dennis cranny is in zurich. where going to take a break. the stock is escalating conflict and whether john kerry will have any luck. we will see you in a moment. ♪ >> good morning and welcome back to "the pulse echo" returns.erry his arrival comes as the death toll in the conflict rises sharply over the weekend. 500 in gaza. the us live in tel aviv is president of a geopolitical risk organization. we are going to see a diplomacy story over the next few days. do you expect any tangible progress to be made as a result of what the secretary of state is going to try and do here? >> thank you for having me. i don't believe we are going to see any progress at least for the next three or four days. the reason for that is there is no need for an agreement. israel has a lot of work to do in cleaning up these tunnels in the order area of the gaza strip. signs its not show any is going to budge on any of its demands and if we're looking at the original cease-fire that was offered several days ago as the basis for a new agreement, the gaps are too wide

french sprinter is looking to make his mark at next month's european athletic championships in zurich. he won silver two seasons ago in zÜrich. 9.95 seconds in may. >> i have the pleasure in being france,nts -- in paris, meeting up with this young sensation. last year was your first time going under 10 seconds. how did it feel for you? >> how did it feel? it is a goal achieved. for a long time, i tried to run under 10 seconds and i couldn't. to do it in france, that's a relief. >> what are the rest of your goals for this year -- you have the european championships, probably the biggest championships for all the european athletes this year. what are your goals in mind for that? >> my goal is to reach the european final in 200 and 100 meters. after that to be the european champion. but i will only think about that when i'm in the final. you aree believe that reaching european national records. what do you think? >> for the moment, it is true. i've got it in mind. before that, i need to beat my personal best of 9.95. after that, i want to go under 9.90. for the moment, it is a long way a

that's it from zurich. we have got a busy couple days. for the margin they are on target to deliver on the merrill lynch margin. >> a fascinating interview. angst to you and things to boris c -- thanks to you and thanks to boris collardi. the tesco chief executive steps down we look at what his departure means for the world's third-largest supermarket chain. >> welcome back to countdown. let's return to the breaking news. tesco has the departure of its chief executive phil clark. he was at the helm reinvent half years. he is going to leave on october 3 to be replaced by dave lewis. he himself 28 years at unilever. see what is it about this new guy's career that they are highlighting? it is all to do with turnaround. he is talking about the how they have international consumer experience. they talk about how he has experience in change management. they are trying to paint a picture of someone with fresh perspective who is going to make angst happen in a different way. >> he was one of the front runners. that momentum has been building to t

tell us what grabbed your attention about zurich?, our approach is is very broad-based. 2/3 of what we do are international, because they favor dividend than our country does in many cases. zurich is great example what i'm talking about. they have 6.23 yield right now. they're swiss obviously. their cash flow charactertics are great. they're a little more erratic in their cyclical growth of the dividend but that's okay, over five or six years into the future. we expect them to grow 4 or 5% in dividend. starting with a 6.2 yield, with a very steady cash flow base, these are the kind of securities we think can really be helpful in the environment we see in the next three, four, five, six, years. david: we don't want to father get about reits. epr properties is one you brought to us. this is a megaplex reit. a lot of people might suggest that megaflexes might not do so well if consumers are not buying as much. does that concern you at all, consumer purchasing power with a megaplex play. >> of course it does. risk abound in all of these

i leave you with that thought wet, awful,p, miserable zÜrich. >> i love zÜrich.of my favorite cities. >> it is wet. it is wet. >> go and have some cheese or a nice coffee around the corner. very nice. manus cranny, we are going to leave you there. enjoy yourself. manus cranny on the banking story this morning. back within a little bit later. what else have we got? insight on how conversations could impact that relationship. it is coming up next here on "the pulse." ♪ >> welcome back. bp has reported strong second-quarter results that it reported earlier. as russia's trouble mounts, few businesses have as big a stake there as the energy giants. let's try to quantify that risk. what does it actually mean? an analyst at barclays covering this business. our armse to get around exactly how this relationship is going to work or not work going forward. , it always-- rosneft had the potential to go very right or very wrong. >> good morning. bp me, the main impact for is whether rosneft can keep its dividend. ultimately, the sanctions are designed to limit access from the

to zurich now.suisse shares under pressure this morning as the bank posted its biggest quarterly loss since 2008. remember, they paid $2.6 billion to settle a u.s. tax investigation. manus cranny sat down with chief executive brady dougan and started by asking him about the size of the fine, which is enormous, actually surprised him. >> obviously this has been a very long running issue for us. these are events that happened a long time ago. we spent a lot of time fixing this business and cleaning it up and spent a lot of time actually working through the resolution. i think that was long sweep of time for an issue like this. i think we ended up -- obviously as you say, it was a very significant fine. most importantly for us is getting it behind us, something very, very important for us as a business. obviously this is our biggest litigation or regulatory problem out there. >> it is about you, your tenure at the bank. it calls you the teflon man. in other words, you as the c.e.o., you're still standi

