for 2015.fed pushes janet yellen confirms the central bank is on course to raise rates sometime this year. the dollar and american stocks jump. who's driving vw? the supervisory board is expected to name a new ceo. and, back to work. the begun j main inflation gauge falls into negative territory for the first time in more than two years. welcome to "the pulse" live from
bloomberg's european headquarters in london. i'm francine lacqua. but that is back in focus after janet yellen said she is ready to raise interest rates this year. the federal reserve chair said she intends to let the labor market run hot for a while to heal the lingering scars of the global economic crash. let's check in on how the markets have been responding. mark, they seem to be pleased to have clarity. mark: clarity is the buzzword. after the muddled message last week, there's clarity. janet yellen yesterday paving the way for a rate hike in 2015, giving a sense of certainty. investors love that. risk assets are rising. have a look at the msci. before today, it had fallen for five consecutive days, falling every day since the federal reserve kept interest rates unchanged last thursday.
we got a bounce back today. european stocks are rising. the dollar is gaining. gold is falling as well. emerging markets, asian stocks swinging between gains and losses. the certainty has given investors a bit of a boost after this five-day 4% drop in this gauge for global equities. francine, emerging markets are going to the effected -- affected by an interest rate hike by the fed. one of the emerging markets that's been battered by the prospect of high interest rates is malaysia. the ringgit today falling to its lowest level against the dollar since 1998. it's on track for its biggest weekly slump against the dollar since the height of the asian financial crisis in 1998. what we're seeing is, not only is the prospect of higher interest rates scaring
oilstors, but this is an producing country. oil has been coming down. this country relies on trade with china. we know about china's financial woes. there's also a political scandal in snaring the prime minister. this is the worst-performing asian currency against the dollar in the last 12 months. in that period, the dollar has risen by 35%. that's quite an astonishing move. i want to get back into equity markets. there's a big election taking place in spain this weekend, in catalonia. what this election is doing, it's casting a cloud over the spanish stock market. the spanish stock market, the ibex, this benchmark right here has fallen by 8.5% over the last month. alongt's rebounding today
with other european markets, but it's falling over the last month. the concern is that this election could lead to a separatist victory which could lead to the region being separated from spain. this matters because the region accounts for 1/5 of spain's economic activity. spain has been the breakaway economic success this year. spain doesn't need catalonia breaking away. other concerns are companies like santander, companies deriving a lot of their profits from emerging markets like latin america. that's been dragging on the ibex as well. worst-performing european benchmark over the last month. watch out for those elections on sunday. francine: thank you. mark barton with your asset check. let's introduce our guest host, patrick armstrong. he's going to be with us for
much of today's show. he helps manage around 1.2 billion pounds in assets. welcome. let's look at what janet yellen had to say. yellen: most of my colleagues and i anticipate that it will likely be appropriate to raise the target range of the federal funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter. if the fomc were to delay the start of the policy normalization process for too long, we would likely end of having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. the united states has experienced very low inflation on average since the financial crisis. in part reflecting persistent economic weakness that has
proven difficult to fully counter with monetary policy. francine: we should of course mention that fed chair janet yellen has resumed her planned schedule after feeling unwell towards the end of that speech. she felt dehydrated and was seen by medical staff. let's introduce patrick you're sticking around for half an hour. thank you so much for joining us. janet yellen yesterday seemed to be pretty certain that she'll be able to raise interest rates this year. last thursday, she didn't. nothing's changed in the last seven days. patrick: nothing's changed. she was talking about deflationary forces, bringing current inflation into the picture as a decision-making metric. if you would have listened to her in august or july, she would have said we expect to raise rates in september.
it is status quo. every decision we go into, we don't know what the outcome will be. francine: clear guidance is clearly not working, right? what do you make of last week? she was spooked by market turmoil and now she's brave enough? patrick: maybe it's just where the vic's was. by the time we get to october, maybe markets have settled. she didn't want to set off maybe a bear market. francine: our twitter question of the day is, do you believe janet yellen will raise rates in 2015? patrick: putting me on the spot on that one. i would have said no yesterday. today, i'm thinking she will. they are all consistent with that they want to do it. even though nothing will change by the time they get to october and nothing much will change by december. the economy is running not full steam, but doing pretty well.
unemployment may fall below 5%. francine: we are so obsessed with the timing. the important bit is that they raise a little bit, then stay on hold for a while. patrick: they need very loose conditions. with other central banks already cutting interest rates, taiwan, ,nd they see the -- and the ecb a small tightening from the fed relative to everything else may be a little bit more impactful than just the 25 basis points in isolation. francine: do you think the market made a mistake not to raise last week? that's the only thing that's changed. i wouldn't call it a mistake. given the anxiety and where everything was last week, there's very clear deflationary forces that china can export to the united states. if they hike early, that is a
potentially bigger mistake. francine: last time we were here, you talked about china. you had numbers from alibaba. are you more at ease with what's going on in china? patrick: china's slowing. it's not going to achieve 7% growth. the official number will be slightly made up anyway. nike had very good numbers. china isn't going into a hard landing. they've got $3.5 trillion to put into fiscal stimulus. they will start to ease that. they've been very proactive on the monetary side of things. fiscal stimulus is the next thing they are going to engage in. that will drive chinese consumption if they do that effectively. that will be great news for equities as a whole. francine: great news for equities. what's your favorite play? equities are probably due a
correction? patrick: they've had that correction, haven't they? 's a correction. we were short u.s. equities. we've closed that now. i was buying the euro stoxx 50 yesterday. i think that is very cheap. u.s. has deflationary forces, but europe even greater with the euro where it is. francine: patrick, thank you so much for joining us. stays with usong and we will be talking about europe next. here's a look at what else is on our radar. volkswagen's board is expected to name the successor to former ceo martin winterkorn. 27 u.s. states have begun a joint investigation after the world's biggest carmaker admitted cheating over emissions tests. japan's rate of inflation has fallen below zero. the bank of japan's main leisure
fell 0.1% from a year earlier. haruhiko kuroda is expected to discuss the economy with prime minister shinzo they. but to our meeting today according to nikkei newspapers. we will also hear from an ecb governing council member. jens weidmann is speaking later today. ,"ming up on "the pulse driving vw. fed it's not just the looking to raise rates. what about bank of england? we will be talking to former member kate barker. loss, how many iphones can apple sell? we will look at demand for the new models as they arrive in stores today. ♪
francine: volkswagen's supervisor board is expected to appoint monteith mueller later today. the carmaker attempts to repair its tattered reputation. we are joined by international correspondent hans nichols at volkswagen headquarters. ryan chilcote is outside a dealership in london. hans, is matthias mueller clear
of the scandal? hans: in some ways, porsche doesn't have a diesel problem. if you think the problem is focused on diesel, mueller isn't necessarily tainted by it. they have one diesel offering. in some ways, he has a bigger challenge. the entire european auto industry has a bigger challenge. behind me, you can see greenpeace. they have pinocchio. they are protesting. they are saying, no more lies. what they are saying is that the diesel scandal in the united states is just the tip of the iceberg. in some ways, you look at the body language and the pronouncements from her again later's and they are on the same page with greenpeace. the eu want to test everything. they are urging all countries to test. there's a report out in a spanish newspaper that 720,000 the a kohl's will be tested
there. when i spoke with matthias mueller i asked him, is there a danger if regulators went too far? what would they do to the industry? challenge to .educe the co2 giveshould be careful to new orders. it's a huge challenge for the car industry to fulfill the targets. hans: so there's a danger that regulators go too far? yesterday, we were talking about how a single report by this group, the international council for clean transportation, had moved the share price of bmw by x-3 thatse they had an
didn't meet standards. it was polluting 11 times more than the european allotment. i expect the conversation is going to shift from vw and turn into a broader story of, is diesel a safe technology? is it a clean technology? greenpeace is going to try to keep that on the forefront. francine: emissions probes piling up. the scandal has increasingly global implications for vw. there are probes around the world. hans: i think the most interesting development is that 27 u.s. states are starting their own investigations. not only do they have to deal with potentially the department of justice, there are 60 class-action lawsuits that have been filed, and you're going to have a potential fine from the environmental protection agency, then you have these 27 states, maybe more.
