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tv   The Pulse  Bloomberg  May 28, 2015 4:00am-6:01am EDT

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francine: fifa fallout. the french foreign minister calls for the presidential vote to be delayed. g7 in germany. finance ministers meet. the fed's begins with a 12 year low. the british prime minister begins a european tour to rally support for eu performs. welcome to "the pulse" live in london. now, lots to talk about today on the show. in a moment we will go to the
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zürich on the latest on the corruption scandal at fifa. the yen hit a 12 year low against the dollar earlier. on the back of what the fed can do this year. interest rates. we have been hearing a lot from janet yellen building the case for a rate rise. that is sharpening the contrast with the bank of japan's monetary stimulus. yen currently at 1.2365. in china, the shanghai comp close down 6.5%. fears of overheating. we just had news from a hong kong regulators saying that they have a formal intervention -- formal investigation. let's quickly check on the euro as well. this relates back to what the fed will do, and what q.e. has been doing and ongoing talks on greece.
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every day it seems likely have someone else saying it is going well, not so well. 1.0939. the fifa congress in zero has been overshadowed by the biggest corruption scandal in the organization's history. u.s. prosecutors on sealed an indictment charging 14 people as well as guilty pleas for others that detail rampant corruption dating back to 1991. let's get more now on that with mark barton outside in zurich where the fifa will take place. what are some of the specific allegations? mark: a good morning to you. i want you to picture a suitcase stacked with nice, neat piles of $10,000 notes. that is the sort of allegations mentioned in the department of justice indictment which was released yesterday. the doj is alleging that jack
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warner huggies to head up the body that oversees football in north america and central america asked a relative to travel to paris hotel in 2004 to meet with a high-ranking south african bid officials. it is alleged by prosecutors this case was sitting there waiting for jack warner's relative. just one of the allegations in this 47 count indictment unsealed yesterday. i mean, the allegations are startling. money laundering, racketeering, bribery, kickbacks. jack warner is mentioned again and again. in 2011 many years later the enticement says warner directed caribbean football officials to pick up a gift an envelope containing $40,000 in cash ahead of the election for the fifa president in 2011.
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her e we are four years later, and scandal still surrounds the governing body of football. something detailed in very c lever measure by loretta lynch the u.s. attorney general yesterday. loretta lynch: they were expected to uphold the rules and keep soccer honest. instead they corrupted the business of worldwide soccer to serve their interests and enrich themselves. mark: i can give you allegation after allegation and your jaw w ould drop more and more but we sip we do not have the time. francine: what i want to ask you is how in the football world been reacting to yesterday's events? mark: where we are based now is
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where there is a dominant footballing body. it is standing alone in criticizing fifa. yesterday said the election should be postponed by six months. the election for the president tomorrow. eufea -- its confederation meeting takes place in zurich . in its statement says the system blatter has built needs to be rebooted or it will kill football. listen to the general secretary. >> the members of the uefa executive committee are convinced there is a strong need for a change to the leadership of this fifa and strongly believe the fifa congress should be postponed. with new fifa presidential organization -- elections to be
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organized within the next six months. mark: the lust of the soc -- the rest of the soccer world is behind blatter. we already know the south african footballing confederation will vote for blatter tomorrow. they said as much. the french soccer federation has backed a frenchman to lead fifa. he's been vocally critical of blatter. the french soccer federation has backed them to lead fifa. a medical conference is taking place in the building behind me in the hallans stadium. mr. blatter was a no-show. he will be a show tomorrow when
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the official congress gets underway. he will be hoping to win his fif th straight presidential election. francine: let's hope he shows up tomorrow. now, the unfolding fifa scandal is creating new concerns of many of the big-money corporate sponsors. for more on this side of the story, that spring and -- let's bring in aaron. aaron: you can see there is a lot of money at stake and a lot of high-profile exposure at stake for these big household burns that rely on fifa. so you have adidas huge athletic shoemaker. you have coca-cola, budweiser mcdonald's, hyundai. and what is happening is they pay an awful lot of money tens of millions of dollars a year to
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sponsor fifa and to have their brand name associated with the world cup, which has huge viewership. there are 64 world cup games. each of them has the viewership of a super bowl. despite years of swirling allegations of corruption around fifa, you have seen the sponsors give the organization a pass. as we reported yesterday, you're seeing more and more tough for its from some of the sponsors. francine: if you look at some of the individual sponsors -- you mentioned apple and coke -- how likely is it that world cup backers would pull out of such of high profile event? aaron: not apple, but adidas. there is a german sport maker arrived only in size by nike. their whole brand identity is tied up with european soccer.
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they issued a statement yesterday saying that they will continue to support soccer at all levels but we expect transparent behavior. we expect the highest levels of ethical compliance. they are turning up the heat more than they have in the past. visa was stronger in its statement. what it said was they are profoundly disappointed. so you keep hearing echoes of this -- profound disappointment need for transparent standards, need for ethics. and you have not heard this kind of line was before. francine: we certainly have not. thank you so much. he will join us throughout the morning for an update on the sponsorship side. now, we will have more fifa covers. coming up later. lord peter goldsmith will join bloomberg. he is a former attorney for england, wales and northern ireland. you do not want to miss that interview at 1:00 uk time.
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lebron sets to today's twitter question. should sponsors tuneup the heat on fifa? we are hearing from aaron. our coverage continues after the break. ♪ here is a look at what else is on our radar this thursday morning. david cameron is beginning a two day tour of other eu nations in which he will set out the changes he wants to see in britain's relationship with the european union. the french foreign minister says he wants the uk to stay in the e u. the uk foreign secretary center referendum -- set a referendum is possible in 2016. cameron's government has announced the question that voters will be asked. it is should the united kingdom remain a member of the european union? some experts say the fact that the pro membership answer is yes might give the side the edge. the office for national statistics were released its second estimate for first quarter uk grpdp in 20 minutes.
