>> how low can they go? as the yield on the spanish ten-year falls below 2%, we discuss the european economy with the ifo. fifa under fire over handling of corruption allegations. could it be game over? seven is ticketed, stealthy and probably state-sponsored. who is behind the most advanced spy software yet?
good morning. you are watching "the pulse." we are live from bloomberg's european headquarters in london. >> we are just getting some german ifo data. that number just breaking on the bloomberg terminals better than expected. the figure came in 104.7. we had a forecast of 100.3. >> we will dig into the details and find out exactly what is going on here. concerns surrounding the european economy at the moment. we have seen a significant move in european bonds. the reason for that may be more to do with draghi than what we were expecting from the ifo but nevertheless we saw a significant move. the spanish ten-year going below 2%, the first time in history. you also see a significant move on the italian 10 year. the french 10 year as well. we are seeing records on both of those.
ecb effect ise large across the european economy. how much further do we go? >> that is the trillion dollar question, one that we will put to hans-werner sinn in a couple minutes. discovered has been by symantec and is thought to be developed by a nationstate to spy on people and companies in at least 10 countries. here with more is caroline hyde. it has been used for quite a while now. >> 2008 is how long this was being used. symantec ising that a security software maker. we know it for norton. 2008,ms as though from this is a new malicious software that is being used in 10 different countries. we understand they have been used for surveillance, for intelligence gathering. the infections were across a variety of organizations. withdrawn and seems
to have resurfaced since 2013. >> caroline, talk to us about being targeted as a result of the software and house sophisticated it is. >> if you are looking at countries, two countries keep rearing their head. it is russia and saudi arabia. more than half of the attacks seem to have taken place in these countries. there are another eight on the list. india, ireland, afghanistan, iran, belgium, austria and pakistan. these are the countries where so far it has been seen. largely attacking individuals and small businesses. half of all attacks are on the smaller side. another one third of attacks seem to be happening in internet providers and telecom companies. that is huge for symantec to be drilling into the data of individuals and small businesses.
quarter last bit, one seem to be happening across hospitality, energy, airlines, governments and research institutes. it is difficult to ascertain what this is up to, what it is looking for. it can be capturing screenshots, stealing passwords, ticking into deleted files, even. this is why they think it is actually a nationstate behind this. the level of capability, the level of resources that have been pumped into building this incredibly sophisticated malware which has anti-forensic capabilities, which means you can hamper computer investigations, it is incredibly inconspicuous. it covers up its own tracks. it uses a custom-built encrypted virtual filesystem -- that sounds complex, it is pretty complex. they tend to think this is a
nationstate. they don't mention which one but many are already curious on twitter and across the internet, to beng that it is likely only a handful of countries such as the u.s., china, israel. these are the countries that many out there are saying have the level of resource to channel into this. it seems to be one of the main cyber espionage tools used by a nationstate across 10 different countries. >> caroline, thank you so much. caroline hyde with the latest on this malware. here is what else is on our radar. >> in vienna, international foreign ministers are starting to reach a deal on iran's nuclear program before a deadline tonight. u.s. secretary of state john kerry and his iranian counterpart are discussing whether to extend the deadline as both sides say significant gaps still remain.
an exception would be the second since an interim agreement was reached last year. >> european commission president jean-claude juncker is set to announce a 21 billion euro fund to share the risks of new projects with investors this week. that is according to eu officials. the fund would include loans, lending guarantees and equity. the commission will pledge 16 billion euros with 5 billion coming from the european investment bank. itsew york is extending lead over london as the world's most important financial sector. 59 percent of respondents picked new york over london. that is a 16 point swing. london's reputation has been hit in recent months by a string of scandals. >> coming up, fifa under fire
with another sponsor questioning the investigation of world cup corruption. could there be a world cup boycott? >> that is the subject of today's twitter question. would you consider a personal boycott over corruption allegations? let us know what you think. we will take a break. see you in a moment. ♪
>> welcome back. you are watching "the pulse." we are live on bloomberg tv, on the radio, streaming on bloomberg.com. we are on the case of the european economy. let's get back to our top story. we need to go to munich now to talk about the ifo number. the data are better than anticipated. the downturn in the german economy has ground to a halt. let's talk to the institute's president, hans-werner sinn. good morning to you, professor. do we see a recovery from here or is the german economy going to bounce along the bottom? >> well, that we don't know. the line in the indicator for six months in a row. now the good news is it jumped up word by 1.5 points, which is quite a bit. we do have the rule not to
interpret too much in such a move unless we have seen that three times in a row. let's be cautious. but it is good news as such. tax give us a sense of how you see -- i know the rule is, let's reserve judgment until we have a better indication, but the bunde thek seems to be suggesting economy go back home and the month of the year. do you have the same sentiment? what happens next year? , this extreme p from of pessimism which we have had in the summer and a video for now. -- may be over now. labornot forget the term market always was in very good shape. firms wanted to hire new people he site the find passionate site
the zipline -- despite the decline of the indicator. only manufacturing was a problem but that problem may be solved now. german companies report that export expectations have improved since last month. >> professor, i am reading that a lot of people are expecting to see a property boom in germany now. the simple reason for that is the money is incredibly cheap. and the ecb is going to make it potentially even cheaper. there is going to be a lot of liquidity. would you expect construction to be one of the big stories going forward for the german economy? >> could be. we have had very good construction activity for the last four years. of thely, because crisis. before the crisis, german savers
brought their capital to other countries. now they have become very cautious and seek the safe haven at home. gold, asa flight into we say. it seems that this process is going on in particular because the ecb reduced the interest rate further. that is only one of the drivers. the crisis is the main reason. >> do you think mario draghi will deliver in the summer with extra tools? he seems to have suggested that now may be the time to act. >> could be. there is strong opposition against quantitative easing in the directorate, in the council of the ecb, because there is the legal problem of whether it can buy the government bonds off of the separate countries the fed would not buy. the ecb wants to do a similar
thing. there is a lot of dispute about these things. i don't know. >> professor, there is an accusation going around that the isman economic story suffering from groupthink at the moment, that there isn't enough radical views out there that everybody is saying the same thing, that there isn't a big enough debate in germany about what german economic policy is doing to the rest of the eurozone. do you have any sympathy for that argument, that maybe we need more radical voices? i hear that when it comes to the finance ministry, there is only one economist there. >> is there only one economist? i doubt of that. while germany has a slightly different view than many other commentators, because we look at
the problems of europe as a structural problem. southern europe can be cured with more borrowing. we think it has a structural problem by being too expensive. the euro has induced a credit inflationarycame before the crisis. it priced southern europe off its competitiveness. spain, for example, increased its prices during the good euro relative to the rest. that has to be reversed. this cannot be done with macroeconomic policy tools by the ecb. , btp'sspanish 10 year and the french 10 year all hitting record lows this morning in terms of the yield.
