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tv   Countdown  Bloomberg  May 20, 2015 1:00am-3:01am EDT

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mark: japanese stocks climb in the end of the quarter and then a look at the european open. manus: time warner cable is set to be approached by a takeover. plus, liberty global chairman says a tie up would be a great fit. more details on what could be multibillion-dollar deals. anna:mark: merkel and hollande give greece a deadline. we have the latest as they meet in frankfurt. manus:four banks are said to
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be ready to plead guilty in the u.s. more on the cases that could see problemns. citigroup and jpmorgan settling for $1 billion apiece. ♪ mark: welcome to countdown. coming up today, a big day for retail and the u.k. reporting earnings in one hours time. we look forward to what we could see in those reports. manus: japan's economy expanded for the second straight quarter after business is expanded. let us get to shery ahn. first quarter into the next, good news. shery: good news in quite a bit
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of a surprise this morning in asia. japan's gdp growing in any revised 2.4% from the previous quarter beating analyst estimates. much better than the previous quarter. we saw weaker than expected growth at 1.1%. it is how the corporate profit. business is showing signs that will raise wages and start spending more there was a lift from the positive data at 1.1%. of it is the highest level it has been in 15 years. a weak yen has helped lifting stocks this week. we can see the yen has been weakening this whole week. at one point. it reached the lowest level against the dollar in two months. it is reading at about 120.
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an area of caution on the latest beta is we also saw an increase of inventories which suggests consumption is still trailing industrial production. manus: thank you very much for running up the moves on the market. mark? mark: we should bring you breaking news. it is a big day for a number of banks. the swiss bank has just announced it will face no criminal charges no department of justice fine on this fx probe. this is a big day. we are expecting citigroup, j.p. morgan chase and the royal bank of scotland to plead guilty and each pay about $1 billion in fines over allegations they manipulated currency markets according to people with knowledge of these settlement talks. ubs has just come out and said
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it faces no criminal charges, no fine from the doj on this fx probe. it has got conditional immunity from prosecution from this fx probe by the department of justice. the doj is to determine its libel fine for ubs. and ubs says there will be no final impact on the second quarter 2015 results. ubs is required to plead guilty on this legacy libel conduct. you will remember a number of years ago, we have had a number of banks fined for rigging the libel rate and collusion going on as there has been in the fx market. ubs will plead guilty on its legacy libel conduct and pay a $203 million fine.
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the bank is provision for these results and the payments of the board of governors will be $242342 million. a number of fines but it is immune to prosecution for this fx probe whereby today we are expecting a number of fines as citigroup, j.p. morgan chase ubs to plead guilty and pay about $1 billion in fines over allegations they manipulated currency markets. that is the news from ubs. manus: four months of a standoff between greece and the creditors and the bailout deal. there has been a deadline for when they want to see economic reforms from the greek government. let's go to hans nichols. hans, another day, new deadline. 12 days. it is all most like the 12 days of christmas. hans: it does mean peace.
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i don't think we have any indication there will bps for negotiations in the next 12 days -- peaceful negotiations in the next 12 days. they were standing united with an end of may deadline. moments earlier, we heard from the labor minister in greece. he said june 5 was the deadline. that is a slight difference. june 5 deadline is a technical one. that is when payments become due to the imf over the next 14 days. they have 1.5 billion euros due starting june 5. merkle belongs the united. while she might meet with the finance minister of greece, she made it clear the eurogroup, the brussels contact group, is the proper form to getting to a final agreement. angela merkel: the talks need to speed up. they are going to fast. we need progress in the
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brussels group because the agreement was that a program should be established by the end of may and this is necessary because theit expires at the end of june. hans: a drop a little bit yesterday afternoon after christine lagarde said some progress was being made. there was a conversation in athens with party leaders -- very good reporting -- he has a knowledge and does not think the current sales tax reform will pass muster with creditors and it will probably have to go back to the drawing board what they plan to submit. manus? manus: merkleel has internal political pressures. there was one viewpoint that the germans would be happy to cut ties with greece. what is her strategy at the moment? hans: she is starting to address this.
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according to people familiar with the matter, about a third of her caucus could revolt. her chatterjee is to give a major speech directed at her -- her strategy is to give a major speech directed at her party. she will only do it if they got a deal. yesterday stigliztz gave his party a bit of an update. he says they don't understand what they need to do to get a deal. at the same time the greek parliament are considering calling madam lagarde and even a former greek prime minister down to greece to explain why they needed a bailout in the first place. not sure if they would accept that invitation or if it would be tendered. they seem to be the one the most pessimistic that greece understands that thisis predicament. manus: thank you for the latest.
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mark: a frenzy brewing. another potential deal for time warner. caroline hyde is here. he has his eyes on time warner. caroline: there is not one but actually four multiple combinations that is going on in the united states in terms of cable. this is an m&a merry-go-round. time warner just a month ago peeled away its desire to get with comcast the number one player in cable in the u.s. too many competition issues. $64 billion deal collapsed. now, as you mentioned, patrick draghi is a big european player and now eyeing up time warner we understand. this could be $44 billion it would have to pay out to time warner. a significant deal.
