tv Bloomberg Best Bloomberg November 20, 2015 9:00pm-10:01pm EST
♪ >> coming up, the stories that shaped the week in business around the world. the paris terror attacks raised significant questions about global security. bloomberg's coverage offers significant answers. >> this is the shape of things to come. hitting soft targets. >> two hotel chains join forces. things are looking up, but the outlook may not be so bright. we explore the bubbly topic of tech valuations and get a legendary oil man's thoughts on a slumping market. >> we went by the fifth floor,
he said so far, so good. moreis much and so much coming up on "bloomberg best." hello. welcome. the reverberations them last friday's terror attacks in paris were felt all week long. reporters were on the scene and across the globe as the story develops. a major concern has been security. >> getting an idea of who may be involved and how they got into the country. were they born in france, did they come from belgium? all of that will have a big bearing on what happens next, politically. >> have any questions are you seeing in france being asked as
to why security cannot stop these attacks are happening? >> what they have identified over the last hour was under court supervision. there was a warrant out for his arrest. they had already had him, but they lost him. as a heard earlier, there are so many radicalized young men and women who potentially have been cutting back from syria. it is almost impossible to track all of this. it is an is -- an additional question that needs to be asked. again, that comes back to the political story, how exactly are the politicians going to square the story ahead of the elections? they take place regionally next month. >> this is the individual that was just discussed. he was under surveillance. he was one of the five attackers that french authorities have identified. he was under surveillance starting in 2012. i just spoke with the french
vice chairman of the foreign affairs committee and i asked her how that happened. her response was that they have over 7000 potential people that they need to monitor and there just are not the resources to monitor every one of these people. she did say that there needs to be a longer database that has a longer shelf life. you continue to track individuals that could potentially travel to syria. >> former u.s. secretary of defense william joins us from washington. this is the shape of things to come. hitting soft targets. those are being exploited. we can expect that more will come in europe and even in the u.s. it will be tougher in the u.s. for them to penetrate as, but not impossible. we have to have a very long-range strategy and work very closely with our allies. and i would add russia. >> michael, the former secretary
of the department of homeland security joins us from washington. give us a sense of this is another one of a lot of attempts made which have been foiled or is this difference? given the nature of the attacks, is this a different one? >> this is relatively sophisticated. it reminds me of the mumbai attacks in 2008, with multiple actors going around the city. it suggests an ability to do cross-border planning. we have not seen very much of that. i think it is alarming. if you play next to what we saw with respect to the airliner being downed and the bonds in the root, -- the bonds in beirut, it suggests that isis is working on a robust effort outside of the area of its immediate operations to carry out terrorist attacks. i think we'll see more of these. >> one attacks may not have global impact on business or the economy, but often times they
end up being recruiting tools to create a bigger presence for organizations like i says. is that what we could see happening here? >> that is exactly right. with this strategy they have -- i hate to put it this way, to elevate their brand as the worst terrorist around, that ends up attracting people to fight in syria and iraq and carry out operations at home. >> he is in paris and he joins us now live. the state of emergency that has been imposed. president francois hollande is seeking to change the laws governing the state of emergency. tell us how this would impact the search right now. >> what you have right now is a state of emergency that allows searches without a warrant or approval from a judge. what he is looking to do is something that was actually proposed by the last government, the farther right government of nicolas sarkozy, which was to combine what they call a state of siege.