what is the market signaling? that yougot to believe get a compression over bonds continuing. everything is tightening up around europe. market is signaling that we are in for low growth and low inflation. that is not the remedy for high unemployment. >> i'm not sure. this is the macro view which you have. if the country's too expensive, it needs deflation, real devaluation, to become competitive and increase employment. the truth is that one has to go through a difficult period of reducing the price level. think of ireland, which in 2006, they reduced wages and prices and now they have this enormous surge in industrial output.
so that is something which we have to see in the southern european countries too. if we just pump money into these economies, that will never happen. >> professor, i want to talk about russia. were you surprised by the fact that germany has relatively short-lived pain despite all the acrimonious words we are hearing from russia? >> the russian -- the attitude towards russia is a little bit mixed in germany. the chancellor plays a hard card. the secretary of state wants to have a moderate stance. the german population at large is very nervous about sanctions with regard to russia.
i think the majority does not like these sanctions. we are very close and we want to have peace rather than these tensions. it is very difficult for me as an economist to make an overall judgment of the politics. very complicated indeed. >> thank you so much, hans-werner sinn. under fire., fifa another sponsor questioning the investigation into world cup corruption. could there be, should there be a world cup boycott? ♪
>> welcome back to "the pulse." now, the football world cup governing body, fifa is under more scrutiny over its handling of a report investigating corruption. major sponsor coca-cola is now expressing concern over the investigation. lost one majory sponsor, emirates airlines, over the controversy. hans nichols has more from berlin. could coca-cola follow them? >> they might. what we saw over the weekend is that sponsors are getting upset is beingfifa is
run. it all goes back to russia and qatar. the departure of emirates, you can kind of understand that. they are a rival of qatar air. coca-cola making noise is significant. let's look at the quote that came over the weekend. the current conflicting perspectives regarding the investigation are disappointing. our expectation is this will be resolved quickly in a transparent and efficient manner. we have to bang reports. -- two reports, . the german judge in charge of all this has an investigation. after the report came out, after it was submitted, he basically said there is nothing to see here. garcia came back and said, wait a second. that mischaracterized what i said. now we are going to have a debate about this report.
you have seen germans get ahead -- get upset ahead of the german football league. they had some pretty scalding fifa is on hpow running things. then you have the sponsors. these are the sponsors, it is estimated they pay 100 million u.s. dollars for every four year cycle. gets about 350 million sponsors. you have the players turning against you, you may have the sponsors turning against you. fifa may have some difficulties. we should bring guy in to have all the right football terms. happy that you are calling it football. that probably is a big step in the right direction for an american. we will take that as a big positive. the simple truth here is it is about transparency. why not just publish it?
>> this is the great divergent. just get it all out there. is doing is saying there are legal reasons they can't publish it. mr. garcia has referred parts of it to a swiss prosecutor. in some ways, you can see an easy resolution. that is, they publish it all. then there may be legal issues. stay away from that. we have not heard the end of this story. in drips untilt 2018 and 2022. >> all right. international correspondent hans nichols from berlin. >> let's move on and talk about some company news. into has a sao paulo -- into has a sample hello speaking to the financial times. it will face some tough competition. , credit suisse and singapore are also expected to consider a
bid. petra faxed shares are slumping as the u.k. oil and gas engineer is the worst performer on the stoxx 600. the company has issued a profit warning. it says that earnings next year will be 25% lower than expected. >> samsung is planning to shake up its top management. analysts are expecting a large-scale change in leadership. earnings are slumping and market share is shrinking. the restructuring, we think, will be announced next month. let's talk about the markets. aat we have seen is continuation of the reaction to what mario draghi said at the back end of last week. the hints that he may go further. extrams of pushing liquidity into the financial system here in europe. that is continuing to push yields lower and lower in the eurozone. what we see this morning is the spanish 10 year down by four
basis points. is takes the spanish 10 year yield from 2.01% to 1.97%. we haven't been below 2% ever. that probably gives you a sense of the historical importance of what we are dealing with here. btp is also under pressure as well. what you have to look at is the red and green. people are buying spanish bonds, they are buying italian bonds, they are selling german bonds. not much selling but a little bit. in terms of the stories, the dollar a little higher. 1.2396, not by much. a little bit higher. >> coming up, the deadline for an agreement over iran's nuclear weapons program is fast approaching. will a deal be done? >> a reminder, you can follow us on twitter.
>> welcome back to "the pulse." i'm francine lacqua. >> i'm guy johnson and these are the bloomberg top headlines. >> asian shares rose this morning in reaction to friday's interest rate cut by the people's bank of china. the hang seng index closed up almost 4%. chinese 10 year bond yields also saw their biggest drop since 2008 on the news. the rate cut was the first for the chinese central bank since 2012. >> the uk's second-biggest
insurer is in talks to buy friends life. the takeover would be the biggest u.k. insurance industry 2000. up 6%. life shares even more at the moment. britain's lewis hamilton has captured his second formula one world title. the british driver secured the crown yesterday. hamilton overtook his teammate and championship rival with a blistering start and never looked back. now, talks indiana aimed at containing iran's nuclear program could be entering their final hours. significant gaps still remain between the two sides. for more on the story, ryan chilcote is here. what do we know about the talks? >> last night, john kerry sitting in the room with his
iranian counterpart, their sixth set of talks in four days. the second time they have delayed them. that is when they started to talk the e e word, extension period the deadline is this evening. we also heard president obama over the weekend say he is not sure president rouhani maybe wants to do a deal. he said the real deal maker is the supreme leader. he also suggested the interim some positiveed results. in some cases, even rolling back iran's alleged nuclear program. the question is, are we talking about a few days, through thanksgiving, that is one of the options, or are we talking about a several month extension? this morning, the talks continue in earnest. the chinese foreign minister has arrived. he has said he has a comprehensive plan to solve the crisis.