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it is expected to be revised upward slightly. up next we are live at the foreign minister summit in dresden. coming up next. ♪
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francine: we are live on
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bloomberg tv and radio and streaming on your tablet and your phone. we are getting breaking news out of the european central bank. in terms of what they have just published, it is the financial stability report. it gives us insight on what they are thinking in the main concerns they are saying. they think large banks are less confident about market making. i think what they are trying to imply is that large banks may be looking at greece at other negative events that could happen in the eurozone and that is making them more nervous. they say financial markets have showed continued bouts of volatility. they're also saying the euro area, although it has been gaining momentum, that recovery is weak. in terms of their own policy they want to remain focused on price stability. they are looking at inflation. and the overall effect of q.e. finance ministers meet in dr
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esden today. discussions will center around economic growth and sustainability as well as currencies, as the yen hits as 12 year low. greece will also be a major talking point. hans how much will they talk about greece and how much will they talk about the yen and the impact on interest rates from the fed? hans: both greece and the interest rate and currency moves are two sides of a different coin and that coin is stability. that is what leaders want to see. they want to see stability so there can be growth. with greece there is not a lot of reason to be optimistic. we have heard from listing the guard -- christine lagarde saying that not a lot of progress has been made. then on the currency issue, what you clearly need is more stability so you can have growth. i had a long conversation with
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larry summers. we talked about greece and what's happening with the currency. in terms of greece he says both sides need to find it in them to compromise. summers: this greek situation will be much better if they can work it out in some way. both sides are going to have to move. greece has got to get more serious and determined and clear on what the reforms it is going to take. that is not going to be politically easy. but the europeans need to recognize that there are limits to the degree of austerity that can be imposed and that ultimately debt problems get solved through growth. they do not just get solved through austerity. they're going to need to work with the greeks on a strategy for growth. i hope and i expect, but there is far from a certainty, that something will get worked out. hans: at this summit?
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summers: the greeks are not as this summit. with good spirit on both sides and looking into the real abyss it would be for greece if this does not work out and this terribly risky situation it would be for europe, i am hopeful that common ground will be found. hans: does that mean that there is a risk of contagion beyond europe, for the u.s.? it seems like we are talking about contagious in this crisis different from the previous one. summers: people cannot imagine that a $4.5 billion hedge fund could bring the financial system to the halt. ben bernanke, wise as he was, famously said that subprime was no big deal on a systemic aces. there were many who believes that the world was cushioned for
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what happened at lehman brothers. how wrong they were. i see -- i think seeing a greek failure is an experiment that no one should want to run. hans: you get the sense that that view is shared within the u.s. administration? are they doing too much, too little? summers: i will leave the administration to speak for itself and set its own course. there are a lot of people there with a lot of experience and skill. i know they are very much aware of the stake the united states has an successful growth in europe. hans: the one thing the u.s. has weighed in on in that is the value of the run than the. -- the reminbi. what is your view? summers: u.s. policy is had a triumph here. the roman -- the eremimbi is up against all of china's
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trading partners. it is about a 25% trade surplus. that is in the range of fort happens to countries -- is in the range now. i don't think that happened automatically. i think that was a tribute to the economic diplomacy of president obama, of secretary geithner and many others, but i think it is time to recognize that that is no longer the kind of issue for the global economy that it once was. hans: one final question. what is the role of the g7? can you have an economic summit without china and brazil? summers: sure you can. there are crucial issues facing europe, the united states, and japan. top among them for me a secular stagnation. the fact that the growth
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recovery for this recession has been manifestly inadequate and working out what to do about it for the industrial world should be a primary preoccupation. we are not going to solve any other problem, whether it is inequality chronic edge of deficits. no other problem are we going to solve unless we are able to accelerate growth. hans: so, the reminbi is no longer a cuaseause of global instability. the question that may be dominating as to what extent does the devaluation of the yen ahvhave? it is less great for the german automakers. they have a weaker euro. the real issue is how is the u.s. -- which up to those points along with emerging markets -- has been the driver of global growth, how will they react to a strong dollar? we have all these hints about a rate hike at the end of 2018.
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if it weren't for a bunch of guards, i would be in there as well. francine: i knew you would try to find a way to get past security and listen in. hans nichols, our foreign correspondent in dresden. as greece struggles to come to agreements with its creditors, some of the country's biggest lender's are reporting earnings. banks are the liquidity lifeline. one bank's deposit shrank by 15% in the first quarter. portunities when it comes to investing in greece? we are joined by a ceo. thank you for coming on. give us a sense of how worried you are about greece. >> i think we have had a few conversations last may, 2014, then in january this year. our expectation was that there weouould be a standoff between greece and its creditors. francine: you are right.
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>> and for the very reason that the new greek government promised it would tear up the ou mou. the word troika is no longer used by the institutions. at the same time, the government promised they would stay in the eurozone which is the wish of the people. these are two contradictory promises that were made. since janaury when this government was elected, they struggle to reach inside -- to reconcile the two. the standoff is testing people's patients. francine: did you think at the time the standoff would last this long? theo: no. i did not think it would be so painful. indeed whereas a year ago, we did not like greek securities because we thought there was too much optimism priced into them. we were net short last year.
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this year we took the view that slowly the greek government would agree a deal with its creditors. francine: and that is still your view? theo: yes. francine: in the next week? theo: in the next few weeks. these deadlines seem to fall back. the bailout does expire at the end of june. francine: a result how? it seems that acrimony between the two parties is so wide. is there going to be a side that will have to give in? and who will it be? theo: you know what? despite what people say, i do not think the gap is that in august. i think most of -- there is reasonable agreement on how big the budget surplus needs to be. and that target has been reduced by the institutions to accommodate greece. i think there are small differences on labor and on pensions.
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but what seems to be lacking is that final conviction on the greek side and indeed getting the domestic audience and the hard left to approve. and then need to have parliamentary approval. i think we all agree that greece had some serious governance issues. and governments have struggled to reconcile. so this is what's holding back the agreement. rather than a massive gap. the europeans are more realistic than people think. i know larry summers made some comments about that earlier. francine: what do you have in greece? would a anyth anything, corporate bonds? why anyone would have a greek bank at the moment is beyond me. theo: i think people in the u.s. have been questioning that, and it is difficult to explain. is still $140 billion in deposits in greek banks. 90-100 is individuals
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residents. there is a population of 11 millions of people have small amounts. a larger amounts have left the system. as far as where we think there might be value, i think if you look at near term maturities of the greek government and also of the banks, meaning 2017-2019, those securities are implying 40% probability of a grexit. we think that is too high. yes, there is risk but greece does not seem to have developed a plan b. i do not think they are ready to print drchachma. it is painful and the probability of an accident has been rising. francine: so when you look at your hedge funds and investment to make, is it greece that worries you the most? we are on the brink of an interest rate hike from the fed. they have been talking about it for long enough but it seems the timing is -- still we are
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seeing a lot of volatility on the markets, overheating in china, the possibility of a british exit from the eu. theo: what worries me most is that there are very stressed valuations. we are in event driven fund. in an event situation we want to be long or short an event. there are some very stressed valuations. the sooner there is a fed rate hike, the better. we would love to see that. we think there are some great short opportunities and corporate bonds in emerging markets that would suffer as a consequence of high rates. the sooner interest rates normalize led by the u.s. which is ahead of the rest of the world economically, the better it would be. francine: thank you very much. up next we get the second estimate for first quarter u.k. gdp. we'll break the numbers next. you can follow us on twitter. our top stories were all over
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fifa and the uk referendum after the foreign secretary said it may actually be called in 2016. ♪
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francine: welcome back to "the pulse," in london. we are just getting some gdp figures out of the u.k. they have been for the first quarter revised downwards. so we had a figure of 0.4%. now it is coming in at 0.3%. year on year it's at 2.4%. this is a check on what sterling is doing. pound-dollar weakening a tad when that figure was revised
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downwards at 0.3% for that quarter on quarter figure. meanwhile, kingfisher profits met estimates as they set s-- said sales in britain were improving. joining us to discuss gdp figures is the chief economist at the royal institution of chartered surveyors. i have to correct myself. we were expecting it to be revised upwards. so, it's basically flat as expected. but we're a little bit disappointed because economists were expecting this gdp figure to be trending higher because we had great figures for the month of march. is this a product of a new problem. gdp is ok but not as strong as we expected it to be. >> we had seen slightly better
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figures in march on the construction site. they came out with a march figure that suggested that perhaps the numbers were not as bad as initially thought. one might have thought the gdp figures would give a lift. there are some components which have not come through as strongly as one hopes. it is concerning. because i think the bigger picture is less about what happened in 1, but what happens in 2016. only yesterday with the queen's speech we had a reiteration of the direction of government policy. no surprises that there is going to be a big fiscal squeeze. but the sort of impact that has on the economy and on the gdp numbers and what that means for interest rates is quite critical for markets. francine: consumer spending investment helping the u.k. to this longer stretch we have had since the financial crisis. net trade sts a -- acting as a drag.
