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tv   The Pulse  Bloomberg  January 22, 2014 4:00am-6:01am EST

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>>davos optimism in the, air as leaders gathered at the world economic day warm. one. day one.os there's optimism in the air. facebook's chief operating officer makes a fortune and shares hit a record. 's chief executive has resigned. good morning, everybody. you are watching "the pulse."
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i am guy johnson. --are live from europe's bloomberg's european headquarters in london. >> and i am in freezing davos. we have already had a big morning. we spoke to the chairman for ubs. he told me he is confident that there is not going to be too much movement or correction in stocks. he still likes stocks in the u.s. we talked about ubs and some other things. he have a great panel coming up on energy. the energyk to chairman and the amex ceo later on. then we will talk about finances in nigeria with the finance minister. >> iran is the big story as well. francine lacqua, i know you. it is already day one of davos and you have been out there partying. >> it is all about the dancing, isn't it? myn't -- i tried to show
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dance moves to psy. but we are expecting celebrities. davos gets a lot of flack for celebrity-driven sometimes, many ostentatious parties. my take is it does not matter where you meet people, as long as you start that dialogue. a lot of celebrities -- we spoke to matt damon yesterday -- or here for a great cause. this is the biggest export for korea. the same format damon. he is here for a good cause. he wants everyone to have access to clean water in the next five years. on a more serious topic, syria's peace talks have begun about 350 kilometers away from. most. john kerry has just said that the syrian president cannot be part of the transitional government. at least 40 countries and organizations are attending the negotiations. the u.n. withdrew iran's invitation amid pressure from
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the u.s. and saudi arabia. the iranian president says he does not have much hope for success in the peace talks. he made the comments before heading to the world economic forum and i'll post. hans nichols joins us with the latest. we are expecting him to arrive any moment. he needs to now show that he has diplomatic skills but can also translate these diplomatic skills to actually just get some business for iran. >> you are absolutely right. canchallenge for rouhani is he compartmentalize these issues? the economic talks going forward and the lifting of the sanctions on a temporary basis. the six-month window opened on monday. what is happening in montreux, switzerland, where clearly the peace talks have gotten off to a bad start before they even began. the challenge for him is how to convince the international community. i mean international investors as well as corporations.
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this is a six-month test period that could lead to something longer. corporations want a longer horizon, not just six months. of course, there is lots of cash, a wealthy petrol state. they want to develop, they just need access to international markets. them that these nuclear drm and talks will go forward and that there can be a long-term relationship with iran? >> i think the press want to figure out who he is meeting here. that will give some indication of what kind of investment he is looking at. we have not been able to get to the bottom of that. this is the first time that an iranian president shows up at davos in over a decade. >> in many ways, his meetings with large corporations, ceos, are more important than his meetings with heads of state. he needs to assure ceos and corporations that any investment in iran will be able to be
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recouped and will not be gone after six months. quite a challenge, especially when you listen to some of the rhetoric coming out on the serious side, where iran is still being blamed for the collapse and some of the civil war inside of syria. >> thank you so much. we will have 20 more from hans throughout the day. he facebook chief operating officer and now at billionaire to her list of accolades. her fortune surpassed one billion dollars yesterday as facebook closed at a record price. vacuum miller joins us with the latest on her successes. one of theavos, youngest female billionaires. >> there are very few self-made billionaires who are women in the world. maybe a couple dozen, if that. we have one coming up later this week. if you look at sheryl sandberg, here is somebody who lived the life. she went to harvard and became
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larry summers chief of staff. she went to google and sits on the board of walt disney, starbucks. she basically came to bring a business sense to facebook and give it some clout in the business community. the ipo was not so successful at first. it has since risen and the shares are above its operating price. >> it is amazing. we have 80 billionaires and talk to me a little bit about the composition. >> a lot of americans, probably about 20. indian billionaires, last count, about 19. there might be a couple hidden. the indians really love davos. they come out from warm, muggy india and come to the cold air. it is a community feeling. there are a couple of night cap sites that are around, a couple of indian companies. it is a family reunion vibe for
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the indians. >> thank you so much for all of that. the night caps guy, i will keep you updated. >> i am sure. francine lacqua, you enjoy those night caps. let's talk about the other news that has been coming out. a man responsible for leading pimco into a diversified investment firm has resigned after six years in the job. david tweed is in berlin for more. look. what is happening here? what is going on? what does he have to say about this? give us the inside track here. momentwe can do at the is read between the lines because we do not have an absolute play on the reason for it. there was a 4-page memo sent out in which he said that it was a very difficult decision, not an easy decision to step down.
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there is speculation around, is he carrying $30 billion worth of bond redemptions from pimco? has there been a problem with egos within pimco? both bill gross and el-erian have put out statements praising each other as they tried to pat down the idea that there has been friction. bill gross put out a rather curious tweet where he said that he was full of 110% of energy and he is ready to last at pimco for the next 40 years. considering that he was also -- that el-erian was already being called as bill gross' heir appa he is nots clear going anywhere until he is 109 years old. one thing is for sure. this is already the talk of davos. >> he is definitely a loss to
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any company. he has been a great name and a good commentator on monetary policy. i have known him for many years. it is very good to exchange views with them. >> talking to francine lacqua a little bit earlier. >> it will be interesting to know, maybe axl can hire him. maybe that will be the next big higher at ubs. david tweed in snowy berlin. ibm shares fell after hours after the computer chip giant said sales missed estimates. here is more with caroline hyde. big blue is looking a bit battered. >> look at the numbers, $28 billion in sales in the fourth quarter. that is more than the entirety of the u.s. -- of the gdp of bolivia. it is less than hewlett-packard makes. overall, sales are on a downward
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spiral. so bad has it got that even the executives are saying that they are foregoing their bonuses. they are trying to appease the investor base out there. the reason is we are moving to cloud computing. companies are starting to store their data on the cloud. large part of ibm's revenue still comes from selling those huge servers. >> maybe it will do that with lenovo. that can be one part of the turnaround plan. the management gave up their bonus. what they would really like to see is a concrete plan to turn this company around. more of an upwards trajectory. atmaybe they are buying time the moment. they have got plans in place. already, they are offering more cloud services. acquisitions, $2 billion last year buying software technologies. they are trying to get on board. they are playing catch-up with microsoft, trying to get ahead.
