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tv   Bloomberg Best  Bloomberg  June 5, 2016 5:00pm-6:01pm EDT

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♪ anna: coming up on "bloomberg best," the stories that shaped the week in business around the world. from draghi's latest declaration to opec's long-awaited meeting to flash crashes and theme parks in china. we will revisit all the highlights. >> the job cuts were in the sector bp level. >> being in and saying he supports management does not necessarily mean he is not going to want things. anna: and have we got data for you. so many economic indicators out this week and so many ways to read them. >> the ecb decided the stimulus is starting to work. >> income looked decent households are spending at a , decent clip. >> in a word, meh. anna: our roundup of the week's
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best interviews, and big names discussing big challenges. >> institutional investors are trying to deal with volatility using etf's, and etf's and dts are actually sharpening volatility. >> you don't take people out of their walks of life and say, i am going to turn you into a political operative. >> the window of opportunity is closing. we need the resources so we can protect american women. anna: how china's economic acceleration is driving a new car culture. >> this market is growing at 40% or 50% a year. anna: it is all straight ahead on "bloomberg best." ♪ anna: hello and welcome. i'm anna edwards. this is "bloomberg best", your weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. let's begin with a day by day
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look at the top headlines. with markets closed on monday in the u.s. and the u.k., the biggest news to start the week came from asia. >> the singapore listed commodity trader noble group is making headlines again today with the resignation of its ceo. what happened? it happened very quickly. >> here is what we know from the statement from noble today. it says he decided the time was right for him to move on. he has been ceo for four years. noble says he will be replaced by co-ceo's. renzel has been with noble two decades. an old hand in the company. frayes joined noble since. here's where we are with the company. even with the recent rise in commodities prices, noble shares have continued to drop. noble said something else today. it will stop the sale process of
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some of its u.s. operations. that will help prop up its balance sheet. the company has been under attack. allegations against its accounting practices coming from the likes of iceberg research. mark: vw shares falling 17% -- as much as 4.7% earlier after quarterly profits at the vw brand declined 86%. revenue slipped as well. the chief executive says the automaker "achieved respectable results under difficult conditions." chris why did shares fall as , much as 4.7% earlier? was it just the decline in profit of the namesake brand? chris that is certainly a big : reason for it. like the headline figures rose slightly. it was due to some one off charges, 309 million euros. they got some currency tailwinds from the 6.2 billion euros they have set aside for the scandal.
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so i mean the volkswagen brand , is critical. it is so core to the identity of the company. and with the profits falling as 86%, as you said and the profit , margin is minimal 0.3%. so that is a big problem for them. in addition to that, they have also suffered from a decline of profits in china. that's not reflected in the operating profit results. so you know china is their , biggest market. if profitability starts to slim there, that is going to be also a headwind for volkswagen. tom: the prime minister, this is a big deal, folks. he will retract a national sales tax. much of this was foreshadowed when he was with the president and leaders in g7 and at hiroshima, where he made very clear he was playing to a domestic audience. some of this is today the delay of a national sales tax. really quite an abrupt blow to the fiscal side of abenomics.
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how will japan respond? to the prime minister's announcement? >> first of all, i would expect , tom he will do pretty well in , the election next month. we don't know yet, but we think he is going to call a double election, so that will be perfectly timed. notice what he is saying here. a few months ago, he was saying he would not postpone the sales tax hike, unless there was another lehman-like event. now he is blaming the world economy. he is saying the world is at risk. not japan. japan is doing fine because of abenomics, but the external economies are at great risk, so he has to do this. tom: i do not need you to give me your opinion as an economist but when i look at the data, i , have trouble saying that japan is doing fine. which is it? >> oh no, you are right to not see it there. this is clearly, the virtuous cycle that abe has been talking about where corporate profits rise, and then that leads to higher wages and that spurs more consumption, that is not happening.