where there is military control and a state of emergency. basically expanded powers to fight a new kind of war. what you have seen tonight is news of small acts of courage all over the city. parisians have agreed to defiantly sit and cafes tonight, exactly what they were doing on friday night when the attacks began. you are saying some fx on commerce. people are going to work. there is plenty traffic around me. you heard an ambulance going by. larger events have been canceled. several groups have canceled events in the city. we are just beginning to understand the longer term fx that these will have on the economy of paris. former u.k.e minister of counterterrorism. she joins us on set. >> the french government declared and the department -- and the parliament have agreed
to a three-month state of emergency. i think two things are happening. will -- ll -- they something else is also happening. given that the law is now relaxed about the way in which the police can go after people, they will seek to clean up so that we will see arrest of a large number of other suspects or people who have been involved. but they have not been able to pursue them or have not had the evidence. they'll not take them into custody. >> it is fascinating that yesterday we got statements that france is going to use european law and european corporations, which not me european military action, but more european intelligence sharing. is that not being done already? >> you can always increase the level of intelligence sharing. the level of intelligence
♪ "bloombergme back to best." political alliances, humanitarian concerns, all were brought into focus this week as nations responded to the terror attacks in paris. it certainly sparked a number of compelling discussions on liver television and force a change in the agenda for world leaders meeting in turkey. yesterday, it was almost entirely consumed with what happened in paris. the conversations about terrorism and syria and the migration crisis. the official agenda for the dinner last night. >> does that mean that the world leaders distracted from the normal issues that they discuss? >> no it does not. >> i think the evidence and paris are on everyone's minds, with how we continue to move
forward toward greater understanding and cooperation nations will be an important discussion. >> we just had the russian president meet the british prime minister. you know how acrimonious that relationship has been since ukraine. however, coming out of that meeting, a real change in the tone of the relationship. the british prime minister said that the two countries need to work together on syria and the russian president thanked the british prime minister for the intelligence provided after the russian lane exploded over the sinai peninsula. it shows you a couple of things. the russian president has gone from pariah to player. last year, he had lunch by himself and he left early and he cannot meet with anyone. it also shows you how irrespective of their differences, leaders are coming together to work on terrorism, despite that the venue is
usually about economic issues. >> the major concern is that we end up living with a terrorist wants, which is we end up slowing down our economies by overreacting in the next thing we know, we trigger a huge tipping point. we have to be really careful about how we respond to this crisis. for example, if you shut down the french economy completely -- because you're are so worried about any event, what is going to happen? gdp collapses. trade collapses. tourism collapses. the french are worse off. >> nobody is proposing doing that. what we are saying is a long overdue crackdown on the thousands of sympathizers and isil members inside france. the future is not always gotten right. what is happening is a threefold crisis and a massive escalation of conflict in the middle east. and north africa. secondly, a massive influx of people in the millions mostly heading for northern europe.
some of them, only a small minority, are probably terrorist sympathizers and emergence of a fifth column over generations within europe of supporters. >> this is the critical point. francois hollande and condo europe become more anglo-saxon. on friday, did they become more anglo-saxon? >> what i would like to see is the u.s. get a little bit more french. the french have been eager to intervene effectively against the islamic state. it has been britain and the u.s. that have been holding back. i think we need to get a little bit more french. they were highly effective against al qaeda. you have to smash these people. they also have to get tougher domestically. have theh and belgian need to be tougher on domestic issues. blames president obama on
these terrorist attacks. >> and his presidency, barack obama has made no bigger mistake than over syria. he was the one who held back. 2011-2013. in 2013 he drew a redline and it turned into a pink dotted line and he handed responsibility to the russians. he has really let the russians back into the middle east. we have kicked them out of the region in the 1970's. this has been the biggest mistake of his presidency. it has cost more human life than bush's intervention in iraq. nonintervention in syria is a bigger disaster than the bush intervention in iraq. the security packs. more important than the security pact. president hollande signals that he prepared to sacrifice deficit reduction in the name of national security. those words are reinforced by the prime minister this morning, saying france breached the
european budget rules that demand 3% of gdp capital and deficit. i want to bring in the bloomberg team. for the latest from brussels. but first, guy johnson in paris. you look at this line coming out of france and the last way for hours and you wonder why takes precedence. what becomes most important in the hierarchy of issues? it looks like security at the sacrifice of financial stability. is that the direction or france and the rest of europe? by: i think it is very clear that other countries will go down that road. i think you have the answer when it comes to france already. the number was meant to be 3.3% and then 2.7% after that. both president and prime minister are making it very clear at this stage that those numbers will not be hits. the numbers they intend to hit our 5000 more police. 1000 new customs officers. 2500 prison guards.