it gives you a sense of how many jurisdictions they are going to have to deal with. that's why matthias mueller needs to find a solution. i don't know if they just remove the software. that is what dr. winter corn was implicating. then there's a pr solution. that's going to be more difficult. then there's a potential criminal liability aspect and civil liability. matthias mueller is an engineer. he started as a toolmaker's apprentice. he's a pretty sharp guy. he's turned porsche into a profit center. iny had 3 billion in profit 2014 on 190,000 vehicles. francine: hans, thank you. ryan, you are in the u.k., outside a dealership. what do dealers think about the scandal? ryan: what the dealers want right now from volkswagen is
more information. in the united states, the dealers at least know that some of volkswagen's models will not be sold going forward. some of the diesel models. here in europe, they don't even -- they know even less than that. there is information about recalls or compensation. interesting to hear the dealers stateside actually writing a letter on behalf of or in support of the head of the w in north america. you would think they would want him out. actually, they say the new boss in north america that came to office in january of last year has helped turn vw around in the u.s. market and it could be very catastrophic for the u.s. market if vw was to get rid of him. after they wrote that letter last night, we learned that vw intends to get rid of their
north american too. he's one of the three top executives we expect to go. the relationship is critical. in many countries, dealers are the only way that a manufacturer can sell its cars. they have to sell their cars through the dealer. in europe, they can sell in some cases directly. all the same, dealerships are enormously important. they need the dealerships to be happy. they also need them to be profitable. otherwise, they're going to turn their backs on volkswagen. francine: this will have global impact. what do we know about vw sales overall? question.'s the big so far this year, looks like and has sold just over 5 million cars. that's giving vw the upper hand in its battle for supremacy in the car market in terms of global total sales over toyota
by a very thin 20,000 margin. vw was facing declining demand in china. now you have this problem in the united states. morgan stanley saying this scandal could cost the w 4% of its global car sales. in other words, vw is looking pores -- poised to lose if supremacy. the u.s. is going to hurt. diesel engines were a huge part of their strategy in the united states, the world's second are just car market. francine: thank you so much, ryan chilcote and hans nichols. we have a big wrapup because this has huge ramifications for carmakers. let's widen this out to the macro picture in europe and bring you patrick armstrong. patrick, thank you for sticking around. you own some bmw shares. they had, what, the stock price
fell? what's going on? patrick: all of germany, not even the carmakers, there's a potential contagion about made in germany things. i would be very hesitant about getting into the w right now. i think the issue surrounding germany as a whole will pass. it is a scandal with a particular company. francine: is this almost like the libor moment for carmakers or is it just a very unfortunate event? patrick: i hope not. you can't tell for sure, but this, what vw did wasn't a mistake. it was a clear deception. i would be surprised at this point if it's affecting the whole industry, but it's too early. it's justified that you've seen a discount across german automakers. i do think that will pass.
vw has years and years. they are trying to draw a line. they took ownership of it. they fired the ceo. the overhang in terms of lawsuits and how this is going to affect the brand, that's going to last for years. francine: some notes said this is a breaking of the trust of the u.s. consumer, which is probably the most read up consumer in the world. others saying this is such a disaster that it will impact like you were mentioning the made in germany and possibly euro. that seems a little far-fetched. patrick: buy a month, that will be forgotten i think. people overreact in the short-term that this impacts everything. in reality, it's much more focused on vw. maybe diesel as a whole. in the united states, diesel has a very small penetration base. this make a lot billion -- this may kill off diesel in the
united states. francine: i was looking at some charts. for the first time in 11 years, the italian index is performing better than the dax. is it the right time to get back into periphery? patrick: i think it's the right time to on europe as a whole. i think the whole regions cheap. germany's caught up the w and china. i think it's a good time to be buying dax as well. francine: patrick, thanks so much for now. i want to turn now to japan where inflation has turned negative. it is the first decline since april 2013. bloomberg's james baker in tokyo. can we expect a pickup in inflation anytime soon? >> it's hard to say if you believe what the bank of japan is saying. they say inflation is going to take up to 2% next year.