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this is his attempt at kickstart ing that with a boost to consumer spending. jonathan: the refinancing rate staying unchanged at 0%. the deposit facility rate, the depot rate has gotten a lot of attention since it went negative injured -- in june 2014. it remains unchanged at -40 basis points. and the marginal lending facility, the third rate hub of the ecb staying unchanged. that is 0.25%. the ecb to start a corporate bond purchase plan on june 8. we have got the date, june 8 will be the date. that news crossing the wires right now. all we knew before was that it would be in june, 2016. we still have not got the color on the size, but we now know it will start on june 8. >> the one thing opec ministers did agree on is a new secretary-general. that is a positive. you know they have been , bickering about who should get
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that post for four years now. they finally decided the man who was the nigerian front runner. he will be the new secretary-general come august. on the whole, you look at this. they kicked the can down the road when it comes to policy and intervening on the markets. they are still going to let the market as they put it "fix itself." and yet, when they do convene later in the year, at least they will have a new secretary-general, some fresh blood, and maybe we can get some more unity out of this organization. >> it is now less than three weeks away from that crucial brexit vote. and some very big names are speaking out about it. we have jamie dimon and the prime minister weighing in. what is the outlook this morning? >> jamie dimon in the u.k. after being in new york yesterday, flew in to talk to his employees with the chancellor of the treasury. >> it is my opinion that it is a terrible deal for the british economy and jobs. >> he says they may have to cut thousands of jobs in the u.k. if the brexit happens and move
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those to the continent, both for business reasons and if other countries require it. >> your jobs report now. matt: 38,000 jobs. that's the number created in the month of may. it was more than 120,000 below the median estimate in our survey of economists. and the lowest job growth in this country since september, 2010. >> is this a report enough of a shot to alter fed action? >> i think it is enough of a shock to delay june into july for sure. you know the fed has tried to , convince us that one or two hikes this year is in the cards, and i think they want to re-normalize the yield curve and re-normalize short-term rates, but the number like this certainly cancels out in my way of thinking, june in combination with brexit. so we will wait for another one and look for july.
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but the number is so low that they have got to take pause. >> it has been a week full of reports for economists, investors and policymakers to chew on. later in the program, we will review data from around the world, including more u.s. numbers for the fed to consider at the upcoming meeting. up next, carl icahn's latest activist play. and the latest job cuts for investment banking. you are watching "bloomberg best." ♪
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♪ anna: this is "bloomberg best." i am anna edwards. we continue our global tour of the week's top business stories with a frightening 60 seconds for traders in china. >> if you don't think much can happen in a minute, think again. it was a big morning for trading in china. what happened with the options market over there today? >> it was the chinese futures
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market at the 10:00 hour, the market plunged 10% in a minute and then it snapped right back up to where it had been. so, something of a bit of a flash crash there. david: does this raise basic questions about the markets and how they are functioning? >> it seems to be from what we are hearing, it was a fat finger trade rather than something more structural like of course the 2010 flash crash in the u.s. the market was up 3.5%. the biggest gain in three months. there seems to be sentiment that the msci is going to include china in its emerging markets indexes. >> the futures exchange says the flash crash was triggered by one single trader who put in an order for 398 contracts for hedging. that brought the selloff we saw. it was the busiest minute of the session. 1500 contracts changing hands. the value of $218 million. >> disney says it may take legal actions against china's theme park after he claims that snow
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white and captain america look-alikes were seen at the opening of the complex in non-chung. how did a conflict between wanda and disney start? >> actually, the conflict started a week ago where a chief of the new theme park in china went on a national tv program and among some topics, he talked about how disney should not have come to china, and that he thought disney liked -- lacked innovation. these are the opening shots. and disney has stayed quiet until then. they did want to respond to what wong had to say. but then over the weekend, when wong opened the first of 15 hise parks that conglomerate is planning across china there were characters , there that simply put were dressed up as characters that are registered to disney. >> wonder if disney is likely to to actually take action against wanda. is this a warning? >> disney has made very clear in their statement that they have
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not gone so far as to take legal action. they are definitely given themselves room. it's more like a warning shot, i think. >> virgin australian shares are higher after china's hna group says it is buying 13% with plans to increase the state to almost 20% over time. hna runs more than a dozen carriers including hainan airlines. singapore airlines says it is cutting its stake to 20% and response. why specifically hna? >> well, i think they are a perfect partner. it opens up china for us. and china is of course, the inbound biggest source of , inbound tourists for australia. as you know, it is now over one million chinese visitors come to australia every year. and it is growing at a rate of about 18% as it has been for the last five years or so, so it is a very important market for us , and they are a very important and good partner.