here in zÜrich, the biggest loss of credit suisse since 2008.despite the litigation, money roles in and beats estimates. do? brady dougan will we'll talk about that shortly. >> thanks. designs are used and 95% of all mobile phones. new connected devices. i think thermostats and smart watches. are easing off as our insatiable appetite for the latest smart phone. a little bit later. >> thank you very much, caroline. european markets are opening at the moment. features are opening higher and are expected to go higher. go atpi is expected to 2%. that has been a big one. .anet yellen's concern when issue going to start lifting cpi? her third reading. everybody and in the market is talking about inflation repressed and. it can be the message that the rates stay low. the ftse is up. cac 40 is out. we will get another read. you are looking at the eye banks in spain. pain.aqs -- ipex in s the big focus for the market is probably going to be very different. u.k.could come at 1:30 time. that is u.s. inflation. the market is very sensitive. us is a man i kn

it's very zurich. you're victimizing the victim.ou're saying those that experience genocide, and a lot of the things that fareed is referring to in france and in germany. france was the vichy regime that cooperated with germany. you don't even allow them the comfort to feel victimization. you say they have internalized the hatred and they're just like the nazis themselves. it's extremely disturbing. >> social media making it easier to spread hate? >> it makes it easier to spread powerful emotions of any kind. you have a vast insymmetry of power. that asymmetry of power is visible very clearly around the world. and it naturally evokes a certain set of emotions. >> but what is the difference, fareed, between free speech which is protected here and dangerous opinion or dangerous rhetoric? we've seen people using nazi propaganda like swastikas here and abroad. >> look. >> i tend to be more of an american on these issues. i think free speech should protected and you protect precisely the speech that is offensive and worries you. in europ

the city state of monaco is number one followed by zurich and geneva in zitter land. new york ranks fourth. one in every 22 new yorkers is a millionaire. houston and san francisco are the only other american cities to make the top 20. prince george celebrated his first birthday today. the royal family put out new photos of the boy in line to be king, and mom and dad threw a party at kensington palace. great-grandma, the queen sent money-- or at least she had some made. the royal mint produced two limited edition coins to mark george's birthday. tourists with plenty of money are flocking from the far east to the northeast. what's the attraction? that's next. the #1 prescribed comes without a prescription for frequent heartburn. get complete protection. nexium level see this? it shows the pressure points on my tired, achy feet. i had no clue i was putting this kind of stress on my feet. i have flat feet. i found this out at the free dr.scholl's foot mapping center. in less than two minutes i got my foot map and my custom number. i'm a 440. i'm a 210. 340. that number ma

berlin, zurich, many areas down into the teens with a chance for some rain, possibly even some storms all the way through friday. if you have any plans to travel, be prepared to have an umbrella handy because it will be a very wet forecast for the next few days. also let's take a look at the americas. we are watching out for this cold front that is tracking its way eastward through the united states. we had some reports of some hail and some tornados into pennsylvania and ohio. and it looks like the system will continue to move eastward and the tail end of the system will be bringing the possibility of some strong to severe weather down into the central plains so be prepared for some thunderstorms into denver, oklahoma city, and also to houston. highs will be in the low 30s. drier in chicago with sunny skies. much keerl, high of 22 degrees. the eastern seaboard dealing with unstable weather pattern as well in new york, d.c., atlanta, miami all seeing a chance of thunderstorms with a high of around 31 to 32. let's wrap things up with a look at the world cup weather forecast. you can se

frankfurt hobbit at and munich and zÜrich. ub atey run a h frankfurt and munich and zÜrich.n't have the strength of natural demand into frankfurt the same way british airways does at london. >> just because it is not a big city. >> frankfurt is not a big city. 10 million is the population of greater london. not the traffic base. >> the emirates, not very popular it's. -- populace. populous. how big of a problem are the gulf carriers for list on the -- lufthansa? >> they are a big problem. they are finding these carriers coming in and competing by going the hub. behind such as into berlin. >> the kind of sneak in and cherry pick or poach the would be transfer. >> yeah. you wille in hamburger, have to transfer somewhere. if you have someone coming in from the gulf who offers you a light -- a flight through dubai, that may be better than going through frankfurt. >> v.a. is teaming up with qatar. qatar.s teaming up with >> emirates have said to simply they do not see the need to join in partnership. they can grow quite well quite happily as they are. another potentially -- a pot