if you speak to economists we speak to, they say that's not going to happen. it depends on what happens with oil prices. once you strip oil prices out from the indicators, it rose between 0.8% and 1% in august. as you said, cpi is negative. it partly depends on what happens with inflation. it partly depends on the overall economy. you're definitely not going to see the speedy pickup in inflation that the bank of japan is predicting. we are currently at -0.1%. to go from there to 2% in the next 12 months, 11 months actually, is going to be a very tall order for japan's economy. francine: are we actually going to get more from the bank of japan? it seems inevitable that we get something in october. >> that's what i've asked
economists. governor kuroda has said earlier that he thought that inflation might go negative, and that's not necessarily going to force them to act. one indicator they're looking out more now, energy. if you take him at his word and look at the inflation indicators they've said they are looking at more and more, that means they may not have to ease more. they may say, if you ignore oil, there's no reason we should have to ease. there's also the expectation that it is going to happen on the last day of october. francine: james, thank you so much. yellen reaffirms her belief that the fed will hike this year. could the bank of england do the same? patrick armstrong, final word? next year? patrick: next year, i think
welcome back to "the pulse." i'm francine lacqua. these are bloomberg's top headlines. janet yellen has confirmed that the u.s. federal reserve is on track to raise interest rates this year. in a speech at the university of massachusetts, she placed herself in the camp of committee members favoring the 2015 increase. she also said that tightening would be gradual. the fed's next decision comes on october 28. volkswagen's board is expected to name the successor to former
ceo martin winterkorn today. 27 u.s. states have become an investigation into vw after the world's biggest carmaker admitted to cheating on tests. japan's inflation gauge fell 0.1% in august from a year earlier. it is the first decline in prices since april 2013. embarked on aa record campaign of asset purchases. pope francis will address world leaders today at the united nations. the pontiff will push for a successful outcome for climate talks to be held in paris this year. he's also expected to call for a fair economic system and condemn human trafficking and religious prosecution. more than 700 pilgrims were killed in a stampede near mecca on thursday. the disaster happened just two weeks after a crane at the religious site collapsed. the stampede is the worst tragedy at the pilgrimage in 25
years. in central-bank action, janet yellen thinks the fed is still on course to raise rates in 2015. what about the bank of england? earlier, a citigroup economist expressed his doubts that either will be hiking in the near future. >> i think as the evidence comes -- [indiscernible] with pressure on growth coming from commodity prices, we're going to see also downward pressure on the important component of inflation. i think it's unlikely that either the u.k. or u.s. are raising. francine: let's go straight to mark to look at the probabilities of a rate hike. mark: traders agree. looking at interest-rate probability, the chance, the probability of a rate hike in the u.s. this year is at 49%.
before yellen spoke, it was at 43%. it's increased, but there's more than half percent likelihood of no likelihood this year. when the fed didn't go last week , the pound was severely dented. this is the pound since last friday against the dollar. it is down by 2.3%, telling us that interest rate expectations are being pushed down. forward contracts based on the sterling average suggest that the first quarter-point increase by the bank of england will have them in november next year. before the fed didn't move last week, the suggestions were we would see a rate hike in august. this is a map showing you the chances of a u.k. rate hike. the middle part of the chart, the white line, is the chart that is the most central outcome.
it tells us the first rate hike by the bank of england is likely august of nextt year at the earliest. really, whether you are looking at the soanya chart will looking at short sterling futures, looks like it ain't happening till the second half of next year in the u.k. francine: mark, thank you so much. the annual mms takes place at bloomberg today. it brings together former policymakers and the central-bank-watching community. for more on this, we are joined by a former member of the monetary policy committee of the bank of england, kate barker. great to have you on the program. i'm still trying to figure out what we've learned from janet yellen, apart from the fact that she wants to raise rates this year. does she actually feel more comfortable with the environment or is this miscommunication? assumedkind of always
the fed would want to have a situation where the first time they raise rates, the market is kind of expecting it. if you look back, they clearly decided because of worries about china the fed was unlikely to raise rates. we had a whole range of other comments. i think what's important about janet yellen yesterday was, it was the first time that we got a sense she thinks the fed needs to be going up. i imagine it is always data dependent. never say too much about what you might be doing two months down the line. sure as anything, something will knock you off course. francine: are you uneasy about the fact that we used forward guidance? in the last 18 months, there's been this push for the markets to understand better. kate: i think that part right. i was slightly uneasy about forward guidance in the u.k.
best you can do is try to describe what would cause you to change your mind and what you're assuming in what you write doing. markets often take their eye off the ball. you say we may be raising rates and the markets don't take enough notice that would cause you to change your mind. i think the speech from yellen was interesting. it is now more likely the fed is going to raise rates because they have their eye on domestic conditions and they don't think conditions in emerging markets will knock them off that course. francine: how much reasoning is what is happening with the rest of the world? janet yellen may now see herself as central-bank of the world. i would argue that it should have always been the case. she's being led by the markets now. is this dangerous territory? righti think it is quite
for them to recognize their responsibility. enough to arrogant think we were the bank of the rest of the world so we worried more about the world in so far as it impacted us. the bank of england is in a different position. we've seen some signs of potential inflation down the road. while i don't approve necessarily of forward guidance, i think the bank needs to be forward-looking. of course, we've got low commodity prices at the moment. that's keeping down importers. import inflation is low. the bank looked through import inflation when it was high. they ought to look through it again when it is low. you mentioned the conference today. we are sort of saying, this is what we thought ahead of the crisis. this is the kind of emergency stuff we've done during the
crisis. now what do we think about monetary policy? do we think the way in which we judge inflation and set policy ought to change? successeso me that my at the bank of england were dealing with really different problems. francine: so we should argue that inflation should not be looked at at the moment? the central bank has no impact on inflation, so they should look beyond it? kate: current inflation so far as it is important doesn't matter. domestic inflation is important. before we went into inflation targeting, the central bank needed to think about monitoring the economy. growth in europe is satisfactory. we've seen unemployment fall. credit for smaller businesses is flowing much better. in these circumstances, maybe we should be thinking about moving
towards normalization of interest rates. growth looks normal to me. are we in a world where interest rates need to be lower? i'm not really convinced by that. central bankers attached to much importance to themselves. i spent years talking to people like you. francine: it actually matters to financial markets, which is different to the real economy, but the markets have now gotten so big compared to 15 years ago. how much would you focus on that? kate: you don't want to disrupt the market. that's y given does want to give some indication as to where she's going. it is hard to believe with all these noise about everything being gradual it should upset the markets too much. surely everybody's factored that in. i think it's very important for the central banker not to be
