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tv   Countdown  Bloomberg  March 6, 2014 1:00am-3:01am EST

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>> ukraine's crisis moves back to brussels. leaders held an emergency meeting to consider sanctions or russia. we are in brussels and in kiev. >> mario draghi delivers his latest interest rate decision today and you might have all of the data he needs to leave rates unchanged. >> and attracting bidders. they are planning to spin off. it is valued at about $20 billion. >> hello.
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welcome to "countdown." imr orton. barton.mark >> i'm an edwards. -- anna edwards. >> ryan chilcote is in the ground in kiev. >> jonathan ferro is looking at the ecb rate decision later. >> caroline hyde is looking at the bids. is in tel >> let's start by telling you about some of the big news coming up on bloomberg television this morning. we will turn our attention to jcdecaux. of we will get more insight into the company's latest earnings. and a security maker expects
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double-digit growth in profits this year. and the pulse will sit down with discussf executive to europe's second-biggest maker. are holding an emergency summit to decide how they should respond to the russian troop buildup in crimea. there.weed is they said they were making some decisions last night with regards to isolating russia. talk about how that builds pressure on the eu to act next. the mere fact that nato has decided that the situation in russia is so critical that they have taken actions will be putting pressure on the european leaders to take action in
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brussels at their meeting later today. certainly in terms of some sort of sanctions or enunciating what they plan to do. listen to what the secretary general of nato had to say last night about the situation. presentstuation serious implications for the security and stability of the euro atlantic area. russia continues to violate ukraine's sovereignty and their integrity and its own international commitments. take acided today to number of immediate steps. >> what they have decided to do is they will have a naval escort foul escort a u.s. warship diffuse theo
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chemical situation. there'll be no civilian or military day-to-day contact between nato or russia apart from leaving the ambassadorial lines russia's response is that they are furious. that natoeting proves still has a double standard policy and that the cold war stereotypes are still applied to the russian federation. leadersuropean union have got to contend with them. russia refuses to even recognize that eu government and ukraine. >> what kind of action has the eu taken? one assumes that not everyone will be on the same page in these discussions today. >> in terms of what we have seen, the former prime minister of ukraine and 18 other
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officials -- looking ahead and what is decided by the european meeting is going to send a message to vladimir putin. you are right. the eastern europeans and the baltic states arcs extremely concerned that a message must be sent to vladimir putin. or is a cost for your actions going into crimea. they would like some kind of should vladimir putin escalate the situation in the ukraine refused to do yes: the situation in crimea. on the other hand, you have countries led by germany and back by the netherlands and back to bite italy that are concerned about what should happen to their business interest in russia. russia is talking about whether sanctions should be put into play. the russians are talking about freezing the assets of the european countries.
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i have a strong sense of this meeting at the start of 11:00 that could go much longer than three or four hours. >> you better get ready for a long evening. that was david tweed joining us from brussels. the situation remains tense. ryan chilcote has the latest from kiev. good morning. >> good morning. things are heating up in crimea. the united nations envoy fled crimea last night, technically ran out of town. he was there on a fact-finding mission for the united nations. he visited a ukrainian naval base and as he was leaving come he was approached by a group of 15 armed men who told him to leave, which he did. that all of the ukrainian military installations on the peninsula remain surrounded by armed men. servicemen that
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are at those bases want to leave, they are free to do that. it is difficult for them to go back into the installation. the stand off in crimea continues. >> what is the mood elsewhere in ukraine? kiev, it is still slightly celebratory. people are happy that the revolution, if you will, to lace. yesterday is to the contrary, a city of about one million people , there were clashes. russians,out 2000 pro demonstrators, were out on the streets when a group of another 5000 pro-ukrainian protesters were out there. those groups clashed at one point until the police got involved and hold some of them away.
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another group of pro-russians protesters stormed the government building and seized it for at least a short while. two interesting things. stronghold ofa ukraine's richest men. if russia wanted to expand its presence in ukraine from crimea, the reason is to protect ethnic russians. they will bomb places like donetsk. that place could provide the excuse. >> that was ryan chilcote in kiev. >> we go to caroline hyde to look at some of the earnings in a sec there -- the telecoms that. >> they have given us an update for their full-year. sales creep higher. this is being helped in large part by the t-mobile unit.
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we will see it be bought out. growth means that they are spending more in investments. they are downgrading their free cash flow outlook. they will spend more on their debt in the united states. they're also spending more on investment. this is a company where we a mobile phone carriers having to invest in spectrum, in network. mark zuckerberg of facebook saying he wanted everyone to be connect it. rollout of provisions if we're going to get connectivity. that is what is happening everywhere across the board. estimates have bitten sales. >> deutsche telecom it seems is less likely to sell its t-mobile
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division in the u.s.. >> there is speculation that it could be selling to mobile. the key of concern is regulatory issues. want toulators do not see consolidation. there were singing -- they are worried about pricing. >> four big players in the u.s.. >> there are. this is the theme of costs the board. consolidation -- it is what europe is clamoring for. they want to see one european market. they want less roaming charges. that he revenue. why more companies -- that hit revenue. orange ring out with numbers in a bit.
