tv Bloomberg Best Bloomberg February 14, 2016 1:00pm-2:01pm EST
♪ david: coming up, the stories that shaped the week around the world. janet yellen speaks on capitol hill. tech and media companies see a mixed picture in the year ahead. deutsche bank spends tense days trying to sooth investor anxiety. >> this is a long-term game. i mean -- we are reacting to traders. proposals, what it -- budget proposals, to primary votes, it has been an eventful week. >> the democratic bow will be longer and nastier than people thought it would. david: some of the finest minds in business to make sense of market turmoil. >> markets are being pawed by
the bear right now, but they're going to be mauled. >> up 200, down 200. up 300, down 300. you have to ask yourself, why is that happening? david: all of that next on bloomberg best. ♪ david: hello, i am david gura. welcome to "bloomberg best." a weekly look at bloomberg news and analysis from around the world. let's start with a day by day review of the top headlines. on monday, the markets started where they finished the week before, with a big selloff. >> it was kind of an unbelievable day. at one point, you had the nasdaq off by 3%. but into the close, stocks made -- contributed to a rally. the s&p only off 26 points. the dow only up 177 points. >> and ugly day, but it could
have been worse. based on where we were a couple of hours ago. what you attribute the selloff -- what do you attribute today's selloff to? what is this about? >> there is more anxiety about the financial sector. even a few weeks ago, it is a relatively new development. particularly focused on the european banks. but beyond that, there are a few things have been driving markets lower. last week, most of the economic data, even the u.s., was on the soft side. it is reinforcing concerns about the health of the global economy, even the health of the u.s. economy. second, we have had an environment for the past few weeks, where you have seen more effort by some of the world's central banks in japan and europe to either consider or adopt more unconventional monetary policy. and so far, that is not having the intended effect. it is making investors nervous about what happens in a world where central banks may be out of bullets. alix: we have been looking for the bond bubble to burst for years. it seems like the bond bears can
go home right now, because it is exactly what is keeping the bonds propped up. >> it has gotten worse. we are in a world right now that defies everything we learned in school. you have close to half the european sovereign bond markets now with negative yields. for markets overall you have 25% of sovereign bond markets with negative yields. that wasn't supposed to happen. you were supposed to have to pay the government for the privilege of lending to them. so rather than rates going up, they have plunged into areas we did not think was possible. >> deutsche bank slumped yesterday, after becoming the lender in -- the biggest lender in four years, to try and reassure investors it has enough cash. >> a report yesterday raising the specter of deutsche bank's ability to pay. this is a huge torch paper. >> that is the gist of the report. simon adamson wrote this report, questioning deutsche bank's ability to pay their coupon in 2017. if their 2016 profitability
comes in lower than expected, or if there are further litigation costs. remember, this is a big cloud, deutschewe talk about bank, we do not know where they are going to be in long-term litigation costs. what that will do to the profitability. yesterday, they put out a statement saying, yes, they do have enough capital to cover. what they say is, they have a billion dollars for 2016, that would cover $350 million in coupons due in april. but that is if the sale goes through with what could be a what kiva bank. and that there are not any litigation costs. this isn't just a deutsche bank story though. you take a look at lenders in the stoxx 600. all across they are down significantly. you see in 2012 -- that is when mario draghi said, he would save the euro. look at how far they have gone down. quite a precipitous decline. there appear to be two stories.
one is a sort of concern about deutsche bank and our own ability. but then there is a broader concern about the bank stocks in general. but it looks like deutsche bank is taking the brunt of that. >> so the question of negative interest rates came up today during janet yellen's testimony. she was not sure if they would be legal in the united states, but she seemed open to the idea. >> in the spirit of prudent planning, it is something that, in light of european experience, we will look at. we should look at. not because we think there is any reason to use it, but to know what could potentially be available. >> first of all, it's interesting that she, like sam fisher, came out and said, based on the european experience. it makes me wonder if they think it has been successful. if so, what are they looking at to gauge the negative rate experience? success or not.