threatened by the markets. in the end, it's what happens to the real economy that should affect whether you've done the right thing. francine: we're getting some headlines from the bank of england, saying there are risks to stability. the outlook remains challenging. house price inflation may pick up in the near term. i wonder how much you would focus on currencies around the world. currency wars, this gets bandied around sometimes. do you think we are in a race to the bottom? are we back to what happened in 2010? kate: i've been very disconcerted at the way in which country after country says the solution is to devalue. the solution to our problems is to work out a way to get the world growing again. a number of economists say it is not all about monetary policy. it is about fiscal policy. world,n the developed
some countries are trying to pay down their debt too quickly. we know it is going to take a long time. monetary policies do unusual things. fiscal policy has done some unusual things. francine: should the bank of england wait for the fed to increase interest rates before deciding what they do? kate: i don't think you have to wait for the fed, but it is quite likely that if the fed doesn't move, it will make it more difficult for the bank to move. if they push out the bank -- i do wonder if it's being pushed down a little bit too far. the reason for that is the last time there were key indicators that he was thinking maybe six months. francine: he's going to be very critical. francine: there's no way he's going to be in the minority after all this time. his vote for this hike i think is the most important one. francine: kate barker, thank you
for joining us today. that brings us also to today's twitter question. do you believe janet yellen will raise rates in 2015? you can tweet me. still to come, iphone launch day. the iphone 6 sold 34,000 phones and our in the holiday quarter last year. analyst expectations for the new models are a little lower. ♪
francine: welcome back to "the pulse." it's a slamdunk for nike. profits beat expectations. their shares also jumped after hours. here's caroline hyde with the latest. a really good set of results. caroline: they say just do it. they just did it. shares spike in after-hours. profits were shining through. up 23% in their last quarter. up 5%.ales futures orders as well showing this isn't just a one-hit wonder. they see a proxy for future sales up 17%. food for thought for many investors. the reason they are bringing in higher profits, higher prices. they are managing to charge more for some goods, and a lower tax
rate. shares surging after-hours. be, market valuations would $105 billion. that would make it seven times the size of a judas. -- of adidas. they say there's tremendous growth potential, 19% increase in emerging markets sales, futures orders up 6%. emerging market weakness would hurt them if you bring in foreign exchange, but if you strip out, the growth looks good. china, they say these words, the brand, the marketplace, has never been stronger. despite concerns we have about china's growth, china is not a worry for nike. 30% growth in sales. they say next quarter futures orders 27%. that is if you strip out foreign currency. if you factor in the weakness, we will see them get lower.
overall, the underlying business looks strong. gear and buying sports they are front and center of nike's focus. if you go to their website, first thing you see, pictures of women in their outfits. women have been bringing in not only the buyers, but the investor. they are doing well by their own website, selling in their own stores. they've done really well on the fact that it is very fashionable to wear sports clothes now. we see people want to wear nike hightops. that is how they really ched in as well. not only on the back of their jordan where, but they've managed to keep ahead in terms of innovating. nike labs all about trying to have the latest, best running gear. the chief executive, mark parker, so impressed. francine: streetwear.
i like that. if you're going to wear streetwear, you probably need an iphone. staying with big american companies, let's turn to apple. the new iphones go on sale today. bloomberg head of digital nate joins us with the latest. this is not revolutionary. this is enhancing the 6, but not revolutionary. said that theye are expecting a slightly less impressive first week of sales than apple had last year for the 6, partly because typically when apple releases an s edition to its iphone line, they tend to be more incremental updates as opposed to physical redesigns. because last year's design was so well-liked by customers, the design is expected to not be as much of a call for people to
upgrade. the difference this year is that china will be able to buy the iphone -- has been able to buy the iphone on launch day. that was not the case last year. tim cook expects china to become the biggest market for apple, and sales could well be a lot better than some analysts have said if we factor in china's first week. francine: just the fact that he's launching it on the same day makes you go into this mindset of china is important to them. we all know what products apple has. the iphone is probably the most important. >> without question. the iphone eclipses everything else. the iphone as a business for apple is probably around 60% of the company's entire revenue. importantis extremely to the company. with china's focus for apple also being extremely important, pair the two together, put it in
launch week, we can see some interesting numbers. francine: you are holding an iphone 6-s. you have been getting up very early. what does it mean for competitors? >> they have to look at what apple is doing in terms of blending hardware and software together. one of the advantages this new model has is the screen knows how hard you ray pressing it. most screens, you are swiping around, everything is up or down. now it can be up, down, and it can be pressed. apple calls it 3-d touch. it enables you to bring up contextual menus if you physically press and hold. you can see a list of contacts. as developers get their hands on that technology, they will be able to embed physical 3-d interactions with the phone into their apps, which could give the
competition something to follow up on. francine: it sounds confusing, but it's quite easy to use. thank you so much for all of that. coming up on "the pulse," the w's embroiled in scandal and its ceo is out the door. could it be good news for another auto company? plus, the ceo of chrysler, sergio marchionne. that is after the break. ♪
francine: you don't need to go far to see what impact it's had on the community. more than half its population works for the company. hans nichols paid a visit to find out more. wide a little town on a waterway, built for one company, volkswagen. everywhere you look, you see a v and w. with an average income of 92,000 euros per person, this is one of germany's richest cities. the company employs 70,000 of the inhabitants, more than half. that's why the scandal with volkswagen is more than just a passing headline. build by the nazis in the 1930's to make the original people's car, the factory is today the biggest in europe with its own
power plants. the company owns and brands the local soccer club which climbed to the top of the tables and one bank -- and won this year. the city's art museum was financed by the looks like an foundation. -- the volkswagen foundation. the main attraction is a theme park that the company built for 400 million euros. with a 4.9% unemployment rate, the question for this city is whether or not this main entrance will continue to be a two-way street or just an exit for workers. hans nichols, bloomberg, volksberg, germany. francine: as the crisis engulfing the w deepens, talk of mergers and acquisitions has become louder. sergio marchionne has made no secret of his wishes to see more consolidation in the motor industry. bloomberg's italy reporter at large is standing by.
how could the vw scandal actually help marchionne search for a partner? >> ciao, francine. marchionne's theory is that automakers should emerge because they face higher capital expenditure in coming years. costsonne cited higher for emission rules as one of the reasons why carmakers should merge. competitors didn't want to answer his plea for consolidation. now, there's going to the higher cost for emission rules because of a tighter control. marchionne has a right to speak with them. probably, gm may have to reconsider. clearly this is a game changer. francine: great to have you on the program. thank you so much.