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one're looking to sell off unit. these buys could be weak. >> we look for to hearing more about that momentarily. >> the ecb latest rate decision later on today with mario draghi. he said he knew more data before deciding on a stimulus. is he risking deflation? jonathan ferro joins us. >> it might be an excuse to do what some said the ecb is very good at, which is nothing. there have been a lot of comparisons to japan. there was a great piece written yesterday that compared that bank of japan challenges in 1988 to the ecb right now. reluctance of banks to go out there and lend. a strong currency being compared to the euro right now. as well as a debatable monetary policy stance.
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the inflation data is coming in higher than expect it. it is perhaps given them more room to maneuver. nonetheless, below target. -- that is markets one of the factors that draw beat mentioned last night. what is on the table? >> no change in the forecast. think of the options, i the easiest option is to suspend the quiddity. -- liquidity. they will watch the bond purchases back in the real heavy data. , it could add a little bit more. it is something we could talk about later. >> thank you. >> boomer tv will bring you the press conference -- bloomberg tv
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will bring you the press conference. do not miss it. >> past 6:00 in london. israeli prime minister travel to the west coast of the u.s. to talk. elliott has the details. >> benjamin netanyahu is a smooth operator. he sees the uncomfortable situation. it is safe to say he was in his element in california talking about knowledge he and hanging out with tim cook and the founder of whatsapp and talking about technology, is there to keep her for the world to focus on as far as israel is concerned. i will have the details of that interview in about half an hours time. >> we look forward to that. on one of theht biggest outdoor advertisers in the world. it is jcdecaux. xt.will have the co-ceo ne ♪
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>> time for today's company news. acompany will be brining
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pay-tv business. the spanish phone company may pay many euros for the stake. a final agreement might be close. they still need to give the final approval for the deal. torture telekom chief executive is said to have sold -- there are regulatory hurdles. deutsche telekom t-mobile sale less likely. facebook is cracking down on illegal gun sales from its site. users declare a willingness to declare such as selling a gun without a background check or to force it across state lines. people who promote private sales with guns or other might get a message from facebook reminding them to comply with the law.
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welcome back to "countdown." i am mark barton. >> i am anna edwards. 17. time in london is 6: we have numbers from deutsche telekom . we get the details from ca roline. >> it is pitting billionaire against billionaire. this is the second biggest french phone company for vivendi. it is the media heart. putnderstand that they have in a binding offer for the parent company. it is called altice. it is controlled by a billionaire. and there is a construction and telecom company. it is up to them of whether they prefer competition versus cost
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saving. we need consolidation. we need to be able to reduce the players in market in france. competition is so fierce. they have had a price war. savings would come more week. you would be able to have many. if it was bought or a cable company, there will be more competition. there would be less cost savings. regulators to pick up more to it. you got them looking at about two and $2 billion from what we understand. they are trying to work out whether they want competition. >> the event he has been china focus on media as opposed to
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telecom. what are the next steps? >> they want to examine these. what is in their interest? already there have been talking about and distributing shares to their shareholder base. that would be scrapped. they have got to think about what he would get from regulators? it is former likely to get the go-ahead from regulators then we would. they're offering $20 billion. it is a mixture of debt and liquidity. >> thank you. up, bear stearns. more on the potential of default that could come to investors to reassess china's credit. ♪
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>> welcome back to "countdown." i am mark barton. >> i am anna edwards. in mercedes cannot make enough cars for all of the demands. it is signaling a healthy return for the german automaker. it is full of tomorrow's
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technology. this is mercedes benz new s-class. they believe it is the future of motor. it can be controlled by your cell phone and the critics obstacles ahead and even drives on the freeway autonomously. guru says yousign can take your hands off the wheel if the law allowed it. it is the legislation issue. the fuel levels and locate it even in the most confusing carpark. technology iss something others are still working on. >> no one has it this way. nobody has autonomous driving. this car has it all.
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it helps to make driving more safe. it can save lives. cornersomputer predicts and watches the road and controls your speed. it raises the question of how long before the driver becomes obsolete? bloomberg, the geneva motor show. >> amazing to see the transition . phones used to not be welcome in cars. now they are at the center. and phones that can help you find the car. will we have an android car one day? >> exactly. >> let's talk about what is coming up on the show. us that telling economists are not expecting to
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see a change in interest rates. there are some suggesting we might see a negative interest rate. station oftory lay the bond buying program. the s&p was implemented back in 2010-2012. the bank of england meets today. it is a big anniversary this month. >> yes. >> five years since rates were cut to a historic low. >> yes. five years. a lot for the bank of england. >> this is the longest stretch of no change in interest rates. 103 years. >> we're not going that way, are we? [laughter] ahead on the program, we go to brussels ahead of the eu meeting to look at the ukraine crisis on europe. we'll have more from david tweed who is covering that in
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brussels. ♪
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>> i am anna edwards. these are the bloomberg top headlines. the european commission as an aid package for ukraine. it would help ukraine if russia -- the european union throws assets that ukrainians come including the ousted president yanukovych. there's an emergency summit on the ukraine. u.s. secretary of state john kerry that with the russian foreign minister, survey lab sergei labrov. despite the setbacks,
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there are were still some consensus on moving forward. sidesagreed today both and that ukrainians also that we all all better served if this can be resolved through dialogue. that is important. the european central bank faces a rate decision later today here at president mario draghi said he needed more data to make decisions. since then there has been somber than it out but. most economists predict no change in the fence mark -- benchmark rate. >> welcome back to "countdown." i am anna edwards. >> i am mark barton. we are getting breaking numbers run france's biggest carrier of communication. caroline, it is big news on the dividend. >> it is being cut.