or if it didn't mess it up. it did not harm it anyway, versus two it actually helping. >> later on, she did allude to u.s. money market funds. she said, they have to study whether the potential advent of negative yields in the u.s. would disrupt the plumbing of the u.s. financial system. in particular, money market funds. you are already seeing in japan some money market funds closing down to new investors, because it doesn't work. this model doesn't work. and frankly, europe does not rely on money market funds as much as the u.s. does. this could disrupt the commercial paper funding system. this could disrupt companies funding themselves. this is a very serious step. she did allude to it. she said, it would be remiss for them not to look at it more closely. alix: you've just been listening to fed chair janet yellen testifying before congress for the second day. scarlet: what is the big headline you heard from today's testimony? >> i think again, negative rates. they were very explicit back-and-forth on the legality of it, but whether she was prepared to use it. take a listen.
>> we had previously considered them, and decided that they would not work well to foster accommodation back in 2010. in light of the experience of european countries and others that have gone to negative rates, we are taking a look at them again, because we would want to be paired in the event -- be prepared in the event that we needed to add accommodation. >> the mere fact that she is saying -- again, confirming this is a tool we are considering. it may be something we are going to use. it doesn't mean we are going to use it. but, we had this axe out. we are sharpening it, and it's a signal to the markets. >> a little bit of theater, psychotherapy, a lot of politics, and very little information. i would disagree with one of brendan's characterizations. she was asked about the axe of negative interest rates. so she has to respond. , it doesn't mean that they are sharpening it. janet yellen cannot go to capitol hill and say things are
terrible, and we are getting ready to impose negative interest rates, because imagine what the market reaction when being -- would be. >> it is a fourth successive day of declines here in europe. >> the pressure is building up in japan. it all comes ahead of gross data -- growth data out on monday. does this mean we can expect more stimulus from the boj? >> i think that is the question we are all asking ourselves right now. governor kuroda was in parliament all morning, talking about how he is ready to employ -- deployed more stimulus. if it is necessary, that he will not hesitate. i think those are pretty strong comments. i think more action is definitely possible. there are some economists already forecasting that we will get more in march. >> look at japan. my goodness, it is like the boj has completely lost control. >> i think central banks have generally lost a lot. -- lost the plot. in theory, negative interest rates should spurn some kind of action.
but in reality, people put their money in the mattress. and doesn't make them go out and spend. especially, in japan, where you have an aging population that relies on pensions. it is kind of for the economic -- where the economic theory breaks down with the practical reality. david: we will have more on deutsche bank a little later, how it rallied from tuesday's plunge, and how it got the whole world talking about cocos. coming up on "bloomberg best," and round of company news from tech to media to beer. ♪
"bloomberg television." >> a big payday, very big. he is poised to become one of the highest-paid chief educative's after google's parent company, alphabet, offered him restricted stock. >> that is an awfully large, restricted stock grant. at the time that steve jobs got that, he was making a dollar a year, because he was in the mode of turning the company around. any upside was really something shareholders would be happy to give him, given the performance up to that point. but google right now is just firing on all cylinders, and i think that he has come in and done a terrific job taking over the core property. so, i'm not surprised they want to reward him. i think it is a testimony to just how successful google thinks it is right now, and how critical he is seen to be in the company. emily: how closely tied are these rewards to performance? -- awards to performance? >> for google, these are payout
firms through 2019. and their ultimate value will be the stock price. but the number he is getting is the number he is getting. emily: is he in billionaire territory? >> if you allowed him to invest all of these today, and he has options, from the company, they would be worth $650 million. obviously, we are in a down market, so he is getting close. if he stays on, get a few more awards, and google keeps killing it, he could definitely get there pretty quickly. >> stock is tumbling by worse than a year. the japanese government fact a -- backed fund that is bidding for a rescue plan. it is pitching the creation of smart appliances that include another troubled electronics major. >> now we have those trying to -- we have two bidders tried to take control of sharp. on one side we have taiwan's foxconn, and on another side we have the innovation network core of japan. the bid is pretty complex. they are looking to inject some
capital to boost the led business. -- lcd business. this is the business that makes glass panels for iphones and other mobile devices. they are also pitching this idea of a smart home appliance giant. foxconn is offering a package that is worth about ¥660 billion. some of that money would go into sharp in the form of buying new shares, about ¥225 billion would be used to acquire preferred shares. on the other side, ha is offering ¥203 billion to uphold these operations in the future. both companies want to change the operations pretty fundamentally to be able to make sharp more competitive. it has been losing money for years. >> my question to you is this -- profit will increase in 2016 with an increasingly challenging external environment. a very confident statement. looking at the macro picture at the moment. where are your sales and profits specifically going to rise and 2016 -- in 2016?