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simon: i suppose a lot of the optimism on trade will rest on our recovery in the euro area. with head slightly better numbers but not enough to lift up the export performance. for the time being, it is hard to see that turning round and contribute in positively to gdp. francine: what you make of what the conservatives want to do over the next five years? this is a fairer society but still a lot of folks -- simon: absolutely. one of the big challenges is to marry economic cyclet with a parliamentary cycle, as george osbornehe who's the architect of the economic cycle may want to be heading up the conservative party at the end of the parliamentary cycle. so it is quite interesting in balance in there. that suggests me he is going to go harder sooner, get the pain out of the way, which means we could see some disappointments on gdp over the next couple years. but the government -- was always
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quite clear it was going to go quite strongly on adjusting the fiscal the edrift of fiscal policy. the challenge is if it can actually do it that is inconsistent with the idea of it being representing all the people. francine: what does it mean for housing prices? we heard from kingfisher today. they are not doing badly. so, looking through this kind of productivity puzzle, a bit of not bad gdp but not great, either. the housing market is going to remain strong and pick up? simon: all of the things are tied together. it was not just kingfisher. we had good results in telford homes. demonstrating how profitable the market is. going forward, i think the fundamental problem -- is one of supply. francine: it has been five years. simon: could it get worse? when we look at the government's
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austerity program and where they are looking to concentrate cuts. one that is not ring fence does local government. so where are the planning of this -- the planning is based in local government. if local government gets squeezed, i wonder whether a lot of the concerns about planning are going to multiply for trying to get that engine of delivery through the planning systems. it will be even more challenging. francine: they have said supply is something they're focusing on. would this be a danger that you're not doing it on purpose? simon: i think there is a lot of rhetoric. all political parties ahead of the election talked a great story on housing but gave no detail. we can all talk numbers. actually delivering is another matter altogether. and dealing with this whole supply chain, dealing with the planning system that actually
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speeds up the process is going to be a challenge to do that if you are cutting staff. there are some very laudable ideas. where it is consistent with the focus of the austerity program, i'm far from convinced. francine: how worried are you that the referendum is a distraction for the government? because they have something huge on their hands, which now may actually be brought forward to 2016. but they will spend so much energy on this that is there a danger that domestic issues get left to one side? simon: it is not just the referendum. it is the relationship with scotland wales, with the english regions, which are big issues for this parliament. in a sense you wonder whether the sum of the constitutional issues might dominate. i think you are right. -- francine: thank you so much for joining us. here are bloomberg's headlines.
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coca-cola, visa and other sponsors are putting pressure on fifa to resolve its corruption scandal after several officials that football's governing body were indicted. protesters planned for today in front of the venue for fifa's 65th congress. demonstrators will focus on labor laws in qatar. hong kong securities and futures commission is investigating -- a power group. the news comes after the chairman of the solar company dismissed reports of a regulatory probe. shares crash on may 20 tumbling 30% in the last half hour. the shanghai composite fell sharply today as brokerages tightened lending restrictions and investors speculate the government will take measures to cool the nation's equity rally. investors have been worried about overheating in the market .
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380 billion dollars of shares changed hands on the stock exchanges. david cameron is beginning a four country tour of other eu nations in which he will set up the changes he want to see and britain's relationship with the european union. the french foreign minister has said he wants the u.k. to stay in the eu. the u.k. foreign secretary has said a referendum on britain's membership is possible in 2016. up next, more on the story as david cameron's conservative government announces the question voters will be asked in the referendum. should the united kingdom remain a member of the european union? we will use the yes side of the argument, give them the edge? ♪
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>> i do not mind admitting that i am always been positive towards the eu. i think ireland has seen positive benefits. i understand the benefits that eu has made. i also understand the issues the people in the u.k. express. i do not disagree with reforming. i strongly disagree with leaving it. the best way to influence the eu is to influence it from within. so the uncertainty around in the -- an eu referendum will weigh on business.
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i do not think it will weigh too heavily. and the ability to reform the eu , i see it as a positive. i'm hoping some progress will be made on reforming the eu because i think everyone in the eu would benefit. but i would be hopeful that when it comes to a referendum that people will vote to stay within the eu. francine: so that was the iag ceo, parent company of british airways, willie walsh sharing his thoughts. the u.k. government has announced the question that voters will be asked in the referendum on the european union membership. it is -- should the united kingdom remain a member of the european union? according to a professor of politics at the london school of economics, the insertion of the word "remain" and the fact that the programmer should answer is yes might give that side the edge. david cameron is beginning a two
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day tour of other eu nations in which he will set out the changes. for more on this, we are joined by rob hutton. great to have you here in the studio. they do so much for coming in. -- thank you so much for coming. how likely do think the referendum will be called forward in 2016? rob: when he put this to people before the election, they would back away from it quite hard because the idea was floating around. since the election, that has now become a real possibility. there's good domestic arguments for it first of all, which are that the referendum -- they are a vote on the government. and the later you leave that in the parliament, the greater the danger that people just are just grumpy and want to give the prime minister a kick.