however, there is a recognition amongst everyone that the stakes are really high. if they don't agree on something today, the longer the delay, the more difficult to get a deal. back at home in washington and in tehran, those people are quite entrenched in their views. >> across town everybody is gearing up for the opec meeting. all the action is in vienna this week. you are going? -- ryaniranians chilcote is showing up very shortly. oil cuts, iran, the pieces are beginning to move a little bit. >> the iranians according to an iranian news agency are going to propose a one million barrel a day cut when they sit down with the saudi oil minister at a meeting on the sidelines. the only thing i will say is, it
is difficult to imagine two countries that have marred difficulty disagreeing -- more trouble agreeing on anything than the saudi's and iran. they vie for leadership in the gulf. the saudi's are very skeptical speaking about iran's alleged nuclear program. areddition to that, they part of rival factions within opec. they have to agree on a supply cut before they get the other 10 countries in opec to agree. more and more, we are hearing talks that if there is a supply countries would like to see countries like russia agree as well. quote fromo say, the the iranian oil minister is one of the best ones i heard. he said iran won't decrease its share of the global market. your point that opec is in such a tricky situation that they need the help of non-opec
members, are they invited to this meeting? >> there are a couple meetings. all we know in terms of non-opec meetings is the russians are showing up tonight after the head of rosneft plays some hockey. what the russians don't know is who the venezuelans are going to invite. are there any countries other than the venezuelans? >> maybe the americans should show up. >> they are already in town which is the beauty of this. if they extend, you have these geopolitical events -- >> the secretary of energy would get quite upset if john kerry starts making policy decisions. >> to answer your questions, the first thing the saudi oil minister will want to know is, how much are you prepared to cut? the iranians don't want to cut as all because they have already been cutting. the second issue you have to look at is, how useful is a cut
going to be? that is something the saudi's will be worried about. they are worried about losing market share in the united states. you could seesay oil go to $90 a barrel. is that enough of a difference to get the saudi's inspired enough to make a cut? or are they happy for the market to correct itself? >> something we will be watching very closely. onstarts tomorrow and goes for a couple days. >> that is right. oil minister arrives this evening and there will be talks tomorrow, wednesday. >> ryan is there wednesday morning, that is the critical thing. >> ryan, thank you so much. ryan chilcote on the ground in vienna. battle to, the budget see if the eu will punish france. we will also look at president hollande's popularity problem
palio friendly restaurant. bloomberg went to find out more. about paleo diet isn't historical reenactment. it is about taking the sensible principles and saying, this makes sense. i started out doing a pop-up restaurant with my concept. now we have opened london's first paleo restaurant. the whole purpose of the paleo diet is to go back to real food, vegetables, meat, eating all the parts of an animal. the things i found most fascinating were always to do with how the body works or how food works. part-timeto study doing my nutrition diploma. for me, -- [indiscernible]
campaign to get an extra 30,000. that pretty much was the premium difference to getting to zone one. investment from friends and family. there were plenty of restaurants that were much cheaper, but because we are quite unique in what we do, we were very lucky. attracted more investment than we needed. we still got a list of people willing to invest. christmas is probably one of the easiest meals to make paleo. you have a big chunk of meat, which is about as paleo as it comes. chestnut-based stuffing. potatoes cooked in duck
fat, amazing. areo versions of desert quite interesting. you replace flour with ground almonds or you can make paleo sweetened with a bit of maple syrup. >> no refined sugar. i am of the cake school of thought. >> school of eating. good school. christmas is coming up. that is a good faculty that you want to be a member of. what have we got coming up? >> offshore wind accelerator. program aims to reduce the cost of offshore wind by using innovative technologies. more on this after the break. >> we are going to go live to paris to see if the eu will penalize the country. president hollande's approval
we are streaming on your tablet, on your phone and on bloomberg.com. -- on the lookout for what is happening in france right now. president hollande's approval rating dropping to a record low. the economy is a big reason for his lack of popularity. the european commission could announce whether or not it will punish the country for failing to meet its budgetary rules. there are reports the decision may be delayed. good morning. do you think the french will be censored by the commission? do you think we will see a problem with this budget? >> no. imagine -- how can you the second economy in the eurozone will be sanctioned for getting some slack on reducing fiscal expenditures? in a perfect world, yes but the problem is the numbers we are talking about are the numbers
that have been the overhang of the french public expenditures for the past year. i think there is no real reason to sanction france. i guess they will want to see how much of the policy stance on liberalizing the economy will work out. i don't expect any sanction. on thet further scrutiny quality of public expenditure and i expect more diplomatic talks about what the juncker plan will be. if france has to adjust for 6 billion additional to meet the trajectory that was agreed with the commission, that means maybe we could discount it from the juncker plan. we are talking about 300 billion euro deficit. >> let me just cut you off. we still understand that france and italy, these are two countries that will be confronted with a gap between their economic strategies and what the eu wants. you are saying maybe there is no reason, but we understand there
will be some kind of showdown. >> well, the problem is the following. what does it say? it says that basically if ever meet there not to fiscal targets, they will have to pay more in the following round. that is about it. there is no legal obligation. withomentum, especially what draghi said and what is happening in the eurozone, italian market completely down, french economy not growing much, less than 1% for three consecutive years, why the think they would pressure further and put so much financial stress to the eurozone? i think it is not feasible. the legal sanctions, the fines we are talking about are the amount that france needs to adjust. can tell you where the interest is, it comes from berlin.