and by how much? >> we never made that kind of precise prediction, as you know. we have a very diversified portfolio of countries and brands, which allow us to spread the risk. on the one hand, you will have some headwinds, but on the other hand, you have oil consuming countries like vietnam that will benefit from low oil prices. so, overall, our balance and our portfolio footprint leaves us to make that confident statement, while admitting that there will be some headwinds. >> where does that leave europe then? europe also benefits at this time. does this mean this is an opportunity to get more out of the european business? >> oil prices do not translate one-on-one in europe to beer consumption. it would be foolish to make that case. it certainly will bring some additional discretionary purchasing power to people, which beer is a small part of it and we want to play our part. so, no, overall, i think europe can benefit from lower oil
prices in the years to come. >> philippe dimona made a pledge to investors today to prove doubters wrong and bring iacom'snst -- v floundering stock to a new high. on a conference call he said our outlook has been distorted by the naysayers and publicity seekers. he's been with the company for a while. what does he have planned? >> this is probably getting back to basics for viacom. it comes to programming and ratings. it is a challenge for this company. this is a company that has some real ratings weakness. is it because of cord cutting, or because they have not invested in their programming as much? it is probably a lot of both, actually. the company is reinvested in their programming. a lot of new shows. the ratings have started to turn. let's see if that is a long-term trend. if it is, which they believe it is, they believe that they will start to see real improvements
in the cable networks by the end of the year, and into next year. unfortunately, investors are hoping to see the turn a little bit sooner. >> disney reported earnings after the bell yesterday, beating all the estimates. >> really the best quarter that disney has ever recorded, on every front. you look at profits of $2.9 billion. that doubles the massive profits from three years ago. a fantastic quarter driven by star wars merchandising activity at the beginning of star wars. ticket sales, and a suggestion that next quarter we will see a lot more of that. but really a spectacular quarter. and yet, concern that there is a slowdown at espn, and subscribers adapting to a new world of cord cutting. i think that spooked to some longtime shareholders. >> i saw bob iger went out of his way to say there is an uptick in subscribers. but it did not make the market feel any better. >> that is the long-term concern here. while there is more revenue per subscriber, there is concern
that it will not last. as more bundled packages, that do not offer espn, we will see more people go for that. we certainly have not seen that behavior in the marketplace. >> looking at 2016, we have seen a fairly rapid drop in commodity prices. it is not just our materials. it is also oil and gas and a range of products. we are on the front foot. we are taking proactive and prudent action to reduce our costs and to reduce our dividend policy. this is a sensible step we are taking here to protect long-term value to shareholders. >> what does this tell us about your m&a thoughts. does it tell us about the belief that you are getting ready for those tier one assets to become available? >> we are trying to get the -- interested in getting the balance right between growth and shareholder returns.
yes, there are a range of assets that could be more natural than some others. at this stage, there is nothing out there on the market that interests us. but we are holding our powder dry, while we focus on developing our own assets. stephanie: twitter reporting a loss of $90.2 million in the fourth quarter. twitter's user growth stagnated last quarter. sales in the current. our expected to miss analysts forecast. it illustrates that jack dorsey is still struggling to make this site more alluring to consumers and advertisers alike. >> the company so far has kind of been able to get around this stagnation because this is at -- this is not the first quarter that growth has flattened out. they have gotten around it by using this function where they are able to trail facebook, but also able to tweak up quarter after quarter. that has masked the declining users.