europe and africa, good evening to those in asia. welcome to those just waking up in the u.s. google said to be under u.s. android. scrutiny over european regulators are looking into this. we were expecting something in the next couple weeks. first time i'm hearing that google may be under investigation over android in the u.s. under the u.s. antitrust regulator. we will see whether this has an impact on google related stocks. repercussions to fromof the other companies the software that google uses. the fed is back in focus after janet yellen said she is writing raise interest rates this year. speaking in massachusetts last night, the federal reserve chair
said she intends to let the labor market run hot for a a while to heal lingering scars of the crash. markets are relieved. they seem to have a little bit more clarity than 4 days ago. clarity and certainty after a muddled message last thursday msci caused a drop in the index. agent and emerging-market stocks between gains and losses. the dollar rising and gold declining from its rally yesterday. have a closer look at the msci all country world index, it is a gauge of developed and developing markets. it's a pure global benchmark. ratesthe fed kept unchanged last week, from friday through yesterday, stocks fell. was 4%.ine the probability of a rate hike this year has risen after janet
fromn's comments from 49% 43 percent wednesday. there's a 50-50 probability of a hike, depending which way you are looking at it. one country that has been affected by prospects of tighter u.s. monetary policy is ringgit, on track for its worst week against the dollar since 1998, which was the height of the financial crisis. git is being battered by the prospects of tightening policy, the slump in the chinese economy. there's a domestic political scandal encircling the prime minister. oil prices.
earlier against the dollar a cost 4.38 for the first time since the asian financial crisis. an example of a currency hit by an accumulation of factors. one of them being the prospects of tighter u.s. policy, now in the cards after janet yellen clarified a last night. spain's ibex. catalonia elections have been weighing on the ibex, it is the and theropean benchmark fourth worst global benchmark. the fear is if catalonia separatists win, it could lead to a separation of the region which could affect spain's economy, one of the bellwethers this year. francine: thank you. joining us from the next 30 minutes as andrew wilson, ceo of goldman sachs international asset management for emea.
before we get his thoughts, here's the key take away from janet yellen last night. yellen: it will likely be appropriate to raise the target range for the federal funds rate sometime later this year and to continue boosting short-term rates and a gradual pace thereafter. if the fomc were to delay the start of the policy normalization process for too upg, we would likely end having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. hasunited states experienced very low inflation on average since the financial crisis. in part, reflecting persistent economic weakness that has proven difficult to fully counter with monetary policy.
share janet yellen has resumed her planned schedule after feeling unwell. she felt dehydrated and was seen by medical staff as a precaution. let's entered as andrew wilson, ceo of goldman sachs's management international for emea. last thursday, markets had the jitters because the fed did not normalization. yesterday janet yellen, a week after, says we will do it by the end of the year. are we more confused? if you look at a fed projections for one day be raising rates, 13 fln seat -- 13 fln seat members said they would hike by the end of the year. she is reiterating that. the surprising element was the focus around the tightening of financial conditions and the weakness of the major
trading partners. it was a recognition that over last three tothe four months we've seen a tightening and financial conditions, primarily through the appreciation of the dollar but also a widening of corporate spreads. acknowledgment of that and probably caution around the slowdown and activity around asia. we would even say some hints in europe that next year will not be as strong. francine: do you believe her when she says they want to start normalizing policy in 2015? october, no policy. december is the end of the year. we may see a little bit more turmoil. andrew: it is a time of more volatility because of are they going to tighten or aren't they? the market has priced in about 50-50. i think they are genuine when they say it depends on data. in her speech last night she monetary policy, if you tighten too long, there is a
risk we have to tighten later. she should have hike last week. i know that hindsight is a great thing but given the speech yesterday was she worried more about china last week? andrew: i'm not sure much has changed. they are trying to balance out no inflationary pressures, that is because energy prices have come down. the labor market, despite unemployment being at 5.1%, we've not seen that much of a pickup in average hourly earnings. it has moved up a little but not as much as you would expect. fomc's debate within the as to where the inflationary pressures going to come from? a mandate,he fed has so does the ecb, it is out of their control. why are they hanging onto this?
ignore that and focus on growth. dualw: the fed has a mandate. they cannot control the energy price. the has been a big driver of why headline inflation has come down. core inflation is stable. the fed with the dual mandate of ensuring the growth, they want to be careful they do not put the brakes on too soon. they equally do not want to wait too long and have to put the brakes on really hard. you put yourdy money? we've had a little bit of a correction in equity markets. probably going to see more of a correction? go intohe right time to fixed income? it is tough to make money. andrew: it is tough around the world. interest rates remain low. you got to recalibrate your return expectations. fixed income is not going to get
you double-digit returns. there are still some opportunities in the corporate market. the dislocations both because of the energy sector as well as some concerns about tightening have created opportunities and the corporate market but you've got to be very specific and selective. to energy sector is likely remain under pressure. we would expect the increased defaults through 2016. maybe a little more cautious around energy but other sectors have equally been hurt and we think there is some chance there. francine: what is your take on europe? the market is assuming the ecb will do mark qe. it does not translate into the real economy and equities remain under pressure. andrew: europe is in a tough spot. we've had the benefits of the lower energy prices. those benefits are going to wane into 2016. the market is expecting an increase in quantitative easing
and maybe an extension of that. the real question is how much impact does it have on the real economy? transmission mechanism is via the era. if the euro were to appreciate, that would cause the ecb consternation. francine: thank you so much. stay with us. we will be talking about japan next. that conversation brings us to today's twitter question. do you believe janet yellen on a 2015 rate rise? tweet me at @flacqua. hashtag #thepulse. u.s.e said to be under antitrust scrutiny. officials asking whether the tech giant stifled competitor access to the mobile operating system. google shares are down in premarket trade. volkswagen's board expected to name the successor to martin winterkorn today. 27 u.s. states have begun a joint investigation after the
carmaker admitted to cheating. the bank of japan's main inflation gauge fell in august. boj is back-- the to her it started two years ago. shinzo abbe is speaking live in tokyo ahead of his trip to new york to attend the yuan general assembly. at who may be next to drive vw and whether they can er the company back from the brink. how many iphones can apple sell? the demand for the mobile. ♪
francine: volkswagen's board is expected to appoint matthias mueller as its new ceo layer today. after admitting to cheating on emissions tests. we joined by hans nichols at volkswagen headquarters in wolfsburg. is outside a dealership in london. is appointing matthias mueller a step to recover? he is still kind of within the group. the meeting just started. they're trying to figure out who the next ceo is going to be. likely matthias mueller, all but set to be the next ceo. if you think he has a problem, it is only as he's part of the
ofkswagen brand as a ceo porsche. in some ways, porsche is among the cleanest on the 12th brands. they don't have a big diesel footprint. porsche has been a profit center. to thes mueller comes position with a strong backing if he does get it. he has a strong backing from the labor union. union, ifrom the later want to make sure they minimize job losses. as they tried to figure out how to get ahead of the scandal. behind me you see green peace activists. it is probably only the beginner of a difficult series for this company. commission probes are piling up across the world. this is becoming more and more
difficult for vw, especially in terms of positions they've set aside. we have a potential probe in spain, 720,000 vehicles affected on top of the 480,000 vehicles in the states. what the eu has said as they went all member states to test the diesel emissions of all brands. , we have the transportation minister saying they will do a spot checks on all brands. , this crisis could affect other auto companies. the market is incredibly sensitive. we saw that yesterday when the market was swinging on bmw based on a report, since retracted, that a bmw vehicle had 11 times allowable emissions. francine: ryan, you are in the u.k. where tests are being carried out. the dealers are the front line of vw sales.