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what is interesting is time warner is also being circled by another player. that is charter communications which is owned by another billionaire. time warner is being eyed up not once, but twice. meanwhile, charter communications which is eyeing up time warner is also looking at bright house which is the sixth cable player in the u.s. still altis is looking at suddenly which is the seventh biggest. mark: he has a big appetite. caroline: the first combination is altis and time warner, the second is charter communications and time warner. the fourth is charter and bright house. this is a frenzy. it is being redraw in the united states. he wants to get into the u.s. before it changes and whoever
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the dominant players are. notably, it is because people are changing. they are making less money and have more fierce competition from amazon, netflix, new players. how do you take this? manus: there have been comments in regards between himself. he is not making an offer. caroline: the speculation has been right about that. we have managed to get a conversation with liberty global's owner on the phone. he is telling us yes a deal would be a great fit. he says check out whether it be germany, the u.k., the netherlands -- there are significant synergies. very substantial synergies. think of it -- you have cable to which land and you -- cable to whichyou have been virgin media owned by liberty global. analysts have been agreeing.
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a stock-based transaction would give synergies about 1.4 billion pounds. i love this. john malone calls it in a jar. how do you get your ahnd out of the jar with it? manus: i thought bananas slip. jan is the really cherishes it. which part of it does he not want? that is the question we will ask. mark: thank you. top stories this hour -- six chinese citizens have been indicted in charges of stealing mobile phone technology is from two companies in the u.s. and sharing it with our own government. the charges represent the u.s. government's latest efforts to pressure beijing to stop the alleged widespreading trade secrets. taktataata fell in tokyo trading
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after agreeing to the largest u.s. recall in u.s. history. they recalled about 34 million vehicles. they agreed to submit airbag parts to the u.s. government testing. investigators continue to search for the root cause of the defect. it has killed at least six people. whoshares are down 7.6 percent on reports the iris and considering a rule change that might complicate efforts for alibiaba. it could affect yahoos 's existing plans in this chinese e-commerce giant. you can find more on the story at bloomberg.com/europe. manus: join the conversation on twitter. we are both there. i can only presume the ubs story will begin taking on a life of its own. a three-year probation.
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they will not plead guilty to the fx charges as you laid out. they ripped up the libel agreement from 2012. they will pay a fine of $200 million. about half $1 billion between the federal reserve over a three-year probation. mark: as we go to break, let us check on the euro. it is down by 2.78%. the currency slid the most since the board member says the ecb intends to increase purchase of bonds before the liquidity drops. manus:a a private dinner between hedge funds. mark: the expectations were it would not be leaked. manus: the ecb said it ran into
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technical difficulties in printing the statements. mark: it was not announced when he originally made the comment. manus: it was printed yesterday morning at 9 a.m. that they would frontload the bond. if some elements of the market word formed at different times than others, it seems in the injudicious. you get access the bigger information if you are one of the big boys. mark: that is all the rage. when we come back, we will talk about u.k. inflation and the bank of england. will they show a split or a continued united front? we will find out after the break. ♪
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mark: the u.k. has fallen into deflation. my next guest thinks and mighty one month until it turns positive. from the bank of england. the two members was finally balanced. it sadid the path of great expectations for the market was extremely flat. more hawkish than many assumed. >> i think so. the two members of the mpc of what their views are regarding looking through sterling and the
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oil prices. i personally think they will develop their narrative but actually keep voting. and wait for one more month. the read is into the cpi data we had yesterday which was heavily influenced by the timing. and the timing of easter flights and downward pressure on flights. i want to see whether that in the falling inflation which went down, whether those are impacts that picked up the wages without growing at more than 2%. manus: mark carney gave a message that this is as good as it gets. it will not last. but we have this deflation. we have productivity which is under pressure and the fiscal squeeze. does that add up to a delayed hike by the bank of england?
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simon: i can see that moving to the right, particularly if sterling strengthens. sterling is a big factor because mark carney -- what did napoleon say about his generals? they have to be more lucky than good. the economic backdroppers keep inflation under control. the comments yesterday -- he does not need to move any monetary levers when it has weakened. the sterling takes strength anytime anyone sees any decline. we do see the timetable moving. manus: he is quite happy for sterling to continue. simon: the economy can continue to repair. it will be the labor market. it has been the real success story in the u.k. unemployment is at 5.5%. there has been tightness and localized labor markets.
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it is not wages picking about this point than he has less to what you can do with his words and actions. mark: mark carney also said after the report the sooner the referendum takes place, the better because of the uncertainty. you are still putting the chances at 10%. you have outlined a number of scenarios which you believe the outcome will hinge on. simon: if you look back at the precedent in 1975's referendum, they came back with a package of reforms which was based on food and money. that narrative will be developed wide this administration, but probably under the titles of welfare reform and commercial regulations. therefore, i look to the ministerial appointments. there are some key eurosceptics. how they will knit a narrative
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which is how we engage with the european partners because my best guess is with angela merkel and francois hollande facing reelection campaigns they will be keen to offering very little but getting this off the table in 2016 to anticipate the referendum. this is pushing for an earlier referendum in 2070. -- 2017. collectively those appointments put together a narrative which a lot of people have been worried -- also the history of the scottish referendum. i think that is a powerful signal of what they would do in the referendum. manus: we have a quick homage to greece. mark: i was hoping we would not mention greece. manus: shall we not? merkel and hollande, a new
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deadline for the greeks. the fifth of june technically. what do you make of this? simon: they have a 300 million euro repayment to make to the imf on the fifth of june. you also have the prospect of 7 billion euros of repayment in july and august. a deal needs to be struck. there needs to be conversations in this deal happening tomorrow and friday. look there are only two stable it really brands -- equilibriums. greece becomes more like northern europe and structural reforms which is politically impossible for the government. or there is fiscal pulling. it is off the table. given those two scenarios, only two stable equilibriums. any other is unstable. mark: simon, great to see you.