the germans are pretty keen to stick to the rules. i suspect they will be putting pressure to make sure those rules are stuck to. the european union has rules, the eurozone has rules. particularlysire in germany to make sure those rules are stuck two. >> i guess at one point the rules need to be bent. if the germans want to pick on the french because they are not meeting their fiscal targets, we have a problem. the demand in france has held strong. no recession in france. should have adjusted faster. we did not. this is benefiting also the eurozone economy as a whole. this is bringing millions to german companies. i all right, ludovic, understand where you are coming from but what i'm surprised at is that we understand from the
eu commission that there is going to be a problem. some steps have been taken in france, however, more needs to be taken. thatact that you think france is not going to be slapped on the wrist, i think if we put that the one side, do you think that if the commission asks for more, france will give them more? >> there is a problem to your question. i think if the commission wants to do more, it is not about deficits. companies are more european than government. why don't they focus on making sure -- today, turnovers are flat all over europe. isn't that a problem? then, if you really want to talk about it, there are plenty of pipelines for fiscal adjustment. yes, france can do more and they will do more. , the difference
between the commission and france is they have different timing. there is much more to be done in france. morehing is, do they have that is waiting for the commission? i think they are done. there is already 3.8 billion. they cannot add more. >> all right, thank you so much for your time, ludovic subran. now it is time for today's new energy. offshore wind may be a young industry but carbon trust says it will be worth 21 billion pounds by 2020. joining us to discuss is breanne. they run a program called offshore wind accelerator. great to have you on the program. this is huge potential. it is going to become a huge industry. our people starting to realize? are investors at the point where they should be?
we've seen a lot of changes over the last few years. there have been changes with the governments incentive policies. we are on track in the u.k. to of offshoreatts wind by 2020. this is quite important. right now in the u.k., 9% of our energy is coming from wind in general, of which about one third is offshore wind. the reason offshore wind is important is because we are reaching a limit with on shore wind. offshore wind offers an opportunity for scale. we can continue to increase our renewables reach with offshore wind. other points that are interesting for the u.k. is that it is good for the economy. invested 310t million in the northeast. this is going to contribute to about 1000 jobs. we are seeing other manufacturers interested.
>> i guess investors, is there an appetite? subsidies pay for a big chunk of this. investors danger of pulling back to see who next is in government? >> i think offshore wind is a good opportunity for investors because you can have pension funds that are interested in the operating refunds. moreyou might have investors looking at investing more in construction finance. this is something we are working on a lot in my program, to reduce the risks with offshore wind especially in the construction phase, to open it up to more investment. >> education? it is interesting that you talk about the perceived risk. my gut feeling is, the building of this in the middle of the ocean is risky. is that where people want to put their money? do you think it is safer than
people think? >> yes, this is a good question. my program is focused on research and development. it is an industry led program. two thirds of the funding for the work we do comes from industry. that means anything we are working on is quite close to commercialization. we have the developers and the experts that are starting to become double with this and want technologies that can reduce costs for their projects. the other piece of it is helping investors that the risk is going down and the innovations we are looking at our incremental and often used from oil and gas or other industries. they are not necessarily radical innovations. you,en investors come to they want to know how much it is going to cost and the rate of return. >> yes. a big push right now is cost reduction. i think a large part of that is going to come from innovation. offshore wind is a new industry.
there is a lot of potential for cost reduction. the other area we are going to see cost reductions is when we surpass the 10 gigawatts. we are working on a lot of projects that look at things like reducing the cost of the foundation. turbines and foundations make up about half the cost of energy. anything you can do to reduce the amount of steel is going to have a huge effect. >> great to see you on the program. breanne gellalty of offshore wind. >> we are going to take a break. he for we do that, i want to bring you some headlines that are setting twitter a light. they are coming from turkey. from mr. erdogan. women should be equal with women, men with men. women can't be made equal to men. women can't work in every job with men. it goes on.
spectacular, i think, is probably the way i would put that. others are being -- >> a bit more ferocious. >> unbelievable, i think is nearer the mark. >> let's move it on. we will have more on this story. very, very important story. for those listening on bloomberg radio, the first word is up next. for our viewers a second hour of "the pulse" is coming up. >> we will be talking about that definitely and yields as well. the spanish 10 year bond falling below 2% for the first time in history. a are going to talk to european economist about that subject, how much flatter can these curves get? >> then we talk about fifa. the sponsorship headache. nigel kerry is with us. would you boycott the world cup? that is the twitter question of the day. >> we have a few on that
>> how low can they go? the yield on the spanish bond falls, speculation the e.c.b.'s actions also drive surprise gains in german business confidence. >> fifa under fire as sponsors and members slam the association over its handling of corruption allegations. could it be game over for football's governing body? >> sophisticated, stealthy, and probably state-sponsored, who's behind the most advanced spy software yet?
>> good morning to our viewers in europe. good evening to those in asia. a very warm welcome to those just waking up in the united states. i'm guy john sofpble >> and i'm lack lack. this is "the pulse" live from bloomberg's european headquarters in london. >> football's world governing body, fifa, is under, well, more scrutiny. let's be pope light. it's over the handling of a report investigating corruption in the bidding for the 2018-2022 world cups. major sponsor, coca-cola, is now expressing concern about the investigation. fifa has already lost one major sponsor, emirates, over the controversy. could it now see further major sponsors exiting? what impact would that have? let's get the latest and where this story is going. hans nichols is our international correspondent and joins us now from berlin. could coke be heading for the door? >> well, coke hinting that they want to see clarity to this scandal, this controversy over
this report that hasn't been published. it looks into how these games were awarded to qatar. you think of fifa has having two constituencies. one, they have the players, the leagues. two, they have the sponsors. over the weekend, they took shots from both. we've talked about coca-cola. perhaps just as important, if not more important, the head of the german football league. this is a league, the umbrella group for the league. he had comments that were pretty strong and pretty critical and pretty scalding about fifa. here's what he said. he said "credibility of football's world governing body is in free-fall. the action was needed with support of many countries." here's what he's getting at. he's essentially saying that if you're going to have a boycott, it's only going to work if everyone in your -- 75% of the world cup players play in european football league. it's only going to work if the boycott is european-wide. here's the challenge. while there may somebody support for a boycott in
germany, maybe even the u.k., france seems pretty squarely behind, at least the qatar bid. but we may see a situation in the come days with we'll see what the sponsors do, and there's big names, adidas, hyundai, visa, of course coca-cola. but let's look at what the national leagues are saying. up next we might hear from the french league. that might be one that i would be interested in. we know what the germans think. we'll get a sense for the u.k. and italy. this is going to be a drip, drip, drip situation until there's clarity, until they reconcile these two very public and very differing accounts of the investigative report. guy, francine? >> yes, hans why, don't they just publish the full report? >> yes, this is a great call. this is the former director general, and fifa is saying there are legal reasons they can't do that. remember, the lead investigator, michael garcia, he has taken aspects of his investigation and forded them
on to swiss prosecutors for a potential criminal wrongdoing. we'll see how much longer fifa can claim, and it may be a claim that there are legal reasons why they can't put the full report out there, or is there a way to put the report out there, but excise certain parts of it. i suspect the calls for that will be greater in the coming days. guy, francine? >> hans, thank you so much, our international correspondent there, hans nichols in berlin. >> i have to say whether or not you would consider a personal boycott of the world cup. i say opinion probably on the side of a yo that front, but a few nos in terms of tweet questions. moon in coming in, the 2026. i won't be going to any of them, says that tweet respondent. if this was a u.k. m.p., he would have been out. >> now, a new malware has been
