jonathan: the man who helped. charging a traitor with counts. we are outside and he appears in court's. >> we will talk about the turnaround efforts. guy: we will talk about the sushi founder.

good morning. welcome. we are in london. francine: we are getting news from france with a reporter on standby. we understand the interior minister is speaking him one of the networks and is saying they have boarded a terror attack. we understand a man has been arrested and suspected of murder. the terrorist threat is unprecedented and the attack afforded targeted churches. guy: he was arrested with weapons and the kind of thing you would need to carry out the attack. we will have the reporters in a few minutes time. a futures trader has been

charged in the u.s. relating to 2010 and the flash crash. there is an extradition hearing and tell us what else he is been excused of. >> like he said, the prosecutors carried out the illegal trading. the u.s. prosecutors began here in 2009. in the neighborhood, it is known best throughout london because it sits near the flight path. it is not the most desirable. he was hearing out the illegal

trading through 2014. importantly in 2010, the day of the flash crash, there was a significant factor with an balance in trading and he had 19,000 trades on that day. there was a total of $200 billion of affidavits that one out of five on that day wanted. it gained a total of $40 million over those five years. we did speak with a family member who came out of the house and said they have no idea what happened and they have nothing

to say. he jumped in a car to go to the courthouse because, as you said there will be an extradition hearing in downtown. the judge will decide whether or not he should be extradited to the united states. francine: what do prosecutors allege that he did? ryan: they call it spoof and layering. you place a trade without the intention of actually filling the trade and they say that you do a large volume and affectively, you tether offers to a market price and you cancel it before they can actually be carried out or filled. what the prosecutors say is that

he was using regular retail software to do this and, at one point, actually contacted the company who made the software to have it modified so they could be automatically canceled and being given the code so he could work on the software. it is illegal trading that they prosecutors allege that he was using for five years. >> thank you so much. >> i want to take few to paris. we have been getting news from the interior minister in paris talking about the arrest of a student who has been made -- an arrest that has been made. let's get the details. what doing no? mark: -- what do we know?

mark: the terrorist attack has been thwarted and the suspect is algerian. that is what we have at this stage. churches may have been targeted according to papers found and, he wanted to travel to syria. this is in the context of attacks earlier this year and it is certainly making headlines. francine: we understand and arsenal was discovered on sunday and, you mentioned the attacks. how much security have we had? how much has it been stepped up since the charlie hebdo attacks? >> this will put people back on edge and things had certainly combed down in the months since

january. you know the french authorities remain on alert and there is a police presence in paris with us definitely off of the highs that one felt in january. the authorities are still very much on alert. guy: thanks. we will continue our reporting and bring you details as we get it. there is more breaking news and i expect more as it progresses. francine: we have more to talk about.

francine: welcome back. guy: we are expecting a big number and we got one. caroline: it has been difficult for tesco. there is the understatement. the 96 year history was even bigger. there was the excess of the six alien pounds -- 6 billion pounds

loss. there is also commercial income that they are having to reverse. there is a profit black hole that they recognized. dave lewis came to the helm and we also admitted to the pension deficit and the debt load. they cut the junk and it was no longer investment-grade. you see earnings come away and assets and asset values being pushed back down. there are clearly few silver linings in the numbers. customers are buying more and you are getting increasing transactions and volumes. that is not increasing volume

and he says the market is challenging. let's take a look at what progresses. there is improved pricing and cutting of pricing of goods. the deficit i mentioned before they are looking to fill that. the unit they say, the negotiation, it is all about the analytics and it is advanced. we knew that in january and you said you might be selling the asset. what about the tangible assets and the money they could be bringing in? it is ongoing. they may be selling banking assets. many are looking at that today.

there is positive news for leadership. matt will be taking up the role of chief executive and drastic dave has been important and he has done a lot. he has been hit with a barrage of negative views. there is a quarter million a year that he promised and they say that they have found it and they are seeing more cost-saving opportunities. that is putting a bit of a hit in the medium-term. in the longer-term a moves the pension scheme with a defined contribution scheme. there is no dividend.

this is a man who has done a lot. they do feel he is being drastic and this is kitchen-sinking the situation. they need to build the clean slate from here. is the improvement going to reap rewards in a few months? back to you. >> thank you very much. caroline hyde is setting up tesco for us. francine: look at the loss and it is gigantic. the share price is going up. the analysts are giving this time to work. >> absolutely. that is the interesting story. it is making headlines. what are they going to do?

that is the interesting thing. his focus on the u.k. is the most fascinating story. everyone is talking about what he is going to do with the business. he is really going to grow it. he is focusing enormously on stores and customers. we have already seen his upward turns and the reason that is happening is because of the focus on the customer. he is starting to reduce prices and about 49 p prevents trouble -- per vegetable. he is consolidating the brands and making some suppliers unhappy. he may be does not have 10 choices on bread. he has three and it offers clarity.

>> that is what we need. guy: what is the tesco brand synonymous with? >> used to be synonymous with value. it is a business that knows what it means to offer a brand that consumers can trust. they have started to do interesting things and have reduced the sugar content in energy drinks to embark on a health and wellness strategy. they have started to put more senior people in stores and there is rumors that he may do things that are variable. these kind of things bring back trust.

once he starts to roll out the strategies, it is good for the consumer. francine: he is doing things from the ground up. we are talking 2-3 years, if not longer. >> i agree. i think they will do it. there is confidence between the ceo and the people he is putting in place around the globe. the strategy is clear. he is holding back, in terms of what he is going to do. that is part of his strategy. i think they will be back in front and it will be a great time for the consumer. they will regain it within five years. guy: what does he need to sell?