what are they saying to customers? there's a sense amongst the dealers that it is a good thing vw has owned up to this. that might get vw some credit with consumers down the road. there is a sense that may be vw's customers will not punish vw because they think this is an industrywide thing. is that most of the dealers do not have enough information to give their customers. that is what they want from vw. u.s., vw has announced it will suspend selling some models that have been affected by this not very much is information. we have not had any recalls or information about compensation for consumers. in europe, where the issue with diesel cars is bigger -- in the u.s., diesel cars are 1%. last year in europe and the eu,
53% of the cars had diesel engines that were sold. the feeling is that the issue could be larger here. back to the states, and her stingley, the dealer association for vw wrote vw last night and said to not sack the boss of vw north america. he only came in in 2014. unless you have any information directly implicating him in being complicit in the cheating, he's done a great job. prior to that, vw was selling outdated and too expensive products. gives you a sense of how complicated it is going to be for vw going forward. the u.s. market is enormously important. dealers in many countries and is onlydes the u.s. are the mechanism through which vw can sell their cars. sweet.to keep them
if they are not profitable and they go out of business or turn their back on vw, vw is down another leg. francine: thank you, ryan chilcote. hans nichols and wolfsburg, ryan chilcote in london. we have more from goldman sachs asset management. has fallent japan back into deflation for the first time since 2013. what does it mean for boj policy? discussing that next. ♪
francine: welcome back. looking at live pictures of japan's prime minister shinzo abe speaking in tokyo before he leaves for the u.n. meeting in new york. unveiled three new era as including a strong economy, childcare support and social security. japan's deflation has dropped below zero for the first time in more than two years. andrew wilson is ceo of goldman sachs asset management for emea . i've been talking to you for two or three years ago. we were talking about whether this was going to work. we are not the wiser. --rew: the three areas monetary and fiscal reform. theerday was a refresh of
structural reform element. he talked about needing more female precipitation. making childcare free and increasing per tillie. is focused on abe growth improving. plans.ot a lot of images it is encouraging they feel the need to refresh like that. we are looking for the details of how do you achieve that. 600 trillion is admirable but they have not given us a timeframe. a lot of this we are looking for the details. as you mentioned, the inflation number below zero does feel like it is very hard work to generate inflation. objectivesprincipal was to seek wage rates increase and that has been modest. we have not seen broad-based wage increases. francine: the yen is not doing what the boj wants it to do.
there are expectations of more announcements in october. it is stuff they do not want to deal with. will he be able to pull it off. price coming down is a big part everywhere around the world. there is been fighting a head wind in terms of trying to get inflation up. the market is hoping to see some further stimulus measures. arguable with more quantitative easing and more buying of government bonds, which are already incredibly low, is going to generate growth. it has got to be more targeted measures and potentially details of what was announced yesterday. we need more targeted measures around fiscal policy. the question will be how do they pay for it? who is going to pay for the increasing spending. francine: this brings me back to the fed. the boj under pressure, the ecb will have to do more to address
a strengthening euro. you have taiwan lowering interest rates yesterday. how can the fed hike in this environment? andrew: you highlighted the real issue, liquidity provision is increasing. the transmission mechanisms work through a weaker exchange rate. even more upward pressure on the dollar. that works against the fed's objective of needing to raise interest rates. you've got two powerful forces and conflict with each other. how that gets resolved is by the exchange rate. to the extend the dollar moves higher it will potentially temperately fed. we talked about the 50-50 call in december. it is really what is happening to the dollar. if the dollar is moving up and we are seeing pressures on wages, i still think the fed will go. if we are seeing the labor market, even though unemployment
comes down that we are not getting wage pressures, the fed might wait. francine: do you worry about a global recession. citigroup made a bold call, 50% of a global recession in the next 18 months. how are central banks going to deal with it? you define ads how recession. recession and china is not negative growth. to some extent it depends on your definition of what our session is. we would expect to see global growth slowing. slowing materially seems unlikely. the u.s. consumer is in good shape. the labor market is strong. inple feel more confident keeping their jobs. i think the idea of that is -- we would not be as negative. i do think china and broader asia is a concern.