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cents is whatt -- it will be in 2014. you have seen the price wars. it has really hit many of these where it hurts. orange is the biggest phone carrier. cutting dividends and slashing costs for 2014 come it brings in line to compensate sales. the competition is so strong in front. they're having to cut costs. it'll bring more price education. saying why the cfo was the consolidation is positive. -- sfr is being
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looked at the moment. >> give us a fair take on the latest revelation. the bending confirming overnight they have received two bids for the sfr unit that they have. they said they would offer 14.5 billion euros. bouygues. seeing euros.llion operator in france is looking to offer about $20 billion. it looks as if the evaluation --m bouygues >> interesting. -- whatetition competition implications there might be?
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--soon as it was created interesting opportunity for investors. more a lotr might be of oh-fer regulators. tie upou saw bouyges , you're immediately reducing competition. regulators would be worrying about pricing. keep a close eye on those two companies. vivendi thought about selling shares of sfr to its shareholders. >> caroline, thank you. >> eu are holding an emergency summit in brussels to decide how to respond to the russian troop gold up in crimea. -- build up in crimea. david tweed is there.
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>> good morning. there are three aspects to this whole and. there is the military, it diplomatic, economic. i will speak to a european economist based year in brussels. the receiver coming along. the economic aspect of what they're going to decide today must be one of the biggest concerns for them when they are making the decision. for is the biggest concern european leaders? >> it is a retaliation by the russians. they're highly dependent on russian gas. russia is dependent on european money. if they do sanctions and the russians retaliate, it is a lose lose situation. >> there is a divide going on. do show themant to
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that there will be a cost. on the other side, we have angela merkel who has been indicating they want to stick with a dip of manic route -- diplomatic route. what about opening up the lines of the eu leaders? >> the countries that belong to though former soviet bloc are also afraid that the eastern border is coming closer again. for merkel, it is different. they really understand putin. she is having the german interest, economic interest in mind. germany is exporting more than 4% to both russia and the ukraine. >> what about the u.s. situation? the u.s. is talking about potential inking sanctions. however -- banking sanctions.
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how would that affect them? >> we have many international european corporate's are investing in russia. russia is one of the growing markets for europe. the bank lending channel is shut down. huckabee to losses for european profits -- that could lead to losses for european profits. that bank would not be able to do business with the united states. that will have further implications. >> exactly. this will have a big impact. in my view, it is something that european leaders are not keen on doing. >> do you think any situation in ukraine will weigh on the -- that will he made by the european central bank? >> the central marketable him down again. down again.e
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i think they will lean back and keep interest rates on hold. >> a lot of things to consider for that european central bank and the european leaders will be meeting at 11:00 later today. davidor say -- thank you, tweed. >> let's take a look at the latest earnings from the world's largest outdoor advertiser, jcdecaux. jean-charles decaux joins us for a bloomberg interview. thank you for joining us. if we could talk about the numbers you reported, what is the story behind that? >> good morning. the unit is under pressure because of the lack of growth in europe and the fact that the with --s still
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why we had to adjust the value of the business. having said that, the adjustment is on the downside. other business units armor viable than what we paid for in an9 when we made acquisition. some have been underperforming. >> ok. you talked about general softness in the european economy. what would you like to be done about that? european politicians to take action? the central banks to take action? the ecb is meeting today to decide on interest rates. does something need to be done in the european the cover story? positivee seen momentum in the last quarter of 2013. we grew.
1:40 am grew there is some momentum in the southern part of europe, as well as in germany. we see encouraging signs. it started in the second half of last year. beopean countries need to competitive and create more jobs. i think some european countries are on the right track. >> can i ask you about your business in emerging markets? some have concerns. some economists have concerns. we are covering the crisis in ukraine, of course. some people are worried about the investment or the story coming out of emerging markets at the moment. are you concerned about that? downs.e are ups and when you operate a business
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around the world, you have r isks. when you look at our results, revenue is coming from emerging countries. we have good growth in latin america where we finished the installation of 1000 clocks with digital displays. company in a large latin america and created growth. combined latin america, russia, and the middle is clear most of our growth is coming from outgoing markets. some markets are down, like ukraine. jcdecaux clearly benefits from the past growing markets. >> i know as you suggest you
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have been gearing up for the world cup that takes place in brazil. what will be your measure of success in brazil over the years? the years to come? a contracty we won for 25 years. others as bidding on well and benefit from the fact that a lot of brazilian cities are very keen on infrastructure. jcdecaux graded a business model. model.eated a business the need for infrastructure in emerging markets is strong. companyult, the benefits because we can afford to invest on contracts that approve to be successful and profitable.