discovered and is thought to be developed, to have been developed by a nation state to slam people and companies in at least 10 countries. this has been used for quite some time. this is the new software that's been found to do a company that actually makes security software, so they should do. it is symantec. they said that this particular malicious software has been used for intelligence for gathering for surveillance, all the way back to 2008. a variety of organizations seem to have been targeted from 2008 and 2011. they seem to come off the map. then suddenly reasserted itself back in 2013. it seems as though they're out there and they're looking across the countered. >> it's quite a broad spread of people that have been affected by this. >> it is, and trying to dig through the trends is what's been so fascinating for symantec, because they have looked at what countries that
have been targeted. so far they've seen 10, but 50%, nearly half of all those have been targeted at russia and at saudi arabia. then you get into the other countries that are higher up, and it's mexico, ireland comes up pretty high, interestingly enough, india, afghanistan, iran. belgium and austria as well. and then pakistan. but more than half seem to be russia and saudi arabia. then when you look at what institutions, it's largely and you me, individuals. it's also very small businesses. that's who predominantly is being targeted, about half of that. then the other big area of attack is the internet providers, the telecom companies. again, symantec saying that's probably just to get at your and my data, to get to the small individuals. a quarter of all attacks are going for the hospitality, energy, airline, and research institutes. it seems to predominantly be individuals and small businesses at the moment. >> why do they think it's a nation state? >> it's a complexity. it's the absolute wonder at how
this is being created, and the resources that must have been used to do that over such a long period of time. in a statement by symantec, they say the capabilities and level of resources indicate one of the main cyberespionage tools used by a nation state. they don't, unfortunately, name that nation state. we can also, we're hearing gossip i'm sure, but they have this malware with anti-forensics capabilities. i mean, it can hamper computer investigations. it's got incredibly difficult custom-built encrypted virtual systems. i mean, just to say that is complex alone, yet alone what it actually does. it makes it incredibly inconspicuous. you can't find your trail of where it's been. they say, therefore, the structure displays a degree of technical competence rarely seen before. so this is why they think that it's got to be a whole nation state funneling this sort of money. >> all right. thank you very much. caroline hyde on the latest
spyware scandal, malware story that we're watching. >> i mispronounced it. it's region, as caroline pointed out. now here's what else is on our radar this monday morning. >> yeah, in vienna, international foreign ministers are struggling to reach a deal on iran's nuclear program before a deadline tonight. u.s. secretary of state and his iranian counterparts are discussing whether to extend the deadline as both sides say significant gaps still remain. this is the second since an interim agreement was last year agreed, which curtails iran's nuclear activities, in exchange for some sanctions released. >> european commission president is set to announce a 21 billion euro fund to share the risks of new projects with new investors this week, according to e.u. officials. the fund will include loans and lending guarantees and stakes in equity to jump-start private risk taking. the commission will pledge 16 billion you're rose with five
billion coming from the european investment bank. >> new york is extending its lead over london as the world's most financial center. that's according to a survey of. 59% pick new york versus 38% who named london. that's a swing over last year's survey. the reputation has been hit in recent months by a string of scandals and dobts about whether britain will remain in the european union. >> still ahead -- drastic times call for drastic measures. draghi made clear the e.c.b. is ready to ramp up pressure to keep inflation in check. we'll discuss the impact on the euro and the bond markets. ♪
>> good morning. you're watching "the pulse." we're live from europe's bloomberg world headquarters. let's start with f.x. that has been the trajectory this morning on euro-dollar. as you can see, we have been trending higher. we did see a little bit of a blip sort of a little earlier on. i think it was sort of mid-morning, really, where the best description, not a big move, you just peck a ruler and extrapolate the ion you're looking at. throughout the morning, we've been going upwards. the big move probably, it's not a big move, but maybe a more symbolic move, but significant nevertheless, is on what's been
happening on the bond market this morning. you have seen the 10-years dipping down. the market bidding for europe this morning. it's a reaction probably to draghi, i would argue. italian bond market also big yield, dropped by four basis points. it continues to flatten out. the other end of the spectrum, a little off, but not by much. we have seen for the first time in history the spanish 10-year below 2%. that's a significant day. >> yeah, it is a significant day. let's bring in patrick armstrong, managing partner. great to have on you the program. thank you for coming on. guy was mentioning the bond yields. is this all down to draghi doing more and the markets believing him? >> it's exactly what it is, yeah. draghi has shown more and more
confidence in his comments that he does have some control, and he will get the balance sheet back to where it was in 2012. i think that shouldn't be underestimated. that trillion dollars of bond purchases will move into probably ex-complicit q.e., and periphery bonds are going to be the beneficiary of that. >> how much more do we go though? we've got the compression over bonds continuing. we've got curves flattening every where. how much more do those curves flatten? how much more does that compression have to run? >> i don't know how much further. we don't own any periphery debt. i think there will be movement on both sides of that getting the compression that continues, but i think all the steps that draghi is doing is good news for the periphery, but also to reinflate the eurozone, and this will be the consequence at some point. you don't to want buy bonds yielding less than 2% when you have a policy design to create inflation at some point down the road. >> at some point? >> it is. it's not going to materialize next year or the year after,
but when you present money and grow the balance sheet the way they are, towards the end of this decade you will see inflationary consequences in 10-year bonds. you are taking a longer-term view. >> does it mean there are concerns about deflation? >> i think that's the big risk, and draghi's rhetoric and the policies that are in place are designed to battle that risk. it's a real concern. >> >> do you think he will do something in december? >> that's coming out. we'll see what the inflation rates are, if they're moving towards december. if it's december, it will be january. in the big picture, it's whether it starts in january or earlier in december. he's been very explicit that he'll talk the euro down, and he'll make sure people know what his agenda is, and i believe he's going to follow through. >> why do you feel you're right on inflation now? for the last two or three years, everyone got really
excited about que and all this money supplies, the logical consequence is we are going to get inflation. we got the exact opposite. >> yeah, two years ago that's exactly what i was saying, i think probably on your program. wink the consequences will be inflation near term. from what's happened in the united states, you haven't seen inflationary pressures from the q.e. i think that's been pushed back. eventually that will come. what it is good news is for financial assets in the zone where they're doing q.e. it's been great news for the banks in the united states, great news for equities, and knowing you can play the same playbook with what's going to happen in the yours. i think the banks that are the biggest beneficiary. i think that's a great value play and supported by e.c.b. policy. >> what kind of banks, german banks? >> we're buying everything right now. >> italian banks right now? >> dow jones, we've got everything. you're buying banks at .6, .7 times tangible book value at the low end, below book value on the most expensive banks. wheny got the e.c.b. designed
to create a weak euro, zero interest rates, a policy designed to create a strong financial system, banks are going to be the big beneficiary. little a contrarian play, but it's just an incredible value. >> do you buy the equity rather than buying the senior -- you buy -- >> i think equity is the best place. most equities, if you can buy them below book value, they're good value. >> right. no more bank collapses, we're done with that? there's no more risks of banks imploding. you're buying everything? >> we're buying everything, and there's not no risk of the smaller banks collapsing, but every time the financial system in europe will be strong. >> but you'd be more comfortable buying the bigger banks? >> that's how the index works. that's the skew of where my positions are, yeah. >> what is one thing that you would buy at all? i mean, sovereign debt. let's go back to sovereign debt. >> we're short german bonds and .75, .8 yields. it's risk-reward. that's a very good short. what are interest rates going to go down to?