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manus: coming up we get an exclusive look from the former sony ceo. that interview when we come back. ♪
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mark: welcome back. let's give you some of the breaking news from ubs. the agreement from the department of justin regards to libel has been ripped up -- department of justice in regards
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to libel has been ripped up. over $200 million in addition but it will not plead guilty to the fx charges. mark: a big day. stay with us. ♪
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manus: welcome back. what is going to happen with the federal reserve? is that glass half full or half empty? the dollar is up. this is the dollar index. we have rallied up to 3%. construction numbers of gone up since november 2007. the first quarter gdp, how confident is the fed in terms of the first quarter slowdown? was a temporary? will they indicate anything at all? april indicated there will be
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moderate growth. treasury yields are not the highest. the dollar is up. it is marching higher. look at this -- this is what you call momentum. a change of direction. a statement released yesterday, they had a good dinner as well at the reception. the euro dropped on curry's comments being delayed. march 16, may 15, that rally in the euro. that was the fastest rally in the euro dollar since 2010. what you are seeing is really the beginning of a new phase. jpmorgan are the first forecasters and they say you are still looking at again of where it is 141 by the end of 2015 on the euro-dollar trade. that is the news. hans at morgan stanley says it
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is still bear. keep your eye on sterling. a little bit lower this morning. the hawks being kept at bay? it is down. it is starting the day a little bit lower. mr. carney tells the u.k. citizens you have never had it so good, make the most of it because of what not last that long. the dollar-sterling -- we wait for the data. 9;:30, london time. this is day four of the decline. mark: the top stories -- ubs says it will clean guilty to fraud in the u.s. for manipulating benchmark infants rates -- interest rates. it is also paying $342 million to the fed for measures in connection with fx misconduct. citigroup, jpmorgan ubs will
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plead guilty and each will pay about $1 billion in fines over manipulations or allegations they manipulated currency markets, according to people with knowledge of these settlement talks. federal reserve chairperson janet yellen says regulators will address risks of financial ability as officials cited high-speed trading and clearing house as protecting threats -- potential threats. they will work with other regulators to see if actresses are strong enough. firms are arguing that clearinghouse shifts threats to a house full -- handful of losses for banks. the new england patriots will not appeal the national football league penalty for using underinflated footballs. that is according to the team owner. the patriots will pay their one million dealer fine and accept the loss of two draft takes,
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including a first round selection in 2016. you can find more on that story at bloomberg.com/europe. manus: it is less than a half hour ago. we will get a full set of results for the year. all eyes will be on general merchandise. that is a number which includes women's clothing. a key part of the business which the company has struggled with. john joins us. charles the short-term for sales -- we had a little bit of a curtain raising. there was a hint of things were getting better. charles: they are. i think we saw the sales number for their final quarter which is the first quarter of the year. looking ahead we have some soft comparisons. when they started the new internet business, it did not go well.
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they have three more quarters where last year the sales fell. they should be able to do well against those as well. i think we are expected to have confidence with management on the sales outlook. mark: m&s and lingerie is like ham and eggs ora any combination that comes in mind. is it under threat or not? charlses: a lot of people are circling that area. that is the core of their market share. it depends on what you count market or value. yes people are attracted to it. you see victoria secret the u.s. coming into the u.k. now and then you have other specialist startups. manus: that have nearly 800 stores. on a personal level, it is still merchandising. i shope.
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relative -- it i is not quite up there. they need to spend more money on those stores or do they have the money? charles: they have the money but they promised people that the cap would come down. there are hopes of shareholder returns. i think you are right. the flipside of owning your own stores which they do, you the company have to spend money on them. it also comes back to things like the lingerie which they typically put on the floors to draw people up. in many sotertores, it is difficult to find your way up because the escalators are out of the way. there was a lot of money that was shifted. they have not necessarily done that in their older stores. mark: are they less under pressure now? his job in recent years? is he safe because of the
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turnaround in general merchandise? charles: as long as the sales continue to go up, people will accept that. to be fair, he has done a lot of things that needed to be done behind the scenes particularly at fixing their i.t. and the logistics which has been left for ages and ages without investing in. manus: if you were to look at him and say the one key thing double take the stock for urhtether relative to its peers, is it dot com, is of the inside of the stores? what is it? you want the fashion double-click with everybody. charles: i think the magic will it for m&s, it is a combination of little things that have to happen. there is no one thing that is particularly the right.