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there is also the fact that this issue is going to dominate british politics until it is resolved. david cameron does not wanted to dominate british politics. we saw that yesterday with the queen's speech. very heavy domestic stuff. lots of stuff for working people, saying that they are trying to rebrand the conservative party is a party that is interested in people's concerns. and the last thing they want is to spend two years just talking about europe, which is the old conservative party. so there is domestic pressure. francine: i understand the fact that conservatives want to be seen as a fairer party. david cameron is on this tour of european what is he asking? he is seeing leaders to muster support for renegotiation. >> one of the where things is there has been this referendum
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but cameron has not been able to do anything about it. now we have a conservative government and he's off. he was supposed to be in copenhagen this morning. heller had to call an election to stop and coming. he is off to the hague for lunch . paris for dinner. warsaw for breakfast and lunch with angela merkel in berlin. and it's about trying to first of all persuade them to what he wants is reasonable and to try to find areas of agreement. and it's also partly at home to show he is serious and he's trying. francine: we heard today from the french foreign minister saying they want the u.k. to be within the eu. is that helpful at home? if he musters support, is he there to talk about immigration -- one of the red lines? or is this to be seen as someone who is close to the eu so t
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citizens here think that thehatat the eu really wants the u.k.? >> there is an interesting and difficult issue here wishes he has got to get some stuff. the bottom line is david cameron does not want britain to leave the european union. he called us referendum because he was under pressure from his party. and he's got to get something. now, people who do want to leave the european union know what happened in 1975 the last time we had one of these, when there was sort of slightly imaginary concessions were made. and britain was able today, ha -- to say, ha! you can vote to stay in. they fear a repeat of that. with good grounds. that is not the government. the government would say that the plan is to scripture -- to secure real concessions. francine: do we know the concessions they want? >> they have been quite vague.
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they want to set up a shopping list of 10 points and come back and say you only got 7 or 6. they want something and immigration. there is some stuff you can do on immigration domestically about stopping eastern european immigrants from claiming welfare in the u.k. the problem may have got there. immigration is the biggest issue. that is the one that upset people. is that immigrants from the european union -- don't come to claim benefits. theycome to work. people who are unhappy about immigration are not satisfied by that answer because the things that make them happy are -- unhappy are pressures on services, cultural change. so this is a really difficult circle to square. the bottom line is europeans will not give way on freedom of movement. they might give concessions on welfare. though eastern europe does not
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like that. but they are not going to stop the french from coming. francine: very quickly. many people would like that. who are david cameron's biggest allies in europe? >> angela merkel is the big one. and she'sl a also the most powerful person in your. germany sees britain as an ally for the pro-free-market pro- reform, pro-economic growth side to the last thing germany wants it is britain to leave because if you think that through, a big economy deciding to go would be a big vote against the whole eu at a dangerous time. francine: thank you so much for coming on. here are some of bloomberg's headlines. apple has poured more fuel on speculation it is working on a car. jeff williams was confronting
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the by a shareholder over where apple is looking to invest its cash. he said the car is the ultimate mobile device. however apple later assisted the company is explored a lot of different markets. tony blair is to step down from his role as a middle east en piece -- peace envoy. fifa has warned it will reassess its sponsorship -- visa has warned it will reassess his sponsorship of fifa after some members were arrested as part of an international bribery investigation. after u.s. authorities outlined years of corruption at the organization. sponsorship makes up a big part of fifa's income. jonathan ferro takes a closer look at finances. jonathan: seth blatter has
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ruled world football for 17 years. he has overseen five world cups. fifa is a not for profit organization with 209 members. 16 more than the u.n. according to its end report, fifa made $5.5 billion between 2010 and 2014. the majority comes through broadcast deals but also through sponsorship. around $350 million of prize money goes to participants and the world cup. another $2.2 billion goes on expenses. but $1.5 billion goes on what fifa calls solidarity programs -- building pitches in tiny nations. for instance, the cayman island, with a population of less than 60,000 people has received $2 million since 2002. these tiny countries vote who gets elected president of fifa. francine: we will have plenty more from fifa coming up.
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we meet the foreman goldman's banker who swap stocks for sources by opening his own indian restaurant. ♪
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francine: welcome back to "the pulse." now, it was a case of out of the frying pan and into the fire for the former citibanker who gave
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up the security of a staff job to start his restaurant. as he discovered, there are a lot of similarities between the trading floor in the kitchen. ♪ >> hi. i'm here. i have been running restaurants for 10 years. in the city with goldman sachs and price waterhouse. sometimes in the middle of her service you feel like being on the trading floor. but the difference in terms of the time you have with the trading floor, it is instant decisions. it's instinctive in many ways. the restaurant, you use a lot of instinct but you has a -- you have time to consider that instinct heard you can talk yourself out of good ideas. you always miss certain aspects of what you have done in the past when you are here, and you are trying to get your restaurant open. why on earth am i going to all of this stress?
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it is the lack of safety of having a job. thisi s is all upon you. i do love running restaurants. for whatever intensity or stress you have to live through, at the end of it, when you see somebody enjoying the food, it is a real joy. we are just creating food we like. the flavors maybe indian but the dishes are not associated with more traditional styles of restaurants. as opposed to feeling after work within tighter rules of how indian food has always been done. there are lots of people doing that brilliantly and someone else doing something different. francine: nice job. here is a snapshot of the financial markets. european stocks falling.
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this is the picture for the 50. -- the ftse. the dax down. the dax is also flat. the story is that there is a g7 in dresden, germany. they will talk about greece. they have pushed back the officials from the group of 7, have pushed back greek claims that agreement is near. they called for stronger efforts to resolve the crisis. the other story we've been telling you about all day is the yen weakening to a 12 year low. that is fueling the longest rally in japan's nikei 225 stock average. this is on the back of what janet yellen has been saying. so, basically, if you look at what the yen has been doing, it has borne the brunt of a resurgent u.s. coldollar. because of the diversions of what the doj is doing and what the fed is about to do, that
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will not change. that brings us to today's twitter question. fifa. should sponsors turn up the heat on fifa? you can tweet me. we are back in two minutes. ♪
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guy: -- francine: fifa fallout. football's government body feeling the heat. g7 in germany. the talks are overshadowed by greece and the next fed move. the british prime minister begins a european tour to rally support for eu reforms. good morning to our viewers in europe, good evening those in asia and a very warm welcome to those just waking up in the u.s.
