>> doing a deal with draghi. yanis varoufakis arrives in frankfurt to meet the ecb president. will he get the central bank's blessing for his debt plan? >> slippery oil. the commodity falls after the biggest four-day rally in six years. >> and we are going to talk wages and inflation for the work and pensions. good morning. "the pulse welcome to -- welcome

to "the pulse." >> the greek fiscal odyssey moves on to germany today. grace's finance minister will meet the ecb president in frankfurt today. >> let's get to our international correspondent, hans nichols in germany. what kind of a reception is he going to receive in frankfurt? who is going to be the first dimension t-bills? >> i guess varoufakis has to mention t-bills because he has to figure out some way to finance. this entire longer-term payoff deal in maybe april or may, or even june, hinges on their ability to get some sort of bridge financing from the ecb. so far, there's been no indication that they are willing to give that bridge financing. they might need anywhere from -- 10 billion is one number in terms of raising the ceiling. the ft is reporting that the ecb

is unlikely to raise that ceiling. importantly, here in germany, my colleagues reported that angela merkel's government is thinking about playing the long game to wait until april or may. listen to what merkel had to say yesterday when she was talking about this. she didn't seem overly impressed with the offers from greece. >> the greek government obviously still is working on its position, which is understandable if you think how few days this government has been in office. we shall wait for proposals and then enter into talks with them. i don't want to actually comment on every single detail. >> sufficient opportunities. that sounds like an opportunity for a long game, potentially a hard game. yesterday, we saw greek yields come down a little bit. today they are back up, maybe

as the market digests this notion that the ecb has to sign off on any of this. >> hans, in an interview, it seems the greek finance minister also seemed to suggest greece taking some of the 7 billion euros from the bailout. >> there is 7 billion left in the trench. if they stay in the program they get that. it is unclear whether they can access that if they plan to leave the program. here is what is interesting about the 1.9 billion, what they say they want to take. that is the number greece says the ecb as earned off of interest from the loans. varoufakis said that is "our money." unclear whether the ecb subscribes to that same view. i imagine that is going to be one of the first topics of conversation when they meet in frankfurt. >> hans thank you very much

indeed. >> for more news and analysis of that greek tour of europe, let's go to where you can go to, our bloomberg business site. bloomberg.com. there is a really fun piece you should check out on our website. >> a bit of game theory. this is what mr. varoufakis specializes in. we've been thinking about the games he might be playing. jim o'neill is here. he's a bloomberg columnist as well. former chief economist at goldman sachs. good morning. what do you make of all this? >> i don't know why i've got it in my head since the weekend that it is noise about nothing. a decision has been made that greece is starting a new, so one way or another, they are going to do a deal. >> germany? >> germany and brussels. >> they are ready to go, how

far? we are talking about t-bills. at the same time, it is basically, stop austerity. they want to increase wages, higher more people and disregard budget rules. >> i see it going slightly different. i'm presuming that this idea about nominal gdp is the basis of some real deal. not least because it seems quite sensible to me. >> that means nothing. >> sensible and europe don't often go together, do they? but it has got some kind of implicit [indiscernible] -- [indiscernible] i don't really see how germany can be opposed to that. how can they pay back 175% with no growth? it is sort of stupid. they are making it clear they want to be in the eu. is germany going to encourage

the ecb to have a greek bankroll? doesn't make sense. would germany want to have the blame of forcing somebody out? don't really make sense. unless the greeks are saying, we want out, they've got quite a lot of cannons in their hand. we've come a long way on worrying about it. we've turned the corner of it. obviously, its going to be a load of noise. >> what are the implications for other eurozone countries that face similar problems? >> that's the more intriguing issue, especially if the gdp bond debt swap thing becomes real. it could be enormous. you look at the place -- i'm sort of surprised there isn't more talk about germany-italy. no nominal gdp growth for the last decade.

we talk about japanification of europe area that has been happening in italy for ages. italy desperately need something like this. >> isn't it easier to do if the bulk of the debt is held by sovereigns from private markets? >> of course. it is kind of what goes with it. this implicit acknowledgment that these countries need at least nominal gdp growth. and, the other thing which is not irrelevant in this regard, quite a few periphery countries are showing signs of better growth than people thought. at least until oil prices started going up again. lower oil prices are good for europe. maybe, think of the positive outcomes at least for a while. i'm not in the markets anymore, but if i were, that's how i would be thinking. >> so you are optimistic that we

will deeal with greece in an orderly matter. >> everybody has taken this sort of brink. , a different version of the game theory. we've had a lot of that the past few weeks. i think everybody has seen what the other alternatives could be and they are coming to, ok haggle something like they always do in europe. >> but at some point, it may not be good enough. >> at the end of the day, the bigger call problem in my judgment is a germanic -- this notion in germany that reform is the same as fiscal conservatism. to me, it is nonsense. the germans can persist with this idea that every country in europe has got to be like germany. so of course, big picture, this

is enormous. on this latest episode, my hunch is that we may have gone through the worst of it. >> all right, optimistic view. we haven't had many of those. jim o'neill, bloomberg columnist is sticking around. we have talk about oil, elections elsewhere and a little thing called central-bank policy in denmark. >> denmark. whoever thought we would be talking about the danish central-bank? joking. >> we had another bloomberg columnist saying he had seen the movie before. it never ends well. >> good for the danish central-bank study in the spotlight. >> maybe not for the right reason. hold that thought. what else is on our radar? standard & poor's has downgraded six european banks. credit, lloyd's, barclays, all had their ratings cut. s&p cited reduced likelihood of