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they work on getting the stores. they moved the stores were people wanted to be. m&s as they keep working on it stores and improve. it has to improve the whole way it takes merchandise through the channel. most importantly, it needs to get younger customers. mark: is it relevant? it is the word that is relevant -- is m&s relevant again? charles: it is 11% market share which means you are relevant in the clothing market. it remains that the innovator. mark: it is rising when the rest of the market is shrinking isn't it? charles: it is, partly because they have brought the range which people have a higher percentage. mark: it was good to see you charles. join the conversation on
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twitter. we are always there 24 hours a day. bill murray is trending. i gather he was funny on david letterman last night. you know what time i go to bed. but i would like to see that. he is trending -- bill murray. manus: you are not trending, barton. in the meantime join us. we will have a conversation. ubs -- breaking news. they have agreed to pay fines in regards to libel. they have ripped up the department of justice has revved up the libel agreement. they have not exonerated them but they are exempt from an fx charge. more on that story with a man who knows a thing about herit. chris wheeler is next after this
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break. ♪
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manus: the top stories at this hour -- six chinese citizens have been indicted on charges for stealing mobile phone technologies from two companies in the united states and sharing it with her own government. the charges represents the united states government in its efforts to pressure beijing this stop alleged widespread trade secrets. takata fell in tokyo trading
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after agreeing to the largest automotive recall in u.s. history. the company is recalled almost doubled the number of vehicles and is egregious amid arts to u.s. government -- agreed to send parts to u.s. government for testing. shares fell for yahoo! 7.6% on reports the irs is considering a rule change that might complicate the efforts for their stake in alibaba. it could affect their existing plants to have a spin up on the shares. mark: ubs says it will plead guilty to fraud in the u.s. for manipulating interest rates. jpmorgan, barclays ubs plead guilty and will pay about $1 billion in fines in allegations
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they manipulated currency rates. for more, christopher wheeler joins us. we start with ubs. they pleaded guilty to fraud in the u.s. for manipulating benchmark interest rates. they will pay $203 million in fresh fines after it violated this agreement. this allowed them to avoid prosecution. surprised or not? chris: yes, everybody has been waiting for the foreign-exchange news. from what i can see, they have been fined an additional $200 million. it seems they have settled on foreign exchange at $340 million. i think the market was talking -- we had numbers about $800 million. it is disappointing they had to plead guilty on a separate charge on libel. $500 million is a lot of
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money but less than $800 million. manus: what does guilty really mean? you see what happened last year. talk us through what a guilty plea really means. doesn't really change anything? chris: the year to the day since suioss put in their guilty plea -- i think capitol hill has been calling for the fact all these banks have been settling for the mortgage issues and libel and foreign exchange and nobody was pleading guilty. this was not appropriate. we had a couple of guilty pleas and have more today. initially what happens is those that have been -- and certain states cannot deal with banks that put in guilty pleas. that has been mitigated and the banks make a lot of calls to their clients to make sure they are comfortable and move on. this seems a little bit of showboating. mark: do investors lose out? is the reputational damage? chris: reputational damage has
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been done. this is just if you want another kind of black mark. it does not seem to me -- for the last six or seven years we had talks of will ubs lose its u.s. banking lysis due to -- banking license due to tax evasion? none of that has happened. it has been quite mild. it seems like a slap in the wrist. manus: we wrote an article yesterday that after the bond market trying to find out what is going on in the fsx market. the information flow back was virtually nothing. that the behaviors within markets which we would have accepted as being normal and good conduct 10 years ago, or normal conduct are gone. that information flow is about the rating. is that -- is of the operating
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-- even operatingaporating. is that true? chris:n now, that tells you where we are with this. just working in the partnership, i see some compliance come around to me. this is now a constant part of life. the cost over the last four years has been enormous and the surveillance has been much more substantial much more so in example with the global sentiment came back in the early part of the 1990's over the famous internet research versus investment banking investigation which created a high level of disclosure. mark: as these banks struggle christopher, will electronic platforms been used more? chris: absolutely, i was reading about the market this morning. they are saying it will migrate
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into electronic platforms. that is what is happening. you see rates margins, banks are getting out, margins come in. the same has happened to foreign-exchange. it is a very easy market to get into. it is not for competitors to come in. that is the way it is going. i'm afraid that is where they are getting away from the old over-the-counter activity. research analysts like me do that. manus: that brings a number of issues in itself. if you look at the equity market and the west london trade which caused the crash in theory according to regulators allegedly. thank you for compliance. that comes with its own set of issues. are electronic markets more efficient? chris: that is an interesting
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angle. it is easy to manipulate. we have read about these hackers who have tried to break into some of the u.k. bank systems on purpose. which is very important. cyber security will be the new compliance in terms of cost over the next few years. it will be very important. it will change the way investment banks work. goldman sachs is one of the few banks that has a single platform. having got to a single trading platform they are able to manage a lot more people, technologists, rather than traders and that will have an impact on cost. mark: give me a year when litigation will no longer be an issue for banks. chris: following u.s. banks $1 billion from jpmorgan, citi -- that is fine. that is tiny compared to the last few years but that is a lot
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of money. we are seeing mortgages, it will slide off. it will be around next year but still smaller. mark: it was great to see you, christopher. manus: let's get breaking news from one of the sources -- today is the day when the european central bank meets and decide how much money they will give to support the greeks. the new source says the ecb is mulling to accept more greek assets as collateral. so, it is going to be an interesting one in terms of the ongoing support. mark: they mhave mulled in recent weeks but it will cause problems for the.greek banks coming up we have the hamburger that gets topped with a great britain hotdog and chips. manus: oh yeah. ♪
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manus: welcome back. time for an exclusive interview. caroline hyde caught up with hair howard stringer, former ceo of sony. howard: you are still looking get for major companies in this
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society. apple, amazon, google and facebook that are creating p rofits you would not believe. you would never believe that shareholder value. they are going to be foreign formidable until somebody comes along and improves. i don't know who that is. the first competitor will be the chinese because they have the scale. maybe or maybe not. those four companies are so smart and powerful that it will take something to knock them off. i saw a princeton study that said facebook would be intermediated in four years. manus: that was howard stringer speaking to caroline hyde. for more we have that throughout the day. mark: time to look at our favorite stories from our digital world.