they're not going fall towards zero. if the e.c.b. policies are somewhat successful, i think that will drift higher to 1.2 by the end of next year, and that will be a big part of the compression between germany and the periphery. it will be movements in both directions. >> what if you can't deliver? >> well, that's the risk. you don't get anything risk-free, and i think he can deliver, whether germany stops in delivering, i think he's got enough political capital, i suppose, to steal the term from george bush, that he will make this work. the whole world wants him to make it work. i think for that reason i'm confident anyway that the e.c.b. will do it. >> except for the german economy. >> yes. >> i mean, i guess the only reason why you wouldn't make it work is german opposition, if he plays into that, because he can ignore him, as you're saying. but is timing of the essence? will he doesn't do it in december, will he have lost an opportunity? >> well, i don't think so. i think there will be strong words in december at a minimum.
and i think that's what draghi has been incredibly successful with since 2012, whatever it takes, inflation, these are very powerful things, and it's like pavlov and we're like the dogs, i think. he's going to make sure every time the euro strengthens, he's going to punish people who are taking the opposite side of that f. you're seeing stress, there's going to be strong words. that's very powerful, and i think that's going play off. >> eurozone assets or japanese assets, compare and contrast. >> eurozone is cheaper. but i prefer the eurozone banks just because that's the one segment that hasn't moved up at all in the last couple of years. if you bought the eurozone 600 two years ago, or in 2009 versus banks, it's 200% difference in the performance. that's just the one incredibly cheap area in the world right now that policy is very supportive, so i think that's going to push stocks higher than japanese stocks over the next year. >> all right, patrick, thank you so much. patrick armstrong there, managing partner.
now, we're just getting breaking news. >> yeah, b.t., british telecom, in early talks to to buy the u.k. mobile operations, one of which is o.t. b.t. says it's in talks with o2 u.k. mobile. no certainties that transaction will occur. talks are at a highly early stage. b.t. group expressed interest from o2, which is interest in terms of the way this works. b.t. provides mobile services, but the possibility that we will see b.t. making a transaction in the u.k. space is quite interesting, and the fact it's with two operates also quite interesting as well. maybe you can buy both of them. >> now, still to come -- iran says nuclear deal is possible by today's deadline, but is an extension on the way? we'll bring you the latest on these talks after the break. ♪
>> welcome back to "the pulse" live from bloomberg tv and streaming on the ipad and, of course, bloomberg.com. the deadline for nuclear talks with iran is just hours away, yet it seems unlikely there will be a deal today. so what's next? our middle east editor has more. elliott? >> thanks, francine. i'm pleased to say i'm joined by a electric for in iranian politics. great to have you with us.
deadline is looming. we like to see a deal by the time of this deadline, midnight vienna time. if there is a delay, is that a death knell or just a postponement? >> if there's going to be a deal, it looks like it's probably going to be an ex-continuation and probably call it a political agreement, which will say that each side has made promises to compromise, but with this political agreement, they will get extension in order to work out the details of what that compromise exactly looks like. that seems to be the most likely scenario. however, when it comes to iran, nothing is impossible. it's possible that both sides decide not to continue with the negotiations. the chances of that are small, but i don't think it's going to be a death knell. sooner or later the two sides are going to negotiate again. >> what are the main sticking points? is it coming down to the capacity that iran would be allowed to have and also the pace on which sanctions are unwound?