government support for the banks in a crisis under new european legislation. >> broadcaster sky reported a 17% rise in first-half revenue after more customers signed on for his services. sales increased to 4.3 billion pounds. skies chief financial officer told bloomberg that the company's focus would now shift to mobile. >> mobile is the next category of products that we look to bring to market once we are through the headwind we have got in things like home communications and hd. we go into that with the brand that customers say in this space is the leading brand that they would like to purchase more services from. >> disney has posted first-quarter sales earnings that beat estimates. results were boosted by stock holiday scales of, you guessed

it, "frozen" gifts. plenty of those in my house. the company saw income rise 19%. bob iger told bloomberg that he sees growth potential in china. >> the huge growth of movie screens in china to the point where china is the number two movie market in the world, if this continues, it will be the number one movie market. >> coming up, oil taking a hit on the 2014 hack attack and the cost of low pay and deflation. >> we are going to speak to the shadow secretary of work and pensions about wage inflation. our twitter question of the day. when was the last time you got a pay rise? let us know. ♪

>> welcome back to "the pulse." we are live on bloomberg tv and radio. >> we are mobile and we have a new website as well. let's get to today's top stories. rescuers are at the scene of a plane crash near taipei. an airliner plunged into a river after hitting a taxi. the airline has confirmed 19 deaths and 23 people unaccounted for in the second accident in less than a year for this

taiwanese airline. >> at least seven people have been killed in a train crash in new york state. a railroad train struck a car during yesterday evenings rush-hour. at least 12 others were injured. >> jordan has executed two iraqi prisoners as retribution after islamic state militants released a video showing a pilot being burned alive. the incident comes two days after i.s. announced the execution of a japanese hostage. >> oil is back, or is it? it is in the boom market. ryan chilcote joins us with the latest. the oil price seems to have stalled. why? >> one reason might be crude inventories in the united states. we get the official numbers at 10:30.

we have two surveys showing that economists believe the surplus is only getting bigger in the united states. they think the stockpile steak tied could have risen by 3.25 million barrels. there was another one saying they felt there might be more of a surplus. i guess if you have a surplus that is getting bigger, then that is not very bullish for the oil price. beyond that you look at crude production in the united states it is rising. opec production, if the countries are to be believed, is rising according to the figures we got for january, thanks to the saudi's and the iraqis. finally, we also see -- take the oil price for the last 50 days and find the mean. it is $58.

it was just around $58 that we saw the price of oil drop. a lot of people say that that is an indicator that it is a time when sellers or traders tend to sell because they think may be prices are getting a little hefty. >> ryan, walk us through sort of why we got the rally in the first place. the rally looks fairly inconsequential, but people are paying a lot of attention. what kicked it off? run us through the process. >> i think that is exactly right. what kicked it off was on friday. nobody spells out what is going on in the market to is in clear language, but there does to appear to be a correlation. oil producers in the united states are using less rigs than they were a week before. if you look at the number of

rigs producing oil right now, it has been declining. that's the whole idea that some of the spare capacity is coming off the market perhaps in the future, because it doesn't make economic sense at these price levels for those shale producers to be pumping. that survey doesn't reveal what kind of rigs, or what the rigs are being used for. whether they are being used for shale, or conventional vertical. the analysts say, it is hard to come up with any specific event. maybe it is just bargain hunters people covering their shorts. we see plenty of that. all you have to do is go back to january 16. that was the last day before this rise where you saw oil rise by more than 5%. there is plenty of reasons for the price of oil to go up. we just had a report that some gunmen seized an oil field in libya.

the oil price right now is falling. i don't think in the long term anybody thinks that adds up to much with all this oil on the market. >> ryan chilcote with the latest on oil. >> for more on what is behind the oil markets, check out bloomberg business. here's one theory for why oil is going nuts. jim o'neill is still with us. can i draw a line -- ryan is talking about the rate counts -- can i draw a line between greece and a little bit of euphoria or a relaxing of the market conditions? >> well, yes. it could be but of course it has fallen so dramatically since november. on top of what was already a

pretty powerful trend. after being pretty negative about oil, possibly so. i personally bought -- [indiscernible] as the year was turning. i hope this is the beginning of a bit of a reversal. i guess it is pretty close to where we are here. if i remember rightly. maybe a little higher. i concluded rightly or wrongly about three years ago the right price for oil is about $80. it was way higher than that. it took a long time for it to come down. i think what has happened since the turn of the year is what i call big overshoot territory. who knows if something like oil changes with how people traded? i've joked on this program before, it makes foreign-exchange markets seem easy.

i don't believe it is really in anybody's real long-term interest, including the u.s. for oil to continue to drop. if there is a structural bullish story about the u.s. that everybody seems to assume is the case, isn't shale oil part of it? is the u.s. really apt to disappear like that? i think the answer is no. just listening to -- [indiscernible] could the changing of the guard in saudi arabia have something to do with why -- everyone is saying there is no change in policy, but wasn't his funeral this past thursday? >> a lot of factors. >> where do you see it going? going up and stabilizing, or because there is so much slack -- >> oil is stable. >> stable is let's say a range of -- >> i've got my mind on it being

back $70 to $80 this year. >> what happens after that? >> if it starts to recover if this is the beginning of a recovery, investment won't drop that much. the way a lot of these oil guys think -- and i've spent so many of my 30 odd years thinking about it and talking to them -- they have this view of the equilibrium. it was very fashionable this time a year ago to say $100. you can see with the way a lot of them are talking, they are on the verge of saying, it is now $40. if they start doing that, you get into a self-perpetuating circle for a while. it starts to go back up again they are like oh --could you imagine being one of these guys? the psychology and the behavior about big investment decisions is pretty important.