with cranny is in zÜrich the details and an interview with the ceo. tell us more., i think we look at the top line numbers, they are up. that is great. and i caught up with chris wheeler. they decide to step back. equity markets and the debt are doing well. equities are the low. also balance, trading down. the gross margin on the climb coming in asai has dropped. isically, aging clients where they are seeing the big drop in activity. they go on to say this bank is becoming more dependent on asia. that is where more business came in, 90% of a business. those are the numbers when it comes to the issue, it has done that with the germans. they start wrangling with the french. it waslready mentioned not a fair bill. no relationship whatsoever with the matter in the discussions. we have been in discussions. advanced discussions about double digit. it makes noee why sense. it makes no sense to talk about was is related to germany which is a much bigger business. and also when you make the will uphill, we this decision. we do not think it is fair. >> we have inflation in t

this morning, alix steel spoke head of green bonds and zÜrich insurance.at defined green bonds? >> a bond in which the use of for a climatesed friendly agenda, mitigate climate change, if you will. there are several types of green bonds. , which you have mentioned, the road has been largest in that space. have asset backed bonds, revenue -- thatissued debt and i use to fund a project. that is really what we're talking about. standard bond a documentation, but within that there will be a special demarcation for the use of proceeds that will define the climate friendly agenda. >> which is different from an asset backed bond which is back i cash flow. your investor will take the risk of the project. in a proceeds bond, it it is the credit risk. >> why do you like them? >> green bonds is a fantastic opportunity to do well, and to generate good returns, but at the same time, doing good. having a tangible impact on the environment. let me give you an example. fundingt that the seeds --receives one thing funding, in mexico, to replace up to 2 million old and inef

smiling because he's been saying for weeks go into bonds, and mark fobber joining us by phone from zurich. ben willis, tell me what the traders believe triggered the sell-off? >> i'm concerned about the air out of the balloon and come to me. i'll try to get over that. basically you need to view this day, the last day of the month, and you're seeing asset allocation managers hitting the reset button. you're seeing gold under pressure. you're not seeing fear, you'd see more of a flight to the precious metals. liz: you're saying at the root of this is window dressing by hedge fund and mutual fund managers. >> right. i'm one of the people looking for a correction. we've been seeing it for the last month in the sector rotation and correction if you will. it started in the biotech stocks and the social media stocks and the last few days seen money come off the table with chip stocks, that was considerable money considering what happened to micron today. the market is trying to price prosperity. at 4% gdp 7/10% industry increase in the employment cost indice is a indication of good. the market i

chad, hong kong, singapore, zurich.think there would be so many african names. >> what is that city? >> a lovely city in chad. >>> severe storms threatening millions as a city cleans up. indra petersons is tracking what you need to know coming up next. s millions of us. and for many, it's a struggle to keep your a1c down. so imagine -- what if there was a new class of medicine that works differently to lower blood sugar? imagine...loving your numbers. introducing once-daily invokana®. it's the first of a new kind of prescription medicine that's used along with diet and exercise to lower blood sugar in adults with type 2 diabetes. invokana® is a once-daily pill that works around the clock to help lower a1c. here's how. the kidneys allow sugar to be absorbed back into the body. invokana® reduces the amount of sugar allowed back in and sends some sugar out through the process of urination. and while it's not for weight loss, it may help you lose some weight. invokana® can cause important side effects, including dehydration

here in zÜrich, the biggest loss of credit suisse since 2008.on, money roles in and beats estimates. do? brady dougan will we'll talk about that shortly. >> thanks. designs are used and 95% of all mobile phones. new connected devices. i think thermostats and smart watches. royalties sales

he joins us now on the phone from zurich. mr. faber, welcome back. good to have you on. >> thank you very much. >> what kind of a correction are you looking for and when? >> actually, i was looking for a correction, but now i really think that we'll make peak sometime within the next 30 to 60 days. and then go down meaningfully. >> what's meaningfully? >> well, 20% to 30%. >> 20% to 30%. so -- >> don't forget, many stocks are already down 10%. the home builders are down roughly 15%. airlines have just dropped around 10%. you have lots of individual stocks that are down 30%, 40% already. so we're not exactly in a uniformally strong market. the russell 2000 which represents 2,000 companies is down 2% for the year. >> right. >> and big deals, the s&p is up 6%, whereas the philippines, indonesia, india, thailand, vietnam are all up between 15% and 25%. >> yeah, well, from a much lower base. let me just say, i'm sure there are people listening to this, they hear the headline, the hyperbolic headline that says we're heading for a crash of some 20% to 30%.