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i am francine lacqua. this is "the pulse," lies from bloomberg's european headquarters in london. the fifa congress in zurich has been overshadowed by the biggest corruption scandal in the organization's history. u.s. officials charged for people in charges that detail rampant corruption. outside the fifa congress in zurich. what are some of the specific allegations in the department of justice indictment? >> i know you were speaking to the former chief executive of the south african football organization. allegations surrounding the bidding for the 2010 world cup which was ultimately awarded to south africa. bloomberg is running a story
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picturing a suitcase with neatly bundled piles of $10,000 notes. they allege, the prosecutors from the u.s. department of justice, that this payment was to win the nod from fifa to win the contest, essentially, to host the 2010 world cup. fifa or should i say the department of justice, alleges that jack warner who heads soccer in north america, central america and the caribbean, it is alleged that jack walker sent his relatives to a hotel in paris to meet with a height ranking south african official. it's there that the suitcase full of cash was waiting. in 2004, months before the voting on the venue, a representative from morocco
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allegedly offered warner $1 million in exchange for his vote. according to the indictment south africa counted high-ranking officials at fifa the south african government and the bid committee arranged for a $10 million payment from the government to the caribbean football union, which was the football union of jack warner to support "the african diaspora." warner allegedly accepted the offer. he later indicated that he did vote for south africa. ultimately, according to the indictment south africa struggled to make the payment itself fifa paid the bill using money that was intended to support south africa's bill. something which i know the former head of the south african football association will want to answer to. let's listen to the head, the u.s. attorney general loretta lynch, who detailed of the
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rampant corruption in fifa back over 20 years yesterday. ms. lynch: they were expected to uphold pros that keep soccer honest and protect the integrity of the game. they corrupted the business of soccer to serve their interests and enrich themselves. mark: there is so much more. this is just one or two allegations of the 47 count indictment unveiled by the doj yesterday. it portrays corruption on a vast scale. money laundering, racketeering bribery, kickbacks. the indictment says were all embraced by fifa officials as business as usual. quite astonishing. francine: it is. we had just heard from the russian president vladimir putin, saying the u.s. has no jurisdiction in the fifa corruption probe. this has been something we are
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trying to figure out, why this comes from the u.s.. maybe fifa could have done more internally. what are others saying about this? mark: the standout regional consideration says the vote tomorrow should take place. it says the vote should be postponed for six months. it might boycott the election. they are holding a meeting at 12:30 local time. in a statement, it said the system built in 1998 needs to be rebooted are well "ultimately kill football." listen to the secretary general. >> the members of the executive committee are convinced there's a strong need for a change to the leadership of this fifa and
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strongly believe that the fifa congress should be postponed with new elections organized within the next six months. mark: a quick word from the sponsors there. putting pressure on fifa reform. no major sponsors one i will tell you about, they have cut ties with fee for. the bombshell came from visa. the disappointment is profound. they go on to finish the statement saying "should fifa fail to make changes, we have informed them we would reassess our sponsorship." coca-cola adidas gazprom they have made statements, but nothing as stringent as the statement from visa. a big interview coming up with
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the former ceo of the south african association. i'm off to the uefa confederation meeting. this scandal is going to run. francine: thank you so much. mark in zurich. the south african football association says it did not have funds to pay a $10 million bribe to fifa officials in exchange for votes to win the world cup. that is according to the body's former ceo. these allegations are tarnishing the reputation of south africa as a football nation. where do you go #? mr. hack: allegations have been made that have to be proven. i've never heard of it, we never
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send anyone to go take a suitcase of money. the figures that are being mentioned, 10 million u.s. dollars. converter that to our currency it's 100 million rand. my total sponsorships during that period did not even come to 100 million rand. there is no way that i or anyone at the football association or the bid committee signed a kick or some type of payment are received payments for 100 million rand that could be given to someone in a hotel room. we're talking in 2004, you know supposedly, bribing mr. warner. to my knowledge, there were 22 oe 27 executive members who had a vote on south africa's proposal. south africa put a proposal before the fifa executives for the 2006 world cup which we
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believe we should have got. on that day in question the gentleman by the name by jack dempsey reneged on the mandate given to him and the vote went to germany. they hosted a very successful world cup. south africa in 2010 posted what i consider the best world cup ever hosted despite all the criticism that south africa had before -- francine: you deny any wrongdoing. has the department of justice been in touch with you? how they called you? mr. hack: no. i'm not aware -- look, i have been the ceo for the last five years. our books are open for inspection. it's an organization where we do an annual audit. we have never had a 100 million rand or $10 million.
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we have never been contacted i'm not aware of anyone being contacted. they have not advised me. i cannot tell you what mr. warner said or did not say. francine: this is damaging the legacy of the world cup. mr. hack: most certainly it is damaging. as we said, we believe we hosted the best world cup. everybody was skeptical about south africa's ability. we were told we were not ready but we proved we were ready. for these allegations, i cannot comment. all i can say is i can tell you that the south african football association never paid anybody. francine: what i do not understand, i know that these are allegations, but have you spoken to the officials at the south african football association? the department of justice usually does their work correctly. is there you say you have not been contacted and they have not tried to call you. have they tried to call anyone
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else? the south african football association? would you comply with the investigation? what is the next step? mr. hack: i have not heard anything. the first thing i heard of this was when it wrote yesterday. -- it broke yesterday. i have not heard anyone say this is, can you disclose what was in the financial statements. our books are there. how this is allegedly done i cannot tell you and i have no idea. francine: does fifa need a change at the top? mr. hack: sorry? francine: does fifa need a change of the top? mr. hack: let me give you an analogy. if something goes wrong in your organization, the chief executive or the president has to take responsibility.