my hunch is that, we had a lot of excess overhang for years and it resulted in this avalanche of selling. all the speculators jumped on the trend. all the short-term players have to cover their positions. >> very briefly, where is the dollar if oil is at $80? >> simultaneous to this massive consensus about the u.s. structurally as the place to be is this remarkable consensus about the dollar. i don't think it is an the u.s.'s long-term interest to have a repeat of the mid-1980's or 1990's. a lot of people say the dollar has gone up a lot, but not like then. if i'm the u.s. treasury secretary, i'm not going to allow it. part of the story is making sure that u.s. companies want to produce. it is easy to have been bullish for the dollar.

i was myself. here, if we see a resolution in europe and blah blah blah, it is not so clear-cut to me anymore. >> stick around. jim o'neill, bloomberg columnist and former goldman sachs chief stays on for another half hour. ♪

>> s&p cuts its ratings on six

big european banks saying they are less likely to get government help in a future crisis. we will explain the move in an interview you will see first on bloomberg. ♪

>> welcome back to "the pulse" live from bloomberg european headquarters in london. >> that is jim o'neill over there. bloomberg columnist. just checking his watch. let's talk about the u.k. election coming up. nobody seems to have got their arms around the risk associated with this. what is your gut feel? is the u.k. economy more fragile than the data seem to suggest? what is the potential for the

election to upset it? >> the cyclical momentum seems to be strong. we have a seemingly never-ending reoccurring question about the balance of the recovery. given the past 15 months, that's something i'm particularly interested in. i think this current coalition has good initiatives. i still think that has got into the media the past 24 hours. maybe there is a minority or another more complex coalition. maybe there is a risk to the economy that may not be as bad as the risk of getting a surprise in a big outright victory. some would say if you got a big tory victory, eu exit. maybe those risks are even worse. >> could you actually function? the country is not used to it. >> 4.5 years more into this

coalition, it has technically worked surprisingly well. maybe it is something one has to do when you get more adult about these things. germany, everybody loves germany. look how they did a coalition. it obviously stops the most extreme of any dominant party, generally speaking. >> we are getting breaking news. we had a great exclusive interview saying that the u.s. must accept a stronger u.s. dollar. >> r mr.aja -- mr . rajan. >> i'm surprised. >> borrowing in dollars is like russian roulette. >> that's more sensible. if there's something behind that, the finance minister is

going to do more to open up -- >> coming up, isn't it? >> just before here, i was speaking to the indian finance minister. i think it is a big moment for them. they've traveled on so much positive virtuous momentum with the oil price collapse and the love affair on modi. this budget is big. >> what he seems to say is the u.s. have to resign themselves to a stronger u.s. dollar. >> that's for the u.s. treasury and the fed to decide. as i said earlier -- >> your prediction? >> i'll stick my neck out and say the dollar is not going to be higher than estimated. >> first rate hike? >> linked to this issue? it might be more distant than people think. part of me thinks it is ridiculous that rates haven't already gone up in the u.s.

the reason we have them is because inflationary pressures are so low. we have somebody more dovish than bernanke and greenspan. >> ok fair point. jim, thank you so much. jim o'neill, bloomberg economist -- columnist and former goldman sachs chief economist. >> you can find more at our brand-new website, bloomberg.com . >> now to taiwan, where at least 12 people have died after a trans asia airways plane crashed into a river after the domestic flight had taken off from taipei. >> dash cam footage played on taiwanese broadcasting showing the out of control plane clipping a bridge before plummeting into a river. for more, let's go to tim in taipei. he's at the crash site now. what can you tell us?

>> [inaudible] >> tim? tim, i'm so sorry, we are really struggling to hear you. i think the telephone line is very bad. we will try and i'll back in to tim culpan on the ground. we woke keep you updated with any breaking news. unfortunately, we couldn't hear him very well. >> we will make the technology work. in the meantime, greece's finance minister, yanis varoufakis will meet his german

counterpart and the ecb president mario draghi in frankfurt today. the pair hold the keys needed to unlock a new bailout deal for the indebted nation. greek stocks rallied yesterday after varoufakis said greece would drop its demand for a debt write-down. >> sony has narrowed its net loss forecast as it reported preliminary third-quarter net income of ¥89 billion. that beat estimates. the company is restructuring its business. sony has delayed reporting final results until march because of the impact of last year's cyber attack on sony entertainment. >> crude oil's recent rally entering able market. the rise has been driven by speculation that curbs in investment will cut production. many analysts say the rally is temporary. less spending won't eliminate the current supply glut. >> another top story this

morning, six european banks have been cut by standard & poor's. the rating agency says government are less likely to provide aid in a crisis. it has hit hsbc, credit suisse and barclays. richard barnes joins us now from london, first on bloomberg. great to have you on the program. thank you for joining us. do you think you will have to downgrade every bank in europe next year? >> for most of the european countries, we intend to review the ratings on the banks towards the end of this year, when they implement the same powers we've seen in germany and austria. it has really been limited to the banks that we consider teddy systemically important -- consider to be systemically important. >> richard, is this about predictability?

do we no longer have the level of predictability we once had? >> that's exactly right. the governments have passed legislation and implemented reforms to address the too big to fail issue. in the last financial crisis governments provided huge amounts of taxpayer support to the banks to ensure that they remain solvent. a key policy objective of theirs has been to ensure that in future crises, it is the creditors rather than taxpayers that are on the hook. to say that government support will completely go away is probably too much to expect. it is really around the predictability of whether governments would intervene in future crises. >> have you spoken to any of the banks this morning? did they have any arguments back? >> this has been a subject that we've been talking about for quite some time now.