>> those are two of the sticking points, and important ones. the west wants iran to make significant compromises. currently iran has around 900,000 centrifuges. the west wants that number to be at least half, if not even a smaller number. at the same time, iran wants the first step in such an agreement for all the sanctions to be removed. there's also the questions regarding how long such a deal should last. the u.s. apparently wants it 10 or 20 years, iran wants five years. these are numbers we hear. >> inevitably there will be compromises between iran and the world powers, and it seems inevitable that whatever deal is or isn't reached the israelis aren't going to be very happy. what kind of deal would satisfy prime minister netanyahu, and is that the same kind of deal that the u.s. is pushing for? >> prime minister netanyahu wants to completely dismantle its nuclear program, which is not going to happen. this would be culturally suicidal -- i'm sorry, it would be politically suicidal to do it at this stage, at this
stage. i think prime minister netanyahu wants to do that, but might as well buy him a villa in tel aviv, because they will need that after he makes such a compromise. but when nobody in the international community wants to have nuclear weapons, it's called for the elimination of the state of israel, the american way, which iran with some limited enrichment would be the best compromise, leaving rone with something and us in israel with the knowledge that iran would be kept at least a year away from the bond, if it decides to go down that part in the future. >> ok. thanks very much for joining us. that deadline, francine, midnight tonight, vienna time. >> elliott, thank you very much indeed. we also have more comments a little bit later on on what was said this mr. by mr. either owe ban in turkey, vis-a-vis women's rights, a subject that seems to have gotten plenty of
>> welcome back to "the pulse." >> good morning. these are the top headlines. >> shares rally right now, the telecom company is in talks with two operators to buy their u.k. mobile assets. the news came in the last 10 minutes. >> more on that shortly. he one billionen fund.- 21 billion we expected this week. that according to your
officials. the fund will include loans, lending guarantees, and space and equity. the idea is to jumpstart risk-taking and eurozone. the commission will pledge 16 billion euros. turkey's president has been making some controversial comments in this temple today. beogan says women cannot made equal to men. he said they cannot be expected to work in every job that men work. people are taking to twitter to vent frustration. one viewer said he is probably talking about his job. fran's blood will boil if we talk about this any further. we will get the reaction to the story from turkey a little bit later. >> at this point i'm feeling pretty lucky to have been born in europe. let's move on to the currency markets. >> and what has been happening in the bond markets as well. the bond market's more
significant than the currency market. let's start there. actually, we are not going to do that. we're going to do the euro-dollar. reaction, obviously, to what esther draghi had to say last week continues. -- to what mr. draghi had to say last week continues. as you can see, we see spanish bonos down by four basis points, taking the spanish tenure below 2%. that is the first time in history. not an insignificant day. we are selling german bonds this morning, not by much, but we are seeing a better bid on the peripheral bond market today as a result of what mr. draghi had to say at the tail end of last week. >> in about 25 minutes, "surveillance" with tom keene. he joins us with a preview. >> we're looking at a four day work week here in america.
francine, friday, we will have a lot of fun on "surveillance" but that is a quiet day. thanksgiving is on thursday. that is a holiday where turkey is served and we celebrate the pilgrims coming from england over to america. a few years ago. you should try it sometime. you will love it. what we have today? a quiet market. guy with that important yield in spain. a perfect day to speak to mr. hume that what we see in eastern europe and the effects with russia as well. we will talk about the view to 21 he 15 -- 2015. oil at $80. brief usingly will breach o from washington. it is a real mix today. >> i'm looking forward to it.
thank you, tom keene. for the record, i have celebrated thanksgiving because time, you forgetting, i grew up in the states. >> i'm cooking. >> wears invitation? >> i'm buying everything at the store. i'm really not cooking. >> i'm disappointed. >> i'm disappointed, too. >> his cooking tips later on in the program. >> we are digressing from the normal menu of financial news that we deliver on this program, but let's bring it back to the battle between new york and london. keeping its crown as the world's most important financial capital. with london coming in a distant second. this according to a survey. john glover joins us now.
how is new york -- what is going on? >> there are more billionaires here, purely, -- apparently. there are more billionaires in london than there are in new york. no, it seems according to surveys, partly to do with regulation. obviously, there's the usual lyrical uncertainty -- political uncertainty in the u.k. situation with the scottish referendum, plenty of regulations coming from europe that are not necessarily favorable to financial -- >> this is on bankers, bonuses? >> bankers, bonuses. it seems one of the arguments in one section of the report is the eu, collectively, sort of blamed
hedge funds for the financial crisis. >> and americans. >> and americans. it has led to regulations that have encouraged a bit of an a this. there is plenty -- the thing is, more than anything, the report underlines uncertainty and regulation. >> that is interesting. in many ways, the u.s. doesn't have a functioning government. we obviously have what is happening at the white house and capitol hill may be moving into different directions, but the u.s. economy seems to be functioning well without the government. it is a bit like belgium. governmentwe have a -- maybe -- but it is a regulatory story that is really coming out of the survey is being a problem. we're ever governmented here. >> partly true. the initiatives that have stemmed from perhaps not fully understood events.
events that haven't really been understood haven't helped. the financial transaction tax, which sounds like a great idea, if you don't think about it, that hasn't encouraged finance to make a big showing in the u.k. london, perhaps, with its tradition of fairly -- what is laissez-faire, hasn't benefited too much from a more intrusive, more prescriptive repertory regimen in the part of the europeans. the result of that is, the u.s. may not have a government, quite clearly, this point of regulators. they don't they're doing, and it quickly. the uncertainty is what seems to have been -- >> the big enemy. thank you so much for that, john glover. let's get you some company news.
>> do you want to read this one? >> considering to make a bid, saying the british private bank owned by rbs was by definition a consolidator. they will face tough competition. >> google facing a fight with the eu, this time over costa break up the road largest search engine company. lawmakers will vote on a draft resolution that proposes unbundling search and other commercial services should be considered. google accounts for more than 90% of the search market in many european countries and is .lready under eu scrutiny >> samsung is planning to shake up some of its top management. analysts are expecting a large scale change in the oval division. market share is shrinking. the restructuring will be announced next month. >> coming up, under fire.