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have theroducts, they view of mining big data. answer apparently questions in conversational language. they are cutting jobs, slashing costs, divesting. they are getting rid of the x86 server unit. is verystand lenovo close to buying. even more money to invest. at the moment, sluggish turnaround in terms of sales, but profit is up. analysts say they will meet their target by 2015. eyes on whether they can hit the $20 earnings per share. >> caroline hyde on ibm. what else is on our radar this wednesday morning? aboutates is optimistic the future of the world economy. he says that there will be hardly any poor nations by 2035.
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>> almost none. africa,ed companies in north korea if they do not change their government, but it will be less than 10. when i was born, almost all countries were poor. now we are down to about a quarter of them. the next 20 years, if we focus on it, we can make it really exceptional. speaking with michael bloomberg on "in the loop." shares under pressure this morning. it says fourth-quarter earnings were cut by $260 billion. big changes at its power charges unit. abb will report full year results february 13. and a winter storm on america's east coast is causing travel chaos. thousands of flights have been canceled. more than a foot of snow fell in some areas. millions of motorists are also
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facing treacherous journeys and severe delays. the extreme weather has shut down schools in boston, philadelphia, and federal offices in washington dc. it has helped push natural gas prices to record highs. , big readings on the u.k. economy will be emerging at nine: 30. the latest u.k. unemployment data breaks this hour and it could show us that we are inching closer to the bank of england 7% threshold. speaking of the boe, we will get a glimpse of where governor carney's policy makers stand on his record low rates. all of that coming up here on "the pulse." ♪
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"the pulse." clients are appreciating this. we are the biggest in davos,
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market share of 25%. that business model has been working well. you think there are people on the board who would like this to be spun off? >> we have said that the client- centric investment bank is part of the ubs. we have billionaires and as a wealth manager, they want restructuring capabilities and all the services of an investment bank to help them invest for their owners and founders. for us, the investment bank is an integral part of ubs. it is a lot more reduced in balance sheets and focus on
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equities. and it is much less focused on fixing commodities and currencies, as many other investment banks were. we are going back to a 1990s style investment bank that is focused on corporate investments and ultrahigh net worth clients. that is the focus of our investment bank and that fits very well into our investment model. >> that is not going to change as long as it works like that. quick it has been working well. why change a model that works? we clearly have a lot of demand for a client-centric investment bank to help us in wealth management. there is no difference between us and management on that issue. it keeps coming up. >> it was a really great conversation. we went through everything from what the stock markets were going to do to monetary policy to the big risk he sees in the next 12 months. he says there is a danger of
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complacency on the market and that is what we have to be careful about. >> what really caught my eye when i was listening to what he was saying was the fact that he was talking about a musing recovery. you listen to a lot of people in the run-up to davos. they say this is the first post- crisis davos. he was saying to not get your hope of too much. -- up too much. a word of caution. >> watch out, investors. it is not all smooth path ahead. up next, we will bring two of the top names in european energy together. he had the biggest oil company in italy. and the helm of the number two oil and gas company in the u.k. to look at their views on the shift in power among the world's big energy players. that is coming up next live from davos.
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>> welcome back. let's continue the conversation from the world economic forum here in davos. joining us are two of europe's biggest players in the energy sector. the chief executive of amec, second-largest oil and gas company in the u.k. for now. there is a deal to buy foster
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wheeler. also with us is the chairman of eni, the biggest energy company in italy. thank you for joining us on set today. there are a lot of reports and concern in europe that the energy price gap between what a european company has to play -- to pay is widening. it is more expensive to do business in europe because of energy prices. do we need to address that and do we need to address it fast? >> absolutely. the transformation of the shale gas revolution in the united states, allowing them cheap energy is creating a competitive differential between europe and the u.s. gas prices are three times more in europe and that reflects energy prices being two times more. it is such a determining factor in the competitive industrial productivity. companiesen a lot of that find the u.s. market and
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territory very good for relocating. this is putting europe under strong and tough challenge. >> how do you address that? the discrepancy is actually getting bigger and bigger. innovative solutions, how are we able to bridge that gap? it will exist for a certain time. currencies will be adjusted accordingly. the gdp will be adjusted accordingly. the competitiveness of the industry in europe and japan and china will be adjusting too. a lot of actions are taking place. we should not underestimate the , thet of renewable energy impact of the new, alternative solutions to oil and gas. it would not bridge the total gap. at least it would help to close the gap. >> this is something that we would focus on in 2014, countries such as italy need
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competitive support from energy companies. >> it does. having a clear strategy. as one bigll act market, one big country that was lucky to have shale gas to their read theyacted fast have a culture of oil and gas industries and they have tons of equipment to do it. before that revolution happens, europe would take a while for several reasons. first, the equipment is not there. second is the culture. we are not embedded with the oil and gas culture, meaning undersurface ownership in the u.s., the owner of the land owns underneath. in europe, he does not. if you have a european farmer who has shale gas underneath, he goes mad because he sees his
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property disappearing because all of the rights and royalties belong to the state. the opposite in united states, where the same guy would turn into a millionaire. we have different types of regulations. anchors say that now bankers sayre -- that now infrastructure, trillions in investment will be done because of regulatory complexities. we need to do something, have a clear strategy for europe. >> you have just announced a couple of weeks ago this huge acquisition. how important is it for amec and are you willing to pay more? the world is definitely changing from what it was before. you would see one of the biggest u.s.ries in the world, the , actually trying to be an exporter 10-15 years from now.
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it is still producing 10 million barrels per day. at the current stage, we will be seeing a cycle that will last some 10 years. a lot of business will start to take place. what we should not underestimate is the midstream and downstream play in the u.s. because of cheap gas. billion ande than 3 investing $3.2 billion in this business. i do believe there will be a fantastic opportunity. we would like to capture this opportunity in the u.s. and the opportunity in the middle east. when we speak about the middle one of theare being largest exporters in the world. we should not underestimate the consumption, the level of consumption in saudi arabia, for instance. at the end of the day, there have been a lot of studies where saudi were reluctant to export any oil.