the trigger for the rating actions is really some legislation that was passed in the u.k., germany, and austria this year. we've been talking to the banks and others around. i think there are a mixture of views out there. addressing the too big to fail issue isn't something that's going to happen overnight. given the complexity and size of some of these banks, it is going to take many years to make them truly resolvable and truly address the too big to fail issue. i think we are some way down that road. there is still some way to go. >> richard, do you think it will have meaningful impact on the cost of capital for these institutions? most people are assuming that the legislation is being transposed on a national basis. they've seen this coming and they've pretty much priced it in. is this a reflection of current reality? >> i think more generally

ratings are one of many inputs into investors' decisions. this is something we've flagged for quite some time. it might happen depending on the pattern of events and how we analyze them. i think the major influences on cost of capital yield more generally. i think ratings is one of many inputs that investors take into account. >> richard, how much are you looking at greek banks and how much are you worried about them? >> we took some creditwatch actions on the greek banks last week. really around the uncertainty that this currency has. we've seen some deposit outflows in greece and their ability to access markets is quite restricted at the moment. we see potential that they will become more dependent on the ecb

and the national central banks. the current period of uncertainty isn't helpful. >> richard, how good is the information you have? i was in athens last weekend nobody suggested exactly what was happening on the liquidity story with the outflows. >> i think the data coming out of the ecb and the national central banks on a periodic basis -- i think, to look at things in more real-time is more difficult. it is something that we are engaging with the banks to get a picture of what is going on on the ground. >> richard, thank you so much for your time. richard barnes, senior director of standard & poor's. >> less than 100 days from the u.k. general election we speak to rachel reeves.

we are going to talk about wages, productivity, and inflation. ♪

>> welcome back to "the pulse." we are live at bloomberg's london headquarters. >> the british election is just over three months away. how attractive is britain's labor market? our next guest says the current government has failed and this

could cost an additional 9 billion pounds in social security benefits. joining us now is labor's shadow secretary for work and pensions. what would you do to fix that? >> we can't carry on like we are. if wages undershoot expectations in the next parliament as they have done in this parliament that is going to be an additional 9 billion pounds of spending on social security. at a time when we need to the reducing our budget deficit, we can't continue to spend more and more. there's a number of things we can do to make sure that work always pays so fewer people have to rely on benefits. we've said that we would increase the national minimum wage during the course of the next parliament to eight pounds. that would be a 3000 pound pay rise for somebody on minimum wage. that would mean more people can afford to pay the rent, the bills, put food on the table

without housing benefits and tax credits. i think somebody who is in work shouldn't have to rely on house benefits to pay the rent. at the moment, more people are having to do that. >> when used speak to a lot of economists, they say 6% unemployment is a very good figure. especially when you look at the rest of europe. so it is all part of the recovery. it is slowly getting there. >> the reason why real rages pick up is because of the sharp fall in the oil price which is of course great news. finally, after 4.5 years, a pay rise. overall, average workers, 1600 pounds worse off than they were in 2010. that's the biggest fall in living standards that we've seen during a parliament since the 1870's. this is not a record to be proud of.

it is better to be in work, but we need to do more to ensure that work always pays. it can't be right that taxpayers are having to subsidize low pay by paying out more in tax credits and housing benefits. the number of people in work on housing benefits is set to double within a decade. >> but when you look at europe britain is not doing badly at all. unemployment at 6%. all over the rest of the world it is not a bad place to be. >> i don't think we should become place in. we now have 4.9 million people paid less than a living wage. that is up from 3.4 million just five years ago. people are going out to work and working hard and doing the right thing. they should be able to support themselves and their families. at least with the basics. what we are seeing is more people in work having to draw down on benefits. that's pushing up social security spending, pushing up

the deficit. we are having to borrow more and more. that is not right. we can't carry on like that. we need these policies to ensure that work always pays. >> what normally happens in economics is productivity improvements lead to wage rises. what are you going to do as a government to improve productivity? >> this is one of the things that bloomberg talks about a lot. it hasn't been picked up by enough commentators. productivity has been incredibly weak and is one of the things holding back the british economy. when you talk to business people, they talk about a skills match match between businesses and employees. we want to see a bigger investment in apprentices, with more ftse companies and smaller businesses taking on the next generation of apprentices.

we want to see schools teaching more vocational subjects. so those who don't go to university have an alternative route. also, a long-term plan for britain's infrastructure investment. we lag behind many of our competitors when it comes to investment in transport, in renewable energy, in all of those things. >> a lot of those, medium to long-term. one of the things that economists also talk about is the fact that we continue to have a funding gap for small and medium-size companies. credit availability continues to be one of the major problems. is there anything the labour party would do to improve the availability of credit for small and medium-size companies? you talk about the business bank. is there anything beyond that? >> in germany, when i was labor's treasury spokesperson i was speaking to someone who had a much better track record of getting funding for small and

medium-sized businesses. we also need to make sure that we've got those local, regional banks making sure that those businesses are being able to access that finance. whether that is bank lending or equity finance. that's absolutely crucial. most of the productivity growth comes from smaller businesses challenging the status quo. but you only get that if those small businesses have that opportunity to access funding. >> one final question. >> just wanted to talk about business. it seems that business is turning against labor. how should labor handle these executives turning against your plan? >> what we've seen over the last few days is that the tory donors criticized labor's plans. i wouldn't expect those people -- >> how can labor win this? >> that is really important.