someone argue that europe needs a fiscal impetus at the moment. maybe this is one way of actually achieving that. you could argue you get two for the price of one. more spending into an economy that are duly needs it and you get the security services getting what they'll timidly need. a win-win for those in paris, maybe not those in brussels. >> we go to brussels now. you listen to the debate as it evolved the last 34 hours from security standing, let's be clear, france is not signaling that they will throw the talent on budget goals, but security spending -- how does brussels and the eu accommodate with the french want to do? >> they have the means to accommodate, whether or not they have the will or sympathy we will not know. later on today we will hear the eu deputy commissioner in charge of budgetary matters. we'll see how much leeway he gets. if one guidepost can listen to
what he had to say about the refugee crisis, especially in greece, saying that potentially it was next ordinary events which can trigger the suspension of eu budget stability pact rules. on the other side of the equation, i saw a bunch of generals command. defense ministers are meeting here and brussels today. for so long, the conversation has been about the other organization, nato. there has been criticism that nato countries are not spending enough percentage of their gdp on defense. that has usually been criticism lobbed from the u.s. or u.k.. we have those two sides of the story. >> in the wake of the paris attacks, 20 governors have announced their opposition to admitting syrian refugees into their states here in the u.s. joining us next is david miliband. he believes it is the u.s. posterity to help these people in need. david: safety is the first consideration that fits
alongside any determination of refugees. refugee resettlement has been a success story for america because there is security that is in place which involve the fbi, department, security, and over 12 different government agencies. the reason this country has such an incredible history of refugees coming here and becoming the business leaders or even political leaders of this country speaks to not just the humanity of this country, but also the confidence and running effective security systems. the suggestion that we can substitute the word terrorist for the word refugee is quite wrong. the truth is that there are effective systems in place. america is insulated next ordinary way by the benefit of geography from the extraordinary convulsions of the middle east. it would be a terrible sadness is one of the consequences of the parents attacks would be for america to close down. we could show america -- show the world how to bring it refugees. ♪
we spoke to people on both sides. >> the hotel world is buzzing marriottthe news that is going to combine with starwood. take it away. >> who better to speak on the subject. you started the starwoood hotel business. what you make of this deal? >> i actually think it is an interesting merger for both companies. i thought the stock was overvalued in the 1980's. i got concert hedge fund friend of mine asking my opinion. i was surprised. i know they said they were not going to do it. but, i think they did a smart transaction for them because they used stock and their trading and multiple premiums to starwoood hotels. there were enormous energies and the trade industry. i thought it would be held in our marriott initially and then
both companies downplay their interest. i think it is good for starwoood . i think the world is going this way in scale and while i hate to see the company not be around anymore, i did not want to see them flounder. you want to see your kid grow up and find a good partner and get married and have lots of little brand babies. i think he doesn't amazing job. >> marriott shares are up this morning following this deal announcement. help us understand, earlier in the year when we heard that starwoood higher that you were not interested. arne: we got into it quickly. we study the company. it looked expensive and a huge bit of work. >> that is something you are definitely want to buy? expensive and too much work. arne: initially we pulled back
away from it. as the summer went on, we watched and are stocks moved in our favor by 15%. the economics of the deal became meaningfully more attractive. and, we watched the continued evolution of the marketplace. you think about travel agents. you think about the way google is using hotel finder to make hotel reservations. you think about alibaba in china. all of these technology platforms which are investing a ton of money in connecting to the travel business. we thought that by being bigger we would not have to support as many utility-like systems, revenue management systems, property systems. we can spend hundreds of millions of dollars more on consumer-based technology and other things to tie our relationships to our customers. >> and hotel and hospitality, the thing that appears to be the growth opportunity is airbnb and platforms like it. why would you want to make a
move staying in the traditional universe with starwoood which seems to have lost its groove a little bit? arne: the product, that we offer, is a great product. there are still the vast majority of travelers will stay in a hotel as opposed to the uncertainty of staying in somebody's apartment. we think that that will be the case for many years to come. cnw shareholders will get a special dividend when the deal closes. on that subject, we are pleased to say that we are joined by the ceo, phil bentley, who joins us for an exclusive interview today. michael brown is also here. welcome to both of you. welcome to the program. phil, congratulations on the deal. let's talk about it. are you pleased at the price that you have managed to achieve?