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>> are you ready to pay more if needed? >> i do not discuss those things. [laughter] >> i tried. >> it was a good try. we are creating value for the shareholders for amec. what we have offered foster wheeler, not only cash, but paper. that paper will make them own about 23% and that is a good thing. >> the energy sector at the moment is a difficult sector. we saw shell issue the price rocket warning, which took many by surprise. this is something that the industry needs to face. high cost, risk of being taken. do you feel that the industry has a great handle on it? tensions are always a factor in our industry. recent years, there was a lot of tension in several countries which are affecting reduction. -- production.
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technological challenges are increasing. oil and gas are increasingly difficult to find. you need to keep up with technology and the winners will be those who can stay at the edge of this competition. we will see what happens. cash is becoming more and more important. company'sof the because the challenges these companies will face in the next 10-15 years with the finances. it is very dynamic. could it be considered boring five or six years ago, the same traditional players and sellers? >> not today. >> not today. it is a transfer -- a transformation compared to what happened. >> i think the whole landscape is actually changing, whether you are on the operator side or
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the contractor side. from an operator point of view, i foresee there will be a further change of the game. a lot of assets are going to be changed. there will be new focus in new areas with new technologies. on the contracting side, i foresee consolidations in order to offer more services and value. >> we can hear the helicopter. i am not sure if it is the iranian president. would you do business with iran? iran have a position in through canada, but we have been very dormant through the years. >> we are very interested to see the opportunity. >> we will have to catch up with the president a little bit later. thank you so much for joining us today. eniamec ceo and the chairman. over to you for some breaking news. >> the sterling rate spiking. this is cable. let me show you a shot of that
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going through the roof at the moment. ferro is here with me. nil when it comes to the votes of the minutes of last time around. we had a read on the unemployment rate that was very close. >> the bank of england clearly anticipating that. need to no immediate raise rates even if the threshold is hit. this is interesting. back in august, they were saying there was a one in three chance of hitting that rush holt. we are so close right now. the other encouraging thing here is you are seeing earnings just inches little higher by .9%. this could be the change in focus from them, to start to look at the quality of the labor market data. what we are seeing is a slight move in the journey. it is clear we are still below inflation. that is a problem. >> u.n. i have been kicking this
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around all morning. i think it is now the key story. the inflation report will be happening soon. 18th, we will get the latest inflation data. it has come down so much in the target of the andstart getting below 2 the bank of england will be under pressure not to raise rates any time soon and you start to maybe hear that from the economists now as we start to get a rebalancing of the focus on the data that is coming through. >> certainly another card in their hand. the federal reserve can shift the focus to their other side of the mandate, which is price stability and disinflation. they have seen a huge mass of the stuff over the years. they could shift the mandate. the other thing you want to see is convergence. weekly earnings, higher and yes, the uk's -- economy is on a tear. living costs are rising. mortgage costs could be rising
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as well. you need to see weekly earnings climb. this could be less about unemployment and more about the other pieces of data. are they going to throw away the seven percent threshold and change it to 6.5%? we did a survey and 60% of respondents think they could do that in the inflation report. it could be a big question over the credibility of the bank of england to do that just six down the line. the easy way could be to change the focus onto other data points. lex i think that is something we will talk about a great deal in the run-up to that. and the pound spikes higher. >> more pressure on inflation. 4 before that6466 print. getting touchy. >> a bigger move on the euro as well. on the latest data coming out of the u.k. economy. back to davos. warmers a little bit than last year. it is time for a bloomberg exclusive.
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--lier today, i spoke with he shared his vision for the future. >> the way you have to work with the consumer today and tomorrow is very difficult. yesterday and years back, you had to engage in a very different way. the whole agenda around sustainability, it is a different way of communicating, a different way of engaging, developing new products, innovating. get some insights and ideas coming down here. >> this is what, brand management? we know they engage in social media. do they do it when they choose what kind of beer they will drink? >> definitely. they will often go into different websites and have a conversation about what they experience by having whatever beer they drank. experience,out the
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the environment, the packaging. it is a little more complex to market nowadays than it was 50 years ago. >> russia is a big concern for you. can you give us an update on any tax issues, regulations that will make it more difficult for you to do business there? >> it has been challenging for the last few years. .ainly driven by regulation russiasame time, i see as an opportunity. it is a big beer market. it is both a challenge and an opportunity. i believe we have been through the worst in terms of regulation. i think the dialogue between the government and businesses has increased. it still needs to improve because we need more predict ability. future ine a bright russia. >> who will you meet with here? is it to do business?
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i was trying to ask you about acquisitions. the consolidation phase in the beer industry will continue for 2014. this is one of the big stories. >> i think you will see more consolidation. maybe not globally, i do not know, but certainly in different parts of the world. asia and some other places. yes, there will be more consolidation. i am not here to talk about that. i am here to mingle with my colleagues and not only from the beer industry. it will be agencies. to another bloomberg exclusive. the superrich are attending davos this week and they expect to be richer by the time they returned to the alpine villages next year. africa's wealthiest person, one of the many billionaires with an optimistic outlook. we will actually turn the corner. i believe that it will be
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totally different. improvement in all sectors, banking, manufacturing. >> for more, matt miller is back with the latest. they are very bullish. a lot of these guys are in commodities. it is expected to do very well. >> it is really about confidence. the past five years, we have talked about how there is always a crisis looming over davos. this year, everybody seems to be taking it easy. because everyone believes interest rates will remain low and central-bank policy will be in their favor, equities should rise and billionaires should get richer. >> when you come to davos, there is a lot of celebrity-watching. , do they have special
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access compared to the other participants? >> some do. the way they arrive, they come by helicopter. >> we just heard. >> the intercontinental has a helipad in front of it. and they come by train. took a train from geneva into davos. >> we do not know if it is a private train. >> we are still trying to find out if there are private train. speculation that there is. there are millionaires that have special access, typically people who have been coming the longest or pay the most for membership have a special corner past. it allows them into some special entrances beyond some of the glare of going in average. >> we are seeing on top of the center with tunnels and you could have someone sneak in and sneak out without us even knowing. >> the number of billionaires
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that have that special pat is low. it is probably about a handful, perhaps. only heads of state have more superior axis than the is billionaires. -- superior access then those billionaires. >> there are also those trying to promote charity causes. hans nichols caught up with matt damon. when he is not playing jason bourne on the big screen, he is raising money for water. >> there are still 780 million people on planet earth who do not have access to water. >> corporations are doing their part, they are getting their? >> we have a number of corporate a bunch, pepsi, ikea, of stepped-up and they have been really great, and they get it. they are taking a proactive role. it will require a lot more than that, obviously. let's first impressions on davos?
