backed securities. we don't know how to do this. we are always much better off as a central bank slowly dribbling information out. >> central banking is supposed to be boring work. it's a bad thing when you have lots of surprises. what is going on now with the ecb versus what's going on in 2008 with the fed, that is totally different. where you want to compare this situation to is when the fed launched qe3. it was all about the followthrough. >> christine lagarde is said the euro area balance sheet looks better than that of the u.s. >> it is harder to make these

comparisons. the fed is being innovative and ecb is seen as pursuing a lean to policy. europe is different. it's important to remember that you can compare them directly. >> this is really important. we are not seeing -- we're focused on this decision. we have news the only policy to come out of the ecb. there should be a functioning way to govern all of these countries together so they can make these decisions with fiscal policy and not just monetary policy. >> there have been a lot of concerns about what's going on in the u.s. as well. that is the easiest thing to do because it does not require a lot of votes and taking stance on issues. >> what is the one thing you are

going to be listening for? >> risksharing. the way they allocate risk. it's important for the program and is a confidence measure. are we in this together? if so, to what extent? or are we going to go back to more fragmentation? >> they have been clear about this asset allocation. they will not head south with this money. they will spread it around the eurozone. we will head back to tom in davos who is risksharing on top of a hotel. >> we have a lot more to work on today. a very political davos. you mentioned risksharing at the ecb. the peterson institute -- he is truly a star in davos. his great knowledge on german

economics and german culture. robert schiller will join us as well. we will talk to him about behavioral economics wrapped around the drama in davos and europe. tomorrow, a special conversation with one of the most interesting people of the moment. he is the president of the arab republic of egypt and he is hugely controversial in this valley. his come to davos among immense criticism of three jailed journalists in egypt. we will speak to him about the future of his egypt, muslims and christians. a very interesting show tomorrow. i'm fascinated about the conversation tomorrow. >> we saw him holding up a piece of sheet metal. you have been to davos summoning times. it's not just economics, but

politics. >> i have never seen it like it is this year. even 2009 was about banks. this is a distinctly geopolitical -- a fervor to it because of where the markets are. >> i just asked josh wright what he will be listening for. what do you want to hear from this news conference? >> i will steal a page from dr. wright and make clear that this is about how they allocate the bond portfolio. i totally agree with that analysis. michael mckee will be on bloomberg radio with expertise on the ecb. >> we will be carrying that is conference live. "bloomberg surveillance" continues on radio. the good the loop" is coming up next.

-- "in the loop" is coming up next. ♪

>> good morning. we are line from bloomberg world headquarters. you are "in the loop." coming up on the show two

things you will want to know about today. what will the ecb announced in half an hour and where do i put my money? lee cooperman. i feel like i've been in europe all day. the ceo of morgan stanley joining. the cofounder and ceo of salesforce.com, mark benioff joining us from davos. we are expecting the european central bank to make its most controversial move ever. a bond buying program aimed at fighting off relation. -- deflation. announcing other measures in half an hour. may total over $1.2 trillion. consumer prices are falling on an annual basis and they keep declining.