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it remains a source of growth for the company whether you are in brazil or has extent or the middle east. this -- whether you are in brazil or in the middle east. >> ok. thank you for joining us. jean-francois decaux, the co-ceo of jcdecaux. >> the plot is unfolding as we speak. we have confirmed an offer for .ivendi's sfr mobile what are the details? they are saying, look, our offer will give you 10 billion euros. that would be about 15 euros per share. therefore, that the value combines on the synergy. that is equivalent to $26 billion.
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this is the crux of it all. will vivendi go to this? even though it will have more scrutiny over regulations. this is a concern. look at the cost savings. this is the upside. and they get to keep more of their company. they will have a holding over its. it will be sold off. sfrunit is combined with and it would be selling shares. it had more -- >> but more cash element. >> yes. they get $10.5 billion in cash. >> thank you. >> just ahead, strategy. our next guest will make a
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suggestion of high yield. ♪
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>> will come back. back.s -- welcome
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this is "countdown." i am mark barton. >> i am anna edwards. >> there is a bank cleanup story. good morning. thank you for joining us. within the bondlast year, high yield was definitely the place to be. it may an argument -- give me an argument. >> the overall take in the bond in 2014, 1een that should favor the credit spreads over rates. we do not think returns will be as strong as it was in 2013. we have seen it being about five percent. beingnk that the risk in reachable good we think the u.s. economy is improving nicely. >> lester, companies took advantage. >> -- last year, companies took
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advantage. >> certainly did. >> this year has not started well. >> it has been slow. there is somewhat of a bond shortage. could be replicate 2013 but it comes to sales from high-yield companies or not? >> it seems there is not enough supply. it is likely we will not get there. i thought they were cutting back and raising more money in the bond market. >> that is happening. it is coming down slowly. regrettably, the bond market requires a certain size from issuers. it will not reach the smaller enterprises. >> would you be interested in investing in the bonds of european banks while looking ahead to the quality reviews. >> we are invested.
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that. quite positive on >> we will have a short break. our guestar what assist about the global credit he ♪ --
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>> welcome back. i am anna edwards. >> i am mark barton.
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we are back with our guest. tim, thanks for joining us. the u.s. economy, what is your assessment? it showed some improvement in many of the regions. do you share that view? >> d have to become a meteorologist? [laughter] >> we think there'll be a drag in the first quarter. we are positive on the year. residential real estate is improving. has a return to real estate. the stock of loans for commercial development is going up. we think that investment spending will come along at some point this year. we are very positive on the u.s. >> does that mean that the fed reserve is on track? two different bond buying program by $10 billion per meeting? >> we think so. the thing to taper is on track.
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we think the market is over anticipating. that yellen said yesterday she realizes unemployment remains a serious problem. we think that she is going to keep the fed from raising rates for quite some time. >> how will she get that message across? there is that it six percent on up limit rate. next phase of forward guidance? >> we think they'll keep working on their communication. he'll get the point across that they are not going to raise rates any time soon. expectation.he anotheru need threshold? theto say rates will not raised until it hits 5.5%? do you need to look at that inflation rate?
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>> i think so. there is a wealth of employment data that they could pull on. looks at the rate of jobs against the population, it shows the fact that the u.s. is short 3-5,000,000 jobs. it will draw on more employment data. we think that inflation is the key thing that they are looking for. everyone says there's no inflation right now. there's a little bit of an uptick in the average hour of earnings. we are looking at it closely. we will wait to see real signs of inflation. the european central bank, mario draghi said we needed more it added to enable the team to decide on interest rates. he has got more data. some of the has come in better than estimated.
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what does that do to his dial-in the? -- dilemma? it is on the lower page. we do think that rates are correlated. the 10 year rate clearly is. it happens in the u.s. will have an impact on europe. we think that the ecb should be as accommodating as possible and do what it can to get the economy going. >> thank you. >> thank you. time in london is 6:56. "countdown" continues. we are asked to brussels for the eu meeting on ukraine. ♪
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>> ukraine's crisis moves back to brussels where e.u. leaders meet to consider sanctions for russia. we are live in brussels and in kiev. >> mario draghi may have all the data he needs to leave rates unchanged. >> and the s.f.r. unit valued 4.5 billion euros.