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>> i have been here two hours and i have already heard a beautiful concert. i would have to say that is a good start. take care. >> the talk of the newsroom this morning was the similarities between matt damon and hans nichols. at least that is what hans was wanting to talk about. >> i am sure that is exactly what hans nichols wanted to talk about. correspondent of bloomberg television. i think that would be a good gig for him. >> it would do him great. a lot of celebrities come here and sometimes get a little bit of flack, we are not focusing on the right issues. a lot of the celebrities here, five years ago, we had angelina jolie showing up with rad pitt. they are here for charitable causes. they are trying to promote real causes. >> i did see a tweet from hans nichols. he is keeping his feet firmly on the floor, clearing up some ice
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in his life position earlier on. we are keeping him busy. i am glad to see that. >> not too much red carpet. coming up next, we will look at the high style, the high- security digs are the elite rest their heads. it is the most fortified hotel in davos. we will take you there next. ♪
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>> for the rich and powerful descending on davos this week, only the most luxurious and secure hotels will do. o says thatental's ce his brand-new hotel is just what the super elite are looking for. industry long-term. you do not make short-term decisions. ce on the map as a ski resort in the alps, and clearly it's reputation is formed here. it makes sense to have a real anchor luxury hotel here. >> his ceo was speaking to our own hans nichols, who joins us from the helipad of the new hotel. it is not futile. there are so many people dissenting on davos that you need a place to stay. if you are high-powered, a head of state, you need to make sure it is secure.
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>> that is one of the advantages, one of the reasons why the intercontinental has by therked as a zone swiss army. we will show you the helipad. it is just over my shoulder. all morning, we have seen military and transportation helicopters land here. we have been trying to zoom in on them to see who is coming in and out of them. really, think of it as a modern castle. the security, it has everything but a moat surrounding it. ♪ >> the intercontinental davos. a mountain lair that is easy to defend. >> security seems to be quite expensive. up,use of the perimeter set we have a secure area during the world economic forum.
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we have more than a handful of heads of states coming. >> what does that mean? >> six or seven. >> which ones? >> i cannot tell you. >> who decides which head of state gets the presidential suite? >> the world economic forum. >> nestled a gay giant golden egg, the intercontinental is that knew his name in a valley that knows luxury. there is a 10th floor bar to watch the city below. lounge.edicated cigar in the off-season, suites start at $1100. during the wef, well -- >> i cannot tell you. >> more than your market rates? >> of course that is reflected in the rates. one,u come during formula
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you will see that the pricing is slightly different to a normal weekend. >> higher? >> yes. >> the hotel is banking on the conference market from asia and the middle east. of davose new belle has to get through its first ball. >> i have tried to talk to some of the guests to find out exactly what they are paying. here is the shorthand we are going to use. 65 swiss francs for breakfast. that is about 60 euros. we are going to go back and see what their regular menu price is and find the multiplier, simple algebraic equation we are going to solve for x. we will get to the bottom of what an expensive room at the newest hotel in davos actually costs. >> without bad mouthing anyone, i had a very expensive -- not worth it yesterday. we were waiting for an interview. give us a flavor of how
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difficult it is to find accommodations in davos. if you are new and starting here, you do not realize that the hotels are spread out. a lot of them are very basic and these are ceos. secure small, very place. you do not have many accommodations, hotels, or apartments. >> many of the apartments and the hotels here were sanitariums because of the air being so clean. tv patients walk the halls of many of the chalets. johnson, in his earlier years, actually snowshoed in. he is made of party or stock than most ceos. one thing about this hotel, architecturally, i am not quite certain what the critics are going to make of it. it does not fit the profile of the swiss else. -- alps. thatam not sure whether was a veiled compliment or suggesting that you could not use snowshoes in davos now.
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i think you can. >> i am not sure. i had a really big beard then. mountain man, that is what they called me at that point. hans, you have much to live up to. you need to step it up. get away from the algebra and get more into the hiking. that is the way to go. we will work on that. in the meantime, i had a segue to this one. nokia investors may find out as early as this week how much they will get from the sale of their handset unit to microsoft. deutsche bank is rejigging that they may return as much as 3 billion euros to shareholders. nokia is scheduled to report earnings tomorrow morning. of course course, we will bring those to you. itscited challenges at server unit as one of the reasons why profit fell in the last quarter. it is the same unit that lenovo is said to be pursuing.
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talks will resume over a possible sale of the server business. havemazon is said to approached u.s. media companies to acquire rights for an online tv service that would expand amazon prime instant video by offering live programming. sony and verizon are also planning web-based tv services. up next, you have heard of electric cars. scooters? electric we take a look at the latest renewable technology naming to reduce carbon emissions and get drivers thinking green. that is coming up next right here on "the pulse." ♪
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>> welcome back, everyone. itself as anented environmentally friendly alternative to gas powered cars. is a san francisco startup hoping to do the same thing for motorcycles. emily chang got a progress report on their plan to review -- to reboot the commute. >> from the front, it looks like a normal electric stew -- electric scooter. from the side, it is anything but. means the a big hole scooter has as much trunk space as a small car. >> it is a vehicle for carrying
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everyday things. >> he is the visionary behind lit motors. they have 2 prototypes in the works. a commuter scooter. their other vehicle looks like something out of a sci-fi movie. part car, part motorcycle, it will cost about $24,000 and has high-tech safety features that keep it upright right, even in a collision. >> it takes all the safety and convenience of a car and marries that with the efficiency and romance of a motorcycle. electric, but at just $6,000, it is one fourth of the price. car startups are tough. it takes big money and many years to get a new vehicle on the road. after years in development, lit hopes to get both vehicles into production this year. >> i am part of this generation
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y and i am developing a car for me. >> to do that, he has teamed up with a design guru and chief creative officer, designer for big brands like herman miller and bmw. >> what i am excited to do is look at the complete package. how does this new type of vehicle become really attractive to people who know and ride motorcycles and also people who never have? >> kim and one of his engineers are working on their prototype as traffic and gas prices make owning a normal car less desirable. he thinks lit is ready for the fast lane. >> you're not trying to replace the car. we are creating a new class of vehicle for any kind of short commute. >> seriously cool tech. let's talk about some seriously cool places.