times which i think is regarded as a pretty good price. we are joining forces with liberty global as you know which is the largest international cable player in the world. they bring a lot of content to us. they bring scale to us. i think it will be good for our people. they can develop more in the region. it will be good for customers. obviously, good for our u.k. shareholders. for 1.1 billion in the last couple of years to 3.6 billion on the back of this deal. >> you talk in the release about liberty global being outstanding custodians of the business. is this a deal for keeps? phil: i think they take care of their businesses. they look after their people. they share a lot of the philosophy that we have. enjoy the work that you do with the passionate about your customers and invest in technology and content. >> retail giant walmart really
think third-quarter results with stronger than expected earnings. here is how the market is responding right now. good news for our brand that has seen its shares plunge. joining us now, covering walmart and retail. what was behind these better numbers? >> for one, nothing bad happens. we have seen some difficult -- disappointing expectations coming out of walmart as far as their forecast and earning guidance. i think it was a sigh of relief from investors that it was a normal quarter. they beat a penny. comps were up a little more than expected. sales are growing. it is not great or amazing, but when you look at these other retailers, and as we have seen with macy's and nordstrom, there are ugly numbers coming out of retailers, except for walmart. things are better than expected and they have some growth.
that was not to give investors a little bit of confidence. record for your profit after a boost in ticket sales, more than made up for disruptions earlier in 2015. joining us from london, carolyn mccall, ceo of easyjet. could you give us a little bit more detail around your guidance? you not seem to be wanting to steer the market in a drastically different direction, but you said you looked positively at the long-term outlook? >> yes. i think that is right. our results are very, very good. brilliant to the people at easyjet also for our passengers. it has been driven by -- prices are actually down year-over-year. --ces are made over non-seat revenue. that is what gives us a lot of confidence about the outlook going forward. we are --
we just that we are using purchase rights and it put in 36 more aircraft, so we are able to replace old aircraft. 10 of those. willie is the remainder to deepen and expand our strategy and all of the markets we are already in. there are lots of organic growth opportunities for us whether it is the netherlands or switzerland or germany or others. all of those markets look very strong for us. consumer spending is better. economic outlook has improved. >> casino stocks are falling in hong kong after the chief executive forecasts the gaming industry downturn will stretch into next year. we are joined for more. >> indeed, the declines have been going on or some time now. october, another month of decline. not a huge surprise to know that
it will continue into next year, especially because factors remain that are causing the decline. at $25xecutive came in billion. next year. this year, in the first 10 months, -- see, definitely a drop coming up next year. the chief executive says that they will take a closer look at several issues and the next few years which could affect what further casino companies are taking them. if it drops to 25 billion that would be the lowest since 2010. the facts -- the factors causing it is the crackdown on access and -- excess and consumption in china and the slowing economy. those are not going away. we will see this continuing. ♪
we have to start with oil prices. the last time that we sat down you said by the end of the year we would be looking at 70. santa claus is knocking at our door and that is not what oil prices are. >> this is not the end of the year. >> so in the month of december, you think we will see a huge recovery? >> i feel a little bit like the guy who fell off of a 10 story building. when he lived by the fifth floor, he said so far so good. the other guy that fell at the same time said i am not dead yet. ok. that is where i am. trying to make a joke out of maybe a bad call. if i am off, i may be off by six months. >> can you hold tight until then or are you willing to say that this is a bad call and i'm going to sell or are you going to hold tight? >> we have reduced positions. we are in a mode where we still
have power. we are out of the market right now. >> hold on. you are on the market right now. >> meaning what exactly? no explosion -- if people see is selling as they -- in some cases from should they interpret that as capitulation or something different? >> i had it right. we shorted it 98 and then we had it wrong. we believe that we saw the bottom. we did not see the bottom. we went back in and took losses and now we are out weighing. >> the recovery. x --