>> a needs to think carefully about his business. that is where the intelligence is coming from. i do not know, one of the things he could look at is the coffee shops and restaurant chains. that lifestyle is not appealing. we want something more dynamic. i think he will sell out some space. i think he will sell some big development plans. >> i think he should. >> he is the right man for the job.

guy: rolls-royce names east as the executive. breaking out of a jet engine business. he was the chipmaker of holdings. francine: a derivative loss. operating profits behind a luxury brand. guy: yahoo! had a disappointing report. at the same time, the revenue expanded and yahoo! is exploring the options in the japanese

division. >> could a simple adding -- addition to your coffee make you bulletproof? guy: will you put butter in your coffee? we will show you a package that will make you change your mind.

>> the rate is the same five years forward. it is between 200 basis points lower. does that equal quality? yes. u.s. treasuries are a whale of a buy. the best bet is to sell it. francine: that was the bond manager saying that they are short. guy: it is longer than you can stay solvent. the country remains locked in this. >> i think greece will stay in.

it is not a on united fiscal community. it is a monetary community that wants coherence. francine: our athens reporter is in town and with us is the director of investments. thank you for joining us. let's start with him being more confident on progress. is this just talk? >> we are approaching agreement. even if we get the agreement, will the parliament vote for it?

>> there is the possibility of something serious happening here and you think that is increasingly likely. >> the big point for me is that there is an extension of the deadline's and they continue to get government reserves. there are bonds being used and i think the bigger point is, as you say, the short-term measures and institutions are increasingly impatient. i think greece really has too much debt and too little growth. francine: does that mean default

or exit? >> markets have been short on greece. for risk assets, the model scenario is the better one. it is a good outcome for greece and the outcome would increase the risk. now, i think a cyprus-type scenario looks, to us, increasingly likely. capital controls. i do not see how we find a way out of this. we are expecting big news on friday. guy: a quick question are they likely to be successful?

>> they will move forward. i do not know if they will be successful. it will meet pensions. guy: thank you very much. we will take a break.

francine: welcome back to "the pulse" live from bloomberg's european headquarters in london. we have the asset purchase rate. we have some interesting notes of the divergence of where they see future rates going. guy: there's two members saying the decision finally balanced. range of views on the future, all mpc members agreed the next rate move likely to be an

increase, which is interesting. they talked a while ago in a speech about being balanced with the risk of a move to the downside as large as the risk for a move to the upside. maybe a slight difference of opinions internally. if you would think about the recent speeches that have been delivered, i'd say this is slightly more hawkish at the edge than we've seen previously. francine: this is also an important announcement. it is the last time we really hear from mark carney until the u.k. elections. that is on may 7. let's check on the pound. guy: disorderly outcome on greece. there is a risk. decline of u.s. activity. maybe temporary. they are running through a range of risks. i think the headline is that the

next move is up. francine: we are back with maja. when you look at what has just been released, first of all what is your take overall? is it a little more hawkish than we thought? >> based on your comments, yes. 9-0 is what the markets were expecting, but yes, judging from your comments, it was. guy: my interpretation. i remember saying the decision was finally balanced. i'm assuming they all think -- they are all saying the next move is a hike and two of them are saying it is finally balanced. it could have been a 7-2. anyway, when you look at the way the markets are pricing in risk in the u.k. at the moment, there has been a move in sterling, but not much else.

maya: i think if we look at short dated volatiles relative to longer dated volatiles, you could argue something is being priced by way of political risk. sterling, u.k. equities, and gilts. i think perhaps that is right. the polls seem to point to a hung parliament. election looks very uncertain. it is not clear how that affects the economics on the fiscal dynamics, which therefore underpin what is happening with gilts. francine: are we going to see more pound weakness in the run-up to the election? is it going to go steadily down? maya: i think it is too close to call, to be frank. cable has been moving very

closely. inasmuch as one gets a move higher in u.k. rates, that could support the reverse. i think the bigger picture for the u.k. is one of good growth. we are looking at 2% real growth this year. fairly constructive growth. for things like equity markets, that could be quite supportive. it is what is happening -- [indiscernible] when we start thinking about how the politics of at -- guy: if there was a loser fiscal policy, would monetary policy need to be tighter? maya: i'm not sure. i guess it would depend on what

sort of this goal policy you had -- fiscal loosening you had. frankly, i think markets are talking about it and thinking about it. i think the economics actually couldn't be more different. we were dealing with a collapse. it is very different. francine: thank you so much for all that insight. guy: let me run you through some of the other bloomberg top stories. tesco has reported the biggest annual loss in its history. the supermarket saw a loss of 4.7 billion pounds. francine: futures traders from

west london have been arrested and charged in the u.s. with 22 criminal counts related to the crash. he is due to appear today at westminster courts. the crash wuoiped $1 trillion from the u.s. market. guy: the greek finance minister says that greece and its creditors are narrowing their differences. his comments come after prime minister tsipras ordered local governments to transfer funds to the central bank. the estimated 1.5 billion euro transfer could give the government enough cash to stay afloat until the end of may. francine: roche reports and earnings beat on new medicines sales and the drug industry's biggest take over this year. there has been an unsolicited bid for the company. we broke that story yesterday. guy: let's get more on the deal

from bloomberg and televisions -- bloomberg intelligence. walk us through the industrial logic in this acquisition. >> good morning. basically, they have a product they are selling around $3 billion, relative to their $15 billion top line. what they have to work out is how to deal with that patent expiring. if there is not a strategic move internally, to protect against the future generic attack, that only goes so far. i think what they are trying to do here is protect their earnings growth. the mylan deal provides that. francine: it seems that -- are they looking for more money? >> no company in their right mind would say yes on the first approach. if you look at the valuation that the deal would be at it