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we will get back to davos in a minute. we will be talking about the next hour of "the pulse." for those listening on bloomberg radio, the first word is up next. thosee "the pulse" for watching on television. we will be in london and more importantly, we will be in davos. we have a great lineup for the next hour. what do we have? >> we have all angles covered. we have the party scene, the night caps, the braking, exclusive interviews. we will be talking to the nigerian finance minister. she was number two at the world bank just about a year ago. we will get her sense on where nigeria is going and where the world economy is going. this is the first time in five years that we are not dealing with a crisis so we can get some smart conversation going. smart conversations and some decent partying. who is on the line up tonight? >> we think. we are trying to find out.
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i am trying to work our best sources to know whether she will show up. we had a couple of strategies. we caught up with matt damon yesterday. i saw psy. mary j. blige, we will find out. ♪
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a bang, day one. optimism in the air as leaders gather. axel weber says he sees a muted recovery. into thechecks billionaires club as a shares hit a record. has resigned-erian as ceo of the world's largest bond manager. good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u.s.
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a very chilly united states. i am guy johnson, this is "the pulse," live from london. >> i am francine lacqua, and a very sunny davos. day one of the world economic forum, a big morning. we talked exclusively to a couple ceos and spoke to axel weber, who was optimistic about 2014. he said we have to be careful, central banks cannot take all the buried and we will see a very muted recovery in the next 12 months. >> what have we got? you are talking to the nigerian finance minister. africa has been a big subject over the last year, plus the energy angle. talking about that too. what is she going to be talking about? >> she was number two at the yearsbank until a couple
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ago. we will be asking her about oil, whether nigeria is in a better place to attract foreign investment, looking forward to that conversation. and then a lineup for the rest of the day. it is not all hard work. i met with psy yesterday. i tweeted -- i was quite excited. this is at korea night. overhing happened in davos the last four years or five years. all the parties were done by the banks. the bankers got flack for spending too much money, now it is countries, they want to show their best experts. psy, there he is. i am smiling. he said he could not dance or sing for me, he did promise an interview in london. >> wow. looking forward to that. did you try to dance for him, i know you are quite a specialist when it comes to "gangnam
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style." >> i am unashamed of showing my dance moves. i did not -- it did not work at out -- it did not work out as much as i wanted. hans nichols caught up with matt damon, talking about clean water. facebook off rating officer sheryl sandberg is now here, she can now add her -- add billionaire to her list of accolades. they spoke closed at a record price of $58. matt miller joins us more -- with more on her success. >> there are many, she is talking about women's issues, technology, the future of the economy, all the things you expect someone with a high profile at the world economic forum to do. look at her courier, she started
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at harvard, gets her master's degree at harvard, works for larry summers as chief of staff, works for google, poached by facebook. she sits on the board of walt the boarde uses it on of starbucks, she wrote "lean in." young, bright, a very high achiever. one of the role models we need. being a billionaire gives her that visibility extra visibility. talking aboutt it, monitoring who is becoming a billionaire. you can monitor more women approaching that, marissa mayer if yahoo! can take off. i think sheryl sandberg is a great role model for women. >> these are self made billionaires. in a lot of cases, it is women -- in the past, they would inherit or been married to men, this is a new class of women.
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>> the richest women in the world are all inherited wealth, christy walton. all these women inherited from their late husbands or their fathers. now, you have a situation where more women, in china, building a huge real estate fortune. when you look at them, it is quite impressive. getting beyond the normal handfill. to the chinesek billionaire tomorrow, one of the richest women in asia after working in factories. our bloomers -- our bloomberg -- our bloomberg billionaires editor hans nichols. hans nichols caught up with matt damon, he is raising money for water. >> he is. water,aising money for
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this is a blend of serious and celebrity. matt damon is using this venue to raise awareness. he said so many people in the developing world do not have access to water. are still 780 million people on planet earth without access to water. >> corporations are doing their part? number of corporate partners. pepsi, cap, ikea, a bunch of them have stepped up for us and have been great. they are taking a really proactive role and that is wonderful. it is going to require a lot more than that. >> first impressions on davos? here two hours and already heard a beautiful concert, a pretty good start. take care. francine, sorry it was a little loud, a helicopter was just taking off behind me.