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mr. blatter initiated this investigation after the report and he's doing it whether you like the man or you do not like the man is in material. the organization belongs to the people. you are the guardians of that particular sport. if something is wrong, it is up to mr. blatter to fix it. you cannot point out every time something goes wrong with the shop assistants and say the manager does not know. yes, he has to take responsibility. i believe he has taken responsibility. as to what will happen now, that is something that the members of the national associations must decide upon. francine: but actually taking responsibility and my mind would be stepping down. if we follow your logic, if you are the person in charge, you are saying he should step down. mr. hack: well, if you take that
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attitude you'd probably find that 90% of the ceos of this world would have to step down at some time because their employees had done something wrong. if you can resolve the issue and ensure it does not happen, i believe you are doing a good job. you have to look around. you cannot just go putting anybody into an organization that does not have the culture or does not understand what has to be happening. the fact that a former footballer says i want to be the president, i can want to be the president of south africa or usa -- does not mean i'm qualified. sometimes you have to step back look at it logically. could he have for cnet, if he did not, what steps is he going to ensure that the sport does not suffer again. fifa is not the only sport that
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has ever come under criticism for bad administration. you have to learn by the mistakes, ensuree it does not happen again and put stats in place so you're able to comply with what your constituency want s. francine: do you think the vote should go ahead? would it be more reasonable to postpone it? mr. hack: i cannot comment. that is up to the national federations or confederations to make a decision on that. they are the ones who will get all the information at the fifa conference. once that information is digested, they must make a decision. i do not believe they must make an immediate decision. they must evaluate the information determine the right way and it should be done in conjunction with everybody. the worst thing that could happen to football at the moment, i heard a previous statement say that uefa may
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boycott the election of the congress. that is, in my opinion, the worst thing that could happen. sit down, resolve the issue. do not say because i cannot get my weight i am not doing this. there is a process. when you participate in a sport, you agree to participate by the regulations of the sport. there's a constitution. if the constitution does not work in your favor, you cannot turn around and say i am not going to abide by the rules. you formed the constitution. you were party to it. accept the rules. whatever the general assembly decides should be the way forward. not just that one particular confederation says a or another says b. that is not the way to resolve disputes. francine: the problem is i guess the allegations are so big, the suitcases and the scandal has grown so much that may be something does need to happen quickly. raymond hack, if sepp blatter
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was to step down, what it be damaging for african football if he was to step down? mr. hack: it is not a question -- set blatter -- sepp blatter has always had a leaning towards african football he did not want african football to be treated as a stepchild. whoever is the head of football must treat africa the same as everyone else. the fact that europe has financial backings, africa has the numbers there. you might be powerful today but tomorrow you may not be. i do not say mr. blatter must step down, it is up to him. he's the person you must make that decision. i think for federations to say if you do not do this or that we are going to boycott, that is not the way to resolve the
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dispute. a nation, company, everybody has rules and regulations. abide by those rules and regulations. sit down, do not say, i told you to do this and you did not do that. with the scandal in uefa does that mean he must step down, no. unless he can say that he is directly responsible and he's the cause of it -- that is a different story. i think they need to discuss this matter and i believe they will do it at the congress. that is the purpose of the congress. once they have done that and they come up with a feasible decision, that decision must be implemented. whether it is to go ahead or for them to decide each one of the 207 federations must have a say. francine: raymond hack, head of the south african football associations. stocks have fallen after new
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scrutiny over qatar's bid to host the world cup. we are joined by elliott gotkine . tell us what is happening with qatar's stock exchange. elliott: biggest two-day decline since march. down 1.5% yesterday. the big concern for investors is that this mere hint that perhaps qatar and its hosting the 2022 world cup might be in doubt, qatar has denied wrongdoing and fifa said the venue will not be changed, but any hint is raising concerns among investors that some of the $200 billion spending spree qatar is embarking on to build new stadiums, metros highways, he spending could be in doubt. and that could in some way
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crimp economic growth. that affects companies on the qatari index. the imf is forecasting growth of some 7% or so for the qatari economy this year. it is very much reliant on oil and gas. the world's largest exporter of liquid natural gas. the two day declines in their totality are only 3.5%. not a massive crash. we are talking about a smallish selloff. there are concerns that the investigation into alleged impropriety with the awarding of the 2022 world cup to qatar could in some way blowback on its economic prospects. for now, the shares were down a little bit more on the main benchmark index in qatar, almost 3%. down 2% or so for a two-day decline. printing? francine: thank you so much.
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we will have more fifa coverage throughout the day. later, peter goldsmith will join bloomberg. he's the former attorney general for england, wales and northern ireland and a former member of fifa's independent governance committee. 1:00 u.k. time. should sponsors turn up the heat on fifa? tweet me @flacqua. i have had mixed responses. up next live in dresden. greece is looming over proceedings, despite not actually being on the agenda. ♪
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francine: welcome to "the pulse." live from london. the g-7 for finance ministers and central bankers is taking place in dresden. despite not officially being on the agenda, greece is the topic of choice. how much will they talk about greece and how much will they talk about the yen and the impact of fed interest rates? hans: yen gets to the stability question. you cannot have growth without stability. what is going to happen with greece? we've heard of a warning of contagion is a resolution to greece is not found quickly.
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it is not about a potential default but if a resolution is not found quickly. last night i spoke to former u.s. treasury secretary larry summers. he urged both sides to find common ground. mr. summers: both sides are going to have to move. greece is going to have to get more serious and clear on what the reforms it is going to take. that is not going to be politically easy for leadership. the europeans need to recognize that there are limits to the degree of austerity that can the imposed. hans: francine, everyone seems to be urging the greeks to get serious and put forward real proposals. we heard from madame lagarde talking about how it takes two sides to tango and greece needs to get serious. in the last hour we have heard from yanis varoufakis in athens. he's saying that he feels the
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insistence on reforms are "succeeding." -- asphyxiating. he's talking about debt restructuring. it seems that yanis varoufakis and wolfgang schaeuble are afs far geographically, with one being in athens as they are ideologically. francine: we are joined by the chief economist and strategy at schroeder -- if you were at g-7, what would you want to talk about? talking a lot about emerging markets, china, fear of overheating, the yen and greece . >> greece is going to be the topic everybody wants to talk about. the one thing that seems to be spoiling the european recovery story. the economy is recovering. we are seeing the banking sector begin to start lending again. we've got qe from the ecb.
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there is still this risk that greece may not be able to sustain its membership in the eurozone. that has become one of the hot topics even though it was not on the original agenda. francine: how much will they talk about it possible british exit from the eu. david cameron going around europe trying to muster support. do you worry about that or is that just going to be for a couple months before the referendum? >> it is a concern from the business point of view. businesses in the u.k. would have to know what the rules are going to be. that is going to be the concern. in terms of markets -- that is some way off. it is on my clue we are going to see a referendum until the second half of 2016 and possibly even 2017. i do not think markets will begin to focus on that to nearer to the time. francine: are you concerned, we talked about the fed, you saw the yen today, 12 year low.