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you love your burgers, i love my burgers. carl's jr. is selling a 1080 calorie burger. it is called the most american thick burger. it is a beef patty topped with hot dogs and a layer of potato chips. it combines three fourth of july barbecue staples and it is aimed squarely at their core customers -- young, hungry guys. 64 grams of fat and as the ceo said, i am not the food police. my job is to figure out what people want and sell it to them and apparently they want this burger. manus: you look for that. mark: my guest it is a few dollars. fancy or not? manus: i don't want the hot dog in the middle. i'm a bit worried that they are undercooked. mark: it looks juicy though.
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manus: would you eat that? mark: i would. manus: what have i gone for? mark: maybe a bit more highbrow. manus: of course. i bring that atmosphere to countdown. the best nmba internships for a full-time job -- if you want to do your mba. m a management consulting firm is your best choice for a full-time job after you spent all those dollars doing your mba internships. you get 61% of mba if you are doing internship at a management consulting company. you can get a job the year after. 42% return to the bank they did their internship at. i will tell you where it is not great -- only 13%. they bring you in but don't bring you back. that sounds rather familiar. mark: countdown continues in the
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next hour. more on ubs. we will go live to zurich. stay with us. ♪
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manus: ubs says it will plead guilty to fraud in the u.s. for manipulating benchmark interest rates. four other banks are said to be ready to settle for $1 billion each for rigging for an exchange markets. more on the cases. mark: stocks climbed after the economy expanded for the second straight quarter. we bring you up to speed with the asian markets and look ahead to the european open. manus: media m&a is said to be approached for a takeover. plus liberty global chairman john malone says it will be a great fit.
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more details of what could be multibillion-dollar deals. mark: merkel and hollande give greece eight days after months of standoff. we have the latest as ecb policymakers meet in frankfurt. ♪ mark: will come back to countdown. we have breaking news from burburry the the luxury retailer. they make trenchcoats for adjusted profit. let's start with that. adjusted by 69.6. analysts estimating -- adjusted earnings at $2.52.5 billion
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pounds. for the second half, back on the 15th of april, the company said strong domestic and traveler demand in europe had boosted sales at a time where growth in the asia-pacific region was held back a declining revenue in hong kong. burberry said his digital businesses outperformed all region. it is increasing investment in its stores and is open as many as 20 mainline outlets this year. earnings, a narrow beat and the company says 2016 retail revenue will be below single digit percentage rates. manus: marks and spencer 661.2 million pounds. that is a rise in pretax rocket in four years.
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they will have a share buyback program for the loyal and patient shareholders. +++ pounds. the dividend is up. it rises by 7.4% to 11.6%. the for your dividend is up by 6%. mark and spencer, the food margins are excited to grow in 2 015. that looks a little bit light but we have that on marks and spencer's which is millions of poounds of revenue. mark: ubs says it will plead guilty to fraud for manipulating benchmark interest rates. let's go to jeffrey. good morning.
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what is your take away from all of this? jeffrey: good morning. this is a mixed bag. it is good in the sense that ubs seems to of have escaped from the ubs probe. they have some immunity from the doj. they don't have to pay the fine that other banks have to pay. they pay about $240 million to the fed. on the other hand they with the first bank to have it torn up. that will have all sorts of consequences. it essentially makes them a criminal organization. that is the norm now. mark: what are the consequences of that? it was torn up. it has pleaded guilty to fraud for manipulating benchmark
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interest rates. what are the consequences to ubs of this? jeffrey: they are hoping and everybody is hoping the actual consequences -- what i see is uncertainty. about a year ago, a local rival pled guilty to tax evasion. it took them a very long time to get all their ducks in a row. there was a lot of scrutiny for those waivers that everybody thought was kind of forgiven. it turns out they are not easy to get as the banks had hoped. ubs has to get these waivers. i think that will keep them busy for a while and will make for very uncomfortable questioning when they release results. mark: are the fines problematic? it is pain $2 -- paying $203 million in fresh fines.