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leaving after dropping someone off. when you talk to celebrities like matt damon, you get a sense they really want to leverage what is happening here at davos and bring about development policies that are more two point oh, bringing private sector and injecting private sector and market forces into the developing system. turn a profit off development capital, in private the next stage of development. that will be a sideline conversation at davos. the crisis on the european side is on the back burner. >> you are mentioning some of the arrivals by helicopter, it is very difficult to say who is in there, we are expecting the arrival of the iranian president hassan rouhani, we have not had an iranian president in davos for at least a decade. >> what is interesting about rouhani happens at the
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same time as the syrian peace talks. the challenge for hassan rouhani is to convince ceos that the nuclear arms talks are on progress and the six month window when sanctions are lifted for petrochemicals, that can change into something more lasting and meaningful, allowing a run to start exporting oil. lots of business opportunities, we are in a proving time for the iranian president, there is a danger that the talks in syria and the blaming that iran is behind internal conflict in syria could clout some of his ambitions here in davos. much, ourou so international correspondent. i also spoke with the ubs chairman, axel weber. he shared his concerns about a muted recovery. afterm concerned that
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five years or six years after the crisis, stabilization is done and the mute is getting better. people forget, it is a very muted recovery and a slow recovery. consumption is in low gear, hard for us to expect this to look like any previous recovery, a will more dragged out and slow. he reiterated the fact that ubs has no plans to spinoff its investment bank. talking about the fact that the investment bank will go back to the investment banks of the 1960's. i think he meant that it serves the client, more simple. ,heir asset wealth managers billionaires and family-owned businesses also went that support for investment banking if they want to do acquisitions. >> think about some of the names that have been consumed by ubs. banking in the 1960's,
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interesting. francine, we will be back later. to think about that. let's talk about what is happening elsewhere in the world. significant developments in california. mohamed el-erian has resigned as pimco's ceo. he has been back in the business for six years and has been responsible for leading pimco's transformation from the world biggest bond fund manager into a huge diversified investment firm . david tweed is in berlin. onknow he is going to stay as an advisor to the pimco owner . do we know why he went. speculate at this stage. he wrote an internal memo, four pages. the only thing we can get out is that he says the decision to step down has not been easy. go because is did he
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pimco saw a record redemptions last year, or than $30 billion. or has there been a clash of egos between him and co-ceo bill gross. pimco has tried to play that down, both of them have come out praising one another. there was a very curious tweet from bill gross. he said batteries are 110% i am ready to go for another 40 years. that would take him to 100 nine years old. i am wondering whether there is a message there, a lot of people called el-erian the next person to take over from bill gross. bill gross is making it clear he is not going anywhere. that is something to think about. one thing that is certain, already the talk of davos -- company,a loss to any he has been a great name and a
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good commentator on monetary policy. for many years, it is very good to exchange views with him. course, speculation now is what will mohamed el-erian do? will he go to the fed, maybe politics in egypt, perhaps academia. twitter alive with speculation about the next job for him. a couple guys stepping up as well. balls is iverson, mr. well known to our viewers of bloomberg europe. the new deputy cios. right, the other thing about andrew balls, his brother is ed balls, u.k. chancellor. yn has a stellar record as a fixed income
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investor. he was named by morningstar as the 2013 top on investor, fixed income investor for the year. absolutely stellar credentials. these two will be co-deputy chief investment officers. they will sit just underneath bill gross. he indicated he is not going anywhere. >> absolutely not. us fromeed joining berlin. what else is on our radar? the storm hitting new york and the east coast is expected to make commuting pretty treacherous. the snow has grounded thousands of flights and closed schools in boston and philadelphia. it has closed federal offices in washington. bill gatesounder says innovation in technology has the potential to solve global problems. the last of our key stories, ibm facing
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challenges at its server unit, one of the reasons the company's hardware profit fell in the last quarter. the unit is one lenovo is pursuing. ibm dropped for a second straight quarter. still ahead, it could be the most fortified hotel in davos. made for the rich and powerful, hans nichols will take you inside. as well, speaking to nigerian finance and foreign minister, a former managing director of the world bank. coming up right here on "the pulse." ♪
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>> walkabout, you are watching pound spikinghe this morning. seven .1, 7% is the threshold for the bank of england. will the bank raised rates the? the market thinks that will be the case, i caution you. take a look at the inflation rate, coming down quickly as well. a little below 2%, that could change the game. that is the market action in the foreign exchange markets. let me take you back to francine lacqua in davos. focus to nigeria, africa's most populous nation. largely depends on oil production. joining us now is the nigerian
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finance minister and former managing director of the world bank, ngozi okonjo-iweala. thank you for joining us, give me the outlook for nigeria given that there is vandalism with oil and we're expecting the oil price to come under pressure. at a have made our budget very reasonable oil price, benchmark price, $77.5 a barrel. and to to shield us ensure we are not subjected to volatilities in the oil market. we have been reasonably modest. we have taken two point three 8 million barrels a day as production. not as optimistic as we were last year where we had 2.53 million, we have tried to set parameters in a very modest way. we have a budget of fiscal consolidation with growth. fiscally,nsolidate
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but direct whatever resources it you have to remove bottlenecks. that is what we are doing. the outlook for next year, projecting 6.75% growth, the imf is rejecting about 70%, we have been growing at 7% for the past decade. >> you are confident that your putreserves and money you aside means that nigeria can withstand an oil price shock. >> we can, we are a little more vulnerable now than we were in the past. we haverude, where savings to cushion the economy. -- just better than 2.5 billion there. we need to build that up this year. we are looking at that. our reserves are strong, $44 billion in reserves in the
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country. i think with all the parameters we have set and with rebuilding the excess -- we have a sovereign wealth fund we just started with $1 billion. we are looking to build that up, too with some automatic savings. >> what will be your main focus here in davos? you are a woman of the world, a lot of entrepreneurs look up to you as a mentor. have been watching this for many years. you have a special watch. it is basically -- you stay on top of every region. from such a global person, what are you watching in davos? thehree things -- discussion on inequality, i agree with christine lagarde and the pope that we have to look at this issue worldwide and within countries. in nigeria, we are growing fast,
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but that has come with inequality and lack of inclusion of certain segments of the population. >> between the have sent and have not, not men versus women? >> right. gender inequality is also important, we have to empower women. they predominate amongst the halfaves not. we need to have this conversation and work with others to look at inequality. for africa, where we have increasing numbers of young people unemployed and excluded from the mainstream, we have to watch this phenomenon. the second thing is the fact that my country is hosting the world economic forum africa for the first time. may 8 this year, we are handing out these scarves. >> handwoven in nigeria. >> we are ready to receive the world.