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>> so then why is singapore airlines paring its stake? >> now well singapore airlines is a very important partner as well, and we enjoy a very strong relationship with them. but their stake obviously with the placement of the 15%, which is really 13% of the total to hna, the singapore stake and for that matter other people's stakes will drop a percent or two. it is just a byproduct of the mathematics. >> san miguel is selling its telecom business to two other philippine companies in a deal worth $1.5 billion. they hope this will improve their service. the chairman says that two will work together. this deal, what does it mean for san miguel's plan to break into the sector telecom? ,>> what you have here is a cello of $1.15 billion. -- sellout of $1.15 billion. what is does mean is they have been precluded themselves by selling this to get into the telco market.
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that money as the chairman talked about earlier in a sideline interview was going to be focused on other infrastructure plays. as you know, san miguel is aggressively expanding into the infrastructure sector. from roadway, tollways, ports and even power. that money may be used to pare down their debt or expand their warchest into their sectors. >> billionaire investor carl icon has taken what he calls a large position in drugmaker allergan. he's very supportive of the ceo. icahn helped place him there. it was bought way what is now allergan. -- that company was bought by what is now allergan. he of course has bet on a lot of big companies, whether it is apple or other names. he pushes for moves that he thinks will raise shareholder value. what does he have in store for allergan? >> i think we may have to wait and see. he put up this statement, very brief and he does take pains to , say that brett saunders is a great guy.
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these guys go way, way, way, way back. a bunch of years of icahn believing in this guy. take a look at apple for example. he took a stake in apple. said that he likes tim cook. he likes the company's management strategy. then he came in and demanded they start using some of their cash to repay back to stakeholders. so carl icahn being in and saying he supports the manager -- management -- icahn being in does not mean he is not going to want something or have a role that he thinks he can play in the company's future, especially since allergan is at a pivotal point right now. >> we should not assume it is a friendly situation. >> it may be friendly with some tension is always a possibility here. i mean i think there is a broad , spectrum on how activist carl icahn can be and could get in a situation like this, even when he generally supports the direction the company might be going. >> asia's biggest aircraft leasing it firm made its hong kong listing debut. shares of boc aviation trading more than 1% higher.
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now this ipo raised over $1 billion, making it asia's second-biggest share sale this year. robert, this has been a project years in the making. because as you told me before, you really kind of created the regulatory landscape for this to actually happen. >> yes. this is one of the first spin offs of a company like our own. and so obviously, being owned by a highly regulated mainland chinese bank that is listed in both shanghai and hong kong stock exchanges, there are a lot of approvals to go through on the way here. but with help from our advisors, we have successfully navigated those and are listed on the hong kong stock exchange. >> a lot of investors have been going to the bond market for liquidity to finance. how is that going to change or perhaps be more of an obstacle especially since the fed is looking to raise rates? >> we do not see the fed raising rates as an obstacle. as a company, we balance our books in a way that 60% of our
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leases are floating rates. they are naturally hedged against an increase in interest rate. where we do have fixed rate leases we will use the bond market to raise funding for the hedge bets. >> softbank, the largest investor in alibaba group saying they would sell $7.9 billion in its stake in the chinese e-commerce giant to bolster its cash position. and to pay down debt. alibaba falling in extended trade on that news. still, softbank will remain alibaba's largest shareholder with 28% after the sale. softbank is divesting $5 billion in the company's adr. through a new trust. it is also selling some stock back to jack ma's company. the rest of the members of the alibaba partnership as well as the sovereign wealth fund. softbank will be able to balance its own sheet, they have reported holding 8.5 trillion yen of long-term debt. that is according to some research services.