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if they raise interest rates in september or december, doesn't have an impact on european growth? >> the main effect that the fed is having at the moment in terms of europe i think is coming through the currency. so, the dollar has been strengthening recently asked people have begun to focus on the u.s. economy and how it does seem to be firmer. there are inflationary pressures in the u.s., such as stronger wages and a pickup and core inflation. janet yellen has indicated she expects to raise rates this year. from that perspective, it is probably quite good for europe. it helps to weaken the euro. that is one of the support mechanisms. the broader concern, something the g-7 will want to discuss, is the impact it has on the emerging world. of course, we saw in 2013 the taper tantrum, an indication of how markets react when the fed
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is likely to tighten monetary policy. that is a bigger concern because the emerging markets are fairly fragile at the moment. they are not showing a lot of signs of growth. with the fed beginning to raise rates, the authorities want to be sure this is not going to cause a big selloff and financial market volatility such as we saw in 2013. francine: we focus on the emerging markets but it is the ones that do not have structural reforms that we should be worried about. what are you worried about? >> the countries that have the biggest borrowing requirements, the ones that require foreign capital. those economies, known as the fragile five in 2013. a country like india has actually done quite a lot of reforms. it has brought down its current account deficit and is in a stronger position. other economies such as brazil or turkey or south africa, they still have very big requirements. those are the ones the market is going to focus on more in this period as we move towards a fed
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rate rise. francine: should we worry about china? >> china has a strong external financing account. it has a big current account surplus. i think the worry on china it really is coming more about from the weakness of the economy. we have seen the authorities have now had to announce more stimulus. they have cut the interest rates. our forecast, we've had to reduce our interest rate forecast for china. we think they are going to need more stimulus. they are really waiting to see better growth coming through from the u.s. that are demand for their goods so -- better demand for their goods so that export sector can improve. it is about growth. francine: the market is overheating. when you look at the figures, there is so much volatility. does that play into growth? >> what is happening in china is similar to what has happened in
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markets in the developed world for some time. we've been through a period of weak growth. the markets have seen it as an indication of more liquidity. it was not until the people's bank of china began to cut interest rates that the markets began to take off in china. it is a case of bad news is good news. bad news in the economy becoming good news for the market because it means there will be more liquidity. francine: keith, we seem to be in a risk on-risk off mood. do you worry about russia, which we seem to block out unless there is something bad happening? risks for 2015, which is what the g-7 will want to talk about. does russia also feature in? >> it showed. it was not long ago that we used to talk about the g-eight, that seems to have been dropped. russia has stabilized a bit
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recently. they have been able to cut interest rates a little bit. interest rates remain high and it does remain a concern. it is more of a political risk. the concerns over ukraine are still with us. the concerns and eastern europe about what might happen should the situation escalate further. one of the issues that the g-7 faces is whether or not to increase sanctions further on russia into the second half of the year. that probably will be on the agenda. francine: thank you so much. here are bloomberg's other headlines. vladimir putin says the u.s. has no jurisdiction in the fifa corruption probe. after several officials at football's governing body were indicted. protests planned today in front of the venue for fifa's congress. demonstrators will focus on labor laws in qatar the venue for the 2022 world cup. the shanghai composite fell as investors speculated the
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government will take measures. investors have been worried about overheating in the market. today, $380 billion of shares changed hands on the stock exchanges. david cameron is leading a two day, for country tour of other eu nations. he will set out the changes he wants to see with british relationship with the european union. a referendum could come as soon as next year. let's check in on the markets. jonathan ferro has the latest. a little bit of volatility. jonathan: ftse 100, unchanged. dax down. european stocks pulling back from the one-month high. optimism yesterday that a deal is close. you listen to the french and german finance ministers arriving in dresden for the g-7 and they seem to have a different view. lots on the periphery .2 of a
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percent on the ibex. the action in asia making europe look boring. the shanghai composite down 6.5%. lan epic rally over the last 12 months. 100% gain on the shenzhen composite so far this year. pull back, down 6.5%. why? brokerages are tightening margin lending. the debt has fueled a lending in the chinese market. elsewhere, japan. the nikkei up .4%. an 8th straight day in the green. longest gains for japanese equities since 1988. where is it coming from? look to the fx market. dollar-yen to a december 2002 high. the week yen-strong dollar story playing out today. dollar-yen up .2%.
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sterling, cable dropping off the back of a gdp number. the final number, down .1%. 1.5332. 0.9 percentage points a negative contribution to net trade from that. the strong pound, has that got something to do with that? maybe. francine: thank you so much. the u.k. government has announced that the question that european voters will be asked on eu membership -- should the u.k. remain a member of the european union? david cameron begins a two-day, 4 country tour and which he will set out the changes he wants to see and britain's relationship with the eu. the u.k. foreign secretary has said the referendum could come as soon as next year. for more, we're joined by
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bloomberg's political reporter. do we know what david cameron is going to say to leaders and other european countries? is it a list or is it kind of the first tap, can you support me? >> we are testing the waters. this is the first time he has done this with the proper mandate as prime minister of a fully conservative government. this comes after a pre-election period where he alienated quite a bit of people. we roughly know what this is but it is really about seeing where the sticking point fly. francine: where are the sticking points? svenja: immigration. angela is not going to give in on this. the two main issues are unions, which is what the eurosceptics want. contesting this would require a
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treaty change. then we have immigration, specifically benefits for the migrants to the u.k. and another issue where treaty change could be required but they are ways around it. it is about finding the ways in a way that is palatable to germany, france and the rest of the european union -- notably eastern europe. also to the eurosceptics at home. francine: the people he really has to please. we had a map of where he's going. he is doing paris, the hague in terms of the today 4 country tour. is he going to see allies or a little bit of both? svenja: a little bit of both. he's going to poland. he did alienate countries with his comments on immigration and curbing benefits, benefit tourism. these are very important alliances to be forge. he's going to see angela merkel.
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angela merkel has said she wants britain to stay in the eu. learn fabius has also told us that he once britain to stay in. france and germany are more or less on britain's side. francine: how much does he have to really renegotiate? svenja: the problem is, we have the eurosceptic movement in the u.k. that is increasingly alive to dressing up small changes. he's got to get something. privately he's admitting he won a be seeking big changes. francine: thank you. ahead of the g-7 meeting in dresden, hans nichols sat down with yell university -- yale university professor and nobel prize winner robert shiller. >> my new book is called
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"irrational exuberance." it is taken from a phrase that alan greenspan used to define the craziness of markets. i think it is very relevant now to finance ministers because we seem to have a bubble in the bond market. on prices are very high, i.e. interest rates are very low. not just short rates, but long rates, going out 30 years. near record lows. that represents a dramatic mispricing. it will eventually be corrected. we have to worry about how the transition will proceed. hans: when we look at the debate we will likely have in dresden, demand-side resolutions to some of europe's problems, what is your solution? >> i don't know if i have a
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solution. these problems are deep and fundamental. i think they are substantially psychological. there is not a quick fix. for me, financial markets are a cornerstone of modern civilization. they make things happen. it is called financing. just about anything important has to be financed. they do have a problem with instability. there is no simple solution. there are things they can do, it is a matter of debate as to how far you go? hans: what is the difficult solution to greece? >> we have a game being played. it is an emotional game. we have the greeks who feel
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emotionally that they have been suffering for years for european unity and they deserve help. they have a party that they elected. we are going to risk a default. we've seen this kind of thing before. it reminds me of the u.s. debt crisis when the u.s. congress could not agree on a budget and it looked like the u.s. might default. my guess is this will be resolved at the last minute and greece will not default. you do not want a forecast, you want advice. it is a question, like two people are playing chess how am i going to give them both advice? does not make sense. hans: does that mean this is a zero sum game? >> i think we want to avoid a default like greece. we want to avoid a sense of grievance from the greeks that
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they were not treated well. exactly how diplomats work that out is difficult. hans: this is in the realm of diplomacy, not economics. >> it becomes economics. the greek story was the initial impetus for the whole sovereign debt crisis that plagues europe. it has become a focal point where little animosities have become big and angry. there's no clear dividing line between politics and economics just as there is no line between psychology and economics. francine: coming up next bringing security to the cloud. the startup that is helping nato, general electric and nestle keep their internet security walls up. ♪
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francine: welcome back to "the pulse." live from london. let's talk cyber security. nato is enhancing cyber defenses and that a cyber attack could generate a response from the alliance. we are joined by the company that provides nato among others with internet security via the cloud. thank you for coming. give us a sense on how you can
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scale up. this is a new security system that focuses on the cloud. you do not have many competitors. >> we do not have many competitors because to do security in the cloud you have to have a different architecture design. old-school security is like building power generators for your home. we are like building a power plant. we spent a number of years to build it from scratch without having to worry about legacy. i'm sure competition will come. competition is building point products in the cloud. we built the platform by combining firewalls proxies different kinds of security technologies that can correlate information to give you the best results. francine: how big can this be? you do security for nato for the cloud.