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a set of fake is discussions on business and thing is ahe third set of discussions on business and ethics. i am in a group with richard branson, we're looking at human countrieseating fairly and countries trading business fairly. the social aspects. a perceptions problem, people think it is risky to do business there. how do you change that? making it safer for oral four oil workers. thatat we are finding is businesses are coming, the u.n. conference on trade's statistics show nigeria is the largest destination for foreign direct investment in africa. the rate of return is that 30%, we have lots of businesses
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coming in. the eurobond we issued recently was 72%. >> is only a perception problem. life, business people know that we do have problems but they are confined to certain parts of the country. the country is moving along, it is good to do business there. you are not in nigeria, you are not in africa. >> the last word from the finance minister. ngozi okonjo-iweala. back in a couple minutes with plenty more exclusive interviews. ♪
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forelcome that, it is time today's post number. $1 million, that is the number. -- the price offered by quicken loans and warren buffett. to win, choose every winner in the u.s. men's college fast ball -- collegep basketball this year. it is a 68 team single elimination tournament. the odds of picking every winter are less than one in nine quintillion. it.eros after the money looking pretty safe. thought.ou win,
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follow us at twitter, i am @guyjohnsontv, francine @flacqua. see you in a moment. ♪
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>> good morning, welcome that, you are watching "the pulse." live from london. i am guy johnson. i am francine lacqua, live from the world economic forum in davos. have brokeniews, we some news, we talks to axel weber of ubs. i got to show off my dance moves to psy. >> i know this is the highlight of davos thus far. look at the smile in this next picture. one coming up in a minute, she
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is grinning from ear to ear. highlight thus far. the dance moves in the middle of a packed south korean event, a spectacle. finds a hilarious, do you see that? always appreciate your jokes, why shouldn't every body else? i agree. he did promise to come to london, i don't know if he will hold to that, pretty exciting. >> tell him we are having a dance off. >> korea's biggest export. >> we will have a dance off, definitely in the calendar. 20 of other great things coming out of davos. you on toppdate headlines. u.k. unemployment dropped to a number of seven .1%, the lowest level in five years. close to the seven percent
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officialsthe boe said could talk about raising rates. it is a threshold, not a trigger. in the u.s., a winter storm making commuters have a treacherous morning. new york and boston commuters could face 10 inches of snow. it has grounded thousands of flights and closed schools. in the ukraine, antigovernment theirtrators have claimed first fatality after a night of violence -- a third night of balance. police are investigating a dead body found at a medical help point. let's talk about corporate news. ibm has disappointed the market again. missing estimates and posting its seventh straight quarter of declining sales. caroline high joins us with more
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on the report. more of the same. evenven straight quarters, though the figures are enormous, $20 billion is larger than some gdp.ries' apple is making more money, hp is making more money on a quarterly basis. overall in the year, sales are down 5%. ibm has dropped the ball, particularly regarding cloud -- cloud computing. they make servers for storage, we are all going to the internet now. they are playing catch-up. >> what are they going to do to fix at? >> they have been making acquisitions, trying to get into the cloud space, catching up. they got soft where technologies, $2 billion, sales up 69% for the cloud services,
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other new products. the watson supercomputer, moving to mining big data, having a whole new business unit. the supercomputer answers questions and conversational language. they are eliminating jobs, cutting into costs and selling. we were talking about it. lenovo likely to be buying their low end server businesses, the x theit hit their profit in last quarter, a good move if they could sell it for $4.5 billion. the overall, the executives are saying we missed a trick, we are sacrificing our own bonuses because it has been so much concern. interesting that analysts are buoyant on profitability. sales eroding, that drag down shares in after-hours trading.
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they are on track to hit adjusted earnings up. >> bottom line looking alright. >> because they are cutting costs. the bottomle of pnl, line is matching what they are expecting. i have conversations with my computer, i am glad it does not talk back. >> it has got to be unnerving. much, carolinery hyde, european business correspondent. francine, over to you in davos. have justeace talks begun in switzerland, john kerry says the syrian president cannot be part of the transitional government. 40 countries are attending the negotiations, the u.n. with drew invitation amid pressure from the u.s.. president hassan rouhani said he does not have hoped for peace in the talks before heading to the
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root economic forum. hans nichols joins us with the latest. these peace talks are just 350 kilometers away. we are watching it closely here. in some ways, there have not been many developments in the peace talks because everybody is so pessimistic about the prospects. take john kerry's comments that the assad government cannot be part of a transition. in keeping with u.s. policy. they does not seem to be shifting of positions. he challenge for rouhani as lands in switzerland is to keep the two meetings, the two conflicts separate and keep them compartmentalize. if what happens in syria, a breakdown of peace talks, if is blamed for supporting the syrian regime as a proxy, that causes problems here in davos where he is trying to open
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up business opportunities and get a better sense, convincing world leaders that for the six months that sanctions are open for this brief window, in terms of nuclear talks, iran can do business. there is going to be stability and he is a reliable partner moving forward. gives a speech later, his meetings will be on the sidelines, convincing ceos that his diplomatic skills in negotiating the sanctions now can be put into good use with business skills. has to be aware of, he has several audiences, he has to keep the u.s. audience in mind, barack obama and congress, at odds in some ways with obama. he has to keep the hard-line audience in iran in mind, everything will be broadcast back to iran. he has the immediate audience,
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the ceos and companies that can spurt in iran and help growth in that economy after it has seen so much disastrous effects from the sanctions. his case has to be "let us be without sanctions for a moment and prove to you we can do it here, he has a limited amount of of turning things around. those peace talks taking place in syria are by no means simple flying it. >> -- simplifying at. the arrival of the iranian president, first iranian president in davos in at least a decade. i hear helicopters arriving now, difficult to say who is arriving . guy, over to you. more interviews from davos throughout the day. >> looking forward to finding out what else we are seeing in davos.
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let's find out how the markets are trading. manus cranny? reflect whatets axel weber said to francine earlier. the map belowon me feels a lot better than it actually is. the complacency could creep in. on, ams of what is going beautiful statistic of the day, 408 days since we last had a correction on the msci world index. the eighth longest winning period on record for stocks. to 2014. start cannot and/or? the bank of england minutes came out, unemployment data came out, you touched on currency moves. 1.6 --retty crazy, -- 1.6540.
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trying to differentiate between what could cause higher rates. the market is coming back off highs in terms of its perception of where u.k. interest rates will be. foreign exchange traders, the prize of the most overzealous. if you are a cable trader. time,20 minutes' "surveillance" with scarlet fu and tom keene. tom is in davos, looks a little chilly. i was going to say scarlet fu is warm, but with the weather in new york that does not apply. cold in new york, another polar vortex. i was staying in midtown manhattan to prevent transportation staff is. i stayed at the marriott. that is coincidental, tom will be speaking with the ceo of ,arriott international in davos sorensen. marriott just open a new
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location in midtown, the tallest building in new york city, 753 feet. tom will be speaking with them. also, tom will be checking in the steve, a giant in private equity world from bain capital. he is a co-owner of the boston celtics, one of the big nba teams, most valuable franchises in front basketball. >> quite a show. "surveillance, coming up with tom keene and scarlet fu. we're not finished with "the pulse" yet. what have we got coming up? rich arewerful and here in davos. the most secure hotel. the only hotel with its own helipad. no getting in and lets you are
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invited. hans nichols was invited, looking inside what might be the most fortified hotel in davos. it is brand-new, inside peek is coming up next. ♪
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>> welcome back, i am francine lacqua at the world economic forum. the mostin davos, only secure hotel will do.