by increasing the amount of revenue you get from your existing users. that's all a shell game. until you reach energized user -- re-energize your current users, your user growth is stuck. >> aig posted its second straight quarter loss yesterday. they announced a $5 billion share buyback. this is not great news. >> it was a really bad loss. people were accounting for some of the trouble at aig, but this was worse than analysts estimates. a lot of people knew hedge fund performance had been bad at aig. also i guess activists came in , at the right time. >> likely they still had $5 billion around to buy shares. so they put a couple of activists on their board. >> right. they put john paulson on the board, and they put a representative of carl icahn there. he is also on the board of navistar. he's been through this before. >> why didn't carl go on the
♪ david: you are watching "bloomberg best." i am david gura. earlier this week, doubts around europe's largest investment bank. deutsche bank's stock fell sharply. analysts questioned their capacity to make bond payments. we examined what the implications could be for the global financial system. it all began with cocoas. >> the co-ceo tried to calm employees saying, "deutsche bank remains absolutely rocksolid, given our strong capital and position." >> fears yesterday were triggered by a note from credit sites that questioned deutsche bank's ability to pay off coco
bonds. this is a type of debt that, if things go badly, the bank converts into shares. but there's nothing significantly different. this is a fear that the markets brought up front yesterday. >> and it is quite amusing in a way. this whole situation, that they convert into equity, sitting as a percentage. this is more about cash in the -- then the bank actually running into genuine by nato difficulties. that is why they got that note out last night to calm investors. i was getting calls from people, are they going to raise more capital? >> right. >> i think some of the european banks have been slow in getting themselves recapitalized and getting their financial balance sheet in the best place they could be. >> i think deutsche bank is pretty sound, actually. at the end of the day, it is a german national icon.
i think john is doing all the right things. >> we don't have a rating on deutsche bank, formally. my guess is the shareholders there face some kind of dilution in the capital structure. >> we have seen differentiation in europe. yes, deutsche and is trading at -- basis points. ubs is only at 86 basis points. it is important that the banks -- the markets are still differentiating between the banks. >> i think we are in a situation where we have a much better handle of the balance sheet. but that doesn't stop people from having that fear factor. it is not stopping people from having that fear factor. >> i do not have concerns about the bank. >> one bank, one institution raising that level of concern that you get the german finance minister to weigh in, to shore up confidence. i haven't seen this since some
bankers told me they were solvent in 2007 and 2008. >> we have the latest on deutsche bank. it is important that he made that statement, a public vote of confidence in deutsche bank. it also gives you a sense about how little confidence there is out there in the market. what we have is a potential plan to buy back some senior debt. no decision on this has been made. that is according to a person familiar with this. the bank has ample cash to make such a purchase. earlier, the financial times reported, on tuesday, that they could potentially be buying some senior debt, buying back senior debt. this crucially would not include those convertible bonds that have been the center of the story the last 48 hours. >> you and i have seen this train wreck before. we have seen this theater. it is one part international finance confidence trust liquidity, one part the corporate plan and one part the over arching macro economics the
deutsche bank has to deal with, which is the most important? >> i think it is the macro issues. clearly, people are scared and worried. they are worried about the banking system. they are not seeing much growth in europe. all of these banks in europe have been overly aggressive in the past. so, he needs to dial that back. he needs to talk about what they are doing, buying in bonds. it makes a lot of sense when they are trading at that price. i think it is an overreaction. this is deutsche bank. this is the bank of germany. they are going to get the central bank they need. this is the long-term game. we are reacting to traders. they can take advantage of volatility. the real question is, on a long path, is deutsche bank a bank that will fix their problems? figure out a way to get confidence back in their shares? and, my belief is yes. >> let's look at the soap opera known as deutsche bank. let's bring it up right now. it is a five-day intraday chart