that is the view of the executive board member and i spoke to him exclusively at a central bank headquarter and frame for. -- frankfurt. >> you could turn the argument the other way. i think what we communicate is our view of economic conditions in general and we clearly said that risk would increase. you communicate that and then you get the reaction which is the telling of your assessment of the situation. markets do the reasoning. who leads to i would turn the argument the other way. their own analysis about the situation. i think the market behavior is also reading about the mandate of the central bank. and the assessment of the situation. i would not say that -- people say financial dominance of
central banking, i think we communicated our assessment and our reaction function. the assessment, we also said, would have to be done in december. a thorough assessment based on projections. also, any assessment you look at the flaw of data. the flow of data. howalso have to look at this whole adjustment to the itance sheet, how is happening? where are you in this adjustment? i think there you have to absolutely make sure that you are inflation expectations remain anchored, because that would complicate dramatically if markets would revise structuring. a balance sheet recession, when
you revise the markets, households and corporations revise long-term expectations in terms of nominal growth. complicates the whole balance sheet adjustment process. that is clear. china, you have been in that country for over 100 years, i'm edging -- which areas would be pushing aggressively into? >> we will stay focused on infrastructure because we know that there is important needs for that to be served in china. we will also focus on working with chinese companies outside of china. asian infrastructure investment bank, these initiatives are important to china, important to chinese companies, and friendly, they will be important to companies like ge as work with our chinese partners to help
make this a reality and 50 or 60 countries around the world which are touched by the initiative. >> we will likely get an update. you're in a fairly unique situation. you have a unique perspective. we know the headlines. what are they actually doing? >> they are doing a lot. from 10 years ago, they have the world's largest wind industry and they have invested in renewables. yes, there is still the need for -powered coal generation, because it is impossible for china in the short-term to avoid that. in the long run, i see a lot of focus on environmentally responsible -- >> how quickly will he be able to shift the energy? >> it will take a while. i don't think anybody in china is confused about the need to focus on air quality and water quality. how much they can do over what
span of time is the operative question. >> they took a big steak and lift earlier this year, what kind of investor has he been and how active has he been? >> it's good. i saw him last week. the idea was that we had approached them. they have been disciplined investors and they make good noise about the truth behind our business, which is what we want to tell people about today. about the 40% share in san francisco. this is a massive opportunity. lyft is growing faster than any other player in the u.s. >> cases where the u.s. is not dreck we hit, but where american interests are implicated, what is the jeb bush doctrine for when and how you commit american troops on the ground overseas? >> you have to have a compelling national security interest. in the case of islamic terrorism, we have it. this is a unique circumstance, not seen before in history where you have a caliphate that has been formed his energy is
♪ erik: welcome back. my colleague emily chang interviewed two of the most intriguing and influential figures in tech this week. first, lincoln founder reid hoffman. he is not the newer has become a venture capitalist. he invests in both airbnb and facebook. emily put the question to him simply -- are we in a tech double? read: and subways we're in a bubble, in some ways we are not. what is key is that it tends to be a private market bubble and the private market bubble does not have as much public market impact, so i think that it is not something that when you hearken back to 2000-2001, you worry about quite as much. emily: we are in a bubble in the private market but not the
public market? >> a quasi-bubble. emily: i talked your colleague who said something similar, and someone else that we are headed toward catastrophic events. someone else also says that we are in a long-term best. why is there such a diversity of opinion? >> the question comes down to -- hamish to believe that new things will be invented that will be solutions to the problems that are not invented yet? inherently, you could build companies from essentially an idea to something really globally relevant and three years or four years or five years. you look at dueber or airbnb or dropbox or these new companies and they can move very fast to global relevance. they can be important to affect all industries. -- we will create more of those. italy part of the solution not the problem.