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>> welcome to "countdown." i'm mark barton. >> and i'm anna edwards. welcome to the second hour of "countdown." the e.u. has frozen assets of 18 ukrainians. e.u. leaders holding an emergency summit in brussels to look at possible repercussions for russia's action in cry mia. -- crimea. nato decided to take some action last night. run us through the details scomprk what kind of pressure does this put on the e.u. to act now? >> i think this does increase the plesh on the european union, and particularly listen to how it was
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put by the nato secretary general last night. >> the situation in ukraine presents serious instability for the rest of europe and ukraine. russia tinds to violate ukrainian integrity and its own international commitments. so nato decided today to take a number of immediate steps. >> so nato has decided to kick russia out of a joint nato to cise, a naval exercise help a u.s. warship which is headed to syria to diffuse the chemical weapon situation there. at the same time, nato said there will be no more military or civilian relationships
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leave russia and nato leaving the ambassadorial lines open. the reaction from russia was pretty serious. >> nato still applies cold war stereotypes to the russian federation. >> on top of all of that, they have to contend with the fact, the european leaders do, that the russians refuse to even the new government in the ukraine at the moment. >> and there are divergent opinions about which way sanctions need to go. >> this sends a strong message
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o president putin. the balkans are extremely concerned that they need a strong message that russia must pay for what it's done. they are introducing the idea of economic sanctions. idea really coming from germany backed by italy, backed by the netherlands, countries that have economic interests in russia, and they are extremely mindful of the fact that russia is already saying if sanctions are imposed against russia, russia will come back with its own sanctions which could involve freezing the assets of european companies, private and public, that are active in russia. that's a big threat. i suspect this meeting today may go on longer than the three or four hours that it's supposed to. >> david, thank you very much. david tweed joining us from brussels. > while e.u. leaders meet in
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brussels, situations on the ground remain tense. ryan has more from kiev. >> good morning. the situation has heated up in crimea. the united nations nation envoy fled the peninsula, effectively run out of town. his name is robert sary. he was sent from the united nations on a fact-finding mission. he just visited a ukrainian naval interests legislation, and as he left he was greeted by a group of armed men who told him to leave, and he did. all military installations in ukraine remain surrounded by armed men, so if people want to leave those bases, those ukrainian servicemen, they can, but what they can't do is enter them. a bit of a stalemate there on the crimean peninsula. >> what's the mood like
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elsewhere in ukraine, ryan? >> it is a mixed bag, mark. in places like kiev, things are rather as normal. except for of course independence square where you ay lot of protesters celebrating, but depending on who you listen to. in the east, however, chaos continues. we had crashes in an industrial city of about one million people where thousands of pro ukrainian and pro russian demonstrators clashed, hundreds of them, i should say, before they were separated by police and hauled off. separate from that you had a group of pro-russian, if that's what you can call them, demonstrators who seized a government building. definitely i think that's interesting for two reasons. first off, the real power
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broker in the city of donetsk is the city's biggest man. is this some kind of dissatisfaction with the current government from him? the second thing i would point out is, protecting russian speaking people is the pretext that president putin gave for going into crimea. will what's going on in donetsk and other eastern ukrainian cities as well be the pretense for further action, and the answer to that is, we just don't know. >> now we get the e.c.b.'s rate decision later on today. the bank president mario draghi said he needed more data before deciding if further stimulus is necessary. that is certainly some people's fears. >> yeah, it is. if you listen to him at last month's meeting, the euro-zone is not japan. quote, then there is no reason
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to believe that things will drop charlottely." it wasn't a quote from mario drag draghi. it was from the bank of japan's meeting in 1998 followed by a decade of inflation. inflation can be a bit of a self-fulfilling prophecy. in six months, you are not going to go out and spend tomorrow. > you don't want to get into a deflationary spiral. >> exactly. >> other banks are saying now for now the deflation rate reat is insufficient for the e.c.b. to use its strongest threat. >> not much ammunition left. we have actually seen the data. not great, but not really ugly. in fact, on the inflation readings, beating some
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expectations to some extent. as for the options today, rates already at record lows. you have the benchmark at 4.25. >> you could cut it to 4.10. >> i forgot they -- >> maybe you could do something with the deposit. that would be a huge step. then we have something that we talked about earlier, which was suss spending the liquidity operations which they do every week. back in the crisis years, you had the european central bank have the bond. typically when a central bank buys bonds, at least that money, the newly coined money they created in the system -- >> like the bank of england, the d.o.j. >> they weren't happy with that, and they had a bit of a compromise. so in temporary deputies they euros.t and took is 75 because it is temporary, it is something they have to do week on week. the bundus bank has given the
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nod to suspend that operation, but potentially that could give you more liquidity. it is probably one of the easiest options on the table. >> and i've read if they do that it turns the market security program around from 2010 to 2012 into a q.e. program. >> yes, and i think this is probably the biggest problem. the precurse or to this is, if you do that, everyone is going to say, why don't you just do q.e. because you have pretty much done it. and the debate will really get going then. >> two binding offers for its phone unit. now the company must way what is best for share holders with which deal is more likely to get through regulatory hurdles. let's bring in our bloomberg news reporter. e governors m & a with us. talk us through the two deals
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on the table, the two offers on he table for the vivendi s.f.r. unit. >> there are two offers that arrived in formal format last night. one from a large industrial group and the other from newmerica which is an aggressive cable and broad band company which has pursuing s.f.r. for a while to have a real mobile offering. there are interesting contrasts between the two offers. he o l uig offer brings a ever greater risk of regulatory regulations because it would involve cutting the number of mobile operators in france from 4 to 3, something that regulators are very likely to look at extremely closely for the affect it would have on pricing and competition. now they argued that actually in terms of employment, they
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bouygues etter -- draghi has a ck barack ground as a financial investor. so the criticism is he will fire tons of people. course newmerica hit back and said that's not true at all. we have competing press releases, competing -- it is a real old fashioned battle. >> what does this say about the tell coms market? -- telecoms market? >> that is a good question. building high-speed networks is expensive. there have been big, big problems.