showing all the back and forth. what i want to know, folks, is the german view. how has the story adapted and morphed in the last few days? >> it has gone up and down, up and down. it is all hinging on whether investors think deutsche bank has the money to pay coupons. on their 4.6 billion in coco bonds. that is what he gets down to. whether or not it is triggered is on an obscure provision on how you define a certain accounting metric. it is done under german commercial law, not international standards. and investors are trying to figure out whether or not deutsche bank can actually pay them. it is going back and forth. the big question here is does the european central banks try to weigh in and clarify on these new rules? they have some 169 banks that they supervise. will the ecb try to calm the market? if not with a public statement are they going back-and-forth , with deutsche bank on how they
can maybe offer a little more clarity? >> we have confirmation on the story that bloomberg news reported yesterday. deutsche bank is indeed going to buy back some of its debt. it looks like about 3 billion euros or $2 billion. >> mark what is going on over there? >> >> that's right. buying back bonds. ending a quite crazy roller coaster week, this is a five-day chart. we started the week with concerns that deutsche would not be able to pay the coupons on its riskiest debt. deutsche coming out saying, of course it would be able. then there were rumors that it would buy back debt shares. today shares were rising ahead of this news. since the news half an hour ago, shares have shot up. interestingly, over the week, shares are actually down by 1%. they fell 9% monday, they fell 4% tuesday, they rose 10% wednesday, they fell 6%
thursday, and they are up over 10% today. it has been quite an incredibly volatile week. >> what do you think of this deutsche bank move? >> the market is responding well. i think it makes a lot of sense. their debt has been crushed, basically. in recent weeks, that is. they can buy the debt that in less that they issued it. it makes a lot of sense. it reduces their leverage. it sends a signal to the market that they have the cash on hand. we are not worried about being able to pay our bills. the potential downside is that deutsche bank is taking away some of its flexibility. they are using liquidity cash that they could have used down the road to protect themselves. up next, the best of the week interviews. also, bold productions on the price of oil. ♪
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>> welcome back. volatile markets make for spirited conversation. our week starts with a bold prediction about one of the leading independent traders. we spoke exclusively with my colleague ryan. >> we have the situation where we have too much supply. the balance does not look like it is tightening up. we're still seeing bills in the u.s. i cannot say that the price has bottomed out. ryan: hopefully we do not have to put that price on it.
>> the end price would be 48. you can kill me if i am wrong. brian: you do not see a sharp rebound? >> no, we do not because there is so much stock buildup in the world. i think we just believe that it will take a lot of time to work on that. we believe it will happen over time. nobody is going to wake up and see that there is no more oil. >> how long does it take to work through this? >> do you ever get back to that level? >> there is so much more supply.
it is going down in cars as it is in airplanes. you have to believe that there is a possibility. >> the point is that this is a turnaround. a turnaround of the dynamics that have been growing for eight years. and given real growth, and given more inflation that is beyond our control, we will see dynamics of debt accelerating downwards. >> just on this level, some people look at the amount. >> i think it is important because what is important about sustainability is a direction that is taking. also, the absolute level story, let me add what i expect to be the reassessment of 2015. d.c. deflation as the biggest risk to the losing economy? inflation will go as quickly as possible. we're very far from there.
the ecb is doing a great job. my view is that we should continue to do so. on the side of countries, we should do the best to facilitate transition to the economy. >> when you take a look at the investment climate, what is your assessment? now, we have this talk about everything. it does not look optimistic. >> that is true. we have fallen somewhere behind what we should. we have the investment climate. the important thing is that as of last year, we do not make the effort to admit it. we want to admit problems and want to change them. we want to be thoughtful about the reform and policy changes. we do not want to overreact to individual cases. we're ok, even though we're moving that way. >> this is the usual for central banks. we have a quarter of the world cdc where we have negative interest. what does that do to the global economy?