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that is shy of $77 billion. they are increasing this liquidity cushion for the company right now. >> goldman sachs has cut dozens of investment banking jobs in the last few weeks, according to people familiar with the matter. jobs were eliminated across mergers and acquisition teams, the latest in a string of job cuts in the industry. >> we had news of hsbc cutting dozens of senior jobs, and now you're talking about goldman doing the same. and the thing to keep in mind is this is over and above. goldman does this annual 5% cut of jobs every year. so this is over and above that. we saw them do something similar in the trading division where they cut up to 10%. we don't know what percentage of jobs this is, but we do know that the job cuts were in the key cities globally really. hong kong, london, new york and you know, we know it's dozens, it is at the managing director level, at the executive director, vp level. if you look at just how deal
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volumes are this year, that gives you a kind of indication of what the banks are going through, not just goldman, but banks across the state. betty: uber got a big vote of confidence from saudi arabia. the wealth fund investing $3.5 billion in the silicon valley start up and will get a seat on the board. this cash infusion will help the company fund its costly global expansion. this is a huge, huge cash infusion for uber. exactly how are they going to use this money to expand? >> it does seem like a massive amount, $3.5 billion, which is the biggest single investment coming into uber, and bringing their cash pile to about $11 billion. so they do seem to be sitting on a lot of cash today, but they are going to need probably at least that to be able to realize their plans for international expansion. of course, uber today is the world leader in car hailing
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applications, but if you look around the globe, you will notice they have very strong competitors emerging in countries like china and countries like india and across europe as well as in the u.s. so uber is going to need that money. of course they do not have factories or direct employees as much as they do need that money for marketing purposes. but i do think that china is kind of the key piece, especially when you look at the investment that apple made just last month in uber's rival didi in china. $1 billion coming in from apple as part of a broader fundraiser. and that is really going to be a key market for uber. where a lot of funds will be needed for expansion. ♪
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♪ anna: you are watching "bloomberg best."
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i am anna edwards. investors had a feast of economic data to digest this week and with the backdrop of , thursday's ecb rate announcement, plus the fed's upcoming policy meeting, and the u.k. brexit referendum, these reports took on extra importance. here's a look back at the week in data. >> japanese retail sales growth has stalled, adding to the case for prime minister shinzo abe to delay a sales tax increase planned for next year. he'll also be proposing a new similar package to give the economy a shot in the arm, a shot in the arm that it needs. the numbers we got on retail was not bad, but it is like flatlining growth. >> as we were talking about when the numbers broke, flat growth still considered a beat for japan. just goes to show how low expectations are and how weak private consumption remains in the country. those sales unchanged in the month of april from the previous month. still a b. economists were expecting a 0.6% drop for the month.
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more downside when it comes to the on year figures falling 0.8%. still better than forecast after march figures were revised upwards just slightly. we came out of g-7 with the prime minister sounding some crisis hethis lehman warned about may add to the case for further boj stimulus. matt: -- jonathan: bloomberg's paul gordon joins us live with the latest on inflation and jobless numbers. in line, but still not great for president draghi. >> inflation just below zero, unemployment just above 10%. a slight improvement for sure and reason for the ecb to say , that its stimulus is starting to work. but a very long way to go. a big question is where does the inflation come from? it has never really come from industrial goods. it did used to come from energy. that may be returning briefly now, but it is hard to see that as sustained. services inflation is where the ecb needs to see prices increasing. and that also is a hard stretch
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at the moment in this climate. jonathan: april was a strong month for the u.s. consumer. spending in april climbed by the most in nearly seven years. will it impact the fed debate? number, butreat maybe not quite so great if we take three factors into consideration. first of all, spending was flat in the prior month. so there was a little bit of a catapult or a snapback effect there. number two, gas prices increased significantly in the month. so while part of that spending increase was just households paying more for gasoline. and three was the savings rate coming down, which is good news. consumers became a bit more optimistic in the economic outlook, so they loosened the purse strings a bit. those three factors are unlikely to be repeated on a sustained basis going forward. so yes, income looked decent. households are spending at a decent clip, which means that the current quarter of growth is going to bounce back from that lousy number we saw in q1.
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let's not get too out over our skis here too excited based on , this number. the fed likes this number. however yellen and company are , going to go into that june 15 meeting saying one month does not necessarily establish a trend. >> home prices in 20 american cities climbing more than forecast in march as the busy spring selling season began. the s&p case schiller index up 5.4% in march, adding to signs of healthy demand. housing data showed purchases of homes theyd new , strengthened more than expected in april. we may be at the peak point in the housing recovery. are we seeing the second breath, the second life in housing? >> i think the economy has been recovering. employment growth has been, you know solid enough. , people are needing houses.