over the last few days, they've been talking about long-term infrastructure investment so that we can make those decisions about what airport to expand, for example. something that has been on the back burner for years. make these decisions about transport infrastructure and energy infrastructure, but also, keeping britain in the european union. if we have a conservative government, i think the chances are 50-50 about whether we will still be in the european union. that is the biggest market in the world. businesses cannot afford for britain to be absent. >> should business be afraid of criticizing the labour party's economic plans? >> it is totally up to them whether they want to endorse any party. the majority of business people i meet, they are not party

political. they want the government of whichever color to make sure we have long-term infrastructure investments, training our kids -- >> shouldn't be afraid that their businesses would be punished? >> they certainly won't be. governments in three months time will work with businesses big or small to make sure that we are at the heart of europe, creating good quality jobs, making profits to reinvest in the british economy. that's what the labour party is about. >> rachel, thank you so much. rachel reeves, labor's work and pensions shadow secretary. >> now, let's take you to brussels, where alexis tsipras is arriving at the european council. he's being welcomed by the european council president. finance minister varoufakis has just finished his meeting with draghi. >> we've had a couple headlines

from that meeting. the greek finance minister saying he's had a fruitful exchange with the ecb president. mr. draghi has outlined how the ecb supports the euro area. varoufakis going on to say it won't be business as usual in greece. that's going to be quite an explicit meeting, i imagine. >> i would like to be a fly on the wall. we are going to take a break. ♪

>> let's get to today's top stories. target of predicting a record profit of $18 billion for the year. it exceeds the combined estimated profits at volkswagen and general motors. >> a shareholder called it a very good bank. the u.k. lender shares jumped as much as 5% in hong kong. standard chartered is eliminating thousands of jobs. s&p cut the bank's credit rating to a minus. >> organic sales of goods advanced 4% in the fourth quarter, driven by demand for new limited edition handbags. wine and spirits sales also showed signs of a pickup. >> for our viewers, a second

hour of "the pulse." what have we got for you? >> we will be talking about hacking, productivity, and jobs growth. follow us on twitter. we are back in two. ♪

>> doing a deal with mario draghi. did the greek prime minister get the central bank's blessing? >> slippery oil. we are in a bull market. >> sony beats estimates. >> good morning to our viewers in europe.

a warm welcome to those waking up in the united states. >> this is "the pulse." let's turn to commodities. oil is back. or is it? it has seen a big bounce this week. ryan chilcote joins us with the latest. the oil price has stalled this morning. >> we are back around $57 barrel. we have a bit of a stall. crude inventories in the united states might be a that of a -- bit of a clue. yesterday, we got to surveys about the same time that we saw the price of oil begin to fall indicating that what we are going to learn 10:30 washington time is that the stock pile the surplus in the united states is only growing.

then there is no particular good reason why the price of oil should be getting any more expensive. other things that have influencing -- you look at production in the united states. production keeps going up. opec has not been cutting production. if you look at january, opec has been ratcheting up production to just shy of 31 million barrels per day. a technical point -- if you look at the oil price over the last 50 days and you take those 50 prices and divided by 50, you get the mean and that minas $58 per barrel, just north of where we are trading right now. that is called the resistance level. traders tend to sell when they see that they are close to those numbers. perhaps that is a few of the

reasons why we might be seeing it little bit more attention paid to the fundamentals and the technicals amidst what was a pretty serious decline in the price of oil. >> let's talk about short covering. was that what happened? what sparked the rally we have seen? the charts are amazing to see. >> it kicked off on friday. while i don't have a crystal ball, we do see a little bit of a correlation between a report that came out in the united states that gives you the number of rakes that are actually in operation and the numbers that have been idled. what we saw on friday is that producers in the united states are idling more and more rakes -- rigs. the idea there is that although it is a forward indicator some

of the production in the united states is bound to come off-line because it is not making sense economically. keep in mind what i said a bit earlier. production in the united states continues to rise. people were saying that the shale producers were getting taken out of business. beyond that, there were not hard events you could point to for that drive up in the oil prices. there are a lot of analysts saying, it is bargain hunters -- and that may be the case. you don't have to go back to far to find another day when the price of oil went up by more than 5%. the price of oil is full and more than 50%. the bargain hunters are going to come out. they don't need much of a reason to come out. we are going to see that.

you have results of a field getting attacked by gunmen in libya. the price of oil right now is falling. >> ryan chilcote, thank you so much. >> now, the greek fiscal odyssey has moved on to germany today. the finance minister has just wrapped up his meeting with the ecb president mario draghi in frankfurt. let's go up the road a little bit and rejoin hans nichols who is in germany. what do we know? >> we have one side's readout and that is the greek side. he said it was a fruitful exchange. that could mean anything and nothing. what was not said and what we still don't know is whether or not the ecb is going to give a special dispensation to greece to access its funding windows if greece does exit the troika

bailout package, which ends at the end of february. we don't have any information on this crucial point. they said they look forward to a meeting that takes place in germany tomorrow, in berlin. it is not going to be business as usual in greece, they said. not a whole lot coming out of the meeting. we will try to get a readout from the other side as well. >> we also have two newspapers. one italian and one german. >> in the italian paper, he is talking about not taking the 7 billion, but taking 1.9 billion of what he says is there money. -- their money. unclear if the ecb shares that view. there is an interview and the german paper that talks about greece being an insolvent

country and how the troika is a bunch of technocrats. that lack of respect is not going to go down well in berlin. he softened that a little bit saying, just because he doesn't think the troika is rational means he will not negotiate with it. . >> hans, thank you very much indeed. >> for more news and analysis, we go to our bloomberg business site. in copenhagen, it is a domino effect set off by the swiss central bank. the weakening euro has prompted speculation. >> let's go to copenhagen, where we are joined by our bloomberg

news reporter. what are we expecting? how does this relationship work? >> for now, the intervention is up to the danish central-bank. if the danish krone is tied to the euro and they try to keep that plague inside his europe and 5% depreciation ban -- a 0 .5% depreciation band -- they have been intervening heavily in the last several weeks. >> peter, this is very similar to what we saw in switzerland and it just got too expensive for the swiss national bank to keep buying this.