suggests that it shouldn't be hard for teva to push that price up. how far they will go will depend on the accretion they are looking for on the earnings front. on the valuation front, they could push it up. they could go up to $90. that is possible. it certainly has got to be an opening salvo rather than a final price. guy: let's go to switzerland. let's talk about roche. sam: that is their business. a large percentage of russia's sales come from oncology drugs. this was a pretty nice beat. 11.8 billion swiss francs versus 11.5 consensus. it was from the products that we are looking for them to be growing strongly. pro jenna is the key drug for

breast cancer. it is one of the defense mechanisms we talked about before to enable them to stand up to similar threats. this seems to be going well for them. they basically came up with a 5% earnings growth in first quarter. the full-year they are talking about low to mid single digits. this seems to be at the upper end of that. is it possible they've been raising their targets going forward, or is there something we need to look at as to why they will not be able to match that growth in the first quarter? something to look at. francine: sam, thank you so much. guy: coming up, from sushi restaurants top hospitality to fitness. we will speak to the man behind britain's yellow empire. ♪

francine: welcome back to "the pulse." guy: how far can you stretch a brand? to what extent does the u.k. business climate help it grow? we are joined by the founder of the yo yo brand -- the yo brand. he joins us now. very nice to see you. we need to talk about u.k. politics, about what is happening in your business world. let's start with the u.k.

politics. how confident did you feel operating in this country continuing to grow your business with the possible changes that we see in front of us? >> the u.k. is a good place to do business. it is an even better place to do business if it is stable over a long time. i was in -- tony blair, i was a big supporter. i did political broadcasts. i said that britain holds the creative jewel for the world in a way. i don't think that's changed. i come from -- not that i come from the homeland of either one, but i believe in running a country like a business. that's why i've changed sides.

i would vote for labour a again if i thought they were the right people at the right moment. francine: so why are the people at the helm of labour not right? do you not think they will change their course if they get into power? simon: we've had four years. we are doing well. why change? it is no more complex than that. when we've got up to the next level, as you build a business and i've built them from nothing, you goes through these phases. we are not at that stable place yet. we are having a good recovery. when we are there -- the big difference for me is that you hear ed miliband banging on about a fair society. i am behind him on that. to have stability in this world for businesses we need to do it rather like america does. you get that feeling that

everybody is behind america being successful. here, we still live in that old world. to some extent, they are, but i do believe the conservatives all the politicians want that. even though my mom says it was a better world in the old days, it is a better world today. guy: what is it about ed miliband that you think will be destructive towards the current business environment? francine: that is a strong statement. i think you want to continue building it. i don't think he's got the track record. i don't have confidence in him doing that. if you say, let's sort the workers out first, that is the wrong way to do it. guy: is it more regulation? simon: it is not even those details. you can argue each one of those from both sides. in this world, everybody who comes on this program has got an absolute view. i could argue most things from

both sides actually. it is just the sense that we've got somebody, a company, a party in power. francine: give us a sense, it is not a policy problem -- simon: i don't believe the policies today are that different. francine: so it is image? are you concerned about entrepreneurship being held back? simon: there's one word in this world for business. it encompasses so many different things. don't ask me about big business. my patch is small entrepreneurs. francine: that word. simon: it is a good word, isn't it. we live in an entrepreneurial age. we want less red tape. we want to be flexible. right now, we are. we are more flexible than any country in europe.

that is what we need to do. more of the same for the next four years is what i'd like to say. guy: if you had the choice to vote in or out on an eu referendum, which way would you go? simon: i have no idea. none of us know. if we came out of the european union as this entrepreneurial country, we might have an enormous win. i could imagine the board meetings. we could have an enormous win. we could do very well on currency. we could be free to move and go where we want unregulated. it could be kind of a disaster. either way, if you look at our history, we are going to do well. i hate to say this, but it doesn't really matter. francine: do you think we should put it to a referendum? simon: why not? what i do believe is that in 20 50, 100 years, we will be

clicking on the internet on all sorts of issues. it is just the tip of the iceberg. the referendum is taking the temperature. politicians say, what is the temperature? you can find out. just click and tell the government what we think. francine: we have to follow through. it is not only taking the temperature. simon: you won't get that answer from me. i'm so big picture. i like to look at what is going to happen in the long-term future and try to learn from where we might be going. i'm a believer in having leaders who know what they are doing. we try to trip them up, i'm afraid. no wonder good people don't go into politics. guy: its not like you want to go into politics. francine: you should. simon: i've never said this before, but i'd love to go into politics. why would i be so stupid?

i get kicked by you guys, by everybody. it is like the roman political world. francine: it would be worth it. you seem like someone who is genuinely interested. if you were to go into politics what would you do? francine: i am. i'm here. -- simon: i am. i'm here. i'm 63, and my parents were 84 so i've got 20 more years. i would like to in venture in that the bomb. one of the moment, this coalition business is that maybe there is some kind of choice. i always had this fantasy we like iceland which only has 600,000 people but there are no political parties. i would like to see -- we talk about who's going to get in, but we don't talk about how a good coalition could work. how could you have a group of

people who weren't at each other and were working to make the country better? that would be interesting. guy: do you think we have the wrong political system? simon: i don't think it is wrong. where we are is where we need to be. but in time, it will change. in the 17th, 18th 19th century political system, it needs to morph into a modern one. we will be clicking on the internet for a lot of things. we will be run by good managers who will be support. francine: i'm italian. we are used to coalitions. that is a disaster. a lot of governments don't survive. what do you foresee? coalitions don't really work if they are too big. you don't pass any structural reforms. simon: you can say that, but what i've learned from business just because something hasn't worked before, if you approach

it again, you approach it a different way. you find a way past the stonewall. suddenly, you are in a world where things work. it is a lot to do with the atmosphere. if we could change that prime minister's question time so that the constant thing wasn't there. how do we work to make this a better country? how do we not have this tension of the competition of political parties? the worse it gets, the more i say, bring it on. the closer we are to change. guy: the biggest economic problem we seem to face is productivity. how productive are the guys who work for you? how would you make them more productive? simon: i don't run any of our business is on a day-to-day anymore. with in all the yo businesses everybody who is there one study there for the most part. it is a very flat decision-making process.