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they are buying them. there are not enough houses out there. the inventory is low. so they push the price up. it is a modest price increase. nothing scary or exciting. this could go on for some time. >> china's official factory gauge here we have mentioned it , a few times, has signaled improving conditions in the country's manufacturing sector for a third month. pmi stood at 50.1 in may. compared with the meeting estimate of 50 in a bloomberg survey of economists. the data adds to recent evidence of stabilization in the world's second-largest economy. what does this reading really tell us help us work out where , we are in the china story? >> i guess it is like you say. at the least, adding to the narrative that the economy may be stabilizing. we had some decent figures coming out of march and a few wobbles in april. now the picture seems to be that things are somewhat finding their, finding a footing. no real evidence the economy is
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getting momentum either. that is what is key, and that is what is coming out of these numbers today. sure, it's hobbling along, not getting any worse. but when you consider all the stimulus, i mean all the money the government has spent, the various channels they have opened to get credit into the economy, we know there was a record level of credit. we know about all the debt. we know throw it all together, really we still have a picture, where, sure, conditions aren't getting worse but they're not taking off either. no much to write home about i'd say. anna: this contains information about the current economic conditions in each of the 12 federal reserve districts. >> a lot of anecdotal information. the book is published approximately two weeks before the next fomc meeting. that's taking place on the 14th and 15th.
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reporter: yes, the economy is still growing, but at only a modest pace. that's the word the fed chose to use. the fed used that same word, modest, to describe job growth and wage increases since the last book in mid april. in other words, this isn't the kind of assessment that turns hawks into doves. there is little if anything in today's beige book that suggests an urgent need to raise rates at the next fed meeting on june 15. the one area i will say that stands out is labor markets, which the fed described as tight. difficulty hiring, of course, should translate into wage and inflation pressures in the months ahead, but as of now, the fed reported only slight growth in price pressures. shery: next, we'll take a step beyond the numbers. to the week's most compelling
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conversations. topics ranging from apple's efforts to branch into india, to one c.e.o.'s case for supporting dommed trump. our best -- donald trump. our best interviews are coming up. ♪
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shery: this is "bloomberg best." anna: it's time to replay some of the week's most interesting interviews on bloomberg television. we'll start with the exclusive sitdown with cent capital group who reflected on crucial changes in the banking system. >> the good old days, the banks would have deposits and other access to capital from the fed that they would have a very lopat earn and earn a spread and make a loan, with all the regulations, the banks no longer make loans. tory y don't hold inevent and they don't make loans
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anymore. and i'm speaking, you know, making a point by speaking broadly. obviously banks make loans to some extent. but they're really tightly regulated. so, the market then no longer can look to banks to make markets and so you actually have to have a match of a buyer and a seller. if you want to sell, there's nobody there to sell to, and if you want to buy, there's often not anybody selling. what do institutions do? they've turned to e.t.f.'s. an easy way to add beta or take risk off and so paradoxically, and e.t.f.'s are probably only two or three -- markets at $1.4 trillion, if you want to look at the size of those e.t.f.'s, it's -- they're 3% of the market. we don't have, at least as far as i know, any objective evidence of how much trading activity they provide in the market. but let's say it's 10%, what we're hearing. and e.t.f. flows on a daily
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basis do move the market notably one direction or the other. so you have, you know, the advent of institutional investers who are trying to deal with market volatility, using e.t.f.'s and e.t.f.'s are actually sharpening volatility somewhat, so what i think -- that's a lot of details. but what it translates to is you need more and more portfolio managers have to set their course and stay on their course. david: let's take an example, apple. 30% of their phones should be made indigenously in india, if they're allowed to open their own stores there. do you agree with that? doesn't that raise the barrier very high for a company like that? >> unless it is changed, this is a pre-existing policy that already exists for the last several years. and the policy has been that if you have these single branch
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stores, you must have some local sourcing. the rationale behind this has been that every person who looks at the indian market must also invest in the direction of creating some employment opportunities in india. now, logically it's an international policy. in case of a straight product here or there, it must seem a little odd, but there is a sound rationale that when you are looking to invest and capture 1/6 of the world's population, which is a very large market, and a very large middle class, which is littered in these areas and products of its kind are going to be purchased at asthma -- a mavs scale, then please help us in creating job opportunities in those countries, as well as far as manufacture something concerned. >> will you change it? >> they have represented to us, we will examine the matter in cases because cases where there is a very high technology involved, we've already carved out an exception.