how far will the danish central-bank go? >> they told us yesterday that they can basically print as much money as they want to defend the krone. unlike other countries where the currency is to evaluating, the danish krone is appreciating. it is a question of how much money the central bank wants to spend defending it. they said it is basically limitless. they are going all the way in defense of the krone. even if they should fall and let the currency swing outside the 0.5% band then the ecb would kick in.

>> it is fascinating. just out of curiosity, what is danish business saying about all this? you are obviously taking the temperature on a fairly regular basis. what are people talking about? >> this is obviously something the industry cares about a lot. it is something the politicians care about a lot. the general population may not be that much in on the fx policies in general, but the business community is very much in favor of the peg. even though there is quite a lot of euro skepticism, skepticism toward the european union

nonetheless, there is quite a strong political backing for the euro peg. the peg is really something that has a very strong back here in the business community. >> thank you so much for your time. >> right. what else is on our radar? standard & poor's has downgraded six european banks. they all had their ratings cut. >> broadcaster sky reported a 17% rise in first-quarter revenue. sales increased to four pin 3 billion pounds -- 4.3 billion

pounds. >> mobile was always going to be the next category for us. once we were significantly through the head room that we had got in. we go into that with the brand that customers say is the leading brands they would like to purchase more services from. >> strong holiday sales of "frozen" gifts. disney's on net income rise. bob iger said he sees growth potential in china. >> the huge growth is movie screens in china. china is now the number two movie market in the world and if this growth continues, it will be the number one movie market

in the world in the next five years. >> we are just getting some breaking news out of greece. the bid to cover ratio was the lowest since 2006. >> there was a point when bid to cover ratios were very important. they are back. >> the cyber attack that redefined the corporate world. is this the cost of doing business and the corporate age? follow us on twitter. >> are the question of the day -- our twitter question of the day. when did you last get it to rise? -- a payrise? let us know what your thoughts are.

we will take a break. ♪

>> good morning. welcome back. you are watching "the." -- you are watching "the pu lse." sony's hback.

-- hack. was it the first of many? >>let's start off with putting this in context. $35 million. unlucky or unprepared? >> i think probably unlucky and unprepared, as well. there are so many entities and companies that do not understand the risk. there are a lot of companies that are exposed. sony is probably the unlucky one that got targeted. >> i agree with james. generally, companies are poorly prepared. if you are connected to the internet, you are connected to the problem. a business requires the internet to do business. we are all exposed to problems. >> ceo's come on here and they seem unprepared.

>> where does the communication gap lie? >> this is a business risk problem. historically, it has been treated as a technology problem. traditional security measures are not cutting the mustard anymore. the actors that are perpetrating these type of crimes are very sophisticated. the game has really changed and it is a whole different level. we have seen it with sony target, home depot. i think there are many more to come. >> i would agree with all that and i would add that the reason why a think there is a disconnect is that when you go to the boards and the ceo, you need to speak about risks and managing risks. there are two mindsets in the corporate boards. there should be no reason why we ever lose anything. if there is an unfair

expectation it is impossible. the technology teams are not communicating these things in a way that they can make a risk decision. that really is not the way the conversation happens. >> is it 10% of your revenue? how much do i have to spend? >> is there a number? >> what i would recommend and what we do is think of it this way is hedging. you use derivatives to hedge your risk in currency and things like that. you understand what your exposure is and you say, how much of my willing to risk? >> they can do the same thing. figure out remediation cost. i should probably spend, 10%,

15% to protect myself. >> the real issue companies are facing is that they really don't understand where the digital assets are and what they are. therefore, they are unable to quantify the risk. >> they need some sort of assessment. two companies go through a priority process and say this is really important, that is less important? we need to skew are spending to make sure that this is tangible. when they are working their way through the process of understanding the risk, how to they do it? >> managing risk in business is not a new thing. >> does the ceo understand cloud computing? >> do they understand the

exposure? >> i think it is. we recommend three easy steps. know your assets. nowhere the crown jewels are. -- know where the crown jewels are. a bank does not put the vault at the front door. once you know what your exposure is in terms of real dollars and real capital cost then you can say, i should be spending this much. that is a different conversation than the one that happens. i think that conversation happens at maybe 10% of the fortune 500 and ftse. >> some of it was e-mails. this is basic stuff. these are e-mails. that is where the damage was caused. you can go on protect all of that but you still don't have a

grasp of where the real risk lies. >> what is really hidden is, what has it done to their reputation? how has it affected operations? how has it affected the risk profile? what impact is that had another companies that they do business with? the thing that is really different about the cyber problem is that it is far-reaching. the actors in this environment are very sophisticated. the realization of boards and ceos is that this is a significant problem now and it is going to be quite challenging to figure out how to address it. >> that is a good point. there is this view that there are about 1000 people in the world that have the skills to do this and the reality is that there are millions of people that could do this. if you are exposed, the likelihood of someone successfully attacking you is

very high because it is an efficient market. you can go on the darknet and find usernames and passwords and e-mail addresses to do a simple phishing attack. lots of people are going to be coming at you. it is only a matter of time before you get hit. do you have the capabilities to respond and recover? without having to run around in circles at first. >> thank you so much. thank you so much for a great conversation. >> i got it wrong at the beginning. lvmh beat analyst estimates. ♪