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the intercontinental, bill this year. participants at the world economic forum can stay there for the first time. hans nichols had a tour. what was it like? >> there will be a lot of talk about forgers balance sheets, this is a fortress hotel. the prices even higher during the forum. the intercontinental davos, easy to defend. security seems to be cry -- quite expensive, you have a perimeter. we are a particular secure area during the world economic forum. we have a bit more than a handful of heads of states coming -- >> what does that mean?
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>> six or seven. >> which once? >> i cannot tell you. >> who decides which head of state gets the presidential suite? >> the road economic forum. >> behind davos like a giant golden egg, the newest name in a valley that knows luxury. a 10 floor bar to watch the city below. with a dedicated cigar lounge. in the off-season, suites start at $1100. during the wef -- cannot tell you. we have a certain market situation in davos during this period. to monaco during the formula one, the price structure is different to a normal weekend. probably hire. -- higher.
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wef, the hotel is banking on the conference market from asia and the middle east. the new belle of davos has to get through its first ball. ends, theyhe wef will not have access to this helipad right off my shoulder. they say it is a long-term investment in europe. when we spoke with the ceo, he talked about growth outside of europe. biggest piece is north america. ist is a big market, 25%, it going to grow. second to china. of asia, thest middle east and other parts. europe is probably at the bottom. francine, you are downtown and talking to heads of major banks. talking about slower growth in europe.
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it reminds me of the new normal debate and a lot of the language we had after the recession officially ended and the states. yet growth was somewhat anemic. even with anemic growth, back in 2010 and 2011, it would still be the envy of europe. it will be interesting to see how this conversation grows throughout the week and throughout the conference on what constitutes a robust growth and what can europeans be satisfied with. francine? >> i agree. where are we getting this optimism from? report, 57%at davos of respondents think 2014 will be a great year. they think central banks will not do anything. what happens when central banks start doing something? have we seen the limit of central-bank power jacob that is the point axel weber, ubs chairman and former head of the bundesbank was doing. are hypothetical questions.
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they have a real world consequences. what happens when bernanke, connie, -- bernanke, carney, dr aghi star tightening a little more. talking about growth in the 2% range. overnight, we saw the imf report on global growth up to three .5%. none of this will do something to solve the jobless problem in europe and potentially outside of europe if the growth does not -- if the growth stays at a very flat pace. watchings what we are out for. hans nichols, international correspondent in front of the intercontinental. it will be interesting to see where the conversation takes us in the next couple days. we are not in crisis fighting mode, we are not firefighting. we might start to get real conversations, not about whether the euro zone will survive, but how do we achieve growth and have central banks got into the
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end of their power? >> look at some of the data about the eurozone, credit creation and unemployment numbers. the level of youth unemployment, things need to be sorted out. they have got their work cut out for them in davos. you later,back with great conversations to come. let me update you on company news. amazon is said to be seeking content rights to start an internet tv service. the world's largest online retailer said to have approached u.s. media companies. this would expand on amazon's pride video prescription -- prime video service. chief investment officer of facebook is one of the youngest billionaires. sheryl sandberg surpassed $1 billion yesterday after facebook shares closed at a record. m kohl's mohamed el-erian has
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resigned after six years. 's mohamed el-erian has resigned after six years, he will leave his role in march. douglas hodge will become ceo. m bell has been struggling to stem record redemptions from the world's -- emco has been struggling to stem record .edemptions another record storm in the u.s.'s northeast. the latest warnings as wall a -10 degreesp to fahrenheit chill and plenty of snow. all-star lineup of guests in continues. the biggest newsmakers from the world economic forum, coming up next on "the pulse." ♪
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>> welcome that, you are watching "the pulse," live from london. after data a tear showed unemployment has come down to 7'1" percent, the latest data. 7% is the threshold that mark carney said at the bank of england. it is a threshold, not a trigger. spark -- it could spark a debate in the u.k. about rates going higher, sending the pound higher. what is the news from davos? let's find out.
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got hans we have nichols over there with you. mike mckee is in new york. francine? >> plenty of interviews coming up. tom will have a conversation with cain rogoff, and a lot of chief executive officers. i will hand it over to hans, watching the syria peace talks. the iranian president, we have not seen any radiant president in dallas for a decade. speecharrive and give a later. he wants business. i want to figure out who he is going to speak to in davos. say they wish they had a meeting but they are not meeting with him today or tomorrow. >> that is crucial, who rouhani meets with. panning down on a helicopter that just arrived.
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gets outsee which ceo of that helicopter, it is a meetson of who rouhani with on the sideline of this meeting. >> we will see who comes out of that. snow in davos in new york. as of midnight last night, 29 centimeters or 11 inches of snow had fallen in central park. temperatures have plunged, looking at wind chills of about -20 degrees celsius. frigid conditions. schools will open in new york city, closed up and down the east coast as we recover from the storm. that story,n top of making sure everybody is aware of what is happening. that is it for "the pulse," we are by no means done with davos
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coverage. "surveillance" is next. scarlet fu in new york, tom keene in davos. if you want to follow us, feel free. @flacqua.ontv, see you tomorrow. ♪
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>> this is "bloomberg surveillance." television? cable amazon links into creating an online pay-tv service. thomas edison invented the lightbulb, the ceo of general
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electric. developing new power around the world. the tallest hotel in new york, fall from the priciest. marriott opens a new way to watch the snowstorms on the east coast. morning, this is "bloomberg surveillance," live from new york this wednesday, january 22. i am scarlet fu with michael mckee. tom keene is in davos attending the world economic forum. tom, you missed the snowstorm here in new york. are you getting wintry weather in switzerland? >> we will go downhill skiing in central park when we get back. a snowless davos. alps.t cover across the i did a panel with brian moynihan of bank of america, peter sands of standard charter and don barton of


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