but this guy says, ok, i am buying a business class ticket from unit to zÜrich with the full intention the plane. the only thing i want to do is go to the business lounge at the airport, eat, drink, and go home again. they used to allow access to their lounges, which can be pretty glitzy in big airports. they have a spot, massagers, and for a lounges, caviar and champagne. a ticket alone will not do. you actually have to have a boarding pass. enters the airport, the departure area, though so the lounge, eight hendrickson then cancels -- eat and drink then cancels the flight. this guy ever did it a bit. cateringow good is the in the lufthansa lounge to make this journey to the airport worth it? >> that is the funny thing. the guys from munich. if you know where the airport is located, it is not around the corner. it is going to london from heathrow. he undertook some difficulties to even get there. it is not the first-class lounge we are talking about. it is the business class. they say they have to upgrade the food and the product and invest to bring it up to standard. put more into --

manus cranny joins us from zÜrich. provisions are down.big numbers in these numbers that are particularly palatable. nevertheless, the overall picture is more audited. >> looking for a reason why a , the obsession with down 24%. the bad levels are improving. it is amazing how they move from what is going on at the investment bank to equity trading down. you tie a couple of pieces together, deutsche ubs, anddit suisse, now barclays. underwriting fees rise in this set of numbers. you are seeing fee income rise. in deutsche bank, ubs, credit suisse. there is an element to be tied up. payment protection insurance and the other big number -- >> the massive number. i am surprised this is still going on. you still getting phone calls? >> you have an opportunity to sue your bank. >> the number this time around is big. >> 900 million pounds. people say that is a big improvement from 3.5 billion this time last year. it is still a billion pounds. >> and we have litigation charges on top of this. pounds is indeed ber, i have just rounded up. pretax pr

mark joins us now from zurich. good morning to you.ng us today. >> thank you. >> mark, let's talk about the markets. the s&p 500 record high yesterday. global equities have risen 100% in five years. it is a simple question, but it is a question everyone wants to know. with these equity market goes higher? what are your evaluation metrix telling you right now? >> it is a great question because we see these levels but we do look at the underlying evaluations and one of the things we look at is simple p/e. the reality is that say the s&p 500 is on about 15.7 times forward earnings right in line with its historic average. so we don't see extreme evaluations in something that is going to hold the market back at this point. >> in your latest report, mark, i love the line where you mention how many, many analysts and commentators are linking the market. they are calling it artificially enhanced like previous tour de france winners which is after it comes to an end. is it artificially enhanced or not? >> we think it is important that we take i

manus cranny sat down with ceo brady dougan in zÜrich today and he started by asking him whether the surprised him. >> obviously, this has been a long-running issue. these are events that happened a long time ago. we spent a lot of time fixing this business and cleaning it up, and then we spent a long time actually working through the resolutions. that was a long sweep of time for an issue like this. where we ended up was a very significant find, a significant impact on the business overall, but most importantly getting it behind us was something important for us as a business, and obviously this was our biggest litigation or regulatory issue, so getting it resolved was very important. >> that is resolution from the corporate point of view. there is an article from "the new york times," about your tenure, calling you the teflon man. you as the ceo, you are still standing, brady. there is a guilty plea. there is a fine. do you feel you should personally take more responsibility for what has happened? >> well, as i say, these were issues that were not created on my watch. it is somethi

new york city ranks fourth on the worldwide list behind monaco, zurich, and geneva. >> and they say we'ref touch with the real people. >> the new york daily news is reporting rich or not that a study out suggests new yorkers have the blues. >> i think they do. >> new york city is the unhappiest town in the u.s. according to a study. researchers asked residents how satisfied they are in their lives and factored in race, marital status. the unhappiest are pittsburgh, louisville, milwaukee, and detroit. >> i don't get it. >> detroit maybe. they're shutting people's water off in detroit. >> unbelievable. >> milwaukee is full of happy people. >> absolutely. >> people love their brewers. >> why are people unhappy in new york, you think? >> i found out i'm unhappy i'm walking next to millionaires. >> that might be one of them. >> the happiest places include richmond, norfolk, virginia -- >> no. >> okay. this study is just bogus. >> stop it. >> i have lived in several of those places. very happy people. >> people are happy in washington because they're so self-aware. >> that could be. >> they are