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and we'll always be open to look t these areas. >> why do you think the republican leadership is having such a hard time getting behind donald trump? , well, i think rightly so they're unsure. they're uncertain and it's threatening. so, if you think of politics, i don't think there's been a president who's made a payroll or received a payroll since herbert hoover. i mean, president bush owned a baseball team. terms, the organizations of politics are political. so you don't take people out of their walks of life and say, i'm going to turn you into a political operative. you're a political operative. it's what you are. so, by nature, these organizations have bred over time, like we're talking about grapes, they've bred political
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candidates up through the ranks for years and years and years and everybody's invested in that. so when something from the outside comes and challenges that, it's frightening. >> in the end, congress did the right thing with ebola. they funded it, so we could stop it. and i'm hopeful they'll do the right thing with zika. but the sooner the better. the window of opportunity is closing. we need the resources so we can protect american women, protect people from zika. and that can only be done with a long-term commitment that starts soon. >> what is in concrete terms being delayed at this point? research on a vaccine? spraying against mosquitoes? what is not happening now because congress has not taken action? >> we've borrowed money from one part of fighting emergencies to fight zika, so we have to reimburse that money, and we have to start long-term activities to understand the impact of zika on infants and families. to better stop mosquitoes. this is a really difficult
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mosquito to control. we don't have good ways to do it. the sooner we start on them, the sooner we can do it. and to better develop tests to diagnose this infection, and to vaccinate against it. >> how much longer can you shuffle fundsing in the way you've been doing it? >> it's very challenging. every day that goes by, we're not starting programs that could better protect americans. so the sooner congress acts with a supplemental emergency funding bill that restores the money that we bought, and allows us to move forward with multiyear plans to learn more and do more to protect american women, the better. ♪ >> are you optimistic about the risk at the moment threatening the global economy or are you more risks to the down side? >> frankly, it's going to be flat growth, 3%, vis-a-vis last year. 3%, 2015, 3% 2016. a little bit of an improvement in 2017. but very gradual, very moderate.
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overall a rather mediocre, a rather dismal outlook because no surprises. the engines of growth, trade is growing at 2% to 3%. it should be growing at 7%. only five times in the last six years has trade been growing below the rate of growth of the g.d.p. of the world. in those five occasions, there's been a very serious deceleration, even a recession. i'm not saying there's going to be a recession this time, i'm just saying conditions are very difficult on that score of trade. investment. that's, you know, investment today, growth tomorrow, that is growing at about 3%, 3.5%, it should be growing at 7%. credit is not flowing, the banks are saying there's no demand. the small and medium enterprises saying conditions have tightened very much. so they're not getting it. and last but not least, engines of growth in the last 10 years, china, india, south africa,
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indonesia, brazil, russia, i mean, right now second year in recession for brazil, second year in recession for russia, and very flat growth for indonesia or let's say less growth in indonesia, less growth in south africa and then about half the growth of a few years ago in the case of china. so basically that fourth leg of the growth engine, that fourth cylinder of the growth engine, is also at top speed. ♪
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anna: now let's shift gears and look at a recent phenomenon in china. crit's fastest and furious economic development has fueled a rising car culture. bloomberg buckled up and took a
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ride at a soon to be listed beijing auto racing circuit. >> here at track day basically anyone can come out and spend 1,200 m&b, that's $185 u.s., to have fun at the track. beijing as i golden port is trying to put the car culture on the new track, offering, for example, an alternative to cruising or drag racing on the street. bloomberg obtained this video of teens being busted by the police after illegal midnight racing in an underground beijing parking lot. >> the consumer market -- [inaudible] -- basically we're giving them what they want. their needs, they want to go somewhere to drive fast. to push their cars to the limit. this is a safe environment for them to do it. reporter: they're planning an i.p.o. this year as the property
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developer accelerates into a more asset-light licensing model. their fran -- they're franchising race tracks and auto clubs nationwide. seven are already built. with more on the drawing board. including china's first race car track. >> this market is growing at 40%, 50% a year. with so many cars being sold in china, with the young kids, as we can see today, and they spend money buying cars, they spend money on the track, they spend money on girls. reporter: but not all girls here are just along for the ride. 27-year-old estimates she has spent upwards of $30,000 u.s. on gas, tires and tricking out her nissan sky line. >> we're going to do some dressing. >> here we go.
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>> the still pretty rare to have girl here in china. the cool. the smoke. it's just like a big show for everyone. reporter: never mind she studied finance in college. you're racing against guys? >> yes. all guys. 40 guys. reporter: 40 guys? girl power. > yay. >> with giants like amazon an ebay dom faith in ecommerce, there's slim hope for anyone to beat them but it could be possible to join them. that approach has paid off for packs.