>> welcome back to "the pulse." >> a very good bank. shares jumped as much as 5% in hong kong. yesterday, the s&p cut the bank's credit rating. >> statoil updates a new ceo --

appoints a new ceo. >> we will see you in a moment. ♪

>> welcome back. you are watching "the." it continues -- "the pulse." it continues. the markets are beginning to react. >> it would be great if we could get the australian dollar up. it has been rising to a session high. we are just hearing from the

pboc that it will continue its monetary policy. it will have an impact on the region. >> jonathan ferro is standing by. watching the markets, as ever. >> a little bit of a reaction. a big move yesterday. we go higher. up 0.7%. china is the biggest export destination. china is the biggest consumer of copper. then it comes back in little bit more. it is a global story, not just a china story. 12 nations easing monetary policy. greece is really front and center for the market this morning.

the finance minister saying he is a finance minister of a bankrupt country. remarkable comments. the greek bond yields going in little bit higher. what is the value anymore? greece is trying to issue bills. the lowest demand since 2006. is got to question, what do they expect? -- you've got to question, what do they expect? elsewhere, the really big headline is china. >> we will wait to see what the impact of that will be. 16 central banks have taken action in such short order. they are rushing to try to capture some of the growth that exists around the world at the moment. the chinese are playing a part in this. we have seen surprising news from them in the past.

what defines a central banks becoming less surprising. >> they announced it on the website today and that will take effect tomorrow. we have the breaking news out of china. we are coming up on our sister channel in the u.s.. in about 25 minutes it is "surveillance." >> what we are looking at is what you nailed. the australian dollar. what john said about copper speaks volumes. everyone seems to be cutting interest rates to spur demand. this excuse, that excuse, but there we are with a lot of rate cuts going on. there is the australian dollar up a dose, with a little bit of pop off of the lower interest rates in china. we will talk to brian belski of bmo capital about how you invest

in the united states given a low interest rate and a chronic low rate regime. robert michel will join us. we will talk to him about the bond business and findings the coupon and the distinction between very low yields versus the corporate world right now. the two-year in germany is stunning. 0.199 negative. we will speak of a china, a very patient china. i know without breaking news on china's interest rates -- we are seeing a race to the bottom. >> i like the way everyone is prudent. they seem to have some firepower behind the business. >> well, i put on a prudent

bowtie this morning, so we are all prudent today. we had a horrific train crash north of new york city tonight. there is still no release of the seven dead on that train. all of new york city and wall street is transfixed this morning. so many people that we know that ride the metro north on the afternoon commute. >> human tragedies. i know you will cover that. the taiwanese air crash. surveillance is in 25 minutes. >>s sky released results, showing growth. they are becoming the dominant player in subscription television in europe. >> sales up, profit up, a good start for what is now a company that is not just dominant in the u.k. they have two thirds of the pay-tv market here. there the second player -- biggest player in europe.

rupert murdoch is putting the puzzle pieces together to become a juggernaut in europe overall and we are seeing a strong start . operating profit is up 16%. scale has grown. they are adding customers in the u.k. >> it has been an excellent start. we see record growth in germany. in the u.k., we have seen the strongest customer growth in nine years. we posted revenue growth of 5%. >> i think that churn comment is really important. lowest rates of churn. they are not hemorrhaging customers. these companies are now all talking about an interesting

move recently made by sky. it is lighting a fire underneath telecoms. you have to have mobile. sky is getting in on that and they are managing to stop any customers jumping to other competitors. they are offering very cheap deals to keep them. >> what about the negatives? >> big risk. the auction rights. we will find out later this month how much a company is going to have to throw at this situation. 2012 was when they bid for the three-year rights to these football matches. and the u.k. come of most popular sport is football. 3 billion pounds was how much

they bid up the cost, ramping it up 70%. will skype up enough cash into it? -- sky pump enough cash into it? it is closed envelope bids. you just have to guess. >> analysts are worried. >> if we are underestimating this particular risk, 15% of the biggest spenders subscribers could be lost if they lose the majority of matches. after customers could switch. this is crucial -- half the customers could switch. this is crucial. >> french fashion house lvmh, a new president. >> everything turns to gold.

he said down to talk to bloomberg. the future of the switch watch industry -- swiss watch industry. >> let's close the door. it has nothing to do with the price. if you think luxury is a question of price, you are wrong. >> one of the most important men in the watch business. >> luxury is defined by the people who wear it. >> he is the president of lvmh's watch brands. >> the risk makes your product luxury. >> he has been building up and reinvigorating watch companies since his late 30's. now, he is dealing with a very strong swiss franc that is going to hurt margins. last year, growth fell to single figures.