we are talking about the 2018-2022 world cup. being tackled by sponsors who have cried foul at the lack of transparency in the bidding process that awarded the rights host to these events which are effectively the world's most widely viewed sporting events. emirates have decided not to extend its sponsorship contracts. -- of events is in atar qatar. coca-cola is expressing concern. good morning to our guest. if you are running coke, running -- would you be running away with thinking about walking away at this stage? what kind of process which you be going through? >> i think they're a long way from walking away straight away. they will be looking at what is going on very carefully, but there will be very nervous at the same time about giving up their position at the top table biggestis the best and
global branding opportunity. >> but at the same time, there are so many sponsors and the have so much money that if they all came close together, then they would make a real difference. >> i think that could make the difference, if they managed to get together and work as a team. they provide about 40% of fifa's finances, so it is a significant power base they have. only if they work together can have a real impact. >> but do they want to? and why would they not? >> we live in a world now where brands are incredibly protective of their image, of their status, and how they're perceived. the expositors should like this, if he gets into the area where the brand could potentially be damaged by an association with fifa, i think they will look at a very, very carefully. >> i guess the argument that may be being held, if we don't say something, do something, be seen
to be taking action, then by implication, we are associated with the problems that are existing at fifa? we are not part of the solution, but part of the problem at that stage. >> the very fact that things have been said by coke and other brands will say something at some point, it shows they are becoming sponsors -- sponsors are becoming more powerful, much more significant. a few years ago, they would not have been listen to. they would have just gone on. >> do they have to be seen as ethical? what i don't understand, there i fifa, the players, guy and possibly going to sit world cup game, and then there are the sponsors. who is it up to do make this change to push for more transparency? >> i think it is up to the brands -- >> to push for more transparency. >> at the end of the day, they will be damaged -- >> so they have the most to
lose. >> they have a lot to lose him a yes. but this is such a powerful vehicle, the world cup, their desperate to be involved with it at the same time because it does provide them with fantastic global platform. >> do you think of coke walked away, pepsi would step in? >> there's always that chance. there was a famous bust up between visa and mastercard when visa took over the sponsorship. their huge rivalries. would be worried about nike. their great battles going on between the top -- >> are their guerrilla marketing operations i could be used year? -- that could be used here? we're notsi saying, taking part in was some acs an operation that has a lack of transparency, are there ways those other guys could be making benefits? >> i think certainly they would such a look at that side. they have to be careful and do but certainly the
existing partners that are involved in the sponsors will be very, very wary of what the competitors will be doing. >> so basically, no change. >> i think if they work as a team and they work together, i think they can put significant pressure on fifa. thes it up to us as consumers to put pressure on the brands? >> they will be thinking carefully about the spirit. they would not want the situation to continue for too much longer with all the rumors and uncertainty. examplesere any other of this kind of situation occurring that spring to mind? in a useful, benchmark for how we think this will proceed? >> there is not really. this is so big. the fifa world cup is one of the biggest events on the planet. it did so much media attention
and some at interest. and these are huge global brands we're talking about. they've got significant power base. they can do something if they work together and use all the resources. >> thank you so much, nigel. cartel clash. find out why opec members are at odds over what to do about falling oil prices, coming up next. ♪
>> welcome back, you are watching "the pulse." on the asset classes, but shea what is happening with the euro dollar. it will be an interesting week. further action from the ecb being priced in. we are coming up to that beginning of december meeting. we give projections, a significant revision and will we see further aggressive action? not sure everybody will be onboard with what he delivers next. the euro has strengthened throughout the morning.
let me show you what has been happening with the bond market because that is where the action is. the real bid this morning has been in peripheral europe reacting to the draghi story. the spanish bonds parading at 1.97. well below 2%. when was the last time he saw below 2% for spanish government 10-year? never. it is never happened before. we are down by four basis points. that is the story. the market is reacting. day,r the rest of the ryan, we're watching bond yields and also watching vienna as we have that deadline for these nuclear talks. that may be postponed. >> we have iran and the six world powers -- powers in talks. talks may be adjourned today to be resumed in december in oman
for more talks. i would not read too much into that. there is talk they would like to get some kind of compromise deal today. the news agency reporting there is hope there could be some kind thatlitical deal today would allow for the implementation of the deal coming later. also when we talk about vienna, we have to talk about opec, that meeting on thursday. it is the pregame show that will occupy our attention. we have the saudi oil minister arriving this week. there's anyone that can move the oil market all by himself, it is mr. 90 arrives this evening. >> he has the spare capacity. we have the russians arriving tomorrow for talks with the venezuelans of perhaps many more. there's a lot of talk the iranians will sit down with the saudi's. i will be in vienna starting to march watch it all. >> ok, we look forward to that with keen anticipation. much of the rest of the
conversation that will happen today is going -- growing backlash against prime minister erdogan's talks -- >> i'm going to let fran do with this one. fairly controversial comments. >> basically, he says women cannot be made equal to men. he says they cannot make to work in every job that the men work, and religion -- the religion has upheld the state's from when women and mothers. i sure you, this has set twitter on fire. it is a pretty sad day, in my view, for women's rights in the country, especially in the early parts of the century, one of the greatest reformers giving women rights. >> i think pretty hard to disagree with what you just said. >> that is something we're watching and bp shares of announcing good morning there in talks with two operators in the
u.k., maybe to buy their mobile operations. bt is overdue talked about the fact -- has overdue talked about the fact it may be expanding its mobile operations. bt is to looking to get back into the workplace. what you may see is bp making acquisitions. probably buying operators such in early-stage talks. also other operators. at least one other operator it is talking to as well. showinging we're pictures of telephone boxes, which is the exact opposite almost, the varying cap solution of six line here in the u.k., vegas -- fixed line here in the ok. more about what is happening in the mobile space. >> [indiscernible] >> a long time ago. shares.tching bt
let's have a roundup of the markets. it is all about the yields, what mario draghi has promised the past couple of days. it seems those a little momentum for him to act in december. we're expecting the ecb to lower their forecast. >> he is looking to spend -- >> more than two pounds, really. >> he is upping the game. the story mario draghi is pointing to. the effects still being felt from last week. the market price of little bit from him last week also priced a bit from the rate cut we saw from the chinese. at that has continued today. the london market is being held thatmber of factors today, story is acting as a bit of a drag. >> and read a great conversation with hans the german business confidence gaining because that is all tied to what mario draghi is expected to do, putting that extra stimulus on a table. but he was quite cautious.
he said, look, let's wait for the moment. it is good news. but certainly, the german economy is going to see some headwinds as we go forward. >> that just about wraps the program up. francine is going to go and continue to tweet about what is happening in turkey. i will continue -- >> we all should, as citizens of humanity. continue to tweet about erdogan and turkey. it is not even a woman issue. keep it right here on bloomberg television. "surveillance" is live from new york with tom keene and his team. i think there are ready in thanksgiving mode. earlier on, he did not want to talk about what was going to be on the program, but is cooking, or lack of it. >> i think we will see a few surprises. watch out. >> very nervous about what could be happening next on "surveillance."
mutually beneficial. markets turn on this monkey -- monday. the turkeys, not the monkeys, down on the farm they turn as well. a new digital media. brand building. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. it is monday, a short work week, november 24. i am tom keene with scarlet fu. she demanded to be on the show today, olivia sterns with us as well. let's get to our top headlines. >> time is running out on the negotiations with iran over its nuclear program. john kerry and his iranian counterpart are talking about extending the deadline. u.s., russia, china, and others are going to stop -- try to stop iran from developing nuclear weapons but iran wants fewer economic sanctions. if there is an agreement, the