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this situation is born of vivendi to separate itself from s.f.r. and focus on media and content. that's what has put s.f.r. in play. s.f.r. began as an unloved stepchild and now it has become the belle of the ball. now whatever happens at this point it looks like vivendi should have a buyer, if they want a buyer, or they coo proceed with a spinoff of s.f.r., which was the original plan. >> coming up on "countdown," our next guest says it is not yet time to completely avoid the emerging markets, that's despite the risk of the conflict in crimea.
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>> welcome back. i'm mark barton. diplomatics efforts to deescalate the crisis in ukraine. let's take a look at how the markets are digesting the information. from swiss private banking,
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michael o'sullivan. good morning. thank you for joining us. what is your read, michael, on how asset markets have faired this week? we've seen huge asset drops because of the issue in ukraine. what is your take on that, on how investors should be reacting from here? > i think the monday morning visited some financial pain on russia in terms of higher rates. i think that is contained now in terms of valuations. i think russian equities back o valuations of 1999 looks cheap on the long view. i would be having russia on a stabilization scenario. i think, however, the situation is still loaded with what you might call tail risk, risk
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in rd syria and iran, risks ukraine, and the risk surrounding a sort of tit for tat that we may see in coming days. i think there is also a situation in germany and the u.s. -- i hope we have a russian side -- that this situation needs to be calmed. that very, very slow ideas need to be formed around this. i don't see any quick solution in terms of a russian disengagement from crimea. i think that will probably persist. i think the question is whether the extent of sanctions on russia and any contrary measures. >> what's the risk of spending 80% of one's expenditures on these very dramatic events? >> i think what i've been
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trying to tell colleagues and clients is that there is a much bigger picture here for the rest of 2014. days crucial issue. the global business cycle. on monday we had some quite good data. the u.s. was pretty strong. good data coming through in the euro-zone. interesting that investors have greeted this crisis in russia, ukraine by buying more euro-zone periphery debt. yielded in italy and spain now below 3.5%, which i think is a good sign. >> and does that yield performance within the european peripheral bond market, is a lot of that dependent, though, michael on the e.c.b. possibly doing something, kicking off with today? >> i think it is based on a broader recovery story. i think the e.c.b. are in a difficult maybe interesting
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place in that they had scope to more, and that they would signal in their forecast to the lower side to give them the intellectual cover, as it were, to do more later on if need be. i think the issue for the e.c.b. is actually taking acks that will have a direct impact on the economy in the euro-zone reducing from the cast for companies, for example. >> michael, always good to chat with you. hank you for joining us today. >> now coming up on the rogram, israeli prime minister travels to california and talks tech with apple. details next.
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>> welcome back to "countdown". i'm anna edwards. >> i'm mark barton. 7:23 here in london. >> the israeli prime minister, benjamin netanyahu, took a break from talking peace and iran to discuss a subject he very much enjoys, he talked tech. elliott has the details. he seemed to talk more about what israel can do for california than vice-versa. >> netanyahu certainly wasn't afraid to crow about israel's
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technological achievements. israel is, among other things, a leader in water technology, things like drip irrigation, water sanitizing. when he met with jerry brown, he said he would like israeli technology to help california deal with its drought problems. when he asked what he learned from his trip to apple, he said he learned that apple is in israel for a very good reason. the israeli prime minister wants more. >> i would like to give all the venture capitalists to come to israel and see how they can our tech knowledge jifts o cooperate with them. >> help generate more israeli start-ups. and also, anna, we understand
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that netanyahu may have invited cook to come to israel. >> in terms of the israeli start-up, how is israel going .o produce the next depoogl is start-up happening in the rate we've seen in recent years? >> i think what netanyahu is saying is that what he would love and israel would love to have the next globally dominant technology company come out of his country. but he was realistcally modest when asked if he thought the next google would come from israel? >> that would be great, but that retires marketing reach. they have brilliant people. they developed these start-ups. it used to be if they sell at 100 million, they were wildly successful. now they sell in the billions.