many of the asian economies have built their growth models around supplying capital goods to china . as china rebalance is towards the consumer, they've got to rethink growth models. francine: it seems that this recovery would be being led by consumption. if inflation starts creeping up it might be another headache. i want to talk about liquidity. my time with you is short. how concerned are you about liquidity? times of market volatility as a result of china and times of policy changes, liquidity is always less plentiful. particularly in markets like corporate bonds, emerging market bonds. the liquidity environment is more challenging. at other cycler turning points. it is not so obvious that it is
materially worse. in the government markets we are seeing liquidity issues. we saw it with the flash crash in october. there are liquidity issues. playing out almost as much in government markets as non-government markets. i was speaking to a fixed income player and he said his main worry is how to get the nextets out when recession hits. how much do you worry about that and how do you position yourself? you manage a portfolio to ensure you have liquidity to think about redemptions. the last week has been very volatile. we've seen very large outflows from emerging market mutual funds. the market has coped under has been a repricing. emerging markets have been hit very hard. is reflected in repricing. investors still have to get their money out of those funds. ,hey might not like the price
but they can get their liquidity. fed,ine: we talked about a the bank of japan and the ecb. what does this mean for the bank of england? we are looking at a referendum and an opposition that is hardly they're looking at jeremy corbyn . what does it mean for the u.k.? andrew: the economy is actually doing pretty well. they need to see inflationary pressures. is a little bit more wage inflation in the u.k. we still think the bank of england will be raising rates probably q2 of next year. if we are right around weakness in europe next year, given it is such a big trading partner, that will also be playing on the minds of the bank of england. it will come back to the inflation story. is going to come back to the labor markets. the bank of england, like the fed, will be focused on the labor market. to wage pressure starting
emerge and do they need to get ahead of that. francine: thank you so much, andrew wilson, emea chief executive at goldman sachs asset management. london, 5:30 a.m. in new york. janet yellen has confirmed the u.s. federal reserve is on track to raise interest rates this year. in a speech at the university of massachusetts, she placed herself in the camp of committee members favoring a 2015 increase speed she stressed that tightening would be gradual to allow the labor market to improve. the fed's next decision comes december 20 at volkswagen is expected to announce a successor to martin winterkorn today. u.s. states have begun investigating after the carmaker cheating.o google said to be under u.s. antitrust scrutiny over its android platform. officials asking whether the
tech giant stifled access to its mobile operating system. we will are down in premarket trade. pope francis will address world leaders today at the united nations in new york. the pontiff will push for a successful outcome for climate talks to be held in paris later this year. a's expected to call for fairer economic system and condemn human trafficking and religious persecution across the globe. mother and 700 pilgrims were killed near the saudi holy city of mecca. just two weeks after a crane collapsed. the stampede is the worst tragedy for the hajj pilgrimage in 25 years. on the market. jonathan ferro has the latest. jon: what a week. this is a snapback. 4 percentager points. an dax hit a 2015 low for
index that at one point this year was up as much as 25%. a little bit of a comeback this morning. 100 asck for the ftse well. some of the worst performers on the week. vw stocks on the dax trading higher. ftse, glencore up by 3.64%. about stocks taking a beating, glencore stocks trading below 100 pence for the first time yesterday. glencore, a penny stock. who saw that coming? china and the commodity rout. fx market, this has been the story. we've been talking about equities. look to the fx market. at $1.1149. it is
the dollar store this week. the dollarindex heading for its biggest weekly advance since july. good news for europe and the ecb. this is dollar ringgit. a stronger dollar and a weaker malaysian ringgit. 4.3863, the highest since 1998. heading for the worst week against the dollar since 1998. 1998 means a lot of things to a lot of people and they are mostly not good. andrew: 25 -- francine: five minutes from now, "surveillance" with tom keene. janet yellen reframing the debate and the markets trying to move with her. but that's the lead story there are at least eight stories. the news floor is -- the news flow is absolutely extraordinary. you and i can be on for 15 hours. chair yellen front and center, nightportant speech last
in amherst, massachusetts. i spoke with michael mckee. he said there was some real .ubstance to the nuance she was slightly ill near the end of the speech but is doing fine this morning. speak, among other people, to james sweeney of credit squeeze. he has been dead on about deflation. lausanne sounders will join us aboutharles schwab market events and how they lead into the markets and what we do with our money. the equity markets have been volatile but at the same time stable. nick will join us from eurasia group. we look at the beginning of our international relations stories. president xi traveling to washington. we have the pope in new york city. i got a glimpse of him last
night, which was quite something to see. to thatn traveling united nations, where he will speak. president obama will speak monday. i was in the lobby of the ritz carlton hotel last night and it was absolutely jammed with contingents from the united nations. francine: it is going to be an incredible couple of days. we also had this index physically saying that london is now the financial capital of the world. what does it mean for new york? disagree with it, particularly in the sense of deeper foreign exchange and to an extent the bond market. particularly foreign exchange. it is healthy competition in both cities that have a lot to offer. hason seems to have the up of some challenges for the traditional markets. you saw the report of an empty
fluoride goldman sachs, which may be speaks a little bit about the back-and-forth battle. francine: you are right. this has huge applications for jeremy corbyn if he pushes all the conversation to the left. tom keene with "surveillance" in 25 minutes. ♪ francine: wolfsburg is the home of volkswagen. you don't get to go far to see what impact it has had. more than half of the population works for the company. hans nichols paid a visit. wolfsburg, start -- and those found built for one company, volkswagen. everywhere you look you see a v and a w. 92,000 average income of euros per person, one of germany's richest cities. the company employs 70,000 of the 125,000 inhabitants, more
than half. the scandal and volkswagen and the share price drop is more than just a passing headline. in the 1930'sazis to make the original peoples car, the factory is today the biggest in europe with its own power plant. the company owns and brands the local soccer club, which climbed to the top and won a coveted cup this year. the city's modern art museum was opened in 1994 and was financed by the volkswagen foundation. the main attraction is out of the theme autostadt, park the company built. with a 4.9% unemployment rate, far below germany's average, the question is whether or not this will be a two-way street or just an exit for workers addressing volkswagen. hans nichols, bloomberg, wolfsburg, germany. francine: the company finds
itself with a collapsing share price and bruised reputation. what is next for the world's biggest carmaker and other manufacturers? here with his insight from norbert kalliwoda. how worried are you that this is the beginning of what could be the libor saga for the car industry? norbert: if you ask me how long firstt take to recover, they have to recover all errors. they have to improve the situation. andink it should recover into her three quarters the most difficulties. we have to see how it is going on. arecine: my first question, you concerned that there are
more carmakers that cheated on the missions? and little bit like the libor scandal was an awakening for a lot of baking sectors. do you think we will see more car companies coming out having to admit they also cheated? not sure if the other car manufacturers have the same or similar questions. there are rumors about other huge car manufacturers but it is not shown yet. but the risk remains. there's lots of uncertainty about the car industry at the moment. probably one are of the most optimistic commentators i've seen. you think vw will recover all errors. he believed the vehicles will be repaired and they will show transparency to shareholders. 6.5 billion put aside to provision. will that be enough or will
receive more fines and will the provisions have to go up? norbert: there are some incidents and some rumors that 6.5 billion is not enough. million -- that 40 lots more cars are impacted in this innocence scandal. what i say is the balance sheet of volkswagen is relatively strong with the equity above 90 billion. they can afford the lawsuit. we do not know the figure. 6.5.showed the it might be that it is not enough. francine: what is your biggest take on all of this? are we going to see a lot of carmakers having to abandon
diesel? is there going to be more consolidation? i guess we will only figure it out when we know who volkswagen appoints as ceo, the repercussions in years to come. norbert: can you repeat the question? francine: what i was trying to get to, does this has implications for the diesel industry? does it have implications for carmakers that they will have to consolidate and have more emanate -- more cycloserin -- more m&a, will that happen because of the scandal? the sales of diesel for --kswagen has a share of this part of volkswagen is impacted. the pressure about other car manufacturers who deliver diesel cars will be seen.