i can't explain how that happens. maybe i have a little credit. there is a culture. it is a great place to work. people are proud of it. that is not the magical thing in the board room. that grows over time. even in bloomberg, you get the feeling that here's a group of people wanting to do something really great. did i answer the question? guy: everybody talks about the fact that if you want to solve economic issues, you've got to improve productivity. simon: right back to ed miliband. you need to have a culture where there is a sense that you share out the success proportionally to what the contribution is. we come from a world that i grew up in, i was working in an umbrella factory and i used to read "the daily mirror" on the loo. that is what you did. americans say, we are going to

make this a great country. it is a long time to change it but i think we do need to do that. francine: on that great message, there you go. simon, thank you so much. simon woodroffe. guy: we are going to take a break. ♪

guy: welcome back.

for our viewers, it is a second hour of this program, "the pulse ." francine: we will talk tech with the dropbox chief operating officer. we will also talk coffee. we will tell you about a man who says a bit of butter in your morning joe could help. guy: basically, change your coffee, change your life or the way you make your coffee. there are a few ingredients that go into this cup of morning coffee that are different from the regular cup of coffee. apparently it makes you invincible. francine: then we will talk about the pound also. we saw those minutes coming out. and then, france. the tax -- attacks on churches in paris. we heard the french interior minister a little earlier. we will bring any new updates. guy: we will do all of that. some pretty serious subjects.

i want to wrap things up with our twitter question of the day, taking it back to the coffee. would you put butter in your coffee? let us know what you think. ♪ . .

francine: the man who may have helped to bring down dow. charged with 22 criminal counts. we're live outside his house as he prepares to appear in court. guy: we're going to talk about the c.e.o.'s turnaround plan. francine: we'll speak to the chief operating officer about their expansion into the u.k. and europe. guy: good morning to our viewers in europe.

good evening to those in asia. a warm welcome to those just waking up in the united states. i'm guy johnson. francine: i'm francine lacqua. today we have a great show. we'll be talking butter in your coffee and about more serious things. we'll be talking about the pound and the futures trader possibly gone rogue and we'll talking about some possible french attacks that have been thwarted as well. guy: let's start off in london where a trader has been charged in the u.s. relating to the 2010 flash crash. he is due to appear in court today in london. ryan chilcote is outside his home. ryan, set the seen for us. where is it? planes flying overhead. what is going on? why are you there?

ryan: we are in west london right underneath the flight path at heathrow airport. the u.s. alleged a sole trader nearly brought down global markets and at least for a moment, for the flash there, that is why it is called a flash crash brought down the dow jones by a total of 1,000 points. so this is where he was operating according to a u.s. after david that was unsealed yesterday -- after david. they said he was engaged in illegal trading. march 6 2010 the day of the flash crash he placed 19,000 trades betting a total of $200 million. one out of every five trades with a sell at the end of it and he was permanently responsible for it according to the prosecutors. and that the prosecutors said

led to him illegally gaining profit on one day. they sate actually began this 2009 when he started trading like that through 2014 and he gained about $40 million. he is now in an extradition hearing. that is supposed to start about 10 miles from here and a judge will decide whether he should be extradited to the united states. francine: when are we expecting that decision to be made? it takes usually a couple of weeks or months. could it be actually years? ryan: i don't know the answer to that. it is entirely possible that it will take more than just today. you would not be surprised if the judge wanted the defense to

have an opportunity to prepare some kind of case. clearly the prosecutors have been working on this for a very long time. and the nature of the case is very, very complicated . they say he was engaged in something called spoofing and layering which is where you place a bid without the intention of actually filling it and then you cancel it before that can happen. you do it in very large numbers. each time making a very little bit of money. sort of tethering your bid price or your trade price, trade offering price to the market paste price. just a few ticks off of it. so that the trade never gets filled. he will likely maintain this is what a lot high frequency traders, high frequency geeks as he said in some of his conversations according to the aft would do in any case.

we'll have to see. that hearing getting underway just now. guy: ryan, thank you very much indeed. let's carry on the conversation not specifically related to this but more generally. on a sort of very big picture, does it worry you that a man in a house -- underneath the heathrow flight path can do so much damage? >> it doesn't surprise me. cybercrime is a growing threat globally. it can be that -- undetected for a very long period of time. it needs some software. it needs some equipment. it doesn't need a big infrastructure. whether it is heathrow, it could be anywhere. francine: we don't want to spend too much time on that because we

have so much to talk about asset bubbles. the image over the financial people, that had repercussions on the u.k. election or the way that regular slation treated? >> i think they will change their minds on who they are going to vote for next week because they discovered a potential criminal in their midst. guy: to the point about regulation, one of the big issues for financial services in this country is the threat of greater regulation. the more we see headlines like this, it is not helpful, is it? >> you do it looking backwards. of course you're going to get people saying we tightened this and put this defense -- back to the point about the crime. it can go undetected an averpbl for 200 days. the systems are getting -- signatures can be forged. to fight back you need to be