>> nobody really knows. the thing about these experiments is that they are experiments. we have no historical precedent. none, at all, ever. i'll give you one small example of this. the general idea is that if you charge negative interest rates on the reserves of the central bank, that somehow it will translate into lower lending rates. you have to remember that these negative rates and reserves are actually squeezing bank margins and profits. this is something we do not want in this circumstance. we want them to make more money so that they can build up capital.
what are banks going to do? one possibility is that they .one possibility is that they lower rates for customers. as possible within limits. there are then worries about people taking the money out. then come you simply raise the rate that you charge for people to borrow, which is the exact opposite of what the policies and tension. i repeat, this is all experimental. we will wait and see how it works out. i am very skeptical. >> are you not worried about negative rates? >> no.
the negative rate environment that moves to the banking system for the past four years, things that change their model do not get the significant benefits from a negative interest rate, because climates -- clients will be moving to us. we will find a solution. we are in a good position to convert her to retail bonds in assets under management. you can gain much more money than you lose. then, to compare the banks is the cost that we will use in a significant way. i see significant opportunities coming from this area. in any case, we are not in that position. it is possibly 10%. not 50%. the implication and evaluation in the market. >> given what global markets look like, are you worried we will see an interest slowdown? >> i'm worried will run out of
live premium sports content. >> a given how great things are going in terms of streaming and digital, how do we get people to those games? many people need to get to those and they need to be updated. >> as technology has started to get better, as hd is coming through the pipe, as people would prefer to stay home and watch games on these digital screens, in fact, the opposite has happened. i think these arenas have become modern-day town hall. despite all the great digital media, people want to gather and meet with each other. there are statistics about how religious observation is going down. where are people going? they're going to arenas and stadiums. ♪
number one is how focused he is on climate change. he really wants this to be part of his legacy of his final year in the white house. this budget really takes a crack at trying to address climate change both on the policy side and the revenue side by imposing a $10 tax on oil. there's also a surprise in terms of the economic assumptions. the white house is assuming that the unemployment rate in the united states will not go below 5%. while we are at 4.9% now, that is a very interesting function.
finally, there is an assumption of 2 trillion more dollars been raised over the next decade. that is a big number. it is something that is unlikely to be achieved. >> congress will not hold any hearings on that. is that unusual? >> the republicans and both chambers announced that they will not be inviting the director to come to capitol hill and testing president's budget. that is very unusual. as you can imagine, democrats are very upset about it. >> a donald trump and bernie sanders have one the latest primaries. hillary clinton with strong came through the crowded field. we have 10 days before the republican primary. another seven after that. what, and terms of a ground game will need going on in regards to staffing changes and so forth? >> definitely staffing changes on hillary clinton side. she already said that ever loss to bernie sanders that she'll make changes. in terms of ground game, john kasich who was a second-place finisher, it is not really have a ground game. he does not have the money.
it will be interesting to see what happens to him. >> are wiser about who will win? >> the democratic battle will be a lot longer than people thought it would. bernie sanders victory was very stunning. he picked up a lot of young voters and women. older voters as well. that is going to be quite a dramatic shift. on the republican side, donald trump very bit -- one very much. -- was very victorious. >> we have a final push to support some -- to push support for new eu. plenty people in london are paying a great deal of attention to this. >> they need to start reading a fresh newspaper. the french are leading the opposition to this draft proposal hammered out a few weeks ago. david cameron celebrating this as a potential victory. it looks like it has a ways to go. depending on how firm you think the opposition is tells you whether i not you think something will get across the finish line. basically, the dispute on the bankside, will have another
dispute in a second, is can the eu, and the eurozone have rules? how quickly can they implement those rules? with the u.k. wants is a little more autonomy. what they really want is the total power. that is with the french are objecting to. it is a complicated situation. it basically gets back to who control the regulation, and how quickly can the regulation be put into effect. we still have the divide on that. eastern european countries are uncomfortable with the welfare payments. cameron has had that out. it bears noting that he has a difficult proposal at home on the welfare scheme on what you pay for child benefits and
children living outside of the u.k.. it is always hard to tell how firm the opposition is and how much they're willing to negotiate. it seems like they have shuttle diplomacy. they will travel all over the european union on monday and tuesday. there were two paris, berlin, and the product. i hope he gets frequent flyer miles for that. ♪
what is going on? the numbers are being haunted by the bear. -- the markets are being pawed by the bear. they will be mauled. the reason for that is that this is not just the end of a bull market. it is the end of an era. the end of a worldwide era in which central banks trade money, inject liquidity, and support markets and manipulate an intruder in the pricing of financial assets like never before. what it did was create a massive credit expense in the world. we have 40 trillion of debt in the world in 1995. we of 224 trillion today. every place has peaked debt. second, the central banks are all out of power. the fed is painted into a
corner. we are here market say no interest rate increase in the coming year. that is 100 months at zero money market cost. you will destroy a financial system on eight years of zero money. >> we have had person after person after person come in with a different picture. yesterday, goldman came in and said there is a 25% chance or less of recession. what do you see that they do not? >> out of the last seven recessions, wall street and goldman in particular has predicted none of them. >> i do not think we are going to a recession at all. we can talk ourselves into it.