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>> we actually started out as a branch of a retail pharmacy in bronx, new york. we had access to different merchandise, health and beauty product from our distributors. we wanted to make it a side business and sell the merchandise online. we raised about $750,000 from friends and family, aunts, uncles, cousins, that's how it was started. a that point we did see that retail was slowly on the decline and ecommerce was on the rise. another vision we had that many other people didn't see was that marketplaces would be the future and we thought that amazon would lead that charge. we other -- our goal was to partner with amazon, work with them, become one of their largest retailers and build a brand within a brand. we were burning through cash the first couple of years. trying to build our technology. one of the things we didn't want to do was use outside third
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party software for our warehouse manager system because that would create a level playing field between us and our competitors. we knew we needed an edge. we built all our software and biment warehouse fulfillment and logistic software. one of the key facters in us starting the trend up were building out software that allowed us to dynamically price. we base by cluesed key factors like shopping pattern characteristics, rankings, weightdy mentions. that alloweds now currently to change our prices across the board every 45 minutes. some of the metrics speak for themselves. we used to have an 9% rating and now we're at 99%. the customers are happy, amazon's happy. our other partners are happy. we're shipping out 130 to 140,000 packages a week. a few years ago we were shipping 50 packages out a day. we started with six employees, now we have 350 employees. we went from a 3,000-square-foot facility to a 3,200-square-foot ma silt and we're moving to bigger this summer. we did $1 million in revenue the
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first year. currently we're going to finish off 2016 somewhere between $140 million and $160 million. we've at this point created a plug and play model, as sales channels pop up, i believe within three to five years, we can be a $500 million company. ♪
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>> the very, very busy as far as ecodata. just talked about the inflation numbers, trade minus 6% on exports. so, simple function is asia pacific, that's today, june 1. have a look at everything that's coming out today. >> this is seag. looks at sort of seasonal moves in whatever underlying security you're looking at.
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>> maybe they'll become your favorites too. here's another function you'll find useful. quic go. it will take you to our quick page where you can get fast insights into timely topics. brazil is the focus of a quick ake this week. >> this recent years brazil has gone through a roller cost he -- a roller coaster of turmoil. between economic woes, corruption scandals and impeachment proceedings, brazil is in a deep crisis. many blaming fingers point to the president who was recently suspended from office. but this has been a slow unraveling for the world's fifth most populous country. so here's the situation. in order to understand this, you need to start with her predecessor.
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a rags to riches story, lula was wildly popular and became a symbol for economic's -- razil's economic assent. the first woman to become elected president of brazil in 2010. during her presidency, global prices for raw materials began dropping and a corruption scandal paralyzed many infrastructure projects, putting severe strain on brazil's economy. how bad did it get? brazil's economy strange 3.% in 2015. the most in a quarter century. the country's credit rating was downgraded to junk and business and consumer confidence levels fell to nearly their lowest on record. rue self's presidency has also been strained by the massive scandal involving the state-run oil company. an investigation dubbed operation car wash revealed the deeply corrupt organization and government. it unearthed a scheme started over a decade ago involving
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bribery, collusion and kickbacks implicating officials. rousef herself has not been named but what might prove her undoing is claims she doctored accounts to cover up the government's deficit woes during her 2014 re-election campaign. in march, more than three million brazilians took to the streets calling for her ouster. on may 12, the senate voted to put her on trial. the argument.re's those in the anti-rousseff camp say that her time is over. even if she survives her upcoming trial, which many say she won't, a fragmented government and angry public will prevent her from accomplishing anything meaningful. the pro-rousseff camp says her successor, the vice president, isn't much better. just last year he tweeted, quote, impeachment is unthinkable. since then, rousseff herself has accused him of attempting a coup. looking big picture, there aren't many good guys here.
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352 of brazil's 594 members of congress are currently under investigation for corruption charges. brazil's future is uncertain right now. but whoever rises to power next faces a tough task in stitching the country back together. ♪ >> you can find many more quick takes on a range of subjects at bloomberg.com. along with all the latest business news and analysis, 24 hours a day. that will be all for bloomberg best this week. thanks for watching bloomberg television. ♪
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>> i am cory johnson in for emily chang and this is the best of bloomberg west. coming up, ridesharing startups are duking it out over cooper announcing a three and a half billion dollar injection from the saudi find, and we will catch up with lyft's chief business officer.

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