proactive and to really invest. this is a really serious issue tr corporations beyond the financial sector. it really is. francine: keep it there. we have to talk about china and the u.k. elections. guy: the other big story of the morning, tesco reported the biggest loss in almost a century. caroline hyde here to break down the numbers. an even bigger number than we expected. it seems tesco started selling kitchen sinks. caroline: they have kitchen things. that is exactly what the word is. i think the numbers are phenomenal. we get a quote from dave lewis, their chief executive. it has been a difficult year for tesco. understatement of the year. excess of 6 billion pounds lost,

biggest their history. this includes property write-downs. we're expecting them but they are bigger than had been expected. goodwill charges, stock charges, restructuring charges and even commercial income being revised from the previous year. that profit black hole that came onboard the minute lewis took the helm. that is haunting him. still we're seeing companies, same as b.p. and deutschea, lufftansa. -- luff transa. benefit theme, a contribution benefit scheme. they are having to pump a quarter of a billion pounds per year into this to try to shrink the deficit. this is a company that was cut to junk status. no longer investment grade at standard and poor's and moody's.

this is a problem for tesco. they are saying they are selling more to commerce. transactions are up. volumes are up. value is still a problem. also where are we going in terms of asset sales? many expect aed we would start to see a shoring up of the balance sheet. we would hear more on what might be disposed of. this could be worth 2 billion pounds. this in january was under surveillance looked at to be sold. that's not what people were expecting to be told. what about the asian assets many thought would be up for grabs? what about tesco bank? we still have going to have to wait and see as to whether they see assets will be cashed in on

or whether that will help the bank balance of tesco. matt davies, the chief executive will start earlier than had previously been thought. he is coming onboard to push through these changes. they are getting more customers in their stores. we are starting to see this work. you have to hand it to dave lewis, since he has come, he has promised savings of a quarter billion per year. he is saying he can outstrip that and find 150 million more than that. 43 strorse being closed. this will hit immediately but in the long-term this will give them savings. they are also closing that pension scheme. he has taken on a lot so far dave lewis. the silver lining is more people are going into the stores. the numbers are improving. they are outperforming the rest of the market. the standout retailer they say

for the first quarter. have to wait for the first quarter numbers to see if that is working. back to you. francine: thank you, caroline hyde. guy: hung on to the data an litics company as well. that is a big area she thought they could focus on. let's get back to you and cameron from blackrock. let's talk about the u.k.. every little bit helps. it looks like we're heading into a hung parliament. what's your read of the story? >> the real election starts on may 8. i think it is pretty clear that the manifestos are preinsurgency curse ofs to that negotiation. i think that despite what they say in public, they have known for a long time there is going

to have to be deals done. i think we're headed towards that. francine: what does it mean for equities? >> it is playing out in currencies because it is unclear what the lineup is going to be after the election. there are materially different outcomes for certain stocks. not just the lineup. but the strength of that lineup the majority, the priorities in terms of what comes along. the currency has been taking it because the two outcomes conservative-led coalition or a labor-led minority government both have rather disturbing, potentially disturbing consequences for currency. the conservative side, the leadup to the referendum and the labour because the agenda of the s&p ultimately is

separative. -- separatism. guy: is there a better -- for the markets? if you were going to picket, what would it be? >> i think the best outcome is going to be a minority. one of the two parties, major parties leaving a mixed coalition. coalition probably rather than minority. one where special interests are just about -- we get very little government over the next few years in some ways could be something of a blessing. francine: all right. thank you so much. you will stay with us and we will be talking about asset bubbles next. guy: coming up does a simple addition to your morning coffee make you invincible? francine: that brings us to today's twitter question. would you put butter in your coffee? we have had some great responses. the italians say my espresso is

too small. i dispute that m i'm i tal ian. tweet us at guyjohnsontv and flacqua. ♪

>> five years forward in both germany and the u.s.

the yield difference between those two securities is about 200 basis points lower for germany as well. equaled quality. yes. but 200 basis points lower in germany. what does that say? it says u.s. treasuries are a whale of a buy or u.s. german bonds are a whale of a short. sell the fwuneds buy the treasury. francine: welcome back to "the pulse". that was bill gross. he said the 10-year german buned is the short of the lifetime. the only question is timing. that little thing called timing. guy: con assumption to jump 2%. 1.2 in 2016. a 2015 number. 2016 economic growth at 1.8.

2015 i'm trying to find an economic growth number. last time around 1.5. the germans are upping their expectations when it comes to economic growth. maybe the bond story has a little bit more behind it. francine: yeah it does. it is also a greek story. they may have bought six weeks of time. the e.c.b. is finding ways to limit liquidity steens the greek financial system. guy: we have a haret of deadlines but the new one is now end of june. that is how much time the greeks have bought themselves, yeah? hans: that will be reviewed later on today. we expect a conference call.