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are the fines problematic or not? jeffrey: it seems not at all because ubs was fully provisioned to take $1.8 billion provisions in the third quarter last year. that was more than enough for the entirety of those probes. that will not have any negative effects this quarter. mark: good to see you jeffrey. we bring in christopher wheeler again to share jeffrey's view. it's ok while to get it stuck. christopher: we issued in last year -- trying to get where they did with a single guilty plea. i think this is moved quicker in my opinion. i'm still not sure exactly what
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it does or how it damages the bank. for all the banks that get fined today, whether it is an impact on capital. ubs was hit with a capital surcharge a couple of years ago in respect to a couple of litigation costs. when these hits come the regulators look and see if maybe they should put a surcharge because part of the capital regime includes not just capital risk in market risk. manus: and is what the national bank did a couple of years ago. that has been leveled off. when they talk about a guilty charge -- it is interesting on what jeffrey said which is this is a bank that is now guilty of fraud. credits suiss is a bank guilty of fraud. what are the ramifications of doing business in the united states, if at all? christopher: this will get
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capitol hill agitated again. as i said, the whole concept of these guilty pleas were that politicians were saying this was ridiculous. these people were settling rather than pleading guilty. we need to see people be held accountable. we will get more pleased today -- pleas today. there is a lot of scalia and around -- scullying around and very little threat of whether they will hold their banking licenses. mark: will these change their behaviors? these fines and the original actions? christopher: there has been an enormous change in behavior and you can say that is good. people are running scared. you must be much more scrupulous in the way you operate because we will be looking at you carefully. that has ballooned. manus: let's bring it back down
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to what it means for investors. these fines are being taken off the plate month by month quarter by quarter. does these make these institutions more investable? ubs is out there in the league of its own in terms of capital, dividend for density versus what -- propensity versus what else they have. christopher: if i look at what the u.s. bank is doing i would say there is much more because there are cases with mortgage issues and now libel. it is the same for deutsche. i think they are becoming more investable because they are getting more clarity on what they are capable of earning in terms of capital. manus: thank you chris wheeler. a standoff between greece and its creditors over bailout. the two biggest economies in europe have set the deadlines
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and when they want to see economic reform. let's go to hans nichols. hans< another date another deadline. hans: the end of may manifests where merkel and hollande made a point that the correct forum for these talks is the eurogroup. on the sidelines they will likely have conversations with the finance minister of greece. listen to how merkel talked about the need for acceleration of talks. angela merkel: the talks need to speak up. rather than that, they are going to fast. we wish for clear progress, especially in the so-called brussels group biggest the agreement of february was that the program should be established by the end of may and this is necessary because it expires at the end of june. hans: we heard from the greek labour minister and said the
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deadline was actually june 5. that is when he had the start of payment at that date. over the next 14 days, greece owes 1.5 billion to the imf. that is starting june 5. we started we heard from christine lagarde yesterday about positive talks. at the same time, there is this notion that the sales tax reform that greece is talking about is not going to pass muster with their creditors. this is great reporting from our colleagues. they say the finance minister of greece has told their department the need to redo the sales tax proposal. we heard some news out of the greek daily about what the ecb may be doing, what the european central bank might be doing -- they may be tightening some of the rules on collateral. at the same time, expanding the pool of collateral. .going both ways . the ecb meets today and have
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another discussion on how much to expand and what restrictions the need to put on liquidity systems. manus? manus: merkel is facing her own internal political pressures. the climate has changed in germany and within her own party from where we were in 2012. hans: well, the cdu has been pretty opposed to a third bailout and if the new deal does require a third bailout, merkel may have to give a speech. a third of her caucus appears to be opposed to it. manus: thank you for the roundup. mark: the u.s. has news of another potential the a for time warner. here with more is caroline hyde. a french man has his eyes on time warner. caroline: a maybury go round of meetings in the u.s. -- merry-go-round of meetings in the u.s. they are eyeing up time warner
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just a month after time warner's own deal with comcast to pair the number one and number two cable companies in the world in the u.s. together. that deal unraveled and now altice is looking at time warner. $44 billion in terms of market capitalization. interest is aingly, there are four potential deals. altice is already in the game looking at a u.s. asset -- they are looking at suddenlink. then, it gets even more exciting because there is a third deal. charter communications could also be looking at time warner. they could be thinking this is a nice asset. charter communications owned 25% by john malone. charter communications is looking at bright house.
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together, we can see an absolute cable consolidation. this is all about reinventing themselves in the new world of amazon making content, netflix using films and tv shows. what do cable companies do defend this off? they can probably become more important. manus: talk to me about john malone. he had not made an offer. caroline: a big banana in a jar. mark: i don't keep my bananas in a jar. caroline: the trick is getting your banana. liberty global sees it as a great asset. he called it a great fixed to tie up with his western european assets of liberty global. the question is he has his hand in a jar, how does he get that hand out?