people can, to some extent, their behavior is driven by what they hear. fear is dominating this market. this market is quite irrational. the market does not have a mind. you cannot associate it with the what you and i might think. it is a collective reaction. >> the market is seeing something that the market is missing, or it is concerned for the sake of being concerned. >> there are all sorts of things to be concerned about. we can be concerned about an asteroid hitting the united states. to be serious, the china impact is not to be ignored. oil is a source of our economy. there is a lack of capital reinvestment in that sector. so, i think that realistically, there is a lot to be concerned about. we have had dismal economic growth. the standards for performance
are low. >> oil is hovering at the $28 level. as it goes lower, will it still have as much of an impact? >> oil is a wildcard. econ 10 one says lower oil prices should begin for the economy. we have not seen that. that is why we have anxiety. the pain of oil is evident. the evidence has not yet been realized. believe me, i am not an oil expert. if there is a bottom, i think sam fisher from new york said zero is the bottom. >> we cannot go negative. >> yes, i think that when we defined the bottom, my gut tells me that we we must be close to it. i think it will be a positive. we're starting to get supply cuts back. as i said, the benefits for oil should begin to dissolve. we haven't seen them yet.
the positive story has yet to play out. >> is markets become too relied on central banks, we were told that bankers basically run on ammunition, we must turn right or left. what is the one biggest tournament -- determinant if we turn right or wrong? >> that is if we can turn towards a more conference a policy response. if we get that come you can unlock a lot of cash sitting on the sidelines. you can really tip into a better equilibrium. if we do not get that, it is no longer about slow growth, it is about recession and the financial versus. >> finances -- recession and financial crisis is what we have to get through. six from -- six months from now, 10 months ago, where do you think we are? >> i think companies are doing well at the corporate level. i think that we are in in year of slow growth. >> i think that in many respects, we have a liquidity crisis going on. part of the volatility that we have in these markets, i think
is really a lack of liquidity. a small amount of buying or selling in any market today has a dramatic impact on prices. and, when i step back and look at these moves, every day, whatever market you look at, we have unprecedented moves. when you look at the s&p or the dow come since january 1, we have not had a time. we have never had this much dispersion of prices they in and day out. up a hundred down a hundred, of 100 down 300. you have to ask yourself why does that happen? we have gone through economic cycles, we have gone through growth. we have gone through cycles were we have had unclear monetary system policy. we have gone throughout the cycles before. the issue for me is that we have never gone through one of these inflection points with no liquidity in the market. for me, what i worry about is the fact that there is no
liquidity. investors, retail investors and particularly need to get on the market. their ability to get on the market may not make sense to them. >> will pick up the conversation next week. david: that will do it for bloomberg best. you can find the latest news around the world from bloomberg.com. i am david gora, thank you for watching bloomberg best. ♪
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