carolin is in zurich and has been covering this story all morning long.ier we were talking about how they're going to manage to absorb some of these losses and what the future looks like for them. >> obviously, it's a tough loss to absorb, isn't it? $1.6 billion, that was a charge for the second quarter, resulting in a net loss of around $700 million swiss frank. it is the biggest quarterly loss since the fourth quarter of 20308. it is focusing on its wealth management business and is further scaling back it's fixed income business. so many bank on this and the other side of the bond have done that. but as for the impact on its business from that massive fine and that guilty plea, the impact is imminent. take a listen. >> obviously, there has been some impact. we've had to work through it. i think we certainly appreciate the support we've seen from our customers, and a lot of the hard work done by our employees, as well. but you can see in the second quarter, it was a pretty solid quarter from the point of view. 12 million in net new asset sess one of our

joining us from a zurich based fi firm, ron, thank you so much for joining us.'ve obviously done risk assessments for clients on the situation in russia. would you describe the impact of peanuts? >> i think it's a more philosophical statement they're making. i think top sanctions are necessary, especially in the banking sector. mr. putin is basically a bully who has been challenging the world powers, not only in ukraine, but in syria and other places. he is a determined man. the only way the west can stop him is not only tougher sanctions, but stronger powers. >> does he think he is doing what's best for the russian people? >> it's like ride ago tiger. he has to stay in power and he's doing everything he possibly can to gain popularity. right now, he's in a difficult situation. the hard line is within russia pushing him to take stronger actions. he also knows it's not an easy thing to do. >> when i've had conversations with european leaders in brussels, they talked about the prsh your right now that the olligarchs are sensing as far a pressure. are you hearing s

. -- in zurich. the shares are down.n with dougan of credit suisse, listen to what he had to say about the bank's governance. >> one of the things i think has been the most important focuses of us for many years is making sure we are running a very compliant business, and if you look actually at our record on number, these areas, i think we have a pretty good record. we have not had any issues on the libor site. we do not have any materialist is on the ethics aside, so we have learned a lot of lessons, and we continue to work very hard to run a compliant business. that is an everyday challenge. that is some thing you have to go to work out and try to tackle everything will day, but i think we have actually had a pretty good record of that, and that is something we will continue to be very focused on. it is in the best interest of our clients, it is the right thing for the shareholders. we have to run a very compliant business. >> my take away from that is banking is not a very fun place right now. we are not doing anythi

carries in zurich, carolin, you've been looking at these numbers all morning. what do you think investors take in here? >> there's no big concern because these numbers were slightly better than expected. and i'm looking at goldman sachs's numbers and both of them say this is a solid set of numbers. some of the things that stand out concern the management margin and that was 84 basis points. this is what you alluded to just now. there is a relatively low level of prime confidence. telling me this morning that, look, up to 28% still sitting in cash in terms of client assets. that is very, very worrying. yes, it is a big opportunity to asset managers, but on the other hand, with all that geopolitical risk going on, why shouldn't they move out of cash? it is a very, very good safety buffer, isn't it? now, what one puzzles about ubs's numbers, though, almost 11 billion, that is a very strong and encouraging number. i spoke to the ceo about the company's fixed income and the investment banking results. let's have a listen as to how confident they were about the futur

schiro was previously the ceo of zurich financial services, as well as pricewaterhouse cooper. off to undergo treatment for that cancer. both boards of direct remembers now one person shy in terms of their respective ranks. >>> what's the business community hoping to hear from president obama, on everything from tax inversions to minimum wage. former michigan governor john eng glesh weighing in. plus we'll ask him about the growing divide between the business world and the gop on issues like the export/impact debate lately. >>> dave barger is here following earnings this morning. his contract with the company runs out in february. will he remain ceo past that date. >>> all that and more coming up. i don't always have time to eat like i should. and the more i focus on everything else, the less time i have to take care of me. that's why i like glucerna shakes. they have slowly digestible carbs to help minimize blood sugar spikes. glucerna products help me keep everythibalanced. (crash) ugh! i'm good. well, almost everything. [male announcer] glucerna. delicious shakes and bars...

joining us from zurich, switzerland for a cnbc exclusive is tom naratil, ubs chief financial officerber of our global cfo council. our guest host jeff rosenberg of blackrock is also here with us, as well. tom thank you very much for joining us on cnbc. define the u.s. market for us right now because we're just highlighting record highs for stocks, there rates are low, bond yields are low here and globally how would you characterize the american economy and markets right now. >> thanks brian when we look at the u.s. economy we feel actually quite good about the growth that we see. actually when we look at what we're advising our clients to do u.s. equities and canadian equities are where we're quite favorable. also the theme of north american energy is one that we're very focused on. if you look across the world the rest of the world, including europe, is not proceeding and growing at the same pace as the u.s. and as a result our clients are still holding an excess amount of cash. >> can you help us make sense of what is going on in europe with regards to interest rates? i mean i don'