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i'm not sure there is a cure for that. i'm not going to legislate and tell them, you can't do that. it seems to be our lot to keep on producing these mushrooms. >> netanyahu is not worried about israeli start-ups being brought out. it helps rebrand israel as this tech hub. it's been translated into more than 20 languages. other countries want to emulate israel. i think israel is happy being in that position. i really can't stand mushrooms, so i hope whoever gets there is fond of them, but i'm not fond of them myself. >> oh, elliott, that's dreadful. coming up in tell com round-up -- telecom round-up, we'll be talking about the
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vivendi unit as well as other telecoms. stay with us. ♪
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>> i'm mark barton. the european union has promised to help ukraine and russia. it froze assets on several kraineans. u.s. secretary of state john kerry met with the russian foreign minister and several other european diplomats early in paris. labarov refused to meet with ukraine's ambassador saying he
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is an illegitimate ambassador. >> we agreed today, both sides, and the ukrainians also, that we are far better served if this can be resolved through dialogue. that's important. >> and the european central bank faces a rate decision later. mario draghi said last month he needed more time to make decisions. there have been stronger than expected output and inflation data. no change in the benchmark. >> i'm mark barton. >> i'm anna edwards. let's turn our attention to telecom. all of this morning's news, earnings from orange. we're going to get tell
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congressman numbers later on today. we will have s.f.r. and the scene. elecom let's talk first about vivendi and their options for s.f.r. there seem to be two competing f.r. n the table for s. bouygues the most recent one. what do you think is at stake here? >> let's not forget the french markets used to be for -- in mobile, for a very comfortable market. up until a few years ago. belonging. the market has gone down mainly driven by retail prices. >> so it became increasingly competitive?
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>> super competitive. >> the reaction of these players is, ok, this is not sustainable. we need to merge. >> so will consolidation hold for the drop-in prices or not? it is two main topics are under consideration. one is avoiding falling prices, retail prices, and one is on the cost side. the as you say, the one on prices is probably the most important one and the one most scrutinized by the authorities. in the german market there are two companies that serve in the process of trying to merge. >> so there is a lot of precedent for mergers in the
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telecom arena. how does any telecom players should any one market have? and which market are we talking about? the european commissioner on these matters wants us to see more about europe on one big market and less about the individual market? >> yes, the european condition had this overarching message about let's talk about one single market. ithin that, they want to see competition with every one national market. now going from four to three or from five to four is a big difference. in the french case, like in the german case we are talking about four to three. the risk for europe for the authorities in europe is that they will see prices returning to increase. what is the -- this is
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the european authorities do not want to see. nd this is what the merger with the german company is being recognized. >> and you talk about four to three, because in the u.s. it's sprint -- if soft bank is to buy t-mobile u.s. it will enable four to go to three, but the deutsch telecom c.e.o. today said the sale of t.-mobile is unlikely in the near term because of regulatory concerns. is it only a matter of time before t-mobile is merged? >> the structure of the u.s. market is very different. we have already fewer players erving very large populations. in europe we are talking about hundreds of players serving
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half the amount of the american market. that is very different. so for them it is even more authorities the in letting them come to market. the european authorities are a very colorful one, not only because of the industrial ration ats, but let's not forget we have european election coming up, and the last thing the europeans want to see is something that's affecting the pricing, that is, pricing going up. so it is a business story, but it is also politics. >> what is the earnings story that we need to be mindful of? deutsch telecom has talked about its cash flow forecast, cutting back, its cash flow forecast for 2015. here is the focus on earnings?
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>> for european, deutsch telecom, orange, it in a way is very similar, with the exception of deutsch telecom. they have been very strong in the dot com markets, so they have managed to increase market share? germany, which is a positive story for them. other than that, i think what hey share is fairly weak demand, and a fairly competitive environment. and attempt to grow outside the region. >> is it too late to say who will be the winners amidst all this consolidation within europe if we were to look two, three, four, five years ahead? >> i think in terms of which one will be the winner, yes, it is early to say.
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what we can say is it will happen. it is inevitable. given the structure of the current market, it is inevitable. maybe regulators will impose some very strong recommend dis, but it is in -- remedies, but it is inhe havityable -- it is inevitable. >> thank you for joining us today. principal analyst at telecom media. >> the world's sixth more valuable soccer team a.c. milan is up for sale. here to tell us more about the team and their perspective buyers is their 438th biggest fan. >> it is the love of my life.
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>> it's personal. >> we are going to indulge you for the next minute and a half. >> after royal madrid. >> two -- too short. marketing documents have been sent to potential buyers. an a.c. milan spokesman said the team isn't for sale, but that aparticular person did not want to be identified. the fact of the matter is, they haven't won a title since 2011. >> they are behind the leaders aren't they? >> they are about 17 points behind the leaders. for the people that don't know, you really want to compete in the champions league, because that's where you make a lot of money. it is a very big deal. >> who, by the way, will join you. >> this is a big chafmente up until recently, every single italian club were italian owned. the likes of roma. >> and inter milan as well.
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look, whatever you say about r zoney as a politician -- club owner, as a very successful. in the past few years, this is a man that was in government, found it hard to justify spending 30 million euro at a time when italy was in recession. politically it was not working. the money in italian football seems to be drying up, and this is a club that needs massive -- get all this bs assive revenue, the likes of a.c. milan and inter milan -- >> they -- >> they needed a lot of money, but the brand is still huge in
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asia and the u.s., and a lot of people are talking that the buyer may come from asia. >> who is your favorite player of all time? >> franco berenzi. the best defender in the history of the league. >> i didn't even though. >> my hero growing up. >> he missed that penalty at the cup. >> yes, but that's not how i like to remember him. >> that's how i remember him. >> ever feel like it's getting nowhere. ♪
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>> it's time for "hot shots." look at some of the most compelling images of the day. >> google has launched its strongly hiked project moon. they use weather balloons to
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bring internet access to all parts of the world. it will head to the edges of space with a life span of around 100 days. in doing so, google plans to create a ring of uninterrupted internet access. birds.rterrestrial carnaval.nual participants were judged in 10 categories. the prize -- foss force >> and do you ever feel like you are constantly moving in one big circle? two performance artists are trying out that kind of life. it is equipped with a bed, a toilet, and a kitchen, but they have to coordinate their movements so one doesn't throw off the other.