they will decide whether or not they want to increase e.o., a. and by what amount. what is interesting to me about the german numbers that just crossed, more economic growth for 2015, expected at 1.8% opposed to the 1.5. for the last weeks we have had soft numbers coming out of germany. showing a little bit of fears of contraction. maybe slowing down. if you're looking, if you were looking rather for slower economic growth in jemny to force the jer -- germany to force the germans to the concession table to make negotiations over greece, you didn't get it from today's numbers. the fact that germany feels more confident, that is only going to bolster the finance minister on his course and not give him much of an incentive to give in to the greeks 3. -- greeks. guy: let's get back to blackrock. picking up on what mr. gross was

saying we will. is the bond a short of a lifetime? >> it depends on how long you live. let's goat the bottom of this quite quickly. quantitative easing confiscates high quality bonds from the private market. you get cash back in return. you know, you still have liabilities. you're going to get a chase duration, that long -- you're going to chase it somewhere else. then you tour the other assets. there are plenty of investors who have to buy this stuff irrespective of price. life insurance. they roll over. existing portfolios. foreign exchange reserve management funds as they roll over. driven by regulation irspebtive of price. plenty of people also driven by regulation have some prines

sensitivity and the third group along for the ride. if you look at this globally there are several trillion dollars of excess demand over supply that is purely dictated over regulation over current supply. that is not to say that the bond eight or 10 basis points is a short as bill gross says. you need to get to the on the other hand that process. if you take them at their word, if you listen to what the fed is saying pushing out towards the end of the year, it is good for another year. francine: what is your favorite plan -- very quickly? >> i think japanese equity still, by a long way. great recovery story. companies starting to buy back their shares. increased dividends. production starting to return to japan. very low valuations. francine: thank you very much.

guy: coming up on the show, we're going to think outside the box and talk to dropbox's c.e.o. when we come back. ♪

francine: welcome back an hour. the french police have stopped an attack on a church in paris. caroline give us the details that we know so far. caroline: so what we know so far is the suspect is a 24-year-old

from algeria. he was probably planning at least one or two terrorist attacks on two churches. he was the suspect in the merger of -- that you can see on this picture. the 32-year-old woman who was killed his car in the south of paris. they spoke this morning and explained a little bit about how the suspect was found. basically he called the emergency services because he had some gunshot wounds and the police -- please listen to the morning on italy. >> on sunday morning in paris in the 13th district, the police found in the vehicle and at the home of an individual with

gunshot wounds an arsenal of weapons, ammunition, bullet proof jackets and i.t. hardware showing without a doubt that the suspect was planning an iminnocent attack against one or two shots. -- imminent attack against one or two shots. >> so the suspect was already followed by the police. he had been checked twice in 2014 last year and this year. of course it is a very sensitive matter since the charlie hebdo attack in january, just three months ago. france has already thwarted at least six terrorist attacks in the past two months the internal minister has canceled his trip to greece tomorrow. we'll know more in the next few hours where we will hear from the police later today. back to you. francine: thank you. we'll bring you the latest

developments out of france. guy: you can follow us on twitter. i'm at guyjohnson tv. francine is at flacqua. we'll be back in a couple of minutes. ♪

francine: welcome back to "the pulse" live from bloomberg's european headquarters in london. i'm francine lacqua. guy: i'm guy johnson. these are the bloomberg top headlines. francine: tesco has reported its biggest loss in its history. they took 7 billion pounds in a one-time charge including a 4.7 billion pound write-down on the valuor its stores. it is not great. bottom line, it is not great. just have to rebuild the trust

of its customers. guy: the trade -- the trader from west london is appearing at an extradition hearing this hour in london. the flash crash wiped a artillery yoon dollars from the u.s. market on may 6, 2010. francine: the finance minister said greece and its creditors are nair owing their differences. comments come after prime minister -- to transfer funds from the central funds to give the government enough cash to stay afloat until the on the other hand may. guy: what's going on? jonathan ferro has details. jonathan: 20,000.s if tr first time in 15 years. we open higher here in europe. everything rolled over. this is sort of broad based. losses on the ibex sand spain

over. grexit risk back on the table. we seem to talk about it every day. sounding more optimistic. they think the difference between the creditors is nair owing. -- narrowing. the yield on the 10-year, 13.44%. here is the story, though. as it kicks off in greece, look at the advantage germ gets. a yield on the 10-year, nine basis points. it was half of that last week. just five basis points. why do i say this is an advantage? because this morning they rose their forecast for growth. 1.8% this year from 1.5% previously. typically when you raise your forecast for growth, inflation expectations, growth expectations gain traction and

yields should go lower higher rather. but in germany they are going lower. why? the mess in europe. the q.e. . does germany need that q.e. ? probably not but they get to take advantage of it. yields in germany remain near record lows. 1.5045. that's how much a pound buys you. maybe a touch of hawkishness coming into the bank of england minutes. if you compare it to the chief economist saying it is balanced and we can go lower on rates than go higher. you look at those minutes, the risk of inflation picking up quicker than expected, that sounds more hawkish and the pound strengthens against the dollar. francine: thank you. youen, we talked about your favorite play. -- ewen, we talked about some of

the sectors that you would be watching out for. if greece were to default, what happens to the euro the next day? rry suspect that the euro would actually strengthen because you have some kind of outcome as c.p.r.. -- outcome as it were. not very much. membership of the euro. its value as a single currency begins to decline. the greeks have reached the stage of turning over the piggy bank and shaking it to see if there are any coins left. they have a domestic political constituency which they really have to deal. i don't think the greek parliament is going to sign up to anything material until as it were the last minutes of the last hour.