that is should focus on. on the other hand, a lot of investors are betting on this very broadly so you get valuations we look at a specific valuation and you wonder why it is that way and the answer is people are not really distinguishing very sharply between which companies really benefit from a globalized network age and which companies do not. that is the key issue where breaks between. emily: this is my question. i will push a little bit. is it really subjective whether or not we are in a bubble? 1999, no one would dispute, in retrospect. >> no one ever district -- disputes bubbles in retrospect. that is not actually the test. clearly, that was artificially inflated and had a wee correction that was serious. i think the question comes down to -- some of these valuations are high especially on the private market side. you can pinpoint specific
companies which i will not do because i think it is impolite. that one seems a little crazy. you can see things where private valuations have been much higher than when companies go public. it means the public market is not being as affected as much. you get those kind of things isre you say look, there clearly some elements of a private bubble. however, the key thing comes down to i think we will see more of these companies that go from zero to one billion numbers and less than a decade that actually have global impact. saying -- seeing down -- >> not yet. >> but we are seeing them publicly. square is going public later this day. if the ipo the new thing? >> if private market valuations continue the way they are in the
later rounds, we will see more of this. the inflection point you see is essentially protection. those investors have said that they get protection because they invested at the current price however many years ago and then the other one is when you choose the companies that are actually going up, you win on those. >> speaking of square's ipo, it happened. the stock began trading thursday morning. emily went to the floor of the new york stock exchange shortly after the debut to interview square ceo jack dorsey. emily: how do you think where did today? jack: it is a moment and i'm really excited. it is something that has been a long road and is a milestone. this is not something that you go around. can accelerate us as a business and this is what can help us build the tools to serve our customers in the right way and that is what it is about. i'm excited to get back to work. emily: do you think square is a
technology or payment company? jack: i think it is both. emily: a lot of people are looking at square as an example of private tech unicorns being overvalued. what you think? jack: i don't know, i'm not an economist. emily: what do you think about this idea that square was not able to live up to the valuation set? jet: our expectations are serving our sellers. this is a fundraising event for us. we will continue to build the business and make sure that we're serving ourselves better. emily: where we focus that money? jet: we will focus on not on our new reader. we want to see it on the side of every transaction which enables anyone to accept all of these different bae systems without having to think about it. it is in the market. my mom bought flowers with her watch. it was amazing. really proud of her. we want to see that on the other side of every transaction because it is fast and easy and
as you add more technology and security to the system, more of the fraud and risk potential goes down. we want to see this everywhere. we think we have an amazing opportunity to represent the places that you go to every day, the coffee store, the lunch place, the food truck. if you see that everywhere, you know that you can pay with your phone when you see the square logo. it is amazing. we want to make sure that we have that logo representing. emily: we have talked a lot about your executives. do you think you'll need to higher a president or a coo? jack: we have a significant bench. the function of coo is spread to the entire leadership team. i'm really proud of our dynamic. i'm really proud of our team. also our board. i think we one of the best boards in the world. our focus is on what we need to go forward. david, mary, it
is a great team. emily: is there a public company ceo out there who inspires you? jack: bob iger. i learned from him every single day. emily: what specifically about him? jack: he is not only a great ceo but a great leader. he runs a business that has multiple parts to it. the people in that business feel empowered. it is diversified. it is a true ecosystem. they have really stuck to the purpose of how the company was founded. everything that was started is still in the company today. it is something that we can all learn from. to build a company that lives generation after generation after generation, walt disney was the first technology company and the first ecosystem company. it really focused on is your answers and it is fantastic that it indoors. -- indoors.
♪ erik: welcome back. as we wrap up this edition of "bloomberg best", let's look at charts tell the story of the week in business. >> walmart has been a lacquer this year in part because margins remain under pressure. what we can show you is that the itsow line here is below overall. it is below 5% which is something that people fixated on. both of these are declining. they are pushing to modernize walmart which has eroded profitability. still, the forecast for revenue growth over the next 3-4 years at three-4%. at the bottom part of this, it
is stagnant. growth will be international. orange part will drive everything. international, he is talking about china and not brazil where nats sales continue to suffer. there is no consistency here. i want to talk about what is going on with russia and the ruble. check out this chart. russia is in large part and oil driven economy, the collapse in oil prices have slammed the currency. in recent days, there has been a bit of a disconnect between the ruble and oil. the ruble has gone up and oil is going nowhere. this is oil. there is a believe that thanks to the common enemy of isis that perhaps there will be a thought between russia and the west and that they can perhaps lift sanctions eventually as they pursue this kind of enemy -- this common in many.
investors are betting that will be good for russia. as you can see the emergence. >> what are the inflation expectations? this is the difference between government that and inflation linked bonds? it is the way of gauging inflation-based expectations over the next 10 years. in the u.s., inflation expectations have been rising since september. in germany, they have been rising since august. what has happened in japan since may, inflation expectations have been coming down. the rate is now at .78% which begs the question, why isn't the bank of japan adding to stimulus? today it kept policy rates unchanged. goldman sachs says that the u.s. rates -- >> that is it for "bloomberg best was quote this week. you can get more news at
announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with our continuing coverage of the paris attacks. a paris prosecutor confirmed abdelhamid abaaoud, the presumed ringleader, was killed. they used fingerprint analysis to identify his body. he was involved in four out of six plots against france. he was known to have traveled to syria.