>> it was only 3% better. 3% more than record is another record. [laughter] at 65, he is tasked with steering lvmh's watches into uncharted territory. the competition could not be tougher. >> apple has recruited somebody from burberry. why? because they are crazy? >> jean-claude is quick to admit that a swiss maid's work march -- made smart watch is not possible. >> we cannot produce it in switzerland. nobody can produce it in switzerland. >> instead, they are lining up a u.s. partner.

this means the swiss made label will have to be chopped, along with luxury elements that lvmh is renowned for. >> a smart watch canopy and exclusive watch. it can never be with special materials, platinum, gold diamonds. if it is obsolete, what do you do with the gold? >> it is expected to be launched this year. the marriage will be announced in the coming months. angus bennett, bloomberg, geneva. >> there is something quite topographical about this. swiss mountains, silicon valley. one working with the other. >> we will be speaking with the ceo of play tech. ♪

>> playtech is the world's largest gaming company. recently it inked a 20 year contract. his online gaming a safe bet for investors? great to have you on the program. gaming is an ok business.

in terms of your biggest concerns and how much growth there is, give us a sense of what your main hurdles are. >> i think that we are in a great position. regulations across different countries across the world. we definitely go through a transition period, were more markets are opening up and regulating online gaming, which is a great thing. creating a safe environment, a responsible gaming environment for the players. it is almost like a domino effect now. we have been through the process for a few years and it continues with many markets being opened up in the last few years and many coming up. many countries indicated that they are going to regulate online gaming. it definitely creates opportunities to extend beyond the markets and a great

opportunity for play tech given the fact that we not only extend existing relationships with our customers but also are now able to link up with local retail gaming operations. >> more regulations favors bigger more organized companies. >> absolutely. >> does that run into a problem at some point when the regulators realize that there is a scale advantage? do you think there is an opportunity for smaller companies to come in at some point? >> i think it is a combination of big companies big-little operators that exist in different markets that would like to launch an online gaming arm as soon as regulations happen. at the same time, it obviously provides an opportunity for different other companies from

outside the country companies that are very innovative, that bring new technologies, new innovation and would like to establish themselves in markets. it is a combination of big companies, as well as smaller companies that are very innovative that have very developed and advanced online market capabilities. >> i have a rather monday in question. how much do you know about your players? are they people who come back over and over again? is it here and there? is it housewives? how much do you do profiling? >> our goal is to provide them with the best software and the best tools to do just that. we invest heavily into that. it is the role of the operators to create a safe environment and

an environment that will allow them to understand their customers, the behavior, and serve them in the most trusted way for them. the business is cyclical to an extent. obviously, there is a level that will always exist but as economies improve as people have more disposable income then obviously -- >> where are we now? >> i believe that it is improved. we all know that economies will improve in certain markets and obviously, it will improve the performance of our customers. >> what is the most played game? slot machines? >> yes. but it depends on the country. in certain countries, roulette

and blackjack are very popular -- a lot in the u.k. slot machines are very popular. >> like in vegas. >> like in vegas. [laughter] >> what needs cracking from your point of view? what are the biggest opportunities? >> we see a very clear trend. people talk about the fact that they are very customer centric. if they are not they should be. we focus very much on the combination of data and what we offer -- what the customer's offer to their customers, to the players. we put a lot of effort to that. we have put a lot of effort into mobile. it is about mobile becoming part of our day-to-day not just in developed countries, but in other countries as well. using the data for the benefit of the players as well.

providing the operators with the visibility and at the same time, understanding better the customers and serving them better. from the data that you accumulate, you can personalize it to the extent that each and every player will have an individual, personalized offering. i think this is the future. >> thank you so much. the "frozen" gaming website. i'm sure someone has thought of that. >> we are going to take a break. coming up, cutting the reserve ratio by half a percentage point. how markets reacted. ♪

>> mr. draghi was particularly helpful in outlining the mechanisms by which the euro central-bank supports greece. we had a very fruitful discussion concerning the rules regulations, the process by which the relationship between greece, the eurozone, and the central bank must unfold.

>> that was the great finance ministers baking after his meeting with the ecb president mario draghi in frankfurt. >> mario draghi is giving even less away. [laughter] >> i think my favorite is when he said that mario draghi explained to me what he is up to in the eurozone. >> whatever it takes. >> let's get to the breaking news. >> we have seen other rate cuts. we have jonathan ferro doing all the thinking. what do you think about all this? >> 12 in january. i am trying to count. the rate cut from china back in november very much addressing the price of credit. this one is a liquidity operation. 19.5% is the key.

i would caution the word and it. -- panic. when you do put it into the big picture of global monetary easing it has been quite a remarkable start to the year hasn't it? >> yes. feeling pretty low if you are the fed or the bank of england at this point. >> those two are standing alone in hiking rates -- possibly. there is always a caveat. when i looked at copper earlier -- same story. clearly some concern about china. we have also had the concern about china and the slowdown. they really want to get aggressive. cut, cut, cut the rates. this is not an aggressive rate cut. >> they are tweaking.

>> let's talk about the greek finance minister. he really did not have a lot to say. you wonder how much he really got inside that room. >> there is a very big difference to saying, the greek bank will cut off funding and saying that the greek debt is not eligible as collateral anymore. that is a very different thing. this is quite nuanced. i have a minute left and they have a month to sort this out. >> whatever they do it is a decision on whether they keep greece in or not. who cares about how they do it. either they are in or they are not. that is a political decision. >> that meeting comes next. it would be nice to be in the room with mario draghi. it would be very fascinating. you wonder what shorts you where to that meeting if you are the

greek finance minister. [laughter] that is it for "the pulse." "surveillance" is up next. see you tomorrow. ♪

tom: jordan executes two in response to isis and pro-choice

republicans backpedal on measles mumps, and rubella. good morning, everyone. this is bloomberg surveillance tom: live from our headquarters in new york. i am tom keene. joining me is olivia sterns. a busy news flow. let's get to our top headlines. >> we begin in -- conspicuously off the list, chancellor angela merkel. here he is speaking earlier in frankfurt. >> i have the opportunity to present to him a government unwavering determination that it cannot possibly be business as usual in greece. >> he arrived in germany