this is going to go to wire. any reasonable nonpolitical judgment greece is bust. then let's think about if greece did go out and had a deep recession. how many hundreds of thousands of greeks would -- the rest of europe using their freedom of movement rights 12346 they would still be members of the european union. what political pressure would that bring on to itly which is already seeing a refugee crisis? guy: a refugee crisis out of greece. i don't know what rule is, if you have to leave the e.u. we're going to end up with a lot of legal arguing. can you default inside the your ozone? -- euro-zone. >> a form of capital controls. a greek euro and the rest of the

euro. they are not taking their money out of the country but out of banks. the euro will make the currency of value. in greece. this is unchartered territory. francine: thank you so much. global chief investment at blackrock. guy: we have been talking about it all morning. we're going to talk about putting butter in your coffee. hang with us on this one. a former it can executive said he discovered a new concoction that could make you invincible. francine: it is buttered coffee. we take a look at the mixture and whether the cocktail stacks up to its claims. >> our biology changes in response to the environment

around us in ways that are not ok to us. when you change the environment around you or inside you, you can have results in how you perform and just the quality of your life. i made it my mission to make the changes in the environment around me that make me more effective at everything i do. i'm a professional biohacker. i'm a creator of bulletproof coffee. bulletproof has always been about identifying and taking advantage of every single thing that makes people perform better. when you make it, you just don't care about food. no cravings or hunger for 46 hours. you feel a mental clarity you probably haven't felt in years. i used to weigh 300 pounds. i was having some serious cognitive problems in my 20's. my career was taking off. i had bad health to be perfectly honest. even though i was exercise and

eating a low fat diet, i was frustrated. i made it my mission to hack this problem. i decided to put my full resources and effort into upgrading myself. part of this was a trip to ticket. i went to a very -- tibet. i went to a remote area. 10 degrees below zero. you can expect to feel like a zombie. a tibetan woman handed me a mug of yak tea. i was amazed at how good i felt. when i came back to the states i said i want to recreate that feeling. i looked at all the different types of tea and realized coffee worked way better than tea for creating the state of clarity that i was seeking. different types of coffee have a different effect on how you feel. when i isolated -- toxins on the

primary jitter in coffee i did testing to find the coffee that didn't cause jitters or that cranky coffee feeling. it is blended with grass fed butter instead of milk. now for the secret ingredient, brain octane oil. brain octane oil is about 6% of the fat in coconut oil. the performance benefits are so noticeable, the lack of sugar cravings just turns on right away. we have hot coffee. what it tastes like is the best latte you have ever had. you drink it and then five to 10 minutes later, i feel more like myself. two hours later, i didn't even want to eat the bagel that was in the conference room. the doughnuts lost their fire and song for me.

the really strong cravings for food just go away. that is the amazing thing. that is the secret of why it is so popular. because it works. things that make us better humans are what i'm interested in. my mission with bulletproof is to show people what it feels like to be stronger and to have the energy and bring its every day. coffee is just the beginning. guy: it kind of has the slight vibe of an infomercial. chris: it raises francine: it raises some questions. why do we want to be invincible

in the first place? guy: i can think of a few reasons. francine: also, do i want to try it? yes, please. guy: particularly for us that get up early in the morning. francine: this resembles a drink in sing pour one of our producers said. guy: not salted butter. francine: i would try the salted one. that is just me. would you put butter in your coffee? when you look at the story, is it a story of are we under too much pressure or is it actually -- guy: i think it is just making starbucks more complicated. have a low fat -- i'll have the -- very complicated. it is not for me. i notice you're drinking tea and not coffee, francine.

>> standing at the bar, will he want a little butter in it? francine: the italians say my coffee is too small i can't put butter in it. great to have you on the program. it has been fun. thank you so much. guy: coming up next, we're going to talk about the business of cloud computing with the c.e.o. of dropbox. find out how successful the push has been for his business when we come back. ♪

francine: welcome back to "the pulse" live from london on bloomberg tv. guy: let's talk about cloud computing. our next guest thinks the u.k. is onor those cloud friendly countries. he sees his business growing faster here than in the united states. the dropbox c.e.o. dennis: i understand. francine: another obsession entirely. dennis: and buttered coffee. guy: why do you think the u.k. is growing faster than the u.s.? dennis: one in four british people use dropbox, which is amazing. they aring it for business. people are seeking ways to improve their perm productivity and work productivity.

there were some reports that said that productivity had fallen not just in the u.k. but globally for three years in a row. part of that is because all of this old technology like word processors and spread sheets were built to improve individual productive fifment now there is a whole set of software including dropbox that is focused on improving group productivity and work productivity. that is why british people are moving to companies like dropbox. francine: it is something that we talk about often on the program. when you mention one in four, this must be a group of c.e.o.s that say to their staff you should be using this to be more productive it is not an individual that decides to use it. dennis: over 300 million people use it around the world. over 120 million people. they are finding the dropbox solves problems for them at home like sharing photos or editing documents. they of course go to work and run into a sharing problem or

collaboration problem. they are working on a large video file. they are collaborating around a large design document. the technology that the i.t. department is providing is just not solving those problems. they say i use it at hope. i'm going to trite at work. that's how we -- try it at work. that's how we have been able to get to 100,000 paying businesses around the world. francine: issues that you have, larger companies, one which you used to work for, google sitting up and seeing it and going we can do it too. how do you fend off the competition particularly the larger rivals who are offering google drive and apple storage? dennis: they see the same global that you want dop box saw years ago. there are over 3 billion people connected to the internet now. all of the information that used to reside on hard drives in the next 10 years is all going to go

crowd. of course the big guys are coming in a bit late. we pioneered the market. people just love the product. guy: it would be a horrible place to do business. we have regular lators over here that hate big u.s. tech companies. we want to know who owns it. what do you make of this as an operating -- from a regular point of view and do you worry that the regulatory story is going to -- dennis: i have lived in london for four years and worked in technology from russia to the u.k. and south africa. i think it is a great place to do business. i think the challenge is that europe has around improving the productivity of companies are perfectly suited for dropbox and what we can do for businesses. there is a very large small business population across europe. most people work for companies with under 10 employees. solutions like dropbox really can help them. guy: where is the data stored?