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what is really fascinating is there is very substantial synergies if these companies got together. he has not made his offer yet. they could have about 1.4 billion pounds if the deal was done. vodafone and virgin media -- the netherlands could combine as well. we will see if that deal profits. manus: thank you for wrapping those stories up. mark: japanese stocks rising for a fourth day after the yen weakened to its lowest level against the dollar in two months. data shows the economy grew faster than expected. japanese gdp expanded annualized. the businesses increased spending and boosted inventory. airbag maker takata fell in tokyo trading after agreeing to the largest recall in u.s. history. it almost doubled to 34 million
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vehicles and agreed to submit airbag parts to the u.s. government for testing. investigators continue to search for the root cause of the defect which killed at least six people. six chinese citizens have been indicted in charges of stealing mobile phone technologies from companies in the u.s. and sharing it with their own government. the charges represent the u.s. government's latest effort to pressure beijing to stop the alleged widespread theft of trade secrets. manus: now jump onto twitter if you want to join us. i have tweeted out the latest from our swiss team on the ubs acknowledgment of fraud. they will have no prosecution due to foreign exchange. will ubs jpmorgan barclays have their additional fines levy
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did today? mark: let's check on the euro. it sits at $1.11 now. that is what has happened in the last two days. 1.8% decline. sliding the most in two months yesterday. benoit curr says they plan to increase purchases before liquidity drops this summer. manus: we now know more about the comments as well. he told bankers and hedge fund managers in london about frontloading the market. think it was howard. senior officials from at least five central banks. the next day, the rest of the market finds out. i wonder if that is fair. mark: coming up, can m&s get it sparkle back?
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that is right after this. ♪
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manus: after three years of declining earnings the retailer says it will begin its first stock buyback program since 2008. for more on the story, let's bring in richard parks. great to have you with us. when you look at mark and spencer's, you're rather scathing of the delivery. richard: it has gone from strength to strength and it is brilliant. it is a wonderful business. it is just general merchandise but it has gone down. they make a great plate at the facts sales have improved in the final quarter. so what? they were still way behind
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the market. there were losing market share in general merchandise. mark: it is not resonating with customers? richard: they have to get it right and they have not yet. mark: did they mention their quality spring summer collection? richard: one hopes they will improve. is that enough? i think they really got to increase their appeal. not just their older target market, because they have the oldest customer base in the market at the moment. they have to start bringing younger customers in. i think they lost the older end of the customer base and start dragging them back. what are we seeing at the moment? more emphasis on gross margins and sales are down. it is not a recipe for success
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in the long term. manus: let's break this down. if we think of the u.k. high street, you have certain brands. that is one and of oxford street. then you have big stores. where do you want them to be? do you want them to be turned over? richard: quality and value for money and a degree of fashion ability. it is sitting there in the mass-market. that is what it have to target. i think it is fundamental strategy of splitting the range up into a series of clearly segmented brands so that each brand should stand for something targeting a particular customer. that strategy is right. it is the implementation that is not. no brand is really appealing to a younger customer aside for 35-year-olds. it have to be pulling those people in at this stage and
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getting them to buy it rather than thinking it is old and boring. manus: merchandising. i have been in the stores and my take on it is they are tawdry not appealing and it is not well made. richard: that may be. merchandising is a problem, but it is actual merchandise itself which is the fundamental problem. get that right and you can cope with a certain amount of poor merchandising. mark: what have they learned since the sales forecast after some of its collections were met with an underwhelming response from some of its own customers? what can they learn? richard: they had such a fantastic year last year, but the hurdle this year was too high to make any progress. it is a question of fashion ability. i think it is the fashion ability. mark: it sound so easy.
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why can't they get it right? richard: it is not as easy as it sounds. manus: ok. they have it right on food. and general merchandise. who do you think should come in and save marks and spencer's? very quick. have not even finished his name. richard: look at bhs. you have a great opportunity in bhs. he was in there and owned the market and bhs has gone down and down. he is not the savior. or any business within the arcadia group which is really done well. he is not the man. mark: rose? richard: he did a very good job. he did turn m&s around. he got it moving again.
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i think m&s has done well when they had a fashion man at the top. now they have a food man at the top. mark: stealer from apple. manus: 5.65 versus apple. mark: it was four quid back in the day. richard: m&s as well off without him. manus: i think we have the message. we will bring in a fashionista. richard perks, thank you for being with us. mark: we have the latest insight on the rate discussions on the bank of england, the federal reserve today. we will have a look at the euro today. falling for a third day, over 2% down the last three days. stay with us. ♪
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>> let's check on the dollar and sterling today as we wait for the minutes from the federal reserve. the dollar is up almost 3% over the past three sessions.
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treasury yields also the biggest two-day rally. if you think about it this was the fastest rally in the euro since 2010. that is coming back. the cost of the decline is the highest in four months.
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they say you will see parity by the end of 2015. we are going to have this conversation about the bank of england. 9:30. we get the minutes from the bank of england. will the hawks be kept at bay? fourth day in a row we are seeing sterling decline to the minutes. >> we are finding about the potential interest in time warner. caroline was telling another
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competitor was lined up to buy. it was confirmed. quest they are going to be sopping up 70%. this muddies the water as to whether or not they will still have the financial firepower to buy time warner. they are paying $9 billion to get their hands on this state. it is a european player wanting to get into the united states, while they are seeing a myriad of consolidation. buying the number seven player brings him the exposure to the united states. that would have a price tag of $44 billion.
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potentially competition could be an issue. time warner is a number two cable company. a 25 percent stake liberty global has. they are also looking at time warner. there is a frenzy of m&a about to go on. >> top stories this hour. ubs says it will plead guilty to fraud in the united states. the bank will pay $203 million. ubs is the first of five banks expected to announce settlements today. allegations they manipulated currency rates. janet yellen says regulators will pay debts.