so they will become under pressure. this is the chance for car .anufacturers a volkswagen and others will take care to develop the engines so they will accelerate to establish mobility solutions, as they have already done. thiswill invest more r&d, is my opinion. francine: thank you for joining us, number -- norbert kalliwoda. thousande 6 sold 34 phones per hour. estimates for the new phone are little lower. ♪
francine: here are some more top stories. vote sunday on what many see as a de facto ballot separate from spain. spanish stocks have sold off of theek ahead election. barack obama hosted xi jinping at the white house last night. xi is expected to unveil commitment on climate change, one of the president's top
priorities for his second term in office. india's prime minister heads to silicon valley this weekend. narendra modi will meet with facebook's cofounder mark zuckerberg and executives at google, tesla and apple. he is expected to boost the number of jesus in the u.s.. google is back in the regulatory spotlight with the federal trade commission saying they will be launching an inquiry into the company related to its android mobile operating system. here with more is caroline. this is bloomberg scoop. the federal trade commission has agreed with the justice department in the u.s. to spearhead an investigation. that does not mean there will be a case but they are at the early stages of investigating the introduction of's. this is according to people familiar. , on its mobile
operating system, stifle competitors' access to the operating system? for example, the fact that google search is preloaded, does it hurt other developers? is already investigating this. they've had complaints and they are looking into search as well as the overall android operating system. russia is even more ahead, they ruled that they are guilty. month saidier this that they haven't violated laws by requiring state -- they have violated antitrust laws by requiring apps to preinstall google services. the same issue with microsoft in the 1990's that they promoted internet explorer at the expense of competition. worrying android
basically prioritizes google services and pushes you to use them. say you are samsung, already preloaded with google, gmail, google maps. what about competitors? how hard is it, you already have your apple phone safari preloaded. go on and perhaps download the google search on to your apple device. you can get competitors but is it too tricky? you got to take into account the dominance of the operating android, 59% in the u.s. but 83% across the world. this is what regular tours -- this is what regulators are going to be looking at comedy strength across the world. let's dig into the u.s. this is not the first time the ftc has tackled google. they were looking at search. they voted unanimously not to bring a case, 5-0.
this upset the competitors bringing the case. just to add salt to the wound -- they leaked the companies that washed the complaints, a few staff members felt a case should be brought. perhaps there was a monopoly hurting customers. it is time that perhaps the fcc needs to tackle google and excerpt its authority and make clear it is giving a fair and balanced opinion. google at the moment has not responded to our particular scoop. and neither has the ftc. back to you. francine: caroline hyde with the latest. google shares are down in premarket trading ahead of the u.s. open. records in6 broke october-december last year. apple sold 74.6 million iphones,
which is around 34,000 phones an hour. the new 6s and 6s pleasantville on sale today. how well are they expected to sell? nate joins us with the latest. he is clutching a 6s. iphone is huge. analysts are expecting it to do well but not as well as the iphone 6. they are always expecting it to do well, the question is will it do less well. apple is confident it will exceed the sales they had in this quarter last year for the final launch. this isa reason for that last year at phone was not on sale in china. it was about a month later. one.year is on sale day the iphone is big in china. tim cook says china is on track to be the company's biggest market in the future.
this is probably an indication that if sales are down on this side of the world it is maybe not the case in china. that could bump up the numbers against expectations. francine: the iphone is the single most important device for apple. nate: it is about 60% of revenue for the company. it dwarfs the macintosh for the ipad. every territory, iphone, iphone, iphone. it is the company's biggest product. launch is -- a new important. francine: i know it is different, it is not that different. nate: you have ordered one. you are curious to see. one of the things apple has screent doing, the technology has the ability to know how hard you are pressing it. one of the things you can do, i have given the example of an e-mail. it is not that one, go back, find the next one.
you can press the screen, physically press it. it will reveal what is in the e-mail -- this is just an example. no, it is not that one. you go to the next one. yes, that is the one. and it pops open into your e-mail. it allows the phone to be very different from what it did last year. as well is a better camera and faster processor. apple is hoping this is more significant for an s launch, it does between major product revisions, then previous s launches. it is one of the reasons we think this could be more significant than, say, the 5s a couple years ago. would impacts competitors if we like this. i don't not how long it takes for people to understand whether the fact that you touch harder it will be very compelling and how much pressure is put on competitors. is one of the things
apple does so well. it incorporates these technologies into the phone and makes use of the hardware and software integration. so developersup and people who make apps are able to say how can we use this? instagram is going to have an update that shows the, some of your home feed so you do not have to launch the app to see the most recent picture or activity. and have a look. i could see it being used for planes if you do not want to fire up the app to see if your plane is leaving. if you think that is different, press and hold more to see how fast you need to run to the terminal. it is things like that that are going to get the competition nervous. francine: it is terrifying if you have small children that can handle your phone and press all sorts of stuff. nate: they have built a stronger
case than the last model. francine: bloomberg head of digital's nate. here's what we're watching. p.m. u.k. time, the final reading for second-quarter u.s. gdp. it is not expected to be revised from 3.7% but will indicate what janet yellen is watching. 3:00 p.m., consumer confidence could estimates say it probably fell less than expected. at 6:15, and his bank -- the bu ndesbank's jens weidmann speaks to reporters in italy. volkswagen's supervisory board meets to appoint a new ceo later today. let's join hans nichols in wolfsburg. e are expecting from the meeting is to have a new ceo. hans: that is right.
they've been meeting for about 55 minutes. we will be watching for white smoke behind us. i don't know if that is how they are going to announce matthias mueller as the new ceo. it better be clean smoke, vw has a pr problem. are not just looking for personnel news, i am also looking to see what concrete changes and concrete numbers we have. the numbers we know about from volkswagen, 11 million vehicles. in the states it is 450,000. there's a report out of spain for 720,000. that means there's potentially another 9 million vehicles. we don't know whether they are going to be investigated and we do not know what sort of legal liability and monetary penalties are be attached to those hopefully we will get some clarity at wolfsburg. francine: thank you so much, hans nichols added volkswagen's headquarters in wolfsburg. hans will be joining us to bring
back in the ussr, mr. vladimir putin packed his bags for new york. and president obama will speak as well. and the crime of what they have done to clay christensen's disruption. we speak with adrian wooldridge on the great disruption. good morning, everyone. this is "bloomberg surveillance tom: live from our world headquarters in new york. i'm tom keene. me, vonnie quinn. from london, francine lacqua. see,a remarkable thing we with the put the speech at the united nations. francine: this is something that .s playing hard and volkswagen. the impact that it will have on climate change. story.e volkswagen we will