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is this something i as an individual, it will be marketed? jay: we can go to consumers as well. we started with enterprises because they are security conscious. fundamentally what we have done, rather than you having to build a security moat around every office, in today's world it makes no sense. a fence around the internet around the globe. no matter where you are, what device you are coming from your internet traffic gets directed through our security check posts. we are inspecting traffic to make sure nothing bad comes in and nothing gleeks out. it is a different paradigm. that is why old companies are still try to do it the old way. that is the problem and that is why companies are getting hacked. bad guys are moving faster. companies are moving slower. francine: we have also heard" as
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they a lot of ceos asking why they do not have security experts on their boards. i think this is some and that they will look into more and more. talking about you, ipl? you are the hot topic at the moment. why not ipo straightaway? jay: i think we are running the business almost like a public company. i built a world-class team. i hired a cfo from a private company. we hired a global vp of sales in the last six months who comes from hp having run a multibillion-dollar business. all of the pieces are in place. we can go public when we feel like it is right. francine: what does it mean? the right thing to do, is it going to be based on valuation? where do you want to ipo? have you decided whether it is
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here in london, in the u.s.? jay: we have not yet. i personally believe that if you build great products if you get great customers and keep them happy, you solve the problem. an ipo becomes an important step in the journey. francine: we speak to a lot of founders and entrepreneurs. at some point, you may already have been starting to discussions. do i get bought out by a larger company or do i ipo? jay: that decision was made a long time ago. francine: you are not selling. jay: i have done 4 startups in the past that got sold. most companies get acquired by larger companies. having done it several times this time, the dream from day one was to create a company that becomes the sales force of cloud security. what salesforce did, what workday is doing, we are doing the same thing to a the job
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security point products. when i invested significant money, the goal was i wanted to do it right. i was at a stage in my life where i would invest whatever it takes to build the right platform. this company was created from day one to be the lasting public company. francine: how much money did you need to create this? who is backing you? you need scale. jay: i am lucky. i did a few startups. my first startup i could not raise vc funds. i put my life savings on the line. that gave me plenty of liquidity. i invested whatever money is needed. francine: do you have external backers? do you not want them? jay: we took a strong round of vc funding. we are open to it. we may look at a pre-ipo round. when that happens -- it is not the highest priority for us.
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the company is running cash flow positive. it is a matter of do we put more fuel on the fire for the growth. francine: thank you. when you have that news, you will have to come on this show first to tell us. jay: thank you, i appreciate it. francine: the ceo and founder of zscaler. here are some more headlines. apple has put more fuel on speculation is working on a car. senior vice president of operations geoff wilden was confronted by a shareholder. he says the car is the ultimate mobile device. apple later insisted that the company is exploring different markets. tony blair is to step down from his role as the middle east peace envoy. the former prime minister has held the position for the last 8 years. working on israeli-palestinian relations visa has warned it will reassess its sponsorship with fifa if it fails to reform.
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it comes after some of the most senior members of football's governing body were arrested. visa joins a growing list of companies pressuring for reforms that fifa. next, live outside the g-7 summit in dresden to give you a preview of what we will be watching for the rest of the day. ♪
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francine: welcome back to "the pulse."
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live on bloomberg tv and streaming on for a look at what we are watching, we're joined by hans nichols in dresden. g seven on the way. hans: we will be waiting for reaction from the finance ministers and central bankers to the news out of greece moments ago that greece wants a deal by sunday. a couple interesting things. yanis varoufakis has the full backing of the government. they do not plan to bundle imf payments towards the end of the month. the june 5 day when 300 billion euros is due to the imf is a firm date. the other thing we will be waiting for reaction on, mr. varoufakis spoke earlier and talked about the creditors being as succeeding. he wants to talk about restructuring longer-term debt. from the wolfgang schappell --
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wolfgang schaeuble perspective that is more of the same. talking about a third program. interesting to see what kind of reaction we get today out of this meeting on that. francine: thank you. we will be live throughout the day with the latest on the g-7. we'll keep an eye on the fifa scandal, especially the impact on big-name sponsors like coca-cola, please and mcdonald's. putting pressure on the organization to resolve the scandal. unclear whether it will prompt world cup backers to pull out. peter goldsmith later on bloomberg. former attorney general for england, wales and northern ireland and the former member of fifa's independent governance committee. that is coming at 1:00 u.k. time. it :00 eastern time. that is it for "the pulse." keep it here on bloomberg full stay tuned for surveillance, up
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next live from new york. follow us on twitter. i have had some pretty good responses to the twitter question, "should sponsors boycott or turn up the heat on fifa." some of you have said yes, of course the stop others say look we have to make sure that the football organization stays alive. it is up to sepp blatter to see what he can do. jon ferro was telling us about european markets. the real story is in china. also on the foreign exchange markets in japan. the yen today the lowest in 12 years. this is about the fed. not only will the g-7 talk about greece they will talk about the yen and the impact. they might quiz mario draghi about why certain officials have been telling a restricted number of people some market moving sensitive information.
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the g-7, that is the story of the day. back in two with "surveillance." ♪
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>> this is bloomberg "surveillance." tom: the department of justice will scrutinize u.s. banks as they go after fifa executives. visa has " profound concern." fifa must address issues.
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the yen weakens to a 12 year low as markets weigh how fast yellen will act. oil gives way. good morning, everyone. this is bloomberg "surveillance ." i'm tom keene and joining me is brendan greeley. where's coca-cola? brendan: coca-cola is profoundly disappointed. we have a list. rachel printed out a list of everybody's reaction. i've been doing kremlinology. " profoundly disappointed and expecting reforms." tom: ok, we got a lot on the fifa story. we have a wonderful guess this hour. tom: brendan: brendan: inter milan.


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