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yellen says they will evaluate whether rules and management practices are strong enough. the collapse could lead to big losses with banks. >> let's get back to our top story. ubs will be exempt from the fx round. it looks like an interesting one. the department of justice has
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ripped up the agreement. they have to pay 200 million dollars for that. what do you make of the announcement? >> today is about fx fines. five banks are expected to be fined later today. exactly what they did is they got to the bottom of it fairly quickly, went to the department of justice, and got leniency. they already did that with libor. we cannot expect to get leniency for two and a row.
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>> it is a three-year probation. >> this follows 8 million and finds in november. it is a relative term. >> it is all relative. that is $200 million of fresh fines on the benchmark, on the libor. 342 on foreign exchange. >> today's news is the big news, isn't it? >> everybody is expecting it. i don't think you're going to see a huge movement. it is going to be provision. i guess it's a case of another significant scandal facing the largest banks.
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here we are. there's libor. there's precious metals. the banks will be happy to put this to bed. this is the last significant hurdle. they hope they will clean up their act enough they could start to move on. that might be wishful thinking. >> we are going to get the insight on minutes. will they show leniency, or will they be a switch? last month jennifer they are finely balanced in their view on interest rates. what are we expecting today? >> it could be more finely balanced. the policymakers were taking their position as the vote count was coming in. lo and behold we have a majority
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government. at the time this was the big uncertainty. keep rates where they are. >> he has a strong sterling. he doesn't need to worry too much. he is quite happy. enjoy it while you can. >> that is what he has been saying to consumers. enjoy it while it lasts. rates are up. the thing you have got to pay attention to is what happens to wages. once you see wages start picking up, that will give them how quickly inflation might get to target. they are looking for the next
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increase not coming until next year. for now it means to stay on hold until you can see further recovery. manus: nobody -- mark: nobody mentioned the outcome of the election. how has that changed the bank of england's thinking? but would put an impetus to raise interest rates. there is a lot to talk about. there might be an argument for raising rates. although forecasts say this is a
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temporary dip. it's going to come up by the end of the year. >> you are not supposed to say where you buy it. mark: ray to have you with us. what happens to euro-dollar parity. stay with us.
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the green circle when the euro reached a one-year low.
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they said it would happen in the second quarter. when the euro was at one point 07, there were eight houses forecasting parity or lower. in the past two months, three days after this green circle right here until may 15 the yellow circle right here. the dollar has been falling.
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the dollar traded right there last friday. forecasters have been raising the estimate. a month ago the forecast was for one dollar 04. on monday and tuesday, the euro saying -- sank. qe underpins. right now there is just one house which is forecasting euro-dollar parity this quarter.
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just a quick reminder. the last time the euro traded below parity, it fell to a record 82.30. that is beyond this chart on march 14 last year. what happens to euro-dollar parity. >> european equities is a mixed open. let's get into these markets. the global equity strategist joins us now. what a roller coaster it has been.
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the euro drops, equities rally. keep on buying. >> is way too premature. >> you like the eurozone. you like japan. why do they make sense? >> the u.s. equity market did the same for years in a row. the fed is painting monday like there's no tomorrow. europe and japan are re-fleeting their economies. the pace and the earnings was very low.
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mark: how long will it take it to carry through to profits? >> we had five years in a row. it was negative every single week until three or four weeks ago. the earnings should be in positive territory. >> why is the dax overweight? the first quarter run did taper out, didn't it? many say it was too much of a good thing. >> our story was if you want to
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play autos in germany it is the best. if the euro is falling. germany has no energy. in the beginning of march we made this a good suite. we exited all of the exporters. >> we are to take a short break. what do you think of banks? it is a bright and beautiful day out there. futures in london indicated up. the rest of europe coming to unchanged. futures have indicated slightly
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higher across an equity benchmark. stay with us. ♪
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>> thanks for joining us. a lot of italian banks have already outperformed the industry. >> if you look at italian banks, they are trading on 0.9 times. the economy is just turning around. i think the banks will go to low double digits. they should be trading at a significant premium.
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>> you are talking about emerging markets as things that will come back. talk us through it. >> we're hearing that emerging markets have done terribly for years in a row. they are clearly uncrowded. a lot of them have left emerging markets over two years. they are an interesting area to be an. we like china. we like india. as an asset class it is for all these reasons. >> can emerging markets cope with such a move?
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>> they already have the initial shock of when bond yields spike. the current balances have corrected to some extent. >> thank you for being with us. >> on the move is next. futures are indicating the stoxx will open mixed today.
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it is all about the banks after ubs pleads guilty on libor. as the boj determined the nonprosecution agreement. >> they did. ♪
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>> good morning, and welcome. i am moments away from the start of the european trading session. what a day yesterday was. the best today rally for german stocks since january. that was a busy session. let's get straight to the morning briefs. ubs pleads guilty.
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japan's economy expands for a second straight quarter, beating forecasts's japanese stocks rally. and ecb treat. i'm going to be talking about it throughout the show. i'm looking at futures pretty much dead flat. dax futures lower by 14 points. manus cranny has got your tuesday morning open. >> thank you for that. we are looking at a slight drop this morning. in paris down 2/10 of 1%.

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