when i upload my information from europe, where does it go? is it stored over here? back to the issue of regulation what -- as a u.s. company do you see happening over here? dennis: your data is currently stored in the u.s. we take the privacy and security of that information very seriously. we have team of engineers that are just focused on security engineering. making sure the data is available throughout the world at the blink of an eye. i think when it comes to regulation our approach is, has been and will be to work with regulators understand their perspective and figure out a path that makes sense for the legitimate needs of countries as well as for users. francine: are you concerned about a takeover? are you concerned that you'll be bought up? what is the next step for dropbox? dennis: we don't really talk about it.

we are focused on growing the business and building out our teams and customer base. we have among the 100,000 businesses i mentioned companies like channel 4 which are using us for video editing and so forth. we have companies like pipers which is redesigning london, doing all of their design work on drop wocks for business. we're -- dropbox for business. francine: any governments using you? any public institutions? dennis: some parts of government are using us. a lot of educational institutions. then again the problem that they are running into around collaboration, it is a universal problem. everybody on the planet can collaborate better around large files and information and that is what we do. francine: in terms of partnerships, there is something already in place with microsoft. what is the next one? what kind of partnerships are

you looking for? a different service or the same service that for example with vodafone, just a different provider? dennis: they are a different provider. one is about distributing our product. vodafone is a good example. their customers are asking for dropbox to back up the information on their phone. they will provide that to all of their customers. another type is selling our product. softbank, which is the largest software distributor in japan is selling it for business to the thousands of small businesses that they already work with. then the third type is technology partnerships. you mentioned microsoft. really any software product that is involved in editing or creating large files is a potential partner or current partner for dropbox because you're going to want to store and share those files from somewhere. francine: you have an office here in the united kingdom now. you said you worked in south africa and russia. where is the talent?

where is it easiest to hire? we're heading into election. we have issues about exiting the e.u. and scotland independence, etc. does it become a worry for you in terms of hiring talent from the u.k.? dennis: because the problem we're solving is universal. we doningts think that any political -- don't think any political change is going to change the fundamental demand for our service. in terms of talent, we find tremendous talent in london and all across europe. there now has been a generation of people their 30's who have worked for technology companies like dell or intel or google who are familiar with the fast pace of growth that are required for us to continue to grow our business. so we expect that our office in london will be quite significant over time and we're pretty excited about pitcht guy: would it be -- would it

become more attractive if the u.k. left the e.u.? different tax base and easy flights to the u.s.? does ireland become more attractive? is that something you would look at beefing up? dennis: ireland is attractive now. i was there earlier this week. i think what happened, when the first wave of technology companies went into ireland, they have created this multilingual workforce that can serve all of europe. if you're interested in building a team that is selling or serving german-speaking customers, italian-speaking customers, spanish-speaking customers, ireland is a great place to be. francine: would you butter your coffee yes or no? dennis: i'm a traditionalist. i like my coffee black. guy: good man. let's talk about what we're watching for the rest of the day. we're joined fri madrid by rod

receiving -- rodrigo herrera. in terms of what we're expecting, what are we looking for? >> yes well, they are long awaited. they have not released results since august. the one thing everybody is going to be looking at is the size of the write-downs if they do any. when they put up their results in january, which were unaudited. they may have to write down about 88 billion real in asets. that was a point of contention. managements changed since then. the c.e.o. was we placed. that was the big thing everybody will be looking at. depending on that, we'll see what their income is and if there will be any dividends paid out. francine: this is not only an earnings story but a political story. because of the corruption it has threatened to take down the government with it.

depending on what you were saying and how big the how much of an impact it will have on the brazilian government? >> when the corruption happened a big chunk of it happened while the current brazilian president was chairman of petrobras. there was a link between the company and the government especially because the government controls it. it is a controlling shareholderer. the impact will be big. the head to have government parties treasury is also involved in this scandal and the corruptions scandal and is being investigated. the backlash will be huge. we're not expecting any result frs that in that sense today. this investigation is still going on. it will have a huge backlash. petrobras is a key driver for the brazilian economy. a rot of companies live off of it -- lot of companies live off

it. guy: how is it going to work? >> it is a huge doctor i think sometimes we may lose a bitor per expect oiven this. they have made the biggest two or three years ago they made the biggest corporate -- by an emerging markets company ever. it is a massive player for all investors who are seeking exposure to oil and emerging markets. they have been downgraded by fitch and moody's. one notch above junk rating. it is a big issue for everybody to see what's going to happen here. they have not issued since last year. not only have they not issued but because of the brazilian economy's weakness there haven't been any by brazilian corps since norv. francine: thank you so much. we'll be watching for petrobras and watching for gazprom.

a completely different subject. guy: that wraps things up for "the pulse". for our u.s. viewers, "surveillance" is up next. see you in a moment. ♪ . .

>> this is "bloomberg surveillance." tom: markets turn a waiting in greece's future. can they prosper with this reduced volatility? the trail of america's flash

crash of may 2010. it leads to a modest home in heathrow. and collecting the ever so rare, we consider these czar's faberge eggs. good morning, everybody. this is "bloomberg surveillance." it is wednesday, february 20 second. i'm tom. i've always, olivia sterns and brendan greeley. here is olivia. olivia: $45 billion mega merger with time warner cable. six u.s. senators, led by elizabeth warren, are asking regulators to stop the deal. a saving merger of the largest u.s. cable companies will mean fewer choices for american consumers. the justice department is urged for the deal to be blocked. and the so-called flash crash of