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the performance will run now through march. >> welcome back on "countdown." mark, we often feel like we're on a hamster wheel, don't we? >> i think we could. e work in harmony. >> "on the move" futures? >> after the ukraine there are other issues in play for the european central bank. for those people that tune in to watch things like markets, this could be an interesting day. draghi has a lot of data to review. will they make a move, not just in rates, but will they do something more dramatic? will they try to spur liquidity within the euro-zone?
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we wait to see. the other thing that caught my eye, you have yen moving lower because the biggest tension -- i think there are ramifications on a much bigger stage, apart from just seeing the value of the yen drop. but the biggest tings is going domestic d i find the source. that could be the bank of japan, where the yen is moving. >> and conditions on a regional basis in the u.s. are improving, so says facebook last night. >> 8-10 districts said things are improving. i have a good source. 100 reverages references in the 100 book -- over references to the weather. it is hard to get a read on the conomy due to the weather.
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e'll talk more about that. having a look at stock performance. >> he's been at the company 10 years. his stock just belts it out. olivier piou, gemalto c.e.o. what was the next thing we should be concerned about for security? i know mark barton is one of the most security conscious people. >> in my area of the news room. >> 13 minutes. "on -- 13 minutes until the move." >> our business correspondent is here with everything you need to know telecom related this moorning. a good old-fashioned bid battle as matt campbell was explaining earlier. >> vivendi is trying to spin
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off, get out of telecom, vivendi climbed about 1% to 2% higher. the combination is on it. billionaire vs. billionaire. it is -- there are lots of pros and cons. bouygues offering -- they are saying, listen, our bid is worth 19 billion euro-s for s.f.r. because vivendi offering cash. but we know regulators are going to look at this, and we can only have three telecom pots not four. newmericano offering about the same amount, 40.5 billion euros.
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will that then be more palatable for vivendi? e have numbers from thenl. orange could be about unchanged. they seem to not be -- >> not phased by the fact things will get more competitive in their own market. >> because they need to reduce the price competition we are seeing at the moment. orange coming ot saying they are cutting dividends, because they are a little more roifitable to 2502014. >> caroline, thank you very much. that's the latest on the tell com sector. coming up on the program, we will look ahead to the e.c.b. rate decisions. sfuss. stay with us. ♪
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>> welcome back. this is "countdown." i'm mark barton. >> and i'm anna edwards. a look at the top stories of the day. and they are central bank dominated. >> yeah, they are. particularly going into the e.c.b. it was long expectation, euro-dollar. euro-dollar above 137. that could be a bit of a headache for mario draghi
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today. despite the situation, economists will expect to see it. you can see the dollar pushed above $1.40, and that would be a massive headache for the euro-zone. >> 103 years. why is it relevant? what did i tell you earlier? >> that was the bank of england. >> the period of time that bank of england kept rates on hold. >> from 1822. 103 years. >> this week, this month, 4.5%. >> that is not remotely impressive in a -- >> in the modern era, i think the bank of england gets a little interesting, perhaps in the coming months, when we start to see those votes come in with 9-0, 8-1, 6-3, and you start to see a debate building between the hawks and the doves about where rates are going to be.
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he already said as much. he said he welcomes debate. there will be a more split bank of england. >> at the end of the day, and unfortunately today and the coming week, no one will be talking about monetary policy at the bank of england because there is a scandal looming over the central bank, how much knowledge did they scr? mark carney, the governor, goes in front of the committee next week. likely to be questioned quite aggressively about this and how much the bank of england knew. >> briefly, federal reserve favorite? >> how many times was the word mentioned? >> i could have got bored pretty quick. it was over 1 hundred hookup. i didn't get that far. quite a lot. the economy continues to expand. it is going to be set pretty high. >> thank you very much. >> don't miss our movie scenes. the latest 300, and the grand
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budapest hotel. >> "on the move" up next. keep an eye on all those telecoms. ♪
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to on the move. i made is pretty. , it was the beginning of the trading day and our markets team has everything covered. , jonathanroline- ferro on the markets and ryan chilcote is standing by. over to you. they could be a big day for markets in europe. >> the consensus view is that there'll be no change at the
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bank of england and i think that at the ecb, that is where it will get interesting. inflation beat expectations and what we get today are forecast. like go out for is, what are they going to do on the back of that? oute have numbers coming from deutsche telekom. let's stick with the scene and we could see vivendi this morning. there is a battle brewing. operatora telecom euros. 14